This episode of the My First Million podcast features hosts Sam Parr and Shaan Puri interviewing guest Michael Girdley. They discuss Girdley’s unique business model of managing a portfolio of diverse companies, the philosophy behind his “holdco” structure, and the importance of finding the right partners to operate businesses.
Topics: Entrepreneurship, Holdco, Business Strategy, Operations, Investing
Introduction to Michael Girdley [00:00]
Sam Parr: You own a holdco, I think Girdley Enterprises is the name of it. Within it, you have a bunch of different things. So you own stuff as funky as like a fireworks company called Alabama Fireworks, you own like a software roll-up called Dura Software. You have like a coffee chain, I think. Is that right? You have like your a drive-thru coffee chain that’s got like three or four locations or something like that. And then you incubate a couple of projects. One of which I used actually recently.
Shaan Puri: Michael, what up, dog? Sean, where are you? You’re in Tahoe?
Michael Girdley: I’m in Lake Tahoe, yeah.
Shaan Puri: How is it?
Michael Girdley: It’s amazing. Yeah, this place is great.
Shaan Puri: Is it just a getaway from crypto?
Michael Girdley: 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. Just been like at the lake, in the pool, all that good stuff.
Shaan Puri: That’s awesome. Who, who, so Sean, you want to introduce this guy?
Sam Parr: Yeah, okay, great. So we got Michael Girdley. Is that the way you say it?
Michael Girdley: Yep.
Sam Parr: Yeah, Michael’s here. I’ve been following you on Twitter for a while. And I think you almost want, you almost bought our NFT for the five minutes of fame, but you got outbid at the last minute. Is that right?
Michael Girdley: Yes. Yeah. I had a whole plan about it. I was actually going to short it and then try to make profit from it and sell it in 15 second increments, but some really rich crypto person came in and swooped it out from under me. So, I had a huge plan. I had a huge plan.
Sam Parr: And, and, but you, but it worked anyway. So you got on the pod anyways without it, because you’re a pretty interesting dude. I’ve been following you on Twitter, mostly because you tweet about Chili’s a lot and I’m a big Chili’s guy, huge Chili’s fan. But you also, you kind of fit into this sort of like Andrew Wilkinson-y bucket, which is like you run a holdco. And you run like a pretty big holdco. And so let’s just give people kind of like your, your rundown. Here’s what I know about you. You own a holdco, I think Girdley Enterprises is the name of it. Within it, you have a bunch of different things. So you own stuff as funky as like a fireworks company called Alabama Fireworks, you own like a software roll-up called Dura Software. You have like a coffee chain, I think. Is that right? You have like your a drive-thru coffee chain that’s got like three or four locations or something like that. And then you incubate a couple of projects. One of which I used actually recently called Near, 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 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, um, I don’t know, Sam, where do you want to start? We can, we can go into, into kind of high level or we can dive into any of the details. Where do you want to start?
Michael Girdley: He put together this really good document that explains all the different businesses. But to summarize, it looks like it’s like eight or nine or 10 of them. And so, so I understand the size, it’s over 100 million in revenue, right? And over 750 employees for all eight or 10 of these?
Michael Girdley: Yes.
Understanding the Holdco Model [03:18]
Sam Parr: Whenever I hear people be like, “Okay, yeah, my, my kind of the accumulation of the businesses that I own, some percentage ownership stake in is worth over 100 million dollars,” or like a real estate guy will be like, “You know, I have a billion dollar real estate portfolio.” In my head, and I’m sure there’s a bunch of listeners who are like this too, they’re like, “So what does that mean? Are you a bill, 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 100% of your holdco, and your holdco owns businesses that add up to over 100 million in revenue, does that mean you’re just big balling shot calling? Are you paying yourself like 10 million dollars a year or more out of, out of the profits of these businesses, or what does that really mean?
Michael Girdley: Well, I mean, part of the way I 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 compounders, like, um, Dura, for example, like we want to 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 that I put into it, like I don’t, I don’t get cash flow from that stuff. Um, but that’s by design. Like I’m just a long-term player and a long-term person on all this stuff. You know, the things we went through, just kind of the 10 big holdings that I have, those are all things that I have 50, 60, 30, 40% of company. So it’s not like I, I totally am with you. Like I’ve, I, you know, I felt stressed being like, “Okay, well, I don’t want to be the guy coming in and bullshitting about a bunch of numbers.” But also like, I’m from Texas and like, like I have a hard time like bragging and being like, “Well, okay, here’s some, here’s what my net worth is and here’s how much money I make and all that kind of stuff.” So I’m trying to balance it out to where we can actually get there, uh, without getting past my comfort zone.
The “Do Cool Shit” Budget [04:56]
Shaan Puri: How do we, let’s, let’s not balance that out. Let’s just go to the other end and make you incredibly uncomfortable. Tell me how your net worth, your checking account number, and what it felt like when you lost your virginity. You can pick one to go now.
Michael Girdley: Uh, really drunk, four, and uh, yeah.
Shaan Puri: Yeah, let’s, let’s, let’s really get into it. And it’s like, “Oh, you don’t want to reveal, you don’t want to reveal your penis size, that’s fine. Just tell me about your net worth then.” We’ll settle for that.
Michael Girdley: But it’s seriously, there’s like a, a mental model for these businesses, right? Like, some businesses like you call it a compounder, right? It’s like, uh, if you go into a business like this, you’re going to put up, it only takes X dollars to start, and then it takes Y years to kind of get to some good outcome. Like, like I’ll just give you like a venture startup, right? Like I come from the Silicon Valley venture world. Silicon Valley venture world is you put zero dollars of your own money up, but you’re going to raise likely somewhere between three and 300 million from venture capitalists over time. Uh, you shouldn’t expect to see any big money until you exit, which is on average seven to 10 years. And so like that’s the profile of that, versus my e-commerce business took, I don’t know, I put in 600k to start it. Uh, like that was my first kind of year, uh, commitment that I had to put in. Um, but we can take quarterly profits now. You know, a year or two, we can take quarterly profits if we wanted to. We decided to roll that into growth, but we think that by the year three or four, we should be seeing pretty healthy, you know, quarterly profits that will pay for a, a sweet lifestyle. Right? So that’s like, just to paint a picture of what type of business you’re getting into. Most people don’t know how the holdco 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 are 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.
Michael Girdley: 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 want to be able to do any opportunity that comes through the door, right? And so like, say, 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 going to require outside capital, right? Dura required outside capital. My partner and I who started the business, he’s former head of support for Rackspace. He’s a CEO of the business now. We put up our own money to do the first acquisition, and then we started when we ran out of money, right after a couple million dollars, um, we had to go out and raise money. And so that’s playing that kind of VC compounding 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. Um, so, you know, those, the thing I like about those kind of cash flowy LLCs and stuff like that is like, you know, the upside isn’t as good, like you can’t have a billion dollar exit in that stuff 20 years from now, but you can start cash flowing really quickly. Um, so I like to have a blend of all those things because you can’t, you can’t live on appreciation.
The “Fireworks” Business [08:52]
Shaan Puri: How much money does the fire one do? Fireworks?
Michael Girdley: Uh, it’s multiple tens of millions.
Shaan Puri: No shit. That makes, let’s say, 20, 30, 40 million dollars selling fireworks for two weeks?
Michael Girdley: Uh, we do it twice a year. Uh, fourth for the 4th of July and then we do it again for New Year’s. And Texas, it’s warm enough that actually New Year’s is more pleasant than any place else.
Shaan Puri: Golly, that’s amazing. And that’s and that’s quite profitable if you do well for the the the like the the remaining like three hours. In that three hours, you make all your profit.
Michael Girdley: 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.
Shaan Puri: So that that business is actually kind of an ugly business then, um, because it’s like you have to predict things and it, I don’t know, the world is very unpredictable the last few years. Uh, 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. Um, you’re putting up all the cash 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 firework people don’t really do?
Michael Girdley: Uh, yes, we have a bunch of those. I didn’t come up with any of them. Uh, the thing I realized, and this was about 14, 15 years ago, I actually really suck at optimizations. Like I want to live at like 80,000 feet with like big ideas and strategy and doing what we’re doing right here, right? Like I want to 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 this 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 most, like that 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, um, through just getting the right people on the field. And it means me not doing it, because I absolutely am the wrong, perfect wrong person to run that business. Um, but we do a bunch of different stuff, like we brought, um, digital point of sale to that business. It used to be handwritten for a long number of years. Um, 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 we, it’s not me.
Hiring CEOs and Equity [12:26]
Shaan Puri: When you’re hiring CEOs, how much equity do you give them? And how much, uh, how much do you pay them and how do you incentivize them to want to stay with you for a long time?
Michael Girdley: Yeah, so totally depends upon the situation. Um, you know, obviously if a business is much more established, um, or demands somebody who’s like much more like, um, like mature, um, that that makes a situation where often times you have to come up with more. Um, my best situations are when I can partner with somebody. So all this stuff I’m in, while I have significant stakes in it, I have other people on the cap tables. Like that’s one of my like, I feel like superpowers, like I can just like maintain partnerships. Like I have 100% success rate on partnerships with people. So the absolute best way is if I can get somebody like Paul at Dura is to be like a co-founder. And the absolute best way of that is if they’re a co-founder and they put money in it like me, and then they make that their job. Like that’s the absolute best skin in the game kind of outcome. But, you know, you can have anywhere from a 27-year-old who will make 60 to 80k a year plus benefits, um, to some of these people who are much more senior, like our coffee, um, our coffee person, you know, he worked at 25 years at Circle K and he’s running this, he’s running that business. Um, he obviously needs to make much more money than that. Um, and then the equity really depends, totally depends on the opportunity, depends on how much skin in the game they want to have, uh, what level of commitment they have and how early they’re coming in the venture, but it could be anywhere from 40% to 20% to 5%.
Shaan Puri: And why does, let’s say for Dura, uh, why does your partner want to give you, what, let’s call it, let’s pretend you have 30%. I don’t know what you have, maybe it’s 50, maybe it’s a little less. Let’s just say 30%. Why does he want to have give you 30% and he’s a day-to-day in it, but you’re not, right? Uh, so how do you think about that like value exchange, um, when you’re not going to be the operating person and then they are?
Michael Girdley: Yeah. Well, I mean, I so you’re asking that question from the same lens I have, which is like, being an operator isn’t 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 time I’m part of the very early figuring out what the idea is going to be, um, I’m putting up a substantial amount of money. I put up more money than than say the other partners did. Um, we did some debt to do the first deal, like I personally guaranteed it. Uh, and then the last thing is like, like great teams, they have these complimentary things. 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 50 to 100. Wow. Okay. So that’s, you put up a lot of money. Yeah, so, yeah, it’s getting the game matters. Um, then that also helps me not to try to do too many things. Like I can just be like, “Okay, like I’m putting real money in this, I better really believe in it.” Um, 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, um, 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.
Kevin Ryan and “The Alley Corp” [14:10]
Shaan Puri: Sean, have you heard of um this guy named Kevin Ryan?
Sam Parr: Only through you. He’s like a media, right? Is that is that the same guy?
Shaan Puri: Yeah, so Michael, have you heard of this guy? Kevin Ryan.
Michael Girdley: I’m Googling him.
Sam Parr: All right. So I think there might, there’s probably a billion Kevin Ryans. So like maybe a baseball, let’s say baseball player. Oh, he’s the Alley Corp guy. Okay. 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 DoubleClick and he was like the 30th employee there and then took over as CEO and then DoubleClick was sold for like a billion or many billion and it eventually became AdSense for Google. So like pretty big thing. He told me that he had made like, um, very low digit eight eight figures. Uh, he was like, it was enough money that like I’m set, but uh, like I still wanted to like create stuff. And so him and this guy named Dwight, who I think he worked with at DoubleClick, they started Alley Corp. And their whole thing was, we’re going to fund companies with 200 to $300,000 and all of the ideas are going to come from us. All of the ideas are only going to be back of the envelope math and we’re going to hire someone to get it off the ground and we’re going to give it 300,000 and six months to prove if this is a good idea or a bad idea. And we’re going to do it a bunch of times. A few of their successes that they’ve done this with are uh, Mongo. MongoDB, which I don’t know what it’s at now, but in the range of like a 20 to 50 billion dollar uh, market cap publicly traded software business. The second one is Business Insider, which sold for 600 million, I think, but it’s like a big company now. The third one is Gilt, Gilt Group, which was a clothing company that was huge. 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 Zola. You guys know Zola? It’s like where you go for wedding registries. I believe that’s a unicorn. And there might actually be two or three more of these companies that Alley Corp has like uh, founded. And basically he was like, “Yeah, so me and Dwight just sit around and we come up with like a cool idea. Like I go to a wedding and I just ask people where they bought all the gifts and like, he’s like, “I just had this idea.” So I knew someone who worked at Gilt Group who mentioned she liked this type of business. I hollered at her, I go, “Hey, here’s 300k if you can get this going.” And you get a small portion, but we get most of it. You want to try it? And that’s how it worked. It’s a he’s he’s pretty amazing. Speechless. That’s impressive. It’s like, yeah, I was like, yeah, those guys are really good. There’s this like holdco model is it’s like in vogue, right? Cuz it’s sort of like to me, I I I worked at a startup studio for a while and 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 want to do more entrepreneurial things. And so you self-fund a studio where you’re like, we’re going to work on a bunch of ideas and then you try to find like new winners out of those bunch of bunches of ideas. And so like, you know, I worked at out of one. That’s how I got into tech. Um, you know, Mark Pincus, the guy who created Zinga, then he created one, the guy who created Uber, he created one, Kevin Rose created one, like it’s just a bunch of serial entrepreneurs who create these and they’ve actually had a pretty poor track record of success. And then we see that like the holdco mafia is sort of the same where you get, you know, um, guys like Andrew Wilkinson who’s got Tiny and then you have, you know, bunches of other people who are doing their own holdco versions of that, whether they buy boring businesses, they buy sweaty businesses, they buy software businesses, they buy whatever. Um, and you’re kind of in that boat, you’re in that boat too. Uh, what do you think is the, I guess like, how do you think about that, you know, in terms of like, who do you think should be the type of person who who should do this 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’ve seen a bunch. Yeah, well, I mean, I think there’s two, there’s two bad things going on with holdcos right now. I think there’s a whole group of people that are doing them and they actually uh think it’s not that much work. Like they’re I talked to it and I’m like, “So why are 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 of these people are coming from, or you’re a senior exec in a company, like everything you do in a holdco is exactly the opposite. Like, like when there’s a problem, you don’t rush in and fix it for your company. You actually say, “Man, that really sucks. What are you going to 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 holdcos are really hot. Um, as I talked to most of them, I don’t think as many of them are wired to be holdco people as they really think they are. Like the Me’s, the Xavier Helkins, 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 um 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 idea space, right? And I’m I have like a relatively crappy memory, which is like a why I have to write stuff down like crazy. Um, 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 the vine 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 in the business, they want to 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 or impossible for some of these people. Yeah, you say that, but at the same time I’m like, oh, I everybody I know is like, “Oh, I like to operate at a high level, you know, the 10,000 foot view and I’m an ideas guy.” I don’t know anyone that doesn’t think they’re an ideas guy. Maybe I’m 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 operate, likes to go grind the day-to-day optimizations versus I like to be the idea guy who helps just get it started and somebody else goes and does all the hard work.” You know, that seems like seems like there’s a ratio of 100 idea guys to every one guy who’s just truly loves executing. You ever heard of Excel, dog? That’s my jam. Oh. No, you I lived in the Silicon Valley bubble too. Like I was I fit right in. I was great there. And then I came back here to the the hinterlands 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, HEB. Have you guys heard of this company? Yeah, I love HEB. It’s like my favorite grocery store. It’s it’s insane. You should see how optimized those guys are when they’re running it three or 4% even margins. And like they think it’s great. Tell me everything. About HEB? Yeah. Uh, what what do you want to 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. So you have Charles Butt, who is the majority owner, and then his his relatives are the other rest of the owners and then they have a percentage that’s owned by the employees. But it’s like 85, 90% owned by by these guys. Um, and so they’ll just do crazy stuff. Like when they heard um, when they heard that Trader Joe’s was coming to San Antonio, so HEB’s located here, um, there’s an anecdote that they just packed up all the senior executives who were in charge of product selection, location selection, interior, store experience, all that stuff. They put them on a private jet and they flew out to uh 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.” Um, there’s another anecdote when Walmart came to San Antonio that HEB went and lowered their profit targets because they’re just like, “We’re not losing to Walmart. That’s just the way it’s going to work.” And that all emanated from the ownership, right? You didn’t have this like public stock people coming in and saying like, “Oh, like think quarter by quarter.” Now you had these folks that were thinking like, “We’ve been here for 70 years. How are we going to be here for another 70 years?” Uh and just go crush it. And that goes all the way down the culture. Um, my buddy works there and he said it took 10 years um before people stopped referring to him as the new guy. People just stay. Yeah, imagine that in Silicon Valley. Of all the, it sounds like to you that like HEB is almost like a dream business. They’re not a dream business, but it’s one that like you look at and you’re like, “Damn, that is cool. That is well run. I I admire a few things about that.” What else do you, 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.” Hmm, really good question. I need to think of a good I need to think of a good answer. I’m glad we’re I’m glad this is being edited. Um, when have I done that the most? Um, yeah, we went down one one time we went down, this is super interesting. Um, you know, our business Dura has some employees in Medellin in Colombia, you know, where Pablo Escobar is from. So we went down there to just kind of like start wandering around and like meet our employees and like understand should we outsource more here. Um, 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. Um, I mean, the reason I started the coffee business by the way is like I was riding my bike around Arkansas and I’m like just riding outside the Walmart headquarters cuz like I’m a business nerd and staring at the Walmart headquarters. And uh like there’s this like drive-thru coffee shop there. And it was COVID and I was bored and I so I just sat there for an hour and these guys were just printing money. And I came home and I called my buddy who I’d wanted to work with for years and I was just like, “Hey, we should start a coffee business.” And he said, “Why?” And I sent him the pictures. I was like, “Look at all these people. They’re just like printing money.” Um, so it’s just kind of this idea of just like for me, like like the way I build ventures and the way I find them is just kind of by like stumbling around like an idiot and then like you end up in front of the Walmart headquarters and watch some guy selling millions of dollars worth of coffee. Um, so yeah, that’s another story. And does uh you went to the Berkshire Hathaway uh like summit, which I think is kind of like a pilgrimage for like business people/ entrepreneurs. It’s like, uh you got to go visit the Mecca and like you see the old kind of religious, you know, leader, you know, the the 90-year-old guru sitting there and uh is it worth it? Should I go? Uh, you definitely got to go at least once. I mean, it was like, so I’m 47, so like I always regretted I didn’t see Jerry Garcia before he died. And uh 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 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 uh cash like investing and like a NASCAR race. Like it’s perfect. Um, so I just had so much fun doing it. But it’s also kind of, you know, I feel like going at this point, like Charlie and Warren are getting up there. Like they’re 92 and 98, like the morning, you know, Warren spent a lot of time just kind of 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 got to go once. You just got to 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 $250 on a pair of Roper boots or Justin boots and then walking over and drooling over like how they can buy like a Sunbeam boat. Like it’s just like just the coolest thing. So you got to go at least once. Sam, have you been? No. Uh, I was invited to go. I think you and I were invited with CA and Suly 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 Munger like 93? 98. Oh my god. Yeah. Uh, I guess next year it would have to be the Yeah, I guess next year would have to be like the last one maybe. You got to 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 live tweeted the thing, like it was like, I can’t believe he’s still eating this much peanut brittle. I’m 47, there’s no way I could do that. And he was just sitting there pounding it the whole time. Dude, that that peanut brittle from See’s is fire. I feel that. It it is pretty amazing. These guys have like they have the most success and they do the opposite of what every like, you know, success coach and like motivational entrepreneur, you know, tells you to do. It’s like, you know, they’re like, you know, it’s like if you go on Instagram, it’s like, “Oh, I need to, you know, wake up at 5:00 a.m. I need to, you know, meditate, I need to do my ice plunges, then I need to do my CrossFit workout, then I need to like, you know, do my daily gratitude journal, then I need to do my like hyperfocus chamber where I go and I figure out my priorities for the day, then I need to like speed read and listen to my podcast on 2X speed.” And these guys are basically like, you know, they somehow made it to they became the richest people in the world, lived until they, you know, until they’re about 100 years old, and they wake up every day, they eat McDonald’s breakfast, eat a bunch of M&Ms and Diet Cokes, and then they read and play bridge all day and like go for walks. And uh, you know, that’s where they get their their their ideas from. And so, you know, I think there’s something to what they’re doing. I think it’s a you know, I think they’re still alive because they’re low stress despite what they eat. Uh, and I think they’re they’re smart thinkers because they don’t overload their brain with information like uh, 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. Whoa, I can see the client’s whole history, calls, support tickets, emails, and here’s a task from three days ago I totally missed. HubSpot, grow better. What of your of the things in your uh the the things in your portfolio, which company besides the um besides the the the boot camp, are you like, this is just the greatest thing ever. I’m so happy we own this. Uh, I more people should know how easy, or not easy, but how straightforward this business on. It feels like I’m winning in easy mode. Yeah. Well, I think the near business, so it’s hirewithnear.com. Um, so it actually, this is a this is the this is the apex of what I want for Girdley existence to be, which is I want I’ve gone from starting businesses myself and working in them, then starting businesses and having other people work in them. 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 Girdley automation, like I’m always scaling stuff. So the near 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, they were just such a mess. And then I’d ask them, “Well, have you considered hiring overseas?” And uh 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 said, “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.” Um, and that business I like so much just because everything seems like it’s on easy mode because everybody’s offshoring. Like everybody wants to do this. Um, it was that way when the economy was going well, and now it’s even more so when the economy’s going poorly. Um, and I’ve hired personally of my associates, I have three of the six that work work overseas. I’ve never met them in person. It’s like the best. And you partnered with someone to make this according to the about page, right? Yeah, so um Hayden is started as an associate of mine, so I hire these um people I call them associates and it’s basically an entrepreneur in training program. So I like mentor them through, I pay them a salary, um, and then I help them like get out of the like 12 bad ideas that every entrepreneur has to get when they’re 27 years old. 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 I’ve 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 uh how much do you pay them and how do you incentivize them to want to stay with you for a long time? Yeah, so totally depends upon the situation. Um, you know, obviously if a business is much more established, um, or demands somebody who’s like much more like, um, like mature, um, that that makes a situation where often times you have to come up with more. Um, my best situations are when I can partner with somebody. So all this stuff I’m in, while I have significant stakes in it, I have other people on the cap tables. Like that’s one of my like, I feel like superpowers, like I can just like maintain partnerships. Like I have 100% success rate on partnerships with people. So the absolute best way is if I can get somebody like Paul at Dura is to be like a co-founder. And the absolute best way of that is if they’re a co-founder and they put money in it like me, and then they make that their job. Like that’s the absolute best skin in the game kind of outcome. But, you know, you can have anywhere from a 27-year-old who will make 60 to 80k a year plus benefits, um, to some of these people who are much more senior, like our coffee, um, our coffee person, you know, he worked at 25 years at Circle K and he’s running this, he’s running that business. Um, he obviously needs to make much more money than that. Um, and then the equity really depends, totally depends on the opportunity, depends on how much skin in the game they want to have, uh, what level of commitment they have and how early they’re coming in the venture, but it could be anywhere from 40% to 20% to 5%. And why does, let’s say for Dura, uh, why does your partner want to give you, what, let’s call it, let’s pretend you have 30%. I don’t know what you have, maybe it’s 50, maybe it’s a little less. Let’s just say 30%. Why does he want to have give you 30% and he’s a day-to-day in it, but you’re not, right? Uh, so how do you think about that like value exchange, um, when you’re not going to be the operating person and then they are? Yeah. Well, I mean, I so you’re asking that question from the same lens I have, which is like, being an operator isn’t 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 time I’m part of the very early figuring out what the idea is going to be, um, I’m putting up a substantial amount of money. I put up more money than than say the other partners did. Um, we did some debt to do the first deal, like I personally guaranteed it. Uh, and then the last thing is like, like great teams, they have these complimentary things. 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 50 to 100. Wow. Okay. So that’s, you put up a lot of money. Yeah, so, yeah, it’s getting the game matters. Um, then that also helps me not to try to do too many things. Like I can just be like, “Okay, like I’m putting real money in this, I better really believe in it.” Um, 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, um, 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 um this guy named Kevin Ryan? Only through you. He’s like a media, right? Is that is that the same guy? Yeah, so Michael, have you heard of this guy? Kevin Ryan. I’m Googling him. All right. So I think there might, there’s probably a billion Kevin Ryans. So like maybe a baseball, let’s say baseball player. Oh, he’s the Alley Corp guy. Okay. 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 DoubleClick and he was like the 30th employee there and then took over as CEO and then DoubleClick was sold for like a billion or many billion and it eventually became AdSense for Google. So like pretty big thing. He told me that he had made like, um, very low digit eight eight figures. Uh, he was like, it was enough money that like I’m set, but uh, like I still wanted to like create stuff. And so him and this guy named Dwight, who I think he worked with at DoubleClick, they started Alley Corp. And their whole thing was, we’re going to fund companies with 200 to $300,000 and all of the ideas are going to come from us. All of the ideas are only going to be back of the envelope math and we’re going to hire someone to get it off the ground and we’re going to give it 300,000 and six months to prove if this is a good idea or a bad idea. And we’re going to do it a bunch of times. A few of their successes that they’ve done this with are uh, Mongo. MongoDB, which I don’t know what it’s at now, but in the range of like a 20 to 50 billion dollar uh, market cap publicly traded software business. The second one is Business Insider, which sold for 600 million, I think, but it’s like a big company now. The third one is Gilt, Gilt Group, which was a clothing company that was huge. 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 Zola. You guys know Zola? It’s like where you go for wedding registries. I believe that’s a unicorn. And there might actually be two or three more of these companies that Alley Corp has like uh, founded. And basically he was like, “Yeah, so me and Dwight just sit around and we come up with like a cool idea. Like I go to a wedding and I just ask people where they bought all the gifts and like, he’s like, “I just had this idea.” So I knew someone who worked at Gilt Group who mentioned she liked this type of business. I hollered at her, I go, “Hey, here’s 300k if you can get this going.” And you get a small portion, but we get most of it. You want to try it? And that’s how it worked. It’s a he’s he’s pretty amazing. Speechless. That’s impressive. It’s like, yeah, I was like, yeah, those guys are really good. There’s this like holdco model is it’s like in vogue, right? Cuz it’s sort of like to me, I I I worked at a startup studio for a while and 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 want to do more entrepreneurial things. And so you self-fund a studio where you’re like, we’re going to work on a bunch of ideas and then you try to find like new winners out of those bunch of bunches of ideas. And so like, you know, I worked at out of one. That’s how I got into tech. Um, you know, Mark Pincus, the guy who created Zinga, then he created one, the guy who created Uber, he created one, Kevin Rose created one, like it’s just a bunch of serial entrepreneurs who create these and they’ve actually had a pretty poor track record of success. And then we see that like the holdco mafia is sort of the same where you get, you know, um, guys like Andrew Wilkinson who’s got Tiny and then you have, you know, bunches of other people who are doing their own holdco versions of that, whether they buy boring businesses, they buy sweaty businesses, they buy software businesses, they buy whatever. Um, and you’re kind of in that boat, you’re in that boat too. Uh, what do you think is the, I guess like, how do you think about that, you know, in terms of like, who do you think should be the type of person who who should do this 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’ve seen a bunch. Yeah, well, I mean, I think there’s two, there’s two bad things going on with holdcos right now. I think there’s a whole group of people that are doing them and they actually uh think it’s not that much work. Like they’re I talked to it and I’m like, “So why are 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 of these people are coming from, or you’re a senior exec in a company, like everything you do in a holdco is exactly the opposite. Like, like when there’s a problem, you don’t rush in and fix it for your company. You actually say, “Man, that really sucks. What are you going to 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 holdcos are really hot. Um, as I talked to most of them, I don’t think as many of them are wired to be holdco people as they really think they are. Like the Me’s, the Xavier Helkins, 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 um 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 idea space, right? And I’m I have like a relatively crappy memory, which is like a why I have to write stuff down like crazy. Um, 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 the vine 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 in the business, they want to 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 or impossible for some of these people. Yeah, you say that, but at the same time I’m like, oh, I everybody I know is like, “Oh, I like to operate at a high level, you know, the 10,000 foot view and I’m an ideas guy.” I don’t know anyone that doesn’t think they’re an ideas guy. Maybe I’m 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 operate, likes to go grind the day-to-day optimizations versus I like to be the idea guy who helps just get it started and somebody else goes and does all the hard work.” You know, that seems like seems like there’s a ratio of 100 idea guys to every one guy who’s just truly loves executing. You ever heard of Excel, dog? That’s my jam. Oh. No, you I lived in the Silicon Valley bubble too. Like I was I fit right in. I was great there. And then I came back here to the the hinterlands 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, HEB. Have you guys heard of this company? Yeah, I love HEB. It’s like my favorite grocery store. It’s it’s insane. You should see how optimized those guys are when they’re running it three or 4% even margins. And like they think it’s great. Tell me everything. About HEB? Yeah. Uh, what what do you want to 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. So you have Charles Butt, who is the majority owner, and then his his relatives are the other rest of the owners and then they have a percentage that’s owned by the employees. But it’s like 85, 90% owned by by these guys. Um, and so they’ll just do crazy stuff. Like when they heard um, when they heard that Trader Joe’s was coming to San Antonio, so HEB’s located here, um, there’s an anecdote that they just packed up all the senior executives who were in charge of product selection, location selection, interior, store experience, all that stuff. They put them on a private jet and they flew out to uh 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.” Um, there’s another anecdote when Walmart came to San Antonio that HEB went and lowered their profit targets because they’re just like, “We’re not losing to Walmart. That’s just the way it’s going to work.” And that all emanated from the ownership, right? You didn’t have this like public stock people coming in and saying like, “Oh, like think quarter by quarter.” Now you had these folks that were thinking like, “We’ve been here for 70 years. How are we going to be here for another 70 years?” Uh and just go crush it. And that goes all the way down the culture. Um, my buddy works there and he said it took 10 years um before people stopped referring to him as the new guy. People just stay. Yeah, imagine that in Silicon Valley. Of all the, it sounds like to you that like HEB is almost like a dream business. They’re not a dream business, but it’s one that like you look at and you’re like, “Damn, that is cool. That is well run. I I admire a few things about that.” What else do you, 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.” Hmm, really good question. I need to think of a good I need to think of a good answer. I’m glad we’re I’m glad this is being edited. Um, when have I done that the most? Um, yeah, we went down one one time we went down, this is super interesting. Um, you know, our business Dura has some employees in Medellin in Colombia, you know, where Pablo Escobar is from. So we went down there to just kind of like start wandering around and like meet our employees and like understand should we outsource more here. Um, 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. Um, I mean, the reason I started the coffee business by the way is like I was riding my bike around Arkansas and I’m like just riding outside the Walmart headquarters cuz like I’m a business nerd and staring at the Walmart headquarters. And uh like there’s this like drive-thru coffee shop there. And it was COVID and I was bored and I so I just sat there for an hour and these guys were just printing money. And I came home and I called my buddy who I’d wanted to work with for years and I was just like, “Hey, we should start a coffee business.” And he said, “Why?” And I sent him the pictures. I was like, “Look at all these people. They’re just like printing money.” Um, so it’s just kind of this idea of just like for me, like like the way I build ventures and the way I find them is just kind of by like stumbling around like an idiot and then like you end up in front of the Walmart headquarters and watch some guy selling millions of dollars worth of coffee. Um, so yeah, that’s another story. And does uh you went to the Berkshire Hathaway uh like summit, which I think is kind of like a pilgrimage for like business people/ entrepreneurs. It’s like, uh you got to go visit the Mecca and like you see the old kind of religious, you know, leader, you know, the the 90-year-old guru sitting there and uh is it worth it? Should I go? Uh, you definitely got to go at least once. I mean, it was like, so I’m 47, so like I always regretted I didn’t see Jerry Garcia before he died. And uh 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 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 uh cash like investing and like a NASCAR race. Like it’s perfect. Um, so I just had so much fun doing it. But it’s also kind of, you know, I feel like going at this point, like Charlie and Warren are getting up there. Like they’re 92 and 98, like the morning, you know, Warren spent a lot of time just kind of 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 got to go once. You just got to 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 $250 on a pair of Roper boots or Justin boots and then walking over and drooling over like how they can buy like a Sunbeam boat. Like it’s just like just the coolest thing. So you got to go at least once. Sam, have you been? No. Uh, I was invited to go. I think you and I were invited with CA and Suly 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 Munger like 93? 98. Oh my god. Yeah. Uh, I guess next year it would have to be the Yeah, I guess next year would have to be like the last one maybe. You got to 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 live tweeted the thing, like it was like, I can’t believe he’s still eating this much peanut brittle. I’m 47, there’s no way I could do that. And he was just sitting there pounding it the whole time. Dude, that that peanut brittle from See’s is fire. I feel that. It it is pretty amazing. These guys have like they have the most success and they do the opposite of what every like, you know, success coach and like motivational entrepreneur, you know, tells you to do. It’s like, you know, they’re like, you know, it’s like if you go on Instagram, it’s like, “Oh, I need to, you know, wake up at 5:00 a.m. I need to, you know, meditate, I need to do my ice plunges, then I need to do my CrossFit workout, then I need to like, you know, do my daily gratitude journal, then I need to do my like hyperfocus chamber where I go and I figure out my priorities for the day, then I need to like speed read and listen to my podcast on 2X speed.” And these guys are basically like, you know, they somehow made it to they became the richest people in the world, lived until they, you know, until they’re about 100 years old, and they wake up every day, they eat McDonald’s breakfast, eat a bunch of M&Ms and Diet Cokes, and then they read and play bridge all day and like go for walks. And uh, you know, that’s where they get their their their ideas from. And so, you know, I think there’s something to what they’re doing. I think it’s a you know, I think they’re still alive because they’re low stress despite what they eat. Uh, and I think they’re they’re smart thinkers because they don’t overload their brain with information like uh, 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.