Royce Yudkoff:

Welcome to Think Big, Buy Small, a podcast from Harvard Business School about entrepreneurship through acquisition. We’re your hosts, Royce Yudkoff…

Rick Ruback:

…and Rick Ruback.

Royce Yudkoff:

Today, Rick and I have the pleasure of being joined by Adriana Garcia Ceja. She is a successful searcher who has bought and now runs her own business, and we're going to learn a bunch about her journey. Adriana, welcome to Think Big, Buy Small.

Adrianna Garcia Ceja:

Thank you so much. It's such an honor to be here.

Rick Ruback:

It's so great to have you here. We haven't seen you since you left our class a few years ago. Was it a year ago or a few years ago?

Adrianna Garcia Ceja:

It was two years ago, and in that time period I did acquire a business and I also had my first baby.

Royce Yudkoff:

Yeah, talk about expansion.

Adrianna Garcia Ceja:

Life changes.

Rick Ruback:

Congratulations on both, especially the baby.

Adrianna Garcia Ceja:

She's nine months and is lovely.

Rick Ruback:

Does she come to work with you?

Adrianna Garcia Ceja:

Sometimes, yes. I have had meetings with her. Speaking about the business, our team is all women right now, and so I was actually thirteen weeks pregnant when I acquired the business on June 15th, 2023. And at the time, it was only the seller and my investors that knew. And for many reasons, I didn't want to share at that time with the rest of my team. And when I shared, it was just the best news for everyone. And they gave me a baby shower early this year and everybody's super supportive. So, it has been an amazing journey.

Rick Ruback:

That's so wonderful to hear. One of the things we want to talk about is how this career path aligns for women, and how it works as you build your family. So, what a great thing to talk about. But let's talk about your business.

Adrianna Garcia Ceja:

So, we do care management, primarily for older adults. We service the metro Washington, DC area. We grew up in Northern Virginia, been around since 2004, but we have clients and we're actively expanding into Maryland and DC more and more. So, care management – we are the coordinators of care, medical, any transitions that the client might need, complex chronic conditions, we are the quarterbacks of the care of the individuals. So, it's a very important need and it's been very fun learning the business.

Royce Yudkoff:

So, Adriana, just because this business may be unfamiliar to some of our listeners, you're not actually providing the care in this business. You are identifying what kind of care should be happening. And are you engaging the physicians or the caregivers?

Adrianna Garcia Ceja:

Yes. So, care management, you're primarily medical advocates. You're right. We are not providing the care, although we do have licensed workers, meaning we do have RNs, we have occupational therapists. But even within their capacity of a licensed worker, they are not the provider, so to speak. They are going to go with the older adult or the client to their medical appointments. They are going to go assess their house, assess their situation, and be advocates for them along the stage of the journey. Primarily, because of that, we work with a lot of older adults that are very independent, they don't have family nearby. Those are really the cases where we can do a lot of good for those clients.

Royce Yudkoff:

Tell us the name of your company, Adriana.

Adrianna Garcia Ceja:

We're ElderTree Care Management.

Royce Yudkoff:

ElderTree, that's a lovely name. And one more question from me. Rick, I'm sure you have a few questions as well, but…

Rick Ruback:

Well, I'm just trying to decide when I should sign up.

Royce Yudkoff:

Adriana, I assume that many of your patients, because they're older are on Medicare, or maybe Medicare and Medicaid. And how is the company paid? Tell us a little bit. Is it Medicare paid? Is it a fee for service? A little bit about the economics of the business.

Rick Ruback:

Or commissioned, commissioned from the physicians?

Adrianna Garcia Ceja:

No, actually, and that's something that we are pretty stringent on. So, we are 100% private-pay. We are in the field of aging life care management and within that, we are not allowed to take any referrals or commissions. So, for all folks that are there that are helping their families or maybe going through a transition themselves, if you are going with someone that is getting a referral, there probably is some conflict of interest. We lead with the fact that you are paying for a service, there is no conflict of interest. And so it is concierge health, in that aspect.

Rick Ruback:

So, do you charge by the hour or by the year? Or how does it work?

Adrianna Garcia Ceja:

Of course, there's all sorts of different business models within concierge health. We charge by the hour, in six-minute increments. And we have a base rate, and we have a travel rate. And one of the differentiators for our service versus others is that we are truly 24/7. So, if grandma falls and is at the hospital at 3am, one of our care managers will be out there in the hospital with grandma at 3am. And so for that, it’s obviously a more premium rate for when that happens, but we have a base rate.

Rick Ruback:

And how many employees, approximately?

Adrianna Garcia Ceja:

Around twenty.

Rick Ruback:

Around twenty. And how many clients, approximately?

Adrianna Garcia Ceja:

Roughly two hundred. I mean, we're a monthly service, so to the points on ETA, on contractual revenue, we are reoccurring revenue, not recurring revenue. And so it ebbs and flows, but roughly around two hundred.

Rick Ruback:

Oh, so is there a base level of sign up? Is it like your electric company, where you pay $50 a month for the meter and so much per kilowatt-hour, or is it just per kilowatt-hour?

Adrianna Garcia Ceja:

To be honest, this is one of the areas that I've spent a lot of time understanding over the last sixteen months because I think there's a lot of opportunity to help more people with our service if we better align our revenue model. Right now, as we've grown up, there is a deposit for your first five hours, and that goes towards your first month's bill. But everything beyond that, it's just private pay. We charge in six-minute increments and you'll get your invoice at the end of the month, and you'll pay at that point.

Rick Ruback:

What a great business. It seems that if I had an elderly loved one and I had a full-time job, so I didn't have time to do all the things that I might want to do for my loved one, this is a perfect way of getting some outside help. Plus, I wouldn't know what to do. Let's say my aging uncle, I wouldn't know what services my uncle needed, but you do. So, your firm would say, "Okay, this is what Uncle Charlie should get. And, you know, he needs occupational therapy at this point, or he needs to go to an orthopedist, or he needs to go see the eye doctor." Or whatever it is, you would facilitate that.

Adrianna Garcia Ceja:

Exactly. As I've been learning the business, I mean, those are truly some of my favorite stories. I remember the first time I shadowed with a care manager, she had been with this client, working with her for like a year. She had just moved to a new senior living facility. Her daughter was nowhere nearby but was engaged. And because our care manager knew her well, she was able to say, "Hey, that skin lesion doesn't look so hot right now. Let's go check that out." Low and behold, she had early-stage cancer, and really was her advocate in that situation. So, you know, you go to senior living, you go to other communities, you go through any sort of transition, and obviously we're very blessed that there are people that are there to help decisions, even case managers at hospitals, et cetera. But having that additional level of oversight, accountability from somebody that has that expertise, really has gone a long way for our clients.

Rick Ruback:

What's the age approximately? Are people in their 70s, 80s, 90s, all of the above?

Adrianna Garcia Ceja:

80s. But, like I said, we're care management for older adults, but we do have increasingly more need from younger folks, so special needs, other chronic diseases, and so that age range has been shifting a little bit.

Rick Ruback:

So, you don't have a specialty service for grumpy 70-year-olds yet?

Adrianna Garcia Ceja:

We're ElderTree so older adults are our primary client base.

Royce Yudkoff:

Adriana, one question I wanted to pick up on that came up in your description, so many of your clients are already lodged in care facilities, I assume. Some might be living independently at home but some would be in a facility, which is already providing some level of care, and then they layer you on top of that to really just get a higher level of focus. Is that a description that makes sense?

Adrianna Garcia Ceja:

Yes. Some may be already in facilities, but I'll say they maybe are in one level of facility, in independent living. Maybe they need additional level of care. I think everyone goes into this industry with best intentions and really wanting to do right by the clients, but sometimes there's staff turnover, sometimes there's other situations. And so sometimes it's not the best fit for the client in that facility. So, we will help with those transitions. Or you may be in a rehab facility, have a hospital discharge, and so we will get you to that next transition as well.

Royce Yudkoff:

And how do you acquire clients, Adriana? How do people find the business?

Adrianna Garcia Ceja:

This has been, if I'm honest, one of the more challenging aspects to learn and figure out how to scale, again, in my sixteen months. Historically, we've been a very referral source heavy business. We work to the hip with a lot of elder law attorneys, financial professionals, et cetera. And I've really spent a lot of time figuring out how to diversify the channels as well. We are seeing some Google Ads, some digital, some just regular direct-to-consumer, but really focusing on different channels as well.

Royce Yudkoff:

You know, the concierge medical industry at large is experiencing a tremendous tailwind. Most of it occurs at the primary physician level. And this is so interesting to us because, Rick, I don't think we've encountered a specialty service in concierge medicine before. At least, I've not.

Rick Ruback:

It's specialty in the sense that it's geriatric.

Royce Yudkoff:

Yes, exactly. That's right.

Rick Ruback:

This is such a niche business. I hadn't known that businesses like this existed. Do they exist everywhere? Is this like home nursing, that it's just ubiquitous in our society and I just am, like so many other things, not paying attention? Or is it a special company?

Adrianna Garcia Ceja:

There are care managers probably all over the world but certainly all over the US. Again, we do belong to the Aging Life Care Management Association. There's roughly two thousand care managers across the US. Now, you speak a little bit about niche and why you may not have heard of it. The industry, by and large, is a lot of solo practitioners. And there'd been a handful of businesses that have scaled beyond solo practitioner and really to be up-sized, so I was really blessed with starting out with what I believe is one of the larger platforms, if you will, within the industry. But we've been around since the '80s and I think, because of the tailwinds and because of the need, you're seeing more growth in aging life care management.

Rick Ruback:

So much to talk about. I have three sets of questions. One set is I just want to learn more about the business. It seems like this is a platform business with lots of opportunity to acquire solo practitioners at low multiples, bring their client lists, and get some economies of scale. So, that's one set of questions, if that's your strategy. I'd also like to talk a little bit about your journey. As I remember when you left HBS, I remember you being very focused on some caregiving kind of company to buy. I have this recollection that you were focused on addiction recovery centers. Is that right?

Adrianna Garcia Ceja:

Yes, yes.

Rick Ruback:

And so Royce and I always talk about, with our students, this dichotomy where some students are really interested in the joys of owning and running a small business, without really caring much about what the small business does. You really cared about what the small business did…

Adrianna Garcia Ceja:

Absolutely.

Rick Ruback:

…and so would love to learn more about that. And then would just love to learn more about your journey, generally.

Royce Yudkoff:

Let's start with the journey generally, and Adriana telling us a little bit about your family, where you grew up, your professional and educational journey up to the point you bought the business.

Adrianna Garcia Ceja:

Yeah, absolutely. And, you know, maybe that will explain some of why I was so passionate about choosing the right business for me in the right space, taking you way back. I was born in Mexico City, in a lower economic household. I was raised by a single mom and I was raised by my grandmother, because she was working all the time. My mom never married. She was single by the time that she was six-months pregnant. I grew up surrounded by family, by my grandmother, my grandfather, my aunts and uncles. And our house in Mexico didn't even have hot water. We moved to the US when I was five or six, with my grandmother.

Rick Ruback:

Who moved? You, your mother, and your grandmother?

Adrianna Garcia Ceja:

Yes. My mother, my grandmother, and myself.

Rick Ruback:

Okay.

Adrianna Garcia Ceja:

My mom was a civil servant in Mexico and she got relocated to the US. She worked at the Consulate in Miami. And it was just my grandmother and I, and that's the reason why this business in particular spoke so much to me. We moved when I was six. By the time that I was ten, we were still in Miami, it was just my grandmother, mother, and I. And my grandmother had to go to a bunch of medical appointments, and she was getting really, really sick. My mom and her didn't speak English, I was the only one that spoke English. And I, as a ten-year-old, became sort of her medical advocate, not knowing that that was a term, not knowing what was going on. Unfortunately, after that year, my grandmother had to move back to Mexico and passed from undiagnosed stomach cancer. For me, those years were the most formidable years. You know, my mom was one of seven, and she was the first one to graduate college, so I knew that for us to continue to evolve as a family, it really was a matter of education. And so I grew up, you know, going to public schools, but really, really strove to emphasize my education. Was lucky and blessed to end up going to college in New York. I went to Columbia, got a full ride. And at Columbia I studied political science and economic development, and I really wanted to do something that was meaningful for the world but ended up down the path of investment banking.

Rick Ruback:

So, just to clarify, so when your mother moved to Miami and brought you and your grandmother along with her, did you then stay in Miami?

Adrianna Garcia Ceja:

We moved around a little bit. We were in Miami and in Nebraska, and I graduated school in Nebraska.

Rick Ruback:

Oh, wow. They're different places aren't they, Nebraska and Miami?

Adrianna Garcia Ceja:

Very different, but I ended up meeting my future husband in Nebraska, so it worked out.

Rick Ruback:

One never knows about the journey. You know, the journey is always so interesting and unpredictable, right?

Adrianna Garcia Ceja:

Exactly. So, the investment banking story is a whole other thing, but I just fell in love with business and finance. I did more M&A and corporate strategy after school. And for me, again, I came from a background where my mom was a civil servant. I never really had that business background. And so for me, the first years of college was just really being exposed to all sorts of different business opportunities, and every time I've spoken to you both, I've always said, you know, it never felt like I was an entrepreneur. And up until the time that I was applying for my MBA, I guess, I just always thought the next thing was always going to be something more traditional because that's what I knew. Fast-forward a few years, I applied to business school, and was fortunate enough to get into Harvard Business School, and ended up doing my MBA there at the time of the pandemic. So, I started out in 2019 and I ended up taking a pause during COVID, so deferred a full year, to work at a small business that was search-acquired. And the reason I did that was there's these beautiful posters across HBS that have one question. That is, "What are you going to do with your one wild and precious life?" And for me, just during COVID and the pandemic, I really felt like that next step really needed to be meaningful, not just for me, but going back to my roots of wanting to do something better for society. ETA seemed like the perfect marriage of doing the operational, doing the business, doing the finance aspect of it, but really hoping to invest in something that was positive for society.

Royce Yudkoff:

Inferring that you didn't feel you could find that in a job in an existing large company, that you had to experience entrepreneurship in order to achieve that goal?

Adrianna Garcia Ceja:

I loved my jobs before business school. I was very fortunate in having great managers and great cultures. But ultimately, when I worked at the search-acquired business, the small business, I realized the direct impact that I could have in a business where I felt like we could all move faster towards one goal. And so it wasn't that traditional jobs wouldn't make a difference. I just felt like it would be more targeted through the ETA route.

Rick Ruback:

You graduate from HBS and you do a search focused on this idea that you're going to buy a business that somehow contributes to the greater good. You know, I'm a capitalist, I think every business contributes to the greater good, but you have a finer cut of that.

Adrianna Garcia Ceja:

I do. You talk about the dimensions of ETA, and maybe this is a weird one, but I actually wanted to invest in a business that was somehow very meaningful to me or my family. And so, to your point, I was very focused on mental health. I was very focused on substance use, for family reasons. But I simultaneously was looking at older adults, because of the story of my grandmother. And so that's how I came across aging life care. And I looked across many, many different sub-niches within elder care. Home care, adult day centers, home health. Even a senior living facility has different payer sources, Medicaid, Medicare, private pay. And once we started speaking to folks in the aging life care management space, it just became very clear that there was a lot of opportunity to do good and to really grow a business in this space.

Rick Ruback:

You started with this mission-driven search, but it wasn't necessarily in elder care. Or was it?

Adrianna Garcia Ceja:

I did dual track. I did addiction centers, substance use centers, and elder care. I think it was within the third month of starting that I got a business under LOI for a senior center. And so it quickly became, you know, one of the leads in my thesis. But it was those two industries.

Rick Ruback:

And we never talked about your search. Was your search a funded search or an unfunded search?

Adrianna Garcia Ceja:

It was a funded search, for many reasons. I think the main reason, like I said, my journey was one where I never felt like I was an entrepreneur growing up. I felt like I would really benefit from the mentorship of professional investors in this space. And so that was my primary reason for choosing to go the funded route.

Royce Yudkoff:

And because you had chosen these two industry sectors, I'm assuming that your search was primarily proprietary, meaning you reached out to business owners directly. You weren't really working through brokers all that much.

Adrianna Garcia Ceja:

Exactly. Now, I was working through a few brokers that were focused on this space. They were very helpful for learning the industry, for getting some contacts. But I wasn't seriously considering any broker deal in either space.

Rick Ruback:

When you were doing your search, did you have this thesis when you raised the search capital, and were the investors comfortable with that?

Adrianna Garcia Ceja:

Yes. The mission aspect was very clear in my fundraising conversations. And actually, for me, it was the opposite. I was in a fortunate position to be able to choose the partners that I wanted to take on. And so for me, I was very clear that I wanted to invest in a business that was meaningful, that had positive contributions to society. I didn't say that it was somehow related to my family, necessarily. But there is a lot of investors that you can meet and that you do meet and, for me, understanding what other sort of businesses they backed and what they were looking for, that was very critical for choosing my partners.

Rick Ruback:

Now, when you talked to investors, did you have the sense that investors have the same financial expectations than they would for a searcher without this mission-driven objective? You know, mission-driven investing, generally…

Adrianna Garcia Ceja:

…is different.

Rick Ruback:

It is different. It has lower rates of return. But I'm not sure that's what you expect here.

Adrianna Garcia Ceja:

I love that conversation. Like I said, in undergrad, one of my focuses was socioeconomic development. And so, I would get down these rabbit holes in these papers as to how can you actually make a big difference in countries, or in microfinance, et cetera. And this notion that you need to be either successful or be mission-oriented, I don't buy that. I think you are limiting yourself or limiting the business if you think that way. There were some investors that, you know, had maybe other search funds that were mission-oriented that maybe had other KPIs. But for me, you know, first and foremost, I really believe that we have a very valuable service. I mean, I lived it with my own family. And I think that we have an obligation to grow because of the need. We are not direct providers, we are not physicians, but we can and we do save people's lives. So, that's the important part of it.

Rick Ruback:

I guess where the sensitivity would arise is around pricing. I can imagine that you're slower to raise price than perhaps some purely financial-driven entrepreneur might be. But maybe not. I mean, we've taught you well and you were a good student and you know that raising prices is an engine of revenue growth. So, tell us about that.

Adrianna Garcia Ceja:

Yeah. That's a great point. I think, again, when choosing my investors and choosing my partners, it was almost like a longitudinal study for not just what are you telling me in this one meeting, but what have you really been consistently saying and doing? And what sort of businesses and practices have you done? And so for me, I do have a lot of leeway, I do have a lot of freedom in that. And I also think that, we're concierge, and so raising prices helps deliver the quality that some of our clients expect. Because we're able to benefit from that as well, you know, I think we can also formalize and make a bigger impact for pro-bono cases, because we've always done pro-bono, or Medicaid cases. I think it serves both aspects of it. It starts from, as a CEO, having the flexibility to do that, and really having the support to do that as well.

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Royce Yudkoff:

You know, so often, Rick, you and I have conversations with a portion of our students on their desire to do a mission-driven search, but the most common place that discussion ends is with puzzlement by the student on how they can marry together a mission-driven goal with an economic goal that's successful and they, more often than not, don't seem to be able to reconcile the two. Adriana seems to have reconciled the two in this acquisition.

Rick Ruback:

That's right. Although I think we should say that our students really divide on this question about whether you need to love the service or product that the company you acquire provides, or you need to love the entrepreneurial activity, the joy of managing a business, the joy of managing a workforce, the joy of delighting your customers, the joy of dealing with the everyday challenges that businesses provide. And in so many instances, I think it's good to have a dispassionate view of that service or product when you're buying the business. Because, really, how many profitable antique stores do you think there are?

Royce Yudkoff:

That would be close to none, it would be my guess.

Rick Ruback:

I mean, I don't know. I'm sure we're going to get emails from listeners who tell us, “Oh, you know, we own a profitable antique store and we've been able to marry our love of antiques with a desire to make money.” And I'm sure there are some, but it is an interesting phenomena that many times when people buy businesses that they're in love with it doesn't turn out well.

Royce Yudkoff:

Well, that's right. And also just looking at the reverse image of this, I think you and I believe our students underestimate how satisfying it is to make a customer happy with whatever service you're providing them. You and I strongly believe that when someone pays you money, it's because they are made better off by your product or your service. I think students don't really appreciate how meaningful it is to take an ordinary service, disassociated from making humanity better, and make customers better off, or for that matter, make their own employees better off. And those are very moving experiences outside of the mission-driven world.

Rick Ruback:

Right. And, by the way, I do think they're making the world a better place every time they do that.

Royce Yudkoff:

For sure.

Rick Ruback:

Whenever you can sell a product or service at a higher price than it cost you to provide it, you've created economic value because you have delighted your customers and you've been efficient in doing so. That's something to celebrate.

Royce Yudkoff:

It is something to celebrate. And yet, we have some students, and Adriana is a wonderful example of that, who would say, “That's great. I agree with that, but I need more. I want to feel like the service I'm delivering”…and then you fill in the blank with exactly how it powerfully affects a human being's life.

Rick Ruback:

And I understand that and I appreciate it. And I think the world's a better place because we have people like her. But I think it would be a challenge if you did that in a business that didn't make any money.

Royce Yudkoff:

I think she's done a very good job of being both a smart searcher and a person who's going to pursue mission-driven activities. I think this is going to turn out well.

Rick Ruback:

I think that's right. She might be the best example of this I've seen in a long time.

Royce Yudkoff:

I think so too.

Rick Ruback:

Royce, let’s get back to the conversation.

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Royce Yudkoff:

You've been very clear about the importance of mission in whatever company you bought. Can you tell us a little bit about what you liked about the business, from a business perspective, when you first saw it? What was it that attracted you to it, made you ultimately want to acquire it?

Adrianna Garcia Ceja:

I think the first thing is the business model and the payer base. Again, I looked at Medicaid, I looked at Medicare businesses. Those have a lot of exposure from a regulatory standpoint, for sure. You know, you have a steadier base but the fact that we are private pay means we have a lot more flexibility. There's also, frankly, less infrastructure hurdles to get through, just from a billing cycle. So, that was one that was important. The other aspects that I really liked, in concierge, although we are able to have Medicaid and some pro bono cases, our bread and butter, like the base of the pyramid, if you will, are folks that can afford our services right now. Because of that I'm able to just have more optionality with the sort of care providers, care managers, community partners that I can go with. So, that was also important. I was very interested in this notion of maybe multi-site healthcare, or where geography mattered. And so for me, knowing a lot about the space, being in an affluential demographic in an affluential city, that also really mattered, and one that had a lot of infrastructures for our service as well.

Rick Ruback:

What do you imagine the future of the business? Are you going to grow, expand?

Adrianna Garcia Ceja:

Both.

Rick Ruback:

Acquire?

Adrianna Garcia Ceja:

Yes.

Adrianna Garcia Ceja:

So, our space is very interesting. We have a lot of solo practitioners. I remember at one point, Rick, you said, you know, "Every tuck-in can make sense in the CEO seat.” That's interesting because there's also a lot that you have to clean up and do and integrate. We want to grow. You know, we've grown up in Northern Virginia, we certainly want to go into Maryland and DC. Ten years from now, I hope that we are able to be in major cities, from a service delivery standpoint, and then also being able to service folks in maybe more remote cities, in other ways.

Rick Ruback:

How exciting. What great runway you have in your business because, of course, America is not getting any younger. I know I am, but everybody else is not.

Adrianna Garcia Ceja:

Yeah. There's certainly a lot of opportunity.

Royce Yudkoff:

Tell us a little bit about what it was like right after the closing and stepping in as CEO. Did you have a transition agreement with the seller? What was it like jumping into this business, where like most searchers, you hadn't been in that business before?

Adrianna Garcia Ceja:

Our business, like I said, is / was very referral-source heavy. Although it is normal in search to have a transition agreement and to have a normal, sunset date for the seller, I didn't want to do that. My seller is very well-known in our industry. She’s great. She's been a great mentor to me. So, at the time, you know, we were really just flexible. So, we actually had an employee agreement. Not only that but, like I said, I was thirteen weeks pregnant the day that I acquired, and so I had to think about maternity leave considerations. By the time that I was going into maternity leave, she really helped and stepped up in my stead. So, that was wonderful. Since then, unfortunately, for personal reasons on her end and family reasons, she had to take a step back. And now it is just me. But it did feel like a very natural transition for that.

Rick Ruback:

Did you feel like your background as an MBA prepared you for this job? What I'm wondering about is you're not a medical professional, you're not a nurse practitioner. You've had elderly relatives that you've cared about. But that's really it, right?

Adrianna Garcia Ceja:

Yeah.

Rick Ruback:

How was that transition to being in charge of a company that provides these nuanced services to elderly patients?

Adrianna Garcia Ceja:

If I'm frank, I actually think it's a disadvantage to be an MBA. Especially an MBA from HBS, let me tell you that.

Rick Ruback:

Why? Why, why, why, why, why? You had some of the best faculty in the world.

Adrianna Garcia Ceja:

I do. It's not at all a fault of the faculty. People get into healthcare for very personal reasons. Healthcare is a very challenging job, it's a very challenging industry, especially after what we all lived through in COVID and the pandemic, both from a business standpoint and also from a provider standpoint. And the fact that I was only an MBA with only personal experience tied to this industry, I do think put me at a disadvantage, both with my team and with community partners, and others. Because, frankly, I still think every day I earn the trust of somebody I know, people that I meet, and I have to prove that all the questions you're asking me, like I'm not just going to be someone that's going to come here and raise prices, and look at margin, and do efficiency. That's not me. I want to do this, and scale and grow for the right reasons. You have to prove that. And I think the credential of an MBA from HBS puts you at a disadvantage. Are there benefits? Yes. I mean, I can read a P&L, I can do a financial analysis. I can do a lot of things that I think have been very helpful. But from the start, it certainly has been more challenging than I thought, just really getting the credibility of your team and community partners.

Rick Ruback:

Because people assume, if you're from HBS, you have a different set of objectives than you do.

Adrianna Garcia Ceja:

A hundred percent.

Rick Ruback:

So interesting. And that's maybe largely from people who've never met anybody from HBS. I mean, my guess is that you're the first Harvard MBA student that has worked in your firm.

Adrianna Garcia Ceja:

Yes, I would believe so.

Rick Ruback:

It's often, like so many other biases, they’re not rooted in reality. They're rooted in a perception that people pick up from the newspapers, TV shows. You know, there's a reason why Legally Blonde was done at Harvard Law School and not some other law school.

Adrianna Garcia Ceja:

We certainly have had our fair share of challenges in the first sixteen months. Just like most search deals, you come into a business, and some people choose to leave on their own. There has been change in the business, for sure, and I think every time there is change, you know, people, humans in general, we are all resistant to change. But once you go through something like a new ownership, there's already this fear and trepidation amongst the employee base that, especially with our partners, our community, our industry, any incremental change just feels like a lot more, and so you're starting from square one each time.

Rick Ruback:

I would just say that my experience is that this doesn't have much to do with the Harvard Business School. It's whenever an MBA takes over a business, there's often this perception that, "Oh my God, here comes somebody who just cares about money and doesn't care about the health of the business, or that our customers are well-treated or delighted." And that creates some transition risk. Often, completely without basis, but that transition risk is real.

Adrianna Garcia Ceja:

Yeah. If I think about macro ETA, that's one of the biggest dangers that we have to entrepreneurship through acquisition. You know, you're coming to small businesses, you may start with certain assumptions, you may not. But fundamentally, you know, all you hear about or all you read in the news is private equity or M&A. And you're coming in, Day One, having to really work your way and earn your way for people to trust you and make sure that they know you are not like that.

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Rick Ruback:

Royce, one of the comments that we just heard was that having an MBA, particularly a Harvard MBA, was a disadvantage. What do you think of that?

Royce Yudkoff:

I think that when people say that, what they really mean is some kind of arrogant presentation of an MBA as a credential. And because that's rarer in smaller firms than in big firms, it stands out. I don't think people are particularly commenting on the training or skills that an MBA has. I think they're talking about the effect they have on human beings. My experience is that the best MBAs have this interesting combination of humility and self-confidence.

Rick Ruback:

I agree. The way I love to think about this is what people wear on their first day. And we've heard stories where a searcher will show up in the khakis and the blue button-up shirt in a blue collar business and will feel like a fish out of water and look like a fish out of water. And they'll struggle. But it's kind of an interesting thing that you need to signal somehow, as you said, this humility, a willing to listen, a willing to learn, all those things. And you need to convince people that because you understand business, their lives will be better, right? Nobody would want to hire an engineer that didn't know how to do whatever it is engineering does. But it's bizarre that oftentimes you have engineers running business and they have no idea about how to run a business. An MBA is somebody who has spent some time and effort and learned how to run a business. And so if you marry that engineer with the MBA – that is, you have an engineering firm filled with engineers, but an MBA running the firm – you'll often get much better results than you would without the MBA. And this has been demonstrated over and over again in concierge medical practices, in health spas, in dental shops, in veterinarian services – where the service has to be provided by a specialist but that specialist isn't necessarily great at running the business. The MBA is though, and that makes everybody better off.

Royce Yudkoff:

I think that's exactly right.

Rick Ruback:

Yeah, well we would, wouldn't we?

Royce Yudkoff:

I guess. But it's true, right? You know, maybe because we are surrounded by MBAs all the time, we see that they're all different types of people and there's not one personality there. And they all very much want to succeed in the fullest of ways, which means working with people.

Rick Ruback:

Yeah, and particularly the MBAs who seek out entrepreneurship through acquisition as a career path are in fact self-selecting away from the very businesses – investment banking, private equity, wealth management – they're selecting away from those activities that they're being stereotyped by.

Royce Yudkoff:

Exactly. Let’s return to our conversation.

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Rick Ruback:

One of the things that I really want to make sure we talk about is you're obviously a woman, you’re obviously Hispanic in descent…

Adrianna Garcia Ceja:

Yeah.

Rick Ruback:

…and I just wondered, did you think the search process was okay given that, you know, you weren't maybe the typical searcher? I'm just wondering if you faced any roadblocks that you think are associated with being a Hispanic woman. I mean, searchers all have roadblocks, right? But you might have had extra, so that's what I'm wondering about.

Adrianna Garcia Ceja:

I remember being very nervous about that topic. When I was even sitting in your guys' class, I think at some point I realized that even in prior traditional jobs, I did face discrimination because of who I am or my background. But I just learned to not have that phase me. You know, if I had a whiteboard I would show you, but I have this quadrant of a two-by-two, of when we think about businesses. Maybe one is women and male, and it's white and people of color. I am furthest from the traditional sort of quadrant that you'll think of. I have learned throughout my career that I have to go and figure out ways to make connections across each of those quadrants. For me going into search, yeah, there were people that said, "I would never sell to a woman." Or there were people that would say, you know, interesting comments about Hispanics. I would just stop the conversation there and not have a follow-up conversation, and just didn't let that be a reason why I didn't think I would find or acquire something. I can't change who I am and ultimately I got very blessed with finding the right business for me.

Royce Yudkoff:

I hope there weren't very many of those.

Adrianna Garcia Ceja:

No, not too many. I searched for thirteen months, so…

Rick Ruback:

That's a pretty short time.

Adrianna Garcia Ceja:

Yeah.

Royce Yudkoff:

So, that's encouraging, actually, to hear. I didn't know whether you want to leave us feeling optimistic about these issues or pessimistic, Adriana. But my reaction is, “Wow, you experienced a little of it, that's too much.” But “little” is also the operative word there, which is kind of good.

Adrianna Garcia Ceja:

I think definitely optimistic. Again, you shouldn't change who you are. I wasn't going to change who I was. And there's a lot of deterrents in search. How you look may be one or where you come from might be one. I think it's a matter of mindset. You have to figure it out and, you know, ultimately you control your own path and you just figure out a way across the roadblocks.

Royce Yudkoff:

I mean, one of the reasons this interests Rick and I so much is that, you know, if we go back fifteen years, when Rick and I first started teaching this, there were almost no women in search. And the number of women in search has grown in order of magnitude since then but it's still well short of being 50% of the population, and so we're always interested in what a journey like yours is like. It seems, in outcome, you bought a business faster than the average to buy a business, and it's a good business and a fit with what you were looking for. So, that's super encouraging.

Adrianna Garcia Ceja:

Yes.

Rick Ruback:

I think most people who do a search, that care about the price they pay and the potential return of the investment, and marry that with some other restriction – for example, a geographic restriction or an industry restriction or, in your case, a purpose restriction – usually, they find they have to give up something along the way because it's hard to find the perfect business in the place you want to live, in exactly the industry, with exactly the purpose. But you've done it. So, that's really fabulous.

Adrianna Garcia Ceja:

Well, I don't know. We didn't talk about all the dimensions. So, it's quite possible I traded off some. But to the point on women in search, I remember sitting in your class after a full year and realizing that I was the only woman that was going to search, and writing a very thoughtful but forthright e-mail about the need for more women in search – and thank you both for taking it in such a lovely way. It is something that I feel very passionate about. I wrote that e-mail on International Women's Day and I think that this journey is such a beautiful journey for many individuals, but especially for women. Again, I was thirteen months pregnant the day that I acquired my business and have been very fortunate with a team that is beyond amazing, in a personal way. And I have a ton of flexibility to see my daughter every day, to travel with her. Of course, it's very difficult to juggle everything but I think that for women that consider any career path post-MBA or in general, this is a wonderful career path because of the flexibility that you get.

Royce Yudkoff:

We think so too. We think it's great, relative to working in someone else's company, and being under the control of this whole set of rules and restrictions. I realized a big part of the time you've spent so far in the company has been learning the business, and the people, and the clients. Are there moves of change that you have in your mind yet or is it more a program of steady commitment to how the company has been operated in the past?

Adrianna Garcia Ceja:

I think change is always important. I'd call it evolution and progress. You know, every day we're learning new ways to advocate for clients. I am certainly more data-inclined than maybe we've looked at the business in the past, and so I think there's a lot of power with data. But right now, with our team, the idea, it's really a multi-site expansion. And so the idea is to try to not make any changes, and try to keep our diamond, let's keep our business as it is, and just replicate that, our service model, our business model, across different markets, while learning what makes sense. Maybe Pennsylvania, if we ever go there, is a different market and we need to make some tweaks. Sure, that makes sense. But it's really keeping the core stable.

Rick Ruback:

I'm putting on my ETA professor hat here, my small business professor hat – I would think that a two-part pricing system would make just a ton of sense here, where people pay a monthly subscription fee and then a fee for service, because it seems to me that there's a fixed cost of just having responsibility for the person. You have to scale up for the unexpected things that you're unaware of, and that's kind of a total client size thing, right?

Adrianna Garcia Ceja:

Yeah.

Rick Ruback:

If I need to call you to help my loved one in the hospital and I'm out of state, and so I'm calling you to go provide somebody to sit with my loved one who's fallen, or is having some other medical emergency, I get that I'm going to have to pay a premium price for that, particularly if it occurs in the middle of the night. You know, medical emergencies never occur from nine to five, right? That seems to be a rule. So, whenever medical emergencies occur, you're going to be responsive. And I get that that's a premium price. But there's also a cost of just having that responsibility.

Adrianna Garcia Ceja:

Yeah.

Rick Ruback:

And I think, just like the electric company says, "I don't really care how many kilowatt-hours you use, even if you don't use any kilowatt-hours, the fact that I have to have a connection to you creates costs for me so I'm going to charge you for your meter whether you use it or not." I would think that a two-part pricing system would just make a ton of sense in your marketplace. Are you thinking about that or not?

Adrianna Garcia Ceja:

I am thinking about different pricing and business models. And I think this is really one area where we can maximize the impact from a people count perspective because right now, you know, being hourly and charging in six-minute increments, if you’re signing up, you don't know if your bill's going to be $500 or $10,000, you know, depending on, to your point, the crisis that happens. And so I do think figuring out what the right pricing structure is, is super important for us. It's just unfortunately something I haven't gotten around to yet.

Rick Ruback:

I think getting that right is going to help a lot with expansion because when that pricing makes sense, and the clients understand that it makes sense, then you both have enough resources to provide the level of quality service that you care about and the clients have confidence that that service will be there when they need it. You need both.

Adrianna Garcia Ceja:

One thing I've been very mindful of, to the point on “we don't want to change anything”, is in our primary, I really want to keep the lights on and everything as running. You know, you come in and you make a promise of no change. And my employees, they would say, "Well, you've changed the system, and so-person left." And so there has been this notion of feeling like there's been a lot of change. I also see new markets as opportunities to run experiments, particularly in the pricing standpoint. That's one thing I'm very eager to do.

Rick Ruback:

Yeah. And that's the way you do that, right? You wouldn't do that by changing everybody's price on January 1st. What you'd do is you'd pick some select group of patients and you'd offer this pricing and you'd see if there was pushback. And then you'd learn and adapt and see. New markets are a fine place to do it, but you could do it in your existing market too, I suppose.

Adrianna Garcia Ceja:

Yeah.

Rick Ruback:

We always conclude – and this is always so much fun with former students – we ask if they have any questions for us. So, what do you think, Adriana? Do you have any questions for us or places that you think that we taught you something that turned out just to be maybe less applicable than you thought it would be?

Adrianna Garcia Ceja:

Nothing like that, no.

Rick Ruback:

Oh, thank God. Thank God.

Adrianna Garcia Ceja:

But I have been noodling on this for a while because I really see you both as the gurus of ETA and I have such revered spot in my heart for ETA and for both of you. So much of entrepreneurship through acquisition has changed in the last five to ten years – the demographics, the composition, how people are buying businesses, who they partner with, et cetera. Where is ETA going to be ten years from now?

Rick Ruback:

Let me just say that some of those things are really good. All four of the quadrants that you talked about demographically are getting filled up on the board now, which is a really nice thing to see. So, some of those changes are good. ETA is, I think, becoming a more accepted career path for students and people leaving their MBA program or people who have not even had MBAs, who have just been in middle management for ten years and say, "Wow, I'm ready to move on. I would like to do something different. I would like to have more control over my life." So, I think that trend is going to continue. I think there will continue to be innovations on the funded side where, you know, you have this more concentration of investors. On the unfunded side, you see more capital being attracted. And, if you remember in class, I think we said you should never worry about raising money, that if you find a good target, the money will always be there, and that is particularly true now. I think it is becoming the case that people shouldn't even think about that. People just should think about finding a good opportunity and then worry about the money. I'm not saying you don't have to go through the steps of lining up your investor base and keeping them educated and keeping them informed. But there are a lot of people interested in investing in ETA. So, all that, I think, is good. I think there's going to be more of it.

Royce Yudkoff:

Two more observations I'd make about the future that append to that are there's going to be a knock-on effect as more and more talented, younger workers look at ETA. Traditional employers are going to have to think about how to compete, how to retain those people. So, I think ETA is partly about fulfilling the entrepreneurial and lifestyle dreams of people who want to be entrepreneurs, but I think it's going to make the lives better of people who don't quite want to be entrepreneurs because markets respond, and traditional employers will respond to this drain of talent. The other thought I have, Adriana, is that particularly for self-funded searchers, a key tool for them has been the SBA loan program. And that program, as you know, has been capped at a $5 million loan for many, many, many years. It's been a hugely successful program for the public, for our economy, and for the government, which has actually made a profit off it. Eventually, that cap will have to be moved to keep up, at a minimum with inflation, because it's been so many years since it's been raised. And I think when that is raised, there's going to be an explosion of activity because it'll open up a whole set of companies that sort of fall in “too small” for traditional search but “too big” for a self-funded search, using the SBA program. And that's somewhere in our future, whether it's two years from now or six years from now, it seems like there's a rendezvous with that change, and that'll help search as well.

Adrianna Garcia Ceja:

That's amazing. Thank you both.

Royce Yudkoff:

Adriana, we're so proud to follow your journey. We really are.

Rick Ruback:

What a wonderful impact you're making. I can't wait until you move your business up to the Northeast so that I can sign up.

Adrianna Garcia Ceja:

Thank you both so much.

Rick Ruback:

Thank you.

Royce Yudkoff:

Thank you, Adriana. Be well.

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Rick Ruback:

Royce, what'd you think of this business?

Royce Yudkoff:

I like this business, Rick, and there are two things that I like about it. First, there is a giant tailwind behind various forms of concierge medicine because the healthcare system is under economic pressure in this country and part of the population, that can afford it, is reaching out for other ways to take care of themselves and their families, and this geriatric concierge service is going to be one of the beneficiaries of that change. And the second thing I like about it is there are no dominant players in this business. There's a huge market, there are a lot of small players, and that opens up another way for Adriana to win, which is through tuck under acquisitions. And you and I always talk about a good attribute of a business is to have multiple ways to win. So, those are two things I like. How about you?

Rick Ruback:

I like both those. I particularly like the fact that it's not a service provider, in the sense that it doesn't provide the end service of the eye exam or the dermatological examination or treating the skin cancer, or whatever it might be. What it does is it says, “Oh, you need that? Let me help you find that.” In some sense, the business is almost an information service business, which I think is really essential as healthcare becomes increasingly more fragmented. And, as you say, there's a massive tailwind brought about by the complexity of medical care in the United States, but it's particularly true in geriatric care. So, I think that piece is amazing. Plus, this is one of those businesses that just fits the evolution of society so well. We're getting older as a nation and we're getting more mobile as a nation, so the likelihood that the kids are able to take their parents to the hospital in the middle of the night – maybe if they lived together, that'd be really easy and maybe that's what happened thirty years ago, but it's not what happens now. The kids are living maybe halfway around the world and mom falls, what do I do? I call this service. What a great service. I mean, it not only is so helpful to the person receiving the care and having somebody to sit with them and help usher them through an emergency room or a medical crisis. It is making the kids feel really good. How much would you pay to get rid of guilt in your life, really?

Royce Yudkoff:

Well, there's no limit on how much I'd pay to do that.

Rick Ruback:

Right! It's allowing you to have somebody to provide the care that your lifestyle doesn't allow you to do.

Royce Yudkoff:

And to do it better, right? It’s not like a babysitter who's not as good as mom and dad but provides the care when they go out to a friend's house. It's actually better than you can do because they're going to be wired into the best providers of each of these geriatric services in that community, which you as a younger person, how could you possibly know that? And so, that's wonderful.

Rick Ruback:

I mean, we've both spent time caring for young granddaughters recently and, as much fun as that is, we are not nursery school teachers. There's a limit to our ability to entertain…

Royce Yudkoff:

Exactly.

Rick Ruback:

…a three-year-old, and how cool it is that this service effectively provides that. So, I think it's a fabulous business and one that just fits the changes in America so well. And I love the things you said as well – the fragmented business, the opportunity for tuck-ins and tuck-under acquisitions. I just think she's well positioned for success.

Royce Yudkoff:

Rick, that was a great conversation we had with Adriana. Next week, you and I are speaking with Logan Leslie, who is conducting a fascinating roll-up of car repair stores, each one small scale. At first, it seems too intricate to buy but he's developed a formula which looks really promising.

Rick Ruback:

Yeah, it's really very clever. I learned a lot, both from today's episode and from Logan. Both were fascinating. Royce, do you remember last season?

Royce Yudkoff:

I loved last season and I loved best our final episode.

Rick Ruback:

That’s right, and we’re going to do it again. We’re going to take questions from our listeners once again…

Royce Yudkoff:

…and then you and I are going to answer the questions they’re sending in.

Rick Ruback:

We’re going to try anyway. The best way for them to get the questions to us…

Royce Yudkoff:

…rickandroyce, as if it’s one word, at hbs dot edu.

Rick Ruback:

Because we’re really one team.

Royce Yudkoff:

Almost one person.

Rick Ruback:

Hardly of one mind on most things but that’s what makes it fun.

Royce Yudkoff:

You’ve been listening to Think Big, Buy Small. We’re your hosts, Royce Yudkoff…

Rick Ruback:

…and Rick Ruback.

Royce Yudkoff:

Katie Zandbergen produced today’s episode. 

Rick Ruback:

Craig McDonald is our audio engineer. If you have any questions, comments, thoughts, feel free to just e-mail us, rickandroyce, all one word, at hbs dot edu.

Royce Yudkoff:

We’ll be back next week with another episode of Think Big, Buy Small.