Ben Kaplan 00:00
Hey, this is TOP CEO. The show about CEOs making tough decisions featuring CEOs from startups, scale ups and fortune 500 enterprises. TOP CEO is a business school case study telling the story behind the story and what you can learn from it from those who have faced the fire and come out the other side. Welcome to the TOP CEO podcast
Jason Scherer - VitaTek 00:29
is that you have a very low margins if you have someone that leaves you, you end up you know getting hurt, right you have to layoff people
Tom Cain 00:39
imagine you're the CEO of VitaTek positioned at the cutting edge of medical device manufacturer. You come from a medical device sales background, so you know the market. But you also know the challenges.
Jason Scherer - VitaTek 00:57
We protect the equity like it's gold, like it's our family. But
Tom Cain 01:02
you have a big idea, revolutionize the medical device development and manufacturing process, making it more integrated and efficient. But a number of things stand in your way, plunge into the pulsating core of the medical device development realm, forging alliances amidst the chaos,
Jason Scherer - VitaTek 01:25
you can make a deal as as crazy articulate as you want it to be, or you can make it as simple as you want it to be some mounting
Tom Cain 01:34
towering financial and cultural obstacles and outmaneuvering the suffocating grip of regulatory constraints,
Jason Scherer - VitaTek 01:43
it just the barrier to entry is extreme.
Tom Cain 01:48
First, you face the fragmented arena of specialized houses waging a silent war, each extending their grasp, leading innovators dry in a relentless pursuit of profit. This is the story of Jason Scherer, CEO of VitaTek. And this is The Device.
Ben Kaplan 02:18
Jason, take me through your thinking on you know, you have this vision to make it much easier from sort of beginning to end a disease soup to nuts, take medical devices and make it easier to get through the number of hurdles they have to go through. You experienced the challenges of this because you had been a longtime medical device salesman, you're good at that. And you wanted to say hey, I want to now make my own medical devices. So talk about the business opportunity, but also the challenge and why thinking in terms of a partnership was so critical for USC. Yeah, thanks, Ben.
Jason Scherer - VitaTek 02:58
The main thing with the challenges with the medical device development space, as it stands right now in the US, is that you have a lot of subcategories. You have an r&d house, you have a regulatory house, you have a diamond and tooling house, you have a contract manufacturing house, sometimes you have sterile barrier packaging or labeling house, you have sterilization houses. And then you go on to a traditional medical device company that has distribution, warehousing, and a medical device sales team. The problem is, is that in the space right now, when you go to each development house, as just mentioned, each one is trying to bleed you of money as long as they possibly can to keep you developing with them. For example, if you were to get a development and rapid prototyping done in a month, right, the development houses wouldn't be able to survive. So they want to develop your TED project for two or three years, sometimes four years. Because the longer they have you, the better it is not saying that it can be done in one or two months. But it's the point is is that you don't align on those same objectives. Same the objectives being timelines, deliverables, dollar amounts. So at each part in the phase of the development houses, you have a misalignment of objectives, deliverables, and dollars and then medical
Ben Kaplan 04:29
devices like what's the project you're working on now or something you sold? Like just to give people something concrete? Like what kind of device are we talking about? Yeah,
Jason Scherer - VitaTek 04:36
in medical device that you can do a bunch of different sub classifications of medical devices, whether it be you know, mechanicals, whether it be electrical, whether it be software related, if you want to throw in robots in there, right, or you want to start throwing in biologics. So there's all different types of medical devices. If you want to go to actual medical devices. We do, we do medical devices that have, you know, 20 to 30, some components to it, that are a highly put together assembled product, for example, energy devices, laparoscopic energy devices, lapper scopes, ultrasound machines are direct to me devices, thrombectomy devices, devices that have a lot of intricacies to it. Okay.
Ben Kaplan 05:25
So there's these devices, they're intricacies. And because they're medical, you can't just slap them together and say, We're done. Let's go sell it. No, there's there's a deliberate process involved in this. And you experienced the challenge of this from a couple different perspectives. I mean, one, you were a salesman, you wanted the thought, let's make some devices. And you had difficulty for all the reasons you mentioned in the made, but then to, it just sort of strikes me is you took a hard problem, and you made it even harder, because instead of just saying, I want to just make a device, you said, Now I want to like build a company that makes devices. So I want to do this like multiple times at once. And now, right, you were looking for partners to help you be a partner in making in a company that makes devices not just making a single device. Is that correct?
Jason Scherer - VitaTek 06:11
Yeah. So what we you're spot on better? So I mean, it got to the point where we said to ourselves, okay, well, we're really good at doing this, of bringing a medical device to market in two years. So let's copy and paste that and provide that solution to someone else. So that they don't have to go through all the challenges, right? There's a lot of challenges that go through that development process. Yeah, absolutely.
Ben Kaplan 06:39
Okay, so so your big challenge then, was you're trying to find like, Okay, who is the partner who you felt like, you know, you needed like, physical manufacturing, right? You need someone who could do manufacturing, you need someone who could do compliance. But then what was your process like you were trying to go out to just, we cold calling people, others saying, Hey, I'm looking for a partner in this. What were you doing? Were you was there anywhere in the US? Were you looking in your backyard? How old was your search, like for the partner to execute this business vision? And, and I don't even know if he would have gone on with the business if you hadn't found the partner.
Jason Scherer - VitaTek 07:16
Yeah. So the challenge was, is finding someone that was in Minnesota, finding someone that wants to sell their business fight is someone that had die mold and tooling, that was a huge, huge component. And then there's a very specific problem that occurs right now in in manufacturing, most of the times the medical device company is not allowed on the manufacturing floor. Why is that? It's because there's a lot of problems, right? With potentially having that meaning that they can come in there and take a lot of resources and time of trying to fix their manufacturing problems. Perhaps the medical device manufacturer is working on other projects, right. And they're not getting to that medical device project as quick as they would like, they don't have personnel or what have you. So finding that medical device manufacturer that had that unique capability where engineers from medical device companies can literally be on site and walk the production floor. And as they walk the production floor, what's unique about that, is that if there's any last minute fire drills, if there's any overtime for overnight needs that need to be done, that on site engineer from the medical device company can be there to do those type of tasks at hand.
Ben Kaplan 08:45
I'm trying to get a sense how much of this is a needle in a haystack, you're looking for me, you're talking about Minnesota. So you're focused on one area, that's where you're all you're looking at in your there, the Twin Cities, you need sort of the die cut manufacturing, and you need some type of flexibility because some of your value add, as you describe it, is, you know, having engineers being able to have direct visibility, transparency and manufacturing because that can save a lot of problems issues, you can make different decisions if they know so you need someone who's set up to allow that how many companies that even in this space are there in Minnesota, what's your universe to eventually find? You know, the partner? Yeah,
Jason Scherer - VitaTek 09:22
here in Minnesota. Let's just say we have 100 contract manufacturers in medical device space. Okay.
Ben Kaplan 09:29
100 contract manufacturers and and what did you do? So you're going you're like, you know, I know there's one out there I know there's five out there I there's gonna be 20 What was your thought process? Or like, Please God, let there be one. Like, what was it? Yeah,
Jason Scherer - VitaTek 09:41
yeah, I would say it's, it's the it was the ladder. It was like, Please God, let there be one. Because it honestly doesn't exist. And so I was going through everyone and you have to you have to think about it too. There's a lot of contract manufacturers out of 100 that just don't aren't wanting to sell their company, they want nothing to do with it, they're fine with what they're doing, you didn't have
Ben Kaplan 10:03
to be a sale of the company for it to work for you could have been a partnership or a 5050. Now you wanted you were looking to acquire a company, correct 100%,
Jason Scherer - VitaTek 10:12
it just happened to be where I was. I was going around the Twin Cities as literally cold calling people is finding people on LinkedIn. And you're doing this yourself. Yeah, me and my partner, we're just going one by one through. Luckily, rich Thompson has a ton of experience in the space. He's been doing medical devices for 23 plus years. And so he knew a lot of the people to Google, you know, to go after. But however, it's you know, you really want to look at everyone, right? You want to give everyone a fair shake, you want to see what the if anyone has done anything differently lately?
Ben Kaplan 10:46
And what was the financial parameters here, you had raised funds, or you had self funded to be able to acquire a company, if you could, if you could find it did you have a certain range, you had to stay within you couldn't be too big, too small, like how the finances work?
Jason Scherer - VitaTek 11:01
Yeah, it's self funded. So we couldn't, it was mainly from myself, so we couldn't do anything large, we couldn't do anything, you know, small, a lot of ours, things had to be on a earnouts on a on a future basis. So it had to be attractive from the owner, that they were excited with what we're doing, I
Ben Kaplan 11:20
think, if you weren't going to just like write them a check and cash them out, the minute you take the keys, it was going to be an urn out. So you actually have three levels of things here. One, you need to find the company that exists to you need a company that wants to sell, and then three, you need a company that wants to sell on terms that are somewhat, you know, favorable, and future looking that is not just someone who wants to go to their Caribbean island right now and just give me the check in them off.
Jason Scherer - VitaTek 11:47
Yeah, it was really hard. I mean, you can you can you you're spot on. The other thing, there was a fourth option there, but I really didn't want to do it. The fourth option was, I could hire a couple of people and try and do it myself.
Ben Kaplan 12:00
Okay, you were gonna hire people who had experience from these places? And what would you try to do set up your own manufacturing operation?
Jason Scherer - VitaTek 12:07
Yes, yeah. 100% is to the thought process, the machinery, right, the overhead already, we wanted to base of business of of current medical devices that we're already manufacturing, because that can offset a lot of other things that we're doing. So there's just so many things that go on to try and do it ourselves and stain it up on our on our own. You don't have the experience, people, you know, aren't going to trust you with the manufacturing process. Unless you've been doing it for 20 plus years. Right.
Ben Kaplan 12:38
Very few people build their own manufacturing from scratch. Unless maybe you're Elon Musk or something like that. You right, attempt it right. But it's difficult to do. And how long was the time the sort of the search for the partner? Is this over? What period of time? Are you searching?
Jason Scherer - VitaTek 12:53
About two years,
Ben Kaplan 12:54
that two years? You were searching? And at any point during that time? Did you did you think of, you know, maybe we ought to just build this ourselves.
Jason Scherer - VitaTek 13:01
Every single time as I was interviewing every single person, I was thinking in the back of my head, I'm like, Okay, well, if I tried to do exactly what they're doing right now, how much money would I need to put up of my own? Would I build a get the money? How many people would have to hire, because there's some specialties in the manufacturing process, right? And so you'd have to hire every single one of these people, plus, let alone the equipment, getting the equipment set up and operational. And then having that extra flow of revenue, right, that extra flow revenue is huge. And if you don't have that, how can you stand up a manufacturer? I
Ben Kaplan 13:36
see. And did you mean the extra flow of revenue from your existing projects that you could use that kind of fund other things? And where did that revenue come from? That was from your existing business you had, which was sort of being a partner on earlier parts of the sort of the stream of the development process? You already had that? So you knew you could kind of plug them in to the manufacturing piece that would fund some of this? Is that right? Yeah.
Jason Scherer - VitaTek 13:57
So we have our business is unique, because we have the r&d side, we have regulatory, and then we have our own medical device products. So we have nine medical device products. So we're selling two of them in the marketplace right now. So we have revenue from three different business units, if you will. So is the point of saying hey, perhaps I can use that revenue to stand up my own manufacturing facility. The fact of the matter is, is it just the barrier to entry is extreme, and
Ben Kaplan 14:31
what type of revenue before we get to present day but like kind of like back then when you were like deciding all of this and trying to figure out the partner like what kind of like sort of dollars or we're talking about like revenue wise and people what kind of operation were you and you were trying to become something bigger?
Jason Scherer - VitaTek 14:47
Yeah, we're we were sub three mil in Rev. We were It wasn't much at all. You know, last year combined efforts. We were 10 Rev on forum and EBITA. So we've grown significantly, okay, about
Ben Kaplan 15:04
3 million in revenue. You know, obviously, you've cost against that, too. How could you use that? I guess maybe challenging to be like to build something from scratch. And to have off of that, and of course, you'd be sticking all of it against it right, which would be difficult as well.
Jason Scherer - VitaTek 15:20
Yeah. So it just wasn't gonna, it didn't make sense, right? It just wasn't gonna happen. A
Tom Cain 15:25
labyrinth of fragmented development sectors where every turn is a potential for loss, to the daunting specters of financial, cultural, and regulatory challenges that loom over aspirations of innovation. Our narrative now teeters on the edge of Revelation, poised to dive into the depths where strategies are unfurled, and alliances are forged in the fires of industry adversity. What secrets lie in the blueprint of VitaTek’s voyage from turmoil to triumph? How does one navigate a realm where every challenge is a dragon to be slain? On the path to revolutionizing healthcare? The answers beckon, promising a glimpse into turning the dire adversities into beacons of breakthrough.
Ben Kaplan 16:27
Jason, what was the aha moment? Like when did you realize that there's this company out there called i-Tek? And this company is not in the far flung corners of the great state of Minnesota. But it's actually maybe you can you could go have a coffee because they're down the road, five minutes ended that realization occur? Yeah. So
Jason Scherer - VitaTek 16:48
I remember, I was out to lunch with this contract manufacturer. And I was discussing, you know, we had sat down a number of different times, but I was, I was, I was like, hey, you know, tell me about what it looks like for you in the next five years. And the gentleman was, Pat was like, you know, what, I don't want to be working in five years, I want to be I want to sell my business in five years. And I was just like,
Ben Kaplan 17:19
yeah, you put down your cup of coffee, you're like, wait, but I was like, hey,
Jason Scherer - VitaTek 17:24
just, you know, crazy idea here. What if, what if we just bought it? And he's a, yeah, that that's works great. But how about this, he's like, I actually want to keep on working. And I was like, well, that works out. Well, why don't we? Why don't we work something out where we have earn out over time. And, you know, we combine forces, you know, one plus one is greater than, you know, two, right? It's it's three, four, or five. And let's, let's work something out. So we can, you know, you saw on the contract manufacturing side was always super interesting is that you have a very low margin. Okay, if you have 15 to 20% margins, so that's your, you're always trying to look to the next month, the next quarter. And you're you're working on slim, slim margins, if you have someone that leaves you, you end up you know, getting hurt, all right, you have to layoff people,
Ben Kaplan 18:16
me leaves you meaning losing clients, or something unexpected pulls out, because you're kind of going quarter to quarter year to year. Yeah,
Jason Scherer - VitaTek 18:24
100%. And so you know what, for us, we had very high margins on our regulatory our sterilization, on our own medical device products, right. And then the r&d side, we were purely just trying to get clients through the door. So you, you get to this really awesome marriage, Pat, of saying, Hey, we can do this all together, you don't have to worry about clients leaving you anymore. We have our own medical devices that you can manufacture, they're never gonna leave. And oh, by the way, we're, I'm your perfect retirement option now of saying, hey, let's let's join forces together, and then I will buy you out over time. And, and Pat was 100% agreeable to it? And that's where we got to where we're at today. So
Ben Kaplan 19:17
it took you two years to sort of find Pat, and then how long did the what was the actual contractual process? Like how complex was it to do that kind of for people listening who are CEOs that doesn't haven't done, you know, this type of kind of maybe partnership with unique buyout process and you know, retirement, but not yet. And how complicated was that to negotiate?
Jason Scherer - VitaTek 19:38
Very complicated because, you know, from a typical just business owner, you know, I think I come from a younger generation, he comes from an older generation,
Ben Kaplan 19:50
this has been his baby was he the was he the founder of this and how many years has he worked in this business?
Jason Scherer - VitaTek 19:55
20 plus years? Okay, so
Ben Kaplan 19:57
this is like, this is his child. He's he's raised is that this child? And even if you want to retire, you know, you know, you want to see your child treated well. Right. And then a respected for what you've done right to services. Yeah. So what was that process like? Yeah,
Jason Scherer - VitaTek 20:12
so the the process went over about a six month process where we had to agree on a top line earn out and a bottom line
Ben Kaplan 20:23
based on performance based on like, what the what the price is going to be, you guys kill it, it's going to be here. But it's not less than here if things don't quite work out as as planned. Exactly.
Jason Scherer - VitaTek 20:33
And so we had to go, you know, there's, you can make a deal as as crazy articulate as you want it to be. Or you can make it as simple as you want it to be. Right that's. So what we tried to stick to was as simple of terms as you possibly could be. Every single time we tried to keep it to five different terms, right? Every time we tried to add in more and more things, and we were trying to make it you know, get it more and more complicated. We said to ourselves, and it was a great is a great learning moment for both bosses. The fact of the matter is we kept on saying okay, well, we could make it more complicated. We could put in 20 different
Ben Kaplan 21:10
variables, both sides of this point are saying, let's keep it simple. So both sides had a goal of simplicity.
Jason Scherer - VitaTek 21:16
Yeah, let's keep it simple. So we had always we'd always be to the point where we're like, oh, let's let's add in more and more variables, and then you dial it back and say, no, no, let's keep it to five, let's keep it as simple as possible. Because the more complicated we do it, we're just it's not going to work. So we've dialed it back to there's a there's a top line, there is a bottom line, there was an agreed upon percentage on the merger, there is agreed upon percentage once the buyout happened, and then you know, the sharing of expenses and costs, right. And so we tried to agree on just those five, five simple things and try not to add in of saying oh, well, you know, for crazy terms, medical device project comes in and it's going to use X and Y and Z and maybe it's going to have this equity or you know, you can make it as crazy complicated as you want it to be. We just decide not to do that.
Tom Cain 22:12
Okay, so here's what I'm thinking. It's a Western with a sci fi twist. But there's also a film noir plot running in the background. And dinosaurs because why not right? Take the dinosaurs down a little bit. Okay, no dinosaurs. But a little bit of romance is always welcome.
Tom Cain 22:48
Zombies, yeah, we have to throw some zombies in there. Your vision, our craft? Top thought leader.com. I can't listen to the first draft again, back to the show.
Ben Kaplan 23:04
Jason, was there any point during this negotiation where you were worried it would fall through all the time? All the time? Now? Is that just you being? Are you just a warrior? Jason You can you can come clean on TOP CEO I used to worry or no, you had reason to be because it was precarious and formulated index even also, it can be emotional. Some people may choose like, you know what, I do not want to sell my baby. I can just flat out I've decided I'm not I don't want to do it. So was that founded? Or unfounded reasons for worrying?
Jason Scherer - VitaTek 23:31
You know, there, there's various things that you know, would happen either from my employees or his employees or from me or him that would constantly come up over the past year. Right? It nothing is perfect by any means. We're not kidding ourselves here. Right? There was? I mean, yeah, I could tell you about something. manufacturing equipment being racked, right? It was wrecked who pays for, right? The first person to say, hey, it's not me. But though it's you. It's your man? No, but it's, you know, to be in so it gets to this, like, you know, some things you have to take on the chin and you just have to, you want it to work, right. I think it's like one of those perfect marriages where you get into a marriage, you don't find reasons not to work with each other. Right? The three year old, you're married. It sounds
Ben Kaplan 24:23
like there's actually two pieces. One is during the negotiation itself, just the back and forth the six months. Did you were you worried that people knew that at some point we just walk away and are too far apart? You don't value what I've built stuff like that or no was it you felt like you both sides were committed to getting it done? It was just a matter of time? Yeah,
Jason Scherer - VitaTek 24:40
I think it was the latter. We're both committed to getting it done. We both had something that other wanted, right? The contract manufacturing restocks that are very low margins. They're stuck to their current client base. And they didn't have a way out. On the on our side. We had new growth. We had our own medical devices, we had our own regulatory, we were pulling in new clients that we could then pass on to contract manufacturing, but
Ben Kaplan 25:09
you didn't have the the sort of the plumbing, the infrastructure, so that was there. And then the actual arena is a it's a five year period. Is that right?
Jason Scherer - VitaTek 25:16
Yes. So we have we have a five year burnout buy out,
Ben Kaplan 25:21
where are you in the duration. Now,
Jason Scherer - VitaTek 25:22
this is our second year of being within our merger. So from his from his end, he's really, really excited because he sees the light at the end of the tunnel, that his baby's going to be passed off in a nice manner. And you will have his his burnout, right, which is not a lot of contract manufacturers in the US have that opportunity of having a sizeable dollar amount, or no, it doesn't exist.
Ben Kaplan 25:48
I see. Meaning is not a type of business that is easy to necessarily pass on or sell or something like that. It's it's one that you earn from operating.
Jason Scherer - VitaTek 25:58
Correct? Yeah. Because you think about it from the CM perspective, from all these small business owners. I mean, they're not trying to grow or do you know, 5 million 10 million 20 million, right? In a year. They're just trying to have a business where they can support their employees, right, and support the people in their community. And they're happy, just surviving. Right? That's what they're happy doing. As
Ben Kaplan 26:25
you go through this process. Now, what were some of the I think you alluded to a bit of it, but like, what were some of the challenges that just come from like working together? Different employees, different cultures, different equipments? What were some of the challenges, the new set of challenges you just have to have to overcome? That involves two different companies?
Jason Scherer - VitaTek 26:43
Yeah, the challenges as you can imagine, from a contract manufacturing side, just talk about the culture right? The culture is a totally different world
Ben Kaplan 26:52
didn't match the founders or the company's reflections of the founders mean old school bit newer school, you got the JSON that people just listen, you know, you got the trendy like, I think the sword I don't know the color faux hawk these days are a fade haircut you look you're put together. Guy, I would call your new school. I don't know if you'd call it sounds like been career while a little bit older school, is that correct? Correct. I don't know if the company's parallel this as well.
Jason Scherer - VitaTek 27:14
Yeah, you're you're spot on. So I would say that we're more new school over here. And in the manufacturing, and diamond tooling is old school. However, the it's different cultures completely, right, that culture over here is, is we're trying to innovate and come up with new things as quickly as possible. We're in the trenches, we're in the ground level of medical device, we're in the O R. So we're, you know, we're very much involved. On the manufacturing side. It's purely manufacturing products, right? And then all the regulatory aspects that go along with that. So you can kind of see, it's, it's just a totally different style.
Ben Kaplan 28:01
We're talking to you from the office of the the new school aside the non manufacturing side. Are you are you going back and forth? Do you feel like I need to understand that business over time as well, and I am, you know, being prepared. So at the end of this period, it becomes all integrated, or at this point, do you just sort of leave that with, you know, paths run that a long time, as long as we talk and communicate, you know, he runs that side of the house, I run this side of the house, and we you know, and then and then we just move further down our plan, it's been primed to be you're saying become a manufacturing facility. So you want to combine those? Would that be additional manufacturing here or eventually that that, you know, five minutes down the road? That facility would all come here? Correct.
Jason Scherer - VitaTek 28:45
So it all come here, so everything would be merged into our new building, and the company would become new school at that point.
Ben Kaplan 28:56
I see new school I see. So very much. It's like, you know, people talk about mergers. It's very much like physical, not only just like joining the space, but it's like physical, like heavy machinery that needs to come over and you eventually want to join this together. And that's the first one that eventually comes over. And even your space now is planning for that. Correct.
Jason Scherer - VitaTek 29:18
So that so we'll have all the combinations of everything here. One thing that we cannot move down here is we can't move down the diamond and tool shop up from Blaine, Minnesota. The reason is, is that medical device manufacturing as you can imagine, there's a lot of regulations on the manufacturing process.
Ben Kaplan 29:42
They get approved in a particular location environment. It's like you can't change anything from that or you've got to go back and get reapproved is
Jason Scherer - VitaTek 29:51
Yeah, yeah. And so you think of this what happens with dye mold and tooling, what what do you do when you're manufacturing those sub a huge P 22 steel locks, it's a lot of metal shavings. And so metal, metal, you know, metal shavings can get everywhere. So that's why the buildings have to be completely separated.
Ben Kaplan 30:10
What are the biggest challenges for you now? In the next, you know, from year two to year five? I mean, what are the things that would block your success? What are the things you're gonna have to learn how to overcome what still is out there?
Jason Scherer - VitaTek 30:23
Yeah, my challenges on a day to day basis right now are driving each one of the business units, as our medical devices hit each development process within our company. So as things get stuck, if you will, in, in regulatory, or if they get stuck in eto sterilization, my job is to dig in on why they're getting stuck. And then, obviously come up with an action plan. The other thing is, is from a culture perspective, it's going to be a culture shock, if you will, from a manufacturing facility. Because you can, you know, it's it's a new space, new people, new processes.
Ben Kaplan 31:08
How many people are we talking about between the you know, basically like, like your company, and then i-Tek, how many peoples are involved? We
Jason Scherer - VitaTek 31:16
have 55 employees on board, send off another offer letter. So of 56
Ben Kaplan 31:22
combined, got it? And for bridging the cultural gap. I mean, do you expect everyone to come along board? Do you have some people that will resist if some people who, you know, when someone wants to and has a business for a long time, you know, maybe very loyal to Pat's, and you know, hey, but Pat would have done it like that. Jason knows how Pat would do it, you know, do you ever do you think about things like that?
Jason Scherer - VitaTek 31:45
Oh, 100%. And that's why I think it's so important to have pat on board for a period of time. And we have a really good transition plan. I do 100% believe that people will leave just for whatever reason, right? Either location perspective, or culture perspective, just might our, you know, might not be a good fit anymore. I do think that, that the culture, how do we how do we implement that? I think the best way that I implement myself into a culture of the company, I don't know if you can tell right here. And this is my office is right out in the open, have the entire office floor. Anyone can walk through and talk to me. And you went in, you know, I'm not in a closed door. Nothing in here is closed door, we have class for offices. So it's completely transparent of what's being worked on what's been done, we, you know, all the boards are white whiteboard, so people can have ideas and be talking about ideas constantly. So what does that look like for the old school folks, I think as they come over, it's super important that, again, I go over there, pretty consistently, I try to be over there two or three times a week. I'm trying to walk around trying to talk to everyone, I'm trying to, you know, get to know everyone as much as I possibly can, you know, tell people what's important, there's certain things that are very, very important that needs to be up on top of that, or objective list. But at the same time, we're hiring new people, to, you know, from my perspective, we're hiring new people to be at i-Tek. And then they're also over here. So they're spending time at both a new facility here in the manufacturing facility. So they, we can start having that integration of culture. The other thing that we do, I mean, we did a huge canoe trip, we went to two. So that was super fun with both groups. We try and do outings as much as you possibly can, we're gonna do a tubing outing, but there's no snow here in Minnesota for some reason. So you know, people don't like doing that. Sometimes, you know, people like to be by themselves and don't want to be in any part of the culture. But we're trying to do as much as we possibly can to involve people in the culture, that was the thing that's completely different. We do equity stock options for every single employee that we have here. So everyone has an equity stake within the company, which does not happen to other manufacturing or rd companies at all right? It's very, very rare. So we feel like hey, we protect the equity, like it's gold, like it's our family. And so by giving a piece of that gold a piece of our family, to other employees, right, other that we're hoping that we can share in the success together, right? We're not it's not just an employee, you know, fee for service. Sure.
Ben Kaplan 34:45
Sure. Well, and how will you need to grow as a CEO to to realize the full potential of this next three year period? Are there skills you don't have? Are there things you're working on what will have to change? Just for you as a CEO,
Jason Scherer - VitaTek 35:01
yeah, I think, you know, getting into this isn't it sound like I've done it before. So this is a whole brand new to me. So 100%, I will, I will have to grow, I have to grow from what I was doing, you know, I have a vision of how I want it to happen. But there's a lot that goes into, you know, for instance, I don't have a finance background, I don't have any type of accounting background, to grow into do bigger things as a company, we need to have audited financials, we need to have, you know, there's metrics in place that need to be in place to make sure that the company grows, it's just skill sets that I do not have. And I've never been privy to before, I've never been in the position to. So I'm very, I realized my my shortcomings for sure. However, you know, we have we have some major growth that's going to happen within the next couple of years.
Ben Kaplan 35:59
Final question for you is, what is your advice for other CEOs that feel like to unlock a new business model, they need that perfect partner, right? That they, they have a vision for something, but it's not something that they fully control on their own, that they can implement, they have to find someone else to help them do it. Sometimes, that could be an early stage startup that just needs like, Oh, we don't have this technical expertise, I need this to be able to do this, or it can be much later stage where we're, you know, we just as complementary capabilities or access to markets, it can be someone else, where it's like, Oh, I see what this could be. But I just need someone else. And it's hard to find
Jason Scherer - VitaTek 36:41
them. Yeah, just like maybe how we connected to, I think I feel like the CEOs nowadays need to be networking nonstop, right? Because you never know who you're going to run into, or, you know, who can help you in whatever phase that you're in growth with your company. So I spend, I try to spend a different amount of chunks of time in a week, dedicated to certain things, right? I tried to spend a certain amount of time chunks of my time to networking, I try and spend a certain amount of chunks of my time with my culture of my people, right? Chunks of my time. There's a business unit that is failing in some way, shape, or form, and I need to have action items to move that forward. Right. There's new business that's coming in and that need to move in a certain direction. So I do feel like that is, you know, for new CEOs out there, number one, it can be done. There are people out there that can help you in some way, shape or form. I think just networking is a huge set. It's a huge must
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