Michael Girdley: Why Fireworks Are A Cash Cow and How to Operate a Holdco Worth $100 Million

you own a hold c i think g enterprises the name of it within it you have a bunch of different things so will own stuff as funky as like a fireworks company called alamo fireworks you own like a software roll up called dura software you have like a coffee chain i think is that right you you're a drive through coffee chain that's got like three or four locations or something like that and then you inc bait couple couple projects one of o what one of which i use actually recently michael what up dog sean where are you you're tahoe i'm in lake tahoe yeah how is it it's amazing yeah this place is great is it just a get away from crypto no it was a father's day trip so you know came out here with my wife's family and yeah it's been cool it's been like at the lake in the pool all that gets stuff that's awesome who who so you sean you wanna introduce this guy yeah okay great so we got michael gu is that what you say yep yeah michael's here i've been following you on twitter for a while and and i think you almost want you almost bought our n t for the five vincent of fame but you got out bid at the last minute is that right yes yeah i had a whole plan about it i was actually gonna shard it and then try to make profit from it and sell in fifteen second increments but some really rich crypto person came in and swoop it out from under me so sam a huge plan i had a huge plan and and but you but it worked anyways you got on the pod anyways without it because you're pretty interesting dude but before you on twitter mostly because you tweeted about chili a lot and i'm a big chili guy huge chili fan but you also you kind of fit into this sort of like andrew will concede the bucket which is like you run a hold c and you run like a a pretty big hold c and so let's just give people kind of like your your run here's what i know about you you own a hold c i think gi enterprises the name of it within it you have a bunch of different things so you will own stuff as funky as like a fireworks company called alamo fireworks you own like a software roll up called dura software you have like a coffee chain i think is that right you're a drive through coffee chain that's got like three or four locations or something like that and then you inc bait couple couple projects one of o what one of which i used actually recently called n which is like a way a easy way to hire people in in latin america and i found this awesome dude you know not a plug for near necessarily but it it did work it did work exactly as intended i found this awesome operations guy for my e commerce business there nico so so yeah so that's what you do and i don't know sam where do you wanna start we could we can go into into kind of high level or we could dive into any of the details where do wanna start if he put together this really good document that explains all the different businesses but to summarize it looks like it's like eight or nine or ten of them and so so i understand the size it's over a hundred million in revenue right and over seven hundred fifty employees for all eight or ten of yes whenever i hear people be like okay yeah my my kind of the accumulation of the businesses that i own some percentage ownership taken is worth over a hundred million dollars or like a real estate guy will be like you know i have a billion dollar real estate portfolio in my head and i'm i'm sure there's bunch of listeners who are like this too they're like what does that mean are you like are you are you super loaded is this a like what how do i think about that number right because like you know if i get a salary that's the money i keep if i run a business and i say top line revenue that's not the money i get to keep so when you own a you own a hundred percent of your hold c and your hold c owns businesses that add up to over a hundred million in revenue does that mean you're just big baller of shot colin are you paying yourself like ten million dollars a year or more out of out of the profits of these businesses or what does that really mean yeah well i mean part of the way of set up the structure is like i wanted to be very flexible in terms of strategy so there's some stuff in here that's just like compound like dura for example like we wanna be the next constellation software someday so like i don't that's just compounding the money i put into that and the effort and time and i put into it like i don't i don't get cash flow from that stuff but that's by design like i'm just a long term player on a long term personal and all this stuff you know the things we went through just kind of the ten big holdings that i have those are all things that i have fifty sixty thirty forty percent of company so not like i i i told him with you like i've i you know i i felt stressed being like okay well i wanna be the guy coming in and bullshit about a bunch of numbers but also like i'm from texas and like like i have a hard time like bragging and being like well okay here's here's what i know worth is and here's how much money i make it all that kind of stuff so i'm trying to balance it out to where we can actually get there without getting past my comfort zone how do we let's let's not balance that out let's just go to the other ed it make it incredibly uncomfortable tell me how your net worth your checking account number and what about like when you lost your virgin rigidity you could make one go down really drunk for and yeah yeah let's let's let's really get do it and it's like oh you know what review you know what real reveal your criticized that's fine just tell me about your net worth then we'll settle for that but in in seriously isn't there's like a a mental model for these businesses right like some businesses like you call it a a compound right it's like if you go into a business like this you're gonna put up it only takes x dollars to start and it then it takes why years to kinda get to some good out like like i'll just give like a venture startup right like i come from the silicon valley venture world silicon valley venture world as you put zero dollars of your own money up but you're gonna raise likely somewhere between three and three hundred million from venture capitalists over time you shouldn't expect to see any big money until you exit which is on average seven to ten years it's so like that's the profile of that versus my e commerce business took i don't know i put in six hundred k to start it like that was my first kind of year commitment that i had to put in but we can take quarterly profits now you know a year or two we could take quarterly profits if we wanted to we decided to roll that into growth but we think that by three or three or four we should be seeing pretty healthy you know quarterly profits that will pay for a a sweet lifestyle right so that's like just a paint a picture of what type of business you're getting into most people don't know how the hold c business works so give me those sorts of like what does it take to start how long do you have to wait to get a payday how big those pay you know are you playing a software game like a a vc software game you can make a billion dollars e commerce unlikely to happen but you can pretty safely make tens of millions of dollars if you do it right yeah well i mean i think my theory on stuff is it's been incredibly difficult to find good opportunities over the past five years so i've structured stuff that i wanna be able to do any opportunity that comes to the door right so like so so the danger is say for example i run across a fun idea to work on that you know maybe is in the roll up space well like like that's gonna require outside capital right du required outside capital my partner and i who started the business he's former head of support for racks space he's a ceo of the business now we put up her own money to do the first acquisition and then we start when we ran out of money right after a couple million dollars we had to go out and raise money and so that's playing that kind of vc compound game that i talked about you know other stuff like the coding boot camp that we start like that pays me money every month it's it's similar to what you're talking about so you know those the thing i like about those kind cash flow llc and stuff like that is like you know the upside isn't as good like you can't have a billion dollar exit in that stuff twenty years from now but you could start cash flowing really quickly so i like to have a blend your things could you can you can't live on appreciation how much how much profit does the hundred million make or i think you you said over a hundred million but let's just say it's a hundred million how much profit does it actually make and let's say that you own thirty percent of one company that makes ten million in profit do you do you say like alright we're gonna take of that ten million we're gonna take out three million in profit we own thirty percent we get one million yeah well i typically the stuff in a portfolio for small businesses like this is gonna end run fifteen to twenty percent you know eb margins so then you do in a calculus and say okay well based on that like free cash flow potential margins like okay you gotta a pay off debt service and all that kind of stuff if you have it and then is it better for you take the money out or should you reinvest it inside the business and by and large most of these things are reinvest because i don't have better places to put the money than reinvest in assets and new acquisitions and all that kind of stuff which business is the best cash cow is it like you know the the fireworks company where it's like well yeah open like three months a year and it just prints it prints profits for three months and then we like don't have to think about it from the the nine like i yeah yeah true i'm just saying that loud which business is the best one and why is it fireworks dude fireworks here's why i love fireworks it was the first business that started my whole platform and i was the ceo of it and it is the hardest business in the world to run like it the cash flow sucks like we we aren't even open yet for fourth of july we open in two more days and we've been spending money to get ready for it all the way through the through since january the second and you have to predict what's gonna happen six to twelve months ahead of time and then you have to put up all the cash for it by all the fireworks get all the locations out we have two hundred locations across the state of texas and then open them all up and then we really don't break even until about seven or eight pm on the night of the fourth of july so it is when i ran that business that i was where i cut my teeth as a ceo like it was the hardest business to run to where i went to these other businesses and people would like pay you before you delivered the service or like like when we sort the the coding boot was the second business and i was like you mean they pay us before we teach them the classes like this is amazing i thought it was the greatest thing ever so every other business feels like how much revenue is the fire one do fireworks it's multiple tens of millions yeah no shit that makes let's say twenty thirty forty million dollars selling fireworks for two weeks we do it twice a year fourth for the fourth of july and then we do it again for new in texas it's warm enough that actually new year's is more pleasant than any place else golly that's amazing and that's and that's quite profitable if you do well for the like the the remaining like three hours and that three hours you make all your profits you're all your profit because everybody shows up at the last minute that's the other part i didn't tell you yeah nobody buys anything until the last day because consumers have this habit of not doing things ahead of time so that that business is actually kind of an ugly business then because it's like you have to predict things and then i don't know the world is very unpredictable in the last few years so you have to predict demand you have to operate really well in a very tight time crunch like all your demand gets squeezed into this tiny pipe because you're putting up all the cash up upfront so you're taking some some some risk there did you you're a clever guy did you come up with any clever operating hacks to like make that business suck less that other fireworks people don't really do yes we have a bunch of those i didn't come up with any of them the thing i realized and this was about fourteen fifteen years ago actually really suck at optimizations like i wanna live at like eighty thousand feet with like big ideas and strategy and doing we're doing right here right like i wanna live in an idea space and what i realized about six years into running that business was i am precisely the wrong person to run this business because what you're talking about is it's like game of inches where you have to be like optimizing stuff all the time and like i find that incredibly boring like that is the like data and accounting and hr are like the three most boring things you'd ask me to do in my life and what we've done is a ton of those kind of optimizations like that business has exploded in the past five years no pun intended the through just getting the right people on the field and it means me not doing it because absolutely the wrong perfect wrong person to run that business but we do a bunch of different stuff like we brought digital point of sale to that business it used to be handwritten for a long number of years so some pretty basic stuff that you're like really it took that long but yeah we we've done all that kind of stuff but the it's the royal it's not me how much money did you you said you started this thing with two million dollars of you and your partner's money and then is the rest like a fund that you raised so so dora was something i started we started with their own money the fireworks business i got that the old fashion way i it's a family business i inherited it so that's why you're like how this kind with the fireworks business i i was told i have a fireworks business now and it's great what about the other things did you it so it's like is it is each one like its own you raise money for each one if you need to raise money or you just use your own money yep just if if i need to syndicate the deal i syndicate the deal with other people you know what i've learned and i only do is i hate raising money for stuff unless i'm putting my own money in it so i'll put a substantial amount of my net worth and new stuff and then when i go out to raise money i feel like not yucky otherwise i feel yucky but yeah now which of the business okay so we thought maybe the fireworks business is the best one it turns out that's kind of a a a pretty pretty gnarly business what which of your businesses would you say is like the most in the cash flow category like it's just so beautiful because it works it's just it just worked right away didn't take a ton of money it's you know it's profitable it's not like this brutal business to operate which which one do you like the best yeah the coding boot camp is the best one it's all services low capex and then i mean the thing i like the most about it like it it actually like helps people like it changes their lives and it that's not bullshit by the way like you you'll notice the theme like and all this stuff i'd really like enjoy helping people and it it's a life transformation thing when people go through that and get a better job clearly you've never had a bottle rocket fight man because that are pretty amazing too how big is the you that is that is low eight figures that's amazing and very profitable that runs kinda consistent with what we're talking about that fifteen to twenty percent even emergence and and so so you got a bunch of these so i like your twitter because you talk about a bunch of things that i think most people aren't talking about my feed is very like i don't know my twitter feed is just like the same crypto people the same single valley people and then there's like five people that are like just you know different and i think your friends are all them like that guy mo i think is like a total nut i find him his feed to be hilarious you're kind of a nut you're hilarious there's this guy jay vac i don't know how it says his last name exactly long indian last name he's super smart yeah and like you know people just don't follow you guys in the same like to the same level as i think you should like i'll make a list of these people tweeted out because i think you guys are all way more entertaining on twitter than than most but i wanna read you a couple of tweets and i want you to just kinda r on like you kind of explain it but r on what you what you mean there like what was the kind of the golden thing there so you had one about going to touristy places but doing non touristy things you were tweeting out like you're were in china air tweeting out like what a a paper recycling mill like what is waste paper from the us where does it go once we like where does the waste paper go you like found where it goes at china and it was this gnarly factory but and so like i don't know you're you could talk about that or just this idea of going going on vacation or go to a touristy place but then hitting the non touristy parts of that country talk a little about that yeah well that was a i mean that was a business trip like i was there training the team and helping them go learn how to buy fireworks and like we were just driving down the road and like literally so the process of going to buy fireworks is there is like a silicon valley of fireworks and it's in china and it's about a two hour flight from hong kong in the southeast of china and you go to this place and like it's the same thing every day you go the chinese take you to a fancy dinner and they're always the same restaurant the same food and then they take you to a factory and then they shoot you some fireworks and hopefully you buy them and that happens like for six days a row and then and you have to drink a bunch of nasty bi juice they they have like budweiser chinese budweiser they sodium and it's pretty fun qing down yeah yeah it's pretty fun but yeah after like the fourth year doing that like i was there with with the team and i was we're like driving along and i was just so sick of going to yet another fireworks factory because they all looked the same it's just like the same level old ladies like doing the same thing and all the fireworks workers by the way are like seventy years old they can't hire young people to work in fireworks factories it's just crazy and i was like what is that over there and and they're like oh that's the box factory and i was like a box factory let's go over there and so they pull over to the side of the road the driver goes in and the chinese seller to us like takes us in for a tour of this box factory and for me it was just like an opportunity to kind of push a little bit and like really get underneath and understand like how a culture like lives and really functions and like he told us like look they're they having problem making boxes now because they can't put the wastewater directly in the river anymore i was like oh this is things are so cheap with china but yeah that's it like just you just kinda start wandering and then magic happens so that one of those what type of trip was that where you bring a bunch of texas fireworks workers to china and like yeah i just imagine like just like what the fuck is this soy sauce shit you know what i mean just like imagine that conversation the that was you must had a blast hanging out with a bunch of a texas fireworks guys and a bunch of chinese fireworks guys you guys that that we really got brought together there on that one i love a blown shit up yeah well i mean i'm somewhat worldly the guy the guy that we took on the trip actually the coo for the business is a former a former senior military officer who is romania and lives here in san antonio now used to work aldi and they didn't know what to make of him like they were just totally confused where we had a romania with us like going through rural china so it's pretty good times have you had any of these other like have you intentionally gone and sort of gone off the beaten path to like because i feel like what you're when i look at your your twitter you've sort of accumulated a bunch of random disparate business knowledge and a lot of this comes from like oh you see you guy selling something on the street you're like hey so what is this where does this come from how do you do this right that sort of thing can you tell any other stories of you know sort of like intentionally stumbling into interesting things and because i think more people should do that and yeah i wanna kind of like you know hear some of those stories it's a really good question i need to think a good you think of a good answer i'm glad we're i'm glad this is being edited when have i done that the most yeah we went down one one time we went down and this is super interesting you know our business du has some employees in med and colombia you know where republic escobar from so we went down there to just kinda like start wandering around and like meet our employees and like to understand should we outsource more here and we just started like going around with a guide and just like asking people questions like what do you think of americans what is it like here and like you just start to see random stuff i mean the reason i started the coffee business by the way is like i was riding my bike around arkansas and i'm like just riding outside the walmart headquarters because like i'm a business nerd and staring at the walmart headquarters and like there's this like drive through coffee shop there it was covid and i was bored and i so i just sat there for an hour and these guys were just printing money and i came home and i called my buddy who i'd wanted to work with for years and i was just like hey we just started a coffee business and he said why and i sent him the i was like look at all these people they're just like printing money and so it's was just kind of this idea of just like for me like like the way i build ventures and the way i find them is just kind of by like stumbling around like an idiot and then like you end up in front of walmart at headquarters and watch some guys sell on millions of dollars worth of coffee so yeah that's another story and does you went to the berkshire hathaway like summit which i think is kinda like a pilgrimage for like business people slash entrepreneurs it's like oh you gotta go visit the mecca and like you see the old kind of religious you know leader you know the the ninety year old guru sitting there and is it worth it should i go you definitely gotta go at least once i mean it was like so i'm forty seven so like i always regret i didn't see j garcia before he died and like that was the way i felt about seeing charlie and warren and and you know it's like one of those things where i was kind of happy to be there because it i felt like a once in a lifetime thing and the people watching is amazing like it's like it's like the combination of like cash like investing and like a nascar race like it's perfect so just add so much fun doing it but it's also kind of you know i feel like going at this point like charlie and warren getting up there like they're ninety two and ninety eight like the morning you know warren spent a lot of time just kinda trying to find his words and then he got into a rhythm and it was like he was his old self again and it was pretty awesome but i mean i think if you're a capitalist you gotta go once you just gotta go once because you're just like it's just such it's just such an insane experience seeing these people so devoted to the company dropping two hundred and fifty dollars on a pair of rope boots or justin boots and then walking over and drooling over like how they can buy like a sun beam boat like it's just like just the coolest thing so you gotta go at least once sam have you been no i was invited to go i think you and i were invited with c and su and i didn't go is i guess i i guess i would go just to see it dude those guys are old aren't they like isn't charlie mu like ninety three ninety eight oh my god yeah yeah i got a good connection it would have to be the yeah i guess next year would have to be like it the last one maybe you gotta go just to watch him and see how much peanut brittle he eats in a four hour setting like it was unreal the guy ate like four pounds of peanut brittle and when i like life tweeted the thing it was like i can't believe be still this much peter bro i'm forty seven there's no way i could do that and he was just sitting their pounding it the whole time dude that that peanut butter from seas is fire i feel that it it is pretty amazing these guys have like they the most success and they do the opposite of whatever like you know like success coach and like motivational entrepreneur you know tells you to do it's like you know they're like you know it's like if you will go on instagram it's like oh i need to you know wake up at five am i need to you know meditate i need to do my ice plunge that i need to do my crossfit workout then i need to like you know do my daily gratitude journal and i need to do my like hyper focused chamber where i go and i figure out my priorities for the day then i need to like speed read and listen to my podcast on two x speed and these guys are basically like you know they somehow made it the became of the richest people in the world lived until they you know tell their a hundred years old and they wake up every day they eat mcdonald's breakfast you know a bunch of m and m's diet coke and then they read and play bridge all day and like go for walks and you know that's where they get their their their ideas from and so you know i think there's something too what they're doing i think it's you know i think they're still live because they're low stress despite what they eat and i think they're they're smart thinkers because they don't overload their brain with information like i'm guilty of and i think a bunch of people are when you when you're hooked into social media you're just constantly consuming info this data is wrong every freaking time have you heard of hubspot hubspot is a crm platform where everything is fully integrated well i can see the clients whole history calls support tickets emails and here's a task from three days ago i totally missed hotspot hubspot throw adam what of your of the things in your the the things in your portfolio which company besides the besides the the boot camp are you like this is just the greatest thing ever i'm so happy we own this i more people should know how easy or not easy but how straightforward this business on it feels like i'm winning an easy mode yeah well i think the near business so it's higher with near dot com so it actually this is a this is the this is the apex of what i want for gi existence to be which is i want i've gone from starting businesses myself and working in them then starting businesses and having other people work in them and this is one that has started basically with me doing no work but i have substantial amount on the cap table like it's the apex of gi lay automation like i'm always scaling stuff so the your business like we looked up and like like i i'm in a ceo peer group and like none of my peers could like hire people like it was the past couple years there's just such a mess and then i'd ask them have you considered hiring overseas and they're like i don't know how to do that how would i do that so we we we basically i took one of my associates and i hey we should go build in this direction there's this huge wave and here's this problem let's go try some stuff and see what happens in that business i like so much just because everything seems like it's on easy mode because everybody's offs offshore like everybody wants to do this it was that way when the economy was going well and now it's even more so when the economy is going poorly and i've hired personally of my associates i have three of the six that work work overseas i've never better been person it's like the vest and you partnered with someone to make this a quantity about page right yeah so hayden is started as an associate of mine so i hire these people i call them associates and it's basically an entrepreneur in training program so i like mentored them through i pay them a salary and then i helped them like get out of the like twelve bad ideas that every entrepreneur has to get when they're twenty seven years old they i help them like think through all those and then we work on a good idea together and then at the end of it they can either start a company with me or they can go take a job or whatever and so hayden and franco were two of the guys in that program and like i'm on the cap table with them like i put up the money and have been guiding them through it but they've done all the work when you're hiring ceos how much equity do you give them and how much how much pay them and how do you incentivize them to wanna stay with you for a long time yeah so totally depends upon the situation you know obviously if a business is much more established or demand somebody who's like much more like like mature that that makes a situation where often oftentimes you have to come up with more my best situations are when i can partner with somebody so all this stuff i'm in while i have significant stakes in and i have other people on the cap tables like that's one of my like i feel like super superpower like i can just like maintain partnerships like i have a hundred percent success rate on partnerships with people so the absolute best way is if i can get somebody like paul at dora is to be like a c cofounder founder and the absolute best way of that is if they're a c cofounder and they put money in it like me and then they make that their job like that's the absolute best get in the game kind of outcome but you know you can have anywhere from a twenty seven year old who will make sixty to eighty k a year plus benefits to some of these people who are much more senior like our coffee our coffee person you know he worked at twenty five years at circle k and he's running this he's running that business he obviously needs to make much more money than that and then the equity really depends totally depends on the opportunity it depends on how much skin in the game they wanna have what level of commitment they have and how early they're coming in the venture but it could be anywhere from forty percent to twenty percent to five percent and why does let's say for dora why does your partner wanna give you what let's call it let's pretend you have thirty percent i don't know what you have it's fifty maybe it's a little less let's just say thirty percent why does you wanna have give you thirty percent and he's a day to day in it but you're not right so how do you think about that like value exchange when you're not gonna be the operating person and then they are yeah well i mean a so you're asking that question from the same lens i have which is like being an operator is in our dream most people their their dream is to be an operator they're excited when we're able to work together and create an opportunity for them to be their best self right and that's what i see kind of as that benefit and so and and so i think a situation like that where like you know often oftentimes i'm part of the very early figuring out what the idea is gonna be i'm putting up a substantial amount of money i put up more money than than say the other partners did we did some debt to do the first deal like i personally guaranteed it and then the last thing is like like great teams they have these complimentary like how much money would you use to fund a new business so that one was like a couple million and then some of these are like fifty to a hundred wow okay so that's why do put up a lot of money yeah so yeah it's skin in the game manners then that also helps me not to try to do too many things like i could just be like okay like i've putting real money in this i better really believe in it but like like the last thing with these operators is a lot of the things i feel like i bring to the business where it's like strategy insights like best practices and connections like those are things that they're happy to have somebody along on the journey with them who has the same level of commitment and wants to be a board member like i i don't want their job and i'm not i wouldn't be good at it so you know i think that's that's the partnership i end up having with these folks sean have you heard of this guy named kevin ryan only through you he's like a media right is that that the same guy yeah so michael have you heard of this guy kevin ryan i'm googling him alright so i think they're mike there's probably a billion kevin ryan so like maybe a baseball that's like baseball player he's the might come up so yeah so listen to this guy so early in his career he worked like in the newspaper business nothing particularly exciting and then he worked at this company called double click and he was like the t employee there and then took over as ceo and then double click was sold for like a billion or many billion and it eventually became adsense sense for google so like pretty big thing he told me that he had made like very low digit eight eight figures he was like it was enough money that like i'm upset but like i still wanted to like create stuff and so him and this guy named dwight who i think he worked with that double click they started ali corp and their whole thing was we're gonna fund companies with two hundred to three hundred thousand dollars and all the ideas are gonna come from us all the ideas are only gonna be back of the envelope math and we're gonna hire someone to get it off the ground and we're gonna give it three hundred thousand and six months to prove if this is a good idea or a bad idea and we're gonna do it a bunch of times a few of their successes that they've done this with are mango dot mongodb which i don't know what it's at now but in the range of like a twenty to fifty billion dollar market cap publicly traded software business the second one is business insider which sold for six hundred million i think but it's like a big company now the third one is gil guilt group which was a clothing company that was huge it it didn't actually work out but it was huge for a little while and i think the fourth one there's another oh the fourth one is z you guys know z it's like where you go for wedding regis registry i believe that's a unicorn and they're at might actually be two or three more of these companies that ali court has like founded and basically he was like yeah so me dwight just sit around and we come up with like a cool idea like i go to a wedding and i just asked people where they bought all the gifts and like he's like i just had this idea so i've knew someone who worked at gill group who never mentioned she liked this up of business i hollow out at i go hey here's three hundred k if you can get this going and you get a small portion but we get most of it you wanna try it and that's how it worked it it's he's pretty amazing speechless specialist that's impressive of it's like yeah i was yeah those guys are really good there's the this like hold c model is is like in v right because it it's sort of like to me i i worked a at a startup up studio for a while to i think that was like the thing for a period of time probably still is a thing where yeah you build one company you run it for a while you sell it great now you got cash you still wanna do more entrepreneurial things and so you self fund a studio we're like we're gonna work on a bunch of ideas and then you try to find like new winners out of those bunches bunches of ideas and so like you know i worked at that out of one that's how i got into tech you know mark pink is the guy who created z then he created one of the guy who created uber they created one kevin rose created one like it's just a bunch of serial entrepreneurs who create these if they've actually had a pretty poor track record of success and then we see the like the hold c mafia is sort of the same where you get you know guys like andrew wilkinson who's got tiny and then you have you know bunch of other people who are doing their own hold c versions of that whether they buy boring businesses they buy sweaty businesses they buy software businesses they buy whatever and you're kind of in that boat you're in that boat too what do you think is the i guess like how do you think about that you know in terms of like who do you think should be the type of person who who should do this and and and what are some of the misconceptions or like traps that people fall into when they go down this path because i'm sure you seen a bunch yeah well i mean i think there's two there's two bad things going on with hold codes right now i think there's a whole group of people that are doing them and they actually think it's not that much work like i talked to it like so why you doing this they're like oh it seems really easy i'm like this is really hard and the reason number two that it's like super hard is because this is exactly the opposite of operations like the everything that you do and all the habits and skills that you learn when you are a ceo running a business which is where most these people are coming from or you're a senior exec kind a company like everything you do in a hold c is exactly the opposite like like when there's a problem you don't rush in and fix it for your company you actually say me man that really sucks what are you gonna do about that two entirely different things in terms of the way you approach it so i mean it'll be interesting to see what happens with all these people who think hold codes are really hot as i talk to most of them i don't think as many of them are wired to be hold c people as they really think they are like the means the xavier health like like we're odd like we're different people and there's a reason for that that we're not operators and so it'll be it'll be interesting to see what happens with some of these people what's so hard about it you know i think it goes against people's nature right so like like take me for example like i love to live in this ideal space right and i'm i have like a relatively crappy memory which is like a i why i have to write stuff down like crazy but that's different for other people like a lot of the people that i partner with as operators they look at like what i do as insanity because they just couldn't imagine letting go of divine of these particular things going on and so you know it goes against this human nature where a lot of times like for example those people like there's this problem going on the business they wanna sprint to that problem right and they can't imagine even stepping away from it so it just goes against in my opinion who you are as a person and makes it almost incredibly difficult are impossible for the make people yeah you say that but at the same time i'm like oh everybody i know is like oh i like to operate at a high level you know the ten thousand foot view and i'm ideas gaia don't know anyone that doesn't think they're an ideas guy maybe i just running in the wrong circles but you know i don't know a lot of people who are like you know what i like to grind the operator likes to go grind the day to day optimizations versus i like to be the idea guy who helps just get started and somebody else goes and does all the hard work you know that seems like seems like there's a ratio of a hundred idea guys to every one guy who just truly loves executing you ever heard of excel dog that's my jam oh no no you i lived in the silicon valley bubble too like i was i fit right in i was great there and then i can go to the the inter lands of san antonio and like i started to see these people and like i've got buddies who for example are senior executives at the largest private grocery chain in america he have you guys heard of this company yeah i love h hep it's like my favorite grocery store it's it's insane you should see how optimized those guys are when they're running at three or four percent eb margins and like they think it's great tell me everything about h of yeah what do what do you wanna know like what what why what makes it so great it all comes down to it all comes down to the philosophy of the family that owns it you have charles butt who is the majority owner and then his his relatives are the other rest of the owners and then they have a percentage that's owned by the employees but it's like eighty five ninety percent owned by but by these guys so and so they'll just do crazy stuff like when they heard when they heard that trader joe's was coming to san antonio so hep is located here there's an anecdote that they just packed up all the senior executives who were in charge of product selection location selection interior store experience all the stuff they put them on a private jet and they flew out to to california and said don't come back until you have the best of every single one of their products because we need to up our game there's another anecdote when walmart came to san antonio that he went and lowered their profit targets because they're just like we're not losing walmart that's just the way it's gonna work and that all eliminated from the ownership right you didn't have this like public stock people coming in and saying like oh like quarter by quarter now you have these folks that were thinking like we've been here for seventy years how are we gonna be here for another seventy years and just go crush it and that goes all the way down the culture my buddy works there and he said it took ten years before people stop referring to him as the new guy people just stay yeah i imagine that in silicon valley of all the it sounds like to you that like he is almost like a dream business so not a dream business but it's one that like you look at and you're like damn at is that as well run i i admire a few things about that what else do what other companies do you admire that most people don't maybe know about or think about when it's like oh that's actually really neat for these following reasons really good question what other businesses are super for sexy i feel like i've talked a lot but it's just like think things where it's like man this is these guys got it made they they're it's hard work but it seems like it's like a pretty fun and i think that what they're doing has a lot of soul and they're doing it right sam do you have one while he's thinking yeah i mean it does seem like it's a lot of family guy stuff i would say do you do you guys know black rifle coffee i've heard of one but i don't know much about him i don't drink so i don't really drink too much of it i drink the black stuff because the other stuff has a lot of sugar they're typically drink by like conservatives like they've like do that they've done like they advertise on fox they've done like a good job of it like like this is made in america it's all about freedom like that whole thing which is you know whatever that's cool and but they're like yeah what sponsor rally dirt rally race cars and i asked them i was like why and and they're like because it's freaking awesome and they're like what's the point of like having this company if we can't do dope shit like you know go to a go to a rally car and give out our coffee and or they'll do it with like mountain biking races or they'll do it with the like they make all this all this cool content where they're just like doing like the redneck version of red bull stunt right know like and i think that's awesome i love that stuff i think that to me i imagine in their heads they're like yeah they're like we kinda care about coffee but we really just care about living really cool amazing life and letting people have fun and it just what happens or we're we're selling a bunch of coffee allows us to to do that so that's a good example of a of a business i like and they took it public and it's worth like six or seven hundred million dollars so it's like really successful yeah they're located here in san antonio have you seen it's it's super cool that that business you would think it's like a coffee train and it's actually just a lifestyle brand it's all like you go into the stores and there's like a little coffee thing on the side and then it's like all t shirts and swag and it's good looking stuff like i'm not like their demographic obviously but like it's super fun to like go in there and be like man these guys like i'd wear that even though me i like them a lot sean do you have one you know i do have i do have a couple i like to i kind of admire like oh shit that's simple i like when it's really simple and the person has has like good life perspective so i'll the guy came on the podcast mike brown i met him through you i've been about went to the hustle office and he was he was just sitting there hanging out with you and and you were like this guy is great you know you know what what's great about this guy and i think sam you probably know the story a little bit better than i do but like what they did was they would go around to families in texas that that we're like basically living on a gold mine right it's like they they were living on some valuable deposit of you know minerals or oil or whatever and they would go knock on doors and they would say hey you know you you're living on this land i'll like we'll pay you for the land rights in some way and they would go of those assets and then they would never go do the oil mining rate of oil oil drilling themselves they would then flip that to the oil company and say hey look we got the title rights you know clear and easy that are in the earth and they were making a killing so they were making you know i don't know almost almost a hundred million dollars doing this is that right sam yeah i believe it was multiple eight figures in profit a year with like a team of like eight people and they're like yeah so it was super profitable super small super simple was like well basically we go knock on doors we all people and we explained what we're doing and then we make him an offer that they can't refuse like you know they're not gonna do anything sitting on that land and so you know it to me i'm like this is so simple you compete with pretty much nobody and then you and then he was like i was like so you your it looks like your brother's work in the business like how's that work with family you know some people say different things about that and he was like no it's awesome he's like i love my brothers he's like you know he's like my my philosophy is you you know you find the people that you love and you do life with them and he said that it kinda changed the way i i operated i was like oh yeah who are the people i wanna do life with and like yeah just kind pick the five people who are the most awesome and then find excuses to do life with them that sounded really simple was like i love sam i'm gonna do a podcast with sam and it's like oh our buddy ramon awesome cool i'm gonna go on vacation with the ramona or you know like you want and like you know hey this person's is awesome why don't just come work in one of my businesses right rather than just go work your own job so i really liked i kind of admired that philosophy and i admire just the like sheer profits of what they were doing and how simple it was and how it didn't require you know genius or like honestly i'm sure he felt like was working hard but it's not that hard like it's not well he used to say he was like everyone we hire we make him get into cycling because we all we like going bike riding for two hours in the middle of the day he's like we all we all wanna go for we all wanna go work out yeah yeah so i kind of admire people who are the anti hard work crowd because i'm more of that like you know can you work smarter not harder and then can you even like not feel like you're working could you turn it into play by you know having people who are awesome you know doing it with you so i like that example the other one is bill simmons who started the ringer people i i really don't think media companies are very good business and you know ironically just started a media company but like bill simmons is this fucking awesome and he kinda changed the game for what he does like every sports journalist did things one way he just did it differently and built his he built his following sort of una and what did he do differently so he just like he wrote from the perspective of a fan and that sounds actually that's actually giving it too much intellectual credit actually what he did was he was like alright what are the rules if you're a journalist it's like you need to be objective he's like how can be objective dude i have follow sports because i love the boston red sox i love the celtic i'm from boston i grew up my dad used to take me to the game he's like i'm gonna write as like this die fan and when my team wins i'm gonna be so happy when my team loses i'm a the sky falling he's like that of course was super relatable to a reader because that's who your reader is it's like a die sports fan so he like didn't pretend to be objective that was like the first part then he would be like cool i'm also not just like this flat thing that like i can only like talk about sports so he's like oh you know i love the die trilogy so he'll write a call him that's like you know if nba players were characters in die hard here's who would be bruce willis and die hard too and like you know he would do these crossover overs that didn't nobody else really took those risks and sounded crazy like sam you know you and me both watched the mtv is the challenge he's like a huge challenge fan and he'll talk about it he was he'll do a separate podcast about it even though the audience is kinda niche but it's so nice that when it hits it hits in a very big way like it's a like has a high like emotional score when he does talk about something you get you that that you're in on the joke fee like the trade value twenty of your heroes or the mail band one and anyways then he spun off it did his he doing podcasting before it was popular before it was like an obvious thing and so when he he recently sold the whole company to spotify for like two hundred something million but you know that i i kind of admired that because it was like he deserves that he was the podcasting before podcasting was a thing and so yeah he now has the number one sports podcast and he can cash out and all along the way there was never really any plan you could draw up how that podcast is gonna make the guy two hundred million dollars someday it was like that was an unfathomable thing but he did it because he again it's kinda like your black rifle example it's like yeah i'm just gonna do it because i think it's fun and it's cool shit and like i i kind of believe in this magic for this philosophy that if you take a bunch of shit you put it in the in the hat you kind of mix up the hat like something really good comes of that and you don't have to be able to draw it out you know ahead of time so i kinda i tend to love examples like that because i wanna live my life more like that where i just do things without so much of a of a of a mind map of exactly how it's all gonna pay off dude i love that i think i saw this amazing quote i'm trying to find it but it was from kanye and he was like saying i despise people who do things i can't find the exact quote but he's like i despise people who do stuff and they don't want it to be dope he's like i wanna if i'm do a cl if i wanna do a clothing company i'm making a dope even if that means i lose money i'm making a dope i'm making it awesome he kept using the word dope and he's like i'm just gonna do stuff because it's amazing and yeah it'll probably make money but for all people out there who just do stuff just to get the money but i don't wanna make it awesome in the process think that's really weak and not cool and not done heard that dave chappell story he tells on like some late night show about kanye yeah tell it my life is yeah yeah i i don't remember the exact days because like i was hanging out with kanye and then kanye got a call who who was somebody called them who was it so it was it was a kanye was backstage with dave chappell and jay z and kanye was just coming up and he was playing a a jay z song and kanye verse comes up and kanye is like the new in the room and he goes wait stop that track rewind that and listen to that guy and he like made him rewind and then he's like they're like dude what you doing man you're not like the you're guys the big shot here and then he gets the phone call and he goes oh hello yeah yeah that's fine but can i call you back yeah well i'm backstage watching never seen before clips with dave chappell yeah because my life's dope and i do dope shit and then hangs up i then that's it yeah exactly i love that story that is the best and also like that philosophy is actually kind of amazing first of all to believe in your own life being dope like how many people think that their life is dope that they are dope and they do dope shit and therefore they have a dope life like most people don't give themselves that credit and you know they're kinda waiting for dope stuff to happen for them to be able to say that kanye is the opposite right he's crazy in a bunch of ways but one of the good ways he's crazy is that he just declares my life is dope open and i do dope shit and guess what you'll kinda live up to that reputation if you believe that about yourself right like if you say you know you know i take chances you know i'm i'm bold take i take bold risk well guess what you're gonna actually take the next bold risk when the opportunity presents itself because you've kind of hardwired yourself to to have that identity when we were samuel like this at be when we hired this guy jason hitchcock and jason was jason's is the best person you could hire because he will believe in you and the cause a hundred and fifty percent like he'll believe in you and the mission if you're like his boss and manager or whatever like more than you believe in yourself he'll believe that the company is gonna work even more than the ceo is gonna believe he's like i call him a ko drinker like he drinks the ko aid and he's not ashamed to do it and so he he because he's like the an amazing person to have it a startup when there's actually a lot of people have a bunch of doubt and uncertainty in their mind and so one day i was talking to jason and we were like the hustle khan was coming around around the corner and i was like i think i'd had messaged you i was like i wanna talk at hustle khan and i think you were kinda like yeah like yeah i'll i don't know we got a bunch of speakers over it you kinda blew it off you're like you we no and i was like fair enough but i asked and i was like i was like jason next year we're gonna talk at house khan i was like in fact not just next year we're gonna talk at hu khan in fact everything we do this year i want you to think about how it's gonna play at your hustle con talk you're gonna give you're gonna give this talk about how we grew from one zero to million users how we took over the game in our industry like i want you to not just wake up and be like okay today i'm gonna send out a bunch of emails it's like i want you to think about how this could be part of your talk like how i landed the big fish through cold emails or how i you know growth hacked my way to do x and we used to talk about that literally on a weekly basis like this is part of the house of contact and it was just hype ourselves up to like do the more dope version of the task we were already gonna do because like imagine you're gonna talk about this on stage that means it must have turned out pretty dope or you must have done a pretty dope attempt in order to have that mindset and i i'll i still carry that to this day of like that's a pretty cool way to work here's the here's here's the quote by the way so this is from kanye he said for me dope is what i like most people who wanna make things as dope as possible and by default make money from it the thing that i like least are people who wanna make money from things whether they're dope or not especially make money from making things the least dope that's available and i i read that well and i was like yeah we need to make the intro of the podcast but find a clip of kanye saying that out loud and let's make that the the opening clip of the podcast the other thing we did by the way that's in this bucket that i highly recommend people do is it's tempting to say we should do cool shit yeah blah blah and then like fast forward a month everything's everybody's feeling tight about the budget or the deadlines or the the the goal numbers are not being hit or whatever it's very what's the first thing you cut is the stuff that doesn't easily map to this quarter result and and so we separate created a separate do cool shit budget it was fifteen percent of our total budget we put into a dual cool ship bucket which the outcome of it had to be where at be and then i tried to do this also at twitch where which was like hey whatever the number is that we have to spend fifteen percent is gonna be on cool shit that we cannot like which it doesn't have a measurable immediate payoff so that's like the criteria you can't it can't we'd be used in this much like like making a flame though like making a flame there or or like you know i i don't if you saw it as we did the milk a re brand or whatever and i paid this guy to make this little video that's like this mock apple commercial and like it doesn't do anything it's it's not gonna drive subscribers it's not gonna like make revenue it's i mean in many ways it is arguably a waste of time and money to just like pay the guy to do that and to even think about the concept and all that but i've always had this with my companies which is like i need fifteen percent i was like at the very least this is just to keep myself amused and engaged and like a fan of my own business and i because i know if i'm like the if i'm just more engaged in my own business i'm gonna do that part pay off and on the other side it's like i think your consumers the customers of your business also pay attention to that if they see you doing dope shit just for the sake of doing dope shit they kinda see you as the cool kid in school in a way right like if you're always just begging for for customers or users or doing a discounted sale or like saying please please please follow me please please please subscribe like you're kind of our low status in a way and i think at the hustle you guys did a good job of this too do you did you do do you have any examples of this yeah like we did stuff early on that we kinda like people got mad and i was like they're like you're gonna lose money to lose customers i'm like yeah but it's hilarious like one time we wrote an entire we wrote entire email in trump's voice and so we're like imagine like if you read it and you were saying it out loud like that it was sounds like you donald trump everybody loved it everybody saying it's the best people saying that they're saying it's the best yeah like that's how it that's how that's like how it was written and then another time this was like pretty vulgar but it was pretty funny we wrote the the subject was here's the only tip that you need to know for how to be productive today at work and you opened it up and it was just that picture of johnny cash where he flips off the camera and it just says close this browser and get back to work and that and like that was that was that was that was the emo we said that to a hundred and twenty thousand people we didn't even like we didn't even think we didn't even send an email and then maybe one final thing this woman lindsey worked for me and she sent the tuesday's email on wednesday which is like a mistake and she's like shit she's freaking out and i was like here do this i wrote in slack i was like hey you know i heard you sent the wrong email and she replied in slack yeah my bad is was really messed up i go but we gotta talk but until then just like fix it and she replied with like well what should i do i was like oh no man just put the new email in and send it again and just take a screenshot of this and like put them i no understand i'm sure and goes and she replied with something like funny and that was just the screenshot that just went at the top of the email there's no explain right and so we would do like little things like that all the time what about you michael there any companies that you look at that kinda fall this category it's super fun well i did i did find one to talk about the have you guys done pop sockets before you talked to that we had lot about it now yeah it's a crazy story so it's the it's the little like you take the the back of the case of your phone and you put the little ring on it well that's patented and they're called pop sockets and they're very lit so that this started in twenty fourteen and they sold thirty thousand of these things so they're you know ten or twelve bucks whatever but then they got really popular and people the chinese started trying to knock them off and sell them my amazon and all this stuff and so is it a uc boulder professor and by twenty seventeen they sold thirty five million of them in twenty eighteen they sold sixty million of these things so all because they have a patent on this little way that you know teenage young girls in orange county wanna grip their phone like they're just printing money so supposedly in twenty eighteen they had two hundred million in revenue and ninety million in profit all because of a patent it's one of the grade one big one of the greatest yes i know this is true because i got it off of wikipedia when i researched a few months ago yeah that's that's a man gotta be several hundred million at least i mean you gotta keep growing every every lady i know has one of those things fits your nails in there it's great sam you wanna know a little realization i had today when michael was coming on was like what do i know about michael was like he does that like chili little stick where he's always like you know you know the only thing i don't know i don't know how i explain it but basically is just find an excuse to name drop chili hell great chili is and like why the best place for our meeting and like you're just like you know my god you know so happy for you know mother's day i love my mother but not as much as i love chili right like you just like come up with some way to like integrate chili in and say i don't know if you've seen this but i i actually me and ben talked about this once we go best when we were like trying to build up my brand i was like alright i got this podcast a brand new i got a twitter was like you know a few thousand followers at the time and i was like what should we do to like build a brand so i we did this one like you know two hour exercise we just looked at people who had good brands and was like what are what are people what's some common things that they do and one of the things we found was that a lot of people early on in the tech industry like or like sorry like early on not early on the issue that's like the seventies or some shit but like early on when i got into tech i was following some people on twitter and and i saw this guy ryan hoover and he seemed interesting like he was blogging he started this thing called product hunt but ryan would always it was always phil coffee and lac croix like you would always talk about phil coffee and lac croix and in fact like lac croix kinda of became like a startup up meme i really give right a lot of credit for it because he was always ef talking about lac croix and then when products aren't i got popular it just like accelerated boot like the lac croix meme in the community as like you know what what's like loki great lac croix and like and so he had lac croix and then i don't so pop pom does this thing with domino's all the time where he's like he'll do like domino's pizza he always says domino's is the best i think and and he's just like and it's kind of this thing where you get the serious business persona in one way but then you show this like human side and it's like oh i'm just like i love this thing you know i don't know if yours would be like top chico or something like that like you you used to like gotta pip those out michael's got chilies we gotta make ours cheesecake factory yeah like i was like chick f a cheesecake factory we need something that's like ars s that's like it can't just be false so you gotta a genuinely and only have that love for the only part that's the s is that you talk about it and you don't really talk about it's like your serious serious serious top chico because it's like you know this makes the cut it's that important to me it's that good it is i'm that big of a fan you're like michael you had a great time you know but let me know when you're when you're in austin we'll go out sometime for some cheesecake factory and maybe get the chicken pa potato we'll have a great time yeah sounds good is that a menu like page fourteen of the menu or seven kin delicious menu so i think i think when you pick this thing the thing would recommend it's gotta be something that's well okay sir here's a story for you so i'm twenty five years old and i'm finally figuring out how to talk to women in my life like it's like i had not figured it out at this point and so my buddy and i decided to start going to parties and we would dress up in suits and this is like when everybody's like dressed in like gru like in san francisco like it didn't work so we show up dressed of these fancy suits and it was just odd enough that the women would be like why are you guys doing this like it's just it's just slightly odd right and so i think you need to figure talking what's a peacock yeah okay i could've have been one of those like with the pickup artist guys i who who needs to do this hold coast stuff i could be a pickup artist i i have i could not do that anyway i don't i don't like hair gel enough but anyway the i think you gotta figure out something that's just a little bit odd you're like why does this like technology entrepreneur in san antonio like chili so much so if the cheesecake factory is that i think you're good but whatever it is it's gotta be just a little like that they're like why are they why why are they wearing suits to this party like what's going on it can't be cool yeah that that's the first thing it can't be cool because if you're just trying to say some fad that like everybody thinks is cool that now you're just hopping on a bandwagon you're you have to say something that's actually not so like for me like the genuine one would be cinema upon like i fucking love ci nobody even thinks about ci so that's the the corner for ci is open i can take that corner you know that's a that's a piece on it's a piece of land on the on the board that that nobody's touching right now i could just pick that up for cheap and but the people who but people do know it it's kinda nostalgic and it gives people something to like something that they can gift you some place they can offer to take you some place that every time they go there or see one they won't think of like every time i drive by chili goddamn and i think michael gi right and it's like same thing with the lac crow and ryan hoover it's like they own that mental real estate in my mind and so sam we could do that with cheesecake factory we could just every time someone sees it they us you definitely should do that that's a great idea alright thanks for coming on man wait wait you got a problems per himself what's this handle at g on twitter sick well thank you thank you for coming on that was awesome