Better Together: Interview with Houston Goodwin

Elizabeth Shea talks with Houston Goodwin, CEO of Better Impact, about a different approach to growth: entrepreneurship through acquisition. Houston shares how he stepped into Better Impact through a private equity partnership and led the strategic acquisition of Galaxy Digital to expand the company’s impact in the volunteer management space. He walks through the realities of the acquisition process from diligence to integration, emphasizing the value of operational readiness, cultural alignment, and clear communication. Houston also discusses how the two companies built a “better together” strategy rooted in shared mission and values. This episode is for operators and founders exploring acquisition as a path to growth and what it takes to execute it successfully.

Transcript

SPEAKER_01 0:00

Hello, and welcome to Branching Out, a Tree Fork Strategies podcast. I'm Elizabeth Shea, the founder and CEO, and I created this show to help business owners navigate the ins and outs of an exit event. So each episode, I sit down with seasoned founders and CEOs who have successfully sold their companies through a strategic or financial transaction. Together we discuss what went into their decision to sell, what worked, what they would do differently, and the valuable lessons that they would like to pass along to founders with a sale on the horizon. Our goal is simple to provide a playbook that you can use as you approach your own sale with confidence and clarity, knowing that you're not alone in the process. This is Branching Out. Thank you for joining me. Hello, everybody, and welcome to Branching Out in our latest episode. We are very excited to have Houston Goodwin in our office today. Hello, Houston. How are you today?

SPEAKER_00 0:52

I was doing great. Thanks so much for having me.

SPEAKER_01 0:54

Yes, we're very excited to hear your story. So um Houston comes to us as the CEO of Better Impact, a company in town that um that recently had an acquisition, I understand, for of a company called Galaxy Digital.

SPEAKER_00 1:06

Yeah, absolutely. So happy maybe to start, give you a little background on myself and how I got involved with Better Impact and then our recent acquisition of Galaxy Digital that just happened earlier this year.

SPEAKER_01 1:17

Yeah, I think it would be great. So please take us back to where this all began.

SPEAKER_00 1:21

Absolutely. So my journey in software started with uh constellation software. So, you know, constellation software is one of the number one acquirers of vertical market software in the world. And so, you know, got my hands in the operator seat early on in my career and was able to run a portfolio company owned by Constellation and, you know, got exposed to the operational excellence of companies as well as started my exposure to MA. So, you know, Constellation is always looking and buying companies. And so was able to do that for a while and did that alongside actually my college roommate and really good friend who lives in the same city as I. And we had worked together on and off for, you know, several years in several different roles. And he had moved on to a publicly traded fintech company. And we we found ourselves at a point in our career where we'd done some startups, you know, we had done some side hustles. Um, but what we really both fell in love with is just operating good businesses. Um what we what we discovered with ourselves is neither of us really were the zero to one journey um people. So we had done a couple of startups and and zero to one takes a different personality, I think, and a different skill set than scaling even one to five or five to ten, et cetera. And so, you know, through my career, I learned about a concept called entrepreneurship through acquisition. So instead of starting a company, you would go buy an established company. And so maybe three years ago or so, we kind of started exploring this and we ended up partnering with a private equity group called the Brighton Group and started our journey of ETA and spent about a year looking at companies. And we were really looking for companies that one fit our skill set. We felt was good quality of life for us as well. So in a sector that we really had a personal interest in and cared about to dedicate, you know, a large portion of our time and lives to. The the current operating model and the group and the culture was just a really good fit for us. And so we found that with Better Impact, it was really great. I stepped in as CEO in November of 2024. Um, so just right about a year and a half ago. And, you know, through that, Better Impact is a volunteer management system. So its mission was to help unlock the potential of volunteerism. So we had clients everything from large hospital systems and governments and city parks all the way down to very small, you know, volunteer only or one employee nonprofits. And our goal was to come alongside the people managing those volunteers and provide them software and solutions to help them recruit and engage and retain their volunteers. Um, on that journey, you know, obviously we were casting a little bit of vision of where we want to go as such a great industry with such great people. And we found that one thing it was missing was really some benchmarking and some data, just kind of consolidating it. And at Better Impact, we were tracking hundreds of millions of hours across multiple sectors for volunteerism. And it became apparent quite quickly that there are a few other people in the space that overlapped us in some ways as competitors, but really it's so greenfield. And I always come from an abundance mindset. It was really other people alongside us that were kind of trying to accomplish the same cause. And so after reaching out and talking to some people, we decided is there anyone where we would be better together? So one of those things whereas one plus one equals five. So coming together, we have a little better scale, a little more professionalization and shared resources and shared data to really make the biggest impact possible in such an awesome industry that that really deserves the best foot forward from a software perspective. And so um, I'm based in North Carolina. Uh, we had a company that was also based in North Carolina that was a competitor of ours that I connected with maybe eight months ago and called Galaxy Digital, and started a conversation with their CEO and then their board. And, you know, as these things go, there's a million reasons to say no. And so let's just start out with an intro conversation to see, like, hey, here's kind of where we're headed. Are you all kind of headed in the same direction? Is it even make sense to continue to the next step to see if there's any interest in us joining forces and what that would look like? And over the process of call of eight months, we really worked and did our diligence and we finished the transaction in January of this year. So we're about 90 days in of transaction. And yeah, we're just really excited to be here. We're really excited for what it means for our market. Like we don't have like a role of strategy or like a big acquisition play, but we just felt like, hey, this just makes sense. We fit together, we play to each other's strengths, we have we have complementary products, and we're trying to accomplish the same mission. And so we thought that was a very special pairing. And we're really excited for our clients, our employees, and the market at large for you know what this means for them moving forward this year and and you know into the next years.

SPEAKER_01 5:42

Oh, that's great. So you're better together, right? I love it. I love it. I mean, I think that's typically a you know a goal for a lot of companies that are looking to acquire other firms. What was the reaction from Galaxy Digital at first? Were they, was there any apprehension or was it, hey, this might be a really good fit for us? Not that you need to speak for them, but you know, what do you think that uh that it meant for them? The same thing?

SPEAKER_00 6:04

Yeah, I think it's it's always exciting that I always say like the optimism is easy. It's you got to be pessimistic a little bit to see like where things could go wrong or what are we not asking? And so it's it's a long process to to get a deal across the finish line and a lot of you know diligence and a lot of work, but that's why I go to like the mission and the real belief of like, okay, is the juice worth the squeeze? Right. Is are we, if we got to the other side of this, really going to be better together? And you know, for us, and we are definitely in a like more social good focused sector where like we really are focused, not that other companies aren't focused on their clients, but we really are focused on the impact that we're bringing to a lot of these nonprofits that we partner with and hospitals and governments that are really empowering volunteers to make an impact on their community. And like both companies just believe so much in moving service forward and how important service is for like social connections and community cohesion. And so I think at at this start, it was very important for us that we were kind of aligned all collectively together on the excitement of what could happen if it worked out. And then that overcomes a lot of the hurdles of you know, diligence and and what could be seen as as things that are painful or things that aren't as fun to go through, et cetera.

SPEAKER_01 7:15

Right, right. I mean, it's not always fun, but at the end of the day you can pop some champagne or something, right?

SPEAKER_00 7:20

Yeah, exactly.

SPEAKER_01 7:21

So just tell us about the process. How long did the process take from start to finish? Would you say when you sort of first started looking around to when you finally made the made the acquisition happen and close the deal?

SPEAKER_00 7:33

I would say probably like seven, eight months from like initial like first serious conversation where it was like, hey, is this something worth pursuing to getting to the closing call was about an eight-month journey.

SPEAKER_01 7:45

Okay. So for other companies that are out there that might be looking to make an acquisition or to grow better together, if you will, is there any advice you can give to them, things that they should look out for or really lean in on in terms of their own diligence process?

SPEAKER_00 7:58

Yeah, I I would say like obviously I I wouldn't consider myself an expert in that space, but I can tell you what's like worked for us and worked for for me and my personal experience. One thing that I learned early on in Constellation is the importance of operational excellence within the company that you're a part of. Um and I think that before I feel like companies or we could have at least gotten over our skis a bit with an acquisition where it's exciting and that's an exciting way to grow, or there's there's a lot of excitement around that idea. But if we really invested even during that full eight months, like we made sure we did not take our eye off the ball for improving and getting our internal systems and our internal operations and our internal playbooks to an excellent level as fast as possible. And what that does is that just allows like this first 90 days, it's been really awesome, like meeting the teams, integrating the two teams, getting everyone connected, kind of picking the both best of both worlds. And so I think the number one thing for me at least, I don't know, like general advice for others, but for me is make sure like your house is in order before you go at a bunch because it seems really fun, but there's just so much that can get in your way or get distracted where you actually aren't better together because you can't give people clear direction to get everyone rowing in the same direction, which is such a powerful effect of two good teams integrating well. And certainly we've we we experienced our bumps in the roads and aren't perfect, but I think that's like key first is to make sure that we wanted to make sure that we were a company that was ready to take on a task like this for the market. And if we didn't internally focus very heavily on our systems and processes and SOPs and how we were operating as a business, I think it could have been much less smooth or maybe like certainly just not gotten across the finish line.

SPEAKER_01 9:37

Right. I mean, the transaction is important, but then to make sure that it works afterwards and that it's that it's a smooth transition. Can you talk a little bit about the culture, the the cultural aspect of it? You know, how did you align the cultures within the two organizations, or are you in the process of doing that now?

SPEAKER_00 9:53

Yeah, certainly it's an evolving process. I think um, you know, one thing that's so great about this under sheet specifically is so many people are in it for the right reasons. And I say like everyone's trying to tackle the same problem from different lanes. And so one thing that made this integration easier is that we're both hyper aware of what the problem we're trying to solve is. And we're both hyper aware of the goals that we're trying to accomplish. And now one of the reasons that we've said better together is kind of something that we've really anchored on is now it's not either company, it's both companies can do things better and at a different scale and at a different speed than they could have by themselves. And so that's where a lot of the cultural transformation is happening, is is less about this was the direction we were going and now we've pivoted to this direction. It's more this is the direction we were going, and now we're jumping ahead four years because we're together and we have just economies of scale from like vendor relationships to team size and data and customer size, et cetera. There's challenges that come up with that, but overall, I think that it's gone really, really well. And part of that is just because we have a lot of people who really want to see our clients succeed. They really want to make an impact in the sector. And we we talked with our executive team through this process and was like, you know, we're very value focused. One of our values was volunteers first. Like we always want to have the volunteers in mind, their experience. And we don't want to do anything that's competing with our values, even if it seems like a good idea. And so fairly early on when the conversation started getting serious, where this could be a real thing, you have to balance. You don't want to distract the team because there's always a million opportunities that don't turn into anything. But we brought lists to the team to say, do we feel like this matches our values? Like, are we keeping volunteers first? Are we doing the right thing for the industry by diverting some of the time and attention to put into this combining of these two companies? Um we we felt that was an overwhelming yes. And I believe that the you know Legacy Galaxy team did as well. And so we kind of got those conversations out early, and that's led to a uh, you know, a pretty fun 90 days post post-transaction.

SPEAKER_01 11:55

Yeah, that first 90 days is always a lot of fun, right? You know, getting to know we people and and expanding your services potentially to your client base. Um can you talk a little bit about your client base and how the news was perceived? Did you do anything unique there? How did you communicate this change?

SPEAKER_00 12:11

Yeah, uh in an ideal world, like we tried to do as many either small group cohorts of people or one-on-one conversations as possible, but we have too many clients to accomplish that. So, you know, we put a lot of thought into the press release and the how we went to market live with this. Like the number one message we wanted to get to our clients, which is really important, is like we were not sunsetting any products. So it's like no disruptions to service, like nothing material will change for you as an effect of this. We just want things to get better and things to come out faster and you to have more opportunities with us as a company. Um, so that made it a little easier. I think for sure, if we bought a company as a book of business and we are migrating all of the customers from their system to our system, like that's a whole nother level of customer comms and care. But overall, it was nice because all the message was positive. It was just we have more resources to expend to serve you. We have more resources to expend to make our product better. The product that you're on is staying around. And so I probably met with 200 customers the week leading up to the announcement in a mix of like small groups and one-on-ones. Part of that helps us with the messaging as well. Like you stumble across the messaging the first time. Do you pick your customers that are really bought in that will give you a little grace? And so that way by the the game day when you're going live to the market, you have you have practiced a little bit and been able to see what wasn't clear. So it's not really changing, it's just making sure we're saying things clearly and we're, you know, addressing what's top of mind for those, those customers. Overall, it was received super well. Most of our customers are really excited. The good news is Better Impact and Galaxy Digital both have been in the market for over 20 years each. And so they're they've been around for a while. They've got a lot of brand reputation, and that really helped as well, like, you know, get a little social capital from the market to say, hey, the founders thought this was a good idea. We think this is a good idea. This is what our customers are saying. We're not making any bad changes, we're listening to you, we're hopping on calls. And then honestly, we just had a great team that was scanning the first couple of days for chatter, where there's like a confusing post, you know, a question comes in and I took all the calls, which wasn't a lot, like anybody that had any like concerning questions or anyone that had a question that they posted somewhere. Like I just picked up the phone and called the clients. And I had a certain amount that I was going to be able to do with my calendar, and then we were going to pass it to the next, but we ended up not having that many clients that had many questions. I feel like we did a pretty good job. We had tight messaging. And then all the clients, once we got them on the phone, they were super receptive and and and understood. And part of it is we're just trying to support them better. And this is part of it. Like that's really for us at least, and it's certainly different industries. But that was the heart of this for us is we want them to be taken seriously and their careers to be taken seriously. And most people, myself included, are generally unaware. I'm not I'm no longer unaware, but pre-me joining the industry, just of how critical volunteers are for our communities. Like volunteers are utilized in everything. They're a third of the nonprofit workforce. And generally, I would say the general population doesn't is not aware of how many parts of their communities are literally held up by volunteers and how little resources they have. And so this is part of our mission is to go fight and get them appropriately allocated with resources and provide software that helps them get things like industry standards, benchmarking tools to help them do their job and tell their story as as good as possible.

SPEAKER_01 15:34

Hot soft to you. I think that's amazing. You know, you have two companies that can come together like that and and serve a greater purpose. When you talk to your employees, what was the how was that message received? It seems like you were really able to hone in on what your messaging needed to be to the market and reiterate that, which is always good to reinforce it. How did you go about telling your employees?

SPEAKER_00 15:54

Very similar. It's like keep the circle tight in early stages, obviously, because there's confidentiality. And then also we don't want to create distractions for people. But as we get closer, we started letting more people in. We started letting people specifically that were going to be on the newly formed leadership team because we we really operate as one team. So one team, one platform, one culture. So this wasn't like a bolt-on, or like, okay, so we have our Galaxy folks and our Better Impact Fact folks. We're all Better Impact employees. You know, sunseted the name Galaxy Digital. We kept the product names for the customers. And so, you know, it was it was really fun. We had a uh all hands, like, you know, the day after close, and it was twice the amount of employees that were on either all hands before because we were about equal size as far as employee count goes. And we're just trying to over-communicate. So right now we're doing a weekly newsletter. We do a weekly lunch in there on Fridays where different people are sharing different parts of the company. We're doing monthly all hands. We're just trying to give people as many avenues as possible to reach out, connect, and specifically be in virtual. And we have employees all over the world. Um, our support is 24 hours, five days a week. So we follow the sun. We have a big base in Australia and the UK. And so time zones make a challenge, but just making intentional efforts to get on with the Australian staff or the UK is much easier because we're in the East Coast. So it's fairly large overlap for us. But yeah, a lot of intentionality, a lot of bumps in the roads. And we always say, like, just come from curiosity. So assume good intent when we make a decision that we didn't know how it affects you, and it's not, you know, the best decision from your perspective. Like assume that we weren't intentionally trying to do something wrong and let us know. And we're open to feedback and open to like I always say firm opinions loosely held. Like when you make an act, have a strong opinion on it, but hold it loosely. So if you get presented with new facts, you're easy to let go and make a change. And yeah, I think our employees, for the most part, on both sides, cultures are very similar. So very bought into the mission. Almost all of our customer support staff were users of our products in a nonprofit as a volunteer coordinator that we hired on board to be a member of our team. And so that jives really well with the industry and the culture, and we're keeping that at the forefront.

SPEAKER_01 18:06

That's excellent. I mean, it sounds like you're the poster child for how things should go well, how things should go that that's right.

SPEAKER_00 18:11

Well, it's a lot of hard work and there are bumps in the roads, but I I think that like what you focus on expands. And so if you're focusing on what the what's worth it, we like every time something comes up, that's not ideal. It's like, man, what an opportunity to create value for us and the customers and the company because we know that this can be done better and it's not being done as good as it could be. So let's just do it better. And it's going to be so good for us. It's gonna be so good for our clients. And so I think for us it's just keeping that because there are, it is not all rainbows, you know, it is not all always fun and easy, but it is important, I think, to keep that eye on the prize of why we're doing this and what like why the juice is worth the squeeze. And that that overcomes a lot of the tougher circumstances for sure.

SPEAKER_01 18:53

So I've heard you say that having your systems in place, having them really buttoned up ahead of time, overcommunicate, look to be better together, have transparency and openness when you were asked certain questions from either clients or employees, those are all very good sound pieces of advice to be thinking about, probably on either side, if you're being acquired or if you're going to be acquiring another company. So what are what are some gotchas that you think you you might not have anticipated or or were there any?

SPEAKER_00 19:20

We put a lot of work into diligence. Like I would say nothing has come up for either company that was not on our radar. So like we just were it was out of left field. We didn't expect it. It was like a big problem that we didn't catch. I think everything is just when you get into the seat and you're operating, a lot of things that you thought were a six out of 10 or a seven out, or now a seven out of ten, or you thought it was a nine out of ten, so it was high on radar, but you get in, it's like really an 11 out of 10, and it's it's even more, you know, crucial, or there's, you know, the the problem needs to be fixed even faster. So I would just say it's like a heightened awareness of all the work that you put in and diligence. But you know, that's why I'm really thinkful partner with with a good um private equity group that really helped us with with the diligence to make sure that thankfully for the two acquisitions, like there really hasn't been any, like this just came from nowhere and it was it was a completely blind side. So we do a lot of work and you know, classolation playbook is very simple. Like, what's your gross retention? What's your net retention? It depends on what you're looking to buy and and and all that. But as long as you have a mission critical piece of software, like that overcomes a lot, right? Like I've worked for companies that fall on the line of like very nice to have, but not mission critical at all. So they could cancel at any time and it really did not impact their business in any way. Like that's much tougher than the mission criticality of, hey, this is a vital piece of software for us to run our day-to-day operations, overcomes that gets you a lot of grace where it's like our customers want us to win, which is so great. And so we want to win for them, right? So even if something pops up and there's a bump in the road and we get on the phone with them, it's coming from a like even if they're a bent thing, it's coming from a place of like, we want you to win, we want you to do well because that's gonna help our organization, it's gonna help our mission. And our software is a reflection of them to their community. And so that's something that like we're very upfront, like we take that very seriously. But that's also really helpful, right? Like if you're in other industries where it's not as mission critical, that it makes there's a lot more gotcha moments, I think, because it's just easier for customers to to churn.

SPEAKER_01 21:17

Right. You can see the vision in in the mission that you have, which I think is great because the more critical you are to the marketplace, the more valuable you can potentially be. So you mentioned a couple of things, recurring revenue. What other things really stood out that are important to you when when making this decision?

SPEAKER_00 21:32

Not to keep it like service level, but like life's too short to get in business with people like bad people. So it's like it's like everything on paper can look good, but if the people are just not people you want to be in business with, I think that's where it comes down to like do we trust the person on the other side of the table? Do we trust that we both have our interests aligned? That just makes everything in the diligence process go smoother, makes everything post acquisition go smoother. And again, that's why we kind of lean on that come from curiosity, like you know. I haven't personally experienced this, but I've been around people where it's like if if you go play golf with someone and they cheat, it's you it comes becomes harder and harder to assume good intent when you believe maybe they're the type of person that would do something in malice to purposely like hurt you. And so it's like that's like the biggest red flag, I think, for me is let's get in business with good people and we can make the rest work. And so that was something that was really important for us for both. And and luckily, like I said, in the sector that we're in, like finding people that are aligned for a really important mission and are actually serious about that is harder, I think, in some industries than others. But in our industry, I think it's at the forefront for at least the the two companies that that we brought together. And that makes a lot, a lot easier for sure.

unknown 22:40

Right.

SPEAKER_01 22:40

Well, it sounds like you're doing some great things. And so many people that I have talked to in the past just haven't really done that part of the due diligence to make sure that there is a culture fit, that there's alignment and values and alignment and in the mission and wanting to to do well and get along with people to a certain extent. So so tell me, Houston, what's next for you? What's next for you in in your better together days?

SPEAKER_00 23:01

Yeah, we're really excited. We have a um now an ecosystem. So we're like the only purpose-built platform for the volunteerism industry. We're really excited for some of the stuff that we've working on. We have over 85,000 organizations that touch our software in one way or another to help with either posting volunteer opportunities or managing their volunteer force. We take the responsibility of integration really seriously for our customers. And so that's something that we're being very open about, but we want to make sure that we're integrating the two companies well together from a cultural perspective, but then also the systems and the platforms together, where you hear a lot of horror stories of people like Frankensigning companies together that don't talk together or work together, and it's not a value to the customer, it's just a value to the top line. Um, and so we want to make sure like that's not our that was not the reason for us, you know, bringing Galaxy into the fold with Better Impact. And we want to be able to bring the best service to our clients. And part of that was scaling so we can have enough data to bring some of these benchmarks and create this ecosystem to make a frictionless experience for people who want to get plugged into their communities through volunteerism. And so this is our number one focus for probably at least this year, right, is integrating the teams, integrating the systems, and increasing the speed to which we put products to market that actually creates solutions to real problems that our clients have. And, you know, we're trying to navigate this obviously alongside the AI surge where every day I spend my nights when my son goes to bed reading the latest on how people are using Cloud or different AI models. And you know, there's responsibility for that. We're ISO 27001 compliant. So we take security super seriously. We don't want to just say AI as a hype word and bring it brings no value and it's just like a chat bar. Right. But we're constantly looking at how can we increase the speed to which we bring products to market? How can we increase the speed to which we answer questions and do bug fixes or help desk work or solve tickets? So that's part of our integration strategy is how do we as a SaaS company live in this post AI being actually useful world? Um, because it's no one knows the landscape right now. Everything's changed. It's moving sand under your feet. So we're trying to make sure we remain small and agile enough to stay on top of that. And again, it all just flows through to our mission, though, of like, we're doing this because this is what we're trying to do. You know, someone asked me my post-drone AI, and I was like, we're trying to impact communities and move service forward. And in as much as AI could help us do that faster, like we're for it. And if it's a distraction, then we're gonna pass. That's kind of how we look at everything.

SPEAKER_01 25:38

Um, how did you just curious how you how you melded your your leadership teams together? I mean, I assume you have a bigger leadership team now.

SPEAKER_00 25:46

So we run something called EOS, which is the entrepreneurial operating system.

SPEAKER_01 25:50

Sure.

SPEAKER_00 25:51

Something I've done at companies for a long time. And part of that is you build the seats first before you so you don't build like the seats around the people that you have. You build the seats that the company needs. And so early on, pre-close, I got to get we got together with a couple of people from our team, a couple of people from the other team, and we just we made that model. We discovered like one area we wanted to hire for. So we just brought on a VP of customer experience that came on right at the acquisition close. Uh, she's fantastic. Um, the CEO of Galaxy Digital stayed on as our CRO. So his background was kind of go to market, and so he's he's still actively involved. And then myself and my business partner that I mentioned that went on this, he his background is product. So he's the president of the company, but really stepped into the CPO role. So, really to help speed up products. And then it was very serendipitous. Like we just had really strong teams where they needed some help, and they had really strong teams where we needed some help. It wasn't a lot of hurt feelings on so-and-so, so-and-so's boss now, and they both had similar titles. And so we're very fortunate with a lot of it was just more specialized roles, but not a ton of overlap. And so that that worked out well.

SPEAKER_01 26:56

I love that. Excellent. So, how can people find you? Is it uh betterimpact.com?

SPEAKER_00 27:01

Yeah, betterimpact.com is our website, and then you can find my my name is fairly unique, and I'm on LinkedIn and stay pretty active on there as well. So we'd love to connect.

SPEAKER_01 27:10

So you probably have good search engine optimization on your name, right?

SPEAKER_00 27:13

Yeah, not too bad.

SPEAKER_01 27:14

Oh, excellent. Well, thank you so much, Houston. It's been a delight having you on the show, and I appreciate it. And I wish the best of you better together.

SPEAKER_00 27:22

Awesome. Thank you so much.