Monthly Archives: January 2021

Ep. 110 – Citizen Mad Scientist, Chris Armstrong

By Noah Graff

Today’s show is the second episode in our season about Swiss machining.

I interviewed Chris Armstrong last week while he was parked at a rest stop somewhere in Texas. He was en route on an all day trip to service a customer’s Citizens. I met Chris and his partner, Ryan Madsen, owners of Texas Swiss, a few years ago, trying to sell them some Citizen L20s from Asia.

Texas Swiss, formerly named Mad Science, is a CNC Swiss job shop not far from Houston that focuses primarily on Oil & Gas and Defense, along with some medical and other work thrown in. Chris told me that some of the medical parts the company produces actually have similarities with gun parts because of their size and various other features and shapes.

Scroll down to read more and listen to the podcast, or listen with Google Podcasts,Apple Podcasts or your favorite app.



In the past, I’ve usually talked to Ryan when peddling machines because Chris always seemed to be on the road, servicing the machines of other shops. That puzzled me, but eventually it became clear that servicing machines is truly a second business for their company. Just cranking out parts isn’t enough for Chris because his true passion is wrenching on machines. 

Chris’s Citizen odyssey began 15 years ago. He was 21 years old and had just gotten laid off of his job as a welder at a fab shop. The night he lost his job and the following day he let off steam by blaring Metallica and starting a rehab on his condo’s bathroom. His neighbors in the building complained about the noise. When Chris explained to them that he was pissed off about losing his job one of the neighbors suggested he visit her son’s machine shop the next day. 

Chris Armstrong of Texas Swiss

When Chris came to the shop he laid eyes on a 1993 Citizen L316, and it was love at first sight. The machine was a new addition to the shop because the company was bringing new work in-house, so nobody there knew how to run it yet. Chris seized the unclaimed position of operating the shop’s lone Swiss machine. He taught himself to run it, taking books home at night and memorizing them. He was the beginning of the company’s Swiss department. The company, which was a medical shop, grew exponentially the next few years, but Chris eventually left to work for Citizen. He traveled around doing applications, sales, and support for awhile before finally deciding to start his own Swiss shop. Eventually he teamed up with Ryan Madsen, a high school friend to start their company Mad Science (later renamed Texas Swiss). The company’s original name came from Chris’s nickname, “Mad Scientist,” which he was given when he learned to operate a Matsuura MX-520 in one legendary morning on his own.

Chris says he enjoys the “crime scene forensics” element of troubleshooting machines. Yet, he says the root of most problems he encounters in shops comes from simplest of culprits. He says a lot of problems occur just because machines are not kept clean. Stray swarf and chips can easily cause a chain reaction of production mishaps.

He also says machines often don’t work correctly because they were poorly set up. He says setup people are sometimes in such a hurry to get a job up and running they use the wrong tooling, which is the cause of a lot of machining issues. He told me he likes to say “slow is smooth, smooth is fast.” His philosophy is that the machines are already plenty fast, so taking a little more time for a setup will make production a lot more efficient in the end. He adds, its always important check machines’ sleeves because they’re always suspect. 

Just talking to Chris a few minutes you know he can’t be content with staying home running a production shop, never venturing out into the field. He told me it would be a waste of a God given gift for him not to service machine tools, and that helping people overcome their machining heartaches and bring their projects to life gives him purpose. 

Question: What was the most difficult problem on a machine that you overcame?

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Brady vs. Mahomes: Tough Decision

By Lloyd Graff

Can you give me a good reason to write about the machining business with the Super Bowl approaching? 

Tom Brady, the greatest NFL quarterback ever, against Patrick Mahomes II, who may become the greatest quarterback ever. Yet the life-changing business decision both guys had to make before they turned 21 was whether they wanted to play Major League Baseball or pursue football.

Patrick Mahomes, son of a Major League pitcher with the same name, grew up around the game. His dad played for Minnesota, Detroit, even my Chicago Cubs over an 11-year Major League career. Young Patrick was recruited by Texas Tech University to play both sports and was a relief pitcher for the college team. He would have been drafted after his sophomore season but made it clear to his father and the Major League baseball scouts who followed his course that football was the sport he would build his future on. 

Tom Brady went to the same high school that Barry Bonds graduated from in San Mateo, California. He was a powerful hitter and batted left-handed. He played catcher and was projected as a second or third round draft pick if he did not go to college as a football player. 

Brady chose the pigskin. He had faith in himself choosing Michigan, which had a future pro quarterback at the time in Brian Griese and an all-world prospect named Drew Henson, who was planning to follow Griese’s path. 

Brady did not play his freshman and sophomore years, and he split time with Henson during his junior year and into his senior year. 

The 1999 Orange Bowl was the last game at Michigan for both Brady and Henson. The Michigan coach, Lloyd Carr, picked Brady to start and he played a fantastic game. Henson watched from the sidelines and decided that he was never going to be a quarterback like Brady. He signed a baseball contract to play for George Steinbrenner’s Yankees and collected a $3 million bonus soon after. Hensen was a bust as a baseball player and actually wound up playing in the NFL as a backup quarterback. 

Brady was picked 199th in the 2000 NFL draft, a sixth round choice by New England. After 21 years in the league, now holding virtually every passing record there is, Brady now gets to play in his 10th Super Bowl next week against Mahomes, who was just 4 years old when Brady joined the Patriots.

Tom Brady vs. Patrick Mahomes

The game is worth watching just to see Mahomes and Brady play one another. The two men have played each other four times before, splitting the games. Both men have amazing accuracy. Mahomes can run well, while Brady may be the slowest afoot in the NFL. Mahomes has a chronic toe injury and is coming off a possible concussion during his game against New Orleans. Mahomes has the more dynamic receivers of the Kansas City Chiefs, particularly Tyrek Hill and Travis Kelce. Tom Brady’s Tampa Bay has the better defense.

On paper, Kansas City has the superior team. They have lost only once this season while Tampa Bay barely made the playoffs. But Tom Brady beat the League’s MVP, Aaron Rodgers, on the frozen tundra of Green Bay’s Lambeau Field to get to the Super Bowl. He outplayed Rodgers.

Brady is 43 years old, yet he played every game this season and never had a significant injury. He has a knack for avoiding punishment. He almost always wins big games. 

I know the commercials will be awful. Pepsi’s halftime will be laughable, and the hype will be absurd, but Brady vs. Mahomes makes the Super Bowl a game you have to watch.

Question: Which team will you bet on in the Super Bowl?

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Ep. 109 – Citizen CNC Swiss Lathes with Marc Klecka

By Noah Graff

Today’s show is the first episode of our new season about Swiss-Type CNC machining. Our guest is Marc Klecka, founder and president of Concentric Corporation, a prominent distributor of Citizen-Cincom CNC Swiss lathes in Cleveland, Ohio.

Scroll down to read more and listen to the podcast, or listen with Google Podcasts, Apple Podcasts or your favorite app.


Main Points

Marc talks about his company, Concentric, which has been distributing Citizen Swiss machines for 31 years and Miyano for 10 years (after Citizen acquired the company). (2:20)

Marc gives his “5-year-old explanation” of Swiss CNC Machining (sliding headstock machining). He says the original technology of “Swiss style machining” was developed in Switzerland over a hundred years ago for producing high precision watch components. He says what differentiates CNC Swiss machining from conventional CNC turning is that a CNC Swiss machine grips the part with a collet and also supports the part with a guide bushing. This eliminates the vibration that normally occurs when machining bar on a a conventional CNC lathe. (3:00)

Marc says a traditional Swiss part has a length to diameter ratio of 3 to 1 or more because that is the point where you start sacrificing the rigidity and accuracy on a conventional CNC lathe. He tells a story about a Citizen customer who produced a 10-foot part out of aluminum tubing. (4:40)

Marc talks about the importance of running ground bar stock on Swiss machines, particularly for running lights-out. However, he says that says in the 31-year history of Concentric, he estimates that only 30% of the material run (in Swiss mode) on the machines he has sold has been ground bar stock. He says it is a misconception that Swiss Style CNC machines are only good for running ground stock. (7:25)

Marc says that during 2020 Concentric’s business did ok, but the pandemic made it more difficult to sell machines because it was harder to have in person contact with customers. (11:00)

Marc says that there are lots of good brands of machine tools on the market, but he sees the support and service of local distributors as something that sets Citizen apart. He says that many years ago Marubeni Citizen made a point of having all of its local distributors become self-sufficient for servicing customers. He says that all the Citizen sales engineers also are applications engineers. He says it is important to have sales people who can get in the trenches with customers to solve their problems. (12:00)

Marc talks about Citizen’s proprietary LFV (low frequency vibration) technology, which is featured in many of the latest models. It enables operators to control the geometry of the chip coming off the machine using the machine’s CNC control. He says this capability is significant for manufacturers who want to do lightly attended or unattended machining. (17:20)

Marc talks about the significance of the medical sector for Citizen machines. He explains thread whirling for making long bone screws. He discusses a bone screw that was made on a Citizen featuring a laser that performed a cut on that part while still inside the machine (see video). (21:45)

Marc talks about diverse markets where he sees Citizens being used. He says during COVID-19 woodworking has become more popular and Citizen machines are making tools used for the art. Also, he says tattoos have become more popular during the pandemic and Citizen machines are making parts that go into the tattoo gun pens. He says demand continues to grow for parts for the electric car markets. (26:00)

Noah asks Marc tell him something he learned the week before. Marc jokes hat he learned it probably was not a great thing to break into the Capital building. He also said that he learned about the new LNS chip conveyors that are being put on some of the newest Citizen machines equipped with LFV technology. (31:00)

Question: Which Swiss machine do you prefer to use and why?

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A Battery of Questions

By Lloyd Graff

Every few months it’s fun to write a piece that asks, “what if most of the smart people are wrong?”

I just read a fascinating article in the Wall Street Journal discussing the $50 billion bet Volkswagen has placed on developing an electric car that is better than a Tesla. Should we be surprised that the best German Engineers, who built the diesel that nobody bought (at least in America) and then lied about its numbers, would build an electric car that wouldn’t work? 

VW has now brought in new people, shoved the boss aside except for window dressing, and started over. 

This was all predictable. It takes a crazy lone wolf like Elon Musk to pull off a viable electric car that can sell a half a million vehicles and satisfy a fairly high percentage of them. Musk has shown he can make an Electric, but to me he has not shown that there is a real mass demand for it, at least he did not in the year 2020. 

I do think quite a few Electrics will sell in China because Chairman Xi is going to force them down people’s throats, but excuse me for being heretical, I don’t think most folks care whether a car has a plug or a gas cap, or floats on hydrogen. They want to get from one place to another, safely and comfortably. They either do not care or accept the concept that an electric car, which is really fueled by coal, natural gas, or God forbid a nuclear power plant, will save the planet from the climate change that “smart people” tell them is happening.

Another surprise for you, fewer and fewer people care about cars and driving these days. I suggest you discuss this with your kids and grandchildren who are supposedly aching for these software engineering masterpieces. When I was 16, everybody begged to get a driver’s license on their birthday. Today many young people would rather ride their bikes.

I think Elon Musk already knows this. This is why he is hedging his bets by focusing on his batteries, spaceships, and tunnels to Las Vegas and Austin.

Volkswagen ID.4 Electric Vehicle

He has built a car for people to brag about, and he has become the richest person in the world by doing it, which may enable him to live on Mars until he is 140. Vehicle companies will sell 90 to 100 million things you use for transportation. Musk’s 500,000 electric cars along with what everybody else is producing have a puny 1% of the market. Now Google, Apple, and possibly the Vatican are working on Electrics because everybody knows they are the next big thing. Except, maybe they aren’t. 

I watched a lot of football over the weekend. One insipid car and pickup truck commercial after another was followed by 797 car insurance advertisements. Liberty, Liberty, Liberty, Liberty, Liberty. Please free me from them or I will Progressively lose 15% of my cerebral cortex. 

There is a reason for the proliferation of GEICOs–the reduction in real driving. COVID and Zoom have diminished driving for almost a year. As a result, fewer accidents. State Farm has crushed it. Post-vaccine, people will still be working more remotely. Driving will shrivel. You can finish the story. 

I will place my bet that Earth will survive despite the “Existential Threat” of sweat. 

Enjoy your self-driving electric Volkswagen. I think I’ll walk.

Question: Does a Hybrid car make more sense?

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Ep. 108 – Tool Life Optimization with Benjamin York

By Noah Graff

Our guest on today’s show is Benjamin York. Benjamin’s company, Theory 168, makes a product called Tool Life that collects and analyzes data on machine tools to optimize efficiency in machine shops.

Scroll down to read more and listen to the podcast with Google Podcasts, Apple Podcasts or your favorite app.


Main Points

Benjamin talks about his company, Theory 168. He says the company focuses on optimizing machining processes, particularly in Swiss machining. He says his constant mission has been to “take the art out of machining.” He wants to approach machining from a scientific standpoint rather than believing there are “ghosts in some machines,” as he was originally taught when coming up in the industry. When machine glitches seem mysterious and won’t go away, Benjamin’s attitude is to keep digging deeper, rather than using hacky short-term solutions. (2:45)

Benjamin talks about his background. His father operated machine tools, and Benjamin started spending time with him at the shop when he was 4 or 5 years old. As an adult Benjamin worked in machine shops, and he has been a consultant for machining companies since 2009. (6:15)

Benjamin says that most shops don’t reach their potential for productivity. He says many companies continue to purchase equipment and hire employees while they could get a lot more out of the capacity they already have. (7:30)

Benjamin’s company, Theory 168, builds a product called Tool Life for the purpose of helping companies boost their productivity and utilize the capacity they already have. It uses Web-based software that collects data about machining processes and then analyzes the data so shops know how they can improve their productivity. One of the most significant processes the software is intended to optimize is tool life on a machine, hence the product’s name. (8:20)

Benjamin says he wants to make technology work for the people using it. He wants to make jobs easier. He says one of the potential benefits of making processes less complicated is that companies can hire workers who have less experience. They can hire people based on their potential to grow and create a good company culture. (9:20)

Benjamin explains how Tool Life works. The product measures a myriad of factors such as quality, tool changes, and offsets. (14:00)

Benjamin discusses Tool Life’s physical hardware, which the company calls a “machine weather station.” It’s a 4 x 4 box that connects to machine tools via magnets. It collects data with various sensors, which it transmits to a Web-based cloud via WIFI. Each machine requires its own localized box because of the specific data unique to a machine. For instance, Tool Life collects vibration data relating to a bar feed, various inputs of temperature, and cycle time. After all the data is analyzed the user knows the options available to optimize a process. Perhaps the machine is being operated poorly, the company needs to buy higher quality tools, or change the tools more frequently. (15:00)

Benjamin talks about an add-on product to Tool Life called Shop Map 168 that tracks the location of people in a shop and prescribes how to make the shop more efficient. (25:00)

Benjamin York of Theory 168

Benjamin York of Theory 168

Benjamin says that after the data is collected and the root cause of the untapped productivity is revealed, most machinists are able to come up with solutions on their own to improve their productivity. Benjamin says he believes that most machinists see themselves as race car drivers who are constantly wanting to get the most out of their equipment. He thinks they will naturally be motivated to make necessary changes in how they operate machines to reach their potential. (28:30)

Noah asks Benjamin how he approaches his own work as far as optimizing productivity when coming up with ideas for products or for his business. He says sometimes it is best to come up with creative ideas with very little structure, however Theory 168 has also implemented various software programs that help its team come up with ideas to fit into specific parameters as well. (32:00)

Benjamin says one interesting thing he learned last week is that people have to “trust that things are going to be ok.” He says that over the last year it has been necessary for people to learn this principle. He says that in the end everyone is going to have to work together to get through the difficult times. (33:15)

Benjamin says he thinks that 2021 will be a big year for having gratitude. He says he is looking forward to life being more fun than it has been lately. (34:35)  

Benjamin ends the interview by saying he hopes that improvements in technology will allow more time for people to do the things they want and spend more time with their friends and family. (36:00)

Question: How would you like to become more efficient in 2021?

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What is Winning?

By Lloyd Graff

What is winning? 

We saw one of its faces Monday night when Nick Saban’s Alabama football team annihilated a solid Ohio State squad for Saban’s seventh National Championship. Saban seemed joyful and relieved. He knew he had the superior team and they showed it from the first snap. He acted truly happy for his players, who carried him off the field after they gatoraded him.

In business, winning supposedly comes when you meet a sales goal, move into a new building, or get a promotion. But I find those are rarely moments of elation for me.

Instead they usually feel like “is that all there is?” moments.

The joy I get is in the preparation. It is making the effort to get up the hill, falling down, pushing forward, and falling back again. The thrill comes not from making it to the pinnacle, but from looking back at the struggle and knowing you are almost where you think you want to get to. I have found that reaching the goal often means feeling a letdown.

As I have gotten older, I have come to realize the real prize is not the trophy, the money, the praise. The winning is in being in the moment–of feeling love or gratitude or recovery. Winning also comes from the act of creating something original or delicious or just crazy funny.

A sense of winning comes from helping other people feel better about themselves. The truly successful coach delights in the championship his or her players win for themselves. You can see it in Nick Saban. I saw it watching John Wooden coach UCLA basketball teams to 10 championships in 12 years. 

Coach Nick Saban after winning against Ohio State

It is harder to develop the sense of giving and sharing that make team sports so rewarding for participants, and even fans, when players see accomplishments as more of a vehicle to personal fame and even wealth. The truly superb coaches like Saban and Bill Belichick somehow exhibit the charisma and humanity to integrate the stars and the laborers into a common effort.

Personally I feel a sense of winning when I write a blog that feels true to me and says something worth saying. If it is original, has language that flows, and elicits good comments, that’s gravy. 

I hope you have found your own personal sense of winning today. It isn’t easy.

Questions: What was your last win?

Will the Browns or Bills win a second playoff game?

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Ep. 107 – Reshaping the Supply Chain After COVID-19, with Professor Yossi Sheffi

By Noah Graff

Our guest on today’s show is Professor Yossi Sheffi, author of the new book, The New (AB)NORMAL: Reshaping Business and Supply Chain Strategy Beyond Covid-19.

In the interview, Sheffi explains how companies and governments around the world have dealt with the supply chain disruption over the past year’s pandemic. He also gives insight on how people can prepare for the next time the world’s supply chain is turned on its head

Scroll down to read more and listen to the podcast with Google Podcasts, Apple Podcasts or your favorite app.



Main Points

Yossi defines supply chain as the series of activities that take a product from the raw material stage to a finished product through a series of transportation, shipping, and creation until it finally reaches the consumer. He says the final stop of the supply chain is the responsible disposal of the product after it has been used. (3:15)

Yossi gives his background. He studied civil engineering in Israel and then came to the United States to conduct operational research at MIT, where he studied network theory. Originally he wanted to utilize his education in the urban planning and transportation sector, but he became frustrated because nobody was applying what he thought were brilliant ideas. Eventually he found an opportunity working with trucking companies, using the same mathematical principles he had researched, in the end saving these businesses a lot of money. From there, he branched out into working with the customers of the trucking firms such as manufacturers, retailers, and distributors to optimize their operations. In the process, he started five companies, which he says were all successful and sold out to larger companies. Yossi said he always returned to MIT because he is passionate about teaching and research. (4:35)

Yossi says the secret to being able to do so many projects is to have a very understanding wife. He credits her with keeping their relationship strong and helping him maintain a good relationship with his kids, despite working more or less 24/7. (6:10)

Yossi discusses some of his past books which cover different aspects of the supply chain. In March of 2020, while he was working on a book about new supply chain innovations, the world was struck by the COVID-19 pandemic. He saw this as one of the most significant historical events in the history of the world’s supply chain, so he stopped working on the book he was writing and wrote the New (AB)Normal from March until August of 2020. He says it was essential to get the book out quickly before COVID-19 became tired, old news. (8:30)

Yossi talks about how the US is still slow in fighting COVID-19. He compares vaccination rates in the US to those in Israel. He says Israel plans to have its entire population vaccinated in two and a half months. At the time of this interview (Dec. 2020) Israel was vaccinating upwards of 150,000 people a day, while his home state of Massachusetts was only vaccinating 30,000 people daily. (9:50)

Yossi says one distinct thing about Israel’s approach to the coronavirus is that its government did not hedge its bets of the efficacy of the vaccines. It assumed the two vaccines based on the mRNA from Moderna and Pfizer were effective and ordered them before they were approved by the FDA. Ironically the country was currently in lockdown at the time of the interview, while health professionals were administering the vaccine from 5AM until 10PM (soon to be 24/7). He says the Israeli government even got some of the ultra orthodox authorities on board with administering vaccines on the sabbath by invoking a rabbinical rule that states life is more sacred than anything else. (11:45)

Yossi compares the supply chain challenges for distributing the COVID-19 vaccine to those in the automotive supply chain. He says that in some ways distributing the vaccine is easier because no one is concerned about minimizing costs. (14:15)

Yossi discusses the bullwhip effect on the world’s supply chain, which was significantly apparent in 2020. He says when estimates for supply and demand become distorted because of a disrupted supply chain, the solution for manufactures to not overreact in their inventory buying is to listen to the final consumer. Thus, even Tier 2 or Tier 3 automotive suppliers should be monitoring car sales to predict upcoming production demand, rather than only listening to what the Tier 1 companies tell them. (16:05)

Yossi talks about China. He says country’s autocratic measures enabled it to quarantine successfully and get the pandemic under control. He says that early on during the pandemic, the Chinese government asked banks to give significant loans to medium and small sized companies. He says the Chinese government preferred to keep companies running rather than give money to individual citizens, while in the US the government preferred to support individuals rather than protect businesses. He says that European countries also preferred to support companies rather than individual citizens during the pandemic. He adds that it’s unclear which approach was the best choice. (19:50)

Yossi shares what he found the most shocking about how the supply chain malfunctioned during the pandemic. He says medical supplies in the United States were terribly low, leaving many hospital workers unprotected. He says the US used to have a strategic reserve of PPEs and other medical equipment, but it withered away during the Obama administration. In his new book, Yossi gives suggestions on how the United States should prepare for a future pandemic, including rebuilding a strategic inventory. He also says hospitals need to be stress tested for crises events, and a medical personnel reserve, much like the Army Reserves should be created. The medical personnel reserve would be comprised of people trained to do basic care. It would free up nurses and doctors to do more difficult work. (24:45) 

Yossi gives advice to Tier 2 and Tier 3 manufacturers on how to survive a pandemic. He says they need to ensure they are not too leveraged. He also encourages membership in larger manufacturing associations so they have a voice that represents their types of businesses in Washington. (28:45)

Yossi says he is skeptical that significant manufacturing work in China will return to the US or move elsewhere because it is extremely difficult to replicate the extensive supply chain infrastructure that already exists in China. He says some final assembly of products may leave China, but the parts will continue to be made there. He says this is why it is vital to keep the manufacturing and proprietary knowledge that is already in the United States from leaving. (31:50)

Yossi says that one of the most interesting things he has learned about recently is the COVID-19 vaccine distribution in Israel. He says one key difference between the vaccination process in Israel verses in the US is that in the US patients are required to sign legal wavers to protect against lawsuits, while in Israel just getting in line is considered legally signing off on the procedure. This enables much greater efficiency in the vaccination process. (32:55)

Question: What would you have done differently in 2020?


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Customers For Sale

By Lloyd Graff

You can’t buy love, so they say. But can you buy a customer? If you can, how do you do it and what does it cost? 

This is a question that I think about from a number of angles. One of my jobs at Graff-Pinkert is to help people buy and sell businesses in the machining field. I don’t use the term broker because I see my role not so much as a matchmaker but more as counselor, an advisor to both buyer and seller as they go through the arduous task of developing and completing a transaction that has a decent chance of surviving and possibly even thriving. 

I often know both parties interested in a deal. This may be because I’ve been around for a while. Also, my life is more of an open book than most folks in the business because of the blog, magazine, and podcast, and because I care about the people involved almost as much as the fee. This is a good thing because in this field the fees are highly elusive.

People and companies want to buy machining businesses to acquire new customers, sometimes in a field that is unknown to them. If the selling company has a long-term, closely entwined relationship with a client, and the person who built that connection is leaving soon upon closing, establishing a new relationship is not easy. Introductions are helpful, but the team that does the crucial work must believe in the new folks who are buying the business. The acquirers need to show the proper respect for the previous ownership and team, while attempting to discover how they might do things differently and better. They have to anticipate that the staff they inherited are not going to be enchanted with them, particularly at the beginning. 

Businesses are often sold because they are old and/or rotting. They have held on to the old customers because of goodwill, inertia, and proximity, but family grievances, age, illness, clients changing ownership, and a myriad of other factors may be hidden by rosie looking cashflow and nice looking machinery and buildings. 

Sellers almost always ask too much for what they are selling. They leave it to the would-be buyer to discover the skeletons hidden under the 6061 aluminum chips. 

This is where the advisor in the deal may have to become a business therapist, telling both parties to get real if they have any chance to finally make a deal. 

You get to a point in a lot of deals where the lawyers have mucked things up to balloon their fees, the accountants have made the numbers hopelessly confusing, neither side trusts the other–usually for good reason–and everybody is tired of one another.

This is when I may actually earn my fee, reminding the seller that they might as well get realistic about what the business is really worth and advising the buyer that every deal has psoriasis, but at least this one has a unique aspect that will make it a winner if they just stick it out a bit longer.

Usually that underlying basic value resides in the customers the buyer will acquire and how they can add their special sauce to make the company even more appealing over time. 

Headphone Maker Beats Acquired by Apple

The therapy occasionally works, and sometimes it’s even true. The smart buyers, who have been through the process many times before, know how hard it is to get to the finish line. They will ignore their cautious lawyers and believe in their own conception of value, knowing that a lot of what they thought was valuable will prove to be a dream. But they will make it work anyway. 

That’s the deal game, whether it’s Apple buying headset maker Beats for $3.2 billion, or Joe’s Machining Team buying Jimmy’s Machining Team to get Jimmy’s customers.

Question: Can you buy a customer?

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