In this insightful episode, Angelo Ponzi shares how you can enhance your exit strategy with a strong brand focus. If you’re struggling with market saturation, or if you feel unprepared for a big exit, you won’t want to miss it.
You will discover:
– What internal data analysis reveals to balance client concentration risks
– Why understanding culture ensures a smoother exit and lasting legacy
– How to assess your market size to avoid unrealistic growth goals
Episode Transcript
Scott Ritzheimer
Hello, hello and welcome. Welcome, once again to the secrets of the high demand coach podcast. And here with us today is the one and only Angelo Ponzi, who is a fractional and interim cmo CRO CSO and marketing and brand strategist specializing in B to B, B to C and OTC DTC markets. He is also a keynote speaker and author, podcast host with extensive hands on experience across marketing, branding, advertising, research and sales, with a career spanning diverse industry verticals and brand niches include, his portfolio includes engagements with notable brands such as at&t, formerly SBC global, Erickson, Kendall Jackson, and Disney, among many others. He’s here with us today. Angelo, I’m excited to have you on the show. Something on your website just totally fascinated me, and we’re gonna get into that here in a moment. But first question for you out of the gate is someone, let’s say it’s a founder. They’ve built a multi million dollar business. They’ve got dreams of the big exit, right? That they’re starting to set their their targets. It’s easy to think that the numbers tell the whole story, right? And this may not even be exit, it might be acquisition, but in that whole space of kind of mergers and acquisitions, we get so numbers sensitive, but you emphasize that’s not the whole story. So what is and what can we do about it?
Angelo Ponzi
First of all, Scott, thanks for having me on. Excited to be here. You know, it’s an interesting question, because I’m gonna backtrack just a few months I was invited to sit on a panel on acquiring businesses. And the the moderator was a VC, and he said, I understand why the lawyers here, I wonder understand why the advisors are here and the bankers, but I don’t understand why marketing is here and and so when I kind of went through my spiel with him, if you will, the end, he went, I get it. And so that was an additional trigger for me. And and if you think about whether you’re a quiet let’s focus on a query. I mean, ultimately people concerned about the EBITDA, what you’re buying and making sure it’s financially sound. But I never hear anybody talking about culture. How does the company fit together? Is there an overarching company? Do you roll it up? Do you keep them separate? What happens to the customer base? Are you going to cannibalize your customers? How do your customers feel about this acquisition? And I’ll tell you a quick story after this. And so by digging into the data and understanding and going out and talking to your customers, talking to your prospects, really digging and talking to your employees. Nobody ever talks to the employees. And so when you merge two companies together, people start feeling, is my job in jeopardy? Now they start thinking, especially if they’re key employees. And so none of that’s really, in my opinion, done a whole lot up front, and that becomes something that’s really important, because ultimately, you just made this acquisition, depending on how big is, how you gonna put it together? So I had the opportunity, and fortunate opportunity, to sell my business, and it was they bought me, and they bought my creative partner. I had an ad agency at the time. They bought us both, put us together, and we thought this was going to be great. So we had employee issues about now, who do you take? Who do you not take? Adjustments? I actually was, even though I was one of the senior leadership, I actually took the longest to adjust, because I’d been my own boss for many years, but our clients didn’t like it, because we were purchased by a billion dollar organization, and they just saw $1,000,000,000.07 150 people were used to working with, you know, a small organization, and we lost quite a bit of our business before we even kicked off, because they just assumed we were beginning to become a traditional, siloed agency, and so we’re so right there and then, in my own experience, you know, we had, you know, a lot of work to do. We didn’t handle it well. The acquisition happened very quickly. So I think that, you know, for me, when I look at whether you’re acquiring or looking to sell, so on the sell side, we get invited in that hey, you know, your EBITDA is not quite there. You’re not going to get the multiples that you want. You need to go back into the market and, you know, generate some more revenue and profitability. And when I’m and I I usually get called in. It’s like the bit, they’ve been in business for 20 years. They’re a 10 million company, and then they want to sell them three more, and they want to be a 50 million. And you know, the rationale for me is, well, it took you 20 years to get to 10, and you want to go from 10 to 50 and three. What are you going to do different, right? And I don’t think businesses step back and really analyze, what do we need to do different? How have we saturated our. Market. What are the adjacent markets that we can go into? And part of this came from working with a med tech company. About 16 months ago, I was called in. They wanted me to figure out how big their market was, Tam, Sam and som. And as I started to dig into the data, I looked at their revenues over the last five years, I could see that some of their clients were starting to spend less. They, on average, grew about six and a half percent a year. But this year that I was involved in had a 37% hockey stick growth goal. Wow. Okay. Why? Yeah. And so as we started to dig into all of this, and look at the dynamics of the business. You know, 360, 7% of their business was controlled by three companies. One sales guy controlled about 85% of all their business. And what happened is, we looked at Pipeline and all of this, we I realized that there was something up. And I did find out eventually that they actually brought me in because they wanted to sell. They got a poor valuation, or bad valuation, as they like to say. And so now they wanted to flip the script, thinking they could sell the business in here. And you know, there was just no way that was going to happen. And so they were unrealistic. But the fact that they’d been in business for 40 plus years and had no idea how big the market was. To me, that was just a lot of red flags. So I think, you know, there’s kind of both sides of the fence, if you will. And I’ll turn it back to you, because I’ve been ranked.
Scott Ritzheimer
Yeah, there’s, there’s so many things that I want to unpack in there. The first one was the the hockey stick growth goal. I call it the strategic planning slot machine. You know, it’s like you just, you know, it’s the closest thing that I can relate it to, like in my own life, other than doing it myself, but like outside of work, is when my wife and I were engaged, we went to AM, we went to Target, and they give you this little scanner for your registry. And you just kind of walk around and scan this and scan that, and it adds it to the registry for you, and it feels like you got it, and you didn’t have to pay anything for it, right? That’s basically how a lot of us treat our strategic planning like our target GIF registry, but it feels good. It just doesn’t work very well. But then you brought out a couple of points that that again in my work, in the exit space, I see time and time again, but it’s like these concentrations, right? We focus so much on, how do we grow revenue? How do we grow revenue? And we think of it as it as if all revenue is created equal, but it’s not. So this is where I think you know, going back to your VC example, like, why are you here? It’s why branding needs to have a strategy at the table, even if you’re not like a heavy marketing company, or haven’t been historically, I think it’s especially true. So there’s so many places to start with this. I’m just trying to pick one. But how do you go about right? Let’s say someone is putting an exit they find out they’re overly concentrated, either in a sales rep or in a couple of customers. What? What’s the process for starting to expand that for, for getting out to market in a way that’s healthier and more balanced?
Angelo Ponzi
Yeah. Well, that gets back to a deeper dive into the organization. We, we tend to look in the we broad, right? Well, we tend to look outward more than inward and and I encourage companies to Let’s spend time really dissecting the internal dynamics. So I work with a company, I actually still sit on their board, and we spent the first two months of my engagement literally just looking at their data. And we found so many interesting things about they won 30 they would win 30% of every proposal they put out. That’s and they were 25 year old. Company, fantastic, but where do they concentrate their their number one sales person had 750 accounts, and most of them were tiny, $1,000 $500 right? And but she was spending her time generating that instead of focusing. And so by just understanding the dynamics, understanding where their sales were coming from, not only sales, but profitability, looking at what services, products are really generating revenue and profitability. You know, what are the dogs that you might have been your first product that you started with, but nobody’s really buying it, and you just can’t seem to love go. So really taking that inward look before you start to figure out, where do you go? This med tech company I was talking about, for example, is they were convinced that they had saturated the market. When I first started working with them, turned out to be it was a $7.6 billion market, and they weren’t even close. But we were looking at adjacent markets. How can we use the same products and services we have in a new market without having to, you know, start all over again? And so we found robotics, for example, we could, we could move into robotics very easily with just a new hire versus having to create all brand new services. And so again, it’s that spending time to work. Uh, you know, I call it on the business, right? Work on your business. Really understand where you want to go. Do you have the capabilities? Do you need a new distribution network? This company I was talking about earlier, as we wanted to expand across the United States, we needed installers. Well, we can’t ship people from California to go install a unit. So now we define places across the country where could we have distribution so very strategic approaches. How do you grow? And how do you grow efficiently and profitably, versus just growing? Because I’m sure you know, not every piece of business is good business.
Scott Ritzheimer
Yeah, for sure. So you touched on another major issue, and I see two equal and opposite responses to this. They’re both wrong. So both of them stem from misunderstanding how big their market is. Right? Either, like, overtly, we just that we’ve we’ve maxed out the market, or inadvertently, we just believe that we’ve maxed out the market, but we’ve never actually asked the question. So the first one is, we have to start brand new things in totally different markets that don’t play to our strengths, and it’s just try everything or buy everything, right? And the other side of it is, well, we’ve done everything we can in the market. I guess we’ll just eke out a little bit more efficiency and try to be more profitable, and revenue will grow by 6% with the market, and that’s it. And we just kind of coast, right? So how can folks really unpack how big the market is?
Angelo Ponzi
Well, so part of my kind of back my background is research, and so I’m a big advocate of doing market research, whether you’re doing, you know, quantitative, qualitative, predictive analytics while you’re doing secondary research, is to get facts, not only internally, but externally, to try to understand the dynamics. What are the market drivers, behaviors, those kinds of things, in laying a strategy that way, if you moved into like the example, moving into the robotics market, well, who are the competitors in that market? How many are there? Who owns what share? What are the possibilities of actually being able to leverage the presence or perception of our brand into that new segment? And so all those factors have to be weighed. But a lot of times decisions are made, you know, in this particular companies, you know, is like, yeah, that sounds good. Let’s go to robotics. It was like, well, let’s do some due diligence first, before you invest a whole lot of time and energy to find out that what maybe you win one account, what you spent, you know, 10 times 1010, fold, to win that. And so companies don’t, my broad opinion, spend the time to really understand not only the market, and they’re competing in rights, sales are happening, revenues happening. But you know how much you missing out on is and so doing that due diligence to really drill down, like we do a lot of competitive analysis, and it’s typically a one and done. You know, we’re do our annual competitive intelligence, yeah, but as soon as we’re done with it, competitors do something different. If you don’t have an ongoing program, you’re in trouble. We see that with SWOT analysis. And you know, they they do them, but they don’t really use them, right? Yeah, so can again, just again, I can’t emphasize enough, is just doing that due diligence to really identify the facts, not your personal opinions. You know, I should get out of the boardroom. You know, I work on a wafer stepper company, and did help make semi semiconductors. And there were a million dollars at the time, a machine was a million dollars, and they were making these decisions. And I was like, Whoa, time out. How many of these are you personally going to buy this year? And the answer was none, I said. So why are we using your opinion, not the engineers that are going to have to make those decisions? We need to go talk to them. And so that’s another thing, is go talk to your customers, not not ask your sales people, because it comes back a little filtered. But, you know, hire an independent person to go out and talk to your customers and really understand why they make decisions to hire you, not to hire you, why they buy what’s important to them, how they even find out about you. And so again, back to that due diligence.
Scott Ritzheimer
So good. I want to take a bit of a personal turn here. So a lot of folks I work with, a lot of folks that are listening to this podcast, are founders. And one of the things that’s a little different about founders is like the business is their baby, and it’s true for nonprofits as well, to some extent. And one of the things that a lot of founders want to do is they want to leave a legacy behind, right? And particularly from your lens in terms of your brand or strategy or kind of the ethos of the company, how do you capture that to ensure that their legacy thrives even after they’re gone?
Angelo Ponzi
Well, that’s always an interesting question, right? Because depending on how you sell or whether you’re passing it on to your kids or. Whatever you’re doing. Ultimately, once you don’t own it, they can do anything they want to do with it, right? And so, so part of that is, is ensuring that you have a strong brand, and that people don’t, if you will, don’t want to mess with it, because it potentially is going to hurt them in the marketplace. And and so that’s, you know, building a brand takes time. It’s nurturing. It takes investment. It’s not an expense, it’s an investment. And to making sure that there’s consistency across not only your communications externally, but internally, companies do a poor job in really bringing their employees on board and making sure that they understand their role, what’s their their piece of the puzzle, and how it contributes to the whole and and because everybody they walk out the door at night, they’re not just the accountant or the, you know, inventory manager, they’re they’re a brand ambassador, but if they don’t understand what’s going on, they can’t communicate. So I think there’s it has to be kind of nurtured and set along that people feel proud and and and enthusiastic about working for an organization, and that helps to cement, you know, what that stands for. But, you know, once you sell it in, like, in my case, once I sold my company, they, you know, we, opted for a completely new, different name, you know, my, my name disappeared from the from the shingle, if you will. And that was okay with that. I wasn’t looking for a legacy of, you know, looking to grow a business, but those that want to pass it on, I mean, I think you have to really nurture it along. And, you know, it’s your baby, and I get that, you know, as I’ve This is my third business that I found, and I’m very protective of it, but I found ironically with my last name, it doesn’t speak well sometimes you know that that’s Yeah.
Scott Ritzheimer
Got it. I think the thing that really struck me there is you just have to know what’s important to you right, to some it’s legacy, and that’s great. One of the things that you’ve done, if you’ve reached a stage where you can think about these things right, or have to think about them. You’ve earned the right to do what you want with it. Right? You may not be able to maximize some dollar amount based on all of those things. Maybe you can, maybe you can’t, but knowing what’s most important to you during the process is really what I think is the most important. And I love how you’ve identified, hey, this is what I was trying to do at that stage. Okay, now you can set your strategy based on that. It was very, very cool. I’ve got another question that I want to ask you. Ask all my guests. I’m interested to see what you have to say. Antelope, the question is this, what is the biggest secret that you wish wasn’t a secret at all. What’s that one thing you wish everybody watching or listening today knew?
Angelo Ponzi
Well, I think that’s there’s a lot to unpack there, but I think the for me, it’s get out of your own head, get out of the boardroom and go out into the market and get the facts. Again. I there’s so many case studies of people sitting around the boardroom, making decisions or not paying attention to trends in the market. I mean, just go back to Blockbuster. Kodak is a couple examples, right? They knew. I mean, Kodak invented the digital camera. You know, Blockbuster had the chance to buy Netflix and red box, but they rationalize that, hey, nobody’s going to want to watch, you know, Kodak pictures on their television, those kinds of things. So, I mean, you have to be very aware of what the trends are and what’s happening in the market, and the influences that are going on. And so, like I said, you know, get out of your own thinking. Make decisions based on facts and not emotion, I think is the I wish I could make everybody can see.
Scott Ritzheimer
Yeah, so good Angela, there’s some folks listening, and they find themselves recognizing that they they believe that their market is too small, or they’re thinking about that next stage, or that next exit, or that next acquisition, and they want someone to really help craft a strategy around it, where can they find more out about you and the work that you do.
Angelo Ponzi
So the easiest way is to connect with me on LinkedIn that has links to my website, my social channels and things like that, but LinkedIn is probably the best on my website. I do have, you know, some free resources, some ebooks and things like that. I’m actually, I’m about six weeks away from a strategic planning book, if you will, that we’ll be introducing, and it’ll be up on the website, but the but that’s the easiest place, everything, all my resources are on the website. But to get there. As easy as through LinkedIn.
Scott Ritzheimer
Got it excellent. We’ll get the LinkedIn profile and his website in the profile or in the show notes. So feel free to click through on those. Angelo, thanks for being on the show. Just love, love the way that you you look at the world, you look at business. There’s some really great insights in there that I think are very powerful for some of the folks listening today, I know I enjoyed them, and for those of you who are watching and listening, you know your time and attention mean the world to us, I hope you got as much out of this conversation as I know I did, and I cannot wait to see you next time. Take care.
Contact Angelo Ponzi
Angelo Ponzi is a fractional and interim CMO, CRO, CSO, and marketing and brand strategist specializing in B2B, B2C, and DTC markets. He is also a keynote speaker, author, and podcast host with extensive hands-on experience across marketing, branding, advertising, research, and sales. With a career spanning diverse industry verticals and brand niches, his portfolio includes engagements with notable brands such as AT&T (formerly SBC Global), Ericsson, Kendall-Jackson, and Disney, among many others.
Want to learn more about Angelo Ponzi’s work at Craft? Check out his website at https://www.craftmarketingandbranding.com/
Podcast Booking Status: Open
We are looking for podcast guests, and we want to share your story.
Are you a coach, consultant, or advisor for entrepreneurial organizations? If so, let’s do a great show together – and we can promote you to our audience on all our social media channels, website, and email list.