It’s nice to have a job that gets you excited to wake up in the morning. But what about one that gets you excited to field an emergency call at 9:30 PM to repair a flooded basement, and then to stay up until 2 AM managing the damage? That’s the commitment required to start a company, and as this interview demonstrates, it’s paid off for the founder of Bedrock Restoration, Dan Oppedisano.
I met Dan over a decade ago, when he made the brilliant decision to marry my cousin, Pilar. As you will soon see, they work really well as a team.
Dan already had an impressive and varied resume—as a Wharton MBA with stints in media finance at the National Football League and as a McKinsey consultant—when he decided to found his own company, Bedrock Restoration, which repairs damage from water, fire, smoke, and mold in both residential and commercial properties. In under three years he has scaled it from two employees (one of whom was Dan) to twenty today. And he doesn’t plan to stop there. But what is really interesting is how Dan went from being an independent sponsor searching for an existing business to buy, to deciding to pursue a more grassroots level of entrepreneurship by starting his own firm.
Dan’s focus crystallized during his time at McKinsey, where he found he enjoyed assignments in blue-collar environments. He began asking to be placed on any projects where he could wear steel-toe boots to work. He had a talent for translating the white-collar-speak of the consulting world into terms that people in steel mills, chemical plants, and gold mines understood, and soon gained a reputation around McKinsey as a guy to bring into such projects.
But Dan eventually wanted to go out on his own, finally settling on the building restoration and remediation space. It checked a lot of boxes for him. It was definitely blue collar. And being a frequently essential service for building owners and managers, demand for it was likely to hold up well across the business cycle. While some might not have found it as romantic as, say, a nanotech pharmaceutical startup or an AI-powered reputation management consultancy, Dan was tuned into a philosophy espoused by Amazon founder Jeff Bezos, who once said that instead of looking for what is changing in the next ten years, he looks for what isn’t changing. That is where opportunities to create lasting value lie.
Having chosen the industry, the next question Dan faced was whether to acquire an independent business or buy a franchise. Using Google, he identified 100 prospect firms to contact, and met with two of them. He walked facilities, learning more about the industry while forming and validating hypotheses on opportunities for value creation. He also looked into franchising opportunities, and had finally decided to acquire a franchise of a major national brand when fate intervened.
It happened at a dinner with Pilar, who was set to co-sign his SBA loan for purchasing the franchise. She had been paying close attention to Dan during his search, and had an idea to offer. She reminded Dan of how often he identified practices that could be improved if he had control. That meant there were opportunities to change things from the inside, sure, but that would require time and effort that he could otherwise spend building something entirely his own. It led Dan to an unexpected insight, that the business he really wanted and had envisioned didn’t yet exist. Bedrock Restoration was born.
Dan describes how phenomenal it felt to field that very first phone call from a potential customer at 9:30 pm, a feeling that was later echoed when he received the check for the job. Now, instead of a franchise, he owns 100% of his company, with full autonomy and control over operations and brand. There are no corporate headquarters, LPs, or investor committees to answer to. And as Dan continues to scale he has the potential to use his firm as a platform for acquisitions.
Dan definitely found the right path for himself. While it may not be right for everyone, here are a few widely applicable takeaways from his experience.
Lessons for Building a Business from Scratch
- The Benefits of Early Specialization: Dan discovered the environment he enjoyed working in at McKinsey, and ran with it. It doesn’t always happen that quickly, which is fine, but it did make all of Dan’s subsequent due diligence more focused and meaningful. The less specialized you are, the more you will have to reset with each new opportunity.
- Calculated Risk Requires Deep Industry Knowledge: The decision to build rather than acquire necessarily brings extra risk. To mitigate it, you have to be deeply familiar with the industry and the different types of firms that make it up. From a strictly financial standpoint, the buy-or-build decision is one of either paying a multiple for someone’s existing earnings, or investing the capital to create those earnings yourself. Dan studied his way into a perspective from which he could compare those two alternatives thoroughly and accurately.
- The Three-Statement Model is the Lingua Franca of Business: The more I listen to success stories like Dan’s, the more I am convinced that internalizing the three-statement model, and in particular how its components flow into one another, will optimize your ability to discern opportunities in whatever business and industry setting you are drawn to. It will also allow you to think faster and influence and persuade people not only in finance departments, but in boardrooms, investor committees, and C-suites anywhere in the world. (video: The Financial Statements Explained in 60 Seconds)
Dan is just getting started with Bedrock Restoration, and I anticipate more opportunities to share what he is doing with the ASM community. In the meantime, I would encourage everyone who is trying to find their business focus to ask themselves two questions:
- What are you naturally inclined to do?
- How does that narrow your industry choice?
In terms of starting a business, the lesson is this: If you know the industry well enough, you can evaluate if it’s better to start a business yourself or pay a multiple of earnings to buy one. In most cases, starting a business carries far more risk, which means you have to understand the industry extremely well. If you do, you will maximize your chance of success regardless of the path you choose.
Finally, passion doesn’t always fall on you fully formed. It grows along with knowledge. Dan’s early career led him to his industry of choice. But all the while, his knowledge base and passion were expanding. That passion now drives his leadership, but it took years of learning and exposure to develop. There’s no need to feel rushed.