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You own a holdco.
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I think Gerbely Enterprises is the name of it.
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Within it, you have a bunch of different things.
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So, you will own stuff as funky as like a fireworks company called Alamo Fireworks.
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You own like a software rollup called Dura Software.
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Um you have like a coffee chain, I think. Is that right?
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You have like your a drive-thru coffee chain that's got like three or four locations or something like that.
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Um and then you incubate couple uh couple projects.
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One of one of which I used actually recently.
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Uh Michael, what up, dog? Sean, where are you? You're in Tahoe? I'm in Lake Tahoe, yeah. How is it? It is amazing, yeah. This place is great.
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Is it just a getaway from crypto?
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No, it was a Father's Day trip.
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So, uh you know, came out here with my wife's family and uh yeah, it's been cool.
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Just been like at the lake, in the pool, all that good stuff. That's awesome.
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Who who So, you Sean, you want to introduce this guy? Yeah. Okay, great.
1:01
So, we got Michael Gerbely.
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Is that the way you say it? Yep. Yeah, Michael's here.
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I've been following you on Twitter for a while.
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And uh and I think you almost want you almost bought our NFT for the Five Minutes of Fame, but uh you got outbid at the last minute. Is that right? Yes.
1:21
Yeah, I had a whole plan about it.
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I was actually going to shard it and then try to make profit from it and sell it in 15-second increments, but some really rich crypto person came in and swooped it out from under me. So.
1:33
Sam loves sharding things. I had a huge plan.
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Uh and and but you but it worked anyways.
1:40
You got on the pod anyways without it because uh you're a pretty interesting dude.
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I've been following you on Twitter mostly cuz you tweet about Chili's a lot and I'm a big Chili's guy, huge Chili's fan.
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Um but you also you kind of fit into this sort of like Andrew Wilkinson kind of bucket which is like you run a hold co and you run like a a pretty big hold co.
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And so, let's just give people kind of like your your run down.
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Here's what I know about you.
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Um you own a hold co, I think Curley Enterprises is the name of it.
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Within it you have a bunch of different things.
2:13
So, you will own stuff as funky as like a fireworks company called Alamo Fireworks.
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You own like a software roll up called Dura Software.
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Um you have like a coffee chain, I think. Is that right?
2:26
You have like your a drive-thru coffee chain that's got like three or four locations or something like that.
2:30
Um and then you incubate a couple a couple projects.
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One of one of which I used actually recently called Near, which is like a way a easy way to hire people in in Latin America.
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And I found this awesome dude, uh you know, not a plug for Near necessarily, but it did work it did work exactly as intended.
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I found this awesome operations guy for my e-commerce business there, Nico.
2:51
Um so so yeah, so that's what you do.
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And um I don't know, Sam, where do you want to start?
2:57
We can we can go into into kind of high-level or we can dive into any of the details.
3:01
Where do you want to start?
3:01
He put together this really good document that explains all the different businesses, but to summarize, it looks like it's like eight or nine or 10 of them.
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And so so I understand the size.
3:10
It's over 100 million in revenue, right?
3:12
And over 750 employees for all eight or 10 of these? Yes.
3:17
Whenever I hear people be like, okay, yeah, my my kind of the accumulation of the businesses that I own some percentage ownership stake in is worth over 100 million dollars or like a real estate guy will be like, you know, I have a billion dollar real estate portfolio.
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In my head, and I'm I'm sure there's a bunch of listeners who are like this, too.
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They're like, so what does that mean?
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Are you a bill like are you are you super loaded?
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Is this a like what how do I think about that number, right?
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Cuz like, you know, if I get a salary, that's the money I keep.
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If I run a business and I say top line revenue, that's not the money I get to keep.
3:47
So, when you own a you own 100% of your hold co, and your hold co owns businesses that add up to over a hundred million in revenue, does that mean you're just big balling shot calling?
3:56
Are you paying yourself like ten million dollars a year or more out of out of the profits of these businesses, or what does that really mean? Yeah.
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Well, I mean, part of the way I've set up the structure is like I want it to be very flexible in terms of strategy.
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So, there's some stuff in here that's just like compounders, like um Dura, for example, like we want to be the next Constellation Software someday.
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So, like I don't that's just compounding.
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The money I put into that and the effort and time and that I put into it, like I don't I don't get cash flow from that stuff. Um but that's by design.
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Like I'm just a long-term player and a long-term person on all this stuff.
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You know, the things we went through, just kind of the ten big holdings that I have, those are all things that I have 50, 60, 30, 40% of companies.
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So, it's not like I I I totally am with you.
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Like I've I, you know, I've I felt stressed being like, "Okay, well, I don't want to be the guy coming in and bullshitting about a bunch of numbers, but also like I'm from Texas and like like I have a hard time like bragging and being like, 'Well, okay, here's here's what my net worth is and here's how much money I make and all that kind of stuff.'"
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So, I'm trying to balance it out to where we can actually get there uh without getting past my comfort zone.
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How do we Let's Let's not balance that out.
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Let's just go to the other end and make you incredibly uncomfortable.
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Tell me how about your net worth, your checking account number, and what it felt like when you lost your virginity. You can pick one. Go now.
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Uh really drunk, four, and uh yeah.
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Yeah, let's Let's Let's really going to do it.
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And it's like, "Oh, you don't want to reveal You don't want to reveal reveal your penis size? That's fine.
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Just tell me about your net worth then. We'll settle for that."
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But it seriously is There's like a a mental model for these businesses, right?
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Like some businesses, like you call it a compounder, right?
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It's like uh if you go into a business like this, you're going to put up it only takes X dollars to start, and it then it takes Y years to kind of get to some good outcome.
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Like I'll Like I'll just give you like a venture startup, right?
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Like I come from the Silicon Valley venture world.
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Silicon Valley venture world is you put $0 of your own money up, but you're going to raise likely somewhere between three and 300 million from venture capitalist over time.
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Uh you shouldn't expect to see any big money until you exit, which is on average 7 to 10 years.
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It's a like that's the profile of that versus my e-commerce business took, I don't know, I put in 600k to start it.
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Uh like I that was my first kind of year uh commitment that I had to put in.
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Um but we can take quarterly profits now.
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You know, a year or two we could take quarterly profits if we wanted to.
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We decided to roll that into growth, but we think that by the year three or four we should be seeing pretty healthy, you know, quarterly profits that will pay for a a sweet lifestyle, right?
6:29
So, that's like just to paint a picture of what type of business you're getting into.
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Most people don't know how the HoldCo business works.
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So, give me those sorts of like what does it take to start?
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How long do you have to wait to get a payday?
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How big are those pay you know, are you playing a software game like a a VC software game?
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You can make a billion dollars.
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E-commerce unlikely to happen, but you can pretty safely make tens of millions of dollars if you do it right. Yeah.
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Well, I mean I think my theory on stuff is it's been incredibly difficult to find good opportunities over the past 5 years.
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So, I've structured stuff that I want to be able to do any opportunity that comes through the door, right?
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And so like say so the danger is say for example, I run across a fun idea to work on that, you know, maybe isn't in the roll-up space.
7:13
Well, like like that's going to require outside capital, right?
7:15
Dure required outside capital.
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My partner and I who started the business, he's former head of support for Rackspace.
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He's a CEO of the business now.
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We put up our own money to do the first acquisition, and then we start when we ran out of money right after a couple million dollars, um we had to go out and raise money.
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And so that's playing that kind of VC compounded game that I talked about.
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You know, other stuff like the coding boot camp that we start, like that pays me money every month.
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It's it's similar to what you're talking about.
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Um so, you know, those the thing I like about those kind of cash flowy LLCs and stuff like that is like, you know, the upside isn't as good.
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Like, you can't have a billion-dollar exit in that stuff 20 years from now, but you could start cash flowing really quickly.
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Um, so I like to have a blend of all those things cuz you can't You can't live on appreciation.
7:59
How much How much profit does the 100 million make?
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Or I think you you said over 100 million, but we let's just say it's 100 million.
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How much profit does it actually make?
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And let's say that you own 30% of one company that makes 10 million in profit.
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Do Do you say like, all right, we're going to take of that 10 million, we're going to take out 3 million in profit. We own 30%. We get 1 million. Yeah.
8:18
Well, I typically the stuff in a portfolio for small businesses like this is going to end up run 15 to 20%, you know, EBITDA margins.
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So, then you do the calculus and say, okay, well, based on that like free cash flow potential margins, like, okay, you got to pay off debt service and all that kind of stuff if you have it.
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And then, is it better for you to take the money out or should you reinvest it inside the business?
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And by and large, most of these things are reinvesting because I don't have better places to put the money than reinvesting in assets and new acquisitions and all that kind of stuff.
8:52
Which business is the best cash cow?
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Is it like, you know, that the fireworks company where it's like, well, open like 3 months a year and it just prints prints profits for 3 months and then we like don't have to think about it for the other nine.
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Like, I I don't know if that's true.
9:06
I'm just saying that out loud.
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Which business is the best one and why is it fireworks?
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Dude, fireworks Here's why I love fireworks.
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It was the first business that started my whole platform and I was the CEO of it and it is the hardest business in the world to run.
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Like, it The cash flow sucks.
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Like, we we aren't even open yet for 4th of July.
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We open in 2 more days and we've been spending money to get ready for it all the way through the through since January the 2nd.
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And you have to predict what's going to happen 6 to 12 months ahead of time.
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And then you have to put up all the cash for it, buy all the fireworks, get all the locations out of We have 200 locations across the state of Texas, and then open them all up, and then we really don't break even until about 7:00 or 8:00 p. m.
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on the night of the 4th of July.
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So, it is When I ran that business, that was where I cut my teeth as a CEO.
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Like, it was the hardest business to run to where I went to these other businesses and people would like pay you before you delivered the service or like Like, when we started the the coding bootcamp was the second business, and I was like, you mean they pay us before we teach them the classes? Like, this is amazing.
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I thought it was the greatest thing ever.
10:09
So, every other business feels like it How much revenue does the fire one do? Fireworks?
10:14
Uh, it's multiple tens of millions. Yeah.
10:16
No [ __ ] That makes, let's say, 20, 30, 40 million dollars selling fireworks for 2 weeks?
10:23
Uh, we do it twice a year.
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Uh, fourth for the 4th of July, and then we do it again for New Year's.
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In Texas, it's warm enough that actually New Year's is more pleasant than anyplace else. Golly, that's amazing.
10:32
And that's quite And that's quite profitable if you do well for the the the like the the remaining like 3 hours.
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In that 3 hours, you make all your profit. Your all your profit.
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Cuz everybody shows up at the last minute.
10:43
That's the other part I didn't tell you.
10:46
Yeah, nobody buys anything until the last day cuz consumers have this habit of not doing things ahead of time.
10:50
So, that that business is actually kind of an ugly business then um cuz it's like you have to predict things and it I don't know, the world is very unpredictable the last few years.
10:58
Uh, so you have to predict demand, you have to operate really well in a very tight time crunch.
11:05
Like, all your demand gets squeezed into this tiny pipe.
11:09
Um, you're putting up all the cash up front, so you're taking some some some risk there.
11:12
Did you You're a clever guy.
11:14
Did you come up with any clever operating hacks to like make that business suck less that other firework people don't really do?
11:19
Uh, yes, we have a bunch of those.
11:21
I didn't come up with any of them.
11:23
Uh, the thing I realized, and this was about 14, 15 years ago, I actually really suck at optimizations.
11:30
Like, I want to live at like 80,000 ft with like big ideas and strategy and do what we're doing right here at Rate, like I want to live in an idea space.
11:38
And what I realized about 6 years into running that business was I am precisely the wrong person to run this business cuz what you're talking about is this like game of inches where you have to be like optimizing stuff all the time.
11:47
And like I find that incredibly boring.
11:49
Like that is the most like that and accounting and HR are like the three most boring things you'd ask me to do in my life.
11:56
And what we've done is a ton of those kind of optimizations like that business has exploded in the past 5 years no pun intended um through just getting the right people on the field and it means me not doing it because I'm absolutely in the wrong perfect wrong person to run that business.
12:09
Um but we do a bunch of different stuff like we brought um digital point of sale to that business.
12:15
It used to be handwritten for a long number of years.
12:17
Um so some pretty basic stuff that you're like really it took that long?
12:21
But yeah, we we've done all that kind of stuff but the it's the royal we. It's not me.
12:28
How much money did you you said you started this thing with $2 million of you and your partner's money and then is the rest like a fund that you raised?
12:35
So um so Dura was something I started we started with our own money.
12:38
Uh the fireworks business I got that the old-fashioned way.
12:41
I it's a family business. I inherited it.
12:45
So that's why you're like how'd this guy end up with a fireworks business?
12:47
I I was told I have a fireworks business now and it's great.
12:53
What about the other things?
12:53
Did you have to So it's like is is each one like its own you raise money for each one if you need to raise money or you just use your own money? Yep.
13:03
Just if if I need to syndicate the deal, I syndicate the deal with other people.
13:07
Um you know, what I've learned and that I only do is I hate raising money for stuff unless I'm putting my own money in it.
13:13
So I'll put a substantial amount of my net worth in new stuff and then when I go out to raise money, I feel like not yucky.
13:22
Otherwise, I feel like yucky. But yeah.
13:24
And which of the business Okay, so we thought maybe the fireworks business is the best one.
13:26
Turns out that's kind of a a pretty pretty gnarly business.
13:29
What Which of your businesses would you say is like the most in the cash flow category?
13:36
Like it's just so beautiful because it works.
13:38
It's just It just worked right away.
13:40
Didn't take a ton of money.
13:41
It's you know, it's profitable.
13:43
It's not like this brutal business to operate.
13:45
Which Which one do you like the best?
13:49
Yeah, the coding boot camp is the best one.
13:50
It's all services, low cap ex.
13:50
Um and then I mean the thing I like the most about it like it it actually like helps people.
13:58
Like it changes their lives and I that's not [ __ ] by the way.
14:01
Like you'll notice a theme like in all this stuff I really like enjoy helping people and it it's a life transformation thing when people go through that and get a better job.
14:10
Clearly you've never had a bottle rocket fight, man.
14:11
Cuz those are pretty amazing, too.
14:18
How big is the How big is the coding boot camp?
14:23
Uh that is that is a low eight figures. That's amazing. And very profitable?
14:29
Uh that runs kind of consistent with what we're talking about.
14:31
That 15 to 20% even in margins.
14:33
And And so So you got a bunch of these.
14:36
So um I like your Twitter because you talk about a bunch of things that I think most people aren't talking about.
14:44
My feed is very like I don't know.
14:44
My Twitter feed is just like the same crypto people, the same Silicon Valley people and then there's like five people that are like just you know, different.
14:53
And I think you're friends with all of them.
14:55
Like that guy Molson I think is like a total nut.
14:56
I find him his feed to be hilarious. You're kind of a nut. You're hilarious.
15:01
There's this guy Jay Vas I don't know how to say his last name exactly. Long Indian last name.
15:04
He's super smart and like you know, people just don't follow you guys in the same like to the same level as I think you should.
15:13
Like I'll make a list of these people.
15:14
I'll tweet it out because I think you guys are all way more entertaining on Twitter than than most.
15:17
Um but I want to read you a couple of tweets and I want you to just kind of riff on like it kind of explain it but riff on what you what you mean there like what was the kind of the golden thing there.
15:28
So you had one about going to touristy places but doing non-touristy things.
15:35
You were tweeting out like you were in China you're tweeting out like what a paper recycling mill like what is waste paper from the US where does it go once we like where does the waste paper go and you like found where it goes in
15:50
China it was this gnarly factory and so like I don't know if you you could talk about that or just this idea of going going on vacation or going to a touristy place but then hitting the non-touristy parts of that country talk a little about that. Yeah well that was a I mean
16:02
about that. Yeah well that was a I mean that was a business trip like I was there training the team and helping them go learn how to buy fireworks and like we were just like driving down the road and like literally so the process of going to buy fireworks is there is like a Silicon Valley of fireworks and it's in China and it's
16:21
about a two-hour flight from Hong Kong in the southeast of China and you go to this place and like it's the same thing every day you go the Chinese take you to a fancy dinner and there's always the same restaurant and the same food and then they take you to a factory and then they show you some fireworks and hopefully you buy them and that happens like for six days in a row. And then And
16:35
And then And you have to drink a bunch of nasty baijiu They they have like Budweiser Chinese Budweiser they really serve you and it's pretty fun.
16:45
fun. Tsingtao yeah Yeah it's pretty fun but yeah after like the fourth year of doing that like I was there with with the team and I was we were like driving along and I was just so sick of going to yet another fireworks factory cuz they all look the same it's just like the
16:58
same little ladies like doing the same thing and all the fireworks workers by the way are like 70 years old they can't hire young people to work in fireworks factories it's just crazy and I was like what is that over there and and they're
17:09
like oh that's the box factory and I was like a box factory let's go over there and so they pull over to the side of the road the driver goes in and the Chinese seller to us like takes us in for a tour of this box factory and for me it was just like an opportunity to kind of push
17:24
a little bit and like really get underneath and understand like how a culture like lives and really functions and like he told us like look there they have a problem making boxes now because they can't put the waste water directly in the river anymore. I was like oh this
17:35
I was like oh this is why things are so cheap in China.
17:39
Um but yeah that's it like just you just kind of start wandering and then magic happens so that was one of those What type of trip was that where you bring a bunch of Texas firework workers to China and like I just imagine like just like what the [ __ ] is this soy sauce [ __ ] You know what I mean?
17:54
Just like imagine that conversation and that must you must have had a blast hanging out with a bunch of Texas firework guys and a bunch of Chinese fireworks guys.
18:02
You guys that we really got brought together there on that one.
18:08
I love a blown [ __ ] up. Yeah.
18:08
Well, I mean I'm somewhat worldly.
18:11
The guy the guy that we took on the trip actually the CEO for the business is a former a former senior military officer who's Romanian and lives here in San Antonio now used to work for Aldi and they didn't know what to make of him.
18:24
Like they were just totally confused why we had a Romanian with us like going through rural China.
18:28
So it was pretty good times.
18:31
Have you had any of these other like have you intentionally gone and sort of gone off the beaten path to like cuz I feel like what you do when I look at your your Twitter feed you've sort of accumulated a bunch of random disparate business knowledge and a lot of this comes from like oh you see a guy selling something on the street you're like hey so what is this?
18:48
Where does this come from? How do you do this? Right? That sort of thing.
18:50
Can you tell any other stories of you know sort of like intentionally stumbling into interesting things and cuz I think more people should do that.
18:58
Um and I want to kind of like you know hear some of those stories.
19:05
It's a really good question.
19:05
I need to think of a good I need to think of a good answer.
19:07
I'm glad we're I'm glad this is being edited.
19:11
Um When have I done that the most?
19:15
Um Yeah, we went down one one time we went down this is super interesting.
19:20
Um you know, our business has some employees in Medellin in Colombia, you know, where Pablo Escobar is from.
19:26
So, we went down there to just kind of like start wandering around and like meet our employees and like understand should we outsource more here?
19:33
Um and we just started like going around with a guide and just like asking people questions like what do you think of Americans?
19:39
What is it like here and like you just start to see random stuff.
19:41
Um I mean, the reason I started the coffee business by the way is like I was riding my bike around Arkansas and I'm like just riding outside the Walmart headquarters cuz like I'm a business nerd and staring at the Walmart headquarters and like there's this like drive-thru coffee shop there and it was COVID and I was bored and I so I just sat there for an hour and these guys were just printing money.
20:01
And I came home and I called my buddy who I'd wanted to work with for years and I was just like, "Hey, we should start a coffee business." and he said, "Why?"
20:08
and I sent him the pictures.
20:08
I was like, "Look at all these people.
20:10
They're just like printing money."
20:12
Um so, it's just kind of this idea of just like for me like like the way I build ventures and the way I find them is just kind of like like stumbling around like an idiot and then like you end up in front of the Walmart headquarters and watch some guy selling millions of dollars worth of coffee.
20:27
Um so, yeah, that's another story.
20:29
And does uh you went to the Berkshire Hathaway uh like summit which I think is kind of like a pilgrimage for like business people {slash} entrepreneurs.
20:38
It's like uh you got to go visit the Mecca and like you see the old kind of religious you know, leader you know, the 90-year-old guru sitting there and uh is it worth it? Should I go?
20:48
Uh you definitely got to go at least once.
20:49
I mean, it was like so, I'm 47 so, like I always regretted I didn't see Jerry Garcia before he died and like that was the way I felt about seeing Charlie and Warren and and you know, it's like one of those things where I was kind of happy to be there cuz it felt like like once-in-a-lifetime thing and the people watching is amazing.
21:06
Like, it's like it's like the combination of like uh cash like investing and like a NASCAR race. Like, it's perfect.
21:13
Um so, I just had so much fun doing it.
21:16
But, it's also kind of, you know, I feel like going at this point, like Charlie and Warren are getting up there. Like, they're 92 and 98.
21:24
Like, the morning, you know, Warren spent a lot of time just kind of trying to find his words.
21:28
And then he got into a rhythm and it was like he was his old self again, and it was pretty awesome.
21:32
But, I mean, I think if you're a capitalist, you got to go once.
21:33
You just got to go once cuz you're just like it's just such it's just such an insane experience seeing these people so devoted to the company dropping $250 on a pair of Roper boots or Justin boots, and then walking over and drooling over like how they can buy like a Sunbeam boat.
21:50
Like, it's just like just the coolest thing.
21:52
So, you got to go at least once. Sam, have you been? No. Uh I was invited to go.
21:58
I think you and I were invited with Sieva and Sully, and I didn't go.
22:01
Is it I guess I I guess I would go just to see it.
22:05
Dude, those guys are old.
22:05
Aren't they like Isn't Charlie Munger like 93? 98. Oh my god. Yeah.
22:12
Uh I guess next year it would have to be the Yeah, I guess next year it would have to be like it the last one, maybe.
22:19
You got to go just to watch him and see how much peanut brittle he eats in a 4-hour setting. Like, it was unreal.
22:24
The guy ate like 4 lb of peanut brittle.
22:27
And when I like live-tweeted the thing, like, it was like, "I can't believe he's still eating this much peanut brittle. I'm 47.
22:33
There's no way I could do that."
22:35
He was just sitting there pounding it the whole time.
22:36
Dude, that that peanut brittle from See's is fire. I feel that. It it is pretty amazing.
22:41
These guys have like they have the most success, and they do the opposite of what every like, you know, success coach and like motivational entrepreneur do you know, tells you to do.
22:50
It's like, you know, they're like, you know, it's like if you go on Instagram, it's like, "Oh, I need to, you know, wake up at 5:00 a. m.
22:56
I need to, you know, meditate.
22:58
I need to do my ice plunge, and I need to do my CrossFit workout, then I need to like, you know, do my daily gratitude journal, then I need to do my like hyperfocus chamber where I go and I figure out my priorities for the day, then I need to like speed read and listen to my podcast on 2x speed.
23:10
And these guys are basically like, you know, they somehow made it to they became one of the richest people in the world, lived until they, you know, until they're about 100 years old, and they wake up every day, they eat McDonald's breakfast, eat a bunch of M&M's and Diet Cokes, and then they read and play bridge all day, and like go for walks.
23:27
And uh you know, that's where they get their their their ideas from.
23:28
And so, you know, I think there's something to what they're doing.
23:32
I think it's a you know, I think they're still alive cuz they're low stress, despite what they eat.
23:37
Uh and I think they're they're smart thinkers cuz they don't overload their brain with information.
23:41
Like uh I'm guilty of it, and I think a bunch of people are when you when you're hooked into social media, you're just constantly consuming info.
23:50
This data is wrong every freaking time.
23:53
Have you heard of HubSpot?
23:55
HubSpot is a CRM platform where everything is fully integrated.
23:57
Woah, I can see the client's whole history, calls, support tickets, emails, and here's a task from 3 days ago I totally missed. HubSpot, grow better.
24:11
What of your of the things in your uh the the things in your portfolio, which company besides the um besides the the boot camp, are you like, this is just the greatest thing ever.
24:23
I'm so happy we own this.
24:23
Uh I more people should know how easy, or not easy, but how straightforward this business on.
24:30
It feels like I'm winning in easy mode. Yeah.
24:33
Well, I think the Near business, so it's hirewithnear. com.
24:36
Um so it actually This is a This is the This is the apex of what I want for Girdley existence to be, which is I want I've gone from starting businesses myself and working in them, then starting businesses and having other people work in them.
24:51
And this is one that has started basically with me doing no work, but I have substantial amount on the cap table.
24:56
Like it's the apex of Gurley Automation.
24:58
Like I'm always scaling stuff.
25:00
So the new business, like we looked up and like like I I'm in a CEO peer group and like none of my peers could like hire people.
25:07
Like it was the past couple years, it was just such a mess.
25:10
And then I'd ask them, well, have you considered hiring overseas?
25:11
And uh they're like, I don't know how to do that. How would I do that?
25:15
So we we we basically I took one of my associates and I said, hey, we should go build in this direction.
25:20
There's this huge wave and here's this problem.
25:22
Let's go try some stuff and see what happens.
25:25
Um and that business I like so much just because everything seems like it's on easy mode because everybody's offshoring.
25:30
Like everybody wants to do this.
25:31
Um it was that way when the economy was going well, now it's even more so when the economy's going poorly.
25:37
Um and I've hired personally of my associates, I have three of the six that work work overseas.
25:42
I've never met them in person. It's like the best.
25:46
And you partnered with someone to make this according to the about page, right?
25:50
Yeah, so um Hayden is started as an associate of mine.
25:52
So I hire these um people I call them associates and it's basically an entrepreneur in training program.
25:58
So I like mentor them through. I pay them a salary.
26:01
Um and then I help them like get out of the like 12 bad ideas that every entrepreneur has to get when they're 27 years old.
26:07
I help them like think through all those and then we work on a good idea together.
26:10
And then at the end of it, they can either start a company with me or they can go take a job or whatever.
26:15
And so Hayden and Franco were two of the guys in that program.
26:19
And like I'm on the cap table with them.
26:21
Like I put up the money and have been guiding them through it, but they've done all the work.
26:26
When you're hiring CEOs, how much equity do you give them and how much how much do you pay them and how do you incentivize them to want to stay with you for a long time?
26:34
Yeah, so totally depends upon the situation.
26:35
Um you know, obviously if a business is much more established um or demands somebody who's like much more like um like mature, um that that makes a situation where often times you have to come up with more.
26:50
Um my best situations are when I can partner with somebody.
26:51
So, all this stuff I'm in, while I have significant stakes in it, I have other people on the cap tables.
26:56
Like, that's one of my like, I feel like superpowers.
26:58
Like, I can just like maintain partnerships.
27:00
Like, I have 100% success rate on partnerships with people.
27:05
So, the absolute best way is if I can get somebody like Paul at Dura is to be like a co-founder.
27:08
And the absolute best way of that is if they're a co-founder and they put money in it like me, and then they make that their job.
27:16
Like, that's the absolute best skin in the game kind of outcome.
27:18
But, you know, you can have anywhere from a 27-year-old who will make 60 to 80k a year plus benefits um to some of these people who are much more senior, like our coffee um our coffee person, you know, he worked at 25 years at Circle K, and he's running this he's running that business.
27:37
Um, he obviously needs to make much more money than that.
27:39
Um, and then the equity really depends, totally depends on the opportunity, depends on how much skin in the game they want to have, uh what level of commitment they have, and how early they're coming in the venture.
27:48
But, it could be anywhere from 40% to 20% to 5%.
27:51
And why does, let's say for Dura, uh why does your partner want to give you what it let's call it let's pretend you have 30%.
27:59
I don't know what you have.
28:01
Maybe it's 50, maybe it's a little less. Let's just say 30%.
28:03
Why does he want to have give you 30% and he's a day-to-day in it, but you're not, right?
28:07
Uh so, how do you think about that like value exchange um when you're not going to be the operating person and then they are? Yeah.
28:16
Well, I mean so, you're asking that question from the same lens I have, which is like being an operator isn't our dream.
28:23
Most people their their dream is to be an operator.
28:25
They're excited when we're able to work together and create an opportunity for them to be their best self, right?
28:31
And that's what I see kind of as that benefit.
28:32
And so, and and so, I think a situation like that where like, you know, often time I'm part of the very early figuring out what the idea is going to be.
28:43
Um, I'm putting up a substantial amount of money.
28:44
I put up more money than than say the other partners did.
28:48
We did some debt to do the first deal.
28:50
Like I personally guaranteed it.
28:50
And then the last thing is like like great teams, they have these complimentary things.
28:57
How much money would you use to fund a new business?
28:58
So that one was like a couple million.
29:00
And then some of these are like 50 to 100. Wow. Okay.
29:01
So that's my You do put up a lot of money.
29:06
Yeah, so yeah, skin in the game matters.
29:09
Then that also helps me not to try to do too many things.
29:11
Like I could just be like, okay, like I'm putting real money in this.
29:14
I better really believe in it.
29:17
But like like the last thing with these operators is a lot of the things I feel like I bring to the business where it's like strategy, insights, like best practices and connections.
29:25
Like those are things that they're happy to have somebody along on the journey with them who has the same level of commitment and wants to be a board member.
29:32
Like I I don't want their job.
29:33
And I'm not I wouldn't be good at it.
29:35
So you know, I think that's that's the partnership I end up having with these folks.
29:40
Sean, have you heard of this guy named Kevin Ryan? Only through you.
29:44
He's like a media, right?
29:45
Is that is that the same guy?
29:48
Yeah, so Michael, have you heard of this guy? Kevin Ryan. I'm Googling him. All right.
29:52
So I think there might there's probably a billion Kevin Ryan.
29:54
So like maybe a baseball player like a baseball player name like that might come up.
30:00
Yeah, so listen to this guy.
30:00
So early in his career, he worked like in the newspaper business, nothing particularly exciting.
30:06
And then he worked at this company called DoubleClick.
30:08
And he was like the 30th employee there and then took over as CEO.
30:12
And then DoubleClick was sold for like a billion or many billion.
30:16
And it eventually became AdSense for Google.
30:18
So like pretty big thing.
30:20
He told me that he had made like very low digit eight eight figures.
30:23
He was like it was enough money that like I'm set, but like I still wanted to like create stuff.
30:29
And so him and this guy named Dwight who I think he worked with at DoubleClick, they started AlleyCorp.
30:35
And their whole thing was we're going to fund companies with $200,000 and all of the ideas are going to come from us.
30:43
All the ideas are only going to be back of the envelope math and we're going to hire someone to get it off the ground and we're going to give it 300,000 and 6 months to prove if this is a good idea or a bad idea.
30:53
And we're going to do it a bunch of times.
30:55
A few of their successes that they've done this with are uh [ __ ] MongoDB, which I don't know what it's at now, but in the range of like a 20 to 50 billion dollar uh market cap publicly traded software business.
31:08
The second one is Business Insider, which sold for 600 million, I think, it but it's like a big company now.
31:14
The third one is Gilt Gilt Group, which was a clothing company that was huge.
31:18
It It didn't actually work out, but it was huge for a little while.
31:21
And I think the fourth one There's another Oh, the fourth one is Zola. You guys know Zola?
31:27
It's like where you go for wedding registries.
31:28
I believe that's a unicorn.
31:31
And there might actually be two or three more of these companies that AlleyCorp has like uh founded.
31:37
And basically, he was like, "Yeah, so me and Dwight just sit around and we come up with like a cool idea.
31:41
Like, I go to a wedding and I just ask people where they bought all the gifts and like He's like, "I just had this idea."
31:46
So, I knew someone who worked at Gilt Group who mentioned she liked this type of business. I hollered at her.
31:49
I go, "Hey, here's 300k if you can get this going and you get a small portion, but we get most of it. You want to try it?"
31:56
And that's how it worked.
31:56
It It's a He He's pretty amazing. Speechless. That's impressive. It's like, yeah.
32:06
I was like, "Yeah, these guys are really good."
32:07
There's This like holdco model is is like in vogue. Right?
32:11
Cuz it's sort of like To me, I I I worked at at a startup studio for a while.
32:16
I think that was like the thing for a period of time.
32:18
Probably still is a thing where, you build one company, you run it for a while, you sell it. Great. Now you got cash.
32:24
You still want to do more entrepreneurial things.
32:28
And so, you self-fund a studio where you're like, "We're going to work on a bunch of ideas."
32:31
And then you try to find like new winners out of those bunch of bunches of ideas.
32:35
And so, like, you know, I worked at out of one.
32:39
That's how I got into tech.
32:39
Um, you know, Mark Pincus, the guy who created Zynga, then he created one.
32:43
The guy who created Uber, he created one. Kevin Rose created one.
32:47
Like, it's just a bunch of serial entrepreneurs who create these.
32:51
And they've actually had a pretty poor track record of success.
32:54
And then we see that like the HoldCo Mafia is sort of the same where you get, you know, um, guys like Andrew Wilkinson who's got Tiny.
33:00
And then you have, you know, bunch of other people who are doing their own HoldCo versions of that.
33:06
Whether they buy boring businesses, they buy sweaty businesses, they buy software businesses, they buy whatever.
33:11
Um, and you're kind of in that boat.
33:13
You're in that boat, too.
33:15
Uh, what do you think is the I guess like how do you think about that, you know, in terms of like who do you think should be the type of person who who should do this?
33:22
And And And what are some of the misconceptions or like traps that people fall into when they go down this path?
33:27
Cuz I'm sure you've seen a bunch. Yeah.
33:28
Well, I mean, I think there's two There's two bad things going on with HoldCos right now.
33:32
I think there's a whole group of people that are doing them and they actually, uh, think it's not that much work.
33:42
Like, they're I talk to them and I'm like, "So, why are you doing this?"
33:44
They're like, "Uh, it seems really easy."
33:45
I'm like, "This is really hard."
33:48
And the reason number two that it's like super hard is because this is exactly the opposite of operations.
33:52
Like, the everything that you do and all the habits and skills that you learn when you are a CEO running a business, which is where most of these people are coming from or you're a senior exec in a company, like everything you do in a HoldCo is exactly the opposite.
34:05
Like, like when there's a problem, you don't rush in and fix it for your company.
34:09
You actually say, "Man, that really sucks.
34:13
What are you going to do about that?"
34:14
Two entirely different things in terms of the way you approach it.
34:16
So, you mean, it'll be interesting to see what happens with all these people who think HoldCos are really hot.
34:21
Um, as I talked to most of them, I don't think as many of them are wired to be HoldCo people as they really think they are.
34:27
Like, the Mees, the Xavier Helkinsons, like like we're odd.
34:31
Like, we're different people.
34:34
And there's a reason for that that we're not operators.
34:35
And so, it'll be it'll be interesting to see what happens with some of these people. What's so hard about it?
34:41
You know, I think it goes against people's nature, right?
34:42
So, like like, take me for example, like, I love to live in this idea space, right?
34:47
And I'm I have like a relatively crappy memory, which is like I why I have to write stuff down like crazy.
34:53
Um but that's different for other people.
34:56
Like, a lot of the people that I partner with as operators, they look at like what I do as insanity cuz they just couldn't imagine letting go of the vine of these particular things going on.
35:06
And so, you know, it goes against this human nature where a lot of times, like, for example, those people, like, there's this problem going on in the business, they want to sprint to that problem, right?
35:15
And they can't imagine even stepping away from it.
35:18
So, it just goes against, in my opinion, who you are as a person and makes it almost incredibly difficult or impossible for them to make people.
35:24
Yeah, you say that, but at the same time, I'm like, oh, everybody I know is like, oh, I like to operate at a high level, you know, the 10,000-foot view, and I'm an ideas guy.
35:32
I I don't know anyone that doesn't think they're an ideas guy.
35:34
Maybe I just run in the wrong circles, but you know, I don't know a lot of people who are like, you know what, I like to grind.
35:39
The operator likes to go grind the day-to-day optimizations versus I like to be the idea guy who helps just get it started, and someone else goes and does all the hard work, you know?
35:48
That seems like seems like there's a ratio of 100 idea guys to every one guy who just truly loves executing.
35:56
You ever heard of Excel, dog? That's my jam. Oh.
35:59
The No, you I lived in the Silicon Valley bubble, too.
36:03
Like, I was I fit right in. I was great there.
36:05
And then I came back here to the the hinterlands of San Antonio, and like, I started to see these people.
36:11
And like, I've got buddies who, for example, are senior executives at the largest private grocery chain in America, HEB.
36:16
Have you guys heard of this company? Yeah, I love HEB.
36:19
It's like my favorite grocery store. It's it's insane.
36:23
You should see how optimized those guys are when they're running at 3 or 4% even in margins and like they think it's great. Tell me everything. About HEB? Yeah.
36:33
What what do you want to know?
36:36
Like what what why what makes it so great?
36:38
It all comes down to it all comes down to the philosophy of the family that owns it.
36:42
So you have Charles Butt who is the majority owner and then his his relatives are the other rest of the owners and then they have a percentage that's owned by the employees but it's like 85 90% owned by but by these guys.
36:56
Um and so they'll just do crazy stuff.
36:58
Like when they heard when they heard that Trader Joe's was coming to San Antonio so HEB's located here.
37:04
There's an anecdote that they just packed up all the senior executives who were in charge of product selection location selection interior store experience all that stuff they put them on a private jet and they flew out to to California and said don't come back until you have the best of every single one of their products cuz we need to up our game.
37:22
There's another anecdote when Walmart came to San Antonio that HEB went and lowered their profit targets cuz they're just like we're not losing to Walmart.
37:31
That's just the way it's going to work and that all emanated from the ownership right?
37:34
You didn't have this like public stock people coming in and saying like oh like think quarter by quarter now you have these folks that were thinking like we've been here for 70 years how are we going to be here for another 70 years and just go crush it and that goes all the way down the culture.
37:46
My buddy works there and he said it took 10 years before people stopped referring to him as the new guy. People just stay.
37:58
Yeah imagine that in Silicon Valley.
38:01
Of all the it sounds like to you that like HEB is almost like a dream business or not a dream business but it's one that like you look at and you're like damn that is cool. That is well run.
38:07
I admire a few things about that.
38:09
What else do what other companies do admire that most people don't maybe know about or think about when it's like oh that's actually really neat for these following reasons. Really good question.
38:22
What other businesses are super sexy?
38:24
I feel like I've talked a lot about those on Twitter.
38:27
but it's just like thing things where it's like uh man, this is these guys got it made.
38:32
They they're It's hard work, but it seems like it's like a pretty fun and I think that what they're doing has a lot of soul and they're doing it right.
38:40
Sam, do you have one while he's thinking? Yeah.
38:44
Uh I mean, it does seem like it's a lot of family guy stuff.
38:46
I would say um Do you guys Do you guys know uh uh Black Rifle Coffee?
38:50
I've heard of them, but I don't know much about them. I don't drink.
38:55
So, I don't really drink too much of it.
38:57
I drink the black stuff because the other stuff has a lot of sugar.
38:58
They're typically drank by like conservatives.
39:02
Like they've like do the they've done like they advertise on Fox.
39:03
They've done like a good job of uh it like like this is made in America. It's all about freedom.
39:09
Like that whole thing, which is well, you know, whatever. That's cool.
39:12
And but they're like, "Yeah, let's sponsor rally uh dirt rally race cars." And I asked them. I was like, "Why?"
39:17
And they're like, "Cuz it's freaking awesome."
39:20
And they're like, "What's the point of like having this company if we can't do dope shit?"
39:23
Like, you know, go to a go to a rally car and give out our coffee.
39:27
And or they'll do it with like mountain biking races.
39:29
Or they'll do it with uh like they make all this all this cool content where they're just like doing like the redneck version of Red Bull stunts.
39:36
You know, like uh And I think that's awesome. I love that stuff.
39:41
I think that to me, I imagine in their heads they're like, "Yeah, we're like, we kind of care about coffee, but we really just care about living a really cool amazing life and letting people have fun.
39:51
And it just so happens or we're we're selling a bunch of coffee that allows us to to do that."
39:54
So, that's a good example of a of a business that I like.
39:57
And they took it public and it's worth like six or 700 million dollars.
40:01
So, it's like really successful.
40:03
Yeah, they're located here in San Antonio.
40:04
Have you seen It's It's super cool that that business you think it's like a coffee chain and it's actually just a lifestyle brand.
40:10
It's all like you go into the stores and there's like a little coffee thing on the side.
40:13
And then it's like all t-shirts and swag.
40:17
and it's good looking stuff.
40:17
Like I'm not like their demographic obviously, but like it's super fun to like go in there and be like, "Man, these guys like I'd wear that."
40:23
Even though it doesn't represent me. I like them a lot. Sean, do you have one?
40:28
You know, I do have I do have a couple.
40:29
Um I like to I kind of admire like a [ __ ] that's simple.
40:35
I like when it's really simple and the person has has like good life perspective.
40:39
So, the guy came on the podcast, Mike Brown. I met him through you.
40:43
I met him at I went to the Hustle office and he was he was just sitting there hanging out with you.
40:46
And um and you were like, "This guy's great.
40:49
You know, you know what's great about this guy?"
40:51
And and I think Sam, you probably know the story a little better than I do, but like what they did was they would go around to families in Texas that that were like basically living on a gold mine, right?
41:02
It's like they they were living on some valuable deposit of, you know, minerals or oil or whatever.
41:09
And they would go knock on doors and they would say, "Hey, you know, you um you're living on this land.
41:14
I'll like we'll pay you for the land rights in some way."
41:18
And they would go of those assets.
41:19
And then they would never go do the oil mining oil oil drilling themselves.
41:23
They would then flip that to the oil company and say, "Hey, look, we got the title rights, you know, clear and easy for that are in the earth."
41:30
And they were making a killing.
41:32
So, they were making, you know, I don't know, almost almost a hundred million dollars doing this. Is that right, Sam?
41:37
Yeah, I believe it was multiple eight figures in profit a year.
41:43
With like a team of like eight people.
41:45
And they're like, "Yeah, so It was super profitable, super small, super simple.
41:48
It's like we basically we go knock on doors, we call people, we explain what we're doing, and then we make them an offer that they can't refuse.
41:55
Like you know, they're not going to do anything with sitting on that land.
41:58
And so, you know, it to me I'm like, "This is so simple.
42:00
You compete with pretty much nobody."
42:04
Um and then you And then he was like I was like, "So, your bro It looks like your brother's working the business.
42:08
Like how's that working with family?
42:08
You know, some people say different things about that."
42:10
And he was like, "No, it's awesome."
42:13
He's like, "I love my brothers."
42:14
He's like, you know, uh He's like, "My My philosophy is you you know, you find the people that you love and you do life with them."
42:22
And he said that and it kind of changed the way I I operated.
42:23
I was like, "Oh, yeah, who are the people I want to do life with?"
42:26
And like, you know, just kind of pick the five people who are the most awesome and then find excuses to do life with them.
42:32
That sounded really simple.
42:34
It's like, "Oh, I love Sam.
42:34
I'm going to do a podcast with Sam."
42:35
And it's like, "Oh, our buddy Ramon's awesome. Cool.
42:38
I'm going to go on vacation with Ramon."
42:39
Or you know, like you want And like, you know, "Hey, this person's awesome.
42:43
Why don't you come work in one of my businesses?" Right?
42:46
Rather than just go work in your own job.
42:47
So, I really liked I kind of admired that philosophy and I admired just the like sheer profits of what they were doing and how simple it was and how it didn't require, you know, genius or like Honestly, I'm sure he felt like he was working hard, but it's not that hard.
43:03
Like, it's not Well, he used to say he was like, "Everyone we hire, we make them get into cycling cuz we all we like going bike riding for 2 hours in the middle of the day."
43:11
He's like, "We all we all want to go for we all want to go work out." Yeah.
43:12
Yeah, so I I kind of admire people who are the anti-hard work crowd cuz I'm more of that like, you know, can you work smarter not harder?
43:20
And then can you even like not feel like you're working?
43:23
Can you turn it into play by, you know, having people who are awesome, you know, doing it with you? So, I like that example.
43:27
The other one is uh Bill Simmons who started The Ringer.
43:29
Like, I I really don't think media companies are very good business and you know, ironically just started a media company, but like Bill Simmons is [ __ ] awesome and he kind of changed the game for what he does.
43:40
Like, every sports journalist did things one way.
43:43
He just did it differently and built this he built his following uh sort of unapologetically.
43:49
And What does he do differently?
43:52
So, he just like he wrote from the perspective of a fan.
43:53
And I that sounds actually that's actually giving it too much intellectual credit.
43:57
Actually, what he did was he was like, "All right.
43:58
What are the rules if you're a journalist?"
44:01
It's like, "You need to be objective."
44:03
He's like, "How can I be objective?
44:04
Dude, I follow sports cuz I love the Boston Red Sox. I love the Celtics. I'm from Boston.
44:08
I grew up my dad used to take me to the games.
44:10
He's like, "I'm going to write as like this die hard fan and when my team wins, I'm going to be so happy.
44:16
When my team loses, I'm the sky is falling."
44:17
He's like, "And that of course was super relatable to a reader cuz that's who your reader is.
44:22
It's like a die hard sports fan."
44:23
So, he like didn't pretend to be objective.
44:26
That was like the first part.
44:27
Then he would be like, "Cool, I'm also not just like this flat thing that like I can only like talk about sports."
44:33
So, he's like, "Oh, you know, I love the Die Hard trilogy."
44:35
So, he'll write a column that's like, you know, "If NBA players were characters in Die Hard, here's who would be Bruce Willis in Die Hard 2."
44:42
And like, you know, he would do these crossovers that didn't Nobody else really took those risks. It sounded crazy.
44:47
Like, Sam, you know, you and me both watched MTV's The Challenge.
44:49
He's like a huge Challenge fan and he'll talk about it.
44:53
He also he'll do a a separate podcast about it even though the audience is kind of niche, but it's so niche that when it hits, it hits in a very big way.
45:00
Like it's a like it has a high like emotional score when he does talk about something you get you that that you're in on the joke.
45:05
Be like the trade value of a player.
45:07
heroes or one of your business heroes?
45:08
Or one of your business heroes?
45:08
And uh anyways, then he spun off to his own He was doing podcasting before it was popular, before it was like an obvious thing.
45:14
And so, when he he recently sold the whole company to Spotify for like 200 something million, but you know, that I I kind of admired that because it was like he deserves that.
45:24
He was podcasting before podcasting was a thing.
45:25
And so, yeah, he now has the number one sports podcast and he can cash out.
45:29
And all along the way, there was never really any plan you could draw up how that podcast was going to make the guy $200 someday.
45:39
It was like That was an unfathomable thing, but he did it cuz he Again, it's kind of like your Black Rifle example.
45:45
It's like, "Yeah, I'm just going to do it cuz I think it's fun and it's cool shit."
45:46
And like, I I kind of believe in this magic this philosophy that if you take a bunch of cool [ __ ] you put it in the in the hat, you kind of mix up the hat like something really good comes of that and you don't have to to able to draw it out, you know, ahead of time.
46:00
So, I kind of I tend to love examples like that cuz I want to live my life more like that where I just do things without so much of a of a of a mind map of exactly how it's all going to pay off. Dude, I love that.
46:13
I think I saw this amazing quote.
46:16
I'm trying to find it, but it was from Kanye and he was like saying, "I despise people who do things" I can't find the exact quote, but he's like, "I despise people who do stuff and I don't want it to be dope."
46:25
He's like, "I want to if I'm going to do a clo- if I want to do a clothing company, I'm making it dope.
46:30
Even if that means I lose money. I'm making it dope. I'm making it awesome."
46:33
He kept using the word dope.
46:34
And he's like, "I'm just going to do stuff because it's amazing and yeah, it'll probably make money.
46:38
But for all the people out there who just do stuff just to get the money, but they don't want to make it awesome in the process, I think that's really weak and not cool and not dope."
46:47
heard that Dave Chappelle story he tells on like some late night show about Kanye? Yeah, tell it. My life is dope. Yeah, yeah.
46:52
I I don't remember the exact phrase, but he's like, "I was hanging out with Kanye and then Kanye got a call." Who Who was it? Somebody called him. Who was it?
46:58
So, it was uh it was Kanye was backstage with Dave Chappelle and Jay-Z and Kanye was just coming up and he was playing a a Jay-Z song and Kanye's verse comes up and Kanye's like the noob in the room and he goes, "Wait, stop that track.
47:14
Rewind that and listen to that guy."
47:14
And he like made him rewind and then he's like they're like, "Dude, what are you doing, man?
47:20
You're not like the you're not the big shot here."
47:21
And then he gets a phone call and he goes, "Oh, hello?" "Yeah.
47:28
Yeah, that's fine, but can I call you back?"
47:31
"Uh yeah, well, I'm backstage watching never-seen-before clips with Dave Chappelle.
47:34
Yeah, because my life's dope and I do dope shit." And then hangs up.
47:39
And then that's Yeah, exactly. I love that story.
47:43
That is the best and also like that philosophy is actually kind of amazing.
47:49
First of all, to believe in your own life being dope.
47:51
Like how many people think that their life is dope?
47:55
That they are dope and they do dope [ __ ] and therefore they have a dope life.
47:58
Like most people don't give themselves that credit, and you know, they're kind of waiting for dope stuff to happen for them to be able to say that.
48:05
Kanye's the opposite, right?
48:07
He's crazy in a bunch of ways, but one of the good ways he's crazy is that he just declares, "My life is dope, and I do dope shit." And guess what?
48:13
You'll kind of live up to that reputation if you believe that about yourself, right?
48:17
Like if you say, you know, um you know, I take chances. You know, I'm I'm bold.
48:21
I take I take bold risks. Well, guess what?
48:23
You're going to actually take the next bold risk when the opportunity presents itself cuz you've kind of hardwired yourself to to have that identity.
48:30
When we were Sam, you'll like this at Bebo when um we hired this guy Jason Hitchcock, and Jason was Jason's the best person you can hire because he will believe in you and the cause 150%.
48:42
Like he'll believe in you and the mission if you're like his boss and your manager or whatever, like more than you believe in yourself.
48:51
And he'll believe that the company's going to work even more than the CEO is going to believe.
48:53
He's like a like call him a Kool-Aid drinker.
48:55
Like he drinks the Kool-Aid, and he's not ashamed to do it.
48:58
And so, he because of that he's like the amazing person to have at a startup when there's a actually a lot of people have a bunch of doubt and uncertainty in their mind.
49:05
And so, one day I was talking to Jason, and we were like um the Hustle Con was coming around around the corner, and I was like, "I think I had messaged you."
49:12
I was like, "I want to talk at Hustle Con."
49:13
And I think you were kind of like, "Yeah, like I'll I don't know.
49:17
We got a bunch of speakers already." You kind of blew it off.
49:19
You're like, "You know, we No."
49:19
And and I was like, "All right, fair enough, but I asked."
49:23
And I was like I was like, "Jason, next year we're going to talk at Hustle Con."
49:26
I was like, "In fact, not just next year we're going to talk at Hustle Con.
49:29
In fact, everything we do this year, I want you to think about how it's going to play at your Hustle Con talk you're going to give.
49:35
When you're going to give this talk about how we grew from what zero to a million users, how we took over the game and our industry, like I want you to not just wake up and be like, "Okay, today I'm going to send out a bunch of emails."
49:45
It's like I want you to think about how this could be part of your talk, like how I landed the big fish through cold emails, or how I, you know, growth hacked my way to do X.
49:53
And we used to talk about that literally on a weekly basis like this is part of the Hustle Con talk.
49:59
And it was just to hype ourselves up to like do the more dope version of the task we were already going to do cuz like imagine you're going to talk about this on stage, that means it must have turned out pretty dope or you must have done a pretty dope attempt in order to have that mindset.
50:13
And I I'll still I still carry that to this day of like that's a pretty cool way to work.
50:18
Um Here's the uh Here's the quote, by the way. So, this is from Kanye.
50:21
He said, "For me, dopeness is what I like most.
50:25
People who want to make things as dope as possible and by default make money from it.
50:29
The thing that I like least are people who want to make money from things whether they're dope or not, especially make money from making things the least dope as possible."
50:39
And I I read that quote and I was like yeah.
50:43
We need to make that the intro of the podcast.
50:44
Find a clip of Kanye saying that out loud and let's make that the the opening clip of the podcast.
50:49
Um the other thing we did, by the way, that's in this bucket that I highly recommend people do is it's tempting to say we should do cool [ __ ] yeah, blah blah blah, and then like fast forward a month, everyone's feeling tight about the budget or the deadlines or the the the goal numbers are not being hit or whatever.
51:06
It's very What's the first thing you cut is the stuff that doesn't easily map to this quarter's result.
51:10
And and so we separate we created a separate do cool [ __ ] budget.
51:15
It was 15% of our total budget we put into a do cool [ __ ] budget which the outcome of it had to be Where?
51:21
At uh It was at Bebo and then I tried to do this also at Twitch. Where?
51:25
Um which was like hey, whatever the number is that we have to spend, 15% is going to be on cool [ __ ] that we cannot like we it doesn't have a measurable immediate payoff.
51:37
So, that's like the criteria.
51:39
You can't It can't be used in this budget.
51:40
Like Like making a flamethrower.
51:42
Like making a flamethrower or like, you know, I don't know if you saw this, we did the Milk Road rebrand or whatever, and I paid this guy to make this little video that's like this mock Apple commercial.
51:51
And like, it doesn't do anything.
51:51
It's It's not going to drive subscribers.
51:56
It's not going to like make revenue.
51:58
It's I mean, in many ways it is arguably a waste of time and money to just like pay the guy to do that and to even think about the concept and all that.
52:06
But, I've always had this with my companies, which is like, I need 15%.
52:07
I was like, at the very least, this is just to keep myself amused and engaged and like a fan of my own business.
52:13
And I cuz I know if I'm like the more if I'm just more engaged in my own business, I'm going to do that part will pay off.
52:21
And on the other side, it's like, I think your consumers, the customers of your business, also pay attention to that.
52:27
If they see you doing dope [ __ ] just for the sake of doing dope [ __ ] they kind of see you as the cool kid in school in a way, right?
52:33
Like, if you're always just begging for for customers or users or doing a discounted sale or like saying, "Please, please, please follow me.
52:41
Please, please, please subscribe."
52:42
Like, you kind of are low status in a way.
52:44
And I think at The Hustle, you guys did a good job of this, too.
52:46
Do you Did you do Do you have any examples of this?
52:49
Yeah, like we did stuff early on that we kind of like people got mad at, and I was like, they're like, "You're going to lose money, lose customers."
52:54
I'm like, "Yeah, but it's hilarious."
52:55
Like, one time uh we wrote entire we wrote entire email in Trump's voice.
53:02
And so, we're like, imagine like if you read it and you were saying it out loud, like that it would sound like you were Donald Trump. Everybody loved it.
53:08
Everybody's saying it's the best. People are saying that.
53:11
They're saying it's the best.
53:11
Yeah, like that's how it That's how it That's like how it was written.
53:14
Uh and then another time, um this was like pretty vulgar, but it was pretty funny.
53:20
We wrote the the subject was, "Here's the only tip that you need to know for how to be productive today at work."
53:26
And you open it up, and it was just that picture of Johnny Cash where he flips off the camera, and it just says, "Close this browser and get back to work."
53:34
And that And like that was That was That was it. That was the email.
53:37
We sent that to 120,000 people.
53:39
We didn't even like We didn't even We didn't even send an email.
53:41
And then maybe one final thing, this woman, Lindsey, worked for me and she sent the Tuesday's email on Wednesday, which is like a mistake. And she's like, "Shit." She's freaking out.
53:52
And I was like, "Here, do this." Um I wrote in Slack.
53:53
I was like, "Hey, uh you know, I heard you sent the wrong email."
53:59
And she replied in Slack, "Yeah, my bad.
54:01
It was really messed up." I go, "We got to talk.
54:03
But until then, just like fix it."
54:05
And she replied with like, "Well, what should I do?"
54:08
I was like, "I don't know, man.
54:09
Just put the new email in and send it again.
54:10
Just take a screenshot of this and like put that in and they'll understand, I'm sure."
54:14
And he goes and she replied with something like funny.
54:16
And that was just the screenshot.
54:17
That just went at the top of the email. There was no explainer. Right.
54:21
And so we would do like little things like that all the time. What about you, Michael?
54:24
Are there any companies that you look at that kind of fall in this category? It's super fun.
54:31
Uh well, I did I did find one to talk about.
54:33
The Have you guys done PopSockets before? You talked to that? I don't know.
54:37
We haven't talked about it, no.
54:39
Yeah, it's a crazy story.
54:40
So, um it's the it's the little like you take the the back of the case of your phone and you put the little ring on it. Well, that's patented.
54:47
And they're called PopSockets.
54:50
And they're very litigious.
54:50
So, the business started in 2014 and they sold 30,000 of these things.
54:54
So, they're you know, 10 or 12 bucks, whatever.
54:56
Um but then they got really popular.
54:59
And people the Chinese started trying to knock them off and sell them on Amazon and all this stuff.
55:03
Um and so, it was a a UC Boulder professor.
55:06
And by 2017, they sold 35 million of them.
55:10
In 2018, they sold 60 million of these things.
55:12
So, all because they have a patent on this little way that, you know, teenage young girls in Orange County want to grip their phone, like they're just printing money.
55:20
So, supposedly in 2018, they had 200 million in revenue and 90 million in profit, all cuz of a patent.
55:28
It's one of the great one of the one of the greatest Yes.
55:33
I know this is true cuz I got it off of Wikipedia When I I researched this a few months ago.
55:40
Yeah, that's that's amazing.
55:40
Got to be several hundred million, at least.
55:42
I mean, they got to keep drawing.
55:44
Ev- Every lady I know has one of those things.
55:47
It fits your nails in there. It's great.
55:48
Sam, you know you want to know a little realization I had today?
55:51
When Michael was coming on, I was like, all right, what do I know about Michael?
55:53
I was like, uh he does that like Chili's little stick where he's always like, you know, you know, the only thing I don't even I don't even know how to I would explain it.
56:00
But you basically are just finding an excuse to name drop Chili's and say how great Chili's is and like why it's the best place for a meeting and like you're just like, you know, oh my god, I you know, so happy for you know, Mother's Day.
56:09
I love my mother, but not as much as I love Chili's, right?
56:10
Like you just like come up with some way to like integrate Chili's in.
56:12
And Sam, I don't know if you've seen this, but I I actually me and Ben talked about this once.
56:17
We go when we were like trying to build up uh my brand.
56:20
It was like, all right, I got this podcast. It's brand new. I got a Twitter.
56:23
It was like, you know, a few thousand followers at the time.
56:24
It was like, what should we do to like build a brand?
56:28
So, I I we did this one like, you know, 2-hour exercise.
56:30
We just looked at people who had good brands.
56:31
We're like, what are what are peop- what's some common things that they do?
56:34
And one of the things we found was that a lot of people had early on in the tech industry like uh or like sorry, like early on not early on the tech industry.
56:43
That's like in the '70s or some [ __ ] But like early on when I got into tech, I was following some people on Twitter and um and I saw this guy Ryan Hoover and he seemed interesting. He was blogging.
56:52
He started this thing called Product Hunt.
56:54
But Ryan would always it was always Phil's Coffee and LaCroix.
57:00
Like he would always talk about Phil's Coffee and LaCroix.
57:02
And in fact like LaCroix kind of became like a startup meme.
57:05
I really give Ryan a lot of credit for it because he was always effing talking about LaCroix.
57:08
And then when Product Hunt got popular, it just like accelerated the like the LaCroix meme in the community as like, you know what's like low-key great? LaCroix.
57:16
And like um And so he had LaCroix.
57:19
And then I don't know so Pomp Pomp does this thing with Domino's all the time where he's like he'll do like a Domino's pizza.
57:25
He always says that like Domino's is the best, I think.
57:28
And um and he's just like and it's kind of this thing where you get this serious business persona in one way but then you show this like human side and it's like ah I'm just like I love this thing.
57:38
Uh you know, I don't know if yours would be like Topo Chico or something like that.
57:41
Like you used to like kind of pick those out. Michael's got Chili's.
57:44
We got to make ours Cheesecake Factory.
57:46
Yeah, like I was like Chick-fil-A, Cheesecake Factory.
57:48
We need something that's like our stick uh that's like it can't just be false.
57:53
Like you got to genuinely have that love for it.
57:56
The only part that's the stick is that you talk about it and you don't really talk about It's like you're serious serious serious Topo Chico cuz it's like you know, this makes the cut.
58:06
It's that important to me. It's that good.
58:07
It is I'm that big of a fan.
58:12
You're like Michael uh we had a great time, you know, let me know when you're when you're in Austin.
58:16
We'll go out sometime for some Cheesecake Factory and uh maybe get the chicken piccata. We'll have a great time. Yes, that sounds good.
58:20
Is that on menu like page 14 of the menu or 57? menu.
58:28
So I think I think when you pick this thing, the thing I would recommend, it's got to be something that's Well, okay, so here's a story for you.
58:33
So I'm 25 years old and I'm finally figuring out how to talk to women in my life.
58:37
Like it's just like I had not figured it out at this point.
58:41
And so my buddy and I decided to start going to parties and we would dress up in suits.
58:47
And this is like when everybody's like dressed in like grunge like in San Francisco. Like so it didn't work.
58:52
So we show up dressed in these fancy suits and it was just odd enough that the women would be like, "Why are you guys doing this?"
58:59
Like it's just it's just slightly odd, right?
59:00
And so I think you need to figure Peacocking. What's it called? Peacocking? Yeah, okay.
59:10
I could have been one of those like with the pickup artist guys.
59:12
I who who needs to do this whole ghost stuff?
59:14
I could be a pickup artist.
59:15
I I have I could not do that.
59:17
Anyway, uh I don't I don't like hair gel enough.
59:20
But anyway, the um I think you got to figure out something that's just a a bit odd.
59:24
You're like, "Why does this like technology entrepreneur in San Antonio like chili so much?
59:30
So, if the Cheesecake Factory is that, I think you're good.
59:32
But whatever it is, it's got to be just a little like that they're like, why are they why why are they wearing suits to this party? Like what's going on? It can't be cool.
59:40
That That's the first thing. It can't be cool.
59:42
Cuz if you're just trying to say some fad that like everybody thinks is cool, then now you're just hopping on a bandwagon.
59:47
You have to You have to say something that's actually not so cool.
59:50
Like for me, like the genuine one would be Cinnabon.
59:51
Like I [ __ ] love Cinnabon.
59:53
Nobody even thinks about Cinnabon.
59:55
So that's the the corner for Cinnabon is open.
59:57
I could take that corner.
59:58
You know, that's a that's a piece on the That's a piece of land on the on the board that that nobody's touching right now.
1:00:03
I could just pick that up for cheap.
1:00:04
And but the people who but people do know it. It's kind of nostalgic.
1:00:08
And it gives people something to like something that they can gift you.
1:00:12
Some place they can offer to take you.
1:00:14
Some place that every time they go there or see one, they will think of you.
1:00:18
Like every time I drive by a Chili's, god damn it, I think of Michael Geraghty, right?
1:00:21
And it's like same thing with the LaCroix and Ryan Hoover.
1:00:24
It's like they own that mental real estate in my mind.
1:00:26
And so Sam, we could do that with Cheesecake Factory.
1:00:30
We could just every time someone sees it, they see us.
1:00:35
You definitely should do that. That's a great idea. All right.
1:00:37
Thanks for coming on, man.
1:00:39
Wait wait let him promote promote himself. What's his handle? @geraghty on Twitter. Sick. Well, thank you. Thank you for coming on. That was awesome.