Episode 26: Real Branding: Re-Inventing a Category

Speaker A: Uh, welcome to Beer Stories for Private Equity. Join us for our weekly happy hour, tapping into 27 years of PE experience one pint at a time. This podcast is powered by Monogram Group. Find us@monogramgroup.com this episode is sponsored by Private Equity Professional, PE's news leader since 2007. Stay connected to the latest news, insights and trends in private equity@peprofessional.com welcome to

Speaker B: episode 26 of Beer Stories for Private Equity. On today's show, we're excited to be joined by Pete Moore, founder and chief dream architect of Integrity Square.

Speaker A: If you'd like to be considered as a guest in our lineup, please email us@podcastonogramgroup.com

Speaker B: and for Monogram Group, here's your host, Scott Markman.

Speaker C: Please fasten your seatbelts.

Speaker B: Welcome to the latest episode of Beer Stories for Private Equity. I'm Scott Markman, your host, and it is my absolute pleasure to be joined by Pete Moore from Integrity Square. Um, what is really cool about today's episode is that Pete is in the office. I think this is only our second episode where our guest and I are, you know, 20 something some feet apart in different rooms. Thank you very much, Pete. Welcome to the podcast.

Speaker C: Thanks, man. It's a pleasure to be here. And, uh, you know, I feel like this is like a personal, remote, uh, you know, conversation. So I feel.

Speaker B: I feel.

Speaker C: I feel the warmth, and I also feel the solitude of it.

Speaker B: I have to ask him to reveal his shirt because it's freaking cool.

Speaker C: So I just went to a trade show and I was talking all about ebitda. So I got one of these I love EBITDA shirts that every one of your Private equity guys could get a hold of just by going to Amazon.com and type in Ibadan. I also learned that there's a new hip hop song that is, uh, is called Ebitda. The, uh, the chorus is, um, uh, I feel like 10 times EBITDA. So, I mean, that's proliferating now. It's a pop culture.

Speaker B: You're gonna say, you can take your EBITDA and shove it, blah, blah, blah.

Speaker C: No, no, no. It's actually like a pretty good valuation. Like 10 times EBITDA, as is our

Speaker B: longtime habit here on Beer Stories. Uh, if those six of you that are watching the video, um, Kona Big wave is my beard du jour, Liquid Aloha, named after our longtime mascot Kona, um, who unfortunately, um, passed away this summer. There is his photo.

Speaker A: No.

Speaker B: Um, so in his honor, um, here we go.

Speaker C: I will Be drinking from the Monogram tea. Big wave pig selection.

Speaker B: I want to start with, um, your title, because I think it's an. An excellent window into you and the. And the firm. So Pete's official title is Chief Dream Architect.

Speaker C: Yeah. So, um, look, one of the benefits of running your own investment banking, you know, m. And a boutique operation is that you get to call yourself whatever you want at any time, which is a blessing. And of course, if you're creative like you are. You know, as I started the firm, uh, now it's going on 15 years, uh, I originally, you know, had my title as, you know, managing partner. And then as earlier stage companies would come to us, and I got really excited about a couple of the companies that we were working with, and I said, you know, you need to kind of like, architect to get to the level of becoming a platform acquisition. I kept using the term architect. And then I was watching one of these shows on the Discovery Channel. I think it was like, architecting the, um, you know, some of these, like, crazy civil engineering projects that nobody really talks about. He's taking for granted. Like, you know, like, the water that goes for. Into New York City actually goes under the Hudson River. If you could ever really do something from like, a, uh, architectural standpoint or, like, design and engineering, like, that's amazing. So I started saying to people, like, look, you need, like, a dream architect to, like, take your dream and architect this thing into reality. Because right now you just come in here with some PowerPoint slides. And so I kind of came up one night with, like, hey, I'm going to be chief Dream Architect.

Speaker A: All right.

Speaker B: We always start with, um, a client's, uh, backstory. And so just one brief overview of where you were raised. Where did you go to undergrad and business school, kind of leading up to, you know, eventually starting the firm.

Speaker C: Um, so I'm from Long island originally. Uh, my dad was a CEO of a, uh, beverage equipment company. Every dinner at, uh, you know, at 6pm had some business element to it. So I was always peppered with that and, you know, learned mostly from my dad as my mentor. I started playing goalie in soccer back when I was 10 years old. And this important story that kind of defined things for me, you know, being a goalie and as we talked about with hockey, you know, you know, you're not responsible for the team winning. You're responsible to make sure we don't lose. And I always had that mentality of, like, you know what? Like, it's awesome if we win. I don't need to be the one to put up the goals. I don't really have an ego. It matters that we scored. It didn't matter that I did, uh, you know, like, at a young age, which kind of, like, as I look back on it, it's actually really important. Um, so there's like a humility to playing goalie. There's somewhat of, like a, uh, you know, I. I'm the last line of defense. Like, I gotta figure out a way to make sure, like this that we win. I've kind of carried that into business. When I went to undergrad down at Emory, I became the president of Fraternity. And when I went into business, I went into finance at JP Morgan, helping companies put deals together on the mergers and acquisition side, then went to DLJ and did mergers and acquisitions like Hunting. So we were like, on the transaction development side, which I love because I was just basically going out there and trying to open doors. And then I went on to Harvard, uh, business school. But I was also a private equity guy. So I ended up working for a firm, you know, well, uh, Peter Brockway

Speaker B: and Michael Moran and my second private equity client ever.

Speaker C: Yeah. And then I had a job offer at HRG Capital down in, um, down on Brickell and Brockway, uh, Moran at the same time. And, uh, decided to work with the Brockway guys because I loved how they operated and they had a relationship building that was very evident when you talk to them. And they did a great job and made a lot of money for people and also created a culture of partnership from there. I, uh, I went on to start up a software company as a sister company of Gold's Gym, which they had acquired. So I've always been in the health and fitness side. I love watching and playing sports. I like to think about business as a sport.

Speaker B: You know, I started this agency 36 years ago. We only have one credo. It's really simple. We win as a team, we lose as a team. That's it. Yeah, that's culture. And I've. I've, uh, sort of developed that from day one. And it has direct implication for everything.

Speaker C: It's got a lot of different layers to it. And I was actually thinking about this recently on deals. There were times when I. We got to make, like, strategic decisions. And I got to be like, yo, guys, uh, you guys got to get on board with this, because we have one time to, like, try and get more money from this deal. And, like, my client and my team, because they get all paid on commission when a deal closes. Pretty much, you know, and me, like, we got to all say, like, this is what we're doing, and we're doing it. It does kind of like wind everybody up to understand, like, hey, if you got something to say right now, and we. We agree to it. Like, there was a deal I just worked on where one of my guys had a really good idea. We all bought into his idea, and, um, and. And the client accept. The counterparty accepted it.

Speaker B: Well, let me add another layer to this. I worked for some. Some folks where, you know, the person's name over the door, you know, was there for a reason. It took all the glory, and everybody understood that it was a cult of personality. I worked for two guys like that, and I'm. I'm a wee person. I actually, in a weird way, a little bit run away from the glory. Um, I don't want it. I don't need it. I think it's a little bit destructive. You know, I get plenty of opportunities to be the man and all that good stuff. But in terms of who does the work, who takes the credit? We solve the problem. If we fall down, we fall down. I don't point fingers. Nobody here points fingers. We just, we. We own it collectively. We solve the problem collectively. And when we get the glory, we get the glory collectively, and we. We share in the success. That's it.

Speaker C: Uh, back in 1999, I worked at Brockway Moran. Peter Brockway is a dear friend, and he's probably one of the nicest guys. And I wanted to start this Internet company, which I ended up doing with his blessing. But I saw. I went to him when we bought Gold's Gym in August of 99, and I was, like, 27 years old, just out of business school, and I said, hey, we. I think we should do a Gold gym Internet group. We should do online fitness, nutrition programs. This is, like, kind of before, like, the Internet was like, just off of, like, AOL dial up. It was way too early. And I said, we need to be selling leads to our. Our franchisees. We need all their personal trainers up there. We need to be doing. Selling corporate memberships online. We need to do our billing through the Internet. And he walked me to the front of the lobby in Boca Raton, and he. And he pointed to the sign and he said. And he patted me on the back because we were buddies at that point. He's like, pete, it's called Brockway Miranda Partners names not on the door. Mine is, that means that I cannot invest in anything that I don't fully Understand yet. And then when, when Brockway raised their last fund, you know, they turned it into Blue Sea Capital. So his name wasn't on the door. But just the fact that like him having his name on the door, I think at that point was probably positive because it made him think twice about doing anything.

Speaker B: I need to stop you for a second. Are you telling me that the origin story of Blue Sea Capital is Broccoli Moran?

Speaker C: Yeah.

Speaker B: Do you know that Blue Sea separately was a client?

Speaker C: Yeah, they're West Palm Beach. Yeah. So Brockway and Michael, uh, Moran, um, raised their last fund, you know, basically ran that, that off and Brockway became a senior, ah, advisor up at uh, Blue Sea Capital.

Speaker B: They're also great folks.

Speaker C: Like, uh, no, I mean they're all. Yeah, it's basically like, you know, Brockway Moran 2.0. To the, to your point of, like, when is a team loses a team, what do we call the team whose name's on the door? Who's not on the door? So it's an interesting thing to like when people start up companies, you know, think about what you call the company and what your last name means and what do you want it to represent? Um, and what does it allow you to do or not to from your standpoint, like, you know, kudos to you for like saying like, hey, this isn't about me and if your name's on the door, then instinctively it is about you.

Speaker B: I picked a name monogram when it was me and a coffee table near o' Hara in an apartment. And I was just going to be a single shingle guy, but I thought this through and it was, what would you want the name to represent? And the symbolism is the mark of the individual in a collective context.

Speaker C: Yeah. So I think private equity firms, if that's the audience here, um, I think their name matters, I think their brand matters. I think how they interact with people and train their junior people who are doing deals and like, the culture of that is important. Unfortunately, what I'm seeing now, a number of these private equity firms right now are kind of just like agreeing to a deal and then kind of just flipping it over to their, to the lawyers. And the lawyers become like, very litigious. And like, you know, yeah, they said that, but they didn't mean that. Or oh yeah, it was in the LoI. But it wasn't like that wasn't really what the spirit of it was. I'm like, I don't know what you're talking about. Like, I'm in a relationship business here

Speaker B: because there's this like, you know, explosion of, you know, folks that want to hang their own shingle. Um, we're working on five startup firms at one time. And so part of that is naming. And so we're getting into these issues we're talking about with one or two or three people that are, you know, they had their 10, 15 year career and they've decided to do their own thing and they take what they're going to call themselves very seriously. Before we do creative, visual anything, it's just what the F is your name and why? How can that be the anchor and the, you know, the ground for all kinds of stuff you build around it.

Speaker C: And at the end of the day, um, people win deals based on personality. People win deal based on trust. People win deals based on relationships. And if you're a, uh, fund like a, uh, Garnet Station or Brockway Moran and Partners or like Blue Sea Capital, and you can call upon, you know, 25 years of like, stories, you know, if you don't reference check the private equity firms that are in your process, like, shame on you, man. Because people tell you the truth about how certain partners act or how the, what the firm's culture and what their DNA is and like how they actually treat you. And it's pretty consistent. The best part about people that work for private equity, they will tell you the truth. And it's usually binary. It's like, this was the worst fucking experience of my life. These guys stole my company. I didn't understand the cap table. They put in capital calls, they took over the board. Or they'd be like, these guys are fantastic. They stuck with me. They helped support all my financial decisions. I got diversity, we had a great outcome. And I'm an investor in their fund, right? So it's like, it's like those are like the only two things you're going to say. No one's going to be like, ah, uh, you know, it's okay. Like, I think it was all right. No, they'll tell you one or two.

Speaker B: I told you. I grew up in an entrepreneurial family. My parents had a small business and well, I learned from my folks since time I was very young was, you know, you, you have your reputation and that's really all that matters. You guard it. You make certain decisions that probably suck at the time to guard your reputation. Just like, when does team lose the team? Trust is the currency of business and it's really the currency of private equity. If you do not have a good reputation and a trustful, you know, Reputation out there, you're toast. Now sometimes you have to, you know, you think you're right and they think you're right and okay, you're the client, you're right. It's just, that's just business just happens sometimes and you move on for, you know, the next day. But we do certain things around here every single day. This is part of win as a team. They build that reputation. And I'll give you a 10 second example. We are known for responsiveness. People around here know that if you do not respond to an email within an hour, you will see my wrath. Because that is the reputation like that. Uh, and don't you wait till tonight to respond to a two, uh, sentence response. Don't do it.

Speaker C: I was working on a deal and there was a private equity guy, he had like an autoresponder on. I never even like received an autoresponder from like a private equity person before in my life until like two years ago. I was like shocked. I'm like, bro, this thing better be like, if you want to be in the deal business and you want to be in a relationship business, like this thing better be like glued to your hand except for like the five hours that you may need to sleep tonight. I'm like, dude, if you want to be in like a global business world, like be responsive, like the most important thing is to like be responsive, be, be alert. And I would also say like be thoughtful at the same time, right? So you just can't like just get on a call or like just jumble something out, like be thoughtful about it. That might take some time. So when somebody's private equity deals don't work out the way they should, you know, like, you started this, you know, finish it, you know, with the same amount of dignity. Buying companies that selling companies, like it's uncomfortable, right? But don't shy away from like the tough parts of like severing relationships or you know, giving people, you know, the freedom to go and do something else or negotiating non competes because you negotiate on the way in. And you seem like a pretty affable, you know, credit, credit worthy person. Like stick with that because it'll get you the next deal. You don't even know.

Speaker B: All right, we have spent a lot of time on the sizzle, which I love, but I want to get to the stake, which is what you want to talk about, which is what's on your shirt called Halo. Take a minute and give the backstory of how you develop this term, how and why and how much you're leaning into it.

Speaker C: When I see something I want to and it's not right, I want to change it. That's just kind of probably like a baseline of, uh, the way I approach life. So I've been telling people for 15 years when I started Integrity Square that I was a health and wellness banker. About eight years ago, I said, you know what? This word does not properly represent the enthusiasm and passion and science that my clients are now having. I started to look at the word, and I found out that there was a guy at the Mayo Clinic back in the 1950s, really nice guy, Dr. Halbert Dunn. And he was trying to come up with the opposite of illness. So the antonym of illness would obviously be wellness. People were using the term wellness for basically everything under the sun that might be self care or self help. Um, and it really started to cloud the waters of, is that a product? Is that a service? Is that an industry? I started ticking around with some letters, and I'm like, you know, this acronym, H A L O could stand for health active lifestyle outdoors, which would create a halo effect, which would now infuse, like, all the passion, all the energy, all the experience, all the excitement that companies and members have about joining health clubs or go into, like, a boutique fitness class. And, uh, and what I want to do is I want to make sure that we get as much money as we can behind companies that are helping solve loneliness, diabetes, obesity, and just making people happy. So I'm on a pursuit to be like, Captain Halo. Like, I have in my name tag here, and I want to basically say, hey, can we get like, uh, 55 to 60 companies that are publicly traded companies like Lifetime Fitness, Planet Fitness, Dick's Sporting Goods, Peloton, put that together as like, a public company index, which we're launching on January 1st. And then can we have a institutional investor summit that's called the Halo? Uh, institutional investor summit, and start to people to start saying, hey, I invest in technology, I invest in health care, and I invest in the halo sector, um, uh, of people's wallet. So that's why I'm like, gung ho about it. I really want to do it because I think it's the right thing to do. And I get excited about people being able to say, hey, I'm part of the halo sector.

Speaker B: What really fascinates me and when we first met was what you just described as audacious as hell, ambitious as hell. We don't come across folks in any category ever who are trying to rebrand a category, let alone Their firm. You've opted it. You've self identified and opted into some years ago. Trying to reinvent category for a lot of reasons, because I think you're right. Wellness is the absence of something, not the indication of something, let alone the benefit of something.

Speaker C: You know, my buddies from, from college until we went to Emory, you know, some of them became stock brokers, you know, and then they morphed into like, oh, um, m. I'm a financial consultant right now. Every single one of them tells me that they're in wealth management.

Speaker B: So.

Speaker C: So the financial services industry at these banks have realized, like, assets under management is like a good thing to say. And wealth management is much better than being a stockbroker. Words matter. The other thing is like, guys in the oil and gas industry, like, nobody says they're in that anymore. They all say, like, mini energy business, right? And like, people love energy, right? It just doesn't. You don't know where it's coming from.

Speaker B: You laid out, uh, parallel kind of paradigms. Wealth management implies there's wealth to be managed, and it requires a level of sophistication and insight and whatever to manage wealth. That elevates the craft. Stockbroker as well. Is Kona a good stock to get? I don't know. Let's look at it, Harry. It's just a different mindset and a different implication for and affect the same skill.

Speaker C: Now that I think about my guys that, you know, 25 years ago were like financial consultants and like, trying to build a, A book of like, retail business. I think for them, when they say wealth management, it enhances themselves. If you're like, managing wealth, you're like, you're like on top of wealth.

Speaker B: You know what I mean? Number two, the implication is all of my clients have at least 2 million of. Of their money, you know, uh, that I kind of, you know, manipulate and control. It's like, look, you can be a wealth manager and your client could have $40,000, but, you know, you're on a great journey. Don't get me wrong, but it's not 2 million. Let me just flash in my head, Pete, because I. On my screen, I'm looking at the, uh, acronym and the term health Active lifestyle, not towards. You know what this is? This is the polar opposite of AI thinking you could feed all this crap, all the inputs into like, an AI agent, and the AI agent would never come up with the what, the how and the why of what you're trying to do. Because that takes a lifetime of experience, a certain point of View. And so in a weird way this is like the Anti AI agenda.

Speaker C: I was also just watching Jeff bezos on a LinkedIn talk about Jeff Wilkie, who's now, I think the CEO of Amazon. Jeff Wilkie used to come into and be like, you could destroy Amazon any day of the week. He's like, what are you talking? Like Jeff, he said this, Jeff Bezos, he's like, you have so many ideas that all these ideas will destroy the company. And it kind of like made him stop and be like, let me just write some things down. So this Halo index thing, like this has been like a five year plan of like, hey, can I get these private equity guys to use it? Can I, can I like infiltrate? I got these like bracelets, like talk about like anti AI. So I got these Go Go Halo bracelets that I had made. But somehow it got around the trade show that I need them personally. But the point being is that if I could get into the room, Dick, the CEO of Dick's Sporting Goods, and I could get the CEO of Lifetime Fitness, and they're speaking back to back at a Halo institutional conference. There's no reason why Dick's Sporting Goods should not be powering the entire fitness industry's e commerce. All the data that every health club has on check in on what machines you go to, on what programs you do. I know exactly when you need a new pair of sneakers. I know exactly the race that you are going to attend. Right. I know exactly the sports that your kids play. I know exact, like I know everything that I need to know to basically hand deliver you to like specific categories within Dick Sporting Goods to make purchases. And why doesn't the health club get 8% of that affiliate revenue? Like that's where this is going.

Speaker B: This broad, complex, interrelated ecosystem of data. To your point, this kind of correlation, interrelation in value delivery within members of an ecosystem already exists. It just doesn't exist in this category.

Speaker C: It doesn't. Right. And when you think about what's going to happen over the next five years is that all these companies are going to be wanting to kind of partner with each other, but they really won't know each other. Costco just did a deal where they're doing like Oz Epic. Yeah, it's a new thing where like they're selling Oz Epic, uh, at uh, Costco, which is great. I mean Costco's got 77 million members. There was obviously somebody at Costco that had a relationship or got a relationship with somebody at uh, you know, Novo And Eli Lilly. And they had a conversation and they met probably several times and they say, this is how we're going to roll this out. So, like, all these deals that happen, like, they don't happen over A.I. you know, they happen by somebody calling somebody else or somebody seeing somebody at a trade show. Somebody's got to hit the phone. And like, there's, there's. So there's no substitute for networking ever. And I hope there is.

Speaker B: But again, if, if you define it a little bit, not control, but a little bit, or, uh, behind, I'll call it this ecosystem. It puts you in a position of opportunity uniquely, because you built the term and the idea of it. Well, at that point, you know, you a little bit have your cantilever, your fingers over it in a, in a good way, and you're creating your own upper set of opportunities.

Speaker C: You know, if you're looking at health clubs or you're looking at med spas, or you look at nutritional supplements, understand that, like, all those things are wrapped under the halo sector focus. And if you do a deal where you're buying a four wall unit economic health club or a med spa, the four walls of that business are really like a 20 minute or a marketing radius around that physical location. They're no longer just like, what is the four walls unit economics of that business. So by, by becoming a halo company, you start to say, I have a bricks and mortar location, but I'm drop shipping supplements, or I'm drop shipping weight loss pills or testosterone. Like, now you're talking about, hey, how profitable are these businesses? That. And then, Scott, what I want to do is I want to be able to go and sell those businesses to private equity firms to say, like, hey, look how much money you can make in the halo sector. Companies that are in the sector need to realize like, hey, if I'm a profitable business, I get private capital. Private capital let you grow without any, any personal recourse. Right. There's no personal guarantees on private equity, debt and equity. And let's go build a world that, like, looks like a shopping plaza that I want to walk you to.

Speaker B: All right. We always end on a personal note. This is updated from a month ago. The question was, are the Mets going to make the playoffs? We know what happened. And so my question is, what are they going to do in the off season to make the playoffs next year?

Speaker C: I would say that, um, they're going to figure it out and they'll go and buy some more talent. Um, I think the Milwaukee brewers might approve the couple of points recently with, ah, you don't need to fill your roster with just salaries that you got. You need to fill with guys that have heart. What I am most excited about is New York Giants and Jackson, Dart and Scatter Boo and a team.

Speaker B: Scottaboo is awesome, but you all got to get it rid of D Ball. He's. He's not good.

Speaker C: A couple of quotes that came out from those guys is that they want to be the protagonist and they want to win. And you know, there's a lot of guys that are in NFL locker rooms. They're like, you are losing team. Like, it's hard to turn that around. And these guys are like, look, man, we're here, we're new, we're fresh.

Speaker B: We got Jackson, Dart and Scottaboo. I mean, if I was a fan of, of the Giants, I'd be excited about those guys.

Speaker C: Yeah. So that's where, that's where my heart lies. And I hope the Ranger skull go to hold sometime before this podcast launches. It's tough. Oh, man. Anyway, all right, thanks for. Thanks for having me on, man. It's great to see you.

Speaker B: We'll talk soon.

Speaker A: From all of us at Monogram Group, thanks for tuning in to beer stories

Speaker B: for Private Equity Episode 26.

Speaker A: This episode is sponsored by Private Equity Professional, PE's news leader since 2007. Stay connected to the latest news, insights and trends in private equity@peprofessional.com don't forget to hit the subscribe button and you'll be notified as we release new episodes. Please check out the show notes in the description from today's episode. Our email is podcast at monogramgroup. Com. Feel free to email us with any comments or questions and we'll try to answer them in our next episode.