In this episode, Keith Caldwell, CEO of H2O Care Partners, and Sarah Longstreet, the company's Chief Marketing Officer, share the story of building a national water treatment platform. It began in 2021 when Keith met Mark St. Hilaire, founder of H2O Care in Massachusetts, and saw an opportunity to combine doing good with the growth potential of a fragmented, family-run industry. Today the platform spans more than thirty brands across nearly twenty states, supported by a Boston-based resource team of over forty across marketing, finance, hiring, technology, and operations. Keith and Sarah reflect on the network effect that emerges when great local businesses come together, how each new partner brings superpowers that get shared across the platform, and why preserving local brands, community ties, and long-tenured teams is central to how they scale. They also discuss what makes the right partner, from founders approaching retirement to those just getting started, and what's next as the platform continues to grow.

Key Takeaways:

• Great partnerships start with people. Keeping the local name, the team, and the reputation intact is what makes strong family businesses open to joining a platform.
• The network effect is real. Every new partner brings a superpower that can be captured in playbooks and shared so the whole platform gets better.
• Scaling doesn't have to cost you culture. Centralize what lifts everyone, like marketing, finance, and technology, and keep brands, community ties, and daily decisions local.
• The right partner comes down to mindset: teams and customers first, a strong reputation in the industry, and a genuine desire to grow.

Chapters:

1. 00:00 – Introduction
2. 02:57 – The Origin of H2O Care Partners
3. 07:54 – The Network Effect
4. 11:04 – Scaling Culture, Not Just Operations
5. 14:16 – Finding the Right Partners
6. 18:01 – Driving Organic Growth
7. 25:44 – What's Next

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This podcast is the property of Shore Capital Partners LLC. None of the content herein is investment advice, an offer of investment advisory services, or a recommendation or offer relating to any security. See the “Terms of Use” page on the Shore Capital website for other important information.

Welcome to Microcap Moments, a podcast from Shore Capital Partners that highlights the stories of founders, investors, and leaders who have taken on the challenge of transforming ideas and small companies into high-growth organizations.

The journey of building and scaling a business takes one down many unexpected paths.

It's a journey where we learn from our mistakes, fall down often, but have the entrepreneurial grit to pick ourselves up and persevere.

Within this series, we will share these stories of success and failure, of the challenges and the rewards faced by those who dare to dream big.

And through their lessons learned, we hope to inspire others who are on a similar journey of becoming, growing, and leading.

In this episode, I talk with Keith Caldwell, the CEO of H2O Care Partners, and Sarah Longstreet, the company's Chief Marketing Officer.

H2O Care Partners is a national water treatment platform that partners with best-in-class local water treatment companies, most of them family-run, and supports them with centralized resources in marketing, hiring, finance, technology, and operations.

Today, the H2O Care Partners platform spans more than thirty brands across nearly twenty states.

Keith takes us back to where it all started in twenty twenty-one when he met Mark St. Hilaire, the founder of H2O Care in Massachusetts.

Sarah shares why she joined two years later, what drew her to the platform, and how the company has more than doubled in size since.

Both Keith and Sarah talk about the network effect that emerges when great local businesses come together under one platform and how each new partner brings what Sarah calls superpowers that get shared across the network.

They reflect on what makes the right partner, how they preserve local brands and community ties even as the platform scales, and the kinds of founders from those approaching retirement to those just getting started who have found a home with H2O Care Partners.

Will you start by just introducing yourselves and tell us what you do and where you do it?

Maybe Keith, we'll start with you.

I'm Keith Caldwell, the CEO of H2O Care Partners.

We are a national water treatment platform.

We partner with best-in-class local water treatment companies, and we've built out central resources here in Boston.

Think marketing, hiring, finance and account support to help and support businesses and their teams and their customers' growth.

Hi, I'm Sarah Longstreet.

I'm our Chief Marketing Officer for H2O Care Partners.

So me and my team market on behalf of our local partners.

That includes providing lead generation, measurement, and marketing to existing customer base.

Today, that's just over thirty brands in just under twenty different states.

So let's go back, and maybe Keith, you can start.

How did this all get started?

How did H2O Care Partners come to be?

Will you just take us back to how it began?

In 2021, I met Mark St. Hilaire.

Mark is the founder of H2O Care in Massachusetts.

Three locations, family business.

His wife worked in the company, his son.

Fantastic reputation in the industry.

And the more I got to know Mark in the industry, just believed there was this incredible opportunity both at H2O Care and then more broadly.

And this combination of doing good and providing more water treatment solutions for more people across the United States, combined with the growth opportunity and feeling like we're just at the beginning of this water treatment revolution, if you will.

And there were lots of other companies out there like Mark's that had built awesome companies, were also open to backend support and growth resources to reach more customers and to better service their own employees.

And so our vision is to be the most trusted clean water partner in America.

We started in April 2022 partnering with Mark in H2O Care.

Today, we are over thirty brands across the US and have an incredible network of founders, business leaders, teams, and customers.

I'm curious, Keith, to pull on that thread a little bit.

You mentioned a family business.

You know, what was it about a family business and the kind of model that you saw in water treatment that made you think that was ripe for this kind of partnership and platform and growth?

I think instinctively you would think a place that's so family-oriented and family business-oriented wouldn't be ripe for this kind of experience.

What was it about it that made it seem right?

I think it all comes down to the people at the end of the day, and Mark had built this incredibly tight-knit culture.

At the same time, he aspired to reach more customers.

And so I think the combination of we were gonna come in as a partner, we weren't gonna change the H2O Care name.

We're hiring all of his employees post-close.

Business was gonna continue as usual with the addition of we were gonna be building these resources here in Boston to support his team and to be able to reach more customers and hopefully better service those customers over time.

And so it ended up being a great partnership.

And in early days it was really just, it was Mark and I, and then we hired Raffi, a controller, to help build out our finance and accounting support.

We hired Chris Byrne, who was partnership development support.

So his job was to go out and find more great partners like Mark.

And David Trompke was our third early hire who was in a Chief of Staff role, and think of an athlete who could go help Mark and his team solve any of a variety of challenges that they were having every day.

So David early on helped with technician recruiting.

He helped with our dashboard implementation, with later with our ServiceTitan implementation, and so that was early days.

It was a very, a, a skeleton crew of support and now we've built this over time in Boston.

We've got over forty resource team members across finance and accounting, across marketing, across people support, across ServiceTitan technology support.

And their job, everyone's job here thinks of the businesses and the business leaders and their teams as their customer.

And so it's a true servant leadership mentality, and everybody comes every day here to best support our partners

I'm curious from that initial thinking about, one, seeing an opportunity in the industry, two, meeting someone as a person and as a business, the caliber of Mark and H2O Care, and now having 30 partners and 40 plus resource team members to support those partners.

What has been confirmed about your original thesis and maybe what's evolved in that time of growth over just a relatively short period of time?

I think we're even more excited today than we were four years ago, and we were very excited four years ago.

So I think a few things have made us especially excited.

So one, there's a lot of incredibly impressive businesses and teams across the US who are all open to bringing on a partner like us who can provide back-end support and resources.

Second, the potential for the industry, and I don't need to tell this to folks that are in the industry, for me, is unparalleled.

And this neat combination of regulatory environment with increased consumer awareness of water challenges, the aging infrastructure, I think there's gonna be an opportunity to serve an increasing amount of customers over time.

And as a platform, I know we and all of our partners are excited about that opportunity every day.

And Sarah, I wanna come to you.

Tell me a little bit about when you joined and what the company was like at that point and why it was the right move for you and how you've seen things evolve from your perspective.

So I joined just about two years ago.

I was first introduced to Keith and had a lot of conversations with him to kind of understand what he was building, and I got really excited twofold.

One, because what Keith just mentioned, I think the market opportunity, right?

There's tailwinds and also that we're really helping people.

The company, I think we've more than doubled in those past two years, both just in the size of the team as well as the number of partners.

And so what's been really exciting for me has been how do we keep leveling up?

One of the cool parts about being part of a platform and a network is the more companies that come in, the more perspectives, and every company has a superpower.

And so a cool thing being on the resource team is we get to take some of those superpowers and say, "Hey, this company's doing this really, really well. How do we bring that across, and how do we expose some of the other folks, whether it's what they're doing in the office, what they're doing in sales in the field? How do we help bring that across so that lifts everyone?"

And so I think we just keep leveling up as we get bigger and bigger and have more folks and a, a bigger network.

Yeah, I, I think that's a really important point, right?

That it's not just about growth and then the sort of support team supporting that growth.

It's that you're also facilitating the learning from each of these 30 partners to date as part of improving everybody, sort of the rising tide mentality it feels like.

And, and I think that could be easily overlooked in thinking about this merely as a roll-up or an aggregation of these great small businesses.

The network effect is real here, and every great partner you bring on brings with them one or two or ten, to steal Sarah's word, superpowers or unique capabilities that can then be replicated in other places across the platform.

And so when you go from one to five partners, right, you're bringing in five times when you go from now to thirty.

And then when we see when we get to fifty to a hundred partners, the opportunities for, I would say, not just learning across the platform, but also professional development opportunities are incredible.

And so I think we're at the early innings of putting structure around that.

We do a few things to try to capture these capabilities.

So one, we have a monthly call with all of the business leaders on the platform where they share highlights and challenges, the result of being which hopefully learn from each other there.

Second, we've set up a leader advisory council to help us as a resource team think through longer term strategy and approach.

Third, we have now started to, in a structured way, pull together these best practices in the office and with ServiceTitan and with customer reach outs, with marketing, and build playbooks now that when a partner joins the organization, they have access to this playbook and are able to implement it.

And that wouldn't be possible, right, without the quality of partners that we've brought on and this network effect.

Part of what I'm curious about in addition to thinking about that network effect and best practices in helping all of the companies from a marketing or a data or a process perspective, the sort of operational and business development side of the conversation.

These are family-run businesses.

They all, in my experience in meeting most of them, have very strong, very close-knit cultures.

How do you scale that the same way you're thinking about scaling their operations?

How do you protect that?

How do you grow that culture side of this?

Our goal is to build on that versus take anything away.

And so typically, the companies we partner with will have really long-tenured teams, and that's something if we get in the way of that, right, the business doesn't exist anymore.

And so how we're thinking about it is how can we take all of these incredible teams and cultures and reputations that these businesses have built and invest in resources to ensure that that culture, that legacy can continue for years and years and years.

Our goal in the long term is to be the employer of choice in water treatment.

And so what does that mean?

That means we have invested in resources to help our local businesses hire the best talent.

That means investing in resources centrally to ensure training and onboarding and everything about those first ninety days is successful.

Our vision is for somebody joins one of our partner companies, and they know that there's a career there for them.

And they could-- if they want to stay in a tech role and they love servicing customers and that, and they can do that every day for the next twenty years.

And there's a role for them there.

There's also a role for someone that wants to develop into a manager of sales team members or to be a general manager at one of our locations or to be a business leader president one day, right?

And we've got now stories of folks who have gone from technician to manager of technicians to business leader.

And so I think our job when I think about culture, right, is to do nothing that takes away from everything they've built.

But instead, now with the scale and with the network that we have, investing in resources to add to that, to add to the employee experience.

Sara, any thoughts from where you sit on the culture side of building this larger platform?

Yeah, I'll take it a little bit from the marketing side 'cause I do think there's a culture aspect to the brand and how we show up to our end customers.

And most of our partners maintain that same local brand, and we think it's really important that they also still maintain the local ties in the community and ways in which they're involved with the community.

And so that's definitely something from a marketing perspective that we w-work with partners really closely on to say, "We're not trying to stop anything that you're doing there.

We're trying to help apply best practices in order to drive more volume and reach more customers." But still, how they show up to the end customer today and how they show up in their community, they're still the ones driving that, and they're still, you know, operating in the business day to day and maintaining that culture and really that customer-first mindset as well.

Yeah, I love that.

Just taking some notes, the two of you said words like legacy and career and team and brand and community.

What do you think, you know, is the most important, or what do you hear when you're talking to potential partners for H2O Care Partners about what's most important to those founders?

You've had 30 who found something in you that aligned.

You continue to have conversations every day.

What is it that your partners are looking for?

I think there's a couple different types of individuals or situations where H2O Care Partners could be a great fit.

One is those thinking about retirement or starting to think about retirement.

Maybe it's not next year, but maybe it's three years, five years down the road.

And what's important to them, certainly value for what they've built, but oftentimes more importantly is the business's legacy and their employees, which, as we've talked about over the course of this conversation, have often been with them for years or decades or multiple decades.

And so what we've been able to offer them is the ability to continue their legacy and take care of their employees and take care of their customers.

And so for somebody that's looking to retire in the next 12 months, we have the density and support now where we're typically able to bring them on and then work with that business leader on a transition plan, so they're able to retire in the timeline that is most important to them.

So I think that's one.

I think the second type of individual or situation is someone at the other end of the spectrum.

They've got a long career ahead of them and a desire for massive growth with their company, with their teams reaching more customers.

And so what we're able to offer in that situation is some of these backend resources to support growth.

Atlantic Blue comes to mind.

Chris Mather, who's now a regional president with H2O Care Partners, took over his dad's company years ago, and they've continued to double in size.

And Chris, you know, wanted to build Atlantic Blue into a 50-person, then 100-person, then a 500-person company.

And he was excited about the partnership because I think we've been able to, over time with his partnership, build out some of the resources in-house to drive that growth in lead gen, to drive the recruiting support, to drive the support from a finance and accounting perspective to reach those goals.

When you think about those examples, and again, 30 of them at this point and growing, you're obviously looking for healthy businesses with good leadership and a good reputation.

But from the founder or business leader perspective, what makes the right partner for H2O Care Partners?

Because I can imagine a world where you've got a great business, but that person, despite having a great business, might not be ready to join a, a platform or might not fit what you're looking for.

So any thoughts on what the right partner looks like for you all?

I think it's a couple different things, Anderson.

One is, first, the founder or business leader's mindset, and they're somebody who puts their teams and their customers first.

Second, which is very related to that, is someone that has a great reputation in their industry.

It's the person that when you call company one and they're booked out several weeks, and you ask if they've got any other recommendations, you need to send somebody quicker, they recommend company number two.

And so folks with great reputations.

And then I think third, there is this desire to grow and someone that's excited about having these additional resources at their disposal.

And I think every partnership that has shared those traits has been a massive success, not just from the H2O Care Partners side, but from the business side as well.

Sarah, I wanna come back to you and something we were talking about before with the multiple brands.

So when you think about this and you think about 30 brands within the H2O Care Partners umbrella, you're leading marketing, you're thinking about local presence, you're thinking about local reputation, you're protecting and trying to grow that.

Talk about the marketing approach for this kind of relationship and partnership and platform.

So the way that we think about it is, you know, there are certain things that we will centralize and really drive from the platform team.

So that'll include things like SEO, that'll include things like website development, that'll include things like playbooks for outreach to your existing customer base.

All of that is still done in partnership with the local teams.

So our goal is that your website looks and feels like your brand and really speaks to your local customer.

But the reason and really how we decide what we centralize is based on can we at scale really deliver best practices and help drive continued significant improvements?

There are things that we said, "Hey, actually, these will always stay driven by the local team." So for example, we're never on this, the platform team going to drive executing local events, right?

We don't know which local events in the community are going to be the best ones, and it wouldn't make sense for us to be the ones executing those.

And so we'll partner with the local teams to say, "What is the full marketing plan?" There will always be some aspects that still stay local, and we think that's really important.

And then the things that we centralize and drive from the platform side are things that we believe we can bring in best practices, take the learnings, as we talked about earlier, right?

Take learnings from all different parts of the platform to apply and drive growth.

And when you think about that, just sort of broadening this, and Sarah, you know, this is for you, but then Keith, I'd love to hear you add to that.

I mean, one of the things that's maybe a, an obvious statement, but you're not just buying great businesses and putting them together.

Your goal is to make each of those great businesses that are your partners better businesses.

And that marketing story that you're just describing is part of that.

How do you help a local business owner?

If I'm a local business owner in this space, how do you help me grow organically?

What can you do aside from the things you just described to help me?

So there's two companies that actually come to mind that might help answer that question with a, a few kind of more specific examples.

We have a partner out in Michigan that great business, has always had a huge focus on their customer, but they never had a program focused around review generation or driving reviews on Google, which we know to be a very important aspect of when customers are shopping around and trying to find the right company for them.

So they have four locations.

All locations were rated around 4.6 stars on Google.

We worked with them to really build out a program and automate review requests to their customers after they had jobs.

They've now, across all their locations, are rated either 4.8 or 4.9 stars, which has been really foundational to our SEO program to just drive more folks calling, which was really driven by them continuing the great service that they had, but adding in some of those best practices to really increase that star rating.

It's almost just getting… You're, you're helping to get more people talk about the good service they're providing.

Right.

And more people find them- Yeah … as a result of it, right?

Yeah.

So that's a great one.

Another one that comes to mind is one of our partners in Massachusetts, and we worked with them on just better engaging with their existing customer base.

So they hadn't been reminding their customers when they were due for service.

So for example, if you have a reverse osmosis system, generally you should be changing your filters about once a year.

We worked them to kind of implement our whole playbook, reminding customers to come back.

So that's series of emails, texts, direct mails to say, "Hey, it's about time that you're due for service on your equipment."

And they've just continued to grow the amount of customers that continue to come back for them for service, which has just improved the service that they provide for all of their customers who come in, not just from that first installation, but continuing on through that life cycle.

Yeah, I love that about this industry in particular.

Maybe it's a lot of industries.

But I love that business improvement is value improvement for your customers too, right?

That those reminders aren't just about selling more stuff to the customers.

They're about improving the quality of water, the health of the water system, and so forth, and that there's a really powerful relationship that I've seen between your businesses and the customers.

And that filter update as just a simple example, or getting people talking more about the great service that they have is a way of getting more people that great service, and it just, it is a really powerful thing that I've been fortunate enough to see some firsthand.

So Keith, what about you from your perspective and you think about how when you partner with a company, how you make them better in terms of growth and organic growth in particular?

We aim to be really targeted in the places that we provide support or resources or help with process, and everything else we try to just stay out of the way and let great entrepreneurs operate really.

And so this is always evolving, but the places that we're providing support today, one is from a marketing and lead gen perspective.

So everything Sarah said around reaching more customers and better servicing existing customers.

Second, on the technology front.

So ServiceTitan implementation and ongoing support.

Third is from a finance and accounting, payroll, benefits, insurance.

We're able to take all of that off partners' plates.

Fourth, from a data perspective, so giving partners real time daily and weekly insights that better enable folks to manage their businesses.

Also, operational support.

So every region has a regional president who works every single day with business leaders on operational challenges or initiatives or even just as a thought partner.

So you mentioned things like payroll and insurance and even the implementation of ServiceTitan a- and these kinds of things that you can help these businesses.

If I'm listening to this and, and I have my own water treatment business and I've been managing all of that stuff for as long as I've built my great business, wherever that is, what does it look like for me as the business leader once you start to take some of this stuff that I probably don't want to be doing in the first place?

I didn't get into business to deal with insurance or even payroll for that matter.

How should I be thinking about the potential for partnership if I'm a founder, given what you've just described?

Everybody we partner with still continues to run their business every day.

That being said, right, each of the partnerships we do is custom, right?

So they all look a little bit different.

And we've had owners of businesses who said, "You know what? I don't wanna deal with all of this. I just wanna sell," for example.

And smaller business, great reputation locally.

We had another partner that was a bit bigger in the area, and now that individual is a water specialist for this bigger company.

That's what he wanted to do.

We've got another scenario out in the Midwest where the business leader was looking to retire in four or five years, so it wasn't immediate, but was starting to think about the future, and all he wanted was to get off his plate all of the administrative stuff, the payroll and the insurance and the AP and just everything that goes into running a business.

And so we've been able to, over time, take that off his plate, and now he can go out and focus a much more of his time on selling, which is what he loves to do in addition to running the company, but not necessarily having, you know, all of the administrative responsibilities with it.

So Sarah, I wanna come back to you and just hear from your perspective.

H2O Care Partners is obviously continuing to grow.

You've talked about the marketing approach and the family of brands that you're building.

As you think about an H2O Care Partners who's twice again what it is today, what excites you about what's on the horizon from the marketing perspective?

We've been doing a lot of testing.

So one of the awesome things having so many brands kind of across the country is from a marketing perspective, we can have hypotheses and say, "Let's test either in one area or maybe with one or two brands. Let's see how it works. If it works well, let's scale it and bring it across." So really excited about some of the stuff with-- that we're doing there.

We've been doing some experimenting with AI for things like speed to lead, how do we convert more of our leads into jobs, whether that's because it's after-hours and weekends, or because it's really significant volume coming from certain channels.

So I think as we get bigger, that power will only grow more as well, and having more tests going on and really try and say, how do we always have one or two tests happening, measure them really well, and then be able to bring them across.

And what that means is just more playbooks and more best practices that we can bring to all of our partners across the platform as we continue to learn.

Yeah.

It is just that powerful network effect of learning that you guys have already hit on as well.

Keith, for you, as you think about the next phase of growth, how does the company continue to evolve?

We're in the early innings.

I think the only constant here is change, and we are constantly evolving.

I mentioned earlier, we think of our partners, our businesses, as our customer.

And so what's next for us is directly related to that and investments to better service our partners and their teams and their customers.

Really happening on three fronts over the next twelve months.

One is investment on the people side.

We've recently hired a chief people officer who's now building out her team in Boston to provide support from both the hiring benefits as well as learning and development front for all of our partners.

Second is from a technology standpoint.

We received over fifty thousand calls in the last twelve months after hours, and those are calls that in a, a typical world would go missed.

But we're now at the point where we have the scale and the resources to be able to build an infrastructure to answer those phone calls and to service more customers therefore at the end of the day.

Third is from a new locations standpoint.

What we're seeing every day is there is this incredible demand for services from our partners, and we're constrained a bit right now by… You know, it's not feasible to go service somebody three, four hours away, right?

But there might be this incredible demand there.

And so we are over the next twelve months standing up a function to be able to open new locations with some of our strongest brands, which we're all really excited about.

We are growing fast.

Every day, we are collectively learning from the great partners that we bring on board, and they are teaching others on the platform as well.

And because of all of that, that's why we call this a partnership.

If you enjoyed this episode, check out our other Microcap Moments episodes at www.shorecp.university/podcasts or anywhere you get your podcasts.

Here you will also find our Bigger.

Stronger.

Faster.

and Everyday Heroes series, each highlighting the people and stories that make investing in the lower middle market unique.

You will also find our latest video podcast series, Raw Talent.

This podcast was produced by Shore Capital Partners and recorded in the Andrew Malone Podcast Studio, with story and narration by Anderson Williams, story editing and recording by Austin Johnson, editing by Reel Audiobooks.

Sound design, mixing, and mastering by Mark Galup of Reel Audiobooks.

Special thanks to Keith Caldwell and Sarah Longstreet.

This podcast is a property of Shore Capital Partners LLC.

None of the content herein is investment advice, an offer of investment advisory services, nor a recommendation or offer relating to any security.

See the Terms of Use page on the Shore Capital website for other important information