The flip side is that the business could look bad on paper today, but you believe in the individual who’s running the company, he says. The right deal with the right incentives and support could be worth it.
It’s all about finding a balance between the people running the business and the culture tied to it, with how something looks on paper and what you find out in due diligence.
Synergies or economies of scale are significant, but they are not everything.
“It’s also very important to understand who you’re getting yourself in business with and how that fit is going to be from a long-term perspective,” Halpern says.
Tipping points
Pineapple Payments continues to work through cultural nuances, but Halpern says the business already homes in on culture more during the due diligence period.
Sometimes the smallest things can pay off because they are, again, hot button issues. For instance, every time Halpern called an operator that Pineapple Payments was considering buying, he answered the phone with, “Hey, what’s up dude?”
“I’m thinking to myself, ‘Why?’” Halpern says. “Not that I cared, I’m just thinking, ‘Why is he saying, ‘What’s up, dude’ every time?”
After the deal closed, he learned that the operator wanted to make sure all their conversations were normal and real. It was a test for him.
“At the end of the day, that was something important, that he could act himself, be himself and that we would think about that in the same way and be OK with that, because not everybody would,” he says.
That’s been one of Pineapple Payments most successful acquisitions thus far, and it’s an example of a nonbusiness cultural component that was important to him as the owner, Halpern says.
In a few other cases, the sales engine wasn’t able to ramp up as quickly as Pineapple Payments would have liked, but Halpern is still confident that, in the long term, they will be wins.
“I feel very good about the nine transactions that we’ve done,” he says. “Every one has its own little nuance to it, but when they come together as a whole, we have a very good team.”
Takeaways:
- Cultural fit can make or break a deal.
- When negotiating, look for the hot-button issue.
- Look beyond what’s on paper to the people running things.
The file:
Name: Jon Halpern
Title: Co-founder and president
Company: Pineapple Payments
Born: Pittsburgh
Education: Business degree from The George Washington University
What was your first job, and what did you learn from it? My first job was a car wash and detail business I started at 15. I played golf growing up and was lucky enough that my parents were members at a club here in Pittsburgh. I convinced the GM to allow us to wash and detail cars for members. I would show up at 6 or 7 in the morning, prior to people teeing off. Sitting there in a golf cart, I would flag people down and ask, ‘Do you want your car washed or detailed?’
I took some nos, got some yeses, and a couple of us would work 10-, 12-hour days and do 10 to 20 cars, depending on the day. I learned about the importance of hard work and building relationships.
What’s the best business advice you’ve ever received? Focus on where you’re spending your time. Is it creating and adding value for the business?
Where might people find you on the weekend? During non-COVID times, probably on the golf course. Some weekends, I’m involved with a nonprofit, Social Venture Partners Pittsburgh, where I help out other nonprofits in the community. I also might be going for a run or working out.
What’s your handicap in golf? I haven’t looked in the past few months, but it’s around five.
