Spezialkanzlei: Marktführerschaft in Texas ausbauen

0:00Unternehmer/Gast I'm a 25-year recovering attorney. I have a very specialized practice. >> My condolences. Um we serve as an officer of the court for judges throughout Texas. About 1,400 judges, 250 counties. The our our revenue currently is standing at 15 million. Okay. 74% profit margin. Okay. Uh based on a proprietary piece of software that we developed. Uh I'd like the revenue to get to 20 million. It's a nice round number.

0:27>> Me, too. And it's And it's it's progressing that way. >> For both of us, I guess. >> Yeah. It's progressing that way. Uh so, what's stopping me is we have not conquered the market in Texas. Uh we are number one by a large magnitude. Uh number two, three, and four combined still don't do what we do. And so, we're about half of the entire industry in the state of Texas.

0:51>> Love it. So, where we are now is this crossroads of we have solid relationships with five of the seven whales that could possibly exist in Texas. And the whales being the law firms that ask the judge to appoint a receiver. Mhm. We have relation Like I said, locked-down relationships with five out of the seven. There's two that we will choose not to serve. Yeah. Dicks. [snorts] >> So, we just don't align. >> Yeah. >> [laughter]

1:16>> Our values come into play again. So, we're kind of at this crossroads of do we go to another state? >> Mhm. Or as kind of came from yesterday's discussions, perhaps I go out and do some whale hunting and bring some new whales into Texas. And so, meaning find other national big high-volume law firms that choose not to do business in Texas because Texas is a tough state to practice in.

1:46And so, it's really that fork in the road of what makes more sense. We're a single business building operation outside of Dallas. Mhm. >> We cover the entire state with our our building. So, we have a massive efficiencies. >> Yeah. We are tight. I have a rockstar team. Three of them there are up front on the front row. Versus going into uncharted waters. Yeah. And saying, all right, well, we did it in Texas, we can do it in Oklahoma. What prevents you from doing Oklahoma?

2:16It's never been done. Okay. There there would have to be a tweak to the the law, the legislation might need to pass. So, there's a two-year journey to pass the law to make it more available. Okay. But the good news is the you know, one of the particular whales we have in Texas is saying, "Hey, come to Oklahoma. Mhm. >> We're already here. We need this remedy here." Yeah. But my natural inclination based on efficiencies and processes and systems that are in place is, we'll figure out how to do what you're doing here bigger.

2:46Alex And so, I'm kind of in that fork. Which mountain is worth climbing? What's a great I was you even used the analogy I was going to I was going to use. Um So, the good news is that both ways will get you up the mountain. And I think one of the things that I used to get I'd lose too much sleep over was obsessing over which path when both of them lead you up. So, then I I I would end up deliberating for way longer than I should have because I wanted to find the perfect path rather than just knowing both of them will take me up. Um and so, that's allowed me to take make big decisions faster just as a overarching frame.

3:17Um the second thing with regards to the actual decision. So, when I think about something like this, I think, "Okay, what How do I How do I maximize the risk-adjusted return on on on this on this move, right?" And so, we have if I call a whale up, so you have five whales that you like. Are there any other whales that you like that are not those five that you have relationships with? Not in Texas. But the idea is there are you know, there there's firms out there that do eight states. They just don't do Texas. And so, not a lot of cost into pursuing, "Hey, let me encourage you. Let me tell you what Texas can hold for you." Try to get them to come to us.

3:55Alex Is there And you would know this. Are there laws that prevent you from kind of doing a joint venture or something like that with uh a whale firm so that the two of you isn't exclusive? >> It is critically important that I am independent. >> Okay. Yeah. Heard. Um Yeah, cuz otherwise I would have been like you could put a very big, you know, check on the table for them to get there. Which I guess you could still do, but you would have to have no agreement like they could just take the money, obviously, and then not send it to you. They'd probably still would, but as as a as a risk consideration, um the thing I don't like about that one, my big hang-up, which might be yours, is I just don't want the growth of my business relying on somebody else opening their business and doing a good job.

4:39Uh whereas I'd rather go where the fish already are. So, if Oklahoma has a two-year delay, I mean, that is a pain in the ass, but are there other states that don't have a two-year delay? That's just the most logical first step. >> Because the one whale that's already there. >> Geographic. I mean, it's literally Sure. hour north. Yeah. And we already have a relationship with a Texas whale that is in Oklahoma saying, "Please come here, also." >> How much business is that represent, though?

5:04That's the big question is um it's unknown. Cuz you're doing Texas and you're at 15, right? Oklahoma is way smaller by, you know, head count than Texas. And this is one of five. So, it's like if we had 1/5 current revenue, you know, you're at three. And that's of Texas' slice of pie. Now, whatever the Oklahoma slice of pie goes from three to less than three. Exactly. And like to me, I'm like, I don't know if I care.

5:34Alex You nailed it. That's really a big piece of it is, you know, the growth piece of great, we can take on another state. And of course, Texas could lead to Colorado, and Colorado could lead But you're talking about, all right, you just added 10 more percent revenue. Yeah. Incremental, for sure. >> you have something else dragging and and on your brain at night at 3:00 in the morning, you know? Yeah. I'm with you. So, then what stops you from going to New York? Hypothetically. Like if you if you operate remotely fundamentally within the business, like what Why does if if it's another state is another state is another state? Do you need to be local in order to do it?

6:10Alex >> Some of it has to do with the laws that are in place. You know, this remedy that is a Texas law-based remedy makes sense in Texas because Texas protects wages. You can't do wage garnishment. It protects your homestead. We can't force you to sell your house. It it has a lot you know, it's it's considered of the second toughest state in the nation to recover unpaid debt in or judgments in. So, we come in as a tool that works. And And so, there would be just a handful. I I would estimate three to four states where this would make sense.

6:41Alex >> Okay. It's a matter of is the view worth the climb? Is adding 10, 15% more top-line revenue worth taking my brain, my overthinking brain >> Yeah. to Oklahoma? >> I would say um this will actually be fun. I'm going to do this cuz it'll apply to probably half the room. Um because this is a really cool fundamental um decision. So, uh bear with me. This will be a little bit longer, but you'll hopefully like it. If you don't, don't tell me.

7:10Uh So, let's say that this line represents normal revenue of the business. In my experience, I've I've noticed that I get a 20% decrement or decrease in performance whenever I change anything about the business before any kind of gains can then get accrued from whatever that change was supposed to bring. And so, I see this as my guaranteed cost of change no matter what that I have to pay. And so, what's ended up happening after observing this over and over over again is that number one, if I'm going to take an guaranteed 20% cost, then I'm not going to take a potential for a 20% gain on a guaranteed 20% cost. And so, for me to take a 20% dip, it's like I need to see 50, maybe a double in the business for me to be like, "Okay, this is worth it." And so, what ends up happening is that I think this can I'm speaking to everyone now, but um you get out of this constant desire to tweak everything in your business and drive your employees insane because you're always have a new idea every week and they're like, "Well, we just did this other one." Because what ends up happening is you're like, "Well, this thing's going to net Well, you're like, "Okay, well, what if this does net me 20? I should still do it, right?"

8:15Okay, sure. Let's play that out. But the thing is is that this week you're going to think of something else. You're going to have another 20%. And so, people actually have like persistently far below ex- potential businesses that are operating way below what they should be because we just constantly are changing [ __ ] And so, to ladder back to what we were talking about, um my [sighs] question would be, what state can generate the same amount of revenue as Texas?

8:43None. None. Okay. Then I think that it So, so then you just need to you have to grow the pie of Texas. So, you have two two growth paths, right? You go from 40 or 50% where you're at now to 70, 80%. So, it's like what monopolistic levers can we employ so that like we can starve everyone else out, which then just increases the value of the business a ton, which is awesome.

9:08Um And so, there's share of pie and growing pie of Texas. And if none of the other states really make this feasible, then I think that probably answers that. At least in the short term. So, I don't love the I have to get other people here um as my growth path. And so, it's like number one, the thing that requires the least amount is increase percentage of pie.

9:36Alex Number two would be increase pie percentage. Or sorry, yeah. Pie percentage. And then number three, if I've done both of these things well enough, then that might already be I mean, for sure getting your 20. But then it's like, "Okay, I'm going to look at New York. I'm going to look at some of these other other states that might have opportunity that's still not as good as Texas, but I have truly tapped this. Um and that's probably the order of operations I would do it on. So, then solving for the constraint of, "Okay, why do these other 50% Why are they allowed to breathe?"

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