Ep. 145: Stephen Gold, Ethos Capital | Operator-Investors and the Acceleration Vector Methodology

0:00Hey, everybody.

0:01Stephen Gold: Before we get started with today's episode, I want to take an opportunity to tell you about my new book, AI Marketing Blueprint. It just hit number one bestseller status across multiple categories on Amazon, and it walks you through a proven framework that we are taking our clients through here at How to SaaS and how to stay relevant and visible in a world with AI platforms. One of the biggest problems that we have seen across clients and companies is that the traditional channels that they relied on, like paid search or SEO, have declined significantly or are getting more expensive and competitive.

0:34Stephen Gold: The reason for this is that a lot of buyers are starting to self-educate themselves and research on AI platforms. So a lot of that volume that was previously going to those channels is now moving to these new AI platforms. So to stay relevant, the book walks you through seven new rules that companies in all kinds of verticals and industries need to consider so that they can continue growing their pipeline and revenue and ultimately their enterprise value. So if this applies to your business or one of the companies that you've invested in, I definitely recommend that you pick up a copy. It's available on Amazon, on Apple Books, on Barnes and Noble, and even share it with your teams.

1:10Stephen Gold: Grab a bunch of copies so that you can kind of consume the content together and start to apply it to your business. And with that said, let's move on to the episode. Welcome to the Private Equity Value Creation Podcast, where we interview leading investors, operators, bankers, and advisors to help you answer one question. How do we increase the enterprise value of our companies? My name is Shiv Narayanan, and each episode, I will dive deep with a guest to help you become a better value creator and capital allocator. So with that said, let's jump right in and let's get started with today's episode.

1:46Stephen Gold: My guest today is Stephen Gold, and he is the Partner and Chief Value Creation Officer at Ethos Capital. And what I really enjoyed about my conversation with Stephen is that he walked us through Ethos' framework for how they partner with companies. And for me, it was a very refreshing take because the way Ethos approaches growing the investments that they make is really getting in deep with their investments and partnering with the founders, but also bringing a approach to value creation that I think is very holistic in terms of making sure everybody that's plugged into an investment wins if that investment grows.

2:25Stephen Gold: One of the things that I think is a bit of a mismatch inside private equity firms is not everybody is incentivized the same way. You have the deal teams chasing more deals. You have operating partners who are almost like employees and they don't often have carry inside these firms. And so there's a mismatch in terms of whether some of these people are actually incentivized to grow the businesses that the firm is investing in. And at Ethos, that's actually not the case. And some of the best PE firms that I've seen have a similar incentive structure. And so Stephen walks us through that along with how they look at value creation and which levers they pull on.

3:02Stephen Gold: And I think there's a ton for most PE firms that listen in to learn from in terms of how Ethos approaches it inside their firm and with their portfolio companies. So I hope you take away from it as much as I did. And with that said, I'll leave you to it. Enjoy the episode.

3:23Stephen Gold: All right, Stephen, welcome to the show. How's it going? Good, Shiv. Thanks. Great to be here. Yeah, excited to have you on. Why don't we start with your background and ethos and let's go from there? Yeah, so I came up in probably a non-traditional way from a PE point of view. I spent my life in technology as an operator, really split my time between being in the valley, early stage growth-orientated companies, was part of two businesses. One was sold to Oracle, The other was sold to Model N, which we subsequently took public. And like a lot of folks in technology, M &A is a frequent outcome and activity.

4:09And as part of that, I got acquired in later on to IBM. And it was actually an incredible journey. I was fortunate to end up at a time when Watson was just being introduced through research. And it was a resurgence of AI and the possibilities of artificial intelligence. And I spent the next decade at IBM really working with an amazing team to commercialize AI in a very formidable way. 10 ,000 engagements,$6 billion, five years in the making. And left IBM after that period to become the first general manager for Honeywell's digital business or connected enterprise. business. And again, amazing opportunity, incredible company, but a very different industry.

5:03You know, when you come on to the industrials, things move at a different pace than technology. The way technology gets integrated into the business is very different, but it gave me a really good perspective, you know, of, you know, the effects of industry, the introduction of technologies, the juxtaposition between small companies on the West Coast and more established fortune companies, you know, in other parts of the country. And so I felt very fortunate to have a very fulfilled career. And as I kind of came, you know, towards, you know, the question of what do I want to do next? Through good fortune and a former colleague of IBM, I was introduced to Ethos Capital.

5:51And what's interesting is through the days and early days on the West Coast, I was exposed to both venture capital and private equity. And my perspective, you know, was probably more of a traditional point of view. These entities existed to essentially fund the needs of businesses. I never, never really thought of them doing more. And as I talked to the founders of Ethos Capital, to Eric Brooks and Fadi Shahad, they opened my eyes to an idea that you could marriage the operational intelligence with the investment acumen and create a better investment. I would argue a better investment strategy, certainly one that I think has worked very well for them.

6:41And I originally was an advisor to the firm and, you know, became now a partner of the firm. And then about a year and a half ago, stepped up as our chief value officer, you know, really trying to orchestrate and ensure that, you know, our commitment to the company was beyond capital. It was it was really in the form of value add.

7:07Stephen Gold: Can you expand on that? What does that look like? And what is your methodology behind that? Well, you know, we should probably step back and share that. I think when you talk about value creation or value add among the, you know, among PE counterparts, everybody has a different idea of what constitutes value. And I think traditionally in private equity, a lot of that has been centered around financial engineering, thinking about, you know, how do I defer expense? How do I maybe delay an acquisition that's not going to have immediate gratification and payback? How do I streamline operations to cut costs?

7:48All of those are reasonable in a traditional way. And certainly all of those, I would argue, benefit the shareholder because they are going to improve EBITDA. When we think about value creation from an ethos point of view, it's really about creating a sustainable, durable benefit to the business and the business at large. So we think about stakeholders, we think about employees, customers, communities, partners, and with the belief that if we do that in a meaningful way, that it ends in a better business and a better business just just arguably it's going to have a higher valuation. So we think about value creation.

8:30It's not just simply financial engineering. It's transformational opportunities. How do you how do you change the game? How do you reinvent the business in a way that's not just doing more of the same? It's not simply selling more of something. It's not simply adding a feature to a product. It's not simply opening an office. And we can get into some great examples, but it's truly step function changes. Taking a company we acquired that was an on-premise software solution and transitioning them to be an in-cloud data platform. That's fundamentally a shift that not only has inherent risks, but it has certain unknowns.

9:19Stephen Gold: Yeah, it's really interesting because a lot of firms that maybe are too focused on short-term outcomes may just jump to certain tactics like increasing pricing or cross-sell upsell as the value creation levers. But what you're describing is like really level setting and thinking about what's best for that business and then kind of figuring out which levers you actually need to pull. So can you can you expand on this a little bit more? Like, what is your framework behind that? And how do you figure out which which areas require focus or which ones you're actually going to like invest into? Yeah.

9:54So we've developed, and I should comment, what I'm going to describe has really been, you know, part of our DNA, has been part of our framework from the get-go. What we've done, though, over the years is we really memorialize this into a more formalized process. So we call it our acceleration vector methodology. And, you know, in that methodology, there's really four steps. And I'm smiling because when we started it, there was two, then there was three, now there's four. But it really moves from the process by which, and this starts even before we acquire a company, where we go through an ideation and try to identify what are all the possible acceleration vectors.

10:40So this is a roundtable exercise. Initially, it happens internally, the ethos with the partners, and you surface all the expected acceleration vectors, and then really some of these wild hair ideas. We then kind of go to the next step in that, in which we look to evaluate those vectors. And the way we do that is through a process we call FIT, feasibility, impact, and time. And so we look at each of the vectors and we say, you know, is it feasible? And it's not simply a thumbs up, thumbs down there. I think there's 10 factors that affect feasibility. You know, everything from, you know, is is the technology available to do what you envision is you have the data, do you have the talent?

11:25Can you make the investment? And so we go through this very thoughtful rubric and determine, yes, it's feasible. The second part is if we do it, what's the benefit? What's the value? And obviously, if you determine that the value is insufficient, then you don't pursue that acceleration vector. But given that it's going to have the desired effect and it's a formidable value, then you move to time because the best of idea that's feasible that's going to take four years may not be what you're going to pursue. And I think there is a balance. There's kind of short, medium, and long-term initiatives.

12:02And I think when we look at the fit, it allows us to compartmentalize, you know, where each of the acceleration vectors fit. We then move to kind of the execution. And this is always done with leadership. So we start independently, but then we actually run the ideation with leadership. We have leadership, you know, the portfolio actually do the evaluation kind of independently and come back and caucus and talk about it. And then, you know, we support them in execution. And this is probably a good place to introduce, I think, one of the things that makes Ethos truly unique is that in traditional PE, you have obviously the investment community and they augment that with operating partners.

12:48These are individuals who have been identified and play an advisory role, and they sit on the bench, and they're called in when needed. We don't have operating partners. We have partners that are operators. These are full partners in the business. They are exclusive to Ethos. They write a check on every single deal. So they're investors in the fund and in the actions that we take. And they have significant carry. So they put everything on the line. And the reason that's so important is that we don't have to go out to a consultancy, to a McKinsey or a Bain or a Booz and solicit third party expertise.

13:29We really have a level of expertise that I would argue is unparalleled among the PE communities. And I think it's one of the things that our LPs just love about the business. You know, it's the ex-CIO of Disney. It's the ex-CEO of Forbes. It's the former CMO of Verizon Media. It's the individual who launched blockchain for IBM. I mean, you know, each of our partners brings a core competency and depth of expertise that allows us to have confidence not only in making an investment, but actually in following through on these acceleration vectors. And so when we talk about execution as a stage, what we try to do is we try to identify and marriage the partners that can bring value to the leadership team.

14:23Ultimately, the portfolio is responsible for executing and delivering, but we want to give them every advantage in doing so. And then the last step in the methodology is really the feedback loop. It's the opportunity to cadence and talk about what's working and what's not working, what needs to be modified or tweaked. In fact, I just literally came from a call with one of our portfolio companies. and you know i think it's so rewarding for them to see the you know to see the benefits it's it's kind of like doing the assignment but what you really want to do is you want to get it back and see how you scored and you know you want to see yourself progressing from a c plus to to a b to to an a minus to an a plus and and to bear witness because you know obviously leadership enjoys and reaps the rewards of the work that they do.

15:18And these types of transformational shifts are meaningful. You know, our management teams own a significant percent of the company. And so the type of upside that we can generate, you know, is financially rewarding. But I also would say personally, it's rewarding from a career experience development point of view.

15:39Stephen Gold: Yeah. It's really interesting to hear you talk about that because it's more of like a more holistic approach and it really is incentivizing all the people inside your firm, inside the company, everybody to kind of win together and prioritize the right things. Can you talk about the culture aspect of this? Like as a firm, how do you guys think about culture? Because it feels like it's more of a values driven approach than just thinking about alpha or like a spreadsheet to drive returns? Yeah, well, I think so on the culture part of it, I would describe this as a high performance culture built on exceptional talent, built on intellectual humility, mutual respect and alignment and commitment to winning together.

16:31And what that really looks like is very much a family dynamic. You know, everybody speaks their mind. Everybody has a seat at the table. There is no pecking order. There is no hierarchy. The operating folks work, you know, interactively with the investment folks. It truly is harmonious. And it's funny when I talk to some of my counterparts that have taken on roles in value creation and other PE firms, you know, you can tell there's a little bit of disbelief. It can't really work that way. You know, tell me about how it how you manage the investment committee. We don't have an investment committee.

17:14You know, literally, you know, the partners, the operating folks, the investment folks, the managed party, we're all involved from the very get go in sourcing deals, in early due diligence, in progressing to a bid, to buying a company. You know, everybody's participating. Everybody's aligned. And the way that we do that, which is so important, is through technology. We developed and a home, you know, grew a product we call Petra that helps everybody to stay aligned, to have, you know, we all have the same information. We all have the same access. We, you know, it's an AI-based product. It's using agentic workflows to do a lot of the front-end analysis of an opportunity.

18:05I mean, I literally can put in, you know, something as simple as a URL on a business and 20 minutes later, and it does take 20 minutes, it will come back with a very detailed analysis from over 50 ,000 sources. And it will give me a summary of the company, the management, the product, the competition, the AI risks that are relevant. You know, it'll tell me what are the things that are missing that I need to go and ask for in terms of data or know how. And and that product Petra helps ensure not only do we do we work efficiently, but it helps ensure that all of us are on the same page. So when I get on a call with a partner or I'm talking to to a manager partner or someone from the investment team, I know that we we all have equal footings.

18:56We all have access to the SIM. We all have access to whatever data has been shared with us. And that's something that we weave into our internal processes.

19:11Stephen Gold: Yeah, I think that piece of just like having everybody on the same page is a bit of a unique approach. Even like you mentioned the other operating partners at a different firm asking how it actually works. I find that a lot of operating partner roles are not incentivized correctly because they're almost like employees. And so the employees, they have a job, but whether the company grows or not, they still have a job. And I think sometimes the urgency is not there inside firms where operating partners are incentivized that way versus somebody who actually has the upside and actually can focus on growing those companies and they get something out of it.

19:50Stephen Gold: I think they would approach certain things differently and it wouldn't be as passive as it is inside some farms. A hundred percent that I mean, the level of buy in that occurs across the ethos community is incredible. And it's also important. I said everybody's got a seat at the table. That means for each opportunity, someone can stand up and voice a concern or an objection and they're heard. And, you know, I can tell you the discipline that we have, you know, to to say no to a deal comes from that that ability. You know, it's interesting as as an operator, having done many M &A's, you know, you get so far into a deal that you just want to get the deal done.

20:39Right. Momentum carries you across the finish line and, you know, you get a pat on the back from the CEO for making it happen. That is not the case with ethos. First, we're a concentrated fund. What does that mean? It means we're going to make one to two investments a year over the course of a fund. We're going to make five, six investments where a typical fund is going to make all 12. That means we can't get it wrong. Right. Those investments all have to work. Why do it then? Well, to deliver the type of value that we discussed, to help a portfolio, to go through that methodology that we discussed, we've got to limit the number of investments or we're spreading ourselves too thin.

21:25So it's a necessary byproduct of our approach that we have to stay concentrated. concentrated. And, you know, another great example is, you know, our portfolio companies are busy running a business. And yet, you know, there are market factors that we can help them, you know, transition through. So, for example, AI, right? You can't have a conversation these days, obviously, without talking about artificial intelligence with a portfolio company, let alone a limited partner. And we actually spent quite a bit of time, you know, thinking about this and, you know, developed a very strong point of view and actually now a framework about how do we objectify in a way that's useful to the portfolio, how to handle AI.

22:14And AI really comes down to two things we realize, opportunity and risk. And so we've developed this framework to think about, you know, how do you, you know, run a rubric to evaluate prospective deals, but also to help current deals look at that opportunity, you know, both from, you know, are you ready to act on it? And are you acting on it with prudence and with rigor? And then also, have you identified the risks? And where are you? Right? It's not just about identification. It's about you've got to size the risk. You've got to put together a plan for mitigation. You've got to execute the mitigation.

22:53You've got to deal with with market dynamics and adaptations. And so what we're constantly trying to put in places things that help our portfolio companies, that help our partners, that help our investment team think through, develop strategies, address real concerns. And then ultimately the end state, if you said, so what's the goal of all this? It's to deliver, you know, outside, you know, You know, our our LPs are happy, but more importantly, I would tell you the companies are happy. The management's happy. The employees, the customers, the partners, again, the communities, you know, a rising tide lifts all boats.

23:40And that's really the objective.

23:44Stephen Gold: We'll get back to the show in just a moment. But before we do, one of the most common and important value creation levers that we hear about on the show from private equity investors and our own P.E. partners is go to market. Yet when these same P.E. partners bring us into their portfolio companies or new target investments that they're exploring, we find that the marketing function is quite immature, underutilized and under optimized. And so that's a huge opportunity that we see inside these companies. And if you have a portfolio company that you feel like it's scaled a lot faster to drive more pipeline and revenue, or you're looking at a new investment where you feel like that could be core to your investment thesis, well, we'd love to explore that with you and figure out how we can partner with you to drive more enterprise value creation on the marketing side, similar to the way that we've done with major PE firms like TA, Updata, HG, SDG, and many more.

24:36Stephen Gold: At this point, we've done hundreds of engagements across hundreds of industries and verticals, and we have a ton of benchmarks and frameworks that we bring to these engagements to help you drive as much enterprise value as quickly as possible. So if that sounds like something that you might be interested in, you can just email me directly at shiv at howtosass.com or go to our website and schedule a demo, and we'd love to speak with you about it further. And now with that said, let's get back to the show. How closely are you working with the management teams? because a lot of this planning, I would imagine you need their buy-in on.

25:09Stephen Gold: So what does that dynamic or relationship look like as you're building this plan with your operating partners and your investment team? And at the same time, like you need them to be on board. And I'm assuming they also have their own vision for how they want to grow this thing. Yeah. You know, we try to be very thoughtful upfront on a deal when we go through the management meetings to share with them our thinking, to share with them our process, because we appreciate, it's not necessarily for everyone. And if what we just, you know, describe to them about, you know, our approach, our value creation, our use of partners, you know, doesn't resonate, that's okay, then it's not a deal we're going to do.

25:50So hopefully, by the time that we buy a company, management has, you know, signed up and subscribes to this idea of value creation. The way in which we interact really depends on the organization and our needs. So we will have, obviously, folks from a strategic point of view on the board. We will have partners assigned on various projects to help facilitate. like, well, one of our partners is extremely, extremely astute when it comes to the actual mechanics of using artificial intelligence. So when you get into generative AI and you get into, you know, kind of the Gemini, Claude, you know, open AI kind of discussions, you know, he's living it.

26:36And so he was up in Toronto recently or up in Canada recently working with one of the portfolio teams, engineering team, I'm thinking through a strategy of how a Gentic can be a key enabler. Well, sure, they could have brought in a vendor. They could have brought in an AWS, you know, to do the same thing, but then you introduce bias. And so what we try to do is we try to use our partners in ways in which they provide an ongoing sustained role. Could be, hey, you know, we assign someone to coach the CEO because everybody knows, you know, a CEO of a$50 million company and a$500 million company and a$5 billion company, they have different core requirements on the CEO.

27:23So, you know, we may assign one of our folks that, you know, came out of leadership to work with them on that journey rather than replace that CEO as so many, I think, companies do. You know, the project work, like I just described, could be a marketing, you know, a marketing role, working with an RFP to revamp the narrative and branding. It could be a financial role to help them rethink their systems. It could be in one of the cases we're helping them now in the back office replace an ERP. The ERP they're on is being sunsetted, so they've got to make a transition. So in that case, we pulled in a couple of folks that, like I said, the CIO of Disney, the CTO of Wayfair, people that have been through back office transitions before.

28:10And so, you know, we have that role for the partner. And then on these value creation, we have standing calls monthly, you know, with the partner to kind of talk about the journey, where we are, how we can help. You know, there isn't a discussion that I've been part of where it doesn't end with the ethos saying, what else can we do? How can we help? We don't run companies. We don't tell management how to run their company. We don't instruct them what to do. We, you know, we really are there as a resource to them. And if we if we pick investments smartly, I think management is very receptive and supportive of that partnership.

28:51Stephen Gold: Yeah, I think that's great. What about on the value creation planning side? Like I'm assuming during the deal cycle, you guys are trying to get on the same page and then you mentioned these acceleration vectors. And so how are you planning what things to prioritize with the management team when it comes to those areas? First is there's a little bit of education as to what exactly constitutes value creation. As we talked about earlier, not everybody has the same ideas. We certainly share with them the methodology, and that's all documented and discussed. But then we bring everybody together physically in a workshop.

29:28So there's actually an A-B workshop. It's at least a day. Sometimes it's two where we will go through a very thoughtful process of surfacing. what are all of the possible ways that we could invest and accelerate growth in the business? And from that, everything will be captured, will be documented, will be revisited and circulated to ensure accuracy. And then management will give them the FIT methodology. The FIT methodology is actually a scorecard of sorts where they go through each of the AVs, they go through each of the factors affecting fit, feasibility, impact, and time. And they come up with a score.

30:17And then we come back together and we talk about, based on that assessment, what are the priorities? And if you think about it, you know, what guides priorities? A, it's got to be feasible. If it's not, it gets eliminated. B, it's got to have demonstrable value. And then C, you know, it's got to be spaced in a way that, some of the return happens sooner than later, but you also got to be thinking that some of the investments that may take two or three years to mature are equally important. I think the risk in only focusing on short term is that the market supplants you because you're not thinking forward.

31:00So we come to this prioritization that the next thing that happens is, you know, we regroup and we talk, you know, very openly and pragmatically about, you know, what's it going to take to actually do this? And we just had a discussion with one of the CEOs. He said, look it, for me to do this, I need to invest, you know, call it a million dollars. He goes, I don't have that budgeted, you know. And so that becomes a discussion, you know, with us as a partner. And, you know, if it makes sense, if it's followed the process, if it's, you know, you know, worth doing, you know, we'll greenlight and say, spend the money.

31:38You know, our approach typically is, look, when we buy a company, the first three years, we're arguably investing, not cutting. I mean, literally, you know, we're investing. Our EBITDA actually may go south, which freaks a lot of, I think, PE firms out that, you know, wow, EBITDA declined, but it's because you're investing back into the business. And we'll even give management a hall pass that says, look, we're not going to ding you for that million dollars. Meaning you run the business, you'll have a set of MBOs, KPIs, MIPS, whatever your criteria is, and that's your bonus. And by the way, to the extent that the million dollars, you know, affects or impacts that, we'll carve that out.

32:23We don't want people to feel like, you know, focus on your short term consideration personally, you know, at the expense of the long term opportunity. And so I think that that series of interactions, those series of discussions, those workshops, those debriefs, the documentation, help create a level of confidence and commonality of understanding that you're underwriting what hopefully will be successful. And I say hopefully because we're also thoughtful knowing that with any of these acceleration vectors, some can and some should fail. You know, if the only things you do work, you're probably not stretching very hard.

33:08So, you know, we definitely have a mindset as well is that some of these may not work. And our only ask there is if we're going to find it doesn't work, let's find it out sooner than later. So let's really push on the boundaries of what we're doing. And again, this is how you create an environment of innovation, an environment of adaptation, an environment of collaboration that I think inures to the benefit of all parties.

33:38Stephen Gold: Yeah, that's awesome. What do you guys think when it comes to AI in terms of getting these companies ready for the next phase of their growth and whatever's evolving in their market? Yeah, so it's not a coincidence that six of our 16 partners have a heavy background in AI. And when I say AI, not just the new framework of agentic and generative, but dating back to machine learning and deep learning and natural language processing and computer vision and bringing forward those experience and practices that they have seen in the past and being able to share those with the portfolio leadership. So one of the things that we do that we just completed, we just hosted an AI workshop.

34:25And this wasn't just for the CIO. This was for senior leadership. And the goal of that was really to expose the art of the possible and what it would take for a company to activate and, you know, really engage AI in a way that moves you beyond a proof of concept, you know, into a proof of value. into ultimately, you know, commercialization. And so we host workshops. We do a lot of one-on-one sessions, you know, with the teams to help educate them on very specific aspects of AI. We bring partners in. We just brought AWS in and, you know, had them effectively bring forward a sandbox that allowed what was about 50 developers to have access to the sandbox and their technologies, you know, with the understanding that we were really trying to advance some of the initiatives that had surfaced as part of the prior workshops.

35:30You know, the framework I referenced, we use that, you know, part of the framework as a two-by-two that really, you know, positions them against the market. So it helps them understand not only where am I on my AI journey, but how am I doing against my peer group? And so, again, we use our AI to develop a point of view on that two by two. And I think that opens the eyes of the leadership that says, you know, in some cases are very hard on themselves. That's if I'm not doing enough. But then when they look at the two by two, they're saying, hey, but I'm a market leader. You know, other cases, you know, they may, you know, say, look, I feel like I could do more.

36:14And it turns out I'm a market laggard. And so, you know, we use our methodologies to help inform them, to help calibrate them. You know, the whole risk assessment I had mentioned, we have a list of, I don't know, right now it's about 150 AI related risks across categories, across sales and marketing and finance and logistics. And we go through that with the management team to help them identify and more importantly, again, prioritize what are the risks? But what's interesting about risk that we found is that people tended to think about this in a way that was binary. And what we helped them to work through is that risks have different implications, right?

37:01Some are of a more critical nature. Others are obviously less severe, but also not all of these are going to impact you tomorrow. You know, you need to stage this, you know, what are the near-term risks? What are the mid-term? What are the long-term? And helping management think through that has proven to be invaluable because, you know, AI is changing so fast, it's coming at them that, you know, just the ability to help them, you know, pause, think through and come up with a plan. I would certainly share that when you look at, you know, the world at large, I think, you know, generally, I think companies have have struggled to commercialize AI.

37:43You know, I think we've seen it more in the consumer segment. We've seen it more with with with chatbots and recommendation engines. We've seen it with autonomous driving and other forms. But we haven't really seen it as prolifically done in a successful way and in business. And that's really where we invest. And so, you know, this to me is a golden opportunity, you know, for us to to insert our partners, to insert our process, to help be responsive to the CEO of their team when it comes to to thinking through understanding and applying AI in a meaningful way.

38:24Stephen Gold: Yeah, that's that's great. I think that perspective is a healthy one because a lot of these transformations, I see people being very reactive about AI, but really thinking about what it means for product, what it means for go-to-market and what you should really focus on, I think can move the needle more than kind of just chasing the shiny object that's kind of in front of companies right now. And I think the other part for us is when we start to think about a prospective investment, it's helping internally our own folks think through the opportunity and risks of an investment. I mean, there is no investment today that we look at that doesn't have both.

39:06Early on, years ago, you might say, look, an AI is either an opportunity or it's a deterrent. Today, it's both. And, you know, there's market disruption that's caused by new entrants that are, you know, AI first companies. There's business model disruption that the way you used to charge for products is no longer, I'll say, feasible or acceptable in an AI era. You know, you're redefining roles within businesses. You know, clearly marketing used to be responsible for content creation. Well, you know what? One of the things AI is really good at is content creation. So, you know, how do you rethink that role?

39:47And I think helping, you know, and our companies are starved for talent, right? You know, through these acceleration vectors, they're doing new things, they're growing, they're taking on new challenges. You know, anything that helps facilitate getting things done like AI-enabled processes is a huge benefit.

40:09Stephen Gold: Stephen, thanks for coming on and sharing your holistic vision and how you guys approach building companies at Ethos. I thought it was quite refreshing, and I hope the audience took away from it as much as I did. So I appreciate you doing this. Thanks for listening to today's episode. Before you take off, just a few requests from our side. Number one, if you haven't done so already, please subscribe to the podcast on iTunes or Spotify or YouTube or wherever you go to listen to your podcasts. Number two, if you are in the market for due diligence services, strategy consulting or fractional CMO services, please get in touch with us at www.howtosass.com.

40:47Stephen Gold: And third, please buy a copy of my new book, Exit Ready Marketing. It covers a ton of concepts that we take our customers through, private equity investors, B2B companies, CEOs, operating partners, and marketers. And there's a ton of great value in there that expands on my previous book, Post Acquisition Marketing, as well. So with that said, I hope you enjoyed today's content, and we'll see you on the next episode.