He Got Fired By His DAD… So He Built a $60M/yr Empire

alright my friends today's episode it's special for me and it's gonna be special for anyone out there who's a creator or who owns a media company let me explain so i've got this friend named craig fuller craig fuller runs this company called freight waves it's a data business but they have a media arm and it's a huge company they've raised tens of millions in funding and they make tens of millions in recurring revenue huge business however on the side he ended up buying a bunch of magazines including flying magazines a bunch of boating magazines very weird of him to do that and i wanted to do a podcast about that turns out he's bought all of these niche magazines for a very small amount of money and he's only about three years in into business and the company doing around sixty million in revenue and twelve million in profit and it's his prediction that by two thousand thirty it's gonna do a billion in revenue which is a insane that that's someone's side project that they're doing that and b i wanted to learn all about it i wanted to learn about the model that he's doing where he's basically buying these magazines and then he's selling the audience different products products and services including like building an airplane hanger and and selling space in that hanger for fly magazine things like that so if you have an audience if you wanna build an audience if you want to build a big business on top of that audience this podcast is for you alright check it out i feel like i could rule the world i know i could be what i want to all in in like a days off on a well we're live this is just how we we just get right into it what it's not often that someone's side hobby becomes almost cooler than their main thing particularly given that your main thing is this like massive hit so your craig fuller you've got this thing called freight waves which is a data business but you guys also have a popular media arm and you just you display most of your financials online as if you're a publicly traded company almost and i don't know what the revenue is but it's somewhere in the high tens of millions in recurring revenue and then you also have you've raised what ninety million dollars for that sixty five in venture capital but we raised some debt on top of it so total about little under eighty million or a little bit over eighty million and then your your latest kind of side project that is not really the size of most people side projects is fire media where you've bought dozens of magazines and you've part laid that into like you've turned flying magazine into like a country club but for flying enthusiasts and so you've like bought you know thousands of acres of land you've built an airport and now you've you're buying even more pieces of property more stuff and i think what fire crown does what fifty million this year in revenue sixty million run right so is where what we'll finish this year so golly man and what i didn't realize i was doing research i didn't realize that trucking kinda runs through your family right yeah my father started what's now or hey sold the business last year but it came to fifth largest just tracking up in the us and then my uncle started the a artist what's now how the a just tracking up in us were your uncle and father competitors oh yeah yeah they're pretty pretty dire competitors but are they tight are they are they good family members nowadays they're much better you know they're they do get along now but there was a period of time where they just absolutely hated each other my family is in the pro my father's a produce broker so i grew up with truckers and it's an interesting industry because the people who own the businesses can be pretty wealthy but they're still redneck x like still like blue they're like blue collar guys but they're not necessarily always traditionally educated and they're still rough even if they're quite wealthy was your dad like like a blue collar guy even though that he ran the huge company yeah i mean he's a blue collar guy i mean he you know he looks present presumably in a suit and he's talking to wall street investors i mean he's he certainly is you know he's present present he's not going to embarrass himself in front of folks but he he is you know he's he's a finance guy i mean ultimately in trucking you're operating a business that operates with single digit margins you know one to three percent margins and so you've got know how to operate that business it's an owner operator type business and so he certainly is an operator and he eventually i think recently sold that business for like eight hundred million dollars right yeah he merged it into knights with which is the largest so it was the second largest trucking merger in history the company did about two and a half billion dollars when it sold for eight hundred million and you were working for him and i read that you worked for starting at a young age you kicked ass but for some reason you butted heads with the executive team you got fired i think in your late twenties or early thirties and you started shockingly which i can't believe you did this day trading and you were like i gotta build something and so at thirty six i think or thirty four you were like i wanna do almost like day trading but for freight stuff is that right yeah i mean i got fired twice so i got fired from my father's trucking company us express in two thousand and five it was actually my older brother who became the ceo of express that it had had be fired in two thousand five and the my families a bunch of assholes man pretty large true but we i love them but they're this is this is the family tradition you fire and you go out and start your own business and then they had a payments company a fuel card company that they had inc innovated that i took over and scaled it up and then we sell part of the us bank and we were doing both fleet card processing and debit card processing payment processing for banks what what's a what's a fuel card i i know that truckers have them but i don't entirely know what they do or how they make money when truckers wanna buy fuel you figure two hundred gallons if they're truly topping and off their tank is they're gonna fill up with you know a thousand to your twelve hundred to fourteen hundred dollars wow okay and what they use some card and do they get perks or something what's the business no they it's for fraud management because what will happen is if you don't man i mean think about it you've got you know yous frustrated had nine thousand truck drivers and you're giving them all an expense account that effectively they they're buying fuel but they're all so doing over the road maintenance so if they you need tires or they need breaks down you know those things could be ten twenty thousand dollars on a breakdown situation or could be you know thousands of dollars and tires or fuel and so you know a truck drivers responsible for probably six to eight thousand dollars of expenses per month when you look at total what the total cost of expenses and so you have a lot of fraud that ends up happening and so fleet cards are there to manage the fraud both on the fuel spend but also on the on the you know all the maintenance and stuff got it i never knew what those did alright cool let's so you're you're growing this thing whatever it's working out fine and then you get into freight waves freight alley it it that that works out good how long did it take to to kinda get into the tens of millions in revenue and it's my twenty million hour business by in two years three years something like that how did it grow so fast the formula right like timing was great this is when a lot of the venture capital investment made into the space and then you also had this digitization that was taking place where companies were trying to digitize this supply chain and then you know at the end of the day i had relationships it's funny because my dad didn't put any money in the company he told me it'd i'd be a bad ceo and refused to invest in the business and so i had to go raise capital dude are you in your are you and your family close yeah my dad and i talk about he's now like after he sold express he's now one of my largest investors in fire hair is my largest investor in fire so we're actually really tight i've been following you for a while and when i think of like a a good media ceo you are one of the the people that i think of what attributes did do you have that made him think that you would be a bad ceo yeah well i had ran a business a payments business they fired me in two thousand and fourteen because it was a tech business and tech technology businesses while they generate a lot of margin as they scale they actually bring a lot of capital you know trucking of cash flow business he didn't understand that you know a tech business as it would scale would actually consume capital so he got really mad and he would didn't wanna raise any money so he fired me because he didn't think i could run a a business that would be profitable because that's not how technology companies typically work in their early phases what's funny about that business is that's one of the most valuable assets family's portfolio now it just got a five hundred million dollars dollar valuation lasts you know sold some stock in september of last year so it's done well but i've you know i've been out of that business for many years that's alright so this is the main thing that i wanted to talk about so there's this blog that i love it's called flash and flames i'm pretty sure that like only maybe ten thousand people want three flash flames so if you're listening to this and you're a fan of like media businesses this is my favorite blog on the internet it's written by this guy named colin morrison he's based in england he wrote this article that i think it was called why magazines are the new trophy asset or something like that and i read that you saw that article and you're like i'm gonna go out and buy magazines is that right yeah i mean i was reading it and i was you know it was essentially the trophy asset and he was using an example of mark bin by magazine and some others and it was really interesting because i was like you know i could never buy time magazine you know the two media businesses that i would own that would be trophy assets far beyond it would be like bloomberg would be number one and you know owning owning something up cnbc and scale would also be another obviously there's a way outside my league so they're not happening and i was thinking to myself i had just taken up aviation taken up flying and i was reading flying magazine and i was pretty uni inspired and so i was like it would be cool to own like a an aviation magazine to own fly magazine because that would be my trophy i'm a pilot and that's sort of what i would i would like to do and so it inspired you to reach out to the owners of wine magazine and asked they would sell the magazine and they said it's not for sale but we're happy to talk it to you and i made an offer and they ended up selling it to me and that sort of it was started off same it started off as a side hustle i didn't actually intend i thought print magazines were dead and dinosaurs red print magazines and i became very skeptical of the whole print magazine business model but when i bought it i fell in love with the not just the content and what you could do with it but also the value what print brings to an audience and so what i found is that really these print magazines are completely undervalued that nobody will touch them because they view had the same philosophy that i had about them dying yet they own these fantastically great communities and audiences that have been around for decades and and takeaway as you get into sort of the older populations that have grew up with magazines is they still have these really important sort of connection to the brands and you found that that's a really interesting opportunity were you liquid when you decided to buy it or were you like i if they if the price that they want is in the millions i'm gonna have to go get money from someone no i had enough money to pull that off so with your money do you keep a large percent in like the s and p five hundred and this was just a fraction of it or was this like a meaningful amount it was i mean was a meaningful amount relative to my liquidity i mean in terms of my total that works yeah not significant but i have a lot of paperwork as a pinch venture back founder tends to be but you don't have a lot of liquidity so relative to liquidity yeah it was a big it was a big number then what was the thinking is i'm not to buy this and i'm not to spend some hours per week to making sure that it doesn't lose money well it was profitable i mean it was generated about half million dollars of eb a year as a stand entity about two point a five million dollars in revenue so it was a small this is a small business and we buy businesses at three to five times eb typically the number of these things traded at so we're not talking about a huge like this wasn't a huge capital outlay so it's like one one point five to two point five million dollars is was about you know total purchase price is about three and a half million when you look at cash and and some deferred expenses and deferred payments so he meant about three and a half million dollars which you know seven times five you know two and a half me in upfront and the main deferred and yeah but then you gotta deal with like to journalists a lot of times i hire journalists they're fucking pains in the asses and like when i think of like all my potential side hobbies i'm like i'd rather be a bee keeper said like own freaking bag that you could deal with these employees or i'd rather get to like going for walks or hikes i don't know about this well look i i mean i had you know freight ways as forty or if you look at total contributors that are journal it could qualify the journal as your contributors they forty to fifty so i i knew the what the you know i knew what the rodeo was gonna look like for running you know having teams of journalists work for you what was different though with magazines is these are different than sort of younger sort of digital native journalists or or journalists that have been sort of worked with their news runs as magazine journalists don't do it because they make a lot of money they do it because they love the content and and there also there's a sense of defeat that has existed across all publishers and i've seen this and the multitude of acquisitions are done is we are the editorial teams feel like the the the owners of the magazines don't love them and aren't willing to make investments at i'm and they almost look at you and hate use this term as almost l of their business because in some ways they they love the content they love the subject matter they have the relationships they tend to be sort of micro celebrities in their own communities for the so these are the old school influencers if you will and yet they get no love from corporate because what's happened is the whole magazine business model is collapse in the last ten years because the way that magazines made money in the past the internet has destroyed that business model and rather than sort of digitizing their business model or sort of evolving their business model they just started to cut cost and so that was the way they sort of fend off the inevitable and the problem is at some point the value that the community gets and the audience gets is diminished and these things are just it's a it's sort of a death circle and so what we do is we become in we buy them in some ways we liberate them from this sort of debt inevitable decline and they feel really encouraged by that you know we we upgrade the paper we upgrade the quality we make investments in the editorial team you know fly editorial team went from sort three folks when we bought it to thirty so you have three primary full time employees and then you have contributors that are submitting that an article that goes in a magazine very different from the world you and i sort of come from digital media where you actually have a full time staff that's writing content on a daily basis they're writing they're contributing a piece that's once a month and so it may be an airline pilot or a flight instructor or someone who willie knows the jet market or the turban market and so you you want subject matter expertise and typically riding is a second is is not their primary job they do it as a sort of a side hustle to make a little bit of money and that's why these businesses have operated but what they've what they've also done is they've they've not made investments in like print quality or online assets or any of that stuff how much revenue did did you do in the first year of owning at revenue profit in two thousand twenty two i think we were about seven million dollars in revenue six and a half seven million something like that oh so you like aggressively grew it yeah how because we invested in so a couple things we did was we invested in the magazine we raised the price the magazine was losing seven dollars so the magazine was taken an eight dollars per subscription but it cost them fifteen dollars a month it cost eight dollars a year was the net revenue i know you're look you look for folks that are listening that your face is exactly what mine was they were generating on average eight dollars in revenue per subscriber per year and it cost them fifteen dollars to fill that subscriber they were losing and halves this as far back as our data went two thousand six losing seven dollars per subscriber and i say so fine magazine costs eight dollars a year to subscribe average the average yield the average across the whole subscriber base the magazine generated eight dollars on average per subscriber and when you say yield that's not revenue minus the hard cost that is that is the revenue that's the top line number oh that's stupid that you got like losing sam they were losing seven dollars per magazine a per subscriber per year yeah so like a flying magazine subscribers is definitely gonna pay fifty dollars a year or whatever or you would think right that was my reaction to it is essentially our communications to the staff were to the sales team was basically you're gonna raise the rates of advertising sales because we wanna go to people who so on the ad sales we raised the cost of ads but we also just subscribers basically said look if somebody's not willing to spend thirty or forty dollars a year then they're not really they don't care about the content i mean think about this to buy an airplane you're gonna spend you know minimum fifty thousand that's a you know old aircraft to buy a most of the folks are buying you know quarter of a million to million dollar aircraft and and some of our audience is seventy five million to a hundred million dollar airplanes and so you have a you have a a natural audience that is going to spend a lot of money because they care about the hobby or they care about their careers or whatever it is they're if they're not willing to spend thirty or forty dollars they're also not gonna buy advertise because what happened is in the old days and how many subscribers so we when we bought that with about a hundred and eight thousand subscribers it's pretty great we actually when we raised the price we raised the thirty initially it actually went down to thirty two thousand subscribers no shit we bled out but that's okay like we wanted to do that we wanted to get rid of and it was a lot of what we call free loader they were essentially targeted for advertising purposes or they're the people like you may remember this i when you were younger is your would like your school would have a fundraiser and you would bring home a form and your parents would sign like buy a magazine didn't didn't care about there was a lot of subscriptions like that where the people that were actually subscribing didn't care about the content i basically said i don't want any of them i want the people actually throughout the content and we were very successful in doing that and and so we saw subscriptions grow substantially in terms of actual full paid subscriptions and subscription dollars we were basically doubled the subscription revenue over the course of your year yet still had like a third of the subscribers we've been down to thirty two thousand we're now about forty five thousand we've brought it since i are you able to manage this growth on the cash flows of the business or did you have to put more a capital in i put more capital that i i wanted to put more capital in like i could've have ran it tighter but i didn't want to how much should you put in you know like i we total invested about forty million dollars in the business but that's not flying that's that's all the acquisitions we've done and everything we've acquired at this point in the store you've not raised outside capital no no i didn't raise i actually had a i had half a million dollars in from two brothers of early investors and freight that bought in they got fifteen percent of the business for five hundred thousand dollars so you grow it to seven point five in and how much profit the business was about breakeven at seven point five million because we were not we were not optimizing for profitability we were optimizing for growth who'd you hired to run it so i was i was doing a lot more day to day and i i i created a team to come in to to run the day to day operations okay so we're at the end of twenty two and i think around this time you actually were like holy shit i might have just like hit on something interesting i should go out and buy more and do this again or did you first come up with the crazy idea to buy all that land so about the land in two thousand twenty one about fifteen hundred acres so originally i didn't plan in being a real estate what we actually wanted to do was go out and build a media center connected to a runway because odds you if people are gonna flying in airplanes remember at the end of the day the content for flying is all about the airplane like people care less about the pilot they care a lot about the airplane and this is no different than a car magazine where you go look at the lamb or the ferrari for the aviation audience they wanna see the newest aircraft being produced and so we wanted to create a video center connected to an airport the problem was that none of the airports in the community five regional community airports around chattanooga were willing to sort of do anything they said you know basically you have to go from the state the municipality the state and the faa app to approve it in order to get to build a media center when you say media center you mean yeah to take video we wanted to have a hanger that had a basically they a video studio and the photography studio that we can bring your our planes in you have to build that because it wasn't there's no hanger there's a national hanger shortage across the country and and because what happens is nobody wants to municipalities who own all these airports don't want investment in private hangar for smaller aircraft they they want the bigger airplanes and there's just a a problem of allocation so we decided to go build our own headquarters and i was looking for land look for about fifty acres and i came across this piece of land at fifteen hundred acres and it was priced at three point six five million and i i drove up there and a reminded me of this resort in east tennessee called b farm yeah but my wife absolutely loves sort of back to farming agricultural so i show up there and i'm like this looks and feels a lot like library farm and that list sort of the real inspiration is we wanted to create a fly community with a runway and home sites that are connected to the runway that had that blackberry farm inspired sort of experience how much did you pay for that three point six million did you pay it or did you raise money no i'd borrowed to the bank i mean real estate is one of those things you can go borrow money and so remember i am i have a a relatively high net worth i don't have liquidity this is why i'm asking these questions because your net worth is significantly higher than mine because you your business is bigger of than mine but i'm liquid and even me i'm like scared to make some of these bets you don't seem to have that same fear you seem to be way more offensive and you seem way more i mean look it's not like we're inventing like electric cars or go to mars and so i don't wanna like grand is it make it too grand but like you're out laying a lot of cash on some really crazy ideas you're like i'm gonna build and i'm gonna buy an old magazine and i'm gonna spend more of my money and build an aviation community like that's like really weird and that's really balls why what do you think you what's that gene inside of you that makes you think these wacky things are gonna work because the data like my experience suggests that it will but you know it's taking more shots on goal like yeah i got three and a half million dollars in an investment for a real estate project but if it goes to zero i still own three to half hours of land right the end of the day but that's a huge project to get into because did you know anything about real estate no but you can you can bring in teams to go run those things which we have so like sam it's a matter of scaling businesses and and hiring teams to run these yeah it's risk but yeah i agree with you this is just this is just outside your your expertise and you've made it your expertise very quickly yeah i mean but but media was outside my expertise date running a data business outside expertise but real estate is actually frankly i wouldn't say it's easier it's a it's a it's a different playbook that frankly can be blurred it's not as if you know building a saas business ability of data business there's a very small number of sort of models to follow there's a very few companies that you can sort of model your business i think the risk is lower for that though the risk is lower for disagree i think real estate real estate is so much less risk because you actually have finite assets at the end of the day that's true the difference though is when i i can start a software i can start an internet or data company with significantly less money than it cost to purchase a meaningful piece of property but i own the land remember that land at fifteen hundred acres because at twenty four hundred dollars an acre has value you can sell that land for something else you can partition it out you know if you looked at that at what an acre would go for in that community fifty to sixty thousand if it was subject light this wasn't and so we knew the atlanta had some underlying value but what we didn't know if there would be any demand for pilots we advertised it was in january two thousand twenty two we actually took out ads in our own magazine to test the market what did you say in the ad you know it was written as if it was written to my wife effectively like my wife was the target audience which is your blackberry farm audience and we wrote a story about we're building a resort and we didn't focus on the aviation which is really what you would expect this to focus on we focused on the amenities around the experience that we're were gonna build we shape we vision shaped it and we didn't expect to get a lot of response made over three hundred inbound inquiries on that one ad we took out in our own magazine and we were able to get people signed contracts to basically reserve their spot and we knew in we had a winner did you like make a joke about the fact that you're new to this or or were you like more professional but you're like i i didn't make a joke about no but we i mean know like we're very transparent about the fact this was a a not joke and joke but being light lighthearted you're like you knows what's gonna happen i mean in ultimately saying it's about we we recruit recruited people that actually had experience and doing you know the development the master plan community there are groups that actually take on a lot of the burden to do the work that you need to build these things it's not as if i'm having to fifteen hundred acres is a huge project you're not gonna do that yourself you get you're gonna want teams to deal with zoning issues environmental issues engineering issues and we brought in air airport planning to consultants we brought in development consultants and so it's not as if i'm doing all this work myself i have a whole team you asked who's running these projects i have a team that's running them that's managing all the different pieces of it and they and people wrote in and they basically said if you're able to build this count me in for buying a eight hundred thousand dollar home on that property or so that's that's the pro the lots are six hundred thousand so the homes are probably two million to three million dollars and did they sign the and you they what did they what did they give to you that the bank took as they signed a a contract and they look they put a deposit so forty thousand dollars an acre on a six hundred thousand dollar purchase price but they put forty thousand dollars in per acre and your twenty thousand per lot and was it like you basically quote pre sold was it like fifteen million dollars worth of these prop properties yeah we actually had up to about twenty eight million dollars and total bookings yeah total reservation deposits but we thought we were gonna get through this process for environmental approval quit road zoning approval we actually thought we'd break ground by the end of twenty two so we added some churn we've refunded their money because these are refundable deposits it's not as if they're giving you money that you get to hold on to it's no different than that you bought you put a deposit on an airplane or put a deposit on a car these are fully refundable but we're about fifteen million dollars in in total reservations right now so this project alone is awesome but then it gets even crazier and like i this is i'm just fascinated by you because i view you a little bit as a peer and that we're both like media nerds but the way that we're different is that you're you're doing great with risk like you you're you're going you're taking more risk i think but it doesn't it's all working out and this is where it gets interesting is you're like alright this thing works for flying magazines what fly magazine and when happens if i go out and get more of these titles and do this whole content to commerce thing and did you raise money for that not initially so i not raised any my father invested when he sold his trucking business last year so he's my only outside investor other than the initial round everything was done by myself and i was just using bank debt frankly borrowing money from banks and liquid my portfolio because i felt like i would rather invest in myself than invest in the s and p i think the difference between sam isn't necessarily that i'm like i am willing to take more risk i'm also willing to take more shots on goal i just think fundamentally like an asymmetric mindset that i have is is i may lose let's say the real estate project went to zero you gonna lose three and point a half million of dollars that sucks but you know what i had been my dad cut me off my dad fired me in two thousand fourteen i had basically like no job nothing like it was i was for all intents purposes on my own at right bottom i had to figure it out i've done that before and so i'm not afraid of losing at all and i know that i can get it back and so we've applied that role to everything that we've done and we make acquisitions under the philosophy that it's asymmetric risk is like let's say that we buy a business or buy a magazine that's we spent half a million dollars or million dollars and let's say it goes to zero let's say that we're completely wrong about at thesis and the thing is just a dog well that we write off that half a million million dollar investment but if we're right and we get a three or five or ten x multiple on that business that creates an enormous amount of value for us and so that's how we've approached our acquisitions and i'm willing to take bank debt because bank debt is frankly pretty cheap by the way i think about money differently than you and i think it's cool to hear your perspective because i think i should do it more but the way that i think about it with privately as a entrepreneur of private companies i think if most of my money if most of my net worth is ill liquid any liquidity that i get whether it's annual cash flows or it's from selling i i sold one of my companies i take all that money and i stock it away in like a safe thing where it's like if all else goes to shit from whatever i have that is enough forever and so that's how i view it so like whatever how much money i have i i stick it away and i'm like that doesn't exist basically and yeah i'm gonna go and use a very much smaller sum to go start more companies and i'll try to live off of my income from those companies and if they sell great if they don't hey i still saw up this other thing that i have what you're doing is different than me and i like what you're doing because i think it's bolder and i think it's probably a bit more fun if it works which is you're like even though i've got this private this other private company that is doing quite well so it's not gonna go out to nothing but i have some liquidity i'm gonna pile that liquidity into more interesting but potentially risky things well i like freight ways at some point we'll sell like it will show will do be an exit that to me is the nest egg like or for my long term like i know it's going to sell who knows what it sells for but there is value fundamental tangible value in the business so far and it's big enough that it's slightly different or very i mean it's totally der risked and and there's a lot of value in that business and i i had a salary it's not as if i'd i'm not admit like the board takes care of me and i so for me i have that asset everything else is that will set my family up for dinner you know for at least a generation like my kids would be able to college to be able to buy a house and so forth so i'm not worried about like my ability to survive if everything else falls down but i do think diversifying my risk through all these other projects actually enhances my long term returns particularly if i'm using my balance sheet to borrow money for the bank at frankly relatively low cost what about diversifying your time that's probably that what well that's what teams do for you right like you hire people to run it like you know preston holland who i i think you know we brought precedent to initially run flying he's now running a finance business that we've got that is doing aircraft financing we brought in the team to run we have reached that's running our real estate project so again and i fire myself from almost every functional role i had at freight waves is i are you are you chairman or ceo freight i'm ceo but the day to day day to day functions inside that business i have spencer pile who's my c cfo and coo is running most of the day to day most of the day to day decisions are going through them i'm working through strategy and thinking about the long term prognosis business so i can run and do deals and look at additional ways to lever this business up without getting caught up in the individual sort of min inertia running a business so how many titles has fire crown acquired at this point we're about fifty four i think is the number did you buy them in batches like you bought you typically i mean publishers in the magazine business it's hard to get scale with one title this because there's a finite audience that will care about that content and so typically a publisher here's the thing about magazines is that only twenty five percent of the content a twenty percent five percent of the operations that business actually is value added to a customer you have audience development you have magazine production you have layout like a customer doesn't experience that they only about twenty five percent of the cost structure is the editorial product for the photography so you you need a lot of infrastructure to run successful magazine or frankly the media business operation i think you know the media side magazine right it was the insane basically the hustle we could've have i mean we were at about two million subscribers when i sold now i don't know what it's at let's say three or three and a half basically three people on edit a editorial if we were selling ads so when i ran the company three people on editorial and thirty seven people selling ads and managing ads and making it grow yeah and as three people bring all the value it's crazy right it's i mean it's just how these media businesses work is you have a couple people that are upfront and the rest of it is infrastructure and so what you typically see when we buy a magazine is we're having we're buying a portfolio we're buying not just one title but three or four titles that come along with it and so we've done a you know maybe two maybe maybe twenty different acquisitions that that that made up that portfolio but some of them have been really big we bought bah which is like the the the largest publisher in sweden this sort of a rupert murdoch family of sweden and they owned a bunch of voting titles which we bought last event last fall and really we own boating yacht selling world of fish saltwater sports men and so really this large rain title in aviation we bought a a number of aviation titles through various portfolios and then we just recently bought model trains a bunch of railroad titles and astronomy titles so bring that all together that puts us the whole portfolio just whatever twelve year old craig is into boats planes rc trades so it's almost like by five year olds like dream so let me think of about it boats it's airplanes it's trains and space it's pretty cool for you know like a five year old boy it's pretty magical you know but what we're buying are these audiences that love the content they're they're ent and effectively by owning the the magazine which we finance through the the p and l of the magazine sells subscriptions and advertising we make money in media but we're ultimately buying the audience itself to sit to offer some other product to service to them yeah so let's walk through this playbook so the playbook is to acquire customers profit and you do that by having a media arm that its own business or having a media company that's is is own business and make a profit via subscriptions and advertising step two is to make sure the audience i imagine you'll have to correct me it's you're you're doing something in your head of like will they spend a lot of money on something is that right yeah essentially but if they're if they're ent if a if a category is big and they're enthusiastic about the category then the answer is pretty much yes i mean through the thing to remember about magazines and typically magazines that are decade old magazines is these things have survived enter the great wheel magazines are over a hundred years old they've survived multiple wars they've said survived multiple pandemics they've survived the great depression like the audience truly cares about the content enough to subscribe if vape if these magazines have survived the internet age and multiple phases of it they're going to be around for many many years and so essentially we're buying it because they they care deeply by the content and then ultimately they can buy another product or service and then is step three like raise prices and sell ads better or like do you think about that i don't think we look at it in the same step right so like we do we treat these we have a we have a media business which runs the media operation and then as we go find commerce so let's say aircraft finance we find essentially an executive a ceo if you will that can run that business through its own p l that's separate than the media business but in order to finance that you like these people wouldn't be selling you these businesses if they were kicking ass but you're been able to you've been able to make them kick ass a lot better and so you must be doing something just on the media side that they didn't do one of those things yeah i mean effectively you're fixing a lot of their cost structure and looking at it on in terms of the spend opportunity of that audience and create data that can you know really look at data from the perspective of intent but for someone that wants to buy a product so if you're if you're reading flying magazine you're either a pilot an aspiring pilot or an aircraft owner or somebody who wants to own an airplane this is that's the four prime there's people who read flying because they like airplanes but the small piece of the audience and so we know each of those categories are gonna spend some money in each of their outcome so a student pilot is gonna take flying lessons it's gonna cost him ten thousand dollars if he's gonna be a career pilot he's gonna make fifteen million dollars over the course of his career a lot of opportunity to to help him along his journey if they're an aircraft buyer prospective buyer they're gonna buy an airplane they're also gonna buy insurance finance out of that they're also gonna have a lot of expenses done on that aircraft throughout their life and so these are the journeys that we we have and that's ultimately what we're doing is we're optimizing the the magazine and the advertisers based on intent not based on the fact that this is a number and what we've explained to the owners that the advertisers is wouldn't you rather reach the hundred people that they're gonna buy them buy your airplane versus the hundred thousand people that you know ninety nine percent of those people are never gonna buy any of your products that's what we need to do is actually get into that intent data and we do it through digital like print is just one aspect of what we do but it's driving intent data to actually be able to demonstrate to them there's a value that custom that was a very good pitch and then you when you hire these guys to create so i guess airplane financing means you help people get loans to yep by plane and then i think you have like a classified section so people selling planes and then now you have the real estate one i don't know what you've done with the other titles how you've done the same content to commerce type of play but i wanna hear more about what those are but when you're hiring people to build these businesses on top of an audience so do high how much do you decide to invest in them until the and to invest in their their new the new business until they're able to make a profit yeah we we have a we're pretty patient i mean it depends on the business itself if it's growing and it's getting kpis then we'll to support it you know every business is different obviously the real estate business has you know we haven't broken ground yet so that that is gonna take many years to sort of generate a a profit it has its own sort of journey the finance business is a finance brokerage business and it should generate profitability much quicker than some of the other projects and we buy e commerce businesses we we've now in six e commerce businesses what are he's selling we own the largest nasa or the largest space merch store on the internet called the space store so it's like collectible the aviation nerds and the space nerds are the vin diagram for both of them is pretty tight so if you wanna if you want like a model of a rocket or a patch from one of the missions we we can sell that whether it's spacex or nasa and so what are some like what what are you can do with boating are you gonna build the harbor no i don't think we're do real estate because i think real estate to like the the arbitrage in aviation is that you're taking a piece of land that has beautiful it's a beautiful piece of land but it's not next to a body of water to build a lake front home and so essentially what you're doing is you're taking this land and your arbitrage because the the runway itself is the arbitrage right right that pilots wanna be there and so with boeing it's not as if i get arbitrage like from property or an ocean from property because that's already awesome exactly and there's the the market's already priced that in accordingly so for us we're looking at financing we're looking at e commerce we're looking at other categories that we think we could be successful so probably won't be real estate but it will be in other categories that will we'll look at commerce you i think you said you forty million that you've raised for this whole thing yeah i'd raised i mean in between i mean my father funded has invested the money and we haven't used outside capital if you will their family office of that forty how much have you spent on acquisitions no that's been the predominant of the investment has been through m and a but you're gonna do sixty million dollars in revenue this year i think on the tweet you said ten or fifteen percent profit it's but to our profit in march was eighteen percent and we we think we can sustain twenty and we think ultimately it sort of like levels out around thirty percent so you can sixty million in revenue i think you said so that means twelve million in profit yeah wait that's a run rate number so that's not run full but yeah sixty million and re revenue revenue a little bit over sixty with twenty percent margins and then what do you think that would be worth know if you look at sort of public comps that you're probably talking twelve to fifteen times earnings it's probably what my if it was a public our goal is to get to a billion dollars i guy had no plans to sell this business i like having cash what sam i do appreciate cash flow so it's not just taking risk i actually love cash flow you know as funny as a venture backed founder you kind of jealous you have heard this you talked about this on your podcast before is you get jealous at the cash flow guys yeah the cash flow guys get jealous of the valuation venture and the venture guys almost every founder that i know are super jealous of a cash flow guys because like wait we've built this fantastically high valued business but we don't see any of that money it goes you know ultimately until exit so but you you have both at at this point but you have so on twelve million in profit ten times is is at one twenty is or no sorry you said twelve times twelve yeah i mean like you can look at if it was a private trade probably ten times is a fair number so the business is worth at sixty million run rate twelve million profit i don't i don't know if it's trailing twelve months revenue whatever but roughly a hundred and twenty million to a hundred and eighty million dollars yep you that that what but the business is worth and you started this in twenty two or twenty one one yeah that's awesome okay and then you said i think this is gonna get to a billion in revenue by twenty thirty is that our goal and we can do that through both organic and an organic growth i mean here's the reality there's forty five hundred magazine publishers in there and say there's no exit for these guys i mean a lot of them are they're either owned by large corporations which frankly want to dives their print products because public comps are challenging for them or they're you know family owned businesses where they been running the business for multiple generations or perhaps they started at fifty years ago whatever and they don't have an exit and so we can go find i we're doing a deal right now where it's a you know business about a nine and a half revenue about six hundred thousand dollars and and when you take out all the expenses all the owner expenses about six hundred thousand dollars contribution we'll we'll pay less than one time for that business and so there's just not a lot of folks buying in this category and ultimately you're buying the audience i mean that's really what it's all about is yes we own and generate profit and that's great and cash flow but ultimately so i'd like to say we're a private equity business meets venture capital because ultimately vcs want the asymmetric hundred x return we're gonna inc innovate businesses that can potentially bring those high level returns but using the audience which we already own and so i mean e commerce is never gonna hit that mark but you have an aircraft finance business you have a real estate project they're very well could and we'll find other business models as we grow you're basically building a a a a hi style company so hurst have you read the chief the biography of william randolph hears i have not you should man it's awesome so william randolph hi he he had a successful father his successful father was a minor i think early goal gold and in a gambling bet he won i think the san is so chronic and he goes to his son and he goes well william you've got the chronic hopefully you can make it something into something you've got a year to to make it not lose money and so he he does that and he does it by creating what's called yellow journalism which is like clickbait of the late eighteen hundreds early nineteen hundreds and he kicks ass and he crush it and he starts buying another thing another thing another thing he starts buying all these titles and he's killing it he's crushing it this is like a cable business before cable where it's recurring revenue subscriptions massive margins and then they they get so big so they do a bunch of things one they invest in this new sports network called espn so now her owns something like thirty percent or forty percent or fifty percent i forget the number of espn that's they've made a billion off of that then they buy fit finch ratings i think which is a data business which is exactly what you're at and they start buying all the stuff at this point hurst is owned by the family it's one of the largest family owned businesses in america they own this massive building and right in the heart of new york city my in laws live literally fight like i'm on my wife's like bedroom that she like grew up it and i can like reach out the window and touched like the hears building and i remember that was funny because i almost sold my company to them and i was like sleeping in that room when i was visiting new york city and anyway they own this massive building that i don't think they got a loan on i think they own this like multi billion dollar building they own a ranch in like wyoming or something like that they own everything and it's owned own by this family and it's kinda sick and it's been around for a hundred years that's sort of what you're you're doing you know hers is amazing because it's ten ten billion or twelve billion dollars of revenue no debt like that's what's pretty astounding about her not even on the real estate they they they're they're no debt they actually have a very large venture capital portfolio there yeah they're in investor in freight ways by the way so that's why you know all about them i'm i met i forget who i met with there but i learned a lot about them but they're like older their guys they're like they wear suits they're like the mad men era where they like oh yeah so it would have been of bad fit but that's what you're building and it's awesome look i think media businesses are underappreciated i look i think what's happened is the you know horse during the hurst is they on a bunch of newspapers as well but i think what we're seeing now is this if you own a strong sort of thesis around a media asset and you can build products that take that audience that's ultimately the playbook is like i we have these audiences they love the content they're subscribing pain for a product which is a print magazine or a digital experience they're already the audience we can offer them products and services that they naturally would buy anyways yeah that sounds like when you say that i'm like yeah that's so obvious but like everyone not everyone a lot of people i've tried this few have succeeded h i think is succeeding there might be a couple others but like when buzzfeed says they're gonna do it it's shit it never works out i think it doesn't work out because they have like a committee deciding on these things whereas you could be a bit more of a a kind of a monarch where you're like this is what we're gonna do go well i i think buzzfeed along with a lot of other publishers have sold out to programmatic and and have relied upon the the the platforms the facebook's and the and no one really like loves them too much amazing what is buzzfeed anyways it's like yeah there's like like and i think the difference is that we're folk we're buying magazines and media properties that had been around for decades where the audience like the people talk about their father or the grandfather and they you know reading trains magazine or model railroad or or or flying like they they they it has a lot of affinity to it and then effectively we just had to find services so we make money in media but then we had to find services that we're gonna offer on top of that how many hours a week you working no i don't don't doubt my hours you thinking you but like maybe like a normal nine to five forty hour a week no i mean i i i do when i wake up at six in the morning because my kids wake me up till midnight i'm pretty much either with my kids or or working on the businesses so you're not work to me man like like i to me this isn't work these are this is a game in some ways i mean you're still you're in grind mode it's not like this is all like like a beach like i i do it to myself too like i end up getting overwhelmed but then i'm like i hope be of myself to blame what's your goal to you wanna be a billionaire you wanna just do cool shit you wanna create something that lasts for a hundred years what's what lit no i mean one of the reason i like media businesses because you're you're always learning something new and you get intellectually stimulated by a new challenge it's a new audience it's a it's a new product i don't know to me it's you don't want all the power fame sex and drugs that comes with owning space magazine dot com trains magazine is gonna give me enormous amount of power yeah or model railroad runner no it's not that at all and it's not even the wealth it's more of the chase it's the it's the putting up the score in some ways of solving problems and learning about a a different i mean i we have a business that i paid ten thousand dollars for it's called aero swag it's an e commerce business it it will do hundred thousand dollars this year that is i spend more time on that business proportionally than any other one just because i think it's cool to print on the man t shirt shop for for pilot i frankly should not be spending that much as much time as i do but i enjoy the to me it's a hobby it's a tinkering kai thing i bet it feels awesome to make your dad regret firing you it was fun proving that i could make it work but i had a lot of that i mean a lot of doubt when we first started the business yeah look behind most successful people is a girlfriend and her boyfriend that broke up with them or a father and no with that made like one rude comment or like in my case it was a a media executive who like he like half hazard like and passing was like man these newsletters will never make more than a million dollars a year and like i was like you motherfucker and you thought about it every day right every day you know what i see this guy on sitting at floor seats at the knicks and i'm like your son of a bitch so i would say the best thing to give a founder is an enemy so and freeway ways i had a guy he was he was a ceo of our largest competitor and he really pissed me off because he told me i couldn't couldn't compete against them me like i i like to see you try whatever products and i i woke up every day thinking about it but he fired and i tell you the motivation it wasn't as fun anymore because i needed him to be the guy all of a sudden the company became nice to me and it was like no i wanted assholes like please go back to be an assholes because it like i wake up more slightly more motivated every day i was like that with the founders of morning brew i was like i wanna kill you i'm like if i are you in public i wanna like get a fight now they're like my their family me they're like my best friends well you you are doing a your hosted a one of the podcast on their platform so you know people say you know don't don't be hateful towards this person and in my head i'm like you rage is like the greatest fuel ever hey completely i don't you know tell what's told me if you got hate hating in your heart let it out i'm like no i'm burying that deep that it go nowhere let's feel i need that sam you know it's also it's good for the team because if also have the hatred of the enemy then they will they'll go much further and and fight harder than if than if you don't yeah i love that and it's sort of like a sport where you know like once once the whistle blows you're like anything goes but once the game's over like it's like alright you nothing but love nothing about spec but while we're in between those the the lines like we're getting after it yeah exactly and so i think it's good dude thanks for doing this yep doing it craig fuller that's the pod i feel like i could rule to word i know i could be what i want to from at all in it like a days off on a travel never looking back