Pavement reconstruction and maintenance is one of the largest spending categories for commercial property owners in terms of yearly maintenance. Owning a big market share in this industry in the Colorado market, DACS Asphalt and Paving, one of the largest and fastest growing pavement reconstruction and maintenance firms serving the state’s front range. A selectee for the 2020 Titan 100, its President, Jason Dunn leads from the front and invests a lot in continuously improving himself so that he can lead by example. In this conversation with Bob Roark and TITAN CEO Founder, Jaime Zawmon, Jason discusses what he believes are the marks of a true industry leader in a highly-specific niche. A humble leader and a team player, Jason is a good example that other leaders in blue collar industries should look up to.
We have quite a treat. I have my co-host, Jaime Zawmon. She is the Founder and President of Titan CEO. Our guest is Jason Dunn. He's the President of DACS Asphalt and Concrete. Thank you, Jaime. Thank you, Jason, for being on the show. Jason, tell us a little bit about your company and who you serve.
DACS Asphalt and Concrete is one of the largest and fastest-growing pavement reconstruction and maintenance firms serving the front range of Colorado. We serve commercial property owners and commercial property managers across the front range, all things pavement. That's one of the largest spending categories they have per year in terms of maintenance items. Whether it's us having to repave an entire apartment complex parking lot or take care of a single broken piece of curb and gutter from a snowplow, we take care of that for our customers.
In the parking lot out here, there's a pothole and periodically the crew shows up. That's an interesting niche paving market. What drove you to that particular niche?
A few things are special about this market. One is it's a good business itself. I was a business analyst for many years. I'm accustomed to looking for characteristics and businesses that make them great, sustainable, generators of free cashflow, but one of the things that attracted me to this business too is it's a low bar industry. This is blue-collar world where my competitors oftentimes work growing up in concrete and asphalt and then doing their best as business owners once they grew an attractive firm. If you bring business sophistication, especially from outside of this industry into this world, it gives you an ability to easily differentiate for the customer. If the customer recognizes it, that makes it an exciting opportunity for us.
For you, when you say front range, what's the furthest north you go? what's the furthest south that you go?
It's a little bit nebulous, but it's Colorado Springs to Fort Collins. We’ll go down as far south as Pueblo if needed. My team finished with an overnight, nearly camping trip through the mountains because we were serving some convenience stores that seventeen of this same brand of the store needed work throughout the mountain area. We packed up the crews, overnighted them and got that work done. We can be moving around, but it's Colorado Springs to Fort Collins.
Jason, first of all, we're so excited to recognize you as a 2020 Titan 100. I've got a copy of the book in which you were profiled. This book recognizes 100 of Colorado's top CEOs and C-level executives, Colorado-100 Titans of Industry. Being a Titan of the industry is about finding your niche and you have definitely found that in what you're doing. I'd like to ask you what characteristics do you believe that it takes to be considered a Titan of Industry?
You've done such a wonderful job on this program so I'm honored to be a part of it. It's been great to get to know you and all the other people that you have inducted into this program so thank you. In terms of what it takes to be a Titan of Industry, as you call it, I would think first and foremost is humility. You've got to have a passion for learning. You've got to continuously be trying to improve yourself. Therefore, you can lead by example. You've got to be able to be willing to lead from the front. When there are problems in your business, you got to be ready to get out there on the front lines and deal with them, regardless of whether or not you have the answer. I'd say those are the most important characteristics that have served us well.
I love what you talk about leading from the front in times of adversity. I'm sure that 2020 with COVID, it's been quite a challenge in leading from the front. Do you have any specific examples of how you've navigated that by leading from the front?
It's easier to say in retrospect because the time was just tumultuous. I feel for all small business owners. Many people suffered through this, but small businesses in general faced unprecedented challenges during this time. Lots of empathy for everybody out there in the world operating during this time. Something that helped us is to take a step back and go, “How can we continue to add value to our customer's lives in this time where everything's upside down?” A small example of that, which may seem a little bit outside of asphalt and concrete is we created a distribution list and included a lot of our customers, partners that are all small business owners, even our customers hit that domain.
We created a list to start teaching them about the PPP program, the EIDL program, how to get through the processes of finding these funds. It wasn't just about the selfish interest of, “As long as our customers are stocked with cash, maybe they'll keep spending money with us.” It was about just all of us being able to provide answers for each other, stay relevant in each other's minds to be able to help ourselves through this tough period. It does have great business consequences afterward. Our partners got to see it wasn't about making that 1,000th cold call during this time. I say cold may have been a warm call, but it felt darn cold. You're trying to make a sales pitch during April and May 2020.
We all got inundated with those emails. Instead we said, “Screw it.” That's not what our customer is seeking to do is go spend money on their pavement. They're seeking to survive. Let's talk to them about what's relevant. The same things that are relevant to us as a small business owner. How do we find capital? How do we navigate these times? Let's share the information we've got. We tried to take that perspective. We built our relationships that much deeper during those tougher times. We ended up finding lots of ways to work together with our customers that were mutually beneficial.
I love that what an incredible way to lead that willingness to lean in and to support your customers, your clients. That's an awesome example so thanks for sharing that.
That's a testament to the mastermind approach, cooperate and graduate in the form of military side, but bringing in all your stakeholders, partners, suppliers, customers, and all that, to bring that solution. The COVID revealed character. It didn't necessarily create character. You see that kind of character in the various activities like you're talking about is going into like “We're here to help.” That's a real credit to what you're trying to do. To segue, your path into the asphalt and paving world is I would say somewhat traditional, asymmetric. What I was interested in is given your previous career, when you came home with the thought in mind, to your spouse going, “I want to take and buy DACS,” walk us through your journey from what you did before to the point where you're going like, “This is what I think I want to do.” I'd love to hear the story.
I was fortunate to have found my passion early, which was in the money management business and the investment management business. I'd had a small bit of money that my single mom and I had for me to go to college on. I'd put it with a stockbroker that was a friend and a chunk of that money got lost pretty quick. I learned this person was more of a salesperson than they were an investment professional. I decided I'm never trusting anybody with my money again. I want to know what it is that you can do to make and grow money. I was handed a book at that time when I was eighteen years old on Warren Buffett. I read that book and thought, “This is something I could do.”
I get what he's doing at Berkshire Hathaway and the creation of this business. It's not that it's not that difficult. It's hard, but not that complex. This was my impression at the time and was lucky enough that we had a practitioner of so-called value investing in Memphis at scale and operating mostly in the mutual fund world in Memphis, Tennessee where I grew up. I was able to calm my way into a job there early on while I was in college and generated a fifteen-year career out of that. I ended up leaving that business fifteen years later, managing $6 billion for them. We’ve grown to about $45 billion at our peak. It was a wonderful experience. During that time, I was a generalist analyst and eventually a portfolio manager.
Most of the time, it was as a business analyst trying to find ideas for investment. The great thing about that as a generalist is you're getting to study innumerable wonderful businesses, some bad businesses too, and get to see as well wonderful operators of businesses and what they have in common. Along the way to try to read as much as possible, to find out those who've been successful, how they've been successful. It started that thought, which is you're an analyst you're watching something, these little beautiful pieces of art, it created all over the place. You start to wonder, “Could I run one of those? Could I be successful in business myself as opposed to just studying businesses? Can I do it?” I started to develop early on, but especially as we got into the late post the housing crisis after the fed printed about $4 trillion to get us out of there.
That affected values as they existed in public markets where I wasn't finding that much in public markets that excited me like I did when I first got started in this business. We ended up deciding in 2017 after holding a bunch of cash for a long time. The public markets are not our hunting ground anymore. We gave back the money. We told our clients. We were deeply appreciative and good luck. I took a step back to say, “Where does value still exist?” That was after taking about three months off and doing Brazilian jujitsu, which is my passion. After that time, taking that kind of global look, I saw acquisitions, especially between like $2 million and $8 million range were interesting. They were too big for most individuals to be able to afford. They were too small for private equity to care about.
There is a zone where there weren't a lot of buyers and even worse, a seller of that business is a founder who's coming out who was a critical part of operating that business. They don’t need money to buy the business. They need someone willing to come in and operate. You can see where this might've connected to that earlier desire to test myself. I searched along with the front range where my family wanted to live say 80 deals and fell in love with one which was DACS Asphalt and Concrete that had the characteristics that matched up to the long list of characteristics. I had desired in a business after studying business for twenty plus years and was lucky enough to be able to affect that purchase. That brought me to the asphalt and concrete world.
I love hearing about the passion that started from you from the ground up and how continuing to invest in that passion led you down this path, which gave you this awesome, incredible opportunity to run it. It’s an awesome story when you look at the road right on how someone gets to where they are in that seat. It also is a reminder to everybody that it's never too late in life to change course or to continue to follow a different road in a different path to your passion. Thank you for sharing that specific example with us. I can't even imagine you get into the company and you're like, “Let's go.” There had to be some kind of initiative that you took initially when you got into the seat here of CEO that's helped propel you or take the business to the next level. Could you share maybe some insight into that?
That first year was tough. No two ways around it. Talking about humbling, if you ever want to be humbled, step out of the world where you have twenty plus years of experience in some level of credibility, and maybe some confidence-built step into a world where you know nothing. I felt bad for my people at the time, but the reality was when I did step into the role as manager of this business, my people had to recognize, “We have inherited a leader who doesn't have background” and even worse in this business, in the blue-collar world, this may be fairly common. There were accustomed to hearing an answer from the manager may not be an informed answer. It may not be the right answer, but it's at least an answer. I'm much more comfortable with the idea of being transparent about what you don't know.
“Let's go find the best answer. I don’t know it, let's go find it. We'll learn along the way and everything will be okay.” That turned out to be a stabilizing approach in this world at least when it was first introduced. The bottom line of 2018 was, “I'm not as dumb as I look, give me a little bit of time and we're going to find a beautiful way forward.” I'd say by the winter, after the busy season was over with, we began implementing the traction EOS process. I've been lucky enough also during that 2018 to have some disasters happen, small disasters, but disasters on the West that I could step into and help lead us out of. When you're fighting in the trenches with your team, that's where you build that feeling of team. My team members started to feel that with me. There was a sense of team that came into the winter, a sense of trust that was beginning to build. That set us up with a foundation of being able to propel ourselves in 2019.
When I hear you talk about what that transition was like, you talked a lot about going to find the answers. “I don't know the answers, but we're going to find them together.” That speaks a lot to the characteristic of a Titan, which is the humility that you mentioned earlier. You proved that with your team and that was a good contributor to the trust that you were able to build with them and lead them forward. I'm connecting some of the dots here.
If I can add one thing in my investment career, I got to watch two individuals, in particular, take advantage of this and maybe a slightly different way, but it's the same concept. Watching Warren Buffett and studying Warren Buffett build Berkshire Hathaway, and then someone who perhaps is less known in our circles, but what he's done is incredible. A man named Prem Watsa, who's built a company called Fairfax out of Toronto in Canada, now a $15 billion public company. He's been a mentor of mine.
Watching what they've done, which is they have tried to find the best operators of business that they can. By acquisition, they brought the businesses and their leaders into their various faults at Berkshire and Fairfax. They've set up the conditions for those business leaders to be successful, which is getting out of their way. I do think for me, it's always in the back of my mind that it's like, “I don't have to have all the answers as a manager. I need to be able to identify those people who are truly good at what it is that we are trying to execute, partner with them and set up conditions where they can be successful, get out of their way, and then we can all win together and also have fun at doing so.”
One of the questions is along with the script we were talking about. The other one is how did you get out of Memphis with no accent?
[bctt tweet="You have to continuously try to improve yourself as a leader. If you can do that, you can then lead by example." via="no"]
My oldest daughter, my oldest twin by 60 seconds said, “Dad, who are you on the phone with? I hear your Southern accent.” I'd been on the phone with my dad. It comes back as soon as I talk to family somehow, I got washed out along the way.
I grew up in Tennessee, Alabama in Florida and it comes back like mold. You talk and you go like, “You're talking to relatives.” I had to pick on you. As you show up in the day-to-day operation of the company and you look at the process of focus, self-talk and discipline, what are your rituals or self-talk dialogue that keeps you going, focused and pointed in the direction that you've got in mind?
Some of this is going to sound mundane but starting off the morning right is critical for me. Every morning looks the same, which is the wake-up, the preparation of the caffeine injection, which is as tea, not coffee, and that's better for me. I do a group of activation exercises that get my body ready to do what I do most, which sitting, for better or worse, especially these days with Zoom calls and whatnot. We sit a lot in our day. I sit a lot in my truck is I commute across our broad work area, seeing projects. I do a meditation practice every morning. I also do journaling every morning, which is critical for me. If I can get through that morning routine, which takes about 30 minutes, I'm set up for my day because I can enter the day with gratitude, which is a goal is to exit that session, feeling grateful for what I have in my life. I can also enter the day with neutrality. When I do have challenges come, I'm ready with all my tools. I'm not charged. I'm ready to be able to deal with what comes in front of me. That's been helpful for me.
I hear many CEOs and entrepreneurs talk about the tremendous benefits of meditation, journaling, self-reflection, visualization. As you put your mantras out to attract to the universe, the things that you are visioning for yourself. It's refreshing to hear that you do it as well as you go through things. Switching gears a little bit, DACS has been in business for how long now?
DACS was founded in...