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Pedro Noyola is the CEO of Balanced Business Group, an outsourced accounting and bookkeeping firm serving small boutique wineries. In this episode, Pedro shares his career journey from working at Deloitte, to acquiring his 10th business. Stuart and Pedro also chat about cars, serving winery clients, and balancing family, fun, and career as an entrepreneur.
Join Stuart McLeod as he interviews the world's top accounting leaders to understand their story, how they operate, their goals, mission, and top advice to help you run your accounting firm.
Stuart 00:00:06.449 [music] Hi, I'm Stuart McLeod, CEO and co-founder of Karbon. Welcome to the Accounting Leaders Podcast, the show where I go behind the scenes with the world's top accounting leaders. [music] Today I'm joined by Pedro Noyola, the CEO of Balanced Business Group, which is a bookkeeping service that helps small and midsize business owners make faster, more data-driven decisions. Before acquiring Balanced Business Group, Pedro led and grew a communications software company called FluentStream at more than 100% per year and was recognized as one of the fastest growing companies in America. Pedro started his career at Deloitte and then worked as an executive at enterprise SaaS provider Telogis, which was later acquired by Verizon. It's my pleasure to welcome to the Accounting Leaders Podcast, Pedro Noyola.
Pedro 00:00:59.010 Thank you for having me. I'm super excited to be on.
Stuart 00:01:01.661 Now, we caught up in person not that long ago.
Pedro 00:01:05.718 Yeah, you were nice enough to invite me out to Karbon X at the beautiful Hyatt Tahoe, where we hung out for a couple days, and I got to know you a little bit better, and the rest of the team. That was just an awesome, awesome event. I can't say thank you enough for inviting me and also for gathering so many smart folks. I learned a ton that weekend. I think I told you this while I was there. I went with a few very specific questions that I was looking to hunt down and talk with different people about. I think I went with four questions, and I got three of them answered within the first hour, and I was like, this is going to be the best ever. And then there were so many additional questions that I added to my list that I got answered and then started implementing, essentially, the hour I got back. Great event, and I can't wait for the next one.
Stuart 00:01:57.167 Yeah, no, we're planning already. And you've had a really interesting journey to the accounting industry, but let's go way back and start at the start, and perhaps even we'll touch on your experience in the telecommunications industry. We'll do all that, but we can go back further than that. What was your childhood and education growing up? Tell us about that, Pedro.
Pedro 00:02:19.358 Oh, wow. You're going way back. All right. I'll get on the therapist couch.
Stuart 00:02:25.400 Yeah, I'll send you the bill.
Pedro 00:02:27.029 Yeah, really let loose.
Stuart 00:02:27.580 Just I'll make up a fake license number, though, right?
Pedro 00:02:31.841 Yeah, yeah, yeah. Yeah, we can start back there. So it's probably a similar story to some folks who might be listening. So my dad came over to the US when he was 14.
Stuart 00:02:43.520 Yeah, wow.
Pedro 00:02:44.281 He was technically born in the US but raised in Mexico, so I don't know if I technically count as first generation. But yeah, very--
Stuart 00:02:53.612 Certainly pretty close.
Pedro 00:02:56.032 Yeah. I mean, he was taken back into Mexico when he was 0. So he spent the first 14 years of his life there. And so it was sort of first gen experience where I was the first one in my family to graduate high school, first one to go to college. And growing up, my mom was doing data entry for the State of Texas Comptroller. And so her boss' boss' boss' boss' boss, right, go way up the line, was an accountant with a CPA. And for me, that was what I knew. I grew up in a super small town. It was 1,000 people. I always say it as a joke, but it's not a joke. There were more cows than people in my home.
Stuart 00:03:37.503 Oh, yes.
Pedro 00:03:38.602 Yeah, Austin--
Stuart 00:03:39.080 Yeah, you can say that about all of New Zealand.
Pedro 00:03:42.471 Yeah, but that's sheep, right, so it's different. That's what I knew, was the tip of the professional experience is being an accountant. And so I went to the University of Texas that has an amazing accounting program, shout out. Hook 'em. And I also got funneled into their professional accounting program that was five years. At the end of it, you ended up with your master's in accounting. And then went to go work at Deloitte. They were nice enough to let me go to San Diego to work instead of the Dallas office where I interned. And I did a year at Deloitte before jumping ship into entrepreneurial ventures. Yeah, and then that was really my only year in public accounting, was my very first year out of college. I learned a ton and still use a lot of especially the organizational skills or documentation and sourcing skills to make things super clear, right? Because work papers - and this was back in the day where we still had actual physical papers - were incredibly important. And so, yeah, those are skills I still carry with me. And then from there, yeah, you touched on some other stuff. But I bounced around a lot.
Stuart 00:05:00.775 I mean, I guess, apart from the obvious, why Deloitte just for the year and into the unknown world of entrepreneurship?
Pedro 00:05:09.303 Yeah, great question. It was a really, really hard year.
Stuart 00:05:13.124 Was it?
Pedro 00:05:14.074 We were understaffed. And I think the transition for anybody coming out of college into their first job into the workforce is always tough. But to get thrown into the deep end-- we were working 70, 80, 90 hours plus some that year. Again, we were understaffed through that busy season, and the busy season never really ended. It went into the extension season. And then I remember at the end of it, I was sitting with our partner in charge of the office going through that year, and I had a great rating. I had seen these TV shows about what this is supposed to be like, and that big Happy Gilmore size check that they give you for your bonus at the end of it. That didn't come, right, because it's the real world and that's not how work works. But I didn't know it at the time, so I was pretty crestfallen, disappointed. But that was a good push. Because I saw, basically, what they were billing me out at and said, nobody should be paying that for me. But if they're going to pay it, then I want to get the lion's share of that. And jumped out and started a BPO company. So business process outsourcing, where part of what I did at Deloitte is connect us to-- this was when we were-- it was just getting off the ground within Deloitte to the Indian office. And so I learned about the communications and systems and processes that need to be in place to work across the globe, and then got connected to a team out there who helped me provide those services to other accountants and financial advisors and insurance agents to do data entry and do that type of work. So that was my first entrepreneurial adventure in the real world.
Stuart 00:07:02.214 Yeah. So that was sort of combining your experience with working with big corporate as well as family connections, as well as your desire for perhaps a bit more of work-life balance, right?
Pedro 00:07:15.204 Yeah. Funny enough, there was no work-life balance.
Stuart 00:07:18.835 It was unbalanced.
Pedro 00:07:19.476 Yeah, that's not the way that entrepreneurship works, as everybody already knows. So that was a few years of really plucking away, trying to build up a clientele, and cutting my teeth in entrepreneurship. And then got pulled into a car startup that was-- they were looking--
Stuart 00:07:38.271 A car startup.
Pedro 00:07:39.112 I know, it's like a hard right turn.
Stuart 00:07:41.221 Yeah, very good.
Pedro 00:07:43.830 Yeah, but they were looking for somebody with my degree from the University of Texas, living in the southwest US, with entrepreneurial experience. So they were looking for something very specific. My resume checked all the boxes, and they reached out to me through Facebook. I remember this. And that's the weirdest way to recruit. I've never done it, but it worked for that team. And so I ignored the first outreach, and the recruiter was really persistent and said, "No, no, no, just meet with the team. Meet with the team, and I promise it's going to be worth your time." And it was, and it was one of the smartest, best teams I've ever worked with, and I'm still in touch with a lot of those guys so many years later. It was such a joy. It was such a joy. We didn't end up getting all the funding that we needed. So Tesla is where Tesla is today, and nobody ever heard our name because we were in stealth for too long until it was too late. But six of the people there had been through business school at Harvard Business School, and they encouraged me to apply. And basically, they were really, really tough coaches. I wrote my first essay - it was my first application essay - and handed it to them, and you're so nervous, and these guys have already gone through, and they're so smart, and they had the stamp already, and I get just a giant X on the first draft.
Stuart 00:09:08.666 Oh, no.
Pedro 00:09:10.646 Yeah, and they said, "Good luck applying anywhere." But they did it with a chuckle and then sat down with really constructive criticism and helped with the essays and interviews. And so after that experience in working with them, it really did help me feel like I could contribute at a place like at Harvard Business School. And that was a life-changing experience.
Stuart 00:09:32.858 Yeah. Okay. Was it an electric car company? Was that the idea? Or just a car company in general?
Pedro 00:09:42.556 No, so we were the modern-day Volkswagen Bug. That was our dream. Or the modern-day Model T. So this was a group-- the folks who started it had been in consulting at that point for 30 years. These were ideas they had been collecting and consulting with the auto industry as strategy consultants for their entire lives. And they decided--
Stuart 00:10:08.765 Right, so they knew the industry pretty well.
Pedro 00:10:11.436 They did from the outside, right? And I think that was what really made it special is they said, "Hey, if we could do it from the ground up and we didn't have to manipulate this giant organization to try to implement the strategy that we know will work, here's what we would do." And so they collected all those ideas and collected people, collected funds, and started to implement them. And on day one, they gave me The Innovator's Solution, so Clayton Christensen's book, and said--
Stuart 00:10:43.239 Oh, yep, yep, yep.
Pedro 00:10:44.640 Yeah, which is still, I think, my business bible. So many great ideas in that book.
Stuart 00:10:50.237 Jobs to be done.
Pedro 00:10:51.617 Yeah, exactly. They handed me the book and said, "Hey, read this. This is what we're doing to the car industry." And even though I was the accountant and off in the background managing our funds and money, learned a ton about strategy and marketing and financing. And really, because it was at that point still a small team, I was able to get involved in a lot of different places. Loved being a car guy and considered that as a career, something that I would do even after that experience and after business school. But in the end, wanted to come back to the West Coast and live in Southern California, which is hard to do as a car guy.
Stuart 00:11:30.677 And ultimately, the company, perhaps too early, too late, not enough money, etc. But if you're still in touch with all those guys, what have they gone onto? Probably amazing and great things, by the sounds of it.
Pedro 00:11:46.344 Yeah, amazing and great things. Let's see. We've got one who's a really successful venture capitalist out of London right now, another who has started a VC fund focused on hardware. He lives in LA now. Some really top tier tech executives sprinkled through Silicon Valley here. And that was on the business side. And then the designers and engineers and those folks are leading automotive companies and automotive suppliers throughout the country and the world now. So it was a great team.
Stuart 00:12:21.164 Well, here you go. Because I've gotten this terrible habit of doing 30 seconds of half-assed internet research during podcasts. But there was 21 million-- so if they were going to be the New Age Bug, which I reckon my mom had a Bug in-- or a Beetle, I should say, a VW Beetle, and I reckon I would have been six or seven maybe. I'd have to ask her. So that would have been 1982. Well, it would have been 8. So it was 21 million-- no, nearly 22 million Beetles built both in Germany and in Brazil. So there you go. I reckon they're a fascinating car. And Volkswagen have recently-- I don't think they've released the-- I don't think they've made production yet. But the other famous Volkswagen, of course, was the camper van.
Pedro 00:13:10.448 Oh, yeah.
Stuart 00:13:10.979 And so they've reinvented--
Pedro 00:13:11.960 The Scooby-Doo van.
Stuart 00:13:13.086 Yeah, yeah, yeah. Did you ever see Herbie? I reckon I watched Herbie the movie--
Pedro 00:13:19.924 The Love Bug?
Stuart 00:13:21.095 Herbie the Love Bug. Thank you. Yeah, I reckon I--
Pedro 00:13:22.444 Man, it's been a minute. That's been a long minute. Yeah. That used to come on TV, so I would watch it on television.
Stuart 00:13:29.927 [crosstalk] for my kids.
Pedro 00:13:31.653 Yeah. What a huge accomplishment, right, to put out 21 million vehicles. And it's essentially the same vehicle since their first one.
Stuart 00:13:40.182 Yeah.
Pedro 00:13:40.522 That's what we were looking to do. So it was going to be sub-$10,000, 5-Star crash test rated, doing 40 miles to the gallon on an internal combustion engine. But it was a super modular car, so the plan was when it got cheap enough, we could switch out the drive train and put in-- and we were already sourcing the parts and where we would get it and in talks with different manufacturers to talk about-- whether it be hydrogen or diesel or an electric motor, being ready for that next evolution. But the car still wouldn't have changed. It would have been the same color, same shape, same size, the same interior, just a different drive train.
Stuart 00:14:21.571 Yeah, well, that concept is now alive and well in Volkswagen also with the modular electric drive matrix, which is essentially a couple of types of models on the one chassis, the one sort of battery configuration. Audi is using it. I think Porsche is using it in bits and pieces. So you guys were ahead of your time.
Pedro 00:14:44.990 We were, and it was a cool place to be. We were doing that to the extreme where-- well, I guess the Model T was the same, where it was going to come out in one color. It was going to be this--
Stuart 00:14:56.279 Yes, you can have any-- the old classic, right? You can have any color you like.
Pedro 00:15:00.066 Yeah. We had a plan to-- I don't know if you remember this. Do you remember when you could skin your phone? In fact, I think the company was called Skinit.
Stuart 00:15:11.175 Oh, yeah, vaguely. iPhone age or Nokia age phones?
Pedro 00:15:17.971 No, no, no, I think that was smartphone age. But you could wrap your phone in a skin, essentially, like you can cars. But we were going to set that up to where you could put anything you wanted on your car, anything you could imagine, any color, any design, photo.
Stuart 00:15:34.707 Oh, cool.
Pedro 00:15:35.915 You could skin your car, and that was part of the purchase price.
Stuart 00:15:40.865 Right.
Pedro 00:15:41.555 Yeah. And that was changeable. So say you wanted a pink car one year, and next year you wanted a sunflower. All right. Take the skin off and redo it.
Stuart 00:15:51.424 Do you think car--? to do your phone is one thing, because then you're only advertising that you've got poor taste to a few people. To skin your car, maybe manufacturers go, "Hang on, I don't want the plebs of society ruining my years of design with their crap--
Pedro 00:16:12.693 That's funny.
Stuart 00:16:13.052 --decals."
Pedro 00:16:14.841 That's funny. Yeah, people want personalized--
Stuart 00:16:16.959 There was a guy in Mill Valley-- there was a guy in Mill Valley that every year would get a brand new GT3 - I don't know, what, 400, 500 grand - and create the most horrific decals. One year he had this sort of fake Picasso. One year he had a-- I don't know. It was probably a little bit culturally insensitive to Australian Aboriginal paintings. Was sort of like this dot painting around the car, which is--
Pedro 00:16:46.718 Really?
Stuart 00:16:46.718 See, if people do that, I think it might cause-- there'd be some controversy, no doubt.
Pedro 00:16:53.877 Yeah. Well, I mean, what does it say? Money doesn't buy taste.
Stuart 00:16:58.507 Yeah, yeah, yeah, yeah. Well, yeah, if 2022 proves nothing else but that phrase to be true.
Pedro 00:17:09.117 Yeah. What a crazy time for us to be alive and living in. I can't wait to tell our kids these stories.
Stuart 00:17:18.638 Yeah, they'll be like, "Fuck you, generation. Look what you've done."
Pedro 00:17:24.953 I don't know. It's like we're reaping what other generations have sowed, and maybe, maybe, maybe light bulbs are going off for enough of us--
Stuart 00:17:32.563 Hopefully, we're turning it around.
Pedro 00:17:33.202 --that we can turn it around. Yeah, yeah. But there's a lot to turn. Yeah, which is, I mean, part of the reason--
Stuart 00:17:39.320 And we [crosstalk].
Pedro 00:17:40.680 Yeah, we've been talking about cars the whole time. We are a one-car family partly for that reason. Our car just doesn't move, and yeah, it's like we really don't need even one car. But it's really helpful sometimes, even though we live out in the burbs. So yeah, if enough people have those sorts of little light bulbs, maybe we can keep some trees and some clouds for our kids.
Stuart 00:18:05.900 I'm an optimist at heart, Pedro. I'm an optimist. I think we'll be able to make it happen.
Pedro 00:18:11.378 All right. I hope so.
Stuart 00:18:12.645 Okay. So before its time car company, an amazing experience, amazing group of people. And then it came to a point where you're like, oh, we'll probably have to move on to something else for financial reasons, or it was sort of not going ahead or whatever. So what happened at the end of that?
Pedro 00:18:33.003 Oh, well that's where I went to business school.
Stuart 00:18:36.932 Right. Yeah, cool.
Pedro 00:18:37.729 Yeah, the car company, I think it was sold for parts. We don't really know. There was rumors that some Russian car company bought it. And I think we-- a group of us recently saw a picture of the car floating around online. So who knows? Who knows what happened.
Stuart 00:18:54.126 Who knows?
Pedro 00:18:54.954 Yeah. Yeah, I went to grad school, and then after grad school, joined another awesome team funded later on by Kleiner. And that was another amazing experience. When I joined, I think we were somewhere around, I think, 30 to 50 million in AR. I don't remember exactly. And by the time I left, through different acquisitions and different amalgamations, we ended up at 1.2 billion in ARR over a five-year period. That was great. And I was working-- we were deploying this technology where we put GPS boxes on vehicles and then aggregated that data across really large fleets. And, yeah, pull that in to help people optimize the number of trucks, the type of trucks, their driving behaviors, their routes, and going into these blue collar spaces and showing them how technology and data can help improve things that they've been doing, at that point, longer than I've been alive. I remember going into construction sites and into warehouses, sitting across and trying to pitch the product and sell it. Yeah. And somebody was saying-- literally, tell me, "I've been coming into this office, sitting at this desk for 35 years, doing it the same way, and you're telling me that this is going to be better." And it's, "Yes, yes, it is. Just try it. Just try it."
Stuart 00:20:24.876 Yeah, what the hell would you know?
Pedro 00:20:27.207 Yeah. Yeah, exactly. "What the hell would you know?" But for the folks who bought into it and the folks who tried it, it did revolutionize their businesses, and it was really cool to be a part of that and to see it happen.
Stuart 00:20:38.548 No, I bet. And so you would have picked up a lot of field sales experience. You're sort of learning the craft, right?
Pedro 00:20:47.608 Yeah. Coming out of grad school, I looked at people who had jobs that I thought I wanted, which was leading a B2B SaaS software company, like your job. And a lot of them had carried a bag at some point. Almost all of them had carried a bag and been the salesperson or been a salesperson. And so the writing on the wall for me was pretty clear. And I was one of the very, very, very few people to go and take a sales job out of business school.
Stuart 00:21:17.448 That was brave. That was good on you.
Pedro 00:21:19.846 Yeah, and it would pay dividends later on to gain the experience and to know how it works. And to stand naked in front of a customer and try to convince them to use the product is extremely valuable experience. Like I said about Deloitte, my ticking and tying and documentation, those are things I carry with me every day.
Stuart 00:21:41.678 Yep. And then after your sales experience, did you grow through that company, or you took that somewhere else? What was next for you?
Pedro 00:21:52.126 Yeah, I grew with the company and ended up reporting to our founder and got to do all sorts of things. And yeah, it was basically just thrown at hard problems and said, "Go solve this." And that's what I did for the years that I was there. And then a buddy of mine from grad school, he was looking to transition his career away from private equity, which is when-- he and I had a conversation, and he said, "Hey, you've been working and building up these software companies for other folks and I've been investing in them. Why don't we team up and see if we can do this together?" So I just listened to the episode where you brought Chris on from System Six.
Stuart 00:22:34.597 Yeah, he's great.
Pedro 00:22:36.055 Yeah. So similar experience where we thought out to go and buy a small company and build it and grow it. That was another great experience. My partner and friend, still there running the company. And I am now here at Balanced Business Group in round two where, similarly, just over a year ago, at this point a year and a half ago, I guess, I went out looking for another business to buy and just over a year ago closed on Balanced Business Group.
Stuart 00:23:04.480 Great. And so the one that you were running with your VC mate was FluentStream.
Pedro 00:23:08.644 Correct. Yep. Where, yeah, he and I built it up over a few years. And like I said, he's still there growing it, and I found the next venture.
Stuart 00:23:19.003 All right. Well, let's get into Balanced Business Group. So this was an existing firm that-- how did you sort of come across-- how did all the transactions take place when you took it over?
Pedro 00:23:32.041 Yeah, good question. So the previous owner had spent 12 years building up the business and got to a point where she tapped out. She was working more than she wanted to, given up more of her life to the business than she wanted to, and was looking for help to sort of complete her vision of where she knew the business could go. She had engaged a broker. And at the time, I was kicking around all sorts of rocks trying to figure out what sort of business I was going to acquire. I didn't have my heart set on outsourced accounting or bookkeeping but had had a few conversations. And the broker who she engaged is one of the people that I had a conversation with. And after talking with her, learning more about the business, sort of getting my arms around this space, it met a lot of the dimensions that I was looking for and got really, really excited to-- what I thought I was going to do when I first had the conversation was do a roll-up, so go out and buy a handful of these or a few handfuls of outsourced accounting and bookkeeping businesses and put in systems processes and build them into a medium-sized company.
Pedro 00:24:45.652 That plan, once I landed, I thought I was going to do it, told everybody I was going to do it. "This is what we're going to do." This business, Balanced Business Group, is focused on wineries and vineyards. And at the time, I didn't pay that much mind. I like wine, but it wasn't something I had a deep passion for. But honestly, after even just a few months in, I really got romanced by mostly the people. But there are also some great perks. Yeah, our clients are boutique wineries in between 500 cases of production per year to 20,000 cases of production per year. Not things that you're going to see on the shelf at Trader Joe's or BevMo, for the most part. And they're just really warm, welcoming, salt of the earth, great people. And so I got to know them and was like, man, this is great. Really like working with people who I like, right? I think we've all had--
Stuart 00:25:42.054 Isn't it amazing?
Pedro 00:25:43.522 Yeah, yeah. Because we've all had jobs and experiences where it's just sort of you trudge into work every day and it's like, I don't want to talk about this thing with these people. It's just like, this is not what I want to do with my day. And that wasn't the case here. And so first fell in love with the people, and then started to get to know more and more about their businesses. And the winery business is one where it doesn't have to be that big of a business to be super complicated. There's an agricultural component, a manufacturing component, multiple go-to-market channels because they're selling wholesale or direct to consumer, trying to provide this beautiful tasting room experience that's a retail experience with merchandise and their own products. And there's a lot going on there. Plus, you layer on the compliance aspect of it, it gets super complicated. Which for me, I like puzzles and I like problem-solving. And so it gave me the chance to work on a lot of different sort of puzzles and problems with them at the same time that I was working on Balanced Business Group and turning us into a truly remote-first digital web application adopting business, right?
Pedro 00:27:06.097 So she had gotten it almost there. The previous owner had gotten it almost there, and then I spent the past-- I've spent the past year sort of pushing us to the finish line. And so now a year in, I feel like we're in a great spot working with great clients. We've been able to grow and offer more and more services slowly to help our clients solve more and more of their accounting and finance issues and, at the same time, build up our infrastructure to be able to bring on new people, to manage the growth, to bring on new clients. In fact, talking with you guys, and hopefully Karbon will be the final piece of that puzzle to bring it all together and really help us take it to the next level.
Stuart 00:27:55.572 Yep. No, that makes sense. I love the people aspect of the winery business. We've had a couple of podcast guests that talk about cannabis industry. I've had a couple that are in the wine industry and--
Pedro 00:28:08.650 All right. Listen to that one too.
Stuart 00:28:10.019 Yeah, just getting competitive research. It's a service we provide. It is that though, right? It's like, I can really get in-- the trenches are so enjoyable here. We get to hang out. We get to drink nice wine. We get to solve interesting problems. As you mentioned, it does get complex quickly. As you said, your compliance and your taxes and distribution and manufacturing costs and consultants. And you don't have to be producing that much wine to-- it's a really hard industry to get profitable at small scale, my guess is. A lot of the people aren't in it for massive profit. They're doing it because they love it, because they love the lifestyle around it, yeah?
Pedro 00:28:54.328 Well, that's definitely part of it. I mean, there are different personality types, right? Some people, it's a passion where, you're right, they don't need it to make a lot of money because they've been able to do something somewhere else for their career. But there are a lot of folks for whom it is their family's legacy, their family business. And they've been farmers for generations, and they're coming at it from a different aspect where they do need it to be a real business, to put food on the table and to pay the bills.
Stuart 00:29:23.507 Yeah, "Thanks, dad. You left me with this unprofitable whole lot of grapes."
Pedro 00:29:29.274 Yeah. Yeah, exactly. It's easy to make the wine, but then you got to go sell it, and that's where it can really turn unprofitable. Even though you have this beautiful vineyard, beautiful state, and make an amazing wine, it's a tough industry to sort of be noticed, especially today. The social media world and breaking through and sort of getting your name out there can be really hard.
Stuart 00:29:55.524 What comes to mind when I ask you about somebody that you've really enjoyed working with and you've seen their success grow in the short time that you've been working with them?
Pedro 00:30:04.804 Oh, man. One of our clients-- I'll give a shout out to Mrs. Adams and Kit over at [ADAMVS?]. This is boutique winery. Again, you're not going to see it on the shelves at your local grocery store. It's one of the places where you got to know. You got to be in the know to know about them. But it's a top tier experience. The place that they've built, the estate that they've grown, and the business that they've built has been a lot of fun to work with over the past year. It was one of the places when I had just taken over the business from [Shonda?], the previous owner, and I was going out and meeting folks, meeting the clients, and really wanted to get face time and get in front of them. And I'm taking pictures and sending little snapshots to my wife as I'm pulling out and driving out and looking at the buildings and saying, "Look at this rolling vineyard on top of Napa looking back down. This is work."
Stuart 00:31:07.533 Yeah, yeah. How are the kids?
Pedro 00:31:10.912 Yeah, I'm walking into a work meeting. How's your day?
Stuart 00:31:13.490 Yeah, that's right. Thanks, thanks. You can cook your own dinner tonight.
Pedro 00:31:18.658 Yeah, exactly. Yeah, but that's another part of the past year that's been incredibly fulfilling, is being able to bring my wife and my kids out to meet clients. Once a month, we try to do a tasting at one of our clients, and that's work also. I'm meeting them, seeing them in person, but at the same time doing something fun in a beautiful setting with my family. And for me, that was a big impetus to acquire BBG, is to be able to do all of those things at the same time. I mean, we've all been there too, right? So many choices, so many times where you feel like you have to choose between work and family or work and fun. And here's a place where I get to mix them all up and do them all at the same time.
Stuart 00:32:11.495 And you're very deliberate about the growth of your family and the way that you operate your family. Do you want to tell us a little bit about that where you're comfortable?
Pedro 00:32:20.315 Yeah, sure. Yeah, I get made fun of from my friends about this. My wife and I both do. Because it is a little extreme, I'll give that. My wife went to business school also. She was one of my classmates. That's how we met.
Stuart 00:32:36.345 Oh, nice.
Pedro 00:32:37.844 Yeah, we both come at it from really similar lenses and perspectives. And her family had a lot of these practices also, so we've adopted them and built on them. So we have family board meetings we try to do every month, where we check in on our family OKRs, which we set at the beginning of every year. OKRs, some folks are familiar with, and they're objectives and key results. So one of our family objectives is to build badass kids. That's word for word what we have down. And one of the key results is to make sure that-- at this point, my kids are tiny. They're almost three and almost one. And so the key results right now are just make sure that they're getting so many hours of socialization and so many opportunities to play and to learn and to grow and have new experiences. So, like I said, we check in on those every month. And right now, this year, the kids are crushing their OKRs.
Stuart 00:33:45.723 Oh, good.
Pedro 00:33:47.163 Yeah.
Stuart 00:33:47.531 Well, straight to Harvard for them, then.
Pedro 00:33:51.250 Well, it's going to come up in their performance review, right? We don't want them to be on [a pit?].
Stuart 00:33:56.088 Be out on the street.
Pedro 00:33:58.525 Yeah, it's like the old Jack Welch Neutron Jack method.
Stuart 00:34:02.886 That's it.
Pedro 00:34:03.755 Botton 10% of the kids, you're out of here.
Stuart 00:34:06.995 Yeah, stack rank. That's nice. Stack rank your family. That'll take off.
Pedro 00:34:13.619 No, but yeah, our youngest, Santiago, he's, like I said, 10 months, and he's been on four international flights.
Stuart 00:34:22.504 There you go.
Pedro 00:34:23.942 Yeah, just part of us wanting to get a new experience. Also, my wife goes back and forth between here, the Bay Area, and Denmark and Copenhagen. And she was breastfeeding, so that was how she made it work, is take him on the plane. He's been a super trooper, just an amazing, amazing traveler.
Stuart 00:34:44.132 And I also imagine in the post-COVID world, you sort of felt probably a bit cooped up for a while like everybody else, and getting out there amongst it this year has been something that a lot of people have been trying to do.
Pedro 00:35:00.844 Yeah, we were pretty careful. I'd put us in the-- we weren't in either extreme, but we leaned closer to in the middle, being careful, sort of lean that way slightly.
Stuart 00:35:14.350 Yeah, sure. Especially if your wife's pregnant during COVID and everything, you're going to be pretty cautious.
Pedro 00:35:20.357 Yeah, for a huge chunk of it she was. But it caught up with us just a couple weeks ago.
Stuart 00:35:24.916 Oh, yeah, no.
Pedro 00:35:26.821 Yeah, this latest variant got us. We fought it off for two and a half years. And yeah, they all tested-- my kids and wife tested positive on a Sunday. And then I was dancing around the house all week long gloating about my superhuman immune system.
Stuart 00:35:42.000 Yeah, yeah, good on you. Well, the virus gods saw that, didn't they?
Pedro 00:35:47.407 Oh, they did, and they dropped the hammer on me. Friday morning, I just opened my eyes and immediately knew. It was like, oh, this doesn't feel good.
Stuart 00:35:57.645 But yeah, it catches up with everybody.
Pedro 00:35:58.642 But now we're all on the other side of it. Yep.
Stuart 00:36:00.678 It catches up with everybody in the end. But family values is something that-- we haven't gone as far as you have. I haven't set the kids OKRs. But the first one that comes-- what are we? 12, 10, 4 now. And they've well and truly achieved their iPad time this quarter. They're probably maxed out there. But a little bit like you, we're sort of going through the process of setting family values. Do you want to share a value or an OKR that comes to mind that sort of helped direct, perhaps, a change of behavior or something you reflect upon and go, go us, we did fucking good there?
Pedro 00:36:47.206 Yeah. One of the ones when my oldest daughter was born-- I forget how we worded the objective, but it was basically just to be sure that she's going to be okay no matter what happens to my wife or me. And that was a go us because it forced us to ask some hard questions and answer some hard questions and get it done fast, right? So our living wills and getting life insurance and things that maybe don't get done, maybe get done when they're like four or five or six--
Stuart 00:37:22.947 Yep.
Pedro 00:37:24.107 --if it happens at all. So this practice of my wife and I sitting down at the beginning of the beginning of the year and saying, "Here's what we see happening. Here's what we want to happen. How are we going to attack this?" Because we both have busy careers. And my wife, she is a planner.
Stuart 00:37:48.380 Good. Yeah.
Pedro 00:37:49.006 Yeah, I can have cool ideas and say, "Here's what I think would be fun. Here's what I think would be awesome." And she puts it all in motion. And our calendar's planned out like six months in advance.
Stuart 00:38:02.365 Good.
Pedro 00:38:02.587 Yeah, but that was one where we had to think ahead. Because this was even before my daughter was born. Just thinking ahead of, what do we need to do to be grown-ups, right? It's like, I was 38 when she was born. So at that point, I should have been a grown-up. But still, I think--
Stuart 00:38:22.986 Some people are 68 and still not, so don't worry.
Pedro 00:38:25.353 Yeah, yeah, exactly. Having kids just pushed us into a new realm of adulthood that we weren't ready for. But this very, very nerdy practice of having family meetings and OKRs and goals and budgets sort of set us up to be ready to take on.
Stuart 00:38:45.201 No, good for you. I mean, it's a forcing function of a deliberate conversation. Because you can easily go through marriages, go through family, and just life gets in the way, right?
Pedro 00:38:58.483 Yeah. And all the studies show after kids, there's a dip in marital happiness, and it can be a really, really tough time. And it definitely has been for us, but one of our goals-- so we've got one goal that focuses on our finances, one goal that focuses on our kids, and one goal that focuses on my wife and my relationship and our marriage. And we even tell our kids that's the ultimate. That's number one. Even though they're one and three, they're tiny, we just say mom is number one, dad is number one. We love each other and we got to love each other and prioritize each other for the whole family to work. So we've been on a date-- part of that is we set an OKR to spend time together and have a date every week, which we've been able to pull off for basically the first-- our daughter is going to be three in a little over two weeks. We had a date every week, even during the depths of the pandemic where that meant we got takeout food from a restaurant that wasn't seating anybody inside and just went and parked in a park to eat the food in the park for two hours and just be her and me.
Stuart 00:40:20.112 Yeah. No, and it takes-- I'm sure there's some times you're like, "I can't be bothered. We'll just stay in or whatever." But the deliberate act and the deliberate conversation makes for a better relationship and a better family. So I applaud you for sticking at it. Well done. Good for you.
Pedro 00:40:42.026 Yeah, thanks. Yeah. And it doesn't always feel like the thing that we want to do, right?
Stuart 00:40:48.704 Yeah, I'm sure.
Pedro 00:40:50.365 Yeah, my wife doesn't get tired. I'm sure you'll meet her in person one day. She's just this energizer bunny bundle of energy that never stops. But yeah, I'm human, and I get tired, and sometimes I just want to sit on the couch and just zone out. But yeah, you're right. The goal and the deliberate conversation gets us off the couch and out to a restaurant or a museum. My wife also has this goal of doing a cultural activity every week. Sometimes it overlaps with a date, sometimes it doesn't.
Stuart 00:41:22.684 There you go. You're double billing your time there.
Pedro 00:41:26.273 Yeah. We've gone to see some really weird things because of that goal. In LA, we saw this play. We still live in Santa Monica. And we saw the weirdest play that's ever been put on where-- yeah, the point where we walked out is a guy came out on stage, didn't say a word, didn't engage with the other actors, just stood naked in the corner while, yeah, the other actors, one was dressed up as a rat while a woman who was dressed up as the MC of a circus play whipped him as he's dressed as a rat riding a bicycle.
Stuart 00:42:11.824 Yeah, right. Oh, the bicycle makes all the difference.
Pedro 00:42:16.014 That really pulled it together. Yeah, then the plot made sense.
Stuart 00:42:20.045 Yeah, it makes so much more sense now.
Pedro 00:42:22.494 Yeah. Yeah, when he walked out, then we walked out. It was like, all right, I give up.
Stuart 00:42:26.943 Well, I mean, yeah, this has all got too much. Oh, I get it. Well, we saw Absinthe. Have you seen Absinthe?
Pedro 00:42:32.539 No, what's that?
Stuart 00:42:33.756 Oh, that's sort of Cirque du Soleil for adults.
Pedro 00:42:37.626 Oh, cool.
Stuart 00:42:39.215 It wasn't as weird as that, but there was some weird points, that's for sure.
Pedro 00:42:43.614 All right, Absinthe. We'll check it out.
Stuart 00:42:45.114 Absinthe. And so you were in Santa Monica. Where are you now?
Pedro 00:42:49.612 We live in Burlingame, which is this very quaint little suburb south of San Francisco. My wife, we lived in Dogpatch in the city, and she was commuting down to Palo Alto. Yeah. And then saw this place with trees and grass--
Stuart 00:43:06.346 [crosstalk].
Pedro 00:43:07.375 --on her train ride. Yeah, we checked it out. And at the time, she was pregnant. So we were living in a small apartment in the city and looking for more space. And the second we got out-- we just parked our car in a random street in Burlingame. And the second we got out, the sun's shining, the birds are singing, the sun's poking through the trees. At the time I knew we were having a little girl. I see this dad on a bike with his little girl following him with her bike streamers and her flag sticking off.
Stuart 00:43:42.449 She was happy.
Pedro 00:43:43.678 Yeah, it was like a Disney movie. And so we were immediately sold and said, all right, we're moving into the burbs. And we've loved it here. There's tons and tons of strollers. It's probably similar to Mill Valley in that respect, which people [leave?].
Stuart 00:43:57.217 Yeah, yeah, the southern end versus-- yeah, I get it. Dogpatch, though. Dogpatch had the best French butchery of all of San Francisco. It was amazing.
Pedro 00:44:11.987 Which one? Because there was the French sandwich place off of 3rd street, and then behind there was the butcher.
Stuart 00:44:19.916 The butchers. We would drive from Mill Valley. My mum doesn't listen to this, so it's all right. So my mum was staying with us, and Amanda and I were like-- I love my mum, but a couple of days together and I'm a little bit--
Pedro 00:44:37.307 I get it.
Stuart 00:44:37.698 --baked. And I said to Amanda, "We should make a nice lamb roast or something." And I said to Mum, "We're just going to go and grab the meat." So this is from Mill Valley to Dogpatch on a Saturday or something, which is a good probably hour.
Pedro 00:44:54.738 Yeah, just to get there, get one way through the city.
Stuart 00:44:57.088 Yeah, exactly. And so we're an hour there. And then just next to the butchers, or close by, I reckon there's a little wine bar or something, or maybe even part of it.
Pedro 00:45:09.908 Yeah, the place has changed so much. I think Olivier's, was that the name of the butcher? Olivier's?
Stuart 00:45:14.705 Yeah, that's right. It was too, it was Olivier. And then we sat down for a wine, and then we're sort of decompressing a bit. And then it was like two hours. So we're about five hours getting this lamb roast. We're a little bit late getting back, but it was an amazing meal. But no, I mean, yeah, I get it, right? Mill Valley has got its own funny aspects. But [crosstalk]--
Pedro 00:45:42.171 But you're in Austin now?
Stuart 00:45:44.012 We're in Incline Village in North Lake Tahoe.
Pedro 00:45:46.218 Oh, yeah. I did actually hear that on other episodes. Yeah.
Stuart 00:45:51.515 But for similar reasons you're there, right? Raising the kids out of the city and a bit more grass and a bit more-- we like the unstructured aspect of skiing and horse riding and all that stuff. I think at least pre-pandemic, the seven or eight hours a week on the 101 just going from Mill Valley to Santa Rosa or something for ballet was just getting-- you talk about deliberate conversations. My wife came over one day and I'm like, "I've fucking had it. I'm done. I'm sick of it." Going 40 minutes for two miles is just too much.
Pedro 00:46:31.870 Yeah, we try not to drive if we can-- yeah, absolutely. Unless we absolutely have to. It feels like wasted time.
Stuart 00:46:41.396 Exactly. And it's stressful driving and just sitting in your car. Driving and actually moving somewhere is-- you don't feel the same level of stress as just sitting on a freeway with tens of thousands of other people.
Pedro 00:46:54.607 Yeah. Although one thing I do miss about commuting and driving is that's the time I use to call my friends and a lot of my family. And just this last week, I went from here over to Fremont during a busy time. It was during rush hour, so it was like an hour that way.
Stuart 00:47:15.274 Four and a half hours--
Pedro 00:47:16.233 An hour and a half back. Yeah.
Stuart 00:47:18.081 --to go the 10 miles.
Pedro 00:47:20.291 Yeah, exactly. I could throw a paper plane over to where I was going. But I was able to catch up with all my friends and had good conversations because I wasn't moving that fast and I had time. So that's the one thing I do miss about not commuting. Even though, again, BBG, Balanced Business Group, is a remote-first company, and my commute is down my flight of stairs to my desk here. I don't have as much time to call my friends and catch up.
Stuart 00:47:51.544 Well, you can always swap out the commute for a walk. It's a [building?] game. You don't get the marine layer as bad there, so. I've tried to at least do one walking meeting just to get outside and out of the desk. But sometimes you do need your screen share and all that stuff. But I don't know, we just got to-- again, we got to be deliberate about it. Pedro, what's next for Balanced Business Group? What's next for you and the family? Have you got acquisition plans or something this year?
Pedro 00:48:26.608 Nothing planned, but definitely selectively looking. Would love to grow both ways, whether it be organically, bringing on new clients-- which we're well positioned to bring on new clients. And again, we're focused entirely on the wine industry and boutique wineries that are doing less than 200 cases a year. And so there's lots of demand in our space, and I haven't had the time this past year to really hustle and try to find new clients. And so that's one of the things that's on my agenda, is getting out to more conferences, really getting into the industry more to find more clients and more reference points. But just given the experience I've been able to get to this point in my career-- Balanced Business Group, BBG, was my 10th acquisition that I've led. So I will definitely look at additional acquisitions that fit our criteria, which is outsourced accounting and bookkeeping. We don't do income taxes for wineries. And given a cursory glance, there are plenty of folks who could be good acquisition targets for us. We'd be a good home for folks. One of the things that drew me into the industry was seeing the trends of accountants aging out and not enough new accountants coming into the industry. Huge problem.
Stuart 00:49:55.124 Yeah. Huge problem.
Pedro 00:49:56.986 Yeah, so that was-- I knew sort of in the back of my head that there'd be the chance to add other businesses to BBG and grow that way also.
Stuart 00:50:10.158 We're up on time. There's plenty of topics here. I love the car story. I love talking about acquisition retention problem. I love talking about wine too. We didn't even barely get into-- my knowledge is a bit shy other than I can easily give to you a virtual tour of Willamette or [crosstalk]--
Pedro 00:50:32.316 Oh, nice. Yeah, my knowledge and my palate over the past year have grown exponentially.
Stuart 00:50:39.618 Good. Good. There you go. There's a fringe benefit without paying tax on it. There's even an accounting joke for you thrown into the end.
Pedro 00:50:47.379 Yeah.
Stuart 00:50:48.608 Hey, Pedro, this has been great. I really appreciate your time. And as always, if there's anything that we can do at Karbon to help you guys, we'd be more than happy to do so.
Pedro 00:50:58.210 I appreciate you having me on. Really enjoyed this experience. And yeah, I'm working with the team, and hopefully we'll have you guys in place and implemented before Thanksgiving. That's my goal, and I'm putting it out in the world here on the podcast to make it happen.
Stuart 00:51:12.780 There you go. We'll manifest it for you.
Pedro 00:51:15.852 Yeah. All right. I appreciate it.
Stuart 00:51:17.999 [crosstalk]. Thank you. Cheers.
Pedro 00:51:19.757 Yep. Thank you.
Stuart 00:51:26.278 [music] Thanks for listening to this episode. If you found this discussion interesting, fun, you'll find lots more to help you run a successful accounting firm at Karbon Magazine. There are more than a thousand free resources there, including guides, articles, templates, webinars and more. Just head to Karbonhq.com/resources. I'd also love it if you could leave us a five-star review wherever you listen to this podcast. Let us know you like this session and we'll be able to keep bringing you more guests for you to learn from and get inspired by. Thanks for joining and see you on the next episode of the Accounting Leaders Podcast.