#31 - The Wild Wild West of Mineral Real Estate

what my mentor said when he hired me on that twenty eleven was one of the best times in the history the oil business to be in the oil business he was right i grew up in a small town in the midland texas which actually the oil and gas capital of the world and i started a company that buys oil and gas properties the big fish aren't looking at put them together in a package and then sell them to the big fish the big fish almost every other country in the world that has oil government owns the rights and gets paid for the revenues in the us private citizens actually own the rights to the land and they can be divided up over generation there might be hundreds of people that own a small piece of the mineral state in a particular track what we do is basically track those people down make them lump sum offers or the rights to their property and hopes that there might be future drill in that area we were making millions of dollars putting a lifestyle that to ride bikes every day and work out together and go to this office also club house and spend a lot of time with my kids and families so we had an exit certainly probably could've have had a nine figure exit if people are gonna listen to this and guy this guy has the best fucking life if i've is nine alone ten million million money million dollars hundred million dollar half a billion hundred and fifty million dollars one or two people in a bedroom actually put threats to these like giant multi million dollar companies because you have creativity and you have nothing to lose add another zero to that price buddy add two more zeros first millimeter every week we sit down with self made millionaires and asked them how did you do it i didn't start a podcast i started my own personal business school and the teachers are the successful entrepreneurs behind the biggest brands and businesses that you find today i wanted to know the real stories with all the details like how did you get your first hundred customers what did it feel like shit the i ask them how'd do you spend your money now that you're rich and what would you do if you're starting over from scratch again today if you're like me and you wanna own your own business instead of living a nine to five job this is the podcast for you the hustle presents my first million first hello and welcome we have mike brown here we met like three days ago or something right we just bumped into each other when at sam's office when we were recording the million dollar brainstorm and i hit it off right away and i was excited to get you on and i kinda begging and was like hey how long you in town for let's get in the studio because i like that you're a couple things not a high tech business in fact i think it's a boring business and it's a beautiful boring business non traditional background so you're not like you know got my mba worked up the corporate ladder and then did this thing totally different background some other things to look look forward to and this is really small company and big revenue and those are always excited to me so those are like three of the the things that i'm like people gotta hear this mike brown walk with the podcast first how you feeling in today thanks yeah it's great to be here i appreciate it you spent all morning on a mushroom farm so i think that's like if you're not ready for the podcast i don't know i don't know what else i could do for you yeah definitely a nice relaxing piece of property down south so happy to be back in the city and and back to business okay cool so we i gave people the teaser which is not a high tech business small company big profits what is it that you do my name is mike brown i grew up in a small town in in midland texas which is actually the oil and gas capital of the world and i started a company that buys oil and gas properties and packages them up to private equity backed funds so basically i'm an ag i buy smaller properties that the big fish aren't looking at put them together in a package and then sell them to the big fish the big fish exactly love it and your background is like like i said not traditional so you're not a you didn't come from the corporate world you didn't come from sort of the ivy league where did you come from how did you get into this right so from a very young age i knew that i wanted do two things i knew that i wanted to be in the navy and i knew that i wanted to be an entrepreneur so why do you wanna be in the navy i've always been afraid of that whole thing i was like i gotta avoid you know being courageous and brave and fight for my country so so why did you wanna in the navy was that a family thing no so actually in the third grade i read patriot games and i basically decided i was gonna be ryan and jack ryan went to the naval academy so that's what i was gonna do he's that jack ryan the jack ran of this tv show that's like big now is yeah the same tom clan jack ryan naval academy train before we went to the cia and becoming president and all the crazy things that he did that's what i wanted to do i knew that i to go to naval academy and like and and be in the military it was something i was always interested in but i knew that i was gonna get out as soon as i possibly could and start a company so why why is that why did you wanna get in so bad and why you wanna get out so bad that sounds counterintuitive to me it just seemed like a a really great like like service to our country was very important to me from a young age and then but but like i knew that i didn't wanna be a career admiral kinda guy because i had more to do and entrepreneurship always seemed like a natural fit so i actually i read atlas shrugged when i was sixteen and and hank was my hero and i was like i'm gonna start a company that's that's what i'm gonna do with my life gotcha and so you go to the navy when's the naval academy graduated in in two thousand three and i i actually took the john mccain route through the naval academy so that means i marched a lot of tours with my rifle while my friends were out partying because i managed to get caught for everything that i did so i didn't have a lot of options available so i was actually selected to be a a naval flight officer which is a back seater so i went to flight school and was fortunate enough to get selected for the jet program and so i flew f eighteen in from about two thousand five through two thousand nine went to operation iraqi freedom in two thousand seven two thousand eight and did about seventy five combat missions off the uss truman wow and so you were in from training and actually being active how many years was that so i went to naval academy in ninety nine i got in two thousand eleven okay wow and so you during that time was your mind still on business or you were fully immersed and you know you kinda put that aside yeah so when i was in the squadron why my admissions off the boat i had a good friend we were flying together and we realized that we worked really well together so we would come back from combat missions and pour a tall glass of whiskey which is super illegal on the boat and cheers each other like man we should start a company someday and fast four to twenty eleven i was getting out of the navy and i was moving back to and to my hometown and in texas to kinda go see what it was out there in the world and he called me up a couple months later and he asked how i was doing i was like get here as fast as you can so we came the next day and got a job at the company i was working out time and then we left and found that our company about a year later and so you you did go work for a company for a period of time was that to pay the bills was that you wanted to learn something specific what was the thought process there because i like sharing that because a lot of people right now are in a job and it's easy to like write yourself off it's like man i listened to these interviews they all just went for it but i'm at a job maybe we're different in some so i i like when people share the hey i went and work some for a little while before i to my business yeah totally so you know as i was was getting out of the navy i was looking at a few different options one kind of in the government contracting realm and then i have lunch with a mentor mine growing up and you asked me what my plans were after getting out and and i told him he said no that's not a great idea actually i'd like you to come work for me it's the best time in the history of the oil business to be in the oil business and when a when a door like that opens you just walk through it and and you know this this this guy had been very successful and was basically offering me like a chance to get the playbook and so i went to work for him and and and learned a ton about the industry in the business and and i'm very grateful for that mentorship and then about a year and a half in we started having some differences at depending with firm and and they basically said hey you know you guys are kinda taking a different tact than than we are why don't you go do it on your own right so we took that and ran with it you're like okay it's so let's explain the mechanics of how this works so how do you do your job you said you buy pieces of land that have some value to the oil and gas industry or to what's under the surface so you buy pieces of land you aggregate them together and then you sell them to investment firms once they are sort of proven out to be of value so walk us through what does that mean how does this business work yeah so united states is actually the only country a planet with private mineral ownership in almost every other country in the world that has oil the government owns the rights to that oil and gets paid for the revenues in the us private citizens actually own the rights to the land and they can be divided up over generations so there might be you know hundreds of people that own a small piece of the mineral estate in a particular track what we do is basically track those people down make them lump some offers or the the rights to their property in hopes that there might future drilling in that area interesting so so you said the us is the only country really the only major country at least that has this you know you the citizens can own the land that has the the good stuff underneath the earth and other countries are not doing that why is it the us does is that just the way it was is there a strategic reason why that's good how do you feel about that well it's it's created a tremendous amount of wealth in this country in private wealth right and and i mean it depends on your stance regarding the way the government spends money but you know i'm of the belief that that you know the private sector always is gonna do a better job allocating resources than the government so we we look at private mineral ownership as just a tremendous source of wealth creation in the us and yeah so you know to me it's it's a it's a big difference in what drives the innovation and ability to negotiate deals you know whereas the government's not really incentivized to let people come in and drill if you're a private mineral owner only own a small piece you may make a more favorable deal to the oil company looking to explore that property so it actually drove a lot of the innovation in in the early part of last century that made the us in powerhouse and energy and so you said you get there's a piece of land and it might have a hundred owners is that like typical is that that that the you know a lot of people own small pieces of that mineral estate yeah and and and the way that works is because you know say in the late eighteen hundreds you know one individual might have been granted at homestead they started to pass it down through the generations and so if they had four kids they had four kids you know it starts going up exponentially and gets divided up you know and they might have sold a piece off that retained another piece and so it just starts get pretty complicated right over the you know decades and so you you guys go and you do you know of you know there's a lot of oil underneath this or are you just sort of speculating and saying there might be there might not we we do some we look at some geological studies like how do you know that the assets are valuable so that's that's a great question and there's there's a lot of different ways to go about that for us specifically we decided to focus on the midland basin which is which is a part of the permian basin that is proven up it's been around for a long time and with kinda of the advent of new technology you know horizontal drilling basically opened up massive new deposits creating basically the biggest oil deposit in the world bigger than the the fields in saudi arabia so we stayed in the heart of the heart and and just decided to niche down to the to the very best properties in that area and go after those gotcha and so you guys have been able to do what give us a sense of how the business has evolved from where you guys started to where you guys are today yeah so you know first of all i mean i think it it bear saying that there is both a sense of of luck and expertise apply right so i i wouldn't be where i am without getting to grow up in this this oil rich town and what most other places don't have having of mentor born on a gold mine in a way it totally born on a gold mine and it turned out then when my what my mentor said when he hired me on that twenty eleven was one of the best times in history the oil business to be in the oil business he was right you know we didn't hindsight me twenty twenty we didn't know at the time what was gonna happen but this was really on the pre of this this massive discovery that that was unlocked by horizontal drilling and so we just happened to be in the right place the right time but what we did really well was make good investment decisions and then find properties that we believed in and double and triple down and leverage ourselves to the hilt to make sure that we could keep as much as we possibly can and we built a portfolio over a lot of years that we just recently exited and so it worked out but there was a tremendous amount of risk there was a tremendous amount of leverage and there was a lot of sleepless nights along the way you know not knowing it i think this thing was gonna work out right and and you self funded this from the beginning you or was it a lot of debt how did you guys even get started yeah completely bootstrap and we never took on money basically what we would do is go out and find a property that we wanna acquire come to an agreement with the seller and then start making calls to find a buyer for that same property right and then use basically other people's money to fund the acquisition and so in between flipping it basically yeah exactly yeah and and so you were holding a property for how long on average i mean the ideal way to do it is actually to do a simultaneous close were one person funds in the morning and you fund the other person in the afternoon but you know as we started to grow and and have a bank of our own we were able to start you know building up a portfolio of properties and so we would hold something anywhere from a couple of months to a couple of years right and so you guys bootstrap this whole thing you and your buddy from the navy basically yeah you you exited recently so you're out of are you out of the business you you have no sort of day to day involvement no the company still exists and and we're still buying and selling properties but you know i've basically handed off my duties and i'm focusing on other things now so i still check in with a team but yeah i'm not involved in the day to day database right and so you built this business into the tens of millions in revenue and how many employees did this end when i saw this this is what blew my mind yeah so it started just j and i and we actually broke seven figures in revenue with just the two of us and then a couple years and we're actually so busy we're like maybe we should hire an assistant like they can actually go check the mail and pay our bills and and do the things that we were still doing so at at our at our peak we had five employees was was the most that we right and how many of those were blood relatives of of your yeah so i was in this incredible business that was providing an amazing wave of life for me and and my business partner and to me i to share that with my family so i actually hired two of my brothers on to work with us and and get to live this unbelievable lifestyle and and i of you know i my flaws feels is that if i'm gonna have to go to work every day i wanna see my very favorite people on the planet so bringing my brothers and wasn't was a no brainer that's great and people sort of discourage this they don't do business with friends and family and of course things can get messy that's absolutely true but there is also an upside that i feel like nobody talks about which is when you work with people who you really love and get along with and have work you know have a relationship for a decade you could do some amazing things and enjoy it in a way that you can't with other people necessarily i i like that you said that absolutely and it's it's been one of the one of the best decisions of my light to to bring them on to my company alright let's take a second to talk about howard stern that's right howard stern the king of audio you you see i think he might be getting ripped off by sirius app if he was to turn his show into a paid subscription product he could nearly triple the ninety million he's making a year as a salary and how would he do it super cast that's right super cast is a sponsor for this week's episode what super cast does is build and maintain paid subscription audiences while allowing you to retain complete control over your content your business and your creative output if you wanna earn media king's ransom use super cast visit super cast dot com for more alright back to the show one like i said i get to see my favorite people every day and and get to do life with them and and also you know yeah people say don't do business with family but if you have their best interest in your heart then it it's always gonna work out like if you put their highest good over over the highest good of your own personal gain then you know you always stay aligned with the business and with your employees who also happen to be your family so it's actually a really great incentive to do right by your stakeholders right and so you you you brought them on and you said something about you know we're living this incredible lifestyle what was this lifestyle like i think i you know i'm here in silicon valley there's a certain i would say lifestyle that comes with entrepreneurship here which is you know there's a big hype machine so you can raise a bunch of money from investors and that gets you this sort of fame circuit where you sort of feel like you're successful before you are and you work a hundred hours a week and you're programming late until the night and you're you know you go down that track that's what kind of what entrepreneurship means here and that's what's encouraged by most people what's the lifestyle been like for you describe describe your business lifestyle yeah so you know something that i came to understand very early on in in this business was that you know there's there's basically two ways to make money one of those ways is kinda what you just described that this hustle you know work hard work hard out work everybody else and and you know kinda get to the front of this this rat race or focus on asymmetric returns and you know in my particular industry you know it didn't matter finding twenty deals that were mediocre we're not as good as finding one deal that had a tremendous upside so so i quickly learn the power of focusing on the highest possible upside that i could find and basically trying to filter out the chat and and really focusing on working smart instead of working hard and so we're gonna we're gonna talk more about this because i think it's really important so you said asymmetric risk and reward essentially what you're trying to balance you wanna take as little risk as you can for a as large of an upside as you can possibly get that sounds obvious but most people are not working that way or living that way because let's say you go to a job you have essentially no risk in a cap reward and the cap reward is not usually it's not asymmetric in the sense that it's not bigger than you know given your hours or your inputs and your and your input is basically time in this case what you're saying is it doesn't matter what time you put in it's really just did you find the right deal or not which may take you one hour it may take a hundred hours it doesn't really matter that the the reward does not care about the end of that the time input is that oh this is a little complicated but that's that's my sense of what you're saying that that's that's exactly what i'm saying is that you know hustling harder wouldn't have necessarily made us more money especially in the beginning you know it was actually you know finding the metrics that we cared about applying those across the board being consistent disciplined as investors and finding the very best deals and like you said they may come across your desk once a week or or once a month it it doesn't really matter timing wise it's finding the best give me an example of your best and worst deals oh man so our our best deal hands down is our our first deal ever which yeah totally for for a few reasons one is we started the company in may of twenty thirteen and we had this idea that you know we're gonna be successful immediately we've got the playbook like we're ready to go we're gonna hit the ground running and in november of that same year we're heading in thanksgiving i've got a brand new one year old child just bought a house and i've got two thousand dollars in my checking account and i'm like oh this is getting a little of racking haven't made a single deal and and starting to kinda of bang our heads against the wall and a life changing deal came across our desk and it it closed like i said when when i was basically one made like obviously it's life changing because you were running out of cash but like what made it how did it come across your desk what was great about it what was the deal so you know the thing is that's that's funny about this like even though we were running out of money it it was never panic button oh my god we made a bad decision it was like hey we know that we've got a good thesis we know that we're gonna find a deal and we've just gotta keep going and and this is you know where there was some actual hard work involved right like we weren't we're working off you weren't snowboarding back then yeah exactly right so so yeah as your resources are dwindling it's like oh man you know so we're really you know basically burning up the phones trying to to find fine leads and a deal that we had been working for like a couple years that was kinda like man if this one ever comes through this is really gonna put us on the map right at that time the universe kind of and so what does that mean because you were saying earlier you basically contact the the lot right holders you contacted the people who own it today yeah you try to convince and them to to sell it to you at a price and you need to get some critical mass you need to own some percentage of i'm sure right for it to be viable so what's actually happening when you're owner of the phones you're calling people saying hey i i hear you know i see you're owner of this have you ever considered selling is that what it sounds like the thing is we actually are are good at this because we believe we're creating win wins and that is that when you're an individual lando owner in this area you have a tremendous amount of concentration risk meaning you have to wait until the oil company comes and drills on your specific piece of property right that may be now that may be in twenty years so we believe it's actually better for individuals to sell their properties to funds that are spread across hundreds of properties and have actually you know risk analysis based on how they their ownership looks so it's it's like playing ro let essentially either you can put all your money on one number or you can sell it to a to a fund who that can then spread their money over every number so that they win every single time so we actually believe that we're creating win wins and in this particular case as is often the case this person had a a a life event either a retirement or a kid going to college or a wedding or you know some looking for a little cash looking for a little cash and it was it was time for them to sell and and then we just got really lucky that they they sold that property to us and immediately six new wells got drilled on it and so we were able to extract a lot of value from that particular deal at a very cool that time excellent alright so that was the best deal what was the worst deal well so well when when i go back to asymmetric returns you know generally what we look at for an asymmetric return is is the worst case scenario here i can get my money back over time best case scenario being like a five extra up right i mean that's kind of the the thing that i'm looking at right you know over time so we actually try not to lose money it's more opportunity cost but the worst thing that actually ever happened to us was we bought a million dollar deal and sent the deed to the county where the deal was located in order to record the deed which is actually actually changed ownership and we didn't receive it back for a couple weeks and we started to get nervous so we called the county courthouse and they essentially told us that they never seen so he lost the deed we lost the deed to a seven figure property that we have purchased by the way with not our money the bank's money right and we had absolutely nothing to show for it so we had to call the guy hat in hand and his essentially explain what happened and it could've have gotten really ugly if you had decided not to work with us right and we would have had you know go to court and and what happened literally got lost in the mail someone stole it what what do you think happened to this deep yeah well you know governments aren't often the most efficient operators and so it would show that it was delivered to the courthouse and then somehow nobody knew it happened to it after that so who knows we'll leave that up to the imagine but fortunately the client that we were working with at that time was was very good to us and after going back and forth with his attorneys and making sure that we weren't doing anything shady finally did sign that deed and we we didn't lose our money but i would be lying by said that it weren't more than one pretty sleepless nights right during that time so we learned to then put in a new procedure as i mentioned earlier and require signatures for everything we delivering to the courthouse from dave that policy was written in blood as well exactly so in a given month how many deals were you guys doing when you're richard let's say average not at the very beginning not at the very end but sort of midway through what is is it one ten zero a month what's the average yeah i mean during our peak would have probably been twenty fifteen and i think we probably did about forty five to fifty deals that year mh so you know three or four month is probably about our average right and so and so you're doing those deals and how do you how do you reconcile right because if i'm arguing against you i say you know you know what you're right that you make your money on the good deals and you have to get the good deals to make it work but by hustling harder by looking for more deals by researching it more i can actually get a better return how do you kind of how do you square that circle yeah so so for me that's this really gets into a a different question which is how much is enough you know what's the balance here i mean we were you know making millions of dollars or putting a lifestyle that you know was amazing my two brothers we get to ride bikes every day and work out together and you know go to this office that's that's kind of also a a club house and like spend a lot of time with my kids and my family so we're you know again lifestyle starts to play in here and and what's important to you and so yeah absolutely you know we had an eight figure exit certainly probably could've have had a nine figure exit if i worked eighty hours a week and you know hired twenty five employees to to do this thing but just not something i ever really desire to do i wanted to create a company that could provide abundance for me and my family and the people that i chose to spend it with but you know kind of this this massive drive to see how big i could grow it just for the sake of of grow never really made sense to me i'm music to my ears this is why i you know i like you right when i met you i can sense that this is the kind of the way you think about things because what you're saying is the end objective is quality of life even if you get more money people want why do you want money you want money so you can enable a better lifestyle you you can enjoy your life more you can feel better but if the things that make you happiest is you know riding your bike or working out or seeing your brothers working you to spend time with kids whatever it is then that's what you need time not more money and if you're throwing away time to get more money you're not you're not getting to that end state which is having an amazing quality of life in fact my brother lot he lives in san francisco here and my sister and my brother they live here and they are are some of the most successful entrepreneurs in but they're in this tech world and they do nothing to tech they own two preschool and and they basically you know it's not like their revenues are super super crazy impressive it's obviously very good but it's not like you know you walk around here in san francisco you could bump into a billionaire on the street but what i love is the quality of life you know they wake up every day they walk their kids to to their school you know their youngest is in their own school so they get to see her all day and really help her you know they built a product for their own kids essentially they you know they get to employ a small number of people that don't have a headaches of of a staff of thousands of people in the middle of the day they go work workout my brother loves loves doing and he goes and does that every single day he gets to do jj ji and so we we call it q of control it's like instead of balling instead of balling out it's q out which is you know your quality of life and so i i love the way you kind of you walked the walk in this regard it sounds like like at an average day look like what like what time would you wake up what would you do with your day yeah so when i was still working in the business primarily and we were growing average day would be to a wake up and and play with my kid and and have reps with him and take him to school head into the office by rep an espresso and then basically what i would generally do is have an hour or two of just strategic planning with my business partner jay we we we would sit in what we call our battle chairs and we would just think through all the various things going on in the business and and to me this is one of the strategies that really made us successful was taking this time to brainstorm to to plan to strategize and one of the things we would really like to do is is go deep down the rabbit hole thinking about deals like how can this go wrong what are the questions these guys gonna ask you know and and go to the second and third level of analysis on everything that we were doing so that we were very intentional you and we we never just threw things to the walls and would you know basically leave it up to chance it would be like okay if we're gonna make this decision let's go down every variable of what could possibly happen and go wrong in try and plan for it but it doesn't mean you always find that which it kinda comes to a a military phrase we have which is don't fall in love with the plan you can spend a a whole day planning and then you know something might pop up that you didn't anticipate now you've gotta start over but more you can go down and and kind of look at all of the different contingencies and have a plan for those things that allows you to not have to make decisions in real time because you basically had the chance to think about it before it and so you you said you know phrase from the military have you been able to apply you know lessons that that you know like principles philosophies to business like what are some of the kinda of top things you guys were able to translate over the military is is incredible as a teacher and as a lifestyle and and we learned as much what to do as what not to do you know what i mean so being in an a league unit like a fighter squadron there are some really interesting things we learned about human performance one of the things is what we call intense positive peer pressure so when you go into the navy intense positive peer pressure yeah yeah what what is that so basically a fighter squadron is in the navy is about thirty six people officers that are that are pilots and and whiz weapon systems officers and they create this environment where you get in as a new guy and your only job is to learn how to operate that aircraft as a weapon of war so you're studying and the older guys in the squadron are are essentially in charge of mentoring and you know it's a very encouraging place but there's this underlying expectation of like hey you're here to perform and the the ultimate sin is not embarrassing yourself it's actually embarrassing the squadron so if you were to go to you know a a joint exercise and show up for a brief unprepared that would be embarrassing to the squadron and like the that's the worst possible thing i do so so it's everyone's kind of again it's not it's not negativity based it's it's very positive like we're all trying to lift each other up but you're gonna go check on your buddy and make sure he knows his stuff because if he embarrass a squadron and that's on you right it's a yeah it it it really sort of the whole team is just accountable for the whole team totally and so we really try to bring that into our business of like hey you know attention to detail like we don't we don't send correspondence out with errors you know and it became actually a game for us to try and get get something past my business partner jay without him circling anything right and and you know that's the kind of a accountability standard that we have is basically hey if we're gonna present ourselves the outside world is the standard and we're not gonna someone if they make a mistake we're gonna find a way to positively report each other so that they're incentivized not to so what's an example of that how do you how do you hold that standard without beating people up when they make the mistake well well you hey first of all show them where that particular standard came from so this is this is something that is is really important to us in our in our company is hey if there's a policy in place take the time to understand what that policy exists because again in the navy the the operations manual it's called nat tops that's how they operate their aircraft they say nat tops is written in blood meaning if there's a procedure in there it's probably because somebody died and then they change the mh the law you know the way to operate and so we kinda brought that same idea to our company saying hey all of these things are here for a reason if you wanna understand that reason we'll tell you what we did and what we screwed up basically that made that policy a thing right and and so giving people the opportunity to understand why something is in place rather than just a bunch of arbitrary rules and then second is don't make arbitrary rules right if you're gonna if you're gonna have policy make sure it means something and that it's actually important because then people have the ability to discern from you know you don't wanna leave it up to to them to decide which rules are important in which aren't don't have any unimportant rules mh okay so they understand the why what mistakes happen when a mistake happens what's an example of how to recover positively versus you know negative pressure yeah so here we like to use a basketball analogy which is basically like hey if we're if we're playing basketball and i pass you the ball and you take the shot and you miss the next time we drill down the court i'm gonna still pass you the ball if you shoot again and miss you're probably not gonna get the ball next time right so so it's not that we wanna come down on somebody for making a mistake but if you start making them same mistake over and over that's gonna be a problem and you're probably not gonna be someone we want the organization right okay fair enough and so what were the things you said you know sometimes you learn what to do and you've gave a couple examples and then the not to do what are some of the not today what are the some of the things that you're like we're not gonna run our business that way we didn't find that that that doesn't translate or we didn't find it effective even when we were in the military right the biggest thing is rewarding performance in the navy you know basically because it's a massive bureaucracy accuracy you can only advance based on time and rank right and this super complicated ranking structure within your squadron it's all based on timing so you know everyone is intrinsically mode motivated but the guys who are the top performers are rewarded with basically more work so there was a specific time where i was in a unit at the guy next to me was basically just incompetent and my boss will come over and be like hey gonna need you to take care of this it's really his responsibility but he doesn't how to do it you but i trust you like well thanks for choosing me so i'm watching him check facebook while i'm literally doing his work and so you know an organization we made sure that we had kind of a a hundred skinner approach where i mean the hundreds you eat which you kill if you're if you're producing revenue if you're making money for the company you're gonna get rewarded which is kind of the anti ent of of the military right yeah just yesterday i was so so we got acquired by by twitch and so i work at twitch now and and we're working on this project that is a pretty important project for the company that everyone's excited about it i'm excited about it so i went asked for a raise a promotion as you do deserve it as exactly i thought i like i i i deserve this you know years ago even though haven't been there for years but i was like i deserve this and this my first time doing that because i've just been running my own company so i've only ever been on the other side where people come ask me and i've never gotten to go ass i was quite excited which was just to say hey i think i deserve this and i asked a question at the beginning i said is this a company where you're rewarded for tenure so basically time time is how you move up or performance and like i'd just like to understand that and let's start there and then so and it's like well actually had a good answer which was its performance as like the leading thing but you have to demonstrate the performance over some amount of time fair enough but i i think that you know if if military or academia is on one end where it's pretty much all just time to to drive your rank up you know you we wanna be on the other side with our businesses which is merit based performance based you reward people for doing the right thing and what you were saying was great which is that not only do they not reward you with higher rank they reward you with more work for doing a good job and that actually happens i see that all the time at our company too like i i see that happening and that's a that's a damn shame yeah totally i mean and and and this kind of goes into the the broader culture which is you know who do you wanna keep around do you wanna keep your high performers or do you wanna keep the people that follow the rules and you know make sure they get their tps reports in on time you know unfortunately in most situations companies are rewarding mediocre performers and the high performers leave and go start their own companies because they can't handle the rules right and so you you live in denver now yeah we once we near near denver yeah once we got the company to a appoint where it was self sustaining and we didn't feel like we had to be you know in midland in the mix all the time we kinda looked at where else we might wanna spend our days and and being kind of an abbott outdoors denver seemed like the place to go san diego austin and denver run the shortlist list and and denver one out so we've been in golden colorado for three years now and your lifestyle was outdoors even when you were you know running the company and do it doing really well it's very easy to get stuck in a desk all day but what like you know i was reading about this don't know if you just mentioned it but you know you guys would stop you go ride a bike for an hour in the middle of the day what's is that a productivity thing is that just i it makes me happy you know tell me about that lifestyle yeah absolutely mean it kinda goes back to that that quality of life thing that we were discussing before you know i mean with entrepreneurship especially and and in our particular business the the work doesn't come in in this steady eight to five monday through friday kind of workflow you know there may be three days of sheer panic where yeah we're staying up late and we miss a few bike rides and then there may be a few days where we're not actually doing that much right i mean it's it's kind of crazy to think that your work is always gonna be perfectly balanced out throughout the day right but that's what people expect that's the way they organize their life totally right and so you know it's always been important to us to to take time to kind of appreciate a yeah where we live and the the unbelievable opportunity that we have to to be able to take a break and and get outside or or do something you really enjoy and also how that factors into your workday you know i mean ultimately science is starting to show that that people can only really have one or two real productive hours in the day and so you can stretch that out into eight hours and go up to the water cooler and and go go get coffee in a doughnut you and get up from your desk ten times a day or you can go take care of yourself practice self care you know meditation exercise and then go get really focused for one to two hours and knock out way more than you would be able to if you weren't taking care of yourself right and in the there's this guy neville i don't know if you if you're super familiar with them he runs angel list and he's he's kind of like a philosopher a type of guy here the in in the tech industry and he has his great metaphor he's like you could either work like a cow or work like like a lion and you he's like a cow goes out and g all day slowly just chewing grass and it takes a long time to digest it and takes a long time to chew it just basically feeds all day for eight hours a day and that's the sort of like monday through friday eight hours you don't even question it you just go in at that time you leave it another you know f five pm or six pm every day that's the that is the style and then working like a lion what does that mean that's that's what you're describing which is you you wait you look you observe for where the where's is the high impact where's is the opportunity where's the pray when you see it you sprint and you you actually you know you go and you catch your prey and you you eat and then you rest and reassess and you figure out okay where the next hunt and i think for creative people and for business people working like a lion and hunting you know basically alternating between sprint and resting is it's pattern that works for me it sounds like it works for you and it's one to consider if you're listening to this yeah absolutely and the other thing i would kind of add in there is taking the time to celebrate wins you know one of right one of the things that lions do that because if a lion doesn't do what i'm not doing yeah i don't know what their their celebration protocol looks like but i'm sure when they get the they're pretty stoked right but you know one one thing that we really prioritize with this this kinda you know this hustle porn type attitude and no offense to sam and the hustle which but you know this this kinda you know get up early and and destroy your enemies because they're out there training harder you know i'm kinda the the anti jo when it comes to that right bad attitude you know we don't take the time to actually appreciate what we've done and i think that that the gratitude and and taking that pause is a really huge part of then being able to to go into the next thing recharged and and intentionally and and having a good understanding of why we do what we do and you know they're kinda this idea that your life has to be like a stock chart it has to you know you have to report quarterly earnings and if you weren't doing more doing better growing your revenues better than you were last quarter than you're some kind of failure and you know that leads to this just just gracious growth for growth sake like which is something i i mentioned earlier that i think we need to be more intentional and go hey actually i don't need to grow anything right now i've i've created something that's really awesome and i've i've had these massive wins i don't need anything else in my life so why don't i stop here is to appreciate what's happened up to this point yeah very very wise i i like that the other thing i like that you do and i don't know if this is something you do a lot of or a little of i i kinda got the sense of it which was you're here on a you're here for an event right now that's why you're in the bay area at it's called trans tech trans tech but there's some other thing but baby bath water or something like that yeah i'm a member of a entrepreneurs organization called baby bath water institute which is founded my bike to great friends holly and michael love who basically have a have a very interesting philosophy which is you know we wanna curate a group of amazing entrepreneurs and then we wanna do life and work together so we build companies together we help each other out and are actually looking at other ways to monetize that and actually invest with each other and get kinda create this entrepreneurial tribe that collectively elevate everyone and and you met sam because we met through sam you met sam at a different event like a similar sort of curated group of people i think it's called two twelve or something like that correct is this something you intentionally do did you just happen to do these two or do you do more of these because i like this i i think it's interesting right it sounds like to me like you're investing in both yourself and your your friends your friend group and your your brain as well like these are sort of a a substitute for business school i'm sure every time you go to one these you learn a lot i'll talk about how you decide to do these if that's paid off for you i'm just curious because i don't do any of that and i i like i i like i'd like to know yeah absolutely it's it's something that's been tremendously additive to my life as an entrepreneur for a couple reasons one there's kind of the the tactical reasons of like hey it's great to get to go have time with other entrepreneurs who are growing businesses and and may have you know ideas or hiring practices or you know very practical things that you can apply and a lot of people go to these communities for that but really the the benefit is actually finding your tribe and finding like minded people who think the way you do you know entrepreneurship can be incredibly lonely because we think a different way than most of the population right and when you kind of think differently than most people it can actually be you know you can find yourself os sized or or not really connecting with other people be because your brain works a different way and so when you go to an entrepreneurial organization with a whole bunch of other people who broken the rules and started their own thing and not played by their traditional you know playbook that they were given it's actually incredibly cath authority to to find your people and go oh alright you know now let's go create under this new paradigm and and think about the things we wanna do and how we wanna show up in the world and then you start building this network of experts in every possibly possible different business area that you can think of so you know i am really good at investing and and you know finding good deals some people really good at marketing some people really good at hiring and growth and now i have this tribe where i can call somebody anytime i need help in one particular area and it just accelerates my path success right it's like no questions asked with these people totally and so you and some of these are expensive some of these are like you you pay twenty grand to go to some of these things if you ever look at that and you're like no that's you know because upfront that's a that's a big price tag for for a lot of people even if you're successful that's just a big you know it's not many to spend that much on in a given month so how do you think about that for me a i have a different relationship to money than most people you know i look which is what i look at money as a tool that should add value to my life which means i have kind of a very easy come easy go attitude of money and how how do most people look at it if they don't look at it as a tool to improve life what do you think is if you're looking at observing how other people have a relationship of money what would you say yeah i mean you know we're taught that that money is scarce and that we have to hustle for it and grind for it and then we have to save it and make sure there's never gonna run out for a rainy day but you know once you kind of have jumped into the entrepreneurial pool and and found some success you know you start to realize that hey i know how to do this now and so you know even if i do run out of money yeah it may be painful for a little while and i may not be able to have all the creature comforts i'm used to but i know that i can use my brain and my skills to create more right and so you kinda start to divorce the scarce mindset and okay if if if if i'm coming from a place of bun and i know how to create well now what am i gonna do with that and and that becomes looking at how am i gonna use my time which is the only non renewable resource right so when i look at the the price tag on some of these entrepreneurs groups which is your original question it's not what return am i gonna get on of my dollars you know if i if i put one dollar in i'm not gonna get three back i don't only give a shit what i'm looking at is how does this increase the overall quality of my life and in the case of a of a organization like maybe bath water you know i've essentially oriented my entire life around around this group all my friends are are in this group i'm building companies with people in this group i'm i'm attending events you know a couple times a month with my friends from this group and that's given so much to my life that i can't put a price on what that's worth to me so str can a check for membership dues is like absolutely right you know thank thank you for not charging me more right yeah i love it that is that is excellent and so what's what's next for you what are you excited about doing what's the next chapter look like yeah so currently i am embracing unemployment and again this kinda gets back to the celebrate wins people are gonna listen to this and be like this guy has the best fucking life they're like this guy enjoys himself he had success he is he's celebrating he's grateful this guy got the best life in fact that might be the title of the podcast mike brown this guy has the best life perfect that that sounds pretty good to me because i do feel like i have the most incredible life and i realized the incredible privilege that i had to be able to have the opportunities to create what i've created but i also am i'm grateful for you know the decisions i made and the and the massive risk that i took that got me here and you know really this this kind of unemployment phase came with a with a conversation with my twenty one year old self which is if i told twenty one year old mike brown hey here's where y'all are at age thirty nine you've exited a company and you know you're thinking about what to do next know what you do twenty one year old mike brown is gonna be like dude take your off and go snowboarding like what what are you thinking you have the opportunity to not do anything for a while and all you're gonna think about is what you're gonna create next but you know that be like that because you're you're not when most people say you know had a conversation with twenty one yourself it's always what advice would you give to yourself when you're twenty one you're asking gonna be opposite it's like hey twenty year old well twenty one year old b give me thirty nine year old mic some advice which is amazing i never heard that before so yeah i mean you know basically i i do get to live at the at the pinnacle of human flourishing and and i have the opportunity to not have to wake up and go grind it out every day and and be stressed out and i'm i am incredibly grateful for that opportunity and and the other thing that that allows me to do is think deeply about how i can create that same outcome for more people and so so that is what i'm working on now is okay how can i take what i build and leverage that to create better outcomes from more people and and so that's kinda what i'm what i'm working on is putting together an investment strategy that focuses on companies with mission driven and purpose driven outcomes love it that's great and so how do people get in touch with you people listen this they're like hey that guy like guy yes he's got the best life and julie's life thoroughly what's a way to follow you get more of your thoughts get in touch with you you you have a panicked face right now you're like oh shit i didn't think anybody would wanna do that right for sure they're gonna wanna do that yeah try try and keep a low profile social media blackout you can find me on of why you enjoy life yeah exactly you you could find me on so you don't do any social you don't do twitter you don't know instagram really i have i have those counts but probably you know in this context linkedin is a good place to look there's a lot of mike brown's on linkedin i got a hoodie on that's how you know that i don't care that much about linkedin yeah that's true finding mike brown on linkedin is like just each you know that that welcome to four thousand search results yeah so the other way people can get in touch you know which if if they wanna talk to me about something via email which is mike at ripple studios dot i o alright gave it out in the end he gave you a way to get in touch with them which i love because sounds like europe you're you you live off the grid a little bit in terms of being connected on the internet so i like that yep yeah hit up okay awesome alright mike we are out of time this has been great dude i really appreciate you doing this and i'm excited for people to listen to this because i i literally started taking notes in the middle of the podcast i was like oh that's a good little phrase to remember that's a good philosophy to to live by so thank you very much for coming on that perfect man i appreciate it