#242 Scot Lowry (Promise Partners & PromiseONE) — The Right to Win in Entrepreneurship Through Acquisition

Scot Lowry [00:00:00]:
It's been incredible to see. We had 7 new members join Promise Partners. The next year we doubled that. In 2024, we had 170 people, and this year we were up close to 200 people who were interested in joining. And again, we had to cap it at 30. It's just had an explosion of interest. Richard would probably be proud to see the, the success and, and the people that have, that have benefited from the group today.

Jeffrey Stern [00:00:27]:
Welcome to the Lay of the Land podcast, where we are exploring what people are building in Cleveland and throughout Northeast Ohio. I am your host, Jeffrey Stern, and today I had the real pleasure of speaking with Scott Lowry. Scott is the managing partner and co-founder of Promise One Companies, a Cleveland-based investment firm that helps purpose-driven entrepreneurs acquire and grow established businesses through entrepreneurship through acquisition, also known as ETA. Prior to launching Promise One, Scott acquired and led Fathom, a digital marketing firm he grew more than 450% over a decade, an experience that became both the financial engine and talent incubator behind Promise1's long-term portfolio strategy. Today, Scott also serves as the Richard Osborn Professor of Entrepreneurship at Case Western Reserve University, where he teaches acquisition entrepreneurship and helps steward one of the nation's longest-standing ETA programs. In our conversation, Scott and I explore Cleveland's unique right to win in ETA and the decades-long lineage that traces back to his mentor, Richard Osborn. We talk about what it truly means to become a credible buyer, how to earn the trust of legacy sellers, and why understanding what matters most to them is the foundation of great deal-making. We unpack the evolution of Promise One's patient capital model, the philosophy of your dream is my dream, and how Scott has managed multiple operators' transition from employee to business owners.

Jeffrey Stern [00:01:53]:
We also discussed negotiation, long-term ownership versus traditional private equity, mentorship, and a deeply personal crucible moment that has shaped Scott's leadership philosophy and sense of purpose. Scott is really a thoughtful entrepreneur, investor, and teacher, and this was a really insightful and meaningful conversation. So I hope you all enjoy it. Lay of the Land is brought to you and is proudly sponsored by Serity Partners. As a wealth management firm, Serity Partners shares Lay of the Land's same dedication to serving local business owners and the Serity Partners Cleveland team understands the challenges that entrepreneurs and founders face here in Cleveland, Northeast Ohio, and beyond. Wealth comes with complexity and increased demands on time and resources. It is easy to become overwhelmed. Serity Partners clients benefit from a unified team of local specialists who coordinate across both business and personal needs.

Jeffrey Stern [00:02:48]:
With Serity Partners' commitment to transparency and putting clients' needs first, complexity can become clarity. To learn more, please visit saritypartners.com or call 212-666-2666 today. Sarity Partners, proud to be recognized as one of the top financial advisory firms in the country.

Jeffrey Stern [00:03:08]:
I want to start with something that, that I think a lot about, this idea of a region's right to win. So when you think or look at a place, you know, what are the structural components, the business history, the institutions, the people, the capital the culture that position it today to lead in a sector that simply wouldn't make as much sense somewhere else. And when I think about Cleveland, and this is actually one of the first things that we talked about when we were together, when, when we met, it feels like we have here a real right to win in entrepreneurship through acquisition because there's this amazing lineage and history that I think most people don't know about, but it goes back decades, both preceding your involvement in it, but also you've been a major part of it. And I thought it would be a great place to start just to kind of share a bit of the history of Cleveland entrepreneurship through acquisition as you're familiar with it and where you found your path intersecting with it.

Scot Lowry [00:04:10]:
Yeah. I mean, I think I'll just go back to when I first ran into it. I had just moved to Cleveland. This is 2000. I came back here from Colorado where I was working to get my MBA at the Weatherhead School at Case. And I was in a class with Richard Osborn, affectionately known as the Gorilla to his students. And he was bringing, he brought in guests almost every class, which was one of the things that I loved about his class. It was very real, very practical, and he was bringing in entrepreneurs and business leaders from all over Cleveland.

Scot Lowry [00:04:48]:
And we had Mal Mixon scheduled to come into class. And at the time, Mal was CEO of Invacare. Invacare was on the New York Stock Exchange. He also had a private investment company called MCM Capital. And I knew of Mal. I didn't know him, but I was, I was really impressed and by his accomplishments and was excited to learn about him in class. I'm sitting in class. Mal's there.

Scot Lowry [00:05:14]:
Richard's interviewing him. And at some point, Richard asks Mal, how did you get started? And he talked about a very sort of pivotal story in my journey. He said, well, I had, I was in Cleveland. I graduated business school. I heard about a company that was for sale for $8 million called Invacare. I lined up an investor. I took every dollar I had, which at the time was $8,000. And we went and bought the company and I ran it.

Scot Lowry [00:05:43]:
And it just like blew my mind. I'm like, wait a minute, you got started by buying the company that's now being traded on the New York Stock Exchange with $8,000 of your own money with support from an investor. And now you're CEO and you've had all these incredible successes. And at that moment, I knew I had to learn every single thing about how did somebody like him pull that off? Because that was exactly what I wanted to do. I had been dreaming about business ownership for years. And I didn't see a pathway for myself. I was in that class. I was getting my MBA.

Scot Lowry [00:06:17]:
I was plotting, you know, how can a guy like me go from employee to business owner? I was thinking about startups. I didn't have a great startup idea. I didn't have a family business to inherit. And I thought if I was going to buy a company, I needed millions of dollars and I certainly didn't have that. So I wasn't sure what I was going to do until that moment. And that really, That got me started. Soon thereafter, the gorilla, Richard Osborn, mentioned to me that there's this group in town called Promise Partners. And so in 2000, the group was about 8 years old.

Scot Lowry [00:06:48]:
It had started in 1992. There was about 25 or so members. There was 4 or 5 people that had actually bought companies, but it was a group of former students who would meet on a monthly basis to help each other figure out how they would go from employee to business owner by buying a company. And I, I couldn't believe it. So I had the idea and now I had the, the community to support me in figuring out how to put a plan together to finally execute a plan to become a business owner. And, and I got involved with that group and immediately just started sponging everything I could from that group. So, you know, from starting with, well, how did you figure out what you wanted to buy? How did you find it? Where did you get the money? How did you find investors? How did you convince them to back you? How'd you get the deal done? And the good news was I had the benefit of about 7 or 8 years of really solid general management experience. I had spent my early career in commercial construction management.

Scot Lowry [00:07:51]:
So I, I was an operator. I had a good track record of being able to get things done. I had managed budgets. So that, that was a huge advantage that I had going for me. And I learned that, you know, early on from the group. But that group was helping me answer all those other questions. And over the next 2 or 3 years, I put together a plan to answer all those questions for myself and set myself up to eventually form a partnership and go out and buy my first company. But that's how I got started.

Scot Lowry [00:08:19]:
And I was just incredibly lucky to find myself in that classroom in the middle of a community that was designed to take people like me that had a burning desire for business ownership and help them put a practical plan together to actually make that happen.

Jeffrey Stern [00:08:38]:
Yeah. What, what do you find are the biggest lessons that you've taken with you from The Gorilla?

Scot Lowry [00:08:44]:
It's absolutely fundamental when I think about, I learned over time being a part of that group. I'll start with the founding idea of the group. So Richard started that group primarily to extend the relationship with students beyond the classroom. So he, you could tell, I mean, he was one of the most beloved professors that Weatherhead has ever known and still is today. You'll meet people that graduated from Weatherhead in the '80s or the '90s, and they, and they'll talk about Richard Osborn. He started this group as a way to extend that relationship. So for me, I graduated in 2001. I got involved with that group immediately.

Scot Lowry [00:09:27]:
2005, I formed a partnership, launched a full-time search, ended up buying a company in 2007. And then I stayed a part of that group as a board member and mentor to this day. And for years until Richard's passing in 2016, I had an ongoing relationship with Richard. So he was a big believer in viewing all relationships as lifelong. And, you know, that's something that I've carried with me. And there was also a huge aspect of, I guess what I'll call, you know, pay it forward. So that group, it's 100% volunteer-led. So today there's something like 150 people involved.

Scot Lowry [00:10:04]:
There's like 120 or so members who are trying to put their plan together and execute that plan to become business owner. And then there's a bunch of mentors. 100% of the people in that group are volunteers except for for one person who's a fractional administrator who like manages the calendar and that sort of thing, but it's, it's 100% volunteer run. And the value that that group creates is incredible. There are, there are professional entrepreneurship through acquisition accelerators throughout the country that are popping up that are, that are backed by big funds and managed by professional managers and things like that. And this group is on the gratitude of former members helping the new members carry forward. So those are pretty profound and have been those ideas of the lifelong relationships and really thinking about Richard gave me the idea. He connected me with this group of people that made it possible for me to become an entrepreneur.

Scot Lowry [00:11:01]:
And I've been in many different ways trying to say thank you for the last 20 years. That's had a profound impact on my journey just through that group. And really, what we've done in our private investment company as well.

Jeffrey Stern [00:11:15]:
Yeah. I mean, there's a traditional closing question, which I'll ask you at the end of this for hidden gems in Cleveland. But as I've become increasingly familiar with Promise Partners over the years, I mean, it feels to me like a true hidden gem of our entrepreneurial ecosystem here.

Scot Lowry [00:11:31]:
Yeah. That, you know, and it's, and the irony is it was, it was literally a hidden gem up until about 4 or 5 years ago. You know, Richard, more, I believe, out of humility, just sort of kept it quiet. You know, he would mention it to a handful of students and there weren't a lot of people in town that knew about the group. There was a few people that had heard of it, but they didn't really know what it was. It sort of felt like this, you know, sort of secret society, if you will. About 10 years ago, we started inviting people that didn't go to Weatherhead into the group, which was a smart move because we had a lot of members who Bought companies and, and their friends or their colleagues were interested in the group and we decided that it made sense to open up beyond the Weatherhead community, which traditionally had been the, the, the primary pathway. And then in 2022, we did a, an event with the Weatherhead School that was very successful.

Scot Lowry [00:12:26]:
There's about 180 people there. It was a sold-out event and it was the first time that we had really presented Promise Partners publicly to the community. And that event has, has gone on. We just did the 4th annual one in October, and there was something like 325 or so people there. We keep trying to squeeze a few more people into the space at the Tinkham Center at Case Western where we do the event. And it's been incredible to see in 2022, we had 7 new members join Promise Partners. The next year we doubled that. It was 14 the first year after the event.

Scot Lowry [00:13:03]:
In 2024, we had 170 people on the I'm interested to join list, and we had to cap it at 30. And this year we were up close to 200 people who were interested in joining. And again, we had to cap it at 30 because it just, you know, we want to make sure that we're able to, you know, support and mentor people in an effective way. But it just shows going from this sort of quiet, almost sort of secret thing, like you said, to making it sort of public and known in the community, it's just had an explosion of interest that has been really fun to see. And, um, but the group is thriving today and it's fun to see that because I think for me and several other people on the board that have been involved from the early days, you know, we just always sort of look around every time we have an event and just think about, you know, Richard would probably be proud to see the success and the people that have benefited from the group today.

Jeffrey Stern [00:14:00]:
I'm sure he would. To pay it forward ultimately though, you kind of have to, understand where, where you came from. And so in regards to your own journey, if you, if you take us back in time to, you know, when you were asking all those, those questions that you spent the 2 years trying to figure out the answer to, what did, what did you come to ultimately? What, what did you learn from that process? And, and take us through how you actually got started and what, what that first chapter looked like.

Scot Lowry [00:14:26]:
Yeah. You know, for me, so I was, when I got involved with the Promise Group, I think there was 4 or 5 people that had actually done it, which at the time was a lot. So and the group was small, so I had the opportunity to connect with those folks and, you know, learn some things quickly. And a couple of big decisions came up early on. So the first thought was, I always thought, you know, if you own a business, you own 100% of the business. And so when I thought, okay, there's this thing where I can go buy a company, I started looking at really small companies that I could buy on my own. And as I started to look at these businesses, I was like, well, these, they're, I think I might be able to figure out a way to buy these, but they're small. They look like they're kind of hard to scale and that seems a little bit risky.

Scot Lowry [00:15:15]:
And I'd rather buy something that's a little bit more scalable, maybe not a lifestyle business like that. So then I started to think about, okay, well, if I'm going to buy a bigger company, I'm going to need investors. And I started to ask the members of the group, well, you know, who did you work with and how did you find these people and how did you build a relationship with them? And it became clear to me me that I wanted to find somebody that had become successful owning and growing small businesses in what I call today a smart money investor. So somebody who's done what I want to do, who also has capital. So it was the capital plus the experience. And I went through this process that today I called build while learning. And so I was building these relationships with potential investors while learning, and I had I had identified 5 or 6 people that had that background. You know, they were successful entrepreneurs.

Scot Lowry [00:16:12]:
They had some capital. I didn't know if they'd ever be interested in investing with me, but I would, I would reach out to those folks and I would, I would say, I'm, I'm interested in, in buying a company someday. I understand that, that you've done that. I understand that you've owned businesses, that you've grown businesses. And I'm, I'm curious, how did you get started? You know, how did you find investors? How did you structure those relationships? How did you find the company that you wanted to buy? How did you know what you wanted to buy? And those would be the initial conversations. And then I started to put together sort of a prototype of what I wanted to buy. I knew based on my background, I wanted to be in sort of B2B, you know, probably more of a services businesses rather than a manufacturing. And I started to think I probably want to stay at the time my two sons were born and we were starting to, I grew some deep roots in Cleveland.

Scot Lowry [00:17:02]:
I knew that I probably wanted to stay in Cleveland. So I started to have a prototype of what I wanted to buy. I started to learn some of the strategies that people had used to network and identify potential companies to buy. So when I would go back and talk to these, at the time, mentors and potential investors, I would start to share with them, here's my latest take on my acquisition criteria. Here's my latest take on my search strategy. Here's how much capital I think I'm going to need because I think based on the size company I want to buy, I think this is what the total purchase price is going to look like. And I think I'm going to be able to get this much from the bank. Maybe I'll get some seller financing.

Scot Lowry [00:17:45]:
I'll probably need about this much support from investors. I'm really looking to partner with people who have been through this process before because I've never actually gone through, I've never written an LOI. I've never done due diligence. I've never negotiated with banks or dealt with lawyers. So I'm looking for somebody who's done that. I can share their experience. And by the way, I've got a lot of general management experience and I think I can run the kind of company that I'm describing. And they would ask me questions.

Scot Lowry [00:18:16]:
Well, why do you think that? And I would, they'd get to know me a little bit more. They'd hear about my background. I also, at that time, based on some of the advice that I had gotten from the people that I was getting peer mentoring from through the Promise Partners Group. They suggested that I was working for a big commercial construction company. I was managing these multimillion-dollar projects in the mountains of Vail, and it was a pretty big company. I had a lot of support. They said, you know, it's great that you've been able to operate in that environment, but if you could go in and run a smaller company, that might make you even more interesting and backable. So I, after graduating, graduating Weatherhead, I found a $2 million wholesale flooring company down in Medina that was looking for a general manager.

Scot Lowry [00:19:02]:
And I consciously took that job so I could demonstrate to potential investors that, that I can actually operate in that kind of an environment. And so over that 2 or 3-year period, while I was building these relationships with potential investors, I was running this company and we're actually growing. That business went from $2 to $5 million. And so as I was checking in with folks, they were like, well, how's it going at the flooring company? You know, and I was, oh, we're doing this. Doing that. We've, you know, added some people and we've got a few more customers. And, you know, so it took a while, but over that period of time, those folks really got to know me. I got to know them.

Scot Lowry [00:19:38]:
Eventually it got to the point where I felt like I was ready. You know, I had, I had saved a little bit of money. I had built these relationships and, and naturally at that point I had earned the right to start to transition into talking about a specific partnership and actually launching a search. And so fortunately at that time, one of the people that I was getting to know, a gentleman by the name of Kevin Shaw, we just had a very explicit conversation and he, in the timing was perfect. He had actually, he was on the board of Promise Partners and he had shared with the group that he was at a point in his career where he had had a successful exit and he was looking to potentially partner with somebody. And Fortunately for me, I had been building a relationship with him and I just might, you know, I raised my hand. I said, I'm your guy. He talked to me and a few other people and ultimately we established our partnership in 2005 that led to me launching a full-time search from that moment forward.

Jeffrey Stern [00:20:41]:
Lay of the Land is brought to you and is proudly sponsored by Roundstone Insurance. Headquartered in Rocky River, Ohio, Roundstone shares Lay of the Land's same passion for bold ideas and lasting impact from our community's entrepreneurs innovators, and leaders. Since 2005, Roundstone has pioneered a self-funded captive health insurance model that delivers robust savings for small and medium-sized businesses. They are part of the solution to rising healthcare costs, helping employers offer affordable, high-quality care while driving job creation and economic growth throughout Northeast Ohio. Like many of the voices featured on Lay of the Land, including Roundstone's founder and CEO, Mike Schroeder, Roundstone believes entrepreneurship, innovation, and community to be the cornerstones of progress. To learn more about how Roundstone is transforming employee health benefits by empowering employers to save thousands in per-employee, per-year healthcare costs, please visit roundstoneinsurance.com. Roundstone Insurance, built for entrepreneurs, backed by innovation, committed to Cleveland.

Jeffrey Stern [00:21:41]:
What did you learn about operating in that environment that led you to feel ready? Like, what does feeling ready mean?

Scot Lowry [00:21:49]:
Yeah, it, it, it, today it's much more clear. Then it was terrifying because I had, this is 2005, my oldest son was 5, my youngest son was 3, my wife was not working, and I was basically, what launching my search meant was I'm quitting my job and I have no income and I'm going to go look for a company for 2 years. Now, Kevin and I had put a deal together where we co-funded the search. And so we figured out what do I need to basically pay the mortgage, pay the lighting bill, buy diapers, get groceries. What's that number? He paid me half and I paid half out of my savings. So we co-funded the search and we planned to be able to do that for 2 years. So I had 2 years to go find a company that we could buy and then I could start getting a salary again. You know, so for that period of time.

Scot Lowry [00:22:48]:
So that was terrifying, you know? So I don't know, I don't know that I ever got to the point where it was like, this makes sense. Like it made no sense at that time, you know, with, with my, you know, situation. However, I was, I was, I was funded. Okay. So I had secured the partnership with, with Kevin and this was, this was absolutely critical. And it's one of the things that I emphasize to the people that I teach and mentor today. That's absolutely critical. So So my partnership with Kevin made it so that I was funded.

Scot Lowry [00:23:18]:
I had the experience to get through the deal process. Kevin at the time had already bought 50 companies in his career and small companies. And so he had been through this, you know, 50 times. I had the operating experience. I had my prior experience and I had, for the prior 3 years, I'd been running this company that I grew from, from $2 to $5 million. I was the, I was the general manager. The owner was passive. He would check in from time to time, but, but, you know, I had demonstrated that I could, I could run the kind of company that we were seeking to buy.

Scot Lowry [00:23:51]:
And so from that standpoint, I was fully credible. Okay. And then I didn't have that language back then, but today, one of the things that I emphasize to people is you have to show up in the marketplace as credible. And primarily that means you're funded, you can get through the process and you can run the business. Okay. So I was totally ready from that standpoint. And what it allowed me to do is when I would, when I was networking and talking to brokers and M&A attorneys and CPAs and insurance people and other people searching for companies and the, there's no secret to searching. It's just you search everywhere with every minute of every day, anywhere that you could possibly look.

Scot Lowry [00:24:37]:
And people say, how do you find a company? You just, you go call out, you know, it's always been the same for the last 20 years. And so I was doing that because I learned that. But when I would meet somebody, I was able to, you know, look them in the eye and say, hi, I'm Scott. I'm the managing partner of Promise One, which is what we named our investment company. We're fully funded. We've bought 50 companies. We've been through this process many times, and I'm actually going to run the business and I've got a pretty strong background and we'll be able to take this business forward. And we always looked for sellers.

Scot Lowry [00:25:09]:
One of our primary criteria was somebody that actually cared about what happened to the business after they sold it. I call those legacy sellers, if you will. And so not one time did anybody ever ask me to prove you have the money, prove that you have the funds. They immediately put us in a category of highly credible buyer. And that was a huge advantage. And I see a lot of people in the marketplace today doing this who haven't done the work to get prepared to be able to show up as a credible buyer who's funded, can get through the process. Maybe they've got the operating experience, maybe they don't. But I was very fortunate that the community that I was plugged into modeled that.

Scot Lowry [00:25:51]:
And I didn't have that language. You know, today, you know, when I teach the acquisition course, I have a whole segment on, you know, the 5 pillars of being a credible buyer. It's, you know, very clear to me today, looking back, But at the time, I was just fortunate that the people that I was around all demonstrated that, you know, they all, they were all successful because they had set themselves up in that way.

Jeffrey Stern [00:26:14]:
So I think when people today think about entrepreneurship, they are often probably still thinking about building a brand new company, setting up shop in their garage, you know, ideating through inception, despite the demonstrable work that you and many other groups across the country increasingly are doing through ETA. It's, it's just not what comes to mind, you know, to, to become a business owner through the acquisition of another company. And put us in the, the shoes of that legacy seller, for, for example, like what, why would they do this and why is this an actual path that has worked that you can do 50 times in the course of a career? Like what, what is the, the actual model itself and, and how you think about it?

Scot Lowry [00:26:58]:
So from the standpoint of the sellers, I think it's, it's still still, it's not common that sellers understand this category of credible buyer. However, when they run into them, they really stand out. And I've had this experience pretty much every deal that I've been involved with, we've had this experience and we really seek to go from, it starts with being credible buyer. So you can't get through the gatekeepers, you can't get through the brokers and the investment bankers if you're not credible. But as soon as you get through the gate, it immediately switches to become, you know, how do you become the preferred buyer? Okay. How do I become the preferred buyer? And Kevin, you know, again, the benefits of partnering with a guy like Kevin Shaw, when we started engaging, the first company that we bought was a company called Fathom. And we actually owned that business for 18 years. It was a digital marketing company back in 2007.

Scot Lowry [00:27:53]:
And we met the founder and we started engaging them. We liked the business. We looked at the numbers. It made sense on a lot of fronts. And Kevin pulled me aside and he said, he said, your number one job is to, is to, is to build rapport and goodwill with Bill, who is the founder. He said, that's the only thing that matters. Get to know Bill. Everything you can know about Bill, why he wants to sell the business, what he hopes for the business after the sale, what motivates him, what he cares about.

Scot Lowry [00:28:25]:
That's the only thing that matters. We have to understand that and we have to be able to deliver on that. And I was like, okay, I got it. And so initially, you know, I thought like I see many people do, I'm like, well, but it's the cash flow model. It's the price. It's the how much cash they're going to get at close. Like, yeah, that matters. That's important.

Scot Lowry [00:28:45]:
We got to be in the ballpark. You got to get that right. But the, he who knows the seller best and attends to what matters most to them is going to be the preferred buyer. And so, so I really got to know Bill and when we met Bill, what we understood was he just wanted to sell the company. He wanted to be out. Okay. He was a, he was a serial startup guy. He created one of the first digital marketing companies in the, in the country.

Scot Lowry [00:29:11]:
So at the time the company was, was doing about $4 million in revenue, had about 25 people and it was on the AdAge top 25 marketing agency, digital marketing agency list. Okay. That's how early the industry was. And, and so he, so he was pretty remarkable in terms of his, his vision. He had, he had done this several times. He had started several other companies. This was one of the biggest companies that he had ever stayed with. He had gone from 0 to 5 to 10, and now he's at a company with 25 people.

Scot Lowry [00:29:43]:
He didn't like it at all. He didn't want to deal with the complexity of a 25-person firm. He was spending 6 months on Put-in-Bay, he had a house on Put-in-Bay, and the other 6 months in Fort Lauderdale. Now the office was in Independence, so he was spending like, like days at the office at Independence. And he loved the people, but he just didn't want to deal with it. And he had a good team and people running the business. He also had, he had acquired along the way 15 partners. Okay.

Scot Lowry [00:30:11]:
So he had raised some money to get the business going during the, this is 2000. 7 were talking to him, like right after the dot-com days of 2000 or so, he had merged with another company. They worked together for a while, then they split off, but they still had the same ownership. So there was a separate company over here and Bill was running this company. So he's basically running this business. He owned, you know, a minority of the business now, a meaningful amount, but a minority. And in his mind, he's doing all the work and most of the benefits going to all these other people. And he just doesn't want to deal with it.

Scot Lowry [00:30:46]:
And he just wants to sell and be out of And so as I got to know Bill, I realized like he loved the industry. He loved digital marketing. He loved selling. He had this vision for video. And this is like before like YouTube was big. Like he was already like ahead of the curve thinking about video marketing. He loved the people, but he just didn't want to like manage them. You know? And so as we got to know Bill, I, you know, I finally came back to Kevin and I said, you know, I think Bill actually wants to stay in this business.

Scot Lowry [00:31:15]:
Business. You know, and it was funny, our first question when we met Bill was like, Bill, this is a great company. It had grown a lot. It was like really profitable. And our first question was, why do you want to sell this? So he was, he was, uh, at the time he was like 48 years, 48 years old. Like, Bill, why do you want to sell this business? And, and he started to, you know, talk about and complain about all these things. And, and so ultimately I said, I think if we could put a deal together where we buy out everybody, we invite Bill back in, we let him stay as CEO, and we tell him he never has to come to the All he has to do is run sales and be the product visionary. I'll come in, you know, my strengths are actually perfect for this.

Scot Lowry [00:31:53]:
Like I love building teams. I love putting systems in place. I love doing the financial management. These are all my skills. And so we had this theory. And so we pitched this to Bill and they were talking to some strategic buyers and some other folks. And, you know, a big, a big publicly traded company. I was, uh, I can't remember what it was, but they were doing, it was like one of the first companies that was like pumping out websites for businesses because not all businesses had websites.

Scot Lowry [00:32:22]:
That's how early this was. And so it was like everybody was starting to get websites and Bill was like, well, what are you going to do with it? Are you going to use it to actually get a customer? So he was one of the first. And so we had this theory and we pitched it to Bill. We said, look,, you know, literally you can go to Put-in-Bay, you can go to Fort Lauderdale. We'll, we'll, we'll have a weekly check-in with me, you, and some of the other senior folks. You don't ever have to come to the office if you don't want to. What do you say? And he really loved that idea because we understood, like, he actually, there was things that he loved, but he couldn't, he just couldn't handle the complexity and the partners and things like that. And it was such a profound experience for me because I realized If I was thinking like most people, it would have just been the price and we would have got smoked.

Scot Lowry [00:33:08]:
He didn't, he didn't really want to sell to these strategic buyers because he knew that they weren't necessarily going to take care of the team. He knew I was going to take care of the team. I needed the team. I didn't, I didn't know anything. Like, remember what I said earlier? I was a construction guy. I knew nothing about digital marketing, but Bill did and the team did. And, and what that company needed to scale, I was able to bring in terms of strategic planning, leadership development, culture shaping, putting in process. These are all things that I learned in my career up to that point.

Scot Lowry [00:33:43]:
And ultimately we became the preferred buyer. We bought the business. Bill stayed on. We literally became best friends. We were, you know, we talked all the time. It worked really well because we were so complementary. We just had different skill sets and we really appreciated and valued each other. We both loved to fish.

Scot Lowry [00:34:06]:
I would fly down to Fort Lauderdale, we'd go fishing down there. I'd go hang out with him on Put-in-Bay. We'd go fishing there. And we ended up having this phenomenal partnership. We doubled the company in 2 years and we were plotting to, what's the next move going to be? We talked about potentially spinning off a company that would do video marketing and he I would lead that and take a small team. And that was the plan. You know, we had a long-term vision for how we were going to work together. And tragically, Bill had a heart attack and died at 50 years old, 2 years into our partnership, which was a massive personal loss.

Scot Lowry [00:34:45]:
It was a loss to the entire company. And, you know, a testament to the strength of the team, we had built a great team at that point, and we were able to, I brought in a CFO, ended up taking over as CEO at that point in time. And we had enough people that understood the market that were able to continue on and be successful with the business. But it was incredible to go through that. But for me, it set the foundation for how we approach these relationships. I mean, the relationship I had with Bill and how we worked together, set the foundation for us being able to take that company forward and go through, you know, literally, you know, 3 generations of digital marketing and sort of, you know, keep reinventing the business and have long-term success. You know, as a result of that, and, you know, and I still have a mug with Bill's initials on it. And I, you know, I always, I look at it from time to time and just, you know, I always wonder, you know,, it would've been so fun to see what would've happened if we didn't lose Bill, you know, the way we did.

Scot Lowry [00:35:54]:
But I think he would've been really proud of, of, you know, what we did ultimately with the business.

Jeffrey Stern [00:35:58]:
Yeah, I'm sure he would. With that foundation in place and the, the lessons learned under what was pretty tremendous growth for, for Fathom in, in that timeframe, just kind of take us through the, the evolution of, of Promise One overall as a firm.

Scot Lowry [00:36:15]:
Yeah. So Kevin and I, early on we had an insight and it was reflected in why we called the firm Promise One. So Kevin was backed by an entrepreneur in Cleveland when he graduated from business school in the 1980s that made it possible for him to be a career acquisition entrepreneur. And he had gotten to a point in his career where he was backing me and we, we had a conversation early on about what if we could do this more than just once a generation? Is it possible that we could replicate this model? And so we named the company Promise One, number one, to sort of tip our hat to Richard Osborn, who had founded Promise Partners in 1992. So part of it was, you know, to say thank you to Richard. And the interesting thing is, So, uh, so the, the through line of Richard actually goes all the way back to Kevin coming out of business school. Kevin did an internship for a local business and Richard was on the board of that company. And he had suggested to the, to the owner of that business, you know, this guy Kevin's pretty sharp.

Scot Lowry [00:37:32]:
You ought to try to create an opportunity for him. And they, they offered Kevin. So Kevin, Kevin was coming out of Stanford. Business school and he had an offer. I think it was either McKinsey or Owens Corning. He had done an internship at one and had a job offer from the other. I think it was McKinsey and they were actually offering him, they were going to give him like a relocation stipend, do a down payment on a house and give him a job as a McKinsey consultant, which, you know, anybody who gets their MBA, they know that like that's sort of You know, that's like the brass ring of MBA. You go to work for McKinsey, you know, something like that.

Scot Lowry [00:38:12]:
And so he had that offer and then he had this offer from this company in Cleveland. They literally had a specialty sealants company that was doing like $200,000 a year in revenue. And they said, Kevin, would you like to come run this company? And we think we can grow the company by doing acquisitions. But it's, you know, it's just a small thing and, you know, we're not really sure what to do with it, but if you want to come in and see if you can do something, we'd love to have you do it. So Kevin Kevin goes to his dad who had put him through Harvard undergrad and Stanford Business School and says, dad, I can either go to McKinsey or I can go become a CEO of a $10 million company. And he's like, I really want to go run the small company. And the dad was like, you're nuts. And anyway, so he did it and Richard had a hand in that and Kevin got to know Richard.

Scot Lowry [00:39:00]:
They did a bunch of acquisitions. They took one of the platform companies public. Richard was on the board of that company. So anyway, You know, Promise and then One, because maybe we could do it again. We got into Fathom and I was still involved with Promise Partners and the group was growing. I think I was like the 9th person to buy a company or something like that in Promise Partners. And, you know, every year Richard would nominate a few more people and I was starting to realize like, this is a pretty phenomenal group. They're all very entrepreneurial.

Scot Lowry [00:39:30]:
And to me, you know, somebody who's entrepreneurial, it's they sort of, they just have an ownership mind, you know, mentality. They have a job. They're always trying to make it better. Even if nobody asks them to, they're just always looking around, you know, how do we do things better, faster? How do we grow this? How do we take care of the people? They're just, they just act like they own the job, even if they don't. Okay. And we've got this growing community of these entrepreneurial people and I'm mentoring them and I'm getting to know them and, and Fathom's growing and we need a head of sales. And I noticed I was like, you know, there's this guy, Shawn Wenger, who's in the Promise Group and he's like the number one sales guy at Johnson Controls. And I'm like, hey, you know, would you like to come work at Fathom and, and help us transform our sales team? And can't pay you what they're paying at Johnson, but I know you want to be a business owner someday.

Scot Lowry [00:40:22]:
So help, help us at Fathom. And then you and I can, we can have lunch once a month and we can talk about your strategy to prepare yourself to go do a search someday. And I'd be happy to to help you with that. And then we, you know, we were getting into different markets and, um, you know, we had a, we had a higher ed business unit. We had a healthcare business unit. We were thinking about getting into like, like professional sports. And I met this guy, Steve Kessen, and he was, he had worked at the Cavaliers and, and he was running this company called Teamwork Online. And they were the, the number one recruiter for like all the professional sports teams.

Scot Lowry [00:40:58]:
And I was like, hey Steve, would you, you know, I know you got this great opportunity, but we're growing this company. We're having a lot of fun. Would you like to join us and we can open up a new business unit and I'll help mentor you and we'll figure out how to get you into a business ownership position someday. And so we started turning Fathom into this incubator, if you will, and it was happening gradually. I didn't know exactly how it was going to play out., but I was sincere and I said, I don't know if I'll, we'll partner with you or if somebody else will, but I'll, I'll help you. And I adopted this, this mantra that I still think a lot about today, which is for Sean and Steve, your dream is my dream. So come to Fathom and whatever you're aspiring to do, we're going to, we're going to use Fathom as a vehicle to help facilitate that. That's my commitment, you know, to you.

Scot Lowry [00:41:50]:
And so those guys joined. We also had some other interesting things going on. So one of the, one of the people that was one one of the 25 people when we acquired the company, this guy, Joe Soltis, very entrepreneurial guy. He had started a payments business when he was in college with his brother. He was running one of our business units at Fathom, just a key guy doing great things, helping us innovate. He was instrumental when we lost Bill, one of the people that really stepped up to help us navigate that. And so as time went on, Joe approached me one day and he says, we've, we've, we've, we've changed the strategy of Fathom. We've really gone upmarket.

Scot Lowry [00:42:32]:
When I, when we bought the company, our average client was like $1,200 a month. I think we had gotten to the point where it was more like, you know, like a month. We started getting bigger clients. We started getting more focused on the industries that we were going after. And Joe really liked the, you know, the, the kind of the smaller local businesses. And he says, I have a, I have an idea that I think I can build build a business around local businesses and franchises. And I said, well, we just spent the last 4.5 years moving away from that. So I'm not really interested in doing that at Fathom, but if you're passionate about this, let's incubate that idea and see what we can do.

Scot Lowry [00:43:11]:
And I said, if you can get it to the point where you've got a critical mass of clients, maybe half dozen or so clients, let's talk. And so on nights and weekends, he did that. He actually started building clients while doing his full-time job at Fathom. And it started to look like it was working and he was super passionate about it. So we, we have reinvested more. We supported that more. He started growing this business inside Fathom. Um, we had, we're tracking this, you know, a little business under the umbrella, you know, separately.

Scot Lowry [00:43:42]:
He got to the point where it was covering his salary full-time and he hired another person, then another person. And we ended up incubating that business until I think it got up to close to like 20 or so people. And then we officially spun it off and he, he moved it to an office in Avon. We backed him to do that. Uh, and Joe is CEO of a company called Choice Local today. And, and we're still partners with him. That company has been incredibly successful. It's number 1 or number 2 marketing agency in the franchise industry today, doing remarkable stuff.

Scot Lowry [00:44:15]:
So we, so we spun that company off. And in, uh, 2019, he said, I think I'm ready. And he had done incredible things. He transformed our sales, he transformed our client services. And we said, all right, what do you want to do? He's like, well, I think I want to go buy a company. And we said, okay, great. One of the things that we realized at that point is like for Joe, like Joe at the time, I think had 4 kids, maybe 5 kids. The idea of him quitting and starting that company was just like a non-starter.

Scot Lowry [00:44:46]:
Like his, but the way we did Joe, Joe was able to keep his salary. We just sort of incrementally started shifting it. He had his health insurance, he had his salary, he had office space. We did all the back office for him. And I knew what he was capable of. It was a, it was an easy decision for me to say no. He probably would've just quit and tried to find investors or something like that. So I felt like, hey, let's, let's see if we could support this.

Scot Lowry [00:45:12]:
With Sean for his search, we did a similar thing where as he, as he started to put his search together, he, he's dedicated one day to the search, four days to his Fathom duties, and we started to develop his successor. And then it was two days search, three days Fathom duties, then, then four days search. And, and then ultimately he handed off his Fathom duties. He was searching full-time. We were meeting all the time. He was doing what I did with Kevin. He had, he had formed what we called Promise 3 in the, in the marketplace. He was, um, highly credible talking to brokers.

Scot Lowry [00:45:47]:
He ended up finding a company that we acquired in Oklahoma called Precision Communications, the number one tall tower broadcast service and construction company in the industry. We closed on that business on March of 2020, which was fascinating. We were literally in Oklahoma closing on the deal and wondering if we were going to be able to get our flight home because COVID coming. And it turned out to be an essential business, COVID-resistant. And we were aware of all this. We kind of saw things coming. So we did that with Sean. Steve ultimately ended up taking over as CEO and becoming an owner and a partner of that business.

Scot Lowry [00:46:30]:
So over time, what has become Promise One today, we have 8 operating companies, we've got some commercial real estate, happened like that. That. We had these relationships, we had these opportunities that popped up. My commitment to support their ambitions to do what Kevin had done in the '80s, what I had done in 2006 and '07, made it possible for us to create these partnerships. And I joke sometimes with Kevin that our model works pretty good, but it's darn hard to scale because the average relationship that we've had with our operating partners has been like 8 years. Like if you're partnering with people that you've worked with and you know that well, you take, it takes a lot of risk out of the equation, but it's like, it's a little tricky to scale. And, but it works great because I know these guys, the, I know what they're capable of as operators. I know their value system.

Scot Lowry [00:47:33]:
Massive amounts of trust and respect. Again, it goes back to these ideas that we really got from Richard in terms of committed to, I'm going to support your career. We look at these as career-long, lifelong relationships and set us up to have the opportunity to partner with these folks and create a pretty fun portfolio.

Jeffrey Stern [00:47:55]:
Yeah. I mean, I love the grounding philosophy of of my dream is your dream, obviously a great deal of intentionality around the whole model, just very long-term in its goals, which I think is at odds, frankly, with a lot of what private equity looks like today. How would you articulate now what the ambition is for the company and what, how you think about success?

Scot Lowry [00:48:24]:
Yeah, I mean, it's, you know, really just building off what's worked. We're not we're not a private equity firm because we don't have any limited partners. We haven't raised a fund. The capital that we put in was the original capital that Kevin and I put in to buy Fathom. We've reinvested. Our capital allocation strategy is pretty simple. We just reinvest. We don't do any distributions beyond taxes, things like that.

Scot Lowry [00:48:51]:
Very patient capital, very long-term oriented. Kevin and I agreed to that early on. We had understanding that we weren't going to buy a company to sell it. We will sell a company sometimes that, that's the right thing to do for the team and for the owners. But we're, our model starts with a phenomenal relationship with somebody like Steve or Sean or Joe. And more recently we've, we started a company with Brittany Trafis, who was one of the executives at Fathom, a guy by the name of Michael London, a woman by the name of Denise Shade. These are all people that are phenomenal people, incredible operators. That's where it starts.

Scot Lowry [00:49:31]:
If we have the opportunity to support somebody like that, help them show up as a highly credible buyer in the marketplace, they, they've done the hard work of becoming exceptional leaders and operators. We bring the capital, we bring the deal experience, they, they go find the business. I'd say one, one thing that's, that's shifting today is we're, we're, we're very interested in, in additional opportunities where we might be able to do some add-on acquisitions. Some of the companies that we're involved with today are, are great platforms. We've got a business in the material handling industry with a phenomenal partner, Dan Farrar, and there's some likely acquisition opportunities there. The business that we just got into with Denise, there's opportunities there as well. So we'll probably look to to do more acquisitive growth also, certainly backing additional entrepreneurs, but always with the long-term focus. And we're not much different than most other investors in this space.

Scot Lowry [00:50:40]:
I mean, we want quality companies, attractive industries that are a great fit for our operators. We tend to stay on the lower, lower end of the middle market. At companies that probably need a little bit of work but are doing well. We're not looking at turnarounds, but these are not like buttoned-up, professionally managed companies with dialed-in financials and leadership development that are great platforms for PE firms. These are companies that probably haven't invested in business development. They probably don't have intentional culture shaping. They don't have a lot depth in terms of their leadership, but we bring in these exceptional operating partners who have those skills, and that gives us a lot of value creation opportunities. So we like, we're not afraid of a company that needs some work.

Scot Lowry [00:51:31]:
And I think that allows us to look at a broader set of companies, maybe buy them at a more reasonable price. And then we've got lots of ways to create value by upleveling the management systems and the leadership and things like that. So we like that model. It's been working. We're continuing to, and you know, we're patient. If we do, if we do, you know, one or two deals a year, that's great. We don't, we don't have a mandate from a bunch of limited partners. We don't have pressure to raise the next fund, that sort of thing.

Scot Lowry [00:52:01]:
So I like it because I get a lot of joy seeing John and Steve and Joe and Denise and, and all these folks do their thing and have the opportunity to, live that dream of becoming an entrepreneur. That's fun. I get a lot of pleasure out of that. I get to help with the deals. I've gotten good at that. And so I really enjoy, once we find a company, I give them the Kevin speech, focus on the seller, learn everything you can about what matters most to them so we can take care of that. And I'll go deal with the attorneys and the CPAs and the banks and the purchase agreements. I'll handle all that.

Scot Lowry [00:52:37]:
We'll work together on it., but I'll do the heavy lifting there. You attend to the relationship and that works pretty good.

Jeffrey Stern [00:52:45]:
What have you learned about deal-making and negotiation?

Scot Lowry [00:52:51]:
Oh boy. That's a big one. You know, for me, you know, you're not going to be surprised. We have to have deep, deep, deep understanding of what matters most to the seller. That's fundamental. Beyond that, I go pretty deep once we get the data. I do all the quality of earnings stuff. I want to make sure I know how this company ticks from the inside out.

Scot Lowry [00:53:20]:
That's not the kind of stuff I want to outsource. So I get a pretty solid command on how the company works. And then because we know the seller, because I know as much as you can, people that do this work, you know that it It is a constant act of making massive high-consequence decisions with 60% of the information that you would like to have. You're never going to know everything that you need to know. You just don't have enough time. But in the month or two leading up to putting an offer or letter of intent on the table and the 45, 60, 90, 120 days maybe of due diligence, I work really hard to make sure that that the fundamental things that matter most, like how does the company work from a financial standpoint? How does the company work from an operating standpoint? What are their, who are the key people? I want to make sure I have a command of that information. And then that really leads me to what I really need to pay attention to and what I don't need to go to the mat on. And so I'm able to prioritize these issues we really have to get right.

Scot Lowry [00:54:28]:
I spend a ton of time on things like working capital. I try to pre-negotiate that upfront. I'm pretty adamant that there's reasonable kind of customary ways to handle that. I try to get that stuff addressed before we do the offer because I don't want something like that to blow up the deal. Technical stuff like that, really understanding like employment agreement terms for key people. What's the deal going to be with the seller? What kind of role are they going to I want to, I want to have a theory and an understanding of what, of what matters most in those areas. Because there's going to be 20 other things that come up that I can, I can, I can just say, no problem, you can have that, but we got to make this right. You know, that sort of thing.

Scot Lowry [00:55:12]:
So I feel like the, the, the, for me, the key to success in negotiations is information. And if I've, if I've got the information right, then we can work out, we can work it out. Different strategy. I mean, I'm not a big game theory negotiation guy. I just sort of stick to my guns on what matters and I try to approach it through reason and logic and sort of make it clear like this really matters and this is why. And if you provide more information and give me another way to look at it, maybe I'll move with you. On it, but that's sort of the approach that we take. And we do do a little bit of, the way we set it up is our operating partner can be the proverbial good cop.

Scot Lowry [00:55:58]:
I can sort of be the bad cop a little bit in terms of working stuff out with the attorney or something like that. So we'll do a little bit of that. That's probably about as far as we go as far as the games of negotiating, if you will. But that's just, that's sort of a natural outcrop of how we approach figuring out what matters and how to structure the relationship.

Jeffrey Stern [00:56:20]:
So speaking of information and knowledge, you are now literally a teacher yourself, both I think figuratively, but also in practice. And this is probably not a fair question, but when you think about, I guess what you would call the curriculum, what is it that you hope people take away from your reflections and like distillation of what you've learned from this work in this industry? And if people are trying to learn about it, you know, what you hope they take away from it?

Scot Lowry [00:56:47]:
I think that one big idea is that you can learn a lot in a classroom setting. So I teach in the MBA program at the Weatherhead School at Case Western. We also have undergrads that can take the graduate courses. We have certificate programs where professionals who are not pursuing a degree can take the class or classes at the Dively Executive Education Center. Those are great. We can, we can, we can explain what ETA, Entrepreneurship Through Acquisition, is. We can talk about the market opportunity. We can give you some ways to think about, is this a fit for me? We can also unpack a big topic in the last year has been becoming a credible buyer.

Scot Lowry [00:57:31]:
That has a lot to do with the popularity. The, there, there's a lot more people in the marketplace If you talk to a broker today who's representing quality companies, 3 or 4 years ago they'd get 100 inquiries. Today they're getting 400 inquiries. The percentage of people who are credible today though is less than it was 3 or 4 years ago. So the need to be credible, so I, we can talk a lot about that. So I can lay all that out and I can give people the building blocks. However, you need something like Promise Partners. So Promise Partners, once people take the courses I always say your next step is join Promise Partners because to take those building blocks, to turn that into a strategy, most people need some time.

Scot Lowry [00:58:17]:
I needed 2 or 3 or 4 years because I didn't have relationships with investors. I was new to Cleveland. I had to build all those relationships from scratch. Some people may be further along in terms of funding and things like that, but that community of support, the peer mentors, the mentor mentors, the Promise Partners group, group works with all the members are in smaller cohorts of 7 to 12 people. They meet on a monthly basis. They're supported by each other. They're supported by mentors. They bring their plan.

Scot Lowry [00:58:48]:
What are you going to do in the next 12 months to go from employee to owner? They might be preparing, building investor relationships, or they might be searching. Without that support vehicle, I don't know how people pull this off because it's tricky and it's challenging. And to do it successfully, Kevin Shaw has this saying that this is, this is not easy, but the path is well worn. Okay. So if you're willing to do what it takes, if you're willing to take the time to establish credibility and set yourself up to launch a fully funded full-time search with experience behind you, and then you're, you're willing to search and work harder than you've ever worked in any job that you've ever had, there's a high likelihood that you can pull this off. But not everybody's willing to do that, you know, and it, and so you can learn in the classroom and, and where do you get that long tail of support? Um, you know, cause an average search these days is like 22 months. So even if you're, even if you're fully credible the day you graduate, there's still on average a 22-month period where you're going to be searching and going through lots of iterations. Uh, Denise Shade, who is our, uh, one of our most recent partners She, she met 900 new people during her search and looked at several hundred companies to buy one.

Scot Lowry [01:00:10]:
Okay. Over, I think she did a 26-month search and she's one of the hardest workers I've ever met. I mean, she executed that search more aggressively than, than I've seen anybody, you know, go after it. And she was in Promise getting support through that whole period of time. So I think the big question for people is, is you can listen to podcasts, you can read books, you can take classes at Case Western, and where are you going to build that peer network, those mentors, those advisors?

Jeffrey Stern [01:00:42]:
That's super critical. Are there any particular ingredients as part of this like broader recipe for ETA that you feel we haven't really touched on yet?

Scot Lowry [01:00:51]:
I think we've covered it. There's a lot of depth there are multiple different funding models. There's a few different search strategies, the whole art and science of putting an acquisition criteria together. There's a lot we could, we could have a whole episode on each one of those topics. But I think the general idea of becoming a credible buyer, having those mentors and advisors, those are the kinds of things that I'd want, you know, people who are exploring this, from my experience, without those things, it would not have been possible for me to get started. And it would not have been possible for us to build the portfolio and the relationships that we have with our operating partners today without those things.

Jeffrey Stern [01:01:36]:
And to round it out, on reflection of your own personal journey as part of Promise Partners, Promise One, all the folks that you built these lifelong relationships with, as part of the journey. Is there anything there that comes to mind that we haven't really talked about that feels important as part of the— I'm sure there's a lot, but as part of the professional journey?

Scot Lowry [01:01:58]:
I just, I think that, you know, for me, it's interesting. I, you know, a story comes to mind that I guess I'll share. It's a little bit personal, but so it's probably the biggest gift that I got from Richard. And I don't think if this didn't happen, I don't think we would have had the success that we've had. So it's going back to, I think it was 2008. So we had bought Fathom. We'd actually bought another little company along the way. It was an ice rink in Chagrin Falls that was bankrupt and we bought it.

Scot Lowry [01:02:34]:
We put a management team in place. So Fathom was technically the second company. I was the managing partner of Promise Partners. I was, uh, we're having a board meeting and I'm sitting in the board meeting and I'm, I'm reflecting. I think it was, we're like 6 months after closing on Fathom. And, and, and frankly, I wasn't, I wasn't doing well. I was like, I'm in my mind, we're having the meeting and we're talking about the new group coming in and we're talking about how the flights are doing. We call the cohorts flights.

Scot Lowry [01:03:07]:
And I think we had another person had become people when people buy a company, we call heroes. I think at that time that was like our, like our 14th hero. Today we just celebrated our 77th hero, you know, so things have really accelerated, but we're talking about the 14th hero and it was a good board meeting, but I'm sitting there in my head going, what am I doing? I'm, I, I, not only did I go from employee to owner, we bought one company, we bought two companies. I don't feel like I've arrived. I was, I was having a lot of personal issues. I was actually getting divorced. I wasn't, you know, in good shape. I didn't feel like my personal relationships were where they needed to be.

Scot Lowry [01:03:47]:
And I'm sort of like, what is the deal? I literally, I got an undergraduate degree. I got a graduate degree. I had a successful career. I bought a house. I got, you know, the two kids. We got the picket fence and I'm not happy like this. Like I, and I was, I was mad because I'm like, I did everything that everybody told me I'm like, what is the, and I'm like having this dialogue with myself and I'm like, did I make a big mistake? Should I have gone into like teaching? Should maybe I should go teach kiteboarding full-time or go on like a mission trip to Africa? What do I need to do? And so anyway, the board meeting ends and I'm standing in the hallway and Richard comes up to me and he puts his hand on my shoulder and he goes, Scott, he goes, He goes, how cool is this? He goes, have you ever, have you ever stepped back and reflected on all the good work that's going on here? Think about all the dreams that, that we're, that we're making come true. Think about all the families that are, that are impacted by the, by the businesses that these people are buying.

Scot Lowry [01:04:54]:
Think of all the jobs that are being created. Think about all the impact on the community. It was, it was looking back. It's so strange that he did that. Cause I didn't say anything. I was doing like everybody does. I was putting on a good face. I don't know if he noticed that I was having an existential crisis in my mind during the board meeting.

Scot Lowry [01:05:13]:
I thought I was doing a pretty good job of playing it off. Like everything's cool. But he said that and, and, and the words that I said is, is out loud were, yeah, that's pretty cool, Richard. In my mind, I was like, I was like, no, that never occurred to me because it's been all about me. And, and then on the way home and over the next couple of weeks, through a couple of other things that happened that were pretty, you know, were pretty interesting. I had this awakening and I realized like, holy smokes, my problem isn't what I'm doing. I'm actually doing exactly what I'm supposed to be doing. I'm an entrepreneur.

Scot Lowry [01:05:46]:
I'm, it's in my DNA through and through. My problem isn't what I'm doing. It's why I'm doing it. I'm a, I'm a selfish son of a bitch. All I'm doing is thinking about my reputation, how much money I'm making and what, And, and it's like, and that doesn't matter. Like that does not matter. And that is not working. And I realized I had been putting so much energy into doing all this because I thought like so many people get caught up.

Scot Lowry [01:06:12]:
If I, if I achieve enough of these things, I'm going to, I'm going to become happy. And I realized that I had this incredible opportunity to, to use this platform, this fat, you know, Fathom, the relationships, the role that I had at Promise Partners. To start to help other people's dreams come true. And that was a profound shift that I don't think would have happened. Maybe it would have happened at some point. I think I would have hit rock bottom somehow, some way and crashed and burned. I mean, I wasn't going in a good direction personally. I mean, professionally, it was looking okay.

Scot Lowry [01:06:51]:
And, you know, but that was a crucible moment that really turned things around. I didn't really look back. And from that point forward, in terms of how we shaped the culture of Fathom, how we approached the partnerships that we create through Promise One, has really been informed by that. And as I look back and I see why Richard started Promise Partners and I see how he approached it and the values that come through that group with the pay it forward, I've just, I've really tried to embody that because that was attractive. That was working. What I was, what I was doing wasn't working in terms of feeling contentment and gratitude and satisfaction from my work. And that's changed. Like today, I'd like to think that I've matured and grown to realize that the financial stuff is great.

Scot Lowry [01:07:43]:
I appreciate it. We've been financially successful, but prioritizing these relationships and thinking about about how can we be helpful to others in achieving their dreams and things like that has really paid off. And I, and again, I have to, what, you know, why am I teaching? Why am I still part of the board of Promise Partners? It's because Richard gave me a kick in the ass and I don't know if he knew it. I kind of think he might've maybe, um, because he was just sort of, you know, that kind of guy. He never said anything. He never asked outwardly. And I never got a chance to tell him about that. You know, he got sick in 2016 and we lost him, but it, looking back and I've, I have a relationship.

Scot Lowry [01:08:29]:
I have coffee with his wife, Elizabeth, from time to time. And I've shared that story with her. And it's just like how lucky I am to have found myself in that class and be influenced by a guy like that. And the cool thing is there are dozens of other people that I think have had that kind of profound influence from Richard, which is, which is super cool.

Jeffrey Stern [01:08:51]:
And I feel really lucky to be one. Crucible moment indeed. Thank you for sharing that. It's pretty cool to understand the origins of my dreams are your dreams as a mantra. Yeah. Well, I think that that's a perfect place to kind of close out here.

Scot Lowry [01:09:11]:
I'll revisit the traditional closing question for you, which is a hidden gem in Cleveland. Sure. Yeah, it's funny. So I'm a transplant and so I've been fortunate. I heard somebody at one point describe Cleveland as Mary Poppins' handbag. You know, you're just always finding new stuff and through the years, you know, whether it was, you know, I moved here from Colorado when I first discovered the mountain biking trails I, my, my wife had a birthday recently and we did a thrift store tour. Like I drove our van around and took her and her friends to all these thrift stores and restaurants, theaters, museums. I mean, you could go on and on.

Scot Lowry [01:09:49]:
There's so many hidden gems there. But for me, my, my favorite thing to do when we're not buying and growing companies is, is kiteboarding. So I grew up on Cape Cod. I started windsurfing when I was 16 and I got into kiteboarding about almost 20 years ago. And there's a, it's not necessarily directly in Cleveland, but it's technically Northeast Ohio. There's my favorite spot. Is up at Conneaut Harbor. There's two breakwalls on both sides of the harbor.

Scot Lowry [01:10:15]:
And on certain days, like days where there's like a northwest wind, if you get like a 25 to 30 knot northwest wind, you can, you can get right up against the, the breakwall. The kite's fully lit. The, the breakwall blocks the wind. So the water's like perfectly flat and just like, like zipping up and down that wall and that flat water with the, and the waves are like, as you know, Lake Erie gets pretty rowdy. It's so shallow with wind like that, the chop and the waves are like out of control. The waves are like hitting the, hitting the rocks. There's like, like spray coming over the rocks and you're like going like 50 miles an hour on the kiteboard on flat, calm water. It's like so cool.

Scot Lowry [01:10:58]:
I get more days on the water down in North Carolina where we have a place and things like that. But those days where I can get out and the wind's set up just right on Conneaut, like that's, that's my happy place in Cleveland.

Jeffrey Stern [01:11:09]:
Cleveland for sure. Oh, that sounds epic.

Scot Lowry [01:11:13]:
Awesome.

Jeffrey Stern [01:11:13]:
Well, Scott, I just want to thank you for coming on, sharing a bit of your reflections on everything, and I really enjoyed learning all about your journey.

Scot Lowry [01:11:22]:
Yeah. Well, and Jeff, it's been great to get to know you and I, you know, I really appreciate the work that you're doing. You know, the whole idea behind the podcast. I think you also are, you know, transplant to Cleveland and I've always been blown away with, I think Cleveland is the biggest small town in the US. There's incredible people. You know, you look at the guests that you've had on your podcast. I'm really honored to be one of them. And just remarkable people that, you know, we get to be a part of the community with, and you know, you're doing a great job of highlighting that and reminds me of how fortunate I am to be part of this community as well.

Jeffrey Stern [01:12:04]:
So thank you for the work that you're doing.

Jeffrey Stern [01:12:08]:
Absolutely.

Jeffrey Stern [01:12:08]:
It's a shared gratitude. I feel it as well. It is a pretty remarkable group of people we have here.

Jeffrey Stern [01:12:14]:
For sure.

Jeffrey Stern [01:12:14]:
Well, if folks had anything they wanted to follow up with you about, learn more about Promise Partners, where would you direct them?

Scot Lowry [01:12:21]:
Yeah, so if you're interested in Promise Partners, just search Promise Partners Cleveland. You'll find the site. If you want to learn about the entrepreneurship through acquisition work that we're doing at Case Western, if you ETA, Weatherhead, there's a whole page on the Weatherhead site that talks about all the courses and certificates and things like that. And those would be probably the two best places to learn more about all the incredible stuff. I think the ETA community in Cleveland is arguably one of the most mature and successful in the country, largely because of the work of Richard and the work at Case and Promise Partners.

Jeffrey Stern [01:12:59]:
So check it out. Yeah, but it brings, brings it full circle back to the right to win. It's something Cleveland should do. Cool.

Scot Lowry [01:13:06]:
Well, thanks again, Scott.

Jeffrey Stern [01:13:10]:
Thank you, Jeff. That's all for this week. Thank you for listening. We'd love to hear your thoughts on today's show. So if you have any feedback, please send over an email to jeffrey@layoftheland.fm or find us on Twitter @podlayoftheland or @sternjeffe. If you or someone you know would make a good guest for our show, please reach out as well and let us know. And if you enjoy the podcast, please subscribe and leave a review on iTunes or on your preferred podcast player. Your support goes a long way to help us spread the word and continue to bring the Cleveland founders and builders we love having on the show.

Jeffrey Stern [01:13:44]:
We'll be back here next week at the same time to map more of the land. The Lay of the Land podcast was developed in collaboration with the UP Company LLC. At the time of this recording, unless otherwise indicated, we do not own equity or other financial interests in the company which appear on this show. All opinions expressed by podcast participants are solely their own and do not reflect the opinions of any entity which employs us. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Thank you for listening, and we'll talk to you next week.