This week's episode of Automation Unpluggedour guest is Dan Woody, President of ResTech Systems.

About Dan Woody:

Dan began his journey in the Home Technology Industry in 1991, following his service in the US Navy, which he joined through the Sea College tuition program. Along with three entrepreneurial friends from elementary school, Dan co-founded a wireless home security business, Appollo Security Co. As the company’s offerings expanded to include comprehensive home and business technology systems, they rebranded as Appollo Systems.

Under Dan’s leadership, the company grew to over 100 team members and surpassed $15M in revenue, thriving until the recession of 2008-2011 significantly impacted the industry. In 2012, the business was restructured, and with his partners retiring, Dan launched a new entity, ResTech Systems. Today, ResTech Systems is a team of 15, delivering luxury-level home and business technology solutions.

During this episode we cover:

• Dan’s career journey from serving as an air crew member in the Navy to founding ResTech Systems in 2012.
• Dan’s economic forecast for the year ahead and tips for navigating a slowdown.
• Dan’s love for speed including power sleds and muscle cars.

SEE ALSO: Show #276: SEO Essentials: Boosting Your CI Business's Online Visibility with Jordan Littman

Transcript

Ron:

Dan Woody. Hello, sir. Good to see you. Thanks for joining me on Automation Unplugged.

Dan:

Yeah. Good to be seen. Thank you for having me. Look forward to it.

Ron:

So Dan, you are president at Restech Systems based there in Plymouth, Minnesota. Are you coming to us from your office there? Do you work out of a home office? Where are you?

Dan:

I am coming to you from my office. I happen to be in my office. So we're one on one with each other with no disruptions.

Ron:

Love it. Tell us a little bit about Restech Systems. What type of work do you guys do and where do you do that work?

Dan:

Very good. We're a full home and business technology integrator. And it encompasses a lot of things from the basics wiring in a home infrastructure, cabling. Yes, we do TVs and speakers like everybody else does, but primarily we're a boutique. Type of organization with 15 employees that, that we're able to work on custom projects that are specifically designed around the client's electronic lifestyle and how they live. So it's everything to do with the lighting in the homes, everything to do with the comfort and environment of the home with shading and thermostat control. And yes, it's for the entertaining aspect of the home and filling the spaces properly with music and lighting and the vibe that feels good. Enterprise grade networks are a backbone of what we do. Cause nothing works in a smart home, if you will, If we don't have a good network and a backbone. So those are all part of what we provide along with, the security aspect through surveillance and security systems to protect the home and family along with the green initiative. We install solar, we install battery backup systems that run the house. So we're becoming greener and greener with how we're harvesting energy, how we're just doing the distribution of energy throughout the house and then based on lighting and shades really reduce our carbon footprint. So for the most part, we're all encompassing everything to do with electronic lifestyle is what we're providing. And we're primarily working on the west side of town here, primarily around Lake Minnetonka. Where we're at the high, as far as the clients, our particular group of clients, the high net worth clients that we're working with are going to be on the west side of town here, primarily. We also do central Minnesota projects that are for second and third homes for our clients that have lake homes that can be as big as their home here in the cities, but they're, a couple of two, three hours away. Those are primarily our areas in Minnesota that we're working. And we also do out state work as well in Wisconsin and other second, third homes that people might have, down in Florida or down in Texas or New Mexico, Arizona, we have a variety of clients of ours that have second and third homes. So we'll travel wherever we need to, but primarily here in the Minneapolis, St. Paul area, along with central Minnesota, the lakes area, if you will, are where we're doing majority of our business.

Ron:

Love it. Are you from that part of the world, Dan?

Dan:

I am. I was born and raised here in Minnesota. So if you like Four Seasons, this is the place. If you like it 78 and sunny all the time, you might need to go to San Diego. Probably your best place.

Ron:

Oh, I say you could have that part of the year here in Florida but...

Dan:

I think that's up until April. And I think that sometime after November in your place. So it's one of those kinds of things that been here, my whole life, born and raised here, feel blessed to have four seasons, believe it or not and...

Ron:

Let's be honest though, your summer season is pretty brief. But I lived in Minneapolis for I, I think you and I have talked about this in the past, I started my career out of Lutron and they put me up in Minneapolis.

Dan:

Yes.

Ron:

And and so I got my taste of the Northern lifestyle and it's. It's a very short, but active summer season. I can say I've never seen a local population embrace and enjoy their summer so much as the folks in Minnesota or really, Minnesota and Wisconsin, that whole area.

Dan:

And that's true. It's a very true story. So our official summer starts are July 4th. I'm going to say it out loud. So something called Memorial Day is raining, and it's right around Mother's Day, and there's really not much happening besides rain and uncertain weather. So we skip that first holiday and we jump right into July 4th. And then we run July 4th until Labor Day. And we've already pulled out my dock, my lift, my boats are, my pontoons are already in storage. And that's what happens here. Just what you said in a brief little stint of time, but we like to put 10 pounds of stuff in a five pound bag. And that's how we do it here.

Ron:

Now you were telling me about some of your hobbies and some of these hobbies are clearly Minnesota hobbies. One of these hobbies, I'll put it out there you were telling me just before we started recording that you... And I haven't seen a picture of this, so you'll have to give, supply me a picture and I can, my team will add it to the post show notes here, but you race muscle sleds from the 1970s. They're not modern muscle sleds, and I'm not sure what most people listening even know what a muscle sled is. So please do tell, but you race them not on snow. That would be too normal. You race them on ice. Just for most of the folks tuned in, have no idea what we're talking about.

Dan:

Yeah. Very good. Well, I'll explain. So, you know, with the four seasons we have here, part of this season is cold and frozen tundra here, okay? Some people lay ice fish, they go drill a hole in the ice, they have perfectly good lake, they drive out on it and drill a hole in it and stick a line down and try to catch fish versus being in a boat, you're going to do it again in a fish house. I don't do much of that. So in the winter time, I'm an avid snowmobiler. And so we recreational wise, we put on a couple thousand miles a year with our new sleds that are 22s, 23s, 24s that are like a Cadillac CTSB. There are 270 horse power, they're turbocharged and they ride like a Cadillac. That's one version. So once we get. We didn't have any snow here last year, so we're going to move that to the side and hope that we have more snow this year. But when we weren't putting miles on our new sleds and covering the country, upper midwest, on the sleds, we turn to the next best option, which is ice racing on snowmobiles. We put them on a shaved track on a lake, so they're flat. Because we're going to be going from zero to hero in, three seconds. And with that, we have to have a flat, smooth surface. Otherwise, we could run into a crash. to trouble getting out of control with too much bumps in the ice or the track surface. So part of what I do is this muscle sleds you referred to. So back in the, 60s and 70s, we had this, I was just born in 69. So it isn't like I lived in that era, but that's when the muscle car era from GM and Ford and Dodge, and all had these Camaros and Chevelles and Mustangs and darts and Hemi Cudas and all these cool muscle cars from the 60s and 70s. So that's where, the terminology comes from is the muscle car area, muscle car era. Now we're dealing with a muscle sled era. So back in the mid seventies is when snowmobile racing from Yamaha, Polaris, Skidoo, Articat, were all these factory sponsored hot rod sleds that were really light and had a horsepower to weight ratio that was, 35%. So there could have been a hundred horse motor in a 270 pound body. If you will. And so that horsepower to weight ratio has a tremendous amount of acceleration and fun associated with it. So we do the same thing with these sleds. So I have a Mercury Snow Twister, a 440. I got a 440 SRX Yamaha 77, and I got a 77 Blizzard 440. And those were considered the three top muscle sleds of that era. And I have three of those that we race competitively. They're all done in from zero to 500 feet or from zero to 660 feet. And they'll do a hundred miles an hour. Zero to a hundred and 500 feet. And for anybody that's been on something older like that is screaming and you're hanging on and it's a blast. I love the endorphins.

Ron:

It's pure fun.

Dan:

I mean, no, I get excited. Sorry. You know, I, I love the business we do. I really do. And it gets me excited, but there's nothing like drag racing in my world. Whether it be on water with a fast boat or whether it be on a drag strip in a car or on a ice track on a sled. That's one of my, one of my things that really get me going.

Ron:

So you mentioned it. So now I'm going to put it on screen here because you don't just raced on ice and on snow. You also race. You race you drag race on I don't know... it's not a road. It's a racetrack. You drag race on racetracks.

Dan:

We do and it's it's called a quarter mile and it's 1320 feet and so we're dead stop and it's about the kind of reaction time when the lights are coming down, when you hit the button to go how close to perfect, which is zero, zero, zero, which means the green light came on exactly as your tires broke the beam. That's called a perfect light called a trip zips. And so if we can run between a 0. 01, zero and perfect. We're going to be competitive regarding the start because you snooze, you lose. And on this particular case there's a picture of my cousin and I same kind of car is a green 67 Fairlane. Mine's a white 66 Fairlane. But those cars all run, 10 seconds, low tens. At 130 miles an hour and 1, 320 feet from a dead stop. And when you're looking at this particular picture, you're, I'm looking out the window. Both these cars are actually coming down off their initial launch where they were probably six, eight inches higher in the front end than what you're seeing, but what you do is you see blue sky, so you let the button go at rotates and all you're doing is looking at the sky in the clouds. It's a blast. And we ride a wheelie with it and set it down and then, race to the end to try to get there first, but not to go too fast. So people talk about drag racing being so simple, "Hey, just pull up there and the light goes green and you hit the gas." No, that's not the case. There's a lot of a process procedure associated with it and making sure you're consistent of how you're doing your process and procedure like business, like life in general. But once you cut a good light and you're off and running without going red, which means if you went too early. If you went red, it means you lost but to go green something better than zero, zero, zero. And then you have to race down at the end, but then we wheel each other down at the very end at 130 miles an hour to make sure you're, I'm ahead of the guy next to me, but not too far ahead of them because if I go too far ahead of them, I might go faster than what I said I was gonna go, which then causes me to lose. So there's a reaction time component at the very start of it. And then there's a wheeling each other judging at the very top end at wide open throttle, trying to discern 12 inches of distance between the front of his or her car and my car at 130 miles an hour is not such an easy task.

Ron:

You have to explain that I you had me at racing. I understand this is drag racing. So your car pops a pretty cool wheelie and then you go down the strip. Super fast. I heard you say you run sub low tens. You're peaking at about 130 miles an hour.

Dan:

That's right.

Ron:

I, that just sounds very fast.

Dan:

It is. It's fun.

Ron:

But I don't understand the end. You said if you go faster than you said, you were going to go, you could lose.

Dan:

That's correct.

Ron:

Clarify that for me.

Dan:

Yeah, very good. So what we do when we bracket race you're identifying a time that your car is going to run. And it's called your dial in time. And so if I say that my car is going to run a 10 20 and my particular opponent says his car is going to run a 10 50, he's got a little slower car than I am, I do, and that's the idea of bracket racing. You can take a car that's faster than a car than another competitor and have them start at a delayed time. So you end up with the finish line at the same time. Okay, so I can have, I can start out sooner, and then I'm going to come catch you. But at the very end, we want to make sure I get to the finish line first without getting there too far ahead, because this distance in between means that you could go too fast. And when you go too fast, you something called you broke out. You went too fast. You broke out, you ran up a 10 19 versus a 10 20. And if the other guy ran a 1050 and ran a 1050 on his 1050 dial in number, he would win. Even though I got to the finish line first, I got there first, but I went too fast. I said, I was going to run a 10 20, but I ran a 10 19. And which means I went too fast and I lose. So it is not tens of seconds or hundreds, it's thousands of a second between winning and losing sometimes. So it's knowing your car, having a consistent car that runs the number each time or very close to it. And then we take the factor of weather into it. So I have a weather station that tells me wind speed, wind direction, humidity, dew point, corrected altitude barometer, grams of water in the air, a whole bunch of different factors that cause the air to be either better.

Ron:

Yeah. Different densities in the air. That's going to affect your friction, which will affect your speeds.

Dan:

It does and it affects the fuel air.

Ron:

And your fuel burn rate.

Dan:

It does. It's the fuel atomization. So when it's full of humidity in the air, that means there's a bunch of water in the air. So when there's a bunch of water, that means we can't add fuel. And so fuel makes something go faster. But if there's no room for fuel in the fuel air mixture because water is taking that place, then we have to lean the car out, meaning we have to... We have to reduce the amount of fuel with it. Increase the amount of air that goes into it to get a ratio that's happy with the atmospheric pressure and what the weather is. I know it's a lot.

Ron:

No, that's amazing. I bet this is fast. I had no idea. That's how drag racing worked.

Dan:

Yeah. And I'll be racing competitively next year on an NHRA circuit. So you'll see me on TV, FS One, FS Two, Dan Woody out of Osseo Minnesota in a 67 Fairlane, and I'll be rolling to the lane. And I'll be racing super stock next year at an NHRA circuit level.

Ron:

I think congratulations are due. What had to be true for you to be invited to, to be on TV and to have that status for racing?

Dan:

Just, by A, having a car that can fit within, one of 16 different classes in NHRA. And the class that I have for my blue car is called super stock. And so it starts out at stock, super stock, super gas, super comp. It goes all the way up the ladder until you're at John Force. You're at, a top fuel funny car, or you're at a top fuel dragster. So that's where it starts on stock and ends up at top fuel category. So what happens to me is the fact that I've been racing for a number of years and I've advanced myself into super stock, I have a professional super stock driver's license, so now I can go compete at these national tracks and so when you're at a national track at a national event you're on TV. Cause it's real deal. And you're, and it's going to be the best of the best in their particular division around the country that gets invited to these things. And that's that's how we, that's how we get invited. So by, by being there by having a qualified car by having a license, by getting grade points, some grade points are about being at other national events that you've raced in that give you points so you can actually race in a national event. So you can't come off of haven't drag raced since you've been in high school and somehow you get a car. They're not going to allow you to run at a national event unless you're a proven drag racer, and you've gone to a variety of events that allow you to qualify to be able to participate.

Ron:

I know this is very much in the weeds, but, and I'm asking this question only because I'm very curious.

Dan:

Sure. Shoot. Yeah.

Ron:

I think I've watched TV and I've seen drag racing before and I always had the, and maybe I've seen the funny cars, right? So the big wheels, the long cars, I thought that I always understood that they would turn the lights. You were allowed to go down the track and the first one to finish was the winner. And is that true sometimes in some types of races and that's different than the type of race you're describing where it's defining the speed of your car in advance, and then proving that you're hitting the speed of your car at the end of the race, that sounds like a different type of race.

Dan:

It is. And it's based upon NHRA class, what kind of class you're in. So in stock and super stock, the stuff that I run, it's bracket racing, which you will declare what you're going to run when you deal with the top, the pro events, which would be pro stock. It would be top fuel, funny car and top fuel dragster. Those are first to the finish line. Those cars are running 330 miles an hour, 3. 5 times faster than what I'm running in that same length of time. So those are the professional classes. Pro stock, funny car, and top fuel dragster that once it's about who gets to the finish line first and there's no penalty or no disqualification for running too fast. So you have seen that correctly, and that's going to be on the professional categories of professional drivers that are at the top of NHRA.

Ron:

I can appreciate the challenge of you knowing your vehicle so well with you probably have calculated this, but there's hundreds, if not thousands of things that need to go right. Every single race. For you to nail the exact time that you predicted. And that has to be in itself incredibly hard and frustrating and exciting to try to achieve

Dan:

All at the same time. So yeah, so just know that there's days that when other fellow racers say to you, Hey, it's your day, Hey, it's your weekend, Hey, it's your race means that all those things are going correctly. That means that the weather is cooperating. Myself as a driver are cutting really good reaction time lights, something at trip zips were a little bit higher than that, that without going a thousandth of a second too fast. And it's a red light and you lose. So it means that your react, your car is running good. The weather is good. You're driving well and what's happening. You get a little bit of luck. Luck has to come along with some of this, that somebody broke at the starting line, somebody missed a gear, somebody spun a tire, something happened that their day wasn't perfect. But allowed your day to be your weekend, to be, your time to shine. So all those factors have to come into play, but. Just know that the good Lord always has something in my particular case because he calms me and allows me to do what he's given me the capability to do and that is a huge factor and so he's on my side. And then when the car is running good i'm cutting good lights and it just seems like this thing is happening and it does, you end up in the winner's circle. You pick up a few thousand dollars for the time that you spent, but just know in our particular, this is more of a love of the sport. This, you will not become wealthy drag racing at a private tier level, i.e. Dan Woody. ResTech is my sponsor along with myself. That is not Napa. That is not Ford Motorsports. That is not Hoosier Tires or Goodyear Tires that have millions of dollars with the budget to do this. So it is a love of the sport. It's a love of the camaraderie with fellow drag racers that love to do this. And the majority of the people that I run with are in their late sixties, seventies, and I'm, I'm 20 years younger than these guys, but it's the fact that to keep the sport going, it's a love of it. It's like a congregation in church. So if it goes from gray hairs to blue hairs, pretty soon there'll be no hairs. And so you're out, right? So mess around. Pretty soon you won't be around. It's one of those things, and so it's, you got to keep the sport young. And so now we have this 30 year old group that's coming in now that were running the Subarus and the turbo cars and all this loud muffler stuff that I didn't grow up with so much, but others have that they're now getting into the sport, in the sport and that's wonderful. So we can keep it alive. Because otherwise it's like anything, if you don't keep it going and introduce a young person to the sport it's going to die. And so it just, it is what it is, but that's what it, that's what I can say.

Ron:

I, I love it. Thank you for sharing your passion for racing. With the audience and of course with me I'm a super nerd for this stuff So I could keep going but I know that the audience does want to learn about your business a little bit and hear some things. Maybe if we could start, Dan, just take us back in time. How did you get into the this industry take us back as far as you're comfortable.

Dan:

Yeah, no worries. Oh man, so I I graduated high school in 88, and from that I didn't get a scholarship for hockey or football or baseball. I played all those sports, but, it, it took the elite of the elite to go on to the next level. And starting that I didn't get any scholarships. I started working at 12 years old I had my paper route, and then I, after my paper, when I started making donuts and rode my moped time to make the boat donuts is almost like the Dunkin Donuts commercial. And so it was one of these things that we didn't come from a family of money or any of that. So I started working early in life. So what happened was when I didn't get any scholarships for any sports I played. I looked at the military to go into the Navy on a C college program. So I flew out to aircraft carriers, dropped off mail, dropped off people. I wasn't a pilot, but I was an air crew member. I was involved with starting the plane going through all its procedures. And basically I was a glorified stewardess today, if you will from, I'm not bringing your pretzels and and sodas I'm telling you all, you're going to sit backwards in this plane and I'm going to strap you up and we're going to go from zero to 140 knots in 2. 2 seconds off an aircraft carrier. And to get back to land, and that's going to be the best ride you're going to have this year. So...

Ron:

That was where your love of speed came from, or did you have that love of speed before that?

Dan:

It was just amplified. I will tell you that I love speed, but being on an aircraft carrier and taking a catapult shot, like a rubber binder from zero to 140 knots, it's like 2.2 miles an hour. It's 1.25 miles an hour. It's, it's crazy. We're going 150 miles an hour and two seconds. I'll tell you, that's something. So when you asked me how to get started so since I didn't have any things growing up and I had to start working, that was one, one avenue I had. So it gave me some money for college when I got out. Once I got out, so I get out of June of 90 I get together with three of my elementary school friends that were business minded. And we sat at Applebee's one day and wanted to figure out what we could do in business together that would make sense. Part of our brainstorming came up with wireless security systems. It's like what? Wireless security systems? That's for the really wealthy people. Nobody has security systems in our neighborhood, and we lived in a, middle class neighborhood and it was only the wealthy people we thought would have a Honeywell sign, in their front yard because they had a security system. Sure enough, we start looking into this and before you know it, we started a company called Apollo Security Company that specialized in wireless lick and stick home security systems. Now these were transmitters the size of a match box car at the time, which were the smallest in the industry. It was going on. And so we started doing that. And that's what we did. We started with my mom, my dad, my aunt, my uncle, you're going to go through your fingers and toes like you do with any business getting started, making a list of prospects that you wanted to go see. And so that's how we started the business with three of us. We quickly grew that up to 15 employees. And then one day we realized that builders had yard signs that were in their, on their properties, but the house wasn't complete yet, but it had a security system side. So we go look in the windows and, Oh man, these guys are working with builders. Oh, geez. We should start working with builders and then our journey started. And with that we started with one builder and then a second builder and a third builder. And before you know it, we had a half a dozen builders doing security systems for them. And then one day a person asked us, do you do intercoms? We looked at each other. Sure. Let's find out about intercoms. So we quickly learned how to do intercoms. And then, hey, do you do central vacuums? Sure. And then we learned how to do central vacuum systems. And then it progressed from there. So that's how we got started early on. 1991 was wireless security. And then just getting started with the builders at that point. So that was our very beginning.

Ron:

Where did that company, where'd you take Apollo?

Dan:

So we took Apollo to the point where we decided to make a name change on the entity to Apollo Systems. Cause we were doing so much more work than just security systems. So we then changed the name to Apollo Systems. We grew that company to 103 employees. Doing a little over $15 million a year annually both commercially and residentially. We had our pretty robust, we were the top game in town. We bought a company called Tech Home Steve Raitt, Bonnie Raitt's brother had that business along with the guys from CEDIA that started it out of Chicago. And we became the largest game in town that was doing what we were doing primarily luxury residential. And then the commercial stuff we were doing was schools like colleges, campuses, for more of that commercial voice and data back in those days is what we were doing. Just, there wasn't a bunch of audio short of some paging that went along with the phone system and things like that. So it was a run, we ran for a number of years that way. I would tell you 15 years, we ran at that clip. And then we had the wonderful recession of 2008 through 2011. And that changed the world.

Ron:

Changed things up a bit.

Dan:

Like, goodness, goodness. Yeah. It's like the new opportunity bell shut off. Let me just give you a couple of turns and it was off. And so what did we do? You have to write, size the business based upon what's coming in for opportunities. And so we went from 103 people down to 26, a hundred and three to 26.

Ron:

Now just out of curiousity, Dan, that business in 08, I mean, 08 was severe for all. Now for me, I was launching my business in 08. So that was terrible and wonderful all at once. Cause I, I had to learn to survive in that normal. But for many businesses, obviously going into 08 was fantastically challenging, but if you were a security business, did you have a pipeline of recurring contracts? Did that change some of the math for you? Did that make things a little easier?

Dan:

It did. And so we built, based on the RMR model, the recurring revenue model we had just under 5,000 accounts. And so when you built from my mom and dad, one, my aunt and uncle, two, three. So we built it up to just under 5,000 accounts that produced, a hundred thousand dollars a month in revenue. So when you have that, that allowed us to get through the lows, the peaks and the valleys that were coming with cashflow. Because we know that cash is king, this old cliche. It is. And cashflow is super important to keep a business running. So our recurring monthly revenue business was the lifeblood. Lifeblood of keeping us going is we were finishing projects and then cutting and laying off at the same time to get down. So we had the proper staff to do the work that we were contracted to do, but not to have too many people on the sidelines that we couldn't afford sitting there. Major deal was having the recurring revenue portion to help us. If we didn't have that RMR coming in, I'm not sure how we would have survived, to be honest with you because lines of credit at that time were very tight because banking and underwriting knew that we can't extend an olive branch to this business that has cut 75 percent of their working staff over the last year due to where we are in the economy. Without that we would've been in tough shape. So it was finish, collect your money, get onto your next job if there's one there, or continue to cut and try to find a way to survive. And that's what we did.

Ron:

Did you continue through with Apollo Systems and or what was the outcome of that whole 08 to 2012 economic pivot.

Dan:

Yeah. Yes. There was two of us standing at the very end. And so the two guys that started the business, myself and Dave Willis were the last one standing. And so with that I stayed all the way through. We basically sold the monitoring accounts to a electrical cooperative here in, in Minnesota, which allowed him to retire. And an investor we had that helped with that funding of those accounts where those two could exit. and where I continued on. I wasn't done to be complete with this business. I, we were young enough and love the business that we're in. We've been pioneering it in this market since wireless security system days. And I wasn't going to throw in the towel. So what we did was, is I was basically my portion of this is I got the whole business. I got all the employees. I got all the inventory. I got all the accounts receivable. I got everything that was associated with it. Cause I was going to continue. And so we did. And I had a team of 10 that came over with me that were with me about 20 years over at Apollo. And they were fully vetted with me and they were true team members that wanted to continue and they're still here today. And so that's been another 12 years since that time is taking place since 2012. We've come the gamut. And so it's one of these things, it's most all things are possible. Let's just say that as a baseline statement. If you're willing to do the work, if you're willing to do the sacrifice, if you're willing to strap, tighten your boots up, if you're willing to go through SEAL team training again, then those that do the work are rewarded. But it's about, work first, play second, this little cliche of geez, that's just obvious. It's buy low, sell high. Okay. No, but work first, play second. And so that is our model here. It's a model with my kids, with their schoolwork or anything, let's get the work done and then we can play. There's no way we can ever get anything done if we play first and then decide to work. So where we think some of our younger people are at today, we'd like to get them turned around with doing the heavy lifting first. So they have the capability to enjoy the fruits of their labor and what they did. So that is, you know, my military background gives me that drive. How I'm built gives me that drive. Starting working at age 12 gives me that drive. And so you know, part of that, I just try to lead as a coach and as somebody that's been there, done that I'm never going to ask you to do something that I wouldn't do myself. It's a difference of the tail wagging the dog or the tail wagging the dog. Is it dog wagging the tail or is it tail wagging the dog? One way is effortlessly. The other way is super painful. And so, we come from that mentality. And I'm very blessed that I got a good team that sees what we're doing and is steadying the course. And we're just trying to do it better and better on a daily, weekly basis. Cause that's what we should be doing is progressing and learning and apply what we've learned. And things like that. So it's how we continue and how we keep it moving. But I got a good team and it's the dedication to our craft. It's a dedication to providing solutions for our discerning clients that deserve it. They've done the work and now they're looking to make sure they can reap that reward for themselves and have some of those finer things and have the electronic lifestyle that they've been working so hard for. And we want to be the company that provides it and supports it.

Ron:

Tell me about your business today. We're in the early fall of 2024. What is what's the state of business like right now? Before we go there, like what's the size of the team or approximately the size of the team today, you've told us where you were in the past.

Dan:

So from where we were in the past, we're at 15 right now, plus a couple other part timers that I have that work for us and other markets if they're up in central Minnesota and they're in Wisconsin. Being part of HGSA, as you know, we are, we have a network of companies nationwide that we can, that are like minded, that we can lean on, should we have out of state work. But I'm 15 plus a couple of part time is where we are today. What's happening today? Well, we've had a slowdown for the last year and a half. Where in 23, we were rocking come January to June. We were ahead of schedule by 25%, which is, you know, a pretty good margin of being ahead of the race and planned. In the playbook, and so what we have planned, here's our plan, we're executing, we're ahead. Come June of last year, all of a sudden, just ah, what's going on with the new projects. And they continue to get delayed was the word, but then we switched the word from delayed to they were on hold. And the word hold is something different. Delay can be a delay a month here, delay a month there but they're going to get back on track. Maybe it was a product shortage cause we had supply chain issues if we all remember back. And you could have delays that way, but something being on hold is what we've been experiencing on our large projects over the last year, year and a half. I will tell you, 18 months it has been the case that these three to four, $3 to 5 million projects, overall home build costs. They were, with inflation and with, they, they don't need a loan per se for that level. They're pulling money from their investments they have or their financial portfolio. So, but their interest rates are still a concern to them. But the biggest part was inflation. I would tell you that the cost of building that three and a half million dollar house now is up a half a million dollars more than it was last year. That would cause the people to hold. And they don't have to move. They've built their wealth where they can withstand the storm and the storm is where the inflation is now rates are up. Of course, the uncertainty about who's in charge of the country comes into play big time. On election year like this, they're going to hold until after November and we can see what's going to happen moving into next year or they can determine whether to hold and not built through the winter months that are cold here and have heating costs. And everything efficiency goes way down cause it's cold. There can be two feet of snow on the ground. The wire you're pulling it in the house and the wire's breaking because it's so cold, I mean, these are things that happen in the winter. So people would choose not to go through that pain. And additional expense and they'll just wait till spring. So that's what we've been dealing with now is over this last year and a half is the hold on projects. Again, they're not gone per se. They haven't left us. They're just on hold until some better pricing comes in all the way around on their home build. That's kind of what we're working with, but it's allowed us to then diversify a year and a half ago and start to do more commercial projects that had audio and video associated with them. Not large schools, not large colleges and plant work that has all this low margin cabling. That needs to be done for voice and data and communication. But to more boutiquey stuff. That it's a office warehouse type of basis. And they want all the services that we offer residentially, but they want it in this commercial building. But the services we're providing are very similar. They're just in a 10, 000 square foot commercial building versus a 10, 000 square foot house. Now there's different products that go in there, but it's still a project that encompasses a variety of our technology solutions from Wi Fi and cameras and access control and boardroom presentation and you name it. It all is there. So we've now been diversifying more into the commercial sector that has Our types of technology offerings included in the scope of work. So when...

Ron:

You would not, Dan normally have gone after or pursued that type of work, is that an accurate statement?

Dan:

It is. That's an absolutely accurate statement.

Ron:

How did you know to do that a year and a half ago?

Dan:

It's cyclical, it's like this when residential is up, commercial is down. When commercial is up, residential is down so that kind of sign wave and that wave has been done this way for a number of years. And I've been through four cycles of things going not very well. Wheels coming off of things, economy wise, if you will. And so I've been through four of those cycles and so I wasn't going to miss it this time. We needed to make sure that we could look and there was opportunities that were coming to me from commercial contractors that I personally have relationships with that are now doing things more than just remodeling a bathroom or remodeling a kitchen or doing something that wouldn't have a lot of our technology in it. Now they're redoing vacation resorts. Now they're, they're doing it and working with tax credits and working with developments that need to be apartment complexes and low income housing that need access control, cameras, wifi. Those are all things we do. And so I looked at a couple of those projects and said, "We can do this. There's no reason why we can't." And so we started bidding our first one and see where the pricing lies. And it's a little less than residential. The margin is less than residential. And you have to hold the money. That's the other part that's different than residential. You don't get the progress payments from your clients. So once I figured out how to build some money in for holding costs. Once I figured out some better ways to bring some monies down, but still maintain margin, we were able then to start doing that type of work. And why, because we needed to fill the gaps in between the residential projects and it became actually familiar. We thought it was unfamiliar, but it's more familiar than you think. Why? Because we're utilizing the same types of technology just in different settings.

Ron:

What are you forecasting as you look into 25 or let's just say post election?

Dan:

Yeah. Survive through 25 is what I'm going to throw up.

Ron:

Through 25 or until 25?

Dan:

Through, through, survive through 25. And so we, we're not here yet, right? So here we sit in September, right? And before you know it, fourth quarter of business is just around the corner. We're in the 24th, today, for crying out loud. So we know here come October 1st, we're in the fourth quarter of the game for 24. So what it's going to be is, is wrapping up your projects you have going. Planting seeds for 25 for the luxury home tours, new projects coming up, and getting a good game plan of how we're going to finish as strong as we can for 24. And that's what's key get your hands on the wheel and take control of your business and take control of your market and what's going on. And what do I see to do is circle the wagons on projects that we've had bid to see where clients are at, to make sure we can see if they're ready to unhold, if you will. Looking ready to release the brakes and so they can start coming our way. So that is what our plan is, is to, is back to see if people are still holding or if they're going to go ahead and start moving in the process. Finding new builders to work with at this time as well. Always, we don't want to run into a situation of who moved my cheese, who moved my cheese? Right? So we don't want to fall into that. We want to fall into the fact of who haven't we spoken with this year that we should, we have time now to go out and shake the trees a little bit. So fourth quarter is gather the stuff you have going on, shake some trees for some new opportunities. The ones that you have plant them, water them. And get ready for what, hopefully, we're going to have a release of the breaks coming. And so I'm trying to gear up right now with adding another salesperson, adding another installer. So when these things happen, we're not sitting here with one hand behind our back wondering, Hey, what happened? How come all this work is here right now? Where'd this come from? We gotta be smarter than that. And so our job is to be aware, get the blinders off get back focused about work turning back on. So you get ready. Okay? And so make sure your team is trained. How about this? Make sure if there's new areas you're looking to go into, like we did in a commercial that I had to get people up to speed on different things that different product lines that they weren't used to. So this is the time to get geared up, get your team trained, get them conditioned for when this happens. We can pick that ball up, hold onto it, and not drop it. And continue to move forward with it. So it's what we're doing is the things I just said and being prepared for what's next. What's next is what we plant and water to grow and continue on our marketing. No different. What we're doing with One Firefly is trying to get to new segments, new builders, architects, designers, commercial people, our residential clients that are there, and just making sure you're being heard. And so they know who to go to when they're ready. And it's a huge thing. So it's, it is work the problem, continue to work the problem, come up with creative ideas that other people haven't come up with. Don't sit back, cause we're going to roll right over the top of you. And then we're looking to implement more AI. For what we're doing to get the efficiencies down to have the things that we can provide better customer service. We can use AI to through Fathom and through other areas to record meetings and help us understand, help us write proposals better to get the efficiency up because I'd rather, is as we're, as we're training, as we're doing other things to get our staff up to speed, we need some help with the things that take a bunch of human involvement that maybe didn't need... That don't need so much human interaction right now. They do need it to verify before we press the send button. But the fact is to utilize more of the tools that are around us and be smarter, work smarter, not harder. And utilize where it's going before you get passed up.

Ron:

Spoken like a true veteran that's been at this game for a while. This is clearly not your first rodeo and everything you're saying is music to my ears. We are right now we're post CEDIA. CEDIA was last month and actually I guess a number of weeks at this point. And what were any big takeaways from you coming out of that show? Either technologies or vendors or any action in the marketplace that's worth kind of ruminating on.

Dan:

Yeah. So it's what were what was the big takeaways? I would tell you the big takeaways from CEDIA this year were video walls. The affordability of 150, 200 inch walls, you know, for commercial situations, or even for a residential home to have a 110 or 120 inch video wall, that is $50,000. Wasn't even possible three, four years ago where Savant or some other Sony, or somebody comes up with a 200 inch wall, that's a half a million dollars or a million dollars. So what we've seen is trying to bring large panels, video walls, home to have them be...

Ron:

Do you see it replacing the projector and the screen or does it replace the TV or what's the application in your mind?

Dan:

That's good. Good. So it's both. So what happens is ultimately in well lit areas, ideally commercially and stuff, you have to have a flamethrower for a projector to be able to see it in a room that's lit up. Okay. But that's the disadvantage of a projector type of situation, big screen, ambient light, you need to have a lot of horsepower in the projector to overcome the ambient light. If that's the case we can build up a video wall that doesn't give, so much consideration to that because it's got a thousand knit panel, or it's got plenty of backlight to it that, that will take the place of a projector and screen eventually. I believe that's where that's going. And when you have a 85 inch TV, for an example, that most manufacturers have, and now there's this 98 inch version, call it a hundred, right? That used to when Sony came out was a 55 or 60 thousand dollar piece that was a hundred inch set. And they were, for the people that had to have the latest and greatest. Now, a hundred inch panel a couple of months ago was $5, 000. Five grand! I mean, okay. So, what's happening, panels are going to stop at some point. You can't get the yield out of a panel, a single panel. So manufacture wise, slow bolt from China coming over, things get broken and you don't get the yield and we don't get the parts. So the cost continues to be high. We're going to see this with modular panels that are going up to create any size aspect ratio you want in any size that's going to be a more of a viable solution moving forward in the future. That was a big thing. Big takeaways was video walls. The other thing is the operating systems from the control platform. Savant, Control4, Nice, Crestron, what they're trying to do now is get into the fact of, this is a Savant operating system. It's not just Savant. It's the Apple OS. It's the, whatever it might be, it's the operating system. We're trying to coin that. So I'm finding more coining and trying to establish themselves as a whole home operating system, even though it has, multiple flavors to it for the different things we're controlling the baseline, the operating system is Savant, or the operating system is, Control4, Crestron, whatever it might be. So we were seeing and hearing more of that language coming out. And then we were getting into the third takeaway was just more and more of the lighting fixtures. So we've been in lighting control for 30 years, but lighting fixtures we've been into for six, seven years. Actual fixtures themselves. So we're seeing more and more fixtures becoming readily available for different applications that allow us to work along with the interior designers, with the lighting specifiers, and we're lighting specifiers as well. But, interior designers have a have a lot to say about that. And they have more control and influence than they might think. And so we're wanting to snuggle up with them more by having fixtures that they like and will work for the decorative aspect of what they were trying to accomplish. Where we then can come in and provide that fixture where they can be involved on it. We can be involved on it. We know how it's going to respond in the room, the space, and especially with our control system. So we're finding more fixtures that were available for us to introduce to be involved in the conversation more early earlier in the process. So, those are about three takeaways that we gathered from CEDIA this year.

Ron:

Dan, you are on the other side of a pretty big surgery. Just recently. And I'm happy to see that you look well, you sound well. How are you feeling? What did you mind sharing? Kind of what you just went through?

Dan:

No, I don't mind sharing. I am seven weeks post op. I shouldn't be out of my house yet for a couple more weeks yet, is what the doctors tell me. And I've been back to work for three weeks now.

Ron:

No power sled racing in the immediate future.

Dan:

I was denied access to that from my...

Ron:

They locked the shed.

Dan:

They did. They just told me no. And I work pretty good under direction, especially when it comes to those that know. Yes. And so I have been, I can't drag race. So I was off on cars and stuff until the winter. I will be able to race sleds, but I was genetically born with a defective heart valve that I didn't figure out I even had one until I was 49 years old. And so we've been watching it for five years and it progressively got worse and so it was time for me to get this replaced. And so some people are born with a... I had a bicuspid aortic valve and everybody, most people have a tricuspid looks like a Mercedes Benz symbol. Mine was a bi, which was two. And they end up leaking is what they do over time. And so sure enough, mine started to leak which means it's a heart murmur. And I was getting slower and slower on my ... I would get fatigued really easy. I'd get tired. Just out of breath, you knew something wasn't right. And so sure enough, I went in and I got a new valve job. I got some new rings and pistons and I am officially...

Ron:

From the best mechanic in town?

Dan:

Yes, Dr. Amanda Stram, a rock star, and she fixed me up and so gave me an opportunity at Dan Woody 2.0. And so I'm taking that opportunity, making changes. As business owners, we have a lot of stress that goes into everything we do. And keeping 15 people along with 15 families going causes stress when cashflow is down and projects are on hold and you name it. So the one thing I had to get away from is the stress associated with the business is your body produces something called Cortisol and it's a chemical, it's a byproduct of stress that comes out that is a very sticky substance. And once that gets into your body and you got all this Cortisol flying around, it touches onto platelets. And before you know it, you can be clogged up. And five years ago, I was completely clean. Mayo Clinic, three days, executive physical. And five years later, I'm clogged up. And the difference between it was what? COVID stresses in the business, deaths here at my company with people that have passed away. My girlfriend, my mom, a variety of things took place that you wouldn't wish on anybody. But your body will tell you when it's had enough because it starts to fail. And your heart is one of the few organs you have that do not replenish themselves, like your liver. Your liver can rebuild itself. Your lungs can help rebuild themselves by building new tissues and things that are going on. Those kinds of things, your muscles rebuild as they tear it on and rebuild. But your heart does not do that. And so I've just had to learn that we're not invincible. Your body will, even though you say go, your body's going to say whoa, whoa, whoa. And then it shows up in medical conditions. Because if we don't have our health, we have nothing. Zero. You got nothing. If you ain't got your health, you got nothing. I don't care what anybody says. When you're laying there in bed and you can't do anything it just told you that you have nothing because without your health, you can't do anything. I'm learning ways to, to work with that now. And so I don't end up in the same boat.

Ron:

How do you feel?

Dan:

I feel pretty darn good. I'll just tell you that right now. I got a second chance on life. So with that, I no longer fatigued. I have a a pep in my step. And I know that one thing that you really have to take care of your body by proper exercise, eating and rest. There's the last part, rest. Your body needs rest. So if you don't give it any rest, the thing is a jalopy. Okay. It coughs, farts, just squeaks. It doesn't drive right. And that's what happens. And so super, super important to focus on the big rocks and the big rocks are your faith, your family, your health the business comes along with that. And you'll treat people better cause you feel better and I would just say that out loud that that's how am I feeling? I'm feeling pretty good. I'm feeling pretty good about a second chance. And now not to fall into the same work habits and the same stressors that I once was doing cause it affects.

Ron:

Well, that's great advice for everyone listening to really understand what's important and you have to take care of yourself in order for you to take care of others, so.

Dan:

Put your own mask on first before assisting others. We've all heard it.

Ron:

That's amazing. Dan, it's been awesome having you on Automation Unplugged. I want to understand what handles or what directions you would give to those that are listening or watching and how they could get in touch with you or to learn more about your business.

Dan:

Absolutely. So best place is just to head to my website to get a feel of who ResTech Systems is. Just R E S, the word tech, and the word systems, dot com. You can see everything we've done there. You can reach out to me personally on an email. It's Woody, my last name, at ResTechSystems.com to me personally. So you got my website, you got me personally. Phone number wise, you just call my shop. (763)710-5700. And one of those ways you will definitely get in contact with me. Email is probably the easiest. And once you get to know me, you'll have my cell phone and we can talk anytime you want.

Ron:

Dan, thanks for coming on the show. My friend.

Dan:

Appreciate you, Ron. Have a good day.

Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly became the leading marketing firm specializing in the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.

Resources and links from the interview:

• Daniel Woody LinkedIn Profile page
• ResTech LinkedIn profile
• ResTech Projects