Building Valuable Businesses

Mike Pinkus: Over the last 10 years at ConnectCPA, we've had the privilege of witnessing the incredible journeys of over a thousand businesses. We've been there for the thrilling highs and daunting lows of entrepreneurship. We've celebrated wild successes and monumental exits, and we've also stood by businesses as they've navigated the stormy seas facing Roblox and challenges that every entrepreneur encounters in their day-to-day grind.

Join us as we dive deep into the stories of these resilient individuals who dared to dream, who persevered, and who were a testament to the power of entrepreneurship. This is their journey, their lessons, and their triumphs.

Welcome to GrowthTales. I'm your host, Mike Pinkus, co-founder of ConnectCPA. Today's guest is Martin Traub-Werner, who is the founder and CEO at VetSuccess, a veterinary data analytics and business intelligence organization. Martin was a major disruptor in the vet space where he and his team at VetSuccess enabled vet practices to take control of their data and drive better decisions and insights into their practices.

Mike Pinkus: Martin scaled the company from infancy through product market fit, and ultimately to exit, where he eventually sold the business to Vet Source, one of the leaders of providing pharmacy technology and business services to the pet health industry.

In this episode, I discussed with Martin what it takes to build a world-class culture, the importance of understanding the financials intimately—from the P&L statement, the budgets, to your balance sheet strength—and finally, how to develop leaders who are so strong that they think and act like a founder.

I really enjoyed my conversation with Martin, and I hope you really enjoy the episode.

Martin, thank you so much for joining me today. Really appreciate you joining us on GrowthTales.

Martin Traub-Werner: Yeah, no worries at all. Thanks, Mike.

Mike Pinkus: And Martin, we've, uh, we've known each other for a long time. I, I—from a business perspective—but I also consider you a friend. Um, you're, you're someone that I look up to as an entrepreneur for what you achieved with VetSuccess, and I'm just really excited to have you here today because I feel like for people that don't know about VetSuccess, it is an opportunity for them to learn about what I believe should be in a textbook on how to scale a business.

Martin Traub-Werner: I mean, like, you make it sound like it was really planned and thoughtful and, like, frankly, behi—you know, there's that, there's that, um, image of the swan, you know, looking so graceful above the water, but down below they're pedaling frantically. That, that, you know, it's behind the scenes that—you know, we, we've had the conversation before—but journeys are never linear. So I'm, I'm not sure about making it a textbook case. I mean, we did, we did great. We, we built something amazing. Um, but, uh, it was not without risk and work and trials.

Mike Pinkus: Well, you did make it look easy, Martin, and I think this brings me to just the first thing I wanna ask you about because I believe you come from an HR background, is that correct?

Martin Traub-Werner: Yes, I do.

Mike Pinkus: So, my first question—and I think it's a question I've always wanted to ask you—how did you get into the vet space? What is the origin story of VetSuccess, given that you do come from an HR background?

Martin Traub-Werner: Yeah, so to be clear, my HR background was—this becomes a much longer answer, so I'll try and shortcut it a bit, but—

Mike Pinkus: That's all right.

Martin Traub-Werner: Go for it. My time in HR really stemmed from an admiration of business process, of being in business. I used to say, okay, the accountants will get the numbers, the finance folks will get the numbers to be what the numbers are gonna be, and the engineers will get the machines and process to work however the machines and process are supposed to work. But if you can figure out the people part, then that is the magic.

So I went off and did an HR degree because I thought that was the key to unlocking businesses. But companies really don’t value what HR professionals can really bring. I was working in HR in a factory, and a woman comes into my office and says, "Susie called me a bitch. What are you gonna do about it?" And in my head, I was like, well, I know what I'm gonna fucking do. I'm gonna quit.

Mike Pinkus: Because—

Martin Traub-Werner: Because whether you are a bitch or not, I don't care. I just wanna work with adults who get the job done, have a good job, do the work, and no drama. I just couldn’t. HR is supposed to be some kind of babysitter, and that is just not what I envisioned for my career or for a successful HR function.

So I didn’t last long in corporate HR and ended up working very closely with an entrepreneur who was a great mentor and a great sales guy. We worked together for 10 years on a project about sales and marketing integration. We had a tool called Sales Link. Sales Link was a little email engine. This was just as email marketing was coming up.

Mike Pinkus: Like a tech, a tech player.

Martin Traub-Werner: Yeah. Yeah, yeah. It was a—we had, we had—we did a CRM, we built a CRM system, and then we built this email engine. And both, like, wildly underfunded and outrageously crazy things to build when, you know, when you've got Salesforce.com and, you know, MailChimp and those kinds of things.

Mike Pinkus: Well, gimme context here. What, what year are we talking about, Martin?

Martin Traub-Werner: 2003, 4, until about—until about 13.

Mike Pinkus: Funding wasn't even that—maybe that common back then anyway.

Martin Traub-Werner: Yeah. I mean, it's sort of the early days of—like, like I remember—I don't remember getting my—well, I'm not gonna age myself in—

Mike Pinkus: Technology.

Martin Traub-Werner: It's fine. It's fine. Anyways, so we're, we're doing this project, and Sales Link was this little email engine where you could customize an email after any interaction, right? And so I cold called into Pfizer Animal Health in Montreal, a guy by the name of John Hayward, who is still in the industry today and who I see at conferences to this day. And he said, "Martin, you know, what you have here is a really good solution for the compliance problem in veterinary medicine."

And I said, "John, absolutely, it's a great solution to the compliance problem in veterinary medicine." He says, "Listen, I've got my team coming into Montreal for a—for a strategy session in a few weeks. Why don't you come in, do a presentation, and let's pilot this in practices across the country?"

I said, "Absolutely. That sounds great." So make a date, get off the phone, and quickly go to Google and Google "compliance problem in veterinary medicine." So I had no idea what the hell he was talking about.

Mike Pinkus: Serendipity.

Martin Traub-Werner: Yeah. Right, right. It's just sort of being open to opportunities. My wife tells a story of her early days in one of Toronto's really big successful law firms, and the sort of founder of the firm at some point came and talked to the new associates and said, "Well, you know, it's very simple. I used to go out to lunches and talk to my friends and ask 'em what they were working on, and I'd say, 'I'd like to help you with that.'"

"I'd like to help you with that" opens doors, right? Somebody says to me, "You've got a solution to the problem in veterinary medicine—the compliance problem in veterinary medicine." Absolutely, it's a great solution.

Mike Pinkus: Open up Google and you find out—

Martin Traub-Werner: And so, yeah, so Pfizer Animal Health put us into—with this little email program—put us into like 90 practices across the country, which is like, if I think about it now, right, it's like—it’s a really big project in the Canadian context. In the U.S. context, it's kind of like 90 practices, that's like a rounding error. That's like a quarter of Florida or something.

Mike Pinkus: No, but for a first, that's a quick, like, win.

Martin Traub-Werner: Yeah, yeah, yeah. It was—it was—it was pretty good. But as practices were using the tool, right, like this required follow-up at the front desk. And so what, of course, I've now learned over the years is that anything that requires additional work on behalf of the veterinary team is gonna require—is gonna face some stiff resistance—with good reason.

Martin Traub-Werner: Right? Not enough time, not enough resource. Their days are a day-to-day firefight. And so they said, "Well, great tool, great process, love the follow-up, but we need you to send the emails."

I said, "Great, to do that, I just need access to all your data." And they're like, "Okay." And I was like, "Wait a second. Like, I need access to all your data." They're like, "Okay, some MBAs can fix that." I'm like, "Okay."

So, just like one thread following another thread—okay, I now need access to all the data. How do I get access to the data? Gotta figure out data extraction. Okay, who's doing data extraction? Well, there was one company doing it particularly well out of the States—Vet Data. And they had sort of envisioned part of their growth to do sort of mass extraction, and I had a mass extraction application.

And so, we started doing that, and then there was normalization problems. And just over and over again, just like one problem—solve that problem—open up another problem, solve that problem—or picks up another problem, solves that problem.

And like, next thing you know, you wake up and you've got an actual solution. So what happened is I was putting these—how did this work? We were using the data—we never ultimately ended up doing triggered marketing for many, many years after that, even though that’s why we got the data.

Because once we started normalizing the data, I started presenting it back to the vets. And I was like, "Doc, you've got a leaky bucket. You're all excited that you got 15 new clients, but there are 25 new clients that you saw two years ago that have not come back into your practice."

Martin Traub-Werner: And so your practice is actually shrinking. And we call this the net change in active patients, right? So that’s a metric that is now pretty well understood. And I was like, "Here, it’s all here in the numbers," right? And I put this big spreadsheet in front of them.

And they're like, "I don't see that." I'm like, "Do you need me to draw you a picture?"

"Yes, I need you to draw me a picture."

"Okay, come on." So I go put it in a graph format and sort of show the picture. They’re like, "Oh. Oh, that’s really a problem."

"Yeah, okay. Well, how can I see these numbers on a regular basis?"

I'm like, "Well, okay, let's figure out how to get these reports."

And so we quickly pivoted with Pfizer Animal Health into practice reporting around parasiticide. And then we converted that into a relationship with Elanco Animal Health down in the States, which was very successful, very big, and important. And it was an enabling contract.

If I had to sell reports—practice reports, data analytics and reporting—to practices one-Z two-Z at 99 bucks a month, that would’ve been a much harder road.

Mike Pinkus: To scale, yeah.

Martin Traub-Werner: There were some real visionaries and really smart people at Elanco at the time. Great leaders—Jamie McDougal, Jessica Petty, Mike Braswell—like, really committed, hardworking, good thinkers. Super committed to the industry. And we developed stuff together. It was great. It was really successful. And we just took all the money that Elanco gave us, poured it right back into the company, and slowly grew, grew, grew.

Wow. That’s a really long origin story.

Mike Pinkus: No, that’s incredible. Did you find that there was a knowledge gap? Like, when you first presented data to these vet practices—a big part of this is, they first have to understand that they need data. Like you mentioned in that first story, they didn’t even understand that. Like, in the SaaS world, you'd be like net revenue retention. But, like, if you look at a doctor, they’re not thinking about data analytics. How did you crack the code on just letting them know it’s a need they have?

Martin Traub-Werner: Yeah. You know, I mean, today it's almost ridiculous, but in my early days, in my early presentations, there's this scene from Moneyball—

Mike Pinkus: Uh, great movie, by the way.

Martin Traub-Werner: Great movie, great movie. And Jonah Hill's character does this whole speech about how, through analytics, they can get on base more often. And he’s doing his player selection based on their ability to get on base, right?

And the scouts are all like, "No, no, we need masculine, big-looking ball players." And Jonah Hill’s character is all like, "No, no, we want this guy."

"That guy never gets a hit."

"I know, but he walks more than everybody else."

So I used to play this clip from Moneyball—the Island of Misfit Toys clip. Now today, if you played it, people would be like, "Well, you're an idiot. Of course, we all know we need data and analytics. Don’t be stupid," right?

But in those days, and we’re not talking—we’re talking 12 years ago, 15 years ago. Yeah, about 15 years ago.

Mike Pinkus: Wow. And I find it interesting, 'cause I actually think there’s still a percentage of the market that doesn’t have great data. And obviously, you disrupted an industry by providing that data at that time.

And Martin, I want to bounce to something new here, which is—that was getting the product off the ground and the education piece. But once you started to hit scale, the next piece that I think you guys were really unique on was you managed your financials very closely.

And I think beyond that, you, as a CEO of a company, had a deeper understanding than most in terms of just knowing where your metrics were—to a level that I still find surprising to this day. So I want to first ask you: where did that business acumen side come from, on understanding your numbers as you started to go to these vet practices, started to sign deals?

And secondly, how did you figure out what that profit and loss should look like? 'Cause you were growing quickly and building a team. How did you figure that out—that plan around growing financially?

Martin Traub-Werner: Maybe the only thing—I'm just listening to the question—I'm like, fuck, fear. Fear of failure, man. Like, it was just like, I didn’t have a plan B, I did not have investors. I had commitments to not just my family, but also to my team and their families. And it’s like, I was scared shitless.

The other piece of the origin story that we don't need to get into, but just—that is there—is the partnership that I had for many years. The partnership that I built the CRM system with, that I built Sales Link with. We hit a real crisis point just as we were launching into the vet market. My business partner wanted to zig, I wanted to zag.

I was the minority shareholder, and the partnership fell apart. And it fell apart at a very critical point where we had this contract with Elanco. And Elanco's saying, like, "All right guys, let's get started." And in the background—you talk about the frantic pedaling behind the scenes—in the background, we're out of money, we’re in debt, the partnership’s falling apart, has ended. And it's sort of like, "Okay, can I rescue this contract? How’s that gonna work?"

And there was just barely enough money in the contract to satisfy all the obligations, and I was the minority shareholder. VetSuccess was very much a phoenix-from-the-ashes kind of thing, really. And so that kind of led into that financial fear.

And so to this day—like, I know you don’t like to talk about ConnectCPAor use this as a platform to talk about your business—but like, that’s where we met, right? We were putting the pieces together, and I had one or two angel investors that kind of rescued me out of that messy situation. And they helped me on the financials, doing the financials for 12 months, 24 months.

But I didn’t feel connected enough to the financials. And so that’s when we started working with you guys. And to this day, I say my favorite meeting of the month was when we’d review the financials with my entire team. I think it was my team’s least favorite meeting of the month.

It was my absolute favorite meeting of the month because we would review budget-to-actual on every line item in the income statement, and review the variances and why there was a variance. And just really understand the business from the numbers. Right? If you were up on revenue—why were you up on revenue? If you were down on revenue—why were you down on revenue?

On the cost of goods sold side, understanding COGS, understanding all of the levers. And that just built muscle memory into the business, which made daily decisions really connected to the P&L.

And so, like, fast forward—here I am, you know, successfully exited VetSuccess in 2018. Stayed on with the acquiring company for a few years, but along the way started a bookkeeping business for veterinary practices to replicate that exact—you know, the hypothesis that I share with vet practices is: I really believe that businesses that are under financial control—that’s the wellspring and a proxy for being under all the other kinds of control in your business.

IT control, inventory control, HR control, drug log control—all of that stuff comes from knowing your business inside and out. And the intricacies. And vet practices are wildly more complicated than just about any other business I’ve seen.

Mike Pinkus: And you have a deep understanding of it. And I did not know that story of the adversity leading into VetSuccess. So that explains the passion for the financials and the unit economics and understanding it.

Martin Traub-Werner: Oh man, it was really bad. One of the angels—I remember this, he's a good buddy, one of the angel investors—I did the presentation and I showed my sort of pro forma P&L. And he’s like, "Well, what are you gonna eat, cat food? Like, look at the salary you're drawing."

I'm like, "Man, if I have to eat cat food to get this thing going, yeah, I’m gonna eat cat food."

And so, the angel investors kind of rescued me in that time. And we did a subsequent transaction, they did really well. I’m still on their Christmas card list. It was good.

Mike Pinkus: I wanna ask you about that. Like, now you have VetBooks, and obviously you can't take the entrepreneur outta Martin, so I did not expect you not to continue to go into new ventures and build new things out. But I wanted to ask you, when did you make the decision to get out or to sell? Like, you had—you were growing, scaling, big team. I'll touch on culture in a second—'cause world-class culture, in my opinion, at VetSuccess. Why move on to another venture? What was the decision behind that?

Martin Traub-Werner: It was less about moving on to another venture and really more about protecting what we built. The veterinary industry continues to this day to consolidate. At the time, the consolidation was fast and furious and wild. And it's very—it’s, I think to this day, very hard to be a successful large independent player in the veterinary space.

The way I describe the industry is it's kind of broken up into teams. There's sort of Team IDEXX, which is sort of a laboratory and diagnostics company, but has also built lots of technology plays, lots of workflow tech, workflow plays, and has deeply ingrained into veterinary practices because of the importance of diagnostics. And they've sort of parlayed their diagnostics into a world-class platform of other sorts.

There's Zoetis, that started as—and through primary revenue is still—pharmaceuticals, but they've done things like gone into insurance and all kinds of other businesses, right? So you've got Team Zoetis. You've got Team IDEXX.

You had Team Covetrus, which was one of the big distributors that was—another topic for another day—but in a weird transaction was purchased by a small home delivery pharmacy. This massive distributor was purchased by this—there's like this, oh really? The minnow ate the whale and then wondered why it had heartburn, right?

But they have a massive platform, massive footprint. They've got distribution and technology. And then there’s VetSource, who I ultimately sold to. They had just taken some investment, were looking to scale the platform. And subsequently, Mars had always been on the cap table. And Mars has since taken an even greater interest in that business. So there's sort of Team Mars now. At the time when I sold, it was Team VetSource.

But with these massive forces and lots of capital and people starting to pay attention to what we were doing and building competitive product—I just had to de-risk it a little bit. It was really hard to keep that. I mean, our line of credit was still personally guaranteed.

Mike Pinkus: For sure.

Martin Traub-Werner: So it's just—you kind of gotta de-risk that a little bit. And we had like 30 employees or 40 employees, right? It was big.

Mike Pinkus: Mm-hmm. I would say that just the idea that, as an owner of a business, it’s—I make an analogy to like a great TV show. It's almost better when it comes to an end where you feel like you're flying high and you achieved something. And like, you know when you watch a TV series, they just take it a little bit too far, and you're like, "Yeah, they should have ended that." But when you go out on a high, I mean—

Martin Traub-Werner: That's where the saying jump the shark comes from, right? It's like Henry Winkler in Happy Days.

Mike Pinkus: Right. Jump—

Martin Traub-Werner: The shark. And it was like, okay, you guys have just taken this too far. It just didn’t work. Yeah, that's a really good analogy, Mike.

You know, it's really hard to give up your baby. And there’s a part of me that will always have my heart with VetSuccess. But I learned a ton from my wife Tamara, who—even with our own kids—from a very, very early stage when we had our kids, there was this recognition that we were raising little humans that had to fly the nest. And that was our job. Our job was to make them independent, good contributing people. And that they were not ours forever.

I could get weepy talking about that—my daughter's going off to university next year. And I’m like—

Mike Pinkus: That’s a big change.

Martin Traub-Werner: Oh, I’m really struggling. I’m really struggling, yeah. And so taking that very same approach to your business, right? It's not mine forever. It becomes something bigger than any one person. And you kind of give it life and let it go.

Mike Pinkus: And the team you built—like you said, I think it’s all special because it lives for a period of time. But that's almost what makes it more special. But the culture you built—you built, Martin—I saw it firsthand. I mean, I attended a number of the events that you guys put on at VetSuccess, and I personally have never seen anything like it.

And that's why I started this conversation by saying it was like a textbook. Like, if you are running a business, what do you want your team culture to look like? And I just had never seen—I’ve seen some great cultures—I’ve never seen that family-esque environment where everyone had everyone’s back. Everyone was cheering everybody on.

I guess my question for you is, I don’t think having a background in HR is enough to foster a culture like that. There's something obviously bigger than that to build a culture within a company. How did you do it? I guess that's the question.

Martin Traub-Werner: Uh, you know, I get asked this question a lot, and there’s a couple of things. It kind of goes back to that origin story of like, “Suzy called me a bitch. What are you gonna do about it?” I’m like, I have no tolerance for that. I just don’t.

So, a couple of things—firing slow and firing fast is really important. Super hard to do. Hiring slow is easy, right? The hiring slow part is super easy. Although even there, people will sort of say like, “Yep, warm body, take it, we need it.” And I’m like, “No, no, no, no. We really have to do our due diligence.”

And then the fire fast part—we all fail at, myself included. But letting go of people, and being okay with letting go of people.

A conversation that we have—and this is particularly true in the Canadian context—that frustrates the hell out of me is people are like, “Oh, I’ve got this person on my team, and I really gotta—ugh—they’re just not pulling their weight. I really gotta get rid of them.” I’m like, “So what’s taking you so long?”

“I can’t afford to fire them.”

“What do you mean?”

“Oh, the severance obligation is too big.”

I’m like, “You’re an idiot. It’s just money. They’re killing your business today. They’re holding you back. They’re an albatross. You’re just not helping your business. And by the way, you’re sending a terrible message to the rest of your team. Because if you know it, the rest of your team knows it too.”

So, being picky about who’s on the team, and then just being really generous. Being generous with time and money—not outrageous—but just, you know...

Katie McLean, who you know, was our COO and sort of my 2IC, and is frankly one of the best leaders I’ve ever met in my entire life—she’s magic. But every year she used to submit her vacation time to me. I’d be like, “I don’t care when you go on vacation.”

“You don’t care?”

“Exactly. I just don’t care. That’s your—”

Mike Pinkus: Leader.

Martin Traub-Werner: “Don’t leave your team hanging. I don’t care if you take three weeks. I don’t care if you take six weeks. Just take the time you need.”

She’s like—so it became a joke. By the third or fourth year we’d been working together, it would be January and she’d—she’s a planner—and she’d plan it all out and she’d be like, “Look, I know you don’t give a shit, but here you go. Here’s when I’m going on vacation.”

Same conversation—“Still don’t care.”

So, just sort of letting people be adults. Work at the kind of place you want to work at. No drama. Support people.

Mike Pinkus: Yeah, the standards mixed with the appreciation and generosity—that’s special. But definitely difficult to balance. And that’s where I have a huge amount of respect for what you guys did. Because what you just commented on is that it was mixed with high standards. Meaning it wasn’t just, “You treated people incredible,” but you didn’t have any standards. VetSuccess was a well-oiled machine. And the bar that you set for each team member—you mentioned—you set it very high. Like your comment was, the rest of the team would figure it out.

Did that continue the whole way through the journey? Like all the way up to the end—that the team would spot strong performers versus weak performers? Was that part of the culture to keep the standards at VetSuccess?

Martin Traub-Werner: Yeah. I mean, by and large, we didn’t part company with that many people. Some people opted out on their own. A few others we had to part company with. And the other thing is that the company changes every six months, right?

And people change as well. So somebody who was really great for one stage of the company—something changes, a new product line, or a new competitor comes in, or something just changes the way you have to operate—and another person may not be up to, or interested in, figuring that out.

I can’t think of the exact situation, but I kind of feel like we had conversations, for example, with people like, “Listen, we’re going this way. If you want to come this way with us, then this is what it’s gonna take. If you don’t want to come this way with us, then just take the next two months and your job is to find another job. And we’ll pay you while we do that so that you don’t have to take any stress. We love you, but recognize that we just may be growing apart.”

The other thing I remembered as you were asking that question, Mike, is when I sold the company, I was asked to identify key leaders who were super important. And to a person that I named in that list, I realized that in some future world—five years, ten years, fifteen years down the road—if I got a call from any one of those people who ostensibly reported to me…

Martin Traub-Werner: Um, but—who I kind of felt like I worked for—if any one of those people were to call me and say, “Hey, I’m working on a project and I’d like you to come work for me on it,” I wouldn’t even hesitate. I wouldn’t think twice, because every single one of them were such great people—good thinkers, committed, hardworking, fun, funny—that I would follow them to the ends of the earth.

And that holds true to this day as I’m sort of thinking through some of those people. You know, I already name-checked McLean. I won’t name-check the rest of the team, but just great people who I want to spend time with and who I want to follow.

And so I think that’s a good measure as well: if you can imagine working for the people who work for you, if you’re not excited about them, then how are the people that they have working for them supposed to be excited, right?

Mike Pinkus: That’s great advice, because yeah, that leadership team—as you said, you had a big team—so those leaders have to carry the same core values you did when you were the only one directing traffic within your organization.

Martin, you scaled the business. You mentioned you had adversity, you dealt with investors, you had an exit. You pretty much checked every box of the things that entrepreneurs go through—and some that many never get to experience, obviously.

So do you have any advice for people that are either starting a business or in a business currently, and they're navigating the waters of decision-making, and like you said, it’s like that duck underwater that’s pedaling really, really fast and trying to stay balanced—what advice would you give to entrepreneurs if they’re in the mix right now?

Martin Traub-Werner: I mean, the toughest thing, I think, is just to stay calm. Right?

Mike Pinkus: Mm-hmm.

Martin Traub-Werner: Overshare—maybe overshare. My sales projections for the first quarter are not going the way I want them to go, right? They're fine. Like, they're great. We're doing fine. But I put some aggressive sales projections out there, and as a result, my budget is aggressive. And, you know, you miss a couple months, and it's like, “Oh, shit.” Like, all of a sudden you might have to make some tweaks.

And like—we’re fine, everything’s great—but I do, I still to this day wake up going like, “Oh…”

Mike Pinkus: That feeling.

Martin Traub-Werner: I don’t know. But just kind of making peace with—I think what I’ve come to understand, and I think this is really important—is to make peace with the rollercoaster.

Because if you celebrate the highs too much, you’re gonna be humbled, because there are gonna be lows. And if you despair the lows too much, you’ll end up in a cycle where you don’t leave open the opportunity to capitalize on the stuff that turns. The next day—there’s gonna be a phone call, or you create a new partnership, or something.

So, it's just trying to stay emotionally neutral—which, anybody who knows me really well would think is a wildly ironic thing for me to say—because I tend to over-dramatize the highs and over-catastrophize the lows.

But that’s sort of what I try to work on, at least. And it’s funny, because the team I’m working with now, periodically they’ll come up with, “Oh, this really bad thing just happened.” I’m like, “No, no, no. It’s fine. Today’s just a bad day. Tomorrow, next week—it’ll be fine.”

And to bring it kind of full circle—a lot of it comes back to just understanding your income statement, understanding your P&L. Because that’s where it all happens.

I mean, you’ll remember our meetings—maybe—where we’d review the P&L and be like, “Okay, let’s review the balance sheet.”

I’m like, “Balance sheet? Don’t care about the balance sheet.”

Mike Pinkus: What does that do? Who cares?

Martin Traub-Werner: Who cares about the balance sheet? This is all in operations—P&L activity. I mean, obviously, the balance sheet’s important, but—

Mike Pinkus: It brings it full circle. So, like, my final question was gonna be: what are you up to right now? And you mentioned VetBooks, and now you're intimately involved in the numbers, and obviously you have a deep understanding of the vet industry.

What is VetBooks up to, and where do you see yourself taking that company?

Martin Traub-Werner: Uh, so let me start backwards—with where I see myself taking the company. I've been asked a bunch of times already, like, “Oh, are you gonna sell your company again?” And you never say never, but I’ve already done that once.

And it's like—I’m just having a lot of fun putting the pieces together, building something of great value. We’re just shy of 80 clients now.

Mike Pinkus: That’s awesome.

Martin Traub-Werner: Yeah, it’s a sizable business. As you know, it is wildly complex and really hard.

Mike Pinkus: Oh my gosh. Service is always complex, right?

Martin Traub-Werner: It’s service, right? Like, I had a product company—it was great. But now, service is like, “Oh, shit, this is different. This is hard.”

So I’m having fun unpacking that a little bit. I think there’s a real opportunity for us to deliver some benchmarks into the industry again. Not competitive benchmarks with VetSuccess and what we did there, but—it’s very uncommon to find a data set of veterinary practice financials that are unified.

Mike Pinkus: Oh, for sure.

Martin Traub-Werner: We do them all the same way. We use the same chart of accounts. Everything is standardized and accounted for the same way. And so I think there’s an opportunity for us to provide some leadership around data, which we’ll do—we’re just in the early parts of exploring some of that.

And increasing the financial literacy of these small business owners. I mean, at the end of the day, both VetSuccess and, frankly, VetBooks have the same mission, which is to help small businesses be successful.

I really, really, really believe in the value of small businesses—small entrepreneurial businesses. All these big, “swing for the fences,” raise a billion dollars or several hundred million dollars—right? Outspend—spend more than you earn... That’s a different world. And, frankly, to me, it’s not even a real world.

I used to joke about the fact that VetSuccess made more money than Uber—not revenue, but profit—for a lot of years. And so helping—really, the real world is built out of small businesses.

And so helping small businesses be successful—whether it was, in the VetSuccess case, understanding their underlying business intelligence and data analytics, or in the VetBooks case, understanding their financials and really improving their financial acumen—you can do a lot of things when you’ve got a profitable business.

And knowing that it’s a profitable business, knowing what levers you can pull, and getting feedback mechanisms to understand how the decisions you make in the day-to-day play out in the financials—that’s pretty cool.

Mike Pinkus: You knew profit was sexy before it was sexy. It's coming back in vogue though.

Martin Traub-Werner: I mean, I just don’t understand—like, where else in the world can you go and say, “Okay, I’m gonna spend a million dollars, I’m only gonna make a hundred thousand dollars,” and that’s okay?

Mike Pinkus: No default to that date, right?

Martin Traub-Werner: Like, what’s up with that?

Mike Pinkus: Look, I obviously see the vast array of different industries and scaling, and there is, in my opinion, a place for a binary outcome when you have something that has the ability to put rocket fuel on it. But to your point, Martin, that is like the 1%—maybe 0.5%—of businesses that have something so uniquely special that it scales. And there’s a place for it.

But it’s really, I think, good advice—and you recognized this early on in your journey—that you have a lot of optionality as a profitable business. It just makes a lot of sense. And I saw you doing that with that focus years ago.

It's interesting how smart entrepreneurs and business leaders—what you see them doing five years ago—suddenly becomes the new norm. And the days of 2021 look like they’re behind us—sky-high valuations and all those things. So yeah, times have changed again.

Martin Traub-Werner: I mean, and that’s the cruelty of low interest rate environments and free money. It’s like a carnival funhouse—it just turns the world completely upside down.

Mike Pinkus: Upside down.

Martin Traub-Werner: And it creates real perverse incentives. Money is free, and therefore you should go hire a bunch of people. And then all of a sudden money’s not free, and it’s like, “Okay, let’s fire all the people.”

And I’m like, wait a sec—that just doesn’t make a lot of sense.

Mike Pinkus: No. And that’s why speaking to entrepreneurs that have had that stability throughout their journey—and that’s why I said the textbook play, that’s how I started this.

I don’t want to hold you much longer, Martin, but what I would wanna say is that—huge respect for what you’ve done all the way up to exit. And congrats on the exit.

And I know you spend your time now on the West Coast. I'd love to visit you sometime on the West Coast.

Martin Traub-Werner: You're welcome. You're welcome anytime. It’s very, very beautiful out here.

Mike Pinkus: Well, it’s morning time for you, and so I’ll let you enjoy the sunshine and everything else on the West Coast. But thanks so much for joining me, Martin, really appreciate it.

Martin Traub-Werner: Thanks, my friend. Yeah, really enjoyed the conversation. Thank you.

Closing Thoughts

Mike Pinkus: That was Martin Traub-Werner, founder of VetSuccess. Martin scaled his business all the way to his successful exit. However, it was not without adversity and many ups and downs along the way.

Here are three important lessons I took from the conversation with Martin:

Number one: Martin noted after years of running his business that he learned not to ride the rollercoaster emotionally. He elaborated to say: if you ride the highs too much, you’re going to get humbled. And if you sink to the lows, you’ll miss out on the opportunity that could be right around the corner.

Number two: Culture is a reflection of what you tolerate. Martin shared the story about when he was in HR and people would come to him with nonsense. He had no tolerance for it. He carried those values through to VetSuccess. And he said the old adage still remains true: hire slow and fire fast.

Number three: Your leadership team matters a lot—but your top one or two team members are critical to be next-level leaders. Martin described Katie at VetSuccess, the COO, as “magic.” He went on to say that he would work for Katie if she had started a business. It was spotting that outlier ability that allowed Martin to feel confident that quality leadership would continue to span the entire organization—even when the team became too big for him to be everywhere.

That’s it for today. As always—keep scaling up and breaking barriers.