$0 to $4M in 12 Months: Marc Cortez’s Playbook for Growth in MedTech

Marc Cortez didn’t plan on becoming an entrepreneur.

But after nearly two decades building someone else’s company, a failed buyout attempt gave him a new perspective — and he launched Converge Medical Technologies from scratch.

Within 12 months, the company hit $4 million in revenue and $1 million in EBITDA.

In this episode, Marc shares:

• How to transition from employee to founder
• Raising capital the right way
• Designing a scalable sales model
• Leading through a 60% revenue loss
• Making tough decisions without losing your culture
• Building a logistics-heavy medical device business
• Why the right partners make or break a company

This conversation is a blueprint for founders navigating rapid growth, operational complexity, and unexpected pivots.

If you're building, scaling, or rebuilding — this episode delivers practical lessons from someone who’s done all three.

Connect with Marc on LinkedIn.

Learn more about Converge Medical Technologies

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Transcript

Marc Cortez 0:00

by month six, we no longer needed to dip into our pockets, so we were covering all of our expenses. And then by month 12, uh, year one, we$4 million in revenue and a million in ebitda. And then after that, it just went real quick.

0:14

Welcome to The Scalability Code, the podcast that helps you get out of the sh*t show and start growing your business. And now for your host, Matt Haney.

Matt Haney 0:23

Here we are today, another episode of the Scalability Code. Today's a special day for me'cause joining us today is Mark Cortez. Mark is the CEO of a company called Converge Medical Technologies, and Mark is a former client of mine joined us today. So Mark, thanks for joining us.

Marc Cortez 0:40

I am happy to be here, Matt.

Matt Haney 0:42

Awesome. So as I do with all interviews, I always say like, when we first introduce ourselves to somebody, it becomes this. How quickly can we get through, our one minute elevator pitch to, to get to the, the meat of what we're talking about? But today we've got some time and I want to go back, and talk about your entrepreneurial journey from where you started and sort of. Where you are today, and this is one of those times where more information is better, and we have the time to talk through it. So, when I look back at my journey, there was a moment in time when I was an introduced to an entrepreneur, and it changed my trajectory. And I'd love to know your kind of moment at some point where you decided entrepreneurship was for you. Oh.

Marc Cortez 1:22

Well, that's a great question. because I never thought I'd be an entrepreneur. I spent the majority of my professional career working for somebody else, and the majority of it actually working in durable medical equipment sales for, uh, an entrepreneur himself. Right. and it wasn't really until he told me that he wanted to sell the company and gave me the opportunity to buy it, that I went out and explored what it would take to actually do something like. That, and ultimately that kind of fell through, but through that process, this happened in 2018, 18 rather. I, took a pause and stopped him like, wait a minute. I'm, I'm essentially running this company for this guy. He's making all the money. He's out there skiing. I am like, I, I just learned how to raise money in the last year. I'm like, why don't I just do this for myself? And so it was really him, it was a blessing that he actually did not allow me to buy his company because it really forced me to go out and partner with actually some really great individuals to, to form our company, converge Medical Technology. and it's been a learning process. but it was a, it's a industry that I know really well, and so it was kind of like doing the exact same thing I had done. With a different product line. And so it's been a lot of fun and I've been able to not only get the same benefits I had in working with people and I work with people I like. So about 80% of our management team I've worked with for 15 or more years because they all kind of filtered over to me as they left that company. but we've had new challenges'cause everything, a lot of, we started everything from ground zero

Matt Haney 2:49

That's awesome. How long have you been in DME?

Marc Cortez 2:53

Now I started in DME, so we're looking at 22 years.

Matt Haney 2:58

That's awesome. And you did, what was your stint like? You, you spent majority of it at one place

Marc Cortez 3:03

yeah. Yep. So I spent 15, 15 years, at that company. Um, and that was a somewhat of a startup as well, but I started in sales and rose to, uh, be head of sales. for a decade. And then we've, we've been in business now, uh, seven years.

Matt Haney 3:19

So when you think back to the first, you know, 22 years ago you were, younger than you were now, but you're working alongside a visionary entrepreneur, somebody that created the business model, right? And where, how early were you in that business?

Marc Cortez 3:31

he created the product.

Matt Haney 3:33

Ah,

Marc Cortez 3:33

created the model.

Matt Haney 3:35

there you go.

Marc Cortez 3:36

so I came in pretty early. They were fumbling through the process. He had its amazing product line, and they kind of knew a little bit of what they were doing. I was fortunate enough to be early enough into the process, so they were, they had proof of concept for about a decade. but when I came on board, it was really actually learning, developing how to actually sell the product, and moving boxes essentially. So I really was there from, I, I'm gonna say the ground floor. Um, after, after he had proof of concept,

Matt Haney 4:07

you got to build a, business with none of the liability or the downside,

Marc Cortez 4:10

Correct.

Matt Haney 4:11

which also means you didn't get into the upside either. But, uh, hey, we

Marc Cortez 4:15

But he did right. And Yeah.

Matt Haney 4:18

No, the, the opportunity to learn from someone else's pocketbook is good, uh, at some point, but you were with them for 15 years.

Marc Cortez 4:25

And he had a great, uh, partner, uh, that came in about five years into my journey, who was operating as our CEO, um, uh, gentleman by the name of Eugene Sung, who had been an operator really his whole career. Not an entrepreneur, but a really, really strong operator. And he mentored me and we worked together essentially. He's number one. I'm number two, and I learned a lot from him how to build scale. Um, and it was very beneficial relationship. So he, he's who I would attribute my, my growth to the most.

Matt Haney 4:57

And, and during that part of building that business, um, did you take different roles or were you always on the revenue side?

Marc Cortez 5:05

Um, I kind of, well, it was, it was a family owned small company, so in

Matt Haney 5:11

So you're wearing all the hats.

Marc Cortez 5:12

wore a lot of different, I had, I had a dabble in everything, so I was definitely on the revenue sales, side, but I also had to move into, compliance warehouse management, billing and collections. I had dabbled in HR and everything, and so, which at the time seemed like a lot of work as it moved into this, our own thing. It was actually great because I had scope over everything that I needed to start a business,

Matt Haney 5:40

Yeah, it was the ultimate, MBA and, and growing and managing people and. How quickly were you able to get out of kind of revenue in that business? Like meaning how quickly were you able to hire staff and start managing sales and, and then focusing on some of the other operational things?

Marc Cortez 5:57

in that business, I mean. It was, you know, again, I started out just as a sales rep. And so we, we scaled in that. I was in that role for two years, and once I moved into management in that role, we started to scale pretty quickly. Um, I only spent a year and a half as a, we'll call, we'll call it like a district or regional manager. Once I moved into head of sales, we grew that business, from top line. When I took over as head of sales, uh, we were at 13 million top line. And we grew it to 46 million, in, uh, the 10 years I was there. So we had double digit growth year over year, over year, over year. Uh, and, and it scaled. We, we had a sales force of, I wanna say 18. We ended up moving to close to 90, uh, during that timeframe, and then

Matt Haney 6:44

That's crazy. And did you do that by adding products or expanding reach?

Marc Cortez 6:49

Expanding reach. We had a, we had a pretty small suite of products. Um, but we, we needed to transform the business when I took over to not only grow the revenue, but grow the profitability of it. So we had to actually move towards a more difficult side of the business, which for us is in the VA workers' comp space where you have to really prove authorization navigate. So we created a sales model. That was replicatable to actually train our reps to target correctly, to sell, to learn how to sell, and then ultimately on the, on the backend side to how to bill and collect,

Matt Haney 7:25

Awesome.

Marc Cortez 7:25

and, and that, uh, that really grew the profitability of the company.

Matt Haney 7:30

So fast forward 15 years into this. Now you get an opportunity, you mentioned earlier, but I'd like to pick on it for just a second. You were, you had the potential to buy that business.

Marc Cortez 7:39

He approached me in 2018 and, and let me know that, hey, I think I wanna sell the company. Um. Uh, I thought I'd worked there for the rest of my life. It was a family owned company. They were very family, so I was very family oriented. I met my wife there,

Matt Haney 7:52

Very

Marc Cortez 7:52

and, uh, we were both sales reps and ended up getting married. and I came back and had a discussion with a friend of mine who was in m and a. Um, also an entrepreneur ended up buying his own company and running it, and we just started talking about it and he said, you know, you, you could raise money to buy that. And my father-in-law, who is a serial entrepreneur, I talked to him about it and he advised go back to the sky and say, give you, gimme 90 days before you actually really take it to market. And I did. And he did. And in those 90 days I found a capital partner out of, um, Dallas, a PE firm, um, that was gonna put an LOI in, in. And then it was really at that point. Um, I think he started holding the brakes, and it ended up being an okay. You know, he, I got an opportunity to see over the wall of what was possible, and that's the gift he gave me.

Matt Haney 8:39

that's it. So then you immediately said, all right, that kick in the pants has got me to look and start your own gig. So then you from nothing started converge.

Marc Cortez 8:49

Yeah. I dec I decided exactly what you said is like, okay, I've worked my butt off. Um, I see what's over on the other side, and I need to find a product. Um, I could do everything else. And so we began to look and I found a really unique product, uh, which is called the Bed Lumbar Extension Machine. It's been around for over 30 years, uh, the manufacturer, um, had some discussions with them. They were, uh, on the verge of filing bankruptcy. the compliment I got and, and they told me how their business model was working. They were trying to do what we had established at our previous company,

Matt Haney 9:23

That you've been doing for 15 years and started

Marc Cortez 9:25

and they were doing it, uh, poorly.

Matt Haney 9:27

So wait, so hold on. So were you still moonlighting at your previous company, kind of bridging the gap between payroll and figuring out how to and working that? Or like what was that transition like? I, hopefully

Marc Cortez 9:38

was, I would call it moonlighting. Um, it was just, you know, on my downtime on a weekend, I'd be, you know,

Matt Haney 9:45

You gotta do that. You gotta mitigate the risk you have against your needs and figure out how to do it. And those processes that's not quick, right?

Marc Cortez 9:51

It, we were still highly on target, despite challenges at our previous company,

Matt Haney 9:58

And then you're trying to go negotiate with the purchase of this device or licensing or whatever. Did

Marc Cortez 10:02

Yep.

Matt Haney 10:02

forever?

Marc Cortez 10:03

No, it didn't really, because the, the benefit that we had is that what we had established in our previous company, WA, was uh, uh, really excellence in, in, in the, the manner of business, uh, or what we actually did. and so we had a name, we've, we've created, we had, it's a really unique space. Not everybody's in it. But we did a really great job of it, so they were aware of who we were. they had an investor that had designed a competitor to our last company, and so it was pretty simple. Um, it was really easy for me to pick apart everything that they tried to do. it did not take very long, and we entered into a, like a, a licensing agreement.

Matt Haney 10:40

So you licensed the product. How, what was the timeline from when you kind of figured out the licensing model? Obviously you had the revenue model'cause you've done it for 15 years and you were gonna flip that into a new product. But when did you start making money? I mean, when was your first point of revenue?'cause at that point, businesses is losing money. You, you have some licensing agreement, you don't have revenue. Like how quickly did it take you to get it to revenue?

Marc Cortez 11:02

real really quickly. so we went out and did a capital raise, uh, for a million dollars. just enough really to hire people. what the other company was, uh, gave us in the transaction was some equipment that we actually can go out and sell. Um, so we actually, we formed the company and then January is when really. Boots hit the ground, which was myself, and two other, guys that used to work with me that we, we all kind of jumped off the ship, uh, around the same time together and formed this with two partners that came over from the previous company, from Mex.

Matt Haney 11:36

Yeah.

Marc Cortez 11:38

They knew how the product worked. That was about what they give us. They gave us, they didn't know how to sell it, but they definitely knew, you know, the clinical aspect, which was, it's very different dealing with back pain to what I previously worked with. and we knew where to go and we knew how to secure the business. so from that million, we bought more equipment, payroll and what have you, to make sure that we didn't have to dip into all of our life savings to do this.

Matt Haney 12:04

right.

Marc Cortez 12:05

by month six, we no longer needed to dip into our pockets, so we were covering all of our expenses. And then by month 12, uh, year one, we$4 million in revenue and a million in ebitda. And then after that, it just went real quick.

Matt Haney 12:20

That's awesome. That's really cool. and you brought over your, your peeps, man, what a great, what a great opportunity. Put the band together again and, and, and move'em over and start doing it. That, that was how many people was there? Four or five of you that jumped

Marc Cortez 12:35

In initially that we, that formed together, um, there were, there was myself and three of three of my reports. So we, we formed the company together. Her. Um, and so, uh, the four of us we knew were the start with, with the two other partners from, from Medex. And then slowly as, people lost their jobs at the other company, mainly we pulled over other people. So when I would hear through the grapevine, so and so was let go. I had maybe had some misalignment with the, with the owner of the other company on who was good and who was not. we started pulling them over. So we have, we've had at, at one point about a dozen. all management level, folks that, that ultimately came and worked with us.

Matt Haney 13:15

That's awesome. so I have a, I have a, an interesting story which you, you are directly a part of, and I think it's one of my, it's one of my favorite pivots to mention. so Mark and I, mark was introduced to me, and, and we come in and I, we meet a couple meetings and we're gonna, uh. We're gonna discuss working together. And then the, the first meeting I have with Mark, you get notice of this, this problem that went down. Tell us that story

Marc Cortez 13:45

I'm not gonna tell too

Matt Haney 13:46

as much as you now be vague, obviously, but you had a business pivot, you had to execute.

Marc Cortez 13:52

we did. We did. We had a huge, We had a huge, pivot.

Matt Haney 13:55

you lost a, a from a contractual purpose, or for some reason you lost a, a lar, you know, 25% or 30% of your revenue. Right.

Marc Cortez 14:03

yes. And so we lost actually about, hmm. About 50% of our revenue, maybe a little bit more, maybe about 60 ac actually in all reality. almost within four months. the first hit came, really on the first you, your first day. Um, and it was a pretty big, it was a pretty big blow. Um, and I will have to say like after we went through the first, we had a great first meeting, and then that evening is when everything, you know, um. Hell's Fire came, and on that next day, I'm gonna give it to you. Like I, I had spent the whole night fielding phone calls, you know, going through all the, the worries that everybody had, including my own. I was, I came in the next meeting and our EOS, uh, annual and I was ready to send everybody home. And I do have to commend you for, um, the. Uh, taking control. Um, it was awesome. And say, okay, like, I'm here. You've paid me. Let's, how are we gonna fix this? And that ended up being the beginning of a, a real pivotable pivotal transition for our business. So I, I do thank you for that. That was a, uh, and holding strong'cause. I mean, I, that was one of the few times I was just mentally exhausted where I'm like, just go home.

Matt Haney 15:14

Yeah. That was a a day, a day I'll never forget. But I will also not forget, you know, the six months after that where I got to watch a team of people that have known each other. For, I guess, 20 years at this point, you know, you and your business partners really lean in and realize that, you guys were in trouble and the, the core group of people weren't gonna let that slowed them down. You guys had seen something similar before, and other businesses you obviously had, you know, dealt with this, but everyone was interested in finding a common solution. It wasn't always pretty. But, you know, kudos to you for, for allowing everyone to have the space and keeping everyone together on track and focusing on what was possible instead of what, what the reality of the situation was. And, it was a great, a great point of leadership by you, um, and the rest of the team too. But being an outsider, seeing it happen and then watching you guys recover was, was, was pretty badass. so that was, that was special. And, You know, not without, not without challenge and without, um, heartache, I'm sure, but mo everyone's still going today and cranking, right?

Marc Cortez 16:27

We're still cranking. Um, uh, we had to downsize a little bit, but very minimally. so, uh, we did not lose a lot of people. it forced us to actually look though at like, and all the roles and jobs we had'cause we were cruising, we were doing great. Um, and you know, during those times, you know, you can get a little fat and be like, Hey, this is awesome. I could do this project, I could do this thing. And is it, you know, and I have a lot of, I have a lot of bandwidth and, and room to actually make mistakes when it comes down. And, and this is such a quick turnaround that, oh my gosh, it's either we're gonna keep. Working. Um, I had to make some really, we, we had to, I didn't have to do, I didn't do it alone. We had to make some tough calls and tough decisions and people were understanding of it, the ones in which we had to do that with. and, you know, hopefully someday we can work, uh, together in many capacities, uh, in different capacities. but we transformed the business, um, and we're still in progress 2020. Um, uh, but we ended up. From a top line, almost flat, uh, which considered we lost half our business.

Matt Haney 17:30

That's crazy, mark. Saying that out loud is absolutely crazy.

Marc Cortez 17:33

It's nuts. Um, we looked at other product lines, things I would never, I would've definitely not never, but I would've not been as quick to do. Um, it forced me to look at other major different revenue streams. What, what could have been a travesty still may turn out to be an amazing opportunity because since we lost this. Let's call it contracting. It's allowed me the opportunity to actually go engage with that provider payer and, and you know, we're moving forward and it's not gonna look exactly the same as it did in the years past, but it may be better for us as a company. So, I believe the team and the team rose. I mean, I definitely saw, to your point, they, they, we challenged'em. They got, they worked smarter. They all worked hard always, but they definitely worked a lot smarter, and held each other accountable and, you know, uh, didn't hold back, you know, yelled, screamed, whatever, all the things that needed to be said. Um, because everybody had a common goal and that was

Matt Haney 18:32

Right.

Marc Cortez 18:32

continue to build this thing. And, and we

Matt Haney 18:34

Right. And, and I'll say a group of highly, competent humans, these people could have punched out. A lot of these folks could have said, you know what, I, I'm, I'm, an asset. I can go work with someone else. I can go do this. But, you know, all the decisions that you guys were making in that moment, I can say I watched'em firsthand and was part of'em were about the people. Mark, you guys looked and leaned in and didn't want to do one thing that was unnecessary. You and the partners said, Hey, we're gonna give this a little more time before we make decisions. We wanna make sure we're not out, you know, affecting people's livelihood. Obviously you have to make decisions in the business as a business owner, but the people forward approach was really, really special to watch. And the fact that you guys ended that year, um, essentially flat, is absolutely incredible.

Marc Cortez 19:22

yeah, yeah, it is a little bit less profitable, but.

Matt Haney 19:26

Well, yeah, less profitable, but you, you're able to, uh, save some, save, save some face, and some potential negative aspects there. I wanna jump into a couple leadership things that I try to talk with people about. and these are meant to be, uh, off the cuff and, and first thing that comes to mind. So, um, I'm gonna rattle off a few of these and we'll pick on some of them once we talk about it. So, hardest thing about managing people, what are your thoughts? What's the hardest thing about managing folks?

Marc Cortez 19:52

think the hardest thing about managing people is, Meeting people where they're at. it, it really is the hardest. Uh, you, you have everything, you know, everything's great when you put a plan on paper, but understanding that not everybody is at the same place that maybe I am or not. Everybody's unfortunately not in my head, and they're lucky they're not.'cause it's probably crazy in there. Um, but being able to kind of take down the plans and the action items to that individual and bring them up along the way. people don't do things just because you're the boss. They don't, not, not in my experience at least, at least not longstanding. And so motivating, getting them to understand and then teaching them along the way. it's also hard, but it's rewarding.

Matt Haney 20:38

Yeah. That's awesome. It's so rewarding. Um, and you're great at, at, at rallying a group of people behind you, uh, next to you, um, to, to move the needle forward. And it's, it's, um, it's not an easy skill, but you, you make it look graceful. I can assure you of that.

matt-haney_2_02-06-2025_192447 20:54

You are listening to the Scalability Code. I'm your host, Matt Haney, founder of Sinclair Ventures, and we help visionary entrepreneurs like you get out of the shit show and focus on growing your business. We offer fractional COO and leadership coaching services that free up that brain of yours to focus on what's next. Learn more about us at SinclairVentures. com. Now back to it.

Matt Haney 21:14

Um, I do want to ask one question about logistics. You guys are a logistics company. tell everyone the size of the product and how it works, and then the biggest challenge you can think of around that

Marc Cortez 21:29

Uh, logistics. Interesting. I never would've called this a logistic company, but you, yeah. But you're actually right in that. So we have a me, a really unique medical device that treats chronic low back pain. I mentioned earlier the medex lumbar extension machine. But in order for it to actually isolate the, the lumbar extensor muscles, the machine has a lot of components and it's big. I'll say it's probably the size of a recliner, is the best way to describe it. When we first took on the product. Uh, and it's, it's not light either. It comes in two pieces. Uh, when we first took it on, the first goal was like, Hey, can we re-engineer this thing to be smaller? And we, and, and, uh, our partners, uh, one, the majority of the, of the capital investment was the manufacturer. they helped us redesign it and they came back with a redesign and made it bigger. And I had to say, well, can you go out and try to load that into the back of a truck or car? And then let.

Matt Haney 22:27

someone video that.

Marc Cortez 22:28

I'm like, I'm like, have you guys tried to actually deliver this?'cause we have to carry it up, flights of stairs. Um, so that, has been the biggest obstacle, uh, for us thus far. Now, we don't jointly, we don't completely outright own the product, so we're not in any rush to try to spend a bunch of money to re-engineer it. the holding company, if you will, they're not either, um, they're just a group of investors. Uh, so eventually we will, but what we had to look at is, okay, how are we gonna deliver this product? and we have no, and at that point we had no money. We had to make a, a decision of, well we need to like start leasing vans and teaching people how to actually correctly lift this. Making sure we had to prescreen people to ensure that they can actually lift 75 to a hundred pounds. Um, because that's what they have to do. and so. We never anticipated that in the initial business plan. but now we have like a fleet of like 30 minivans. So if you become a sales rep here, and you get an awesome like Dodge, Chrysler, um, or Chrysler, um, you know, minivan, uh, we could fit two to three machines in there. so we have a warehouse here in Austin. We manufacture the devices in Green Bay. They're shipped here to Austin, and then from here, Austin, we deploy them to, we operate about 18 different states currently have about 24 sales reps. They each have an in individual storage unit where the inventory sits. It's a rental, device. So when they get an approved order paid for by the insurance, they then take the machine, deploy it to the patient's home, show'em how to use it. Patient keeps it for about 90 days, and then we go back, pick it back up, clean it, redeploy it. If they malfunction, which very rarely happens, we ship'em back to Austin. So all of, so much of the cost is embedded in the shipping and in delivery of the product. So it's an expensive business to run. but until the device can be shippable directly to the patient,

Matt Haney 24:23

Right.

Marc Cortez 24:23

that it is what it is,

Matt Haney 24:25

But that's also what makes the device as unique as, as, as successful as it is, is that it is significant, it's consequential, meaning it's not something that is a, a flimsy piece of something that goes on the floor. It's a legit,

Marc Cortez 24:36

Yeah. When it goes in the house of all, all medical device, almost every piece of DME actually works. I would say the biggest issue you have is compliance. Um, that's the number one objection when you go through, is will somebody use it? One, this device actually works as many do, but one of the enhancements that we have is that it is big. You can't just walk by and forget about it

Matt Haney 24:58

no,

Marc Cortez 24:59

get it outta, you wanna use it so you can get it outta your house.

Matt Haney 25:02

exactly. You want to get well and get it out of there. Yeah. And then once you're well, you want the people that delivered it to come pick the damn thing up and get it outta there. Otherwise you start hanging towels on it and your jacket on it. And so that's awesome. Alright, So, what's been the hardest part about working with your business partners, who you've known for years, who you love and trust, or probably at your wedding, maybe, I don't know, um, or some way, what's been, what's been the biggest challenge there?

Marc Cortez 25:32

so. The biggest challenge, right? So f four of'em, again, three of'em. I've known, one of'em I've known. We played football in college. We've known each other since 1995. Some of my best friends, the two that came in, from MedX, we didn't know at all. We got married really quickly. and so, and the initial part of like, it's like an, it was like an arranged marriage, so there wasn't a, the beginning was really understanding, you know, our work. Model in there and how they work. And it was really onboarding the team together, which took a lot of effort. Like it did. They weren't, we weren't best friends immediately on their part and ours, and so that'd be having honest, truthful, tough conversations, navigating those. That was the hard part. Working with my, my, my partners, the guys that actually, you know, worked with me for 15 or or plus years, or I've known for 30. The hardest part is actually, you know, making sure that we're honest with each other and also still trying to, and doing it with, um, trying to protect our relationship as well. Um, so I think some of the hard part has been like in any relationship, uh, sometimes you don't say the thing you really think because you're fearful of offending the other person. and so we have learned. Um, and continue to learn, to begin to try to say the hard things, as soon as they, so, as soon as they start to bubble up and not wait, and as a result of that, actually our relationships are becoming a lot stronger.

Matt Haney 27:03

That's awesome. That's so cool. and you guys do an annual or, or a couple trips a year or something together to do planning and get, and have some sort of a, a time to, to get to know each other and hopefully put some work aside, but obviously all you guys do is talk about work and figure out how to make it better,

Marc Cortez 27:19

Yeah, yeah, yeah. We went, we, we, we adopted EOS, um, in 2021, 22 rather. we had an implementer, but it, but it really was still, I mean, it was just the one day with the implementer. Then we try to run it. And that forced us to have, you know, quarterlies where we as the executive team or leadership team got together. Um, but then we had other intentional, you know, practices to try to just spend some time going through some, you know, challenges or things that are outside of work. We had one where we, we, we brought in some deals and took our entire management team through a one day mini buds camp, uh, here in Austin. That was really cool'cause it forced people to get really outta their comfort zones. Um, and those, those types of things, you know, bring teams together and the stuff we went through in December really was transformative in the team's dynamic and relationship.

Matt Haney 28:09

That's awesome. Alright, I'm gonna keep us moving to the next topic one I'm really excited about. You are one of the few people I know that owns a donut franchise. Okay. You have to tell us this ex, this is great because Mr. I'm not an entrepreneur. I'm just a sales guy. Turned, now I'm running this huge business. And at some point you decided, uh, very openly, which I love that you're gonna, you're gonna start a donut franchise. Tell us that story. How did you get there? And I want to know.

Marc Cortez 28:38

Uh, that would be one that is, is still evolving, right? So, yes. Um, so we live out, uh, on the, on the bridge of Dripping Springs in Austin, and on two 90. and there is no donut shop that was close, for the whole time. We lived there for almost 13 years now. So our older, we have four kids. Our older two daughters loves loved Shipley Donuts, and the closest Shipley is a 20 minute. 20 to 25 minute, one way trip, right? So if we were gonna, and we used to go all the time when we lived in, down in Circle C, there was one on Brody Lane. So about a decade, maybe more than that ago, my wife had expressed interest and I looked into the franchise, um, and at, at the time wasn't right. And during CVID, she got it in. Someone credit my wife to some of this that, Hey, we should do this some. If we don't do it, somebody else is going to. She's not And so, I did a little due diligence. I wanna say not enough. but I am, I was quite busy. I couldn't do it alone, so I had a buddy of mine who always wanted to, you know, work for himself. he and I formed a company and we went out and we visited Shipley. At the time, Shipley was still owned by the Shipley family. uh, and we bought into the franchise. my whole plan was to put up the money and he was gonna run it. It took forever and a day. Just Done. If that's much of money, it's easy. It took forever, forever in a day for Shipley to approve a location. and they have 80 years, 86 years of success, they had very few franchises fail because they put so much time into the location. We picked a location, then we had to negotiate the lease and it was a brand new build. And so we're a cap end out in dripping the corner of Sawyer Ranch in, in two 90. Well, that took forever for them to get all their permits. So I bought into the franchise in 21. We opened doors in, um, March last year of 25. So it took four years, right. during that timeframe, some of it, you know, through the entrepreneurial thing of what's going on, we're putting capital in. And then I had a thought like, you know, I don't need to put all my money in this and I'm going to, you know. Go raise some capital. So I went to actually some of my current partners and some others, and I had some people put some money in so I didn't have to put all my, all of our money in. Also, during that time, the guy that was gonna run it backed out of it. He had a life change thing. And so we were already, I had already signed the lease, personally guaranteed 10 year lease, by the way. and, and it was July of 24 this happened and we were on vacation and I hang up the phone and. I go to my wife and I say, you know, know, uh, Brian can't do it. And which was the funniest thing. She goes, well, I guess I'll have to do it. And I'm like, yeah, that's, that's not, That's not happening. Like, like, thank, thank you for that. You know, you know that's, you're not waking up at 2:00 AM to make donuts. So I had one other friend I could think of initially. who I, uh, who we were on the same dorm floor in college. He was a wrestler. He lives here in Austin. so, and he actually had food service experience and he runs operations for, uh, a decent sized, uh, tech company here in Austin. So I brought hit and he's a super hardest working guy I've ever met in my life. so I called him up that same day. I kind of told him what was going on, offered him equity in the company. And long and short of it, he joined up and he continues to work his job very effectively and he took over and he went to all the training. He has done a fantastic job hired, learned a lot. We opened the doors, like I say, in March, we took off really great. It's, you know, it's been a, it's been a learning experience over the last nine months. So they went down also really quickly. Um, we found the obstacles where they were hiring. all the financial models were based on Houston and maybe others not Austin. Uh, d did not account for every, all the changes and, you know, had probably hadn't been updated since minimum wage goes up to, went to$15 an hour, everybody. So some of that stuff has to be worked out, but he's become very efficient in the ordering and. People planning. And so I will have to say we kept having to put money into it, up until the last four months. Um, and actually we have had not had to put a dollar into it and we actually have been able to now start to pay, you know, some money back,

Matt Haney 32:54

There you go.

Marc Cortez 32:55

And now as we move into the next realm, I, I've realized I have to take a bigger handed in it. And, and as does my wife. So the next phase is just more marketing and getting more you know, regular business from churches and school functions. Being out in the community. These are things I enjoy doing. But I will say the, the learning that the thing I really was benefit is one, doing my due diligence, I would've done a little bit more. but having that right partner, and it goes back to the people aspect of, of everything, having the right person. That was the best advice I've ever been given. If you hire the right person, your job's easy. Essentially did hire him. and he's, he's run a great, he's doing a great job. And so we have plans to open up more. and, uh, we gotta get this one dialed in first. but our, we, we will, we will open up more franchises may not just be ship lead,

Matt Haney 33:45

Yeah.

Marc Cortez 33:46

is to open up more franchises in the next three, three to five years.

Matt Haney 33:49

So in that experience, did you find a unique passion or some part of it? I know it's not all roses and sunshine, but is there something that gave you energy that allowed you to give back to Converge during a really tough time?

Marc Cortez 34:02

For sure, and even most recently, so we, and, and, this is the, this is the, the, the, the coolest story. because. Converge. I'm running through all this stuff with Converge. I have another, I have another company too that, um, I, that it's a whole other story. Um, but, um, so we're running through all these things facing challenges than ever still trying to figure out the Ship League. I'm pumping money into

Matt Haney 34:24

Yep.

Marc Cortez 34:24

My wife's asking, why aren't we doing certain things? I'm like, well, our money's in donuts right now. Right. we had our Christmas, uh, party, um, and we did it instead of at, uh, Pius Pizza, if you've ever been down and, um. We have these two bakers and they barely, they're, they're, um, they were here on asylum for Venezuela, and, uh, we hired'em in like August. they lost their visas and we had to let'em go. and then they actually came back in, in, uh, late October, November, and they had re regained asylum, regained their visas, barely speak a word of English. So we invited them, you know, said everybody can, you know, come onto the pizza party. They brought their entire family. which was fine, right? So they had them and there were four, four or five kids. So we're just, you know, there's like 15 people there. It's, it's not really big. Um, he asks if he can say something, you know, a toast if, if you will. But, you know, so he gets up and he says something completely in Spanish. you know, I should know Spanish. My last name's Cortez, but I don't. And so one of the other girls there that speaks Spanish, she interpreted for him. And this guy goes on for about five minutes. One, just, you know, one grateful and thankful that, uh, we hired them both back. He, he and his wife both worked there. two, how much of a family atmosphere the company is and how much he values. And three, thanking God and really thanking the united, you know, America, um, in the United States. It was like, I, I, I, I was just like, I'm like, I turned to my partner. I'm like, we gotta open up 10 of these. Um, so it was really being able to give that opportunity to somebody. And them taking, I mean, it really, for me, it was like, well, that's the American dream right there, right? Because these two people work, they don't stop moving. Um, but they saw the bad side of, of really what, you know, what was going on in Venezuela and coming here and actually not just asking for something, but actually giving something. And then we just provided the platform for, for them to do It It was so awesome to see. And I mean, I came back and it's the same thing that keeps energizing me over again and again. Even with Converge, it's that, and I just said this this morning, it's that creating these opportunities in helping people where they take advantage of it and then that helps the company grow. It helps me grow and it's really awesome to watch, that happen. So that was like super duper inspirational.

Matt Haney 36:45

It is so fun to, uh, like you said, give people a platform and, and watch them run with it and, take advantage of it in the best of ways, right? See, it's an opportunity and go with it. And I think as we build leader, you and I build leaders for our career. Like when you give someone that opportunity and they take it as, it's a very rewarding, rewarding place, um, to see that. That's awesome. Well, I love getting to know you, um, mark and I love, uh, your passion, your drive, and I love watching people around you. Like you, you, you put good people in good places, and they're successful. So that's been great to watch. So, let's wrap up this episode, but, I look forward to coming back and hearing more about the donut stories. And obviously the, uh, the logistics business disguised as a durable medical device. So thanks for joining us today on the, on the scalability code.

Marc Cortez 37:33

Uh, thank you.

37:34

Thank you for listening to The Scalability Code. If you made it this far, please follow the show on Apple, Spotify, YouTube, or wherever you get your podcasts. Let's get out of the sh*t show together. We'll see you next time on The Scalability Code.