How Holdco Legend Michael Girdley is Playing Multi-Decade Games (and Winning)

0:00incubating versus buying is a really interesting formula for me I think about it in terms of where I can find significant Advantage right now assets are super expensive and it's very expensive to buy businesses you know I think when assets are expensive you go create assets and so really the past four years has been a lot more incubation for me and a lot less uh m&a Michael girdley holdco Legend you know I feel like there's this new generation of hold Co entrepreneurs and you've been doing it for a while yeah started going on second business I got into and really stepped out of my first one was about a decade

0:42ago so been a while so for folks who don't know you could you could you just explain you know what your portfolio is looking like what you're up to oh sure for sure for sure well today uh what I do is well I tweet a lot evidently but um I own about a dozen different businesses uh here I'm located here in Texas in San Antonio I grew up here moved away for a while but came back uh my wife and I got back here 20 years ago now um before we got married and we've been here ever since and so I have a diversified uh portfolio of companies I

1:20try not to call it a portfolio because that makes me sound like a douchy BC but um you know I would consider those like deep and significant investments in companies I've either created or purchased and uh that are meaningful for me I sit on the board of them and am deeply involved um so there's everything from a fireworks business that was the very first business I was I got into and we still own that there is an education company we started out that was the first company I did outside of the fireworks business and in the past five years have really been an explosion of new businesses I've you know I think

1:54I've honed down my ability to incubate companies uh my model of how to do it uh and my understanding how business Works those have all kind of come together and you over the past year has past five years has really been the growth from two or three businesses up to up to the Dozen where we're at today and how do you think about incubating versus buying uh incubating versus buying is a really interesting formula for me I think about it in terms of where I can find you know significant Advantage um right now assets are super expensive and it's very expensive to buy businesses so I you

2:27know I think when assets are expensive you go create assets and so really the past four years has been a lot more incubation for me and a lot less uh m&a which I feel like goes against what a lot of hold co- entrepreneurs are saying on Twitter you know I feel like right now especially in like Tech hold Co entrepreneur land they're saying you know oh it's so hard to go from zero to one go and buy a business are you seeing that too uh people are saying they should go buy a business yes because it makes it looks like it makes it look like you can skip that that really

3:04annoying part of building a business which is like when you feel like things aren't going anywhere for the first like 18 months or so um you know at the same time like if everybody's trying to go buy a new business right they're gonna prices are going to get pushed up there's gonna be a lot of comp competition going after the same assets and it's gonna be harder for you so yeah you know I think it's just one of those things for me it's always like watching where the opportunity is then rushing to it and if everybody's saying one thing that's usually a sign you should be

3:32doing something different totally I feel like two to three times a day I get the pitch saying do you know how many baby boomers are going to retire over the next few years and they you know how many businesses they run these businesses are going to close down you can buy them for pennies on the dollar well so I mean I think what people don't do is kind of like the you know the law of large numbers aspect to it where it's like okay well why don't you go through and think about all these baby boomer businesses and let's go with the first thing which is businesses you

4:04just don't want to be in right like there's just like okay so that cuts out like all the gentleman's clubs and like all the scummy stuff so that knocks out a bunch of business that you know you're not gonna be proud to tell people you want to be in at a cocktail party and then there's like okay well let's now let's knock out all the businesses that only really exist because something that goes home every night with the owner that could be the owner's relationships like the owner's like knowledge that could be the owner's like credentials and suddenly you look up and there's not that many businesses actually out there

4:32compared to the number of buyers who are out getting them and then there's another problem on top of all that which is a lot of these baby boomers have figured out something to do with their business already they're going to sell it to a strategic or they're going to give it to their kids or they're hiring a a manager so like yeah I know people are finding businesses from Baby Boomers but like I think that's kind of way overblown in terms of how many are truly out there it's not a tsunami it's something more like a little Ripple just how I would think about it and when you

4:57do buy a business how do you like yeah how do you find business you know great businesses to buy yeah uh there's the there's two will ways that buying businesses tends to happen for people including me one is like the front door approach like you just start um you just start doing what everybody else does going through listings learning about an industry making phone calls you know learning about them that's what we do on our podcast Acquisitions Anonymous which of the five podcast I've started that's the one that has survived because it does well and uh like that's what we do we go through listings and we look at a

5:28business each week and then we talk about it and figure out if we would want to pursue it more so you know like most of the m&a I've participated in is um is software m&a because well software is like I know that a lot and I have a competitive Advantage there it's much better for me to go buy something that I have a competitive advantage in than to try to compete you know when I don't and um so in the case of that you know there's the front doorway which is just like looking at listings going through the the Brokers and all that kind of stuff and seeing you know what the

5:57investment bankers and that sort of thing are are pitch ing that works and you can sometimes find deals there um what I find is much more interesting is like the serendipitous approaches where it's like you know through your network like the Great Deals always seem to have some weird way that they come into your into your world like it's a friend of a friend or your college buddy knows something going on it's some data that's not out there that everybody else can see and that kind of inside information is where the most kind of interesting m&a opportunities happen and and most the m&a I've done over the past four

6:28years has been through the Duro software that we set up it's a a really quickly growing company um they're up over 200 people or so Global uh and we've bought going on 15 companies now um through that platform and it's a hold Co that is actually underneath my holdco so there's other shareholders there as well but I founded the business and got it started that way so uh I've participated in you know the underwriting of all those Acquisitions those guys have done so you raised money for that that sub hold Co yeah we started we started it with our own money me and the the CEO uh and then

7:02we did a couple of Acquisitions and then we ran out of money so then we brought on Equity partners and a bank Deb and then it has grown since then and then we brought on a professional uh Investment Group uh a private Equity Firm called Peterson uh they agreed to invest in the company and took board seats and came in and put $50 million in the company uh about four months ago so you know when it was clear the opportunity was really big and required a lot of capital and we were going to run out of my Capital uh we brought in a partner there and so I'm

7:35on the board with those folks and and so that's how that got structured but we started it with our own money and took it from there you know for as much as you can share like are you happy you did that and the reason I ask is I haven't publicly said this but we like last week we had an offer for about $30 million to invest in Lay check out our holding company and the you know one of of the one of the top institutional investors VC's someone I really respect he sits on two public company boards or two or three public company Boards of some of like my

8:09favorite products so I really respect him but the idea of like giving up control and just having and maybe VC is different than PE but just having to prime it for an exit at some point made me a little uncomfortable so we ended up declining that I'm curious he a do you are you happy with that situation and then B if you were me would you have taken that deal from that VC oh if I was you that's a great question um first of all am I happy totally delighted like when we started to talk with Peterson we asked around about their reputation and talk to references and all that kind of

8:49stuff and it it was fascinating even after we signed the deal that friends of mine like college buddies would be like oh I've worked with those guys they're really great and it turns out they are really great and what I enjoy about them and this is a cool anecdote like um they're from uh Utah so it's like a very family oriented stuff so it's not like it's not like uh what I describe as New York private Equity or Dallas private Equity where they like show up and they're like okay show me how you're gonna make me some money like these guys like uh they were awesome like the first meeting they're

9:21like okay well welcome to the business meeting first I'd like to know about you tell me about your family like and I was like what is going on here like these guys are amazing and that was really like a cultural alignment with the company we've created like our number one core value is to make Mom proud like literally we have that written there so it's like the nicest group of people ever so it's a good fit there and I think what is awesome is when you bring on growth Equity from a private Equity Firm like the good ones will go in and invest in adding value enough to where

9:49they earn their seat at the table and like you like it's totally worth it and so you know I think there's also besides that which Peterson is doing for me there's an understanding understanding of my limitations currently like I've never really built a business bigger than where Dura is currently like at a couple hundred people like your mindset and your like small business habits really have to change right like I've done a lot of like 30 50 100 person companies like I understand what that's like and you can still kind of think and act like a small business person but like as you start to get into the

10:21midsize company range like your mindset and your habits have to change again and so I knew when I looked around the table before Peterson came in that we really had an opportunity to we were G to have to grow again as a board and also as a leadership team to meet the kind of ambition that we had and the small business thinking and the habits that I had potentially like I needed to grow so frankly like in those board meetings now like I'm learning a lot just because they've been exposed to a lot of companies on the 200 to a thousand person kind of trajectory and

10:50like that's new to me and there's you know there's a bunch of examples of how that like plays out in practice like in a small business for example you don't have to look look really two or three quarters ahead to think about people problems right you could you're fixing your people problems right now but like at a midsize business like you have to get ahead of the game to be ready or it'll stunt your growth right for example you need to start planning ahead three or four quarters to say okay well we need to have this person in is VP of Corp Dev or this person as a controller

11:18otherwise the company like you can't look up and just change it on a dime because little small companies like speedboat and like a midsize company is like more like a tanker right it takes like a couple quarters to change things and so that's just like one example of like I knew Paul who's my co-founder like we just knew where we needed to learn and brought into people who've done it already and so anyway just totally delighted by by that decision I think it's a win-win win for like everybody involved and super happy I did it or we did it your second question was should you have done that deal like uh I

11:48don't know I'm not you I didn't mean to duck it but like I mean you were you it doesn't sound if you were you if if you were you like if you if you were you and you were in my actually if you were in my seat if you were in my seat let's play this out you're getting $30 million you know call it a SE aund million post um you know we're we're doing quite well um we don't we don't really need the capital but the capital would help fund more Acquisitions like larger Acquisitions and we might be willing to do but we're in software mostly right so

12:26the cost of creating our it when we incubate the cost of as you know the cost is of incubation isn't that high uh so anyways if you were Michael girley which you are but you were playing my role would you what would you do uh I would really ask myself in that situation like if I if you look at your day and you ask yourself during your day based on what you do from get up to do podcasts to go to bed at night and and how you describe that both to yourself and to other people people like that how does that day look after you take that

13:04money and is that going to be a happier day for you or a less happier day and I think it's the first sign for me like like you know I'd ask you right now like in terms of your dayto day like what percentage of your hours are tap dancing to work hours and what percentage are not as fun I mean I don't want to sound pompous or anything or like I'm gloating but 95% of my day is tap dance that's amazing that's that is a higher ratio than most people um you know it's interesting I talked to an entrepreneur last week who took a big slug of money

13:35like that for a VC back business he's running it and uh we did the same exercise and about 40% of his day was tap dancing to work and but at the same time once you take that VC money I think that's the second part of my question like what happens to your days then like how how tap dancing to work are you g to be after you take that money you know you know what I really love about my situation right now is the there's no I don't have a boss right you know like we my my take is that if you have investors you have Micro bosses and you have to

14:07manage expectations and you have to manage up and sometimes subconsciously you're doing things that are you're just trying to please them even if it's subconsciously because a lot of time you respect them you know for example this particular person maybe he says you know go acquire a Marketplace and even if I'm in that boardroom and I'm like no I think we should only be acquiring social networks for these reasons and then you know a month later I come across a Marketplace and I'm like oh I'm trying to like fit it in his model and then all of a sudden I'm like who I guess I'm working for him uh in some ways so the

14:47tap dance I feel like the fact that one one thing I really like about my situation is is we're self-funded you know me and my co-founder do whatever we want yeah it sounds like that's super super important to you and would and would really reduce your like day-to-day happiness so I don't know based on that like time time is like the one thing we can't get back right and it's like why why waste a minute of it on doing a life that really sounds like at its core is something that this VC wants you to live that life right and you have a different life that you want to live so to to me

15:24if I was you and I did the same analysis um you know I would I would totally you know make that decision now if I was Michael Gridley and I did things the way I do it which is like you know it's scalable for me because I tend not to run things and you know that sounds pretty exciting because I like interesting problems and it sounds like the 30 million on a 100 posts would be like some pretty cool problems to go solve and I think that would be fun but it wouldn't change my life as much as it sounds like it would change yours yeah I

15:53mean I had a phone call I I actually when whenever you have a for in the road like this I think that you should call smart people because actually you could just call call five people they don't you know they don't all need to be smart they just need to be people that you respect yeah I called or what happened you didn't pick up you didn't pick up you were you're too busy tap dancing to work or something yeah hey hey this uh you know I don't have much reception here in this chilies something like that you know one of the one of the people I called and going to n call him

16:29out but he was like I think you're making a really really big mistake and he was like concerned for me he was like I don't know why you're making this mistake you know you can be so much bigger and you're not unlocking your potential and with that $30 million like you could you know be public in two or three years and I was like have you spoken to public company CEOs lately like they don't love love it you know um obviously the liquidity is good um but he's like well it's not even just about that it's about the problems he says same thing he's like you'll be able to

17:05solve bigger problems and I'm like I don't know I I I I don't know about that like cuz you know I think if you're a solo preneur you're a multipreneur whatever a lot of the times you're solving interesting problems uh you're just standing on the shoulder of giants in terms of the technologies that you can you know be building upon the audiences that you can create and so I feel challenged in fact I feel more challenged today than I did running vent Venture back startups yeah and I think there's a fundamental I mean when I listen to what your friend talk I think there's a fundamental

17:37misconception a lot of people have especially here in America that bigger is always better right and it's like it's our nature like and it's so ingrained in the way we think about things like we don't even really like slow down and realize like it it's all around us right just like competition is such the core of American society like nobody even really talks about how weird that is like other other countries don't act that way and to me when I see somebody like your your adviser there like advising like hey you need to like it needs to be bigger and better or or it needs to be bigger otherwise it's not

18:09better like it's just a fundamentally flawed like worldview on the other side of that I think I really appreciate this adviser because when you call somebody like that you really want them to like give you a strongly worded but loosely held opinion and it sounds like he did which sounds exactly what you wanted because it helped you think about the issue better yeah I mean another person adviser I asked he was the senior vice president of Corp Dev of a $500 billion company and he just said I just texted him I was like what would you do I could read you the text just full transparency here on the

18:42Pod he had texted me about something else and I was like while I have you if you were me and you were offered $30 million for your hold Co to fuel Acquisitions for 20% of the business from a top Institutional Investor who sits on some board of some dope companies would you do it and then I said we currently generate X dollar of iida and then all of a sudden he's just like oh so it's you know this amount of like he was just calculating the multiples he's like well if the multiple is this then you should do it and multiple is that you know you should do

19:11it and I was thinking to myself no like where's the multiple of fun you know yeah the multiple where's the multiple of fun why is no one talking about the multiple of fun yeah well it's it's also this idea that nobody talks about is that there is a diminishing return on money like and I also have this like weird idea I've been toying with that it's actually there's there's negative marginal Returns on money as you get more of it like as I watch people who are like super rich like super duper rich like G6 or whatever whatever's the more expensive version of that like those people are actually all very like

19:44they spend a lot of time like a protecting the money and B like trying to figure out who around them is not a faker and to me like you know I think I think being somewhat Rich you know someday I'll get there right like that's the perfect thing rather than have to get more money and then you know you eventually get to a point where you're like Jeff Bezos where you're just like like he's just trapped in his Fame and each each additional dollar like actually makes his life worse in my opinion so I think there's an inflection point it's somewhere around being able to afford flying private but but you

20:14know it's like above that I think the marginal utility of dollars like eventually turns negative yeah there's a great framework for this I think it's you know are you building a prison or are you building a castle and I feel like not enough people take that framework when they're making big decisions like this they often times they get so seduced by the vision of what what you know $30 million $2 million whatever it is whatever that Milestone is they just all humans all of us we kind of just like picture what it what it looks like when that moment hits your company gets acquired like all

20:50these milestones and then it happens and you're like um am I in a prison right now yeah I think it's totally true well it reminds me it floated around on Twitter last night there's like a great Don Draper from Mad Men quote where he's like he's given his speech about why people shouldn't pursue happiness and the reason they shouldn't pursue happiness is because when they get it they want to go pursue more happiness it's just like the most bizarre like approach to life but also makes a ton of sense given how Don Draper like grew up like dirt poor and all this kind of stuff and had this really bizarre Life

21:23View but kind of reminds me of that which I was like a this is such a good quote not to you know this is a spoil a spoiler alert for Mad Men so block your ears for people listening but the last minute of Mad Men I don't know if you remember it but it's Dawn Draper in biger I think he's at the esselin retreat center in like the 60s and you just see him not wearing a suit wearing maybe like a t-shirt tucked in like he's in casual wear and he's looking off the you know into the water on these beautiful California Cliffs there's just this amazing Freedom like hippie 60s

22:05music that's playing and you could just tell that Don Draper finally is happy after all that after you know his clawing through life and climbing up the ladder and selling agencies and like Madison Avenue and you know and I think there's I think that was one of the big lessons for Madmen is just don't you know be like what what are you chasing and why such a good show good show so good so good so one of the reasons I wanted to talk to you is what you know it looks like you're having a lot of fun it looks like you're having a lot of fun and you do things I think Bas in

22:48like your curiosity so for example I you know you created a course uh when people think about creating courses a lot of time it's like negative and you know people are like why are you creating a course no you're just like I'm curious about this and you created a course why did you create the course what is it and are you having fun doing it yeah uh look creating a course is like writing a book it's not that much fun it's a lot of work and it's never as good as you want it to be that was the thing I definitely learned um I also learned a lot from

23:16doing the process like I did very much like a master class style course where it's just like look here's a lifetime of learning I'm going to cram it in like the original script was like 450 Pages like just this enormous dump of like everything I feel like I've learned over 25 years in business uh the reality is I think what I've learned since then is like people especially in a like an attention starved or a focus starved world like now like the idea of like a an 80h hour masterclass is probably not something like I would ever do again like I think people want stuff much more

23:48bite-sized and you're seeing like like me sharing messages now like I wouldn't imagine starting another podcast no offense to your podcast but like the aperture of consumption for potential podcast podcast is like is shrinking like not only is people consuming less of them but like the demand for people wanting 60 and 75 minutes stuff I think you know it's limited in terms of the options there for somebody like me so I'm doing like a lot more shorts like I recorded like 20 video shorts yesterday and I find those like super appealing because I just have to concisely put everything down and I think anything I would do in the future around a course

24:22um would be something much more manageable and short like a two to thre hour thing very specifically around that stuff um and so for me like the course is part of figuring out how to like there's this like idea that I want to grow my impact in terms of sharing messages and things I've learned and helping other people kind of figure out or get to the point where I feel like I'm like super happy I want other people to be here and like the course is like how do I make the Investments and feel good about it by monetizing the things I'm saying and then using that to

24:53reinvest in more content so like I've hired like a whole team to do like social media like I have a CEO of it now there's two of us or there's two of them plus me um and I'm trying to get it to a point where I just worry about teaching and messaging and then they just take care of everything else so the course was kind of the first bucket of that and I think we'll do more of that in the future just because well those guys that I hired they kind of want to get paid which is which is important and I I don't want to come out of pocket paying

25:17them so so yeah I'm curious about that I'm starting to see a lot more uh holdco entrepreneurs multi preneurs buildout media companies um so I know I just had Nick Nick cuber sweaty startup on the Pod and you know he has a team now that helps him with stuff how do you think about what are the goals for your media team like what what does success look like to them yeah well we've set a 10-year vision for our media stuff uh to get to a billion annual views um right now I'm at like 20 250 million if you count all the the Twitter stuff so um

25:55that may be low but like the goal for me and the reason to do it is really impact and I think impact is things I want to do in terms of helping people around the world like I've discovered like I'm not just like sharing messages and like teaching here I'm like creating connections with people at scale and I want to do that at a bigger scale and do do it in a very genuine way to help make the world a better place so that's you know that's kind of our Northstar is like Maximum Impact along the way I have some rules which is like number one I'm

26:24not doing social media because I want to get rich and actually is probably not a good way for me to do that there's better things I could do but I think it presents an opportunity for me to scale the other things I'm working on and make them all so much easier right like if I want to fund raise for a deal in the future or if I want to hire somebody like it's just easy just to tweet when you have an audience I think you know this your audience is bigger than mine so um so that's the goal of this is you know for me it's like a karmic refilling

26:51of how I'm doing it like by giving it to the universe it pays me back and then secondarily like the the selfish part of it is it like it makes my world and everything easier when I have an audience and and have all this going on um in terms of how to think about it like look I'm a capitalist I'm a big believer in incentives and capitalism so like I set mine up like to every like like a good Carpenter wood like every nail requires a hammer right so I'm like okay well I'll turn it into a business and to me I think that's beautiful because I know how to set it and forget

27:22it in terms of businesses and then support them in a scalable way and that's what I'm doing with with this particular model another business that I find fascinating just cuz I'm a community guy is scale path that you incubated could you can you explain like what got you excited about that space because that space is just very excit you know is heating up you know last year well going on two years now I made the decision I only want to really work on ideas that could either have an outsized impact on the world or could get to 100 million in Revenue someday so the idea you know the idea of selecting

27:58for ideas went through that lens um you know what we saw with scale path is we very much like deployed the effectuation model that I used to build companies which is like I went and looked at the things that we have available to us you know in terms of our current resources and the change we could make on the world and you know I saw that I've created a bit of a voice around small business operations leadership ownership all that kind of stuff so there's that level of trust that I felt like we could start with and use that to go build a business around so using the associate

28:29model um that I used to basically bring on entrepreneurial apprentices um you know Sam who is the CEO of scale path he and I like dug into that particular idea after going through three other ideas over the previous six months that all sucked uh we dug into that idea and Sam and I went and interviewed a bunch of potential customers and what we saw was in the small business space like there were a bunch of people that were like stuck in their business they wanted to like grow both the business and themselves but they didn't know how to like get past it so we did like straight

29:00up like Lean Startup like interviews with them like what matters to you what are your priorities what are you solving for and we heard like the same things over and over again they're like you know I want to grow my business but I don't have time to go to EO or vistage um and spend like a whole day doing that kind of stuff and also they expect me to show up and know a bunch of things that I don't know already like how to hire people how to fire how to select a lawyer like none of that there's no class that teach you all that stuff

29:26unless you have a parent like I did who like teaches you how to do it and so what Sam and I saw was there was this niche of people running these businesses 500,000 to 5 million wanted to grow but there wasn't anything out there for them um and they didn't want like to go sign up for a marketing course they wanted just like tell me what to do give me a recipe on how to solve this problem that every business has and so from that we went and like set up the business and it's you know you pay a monthly fee you join the CEO pure Network and the unique

29:53thing that we've done is create these playbooks that we're releasing now two per week and it's everything from like how do I hire a lawyer to like how do I fire someone to like how do I do cash planning for my business and you get you come for that stuff and then you stay for the community and we've built a community around that that's um I think very vibrant now compared to a lot of other ones I've been in super engaged um and and it's going off really well we're on month number five and adding new members like you know every couple days which to me is pretty exciting yeah it

30:24reminds me in some ways similar to Trends the by the hustle people came for some of these playbooks um but then stayed for the community um although their Community was on Facebook groups do you yours sounds like it's more like Zoom discussions maybe hosted by a moderator is that how it works uh people what actually interestingly enough when people are in this kind of 500 to5 million do stage like they're they're working in the business like they generally can't leave so what they'll tell you is they want something asynchronous so we're all slack Centric and then what Sam does um and and I'm part of this is uh we'll have a couple

31:06of synchronous events per week and those could be things like we'll bring in an expert who wants to talk about like you know how audits work and like that'll be that particular thing or a Q&A around one of the playbooks will do will do that as well and he's built up a roster of these experts there's like a sales one and then um we have one around uh banking like there are all kinds of folks that he's brought into this network now so it's mostly asynchronous but then there's the synchronous aspect of it as well as how we do it and it's all slack Centric slack and and

31:37basically we use an online portal for the um the actual like playbooks themselves and so far it's worked really well have you heard of everything marketplaces decom no so check it out I just find it a fascinating model so if you go to their website I'm not involved or anything like that I just find it they did a great job uh it says work Community for Marketplace Founders and leaders so first of all you would think that is like super Niche um and it is but they've they this came out of a venture Studio I believe and the way any well first let me explain the product so

32:13basically the way it works is you get access to this you know Community they have events they have a knowledge Hub and resources um so I'm sure some Playbook type stuff and just different guides tutorials toolkits investor database so like who are the most active Marketplace investors and they've got 1,800 people I I know that they're making I had heard that you know they're in the seven figure Revenue range which is really amazing and this I think it was came out of a venture Studio where they were working on multiple products but this was working so well the team was just like let's just focus on

32:48everything marketplaces it's like every Venture Studio does that yeah exactly so I feel like this model that people like you and everything marketplaces are pioneering is is only going to get more and more popular yeah and look we what re I don't know if you're familiar with reforge like and what that does for like you know Tech continuing Edge like or Ed you know what scale path really wants to be is reforge for small business like that's what we're planning on doing so we've got a good chance getting there I'm excited about it how does how does reforge work man I think it's a good question I think

33:27you end up showing up and buying like it's the $2,000 last I saw it was the $2,000 a year and you get like a level of basic stuff and then I think there's some add-on courses that you can pay so basically they've they've optimized everything for most uh employees have a $2,000 educational budget and they like use all of it what's really cool I'm just on their website right now they they have they've raised money from Anders and harowitz and all that kind of stuff that's their first mistake yeah I mean I would have just not raised money um but this artifacts piece that they're doing is really cool so they

34:03have like you could you know this is really cool so they basically list out uh you know board survey at kry first user interview cards at cly Holy Trinity of Dev Team Planning at fractal so they're basically getting all these product onepage brief at brilliant smart home so they're getting all these assets from these companies and they're just you can just download them and this is really cool yeah so the pricing is $2,000 for a person you get one seat and you get to join one cohort and then then they have corporate plans on top of that interesting yeah I mean great great business this looks really smart and

34:39probably producing a ton of value for folks I just don't know if they I would have raised money for this business it's like an incredible not rais money business but maybe they could make it work yeah well like you it's like do you want to Own 100% of a great business or do you want to own 40% of a great business and I think there's this interesting category of ideas and it's a lot of your businesses too that don't need a lot of capital to grow quickly and you know marketplaces communities um to some extent agencies if you can get in the right Niche like they all check that bucket and to me

35:13like that's the other thing I've learned over the past 15 years like I don't really want to be in a bunch more heavy capex businesses because it turns out they eat up all your Capital which totally which totally sucks was the fireworks business that you started or you're involved I mean tell the story about I think it's Alamo Fireworks how did you get involved in the fireworks business uh it's it's the one thing that doesn't look like everything else so yeah so I got in the fireworks business I'm actually the fourth generation Gridley in the fireworks business fifth if you count my you know by marriage um

35:43so my great great great uncle sold fireworks door Todo with a hand card in Kansas back in the 20s and then my grandfather came back from the war uh and the war being World War II he was in the Navy in the Pacific he and his wife my grandmother moved down to San Antonio because they wanted a slower pace of life and that is San Antonio it is a slower place of Life place it is the anti- Miami let's put it that way um and so they got into the wholesale and retailing of fireworks my grandfather was the first person to import fireworks directly from China into Texas uh so

36:19that was a pretty cool aspect of that and then my dad joined the business in the 70s he grew it significantly from just a handful of retail locations to um much bigger well you know well into the hundreds and then my brother and I got involved in the 2000s I was the CEO for8 years uh and that is a very difficult business to run it's super high complexity very difficult for a lot of reasons and um the business is where it is now today we 37 stores around Texas hundreds of locations that are temporary uh pretty significant you know amongst the top two or three vendors in the

36:52state so um I got involved in it because my dad wanted to retire he uh you know recruited my brother and I to come in and you know I got into entrepreneurship the oldfashioned way daddy so so that's and he and he didn't want to sell the business he wanted to share it with his children uh he had flirted with um flirted with selling it um but I think ultimately like you know it was a win-win for everybody I got to come back from California I got to live I think a really good life my wife and I are are super happy here and uh you know he got

37:27to stay you know involved um he's significantly involved in the business he's a landlord for us and um you know it's a if you can figure out how to do family business with family I think it's like a superpower for the family you get to really have you know some interactions that normally you don't have the danger is family businesses have a way of like exploding families so you really have to be careful and navigate the whole thing so you know we spend a lot of effort trying to communicate well as a family get along well be transparent open and and that's the way to make a family business work

37:58was the exploding families line there a fireworks pun or were you just using no that's incredible though yeah no I've heard them all you know that's an explosive business sales must be skyrocketing right you know on and on and on uh since I was a kid so yeah what's what's something you love about that business and what's something that you don't like about that business like there must be uh some yeah go ahead no no go ahead I was just going to say like as a tech person I don't think much about the you know the fireworks business and I'm sure there is some redeeming qualities to it in terms of

38:38like you know it's probably making money Etc yeah look I think fireworks is a great example of um you know businesses that are kind of beautiful and and also challenging in the same way you know like believe it or not the consumer Dynamics create real interesting Moes for a retailer that often other retailers don't have um you know we have brand Affinity with people uh but also just the customer dynamic they all mostly shop on a couple days a year um so that creates opportunities if you own real estate you can potentially you know in the right places you can potentially do really well for for your life um but

39:15look I also love that you know that business is one that is a great business we've got a great team um it's created opportunities for the CEO the CFO uh the CEO as well and um you know it it puts food on the family on the tables for you know multiple girdley family members and I think ultimately like that was one of the Transformations I had to make as an entrepreneur like I think it's easy to start as an entrepreneur and your business you serve the business right because that's what happens when you're trying to get off the ground and it's easy to forget as the business grows

39:47that ultimately the business needs to switch to serving you and I think the business that you know that business taught me that lesson of like oh okay like at a certain point like this business exist to serve me the owner rather than for me to service it and you know I thought that was a great lesson you that it served um things that I don't like you know like look it's much more fun to be in businesses that like fire officials and police officers and public officials like want to have a around like the the first business I started that that wasn't fireworks like like the fire inspector came in and he

40:21was like Hey like uh okay well you guys are pretty close like you're you're past like just call me when you fix that one thing you're open and I was like what is this like these guys were never this nice when we were selling fireworks and it's because they just you know they had this attitude that just wasn't as nice so you know it it it taught me that there's uh it taught me ultimately the thing that matters most in business is not how well I run a business it is what game am I playing like I would much rather play a really good game and be in

40:49a super good business and do that not very good than to be the best at a really hard business because the hard business always wins and I would rather just I'd rather at this point in life I just want to play easy games and definitely be in that business taught me that I feel like Dura software is a very good business to be in like the business of buying hyper Niche software I mean constellation software I've been following them for the last five or so years and they're just so such a great business um what do you think of what do you think of constellation software have

41:22you spent much time just looking at what they're up to tons of time I mean there is there is a thesis right now that there are going to be a lot more consolation style you know hold codes and rollups happening um especially ones that are just holding for yield rather than for appreciation right which is what like what Dura does right like we're we're cash flow buyers and so like I think constellation and Mark Leonard and the things that those guys have invented and then the level they've taken it to like it's just ungodly like like most people don't understand the level of just what mark Leonard and his

41:57team Mark Leonard is the CEO and founder of it former VC like what they've done through like 25 years of just inward focus of like how do we optimize every part of like learning and feedback and the acquisition model and keeping track of potential Acquisitions and like organizing it and then all of that like they just do it at such a high level compared to the smaller aggregators of which we're one right and someday we want to get there but like for example their feedback process of how do postacquisition like you know reflection to do better for the next one is like over the top like it's just like

42:33standardized beautiful data Centric just like all the stuff you want and that's because Mark is really smart he's not in there trying to run those companies he's in there trying to do two things which is you know manage the culture of that business and have the right learning culture there and then second create the systems around that to facilitate that learning culture and so holding everybody accountable around that just I mean just the dude's like a super genius like it's when I look at it I'm like okay that guy's really really good like someday someday I want to get that good um and we'll see he's been doing it for

43:0325 years we've been doing it for five you know we got a long way to go and and I'm optimistic could you can you explain just like what they do for the for folks who don't know much about constellation software and just a primer on on yeah what's a primer on Constellation software what do you need to know if you're interested in in building a a mini constellation yeah 100% um so software is a surprisingly shockingly huge Global Market it's 600 million plus uh a year or 600 billion sorry a year in Revenue so it's like just this enormous thing globally and software is by far

43:40the greatest business model in history right you have sticky customers high gross margin uh you have predictable Revenue you write it once you keep selling it forever like all of those things like are are amazing right um so what constellation realized when they first got started is there's two types of software there's vertical software which is software that goes towards a specific industry so it might go to like the Pet Care industry or it might go to the insurance industry and then there's horizontal software and horizontal software is stuff like Microsoft Word like it sells across every single industry and what constellation realized early on is that this vertical Market

44:17software was super powerful you could go buy this stuff you immediately had pricing power you had durable Revenue like you could generate cash you didn't have to reinvests in the business really to grow it like these are all beautiful things so what they did instead of trying to write and create vertical Market software was they went out and started acquiring these companies and he raised $25 million from um was it cpers it was Omar's or whatever the Ontario pension fund I yeah omers yeah and so that's how they got started they kept doing that compounding buying got it was relatively slow for the first 10 years

44:51and then the snowball kept going because they would take the cash from these Acquisitions and go use that to buy more companies and eventually they're where they are today which I haven't even looked at the market cap recently but it's it's probably close to 100 billion um they're generating just tons of cash and now they've just turned into a giant you know vacuum cleaner that just goes around the world buying software everywhere from North America Canada Europe Australia they have all these divisions and they've segregated them into vertical Market groups depending upon the vertical that they're going after and uh it's just turned into this really beautiful kind of cast generation

45:27machine um that is U it does this at scale and I think I don't even know the exact number but I think they acquired like a billion dollars in Revenue last year I mean just something just like they did an acquisition like every day like just ungodly and they're doing them all like you know mostly small 10 five 10 million in Revenue with some bigger chunks but like just c a crazy velocity and it's turned to this giant Behemoth all done out of Toronto yeah they uh if you look at their stock chart it's literally up in to the right they're at an all-time high uh their stock is up

46:00just about 10,000% since 2009 10,000% real stocks are up 50,000% yeah exactly come on come on Mark come on Leonard get get back to work Buddy he's also like an epic looking guy right yeah he's got this J yeah have you ever met him or no no not all Canadians know each other girley yeah I thought you guys just hung out out the Tim Hortons um yeah so uh yeah he's got like this so Mark linard is like this like this very reclusive guy he rarely goes into the public and part of the reason is a I think he doesn't like it but B you can see in his shareholder letters

46:39he got sick of going and telling people how to do stuff in public and then they would copy him and compete with them and and he did not appreciate that so he doesn't do hardly any interviews anymore and the ones that you see are like few and far between it'll be like some grainy cell phone camera where he's like T taken in a room and um yeah so he's like a reclusive guy he refused to fly anything but economy class for until recently he's also like my size uh in terms of height and also like much wider like I think he out weighs Me by like 50

47:09or 60 pounds and then the best part is he has like this giant Gandalf the wizard beard and uh it just makes him seem like he's just like an oracle like a sage like he's Rick imagine Rick Rubin but he's doing software that's what you end up with exactly yeah he's a rick rubben meets Gandalf software Canadian look guy so he's you you love to see that you know his he's got a crazy looking Vibe about him and and sometimes you need that I mean when he decided what you know when he started consolation what he was doing was crazy right like it was definitely Against the

47:45Grain so and I love that he declined like he's declining media interviews he's he's do you know he's a clus you know it's he's an interesting character I think he is I think Mark is a perfect example of the power you get from maniacal Focus for decades at a time like I think you know I think we keep talking about this issue you and I have talked about it on Twitter a lot like you know are you willing to go do something for decades at a time and if you're willing to do that like you're basically Unstoppable because 99.9% of the planet is totally incapable of

48:18investing more than a couple hours and something and if you could do it for a couple decades like you're guaranteed to win and uh like I think that's that's the biggest takeaway for me watching Mark is like oh if I'm gonna do something like I want to play multi- deade games I don't want to play like multi-year games not as much fun so what's the this is a good place to end what is the multi-decade plan for Michael girley and and companies yeah well I think there's there's two answers for you which is like I'm getting ready to turn 49 and I don't think I have it

48:47figured out like I went on a retreat like last week and like they asked my my two issues were I was like oh I'm figuring out this media thing and like I'm trying to figure out what my life's going to look like you know 15 to 18 years from now when I'm in my late 60s and frankly I just don't really know like I haven't figured it out and that's one of the things I started last year was just kind of thinking about what do I want my life to look like where am I gonna be you know am I traveling around who am I with what am I working on what

49:12risk profile do I have what are you know what is my interaction model with my kids and all that kind of stuff like what does that look like I just I'll be totally straightforward yet like I don't know like I got to spend the next year or so kind of figuring out because that that 20-year thing is I it seems soon right I'm 48 and 68 will'll be here soon you know in terms of the business plan the business plan is doing more of exactly what I'm doing like I am uh I am you know working with the companies that I'm already in you know I hate to use

49:40the word portfolio but it's the portfolio and I'm working on it and they're growing and and they're gonna I think we're gonna have 100% success rate there um but I think you know the thing I want to work on for the next 10 years is creating more huge ideas whether that's buying companies where that's creating companies that buy more companies or whether it's incubating things like scale path you know or or Staffing Company near that are going to turn into you know big impactful things like I only want to work on that stuff like I don't want to launch anything that's small um I only want to do stuff

50:09that I think is g to change the world and get really big someday at this point and maybe that's just a factor of being almost 50 like I see I see the end is coming and I'm just G to do more of that and I love that because it makes my life like so much easier like I just no to so much stuff now because I'm like I'm just doing that and otherwise I say no and yeah it gives me a lot of Peace going back to the I don't know answer that you have for yourself I think there's so many of us who don't know what they want

50:39to be doing in 5 10 15 20 years how do you how do you turn question marks into periods and answer some of those hard questions yeah for me for me I I take time to make really difficult decisions like that and I gather a lot of data I think about them a lot um lots of long walks and that sort of thing and then I talk to smart people like you did to get their opinion on it so I'm in CEO peer groups um I put it out there that I'm still thinking about it I guarantee I'm G to get some messages with input on it

51:09I'll probably talk about it on Twitter at some point that was the best thing I did this week actually I just you know I put some advice that I had gotten from other people out on Twitter and asked for other people's opinions like it makes for great content but it also like helps me figure stuff out and so over the coming months like I think I'll develop a vision of where I want to be you know 20 years from now um which that's what I think I haven't figured out and then once I figure that out it'll be straightforward I'll just make a plan on how to get there but right now

51:35it's data Gathering data Gathering will turn into really listening to what my soul says I need to be doing 20 years from now paint a vision of that and then figure out a plan so that's really a three-step process um says easy does hard is what I would say about that process though I like it and last thing before before we leave what's this what's this chili thing like where where does this connection with Chili's come from and basically for for folks who don't know Michael girdley is a must follow on Twitter but just so you know you're getting 10 or 15% of his tweets to be chili Chili's related

52:09tweets I need to cut down look for me um for me I I have some views of the world that I think are important and and Chile's like yeah it's kind of goofy and I'm a pretty goofy guy and I'm happy to be out there as a goofy guy but I think also there's this idea of how I feel about Chile that how I kind of feel about the part of America that I live in and I think America to some extent is so focused on a number of things but one of them is like I've always felt kind of a resentment to thinking that you know

52:41this idea that everything has to be special it has to be like a Michelin star to be beautiful right or it has to be handcrafted in Downtown LA for it to be great right or it has to be this extreme thing and you know you got to go to Burning Man to find peace like that to me it's just like you know there's joy to be found in many places and I think all those things are beautiful and I think all those things are great but when I like think about Chile's or I joke about it it's really that feeling like I when if I go into a Chili's like

53:06there are people who are nowhere near Twitter nowhere near the world you and I live in and they're just there with their family like enjoying a beer or like relaxing over lunch or spending time with a colleague after you know after hours and to me like just normal people in flyover America like just living life where it's yeah it's easy it's the same every place you go into I think there's just as much Beauty in that as you find in you know a a Brooklyn you know a Brooklyn canery right or an LA kind of club scene that is the one place in the world that only

53:37people get into like I think there's Beauty throughout all of that and it all comes down to for me like making sure you take a moment to slow down and find that beauty because even though it's uniform and every single Chili's looks the same just like every single exit off of American Interstate like I find I find it beautiful that people are able to be special and human and connect with each other in a place like that and do it easily in a way that that works for them so that's when you see me joking about Chili's that's what I'm actually thinking in my heart I'm like man like

54:06every all those Coastal people hate this but like there's Beauty here and they're just missing it I love it and I also think that in a world where especially on on X Twitter so much the content feels like chat GPT like the fact that you're like whenever I see you tweet about Chili's I'm like at least he's black that guy no no no no no no I'm kind of like I'm kind of like all right all right this is not AI content right here I know that you know this is human this is Michael girley behind behind this account so for me it's like a verification that that you yeah yeah and

54:44and and to be honest it makes me feel as a as a audience member like more connected to you and you know I really I feel like I understand you more from from those quirks so I think people should be more quirky on on places like X I think it's I for people that are in My Generation generation x like I go talk to all my friends and uh I'm gonna write it I'm gonna write a front about this about how like there's such an empty Gap where like if you would actually be one of the people in their 40s or 50s who's learned some stuff and

55:13it's like willing to put yourself out there and be a little bit vulnerable like it is such a blue ocean for us like like we have such an opportunity to share and connect and that's what H that's what that's how I think about social media but like my friends are terrified they're like what if I say something stupid I'm like well then you apologize it's pretty straightforward that's just like real life and uh like I think there's such an opportunity there to go and be a real person um just because nobody else in my generation is capable of doing it like we just were just wired to keep our mouth shut

55:41because you know I don't know why maybe the Boomers told us we had to do it but like I think it's such an opportunity and um anyway I don't know I I wish more well actually no more people should not do it because it would be harder for me so yeah you guys stay at home and keep watching Fox News it'll be fine where could people follow you for more Chili's and holdco and business related content yeah 100 perc uh well I don't know if I told you Greg but I am a YouTuber now so you can go to my YouTube channel I am working hard to get good at video it is

56:12very humbling we've recorded 10 things and I've thrown away half of them uh so you can search on uh anywhere on Google girdley I will get you to my website or you can go on YouTube to girdley world or I'm at girle g i d l y on Twitter SLX and uh yeah I appreciate the opportunity to promote myself a little bit of course uh I just gave you a subscribe and people should do the same and also if you're listening to this open yeah just just subscribe to him right now open up your YouTube app go to the website uh he told you what to do and if you you

56:47aren't subscribed to at Greg Eisenberg on YouTube well that's crazy so do that while while you're subscribing to Michael girley thanks so much for joining you gotta come you gotta come back again sometime uh and people please if you're if you're listening to this and you made it to the deep end uh let us know what you thought of this episode uh on Twitter X whatever you want to call it uh and on YouTube thanks Michael thank you man