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

Incubating 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 4 years has been a lot more incubation for me and a lot less M&A.

Michael Girdley, holdco legend. You know, I feel like there's this new generation of holdco 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 ago. So been a while.

So for folks who don't know you, could you, could you just explain, you know, what your portfolio's looking like? What you're up to?

Oh, sure. For sure. For sure. Well, today what I do is, well, I tweet a lot, evidently, but I own about a dozen different businesses here. I'm located here in Texas, in San Antonio. I grew up here, moved away for a while, but came back. My wife and I got back here 20 years ago now before we even got married, and we've been here ever since. And so I have a diversified portfolio of companies. I try not to call it a portfolio because it makes me sound like a douchey PC. But, you know, I would consider those like deep and significant investments in companies I've either created or purchased and that are meaningful for me. I sit on the board of them and am deeply involved. 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 that. That was the first first company I did outside of the fireworks business. And in the past 5 years have really been an explosion of new businesses. I've, you know, I think I've honed down my ability to incubate companies, uh, my model of how to do it, uh, and my understanding of how business works. Those have all kind of come together. And, you know, over the past year has— past 5 years has really been the growth from 2 or 3 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 know, I think when assets are expensive, you go create assets. And so really the past 4 years has been a lot more incubation for me and a lot less M&A, which I feel like goes against what a lot of holdco entrepreneurs are saying on Twitter.

You know, I feel like right now, especially in like tech holdco entrepreneur land, they're saying, you know, 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. Cause it makes it look like, yeah, it makes it look like you can skip that, that really annoying 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. You know, at the same time, like if everybody's trying to go buy a new business, right? They're going to, prices are going to get pushed up. There's going to be a lot of competition going after the same assets and it's going to 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 and then rushing to it. And If everybody's saying one thing, that's usually a sign you should be doing something different.

Totally. I feel like 2 to 3 times a day I get the pitch saying, do you know how many baby boomers are gonna retire over the next few years? And they, you know how many businesses they run? These businesses are gonna close down.

Absolutely.

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 over the first thing, which is businesses you just don't want to be in, right? Like, there's just like, okay, so that cuts out like all the gentlemen'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 compared 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 manager. So, like, yeah, I know people are finding businesses from baby boomers, but, like, I think that it's kind of way overblown in terms of how many are truly out there. It's not a tsunami. It's It's something more like a little ripple. This is how I would think about it.

And when you do buy a business, how do you find great businesses to buy?

Yeah. There's two ways that buying businesses tends to happen for people, including me. One is like the front door approach. 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 5 podcasts 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 business 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 door way, which is just like looking at listings, going through the, the brokers and all that kind of stuff, and seeing, you know, what the investment bankers and that sort of thing are pitching. That works, and you can sometimes find deals there. 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 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 most of the M&A I've done over the past 4 years has been through the company Duro Software that we set up. It's a really quickly growing company. They're up over 200 people or so global. And we've bought going on 15 companies now. Through that platform and it's a holdco 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 I've participated in, you know, the underwriting of all those acquisitions those guys have done.

So you raise money for that, that sub holdco?

Yeah, we started, we started it with our own money, me and the CEO, and then we did a couple of acquisitions and then we ran out of money. So then we brought on equity partners and some bank debt and then it has grown since then. And then we brought on a professional investment group, a private equity firm called Peterson. They agreed to invest in the company and took board seats and came in and put $50 million in the company about 4 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, we brought in a partner there. And so I'm on 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 Late Checkout, our holding company. And the, you know, one of the, one of the top institutional investors, VCs, someone I really respect, he sits on 2 public company boards or 2 or 3 public company boards of some of like my favorite 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, 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? Uh, totally delighted. Like when we started to talk with Peterson, we asked around about their reputation and talked to references and all that kind of stuff. 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 they're from Utah, so it's like a very family-oriented stuff. So it's not like, it's not like what I would 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 going to make me some money. Like these guys, like they were awesome. Like the first meeting, they're like, 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 was 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 they 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 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 mid-sized company range, like, your mindset 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 going 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 1,000 person kind of trajectory. And like, 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 really 2 or 3 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 3 or 4 quarters to say, okay, well, we need to have this person in as VP of Corp Dev or this person as a controller. Otherwise the company, like you can't look up and just change it on a dime because a little small company is like speedboat and like, uh, a mid-sized 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 in some 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, I don't know, I'm not you.

I didn't mean to duck it, but like, I mean, if you were you, it doesn't sound— if you were you, 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, right? Let's play this out. You're getting $30 million, you know, call it a $100 million post. You know, we're doing quite well. We don't, we don't really need the capital, but the capital would help fund more acquisitions, like larger acquisitions than we might be willing to do. But we're in software mostly, right? So the cost of creating our— create it when we incubate, the cost of, as you know, the cost is of incubation isn't that high. So anyways, if you were Michael Girdley, which you are, but you were playing my role, would you— what would you do?

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 how you describe that both to yourself and other people like that, how does that day look after you take that money? 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 day to 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 much higher ratio than most people. You know, it's interesting. I talked to an entrepreneur last week who took a big slug of money like that for a VC-backed business. He's running it and 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 tap dancing to work are you going to be after you take that money?

You know, you know what I really love about my situation right now is there's no— I don't have a boss, right? You know, like, we— my take is that if you have investors, you have micro bosses, and you have to manage 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 tap dance, I feel like the fact that One thing I really like about my situation is we're self-funded, you know, me and my co-founder do whatever we want.

Yeah, it sounds like that's super important to you and would, yeah, 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, or 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, if 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 Girdley 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 100 posts would be like some pretty cool problems to go solve. And I think that would fun, but it wouldn't change my life as much as it sounds like it would change yours.

Yeah. I mean, I had a phone call. I actually, whenever you have a fork in the road like this, I think that you should call smart people because actually you could just call, call 5 people. They don't, you know, they don't all need to be smart. They just need to be people that you respect.

Yeah.

So I called a few people.

Or what happened?

You didn't pick up. You didn't pick up. You were, you were too busy tap dancing to work or something. Yeah. Hey, hey, this, you know, I don't have much reception here in this Chili's. Something like that. You know, one of the, one of the people I called, I'm not going to call him out, 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 2 or 3 years. And I was like, have you spoken to public company CEOs lately? Like they don't love, love it. You know, obviously the liquidity is good. But he's like, well, it's not even just about that. It's about the problems. He says the same thing. He's like, you'll be able to solve bigger problems. And I'm like, I don't know. I don't know about that. Like, cause You know, I think if you're a solopreneur, you're a multipreneur, whatever, a lot of the times you're solving interesting problems. 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 venture-backed 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 misconception 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 advisor there, like advising like, hey, you need to make it, it needs to be bigger and better, or, or it needs to be bigger otherwise it's not better. Like, it's just a fundamentally flawed, like, worldview. On the other side of that, I think I really appreciate this advisor, 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, another advisor 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 pod. 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 holdco 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 dollars of EBITDA. 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 it. And I was thinking to myself, no, like, where's the multiple of fun? You know, 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, they 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 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, he's just trapped in his fame and 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, you know, 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 oftentimes, they get so seduced by the vision of what would, 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 these milestones, and then it happens and you're like, hmm, 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. 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 view. But kind of reminds me of that, which I was like, ah, this is such a good quote.

Not to— you know, this is a spoiler, 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 Don Draper in Big Sur. I think he's at the Esalen 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 music 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 Mad Men. Is just don't, you know, be like, 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, based on like 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 doing the process. Like I did very much like a masterclass style course where it's just like, look, here's a lifetime of learning. I'm gonna 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 80-hour masterclass is probably not something like I would ever do again. Like I think people want stuff much more bite-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 podcasts is like, is shrinking. Like not only is people consuming less of them, but like the demand for people wanting 60 and 75-minute 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, um, would be something much more manageable and short, like a 2 to 3 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 reinvest 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, 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 them.

So, so yeah, I'm curious about that. I'm starting to see a lot more holdco entrepreneurs, multi-preneurs build out media companies. So I know I just had Nick, Nick Huber, 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 to get to 1 billion annual views. Um, right now I'm at like 200 and 250 million if you count all the, the Twitter stuff. So, um, that 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 it in a very genuine way to help make the world a better place. So that's, you know, that's kind of our North Star is like maximum impact. Along the way, I have some rules, which is like, number one, I'm not doing social media because I want to get rich. It 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 fundraise 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 of 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 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 would, 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 it 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 Scalepath that you incubated. Could you, can you explain like what got you excited about that space? 'Cause that space is just very exciting, you know, is heating up.

You know, last year, well, going on 2 years now, I made the decision I only wanna 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 for ideas went through that lens. You know, what we saw with Scalepath is that we very much like deployed the effectuation model that I use 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 model, um, that I used to basically bring on entrepreneurial apprentices, um, you know, Sam, who is the CEO of Scalepath, he and I like dug into that particular idea after going through 3 other ideas over the previous 6 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 up 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 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 teaches you all that stuff unless 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. 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, uh, you know, you pay a monthly fee, you join the CEO Peer Network. And the unique thing that we've done is create these playbooks that we're releasing now, 2 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 I think very vibrant now compared to a lot of other ones I've been in, super engaged. And it's going off really well. We're on month number 5 and adding new members like, you know, every couple days, which to me is pretty exciting.

Yeah, it reminds me in some ways similar to Trends by The Hustle. Yeah, people came for some of these playbooks, but then stayed for the community, 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 to $5 million 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 We'll have a couple of 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. We'll do, we'll do that as well. And he's built up a roster of these experts. There's like a sales one and then we have one around 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 basically 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 everythingmarketplaces.com?

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 we're a community for marketplace founders and leaders. So first of all, you would think that is like super niche. 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 basically the way it works is you get access to this, you know, community. They have events, they have a knowledge hub and resources. 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 know that they're making— I had heard that, you know, they're in the 7-figure revenue range, which is really amazing. And in 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 everything 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, uh, 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 Scalepath 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 of getting there. I'm excited about it.

How does, how does Reforge work, man?

I think it's a good question. I think you 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 some—

yeah, they've raised money from Andreessen Horowitz 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 have like, you could, you know, this is really cool. So they basically list out, uh, you know, board survey at Carry First, user interview cards at Sitly, holy trinity of dev team planning at Fractal. So they're basically getting all these Product one-page 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 probably 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 raise money business, but maybe they can 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, To some extent, agencies, if you can get in the right niche, like they all check that bucket. And to me, like 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?

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 Girdley in the fireworks business. Fifth, if you count my, you know, by marriage. So my great-great-great uncle sold fireworks door to door with a handcart in Kansas back in the '20s. And then my grandfather came back from the war 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 pace 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 that 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 for 8 years. And that is a very difficult business to run. It's super high complexity, very difficult for a lot of reasons. And the business is where it is now today. We're 37 stores around Texas, hundreds of locations that are temporary, pretty significant, you know, amongst the top 2 or 3 vendors in the state. So I got involved in it because my dad wanted to retire. He, you know, recruited my brother and I to come in and, you know, I got into entrepreneurship the old-fashioned 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 to stay, you know, involved. He's significantly involved in the business. He's a landlord for us. And, 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 that's the way to make a family business work.

Was the exploding families line there a fireworks pun, or were you just using—

Oh no, that's incredible though. Yeah, no, I've heard them all, you know, that's an explosive business, right? 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 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 like, you know, it's probably making money, etc.

Yeah, look, I think fireworks is a great example of, you know, businesses that are kind of beautiful and also challenging in the same way. Believe it or not, the consumer dynamics create real interesting moats for a retailer that often other retailers don't have. We have brand affinity with people, but also just the customer dynamic. They all mostly shop on a couple days a year. So that creates opportunities. If you own real estate, you can potentially, in the right places, you could potentially do really well for your life. But look, I also love that 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, and 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 that 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 exists to serve me, the owner, rather than for me to service it. And, you know, I thought that was a great lesson, you know, 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 around. Like the first business I started that that wasn't fireworks, like, like the fire inspector came in and he was like, hey, like, 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, 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 a 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 being 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 5 or so years and they're just so such a great business. What do you think of, what do you think of Constellation Software? Have you 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 Constellation-style, you know, holdcos and roll-ups happening, especially ones that are just holding for yield rather than for appreciation. Right. Which is what like what Dura does, right? Like 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, is just ungodly. Like, like most people don't understand the level of just what Mark Leonard and his team— 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 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 they do post-acquisition, like, you know, reflection to do better for the next one is like over the top. Like it's just like standardized, 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 25 years. We've been doing it for 5, 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 the 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. 600 million plus a year or 600 billion, sorry, a year in revenue. So it's like just this enormous thing globally. And software is by far the greatest business model in history, right? You have sticky customers, high gross margin, you have predictable revenue, you write it once, you keep selling it forever. Like all of those things like are amazing, right? 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 software 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 reinvest in the business really to 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— was it CalPERS? It was OMERS, or whatever the Ontario pension fund—

OMERS.

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, and 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. 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 it's just turned into this really beautiful kind of, cash generation machine, um, that is, uh, 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, $5-10 million in revenue with some bigger chunks, but like just create a crazy velocity. And it's turned into this giant behemoth all done out of Toronto.

Yeah, they, uh, if you look at their stock chart, it's literally up and to the right. They're at an all-time high. Uh, their stock is up just about 10,000% since 2009.

10,000%. Real stocks are up 50,000%.

Yeah, exactly. Come on, come on, Mark. Come on, Leonard. Get back to work, buddy. He's also like an epic looking guy, right?

Yeah, he's got this giant— yeah. Have you ever met him or no?

No, not all Canadians know each other. Girdley.

Yeah, I thought you guys just hung out down at the Tim Hortons. Um, so, uh, yeah, he's got like this— so Mark Leonard 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 he 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, taken in a room and 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 in terms of height and also like much wider. Like I think he outweighs me by like 50 or 60 pounds. And then the best part is he has like this giant Gandalf the Wizard beard and 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 Rubin meets Gandalf software Canadian look guy. So he's, 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 Constellation, what he was doing was crazy, right? Like, it was definitely against the grain. So, and I love that he declined, like, he's declining media interviews. He's, he's doing, you know, he's recluse, 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 investing more than a couple hours in 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 going to do something, like, I want to play multi-decade 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 Girdley 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 figured out. Like, I went on a retreat like last week and like they asked my two issues where 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, is just kind of thinking about what do I want my life to look like? Where am I going to be? You know, am I traveling around? Who am I with? What am I working on? What risk profile do I have? What am I— 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 with you. 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 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 the 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, whether that's creating companies that buy more companies, or whether it's incubating things like ScalePath you know, or our 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. I only want to do stuff that I think is going 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 going to do more of that. And I love that because it makes my life like so much easier. Like, I just say 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 to 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. 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. I put it out there that I'm still thinking about it. I guarantee I'm going to get some messages with input on it. I'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, 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 it'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 3-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 What's this chili thing? Like, where does this connection with chilies come from? And basically, 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-related tweets. I need to cut down on it.

Look, for me, I have some views of the world that I think are important. And chilies, like, yeah, it's kind of goofy. 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 Chili's 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, this 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 gotta go go to Burning Man to find peace. Like, that to me is 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 Chili's, or I joke about it, it's really that feeling. Like, I— when— if I go into a Chili's, like, there 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 Brooklyn, you know, a Brooklyn cannery, right? Or an L.A. kind of club scene that is the one place in the world that only people 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 every— 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 of the content feels like ChatGPT. Like the fact that you're like, whenever I see you tweet about chilies, I'm like, whew, at least he's your black bag guy. 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 Girdley behind, behind this account. So for me, it's like a verification that, that you, yeah.

Yeah.

And to be honest, it makes me feel as an audience member, like more connected to you. And, you know, I really, I feel like I understand you more from those quirks. So I think people should be more quirky on places like X.

I think it's, for people that are in my generation, Generation X, like I go talk to all my friends and I'm gonna write it, I'm gonna write a thread 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 is 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 happened. 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— we're just wired to keep our mouth shut because, 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 anyway, I don't know. 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%. 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 very humbling. We've recorded 10 things and I've thrown away half of them. So you can search on anywhere on Google. Girdley will get you to my website, or you can go on YouTube to Girdley World, or I'm @Girdley, G-I-R-D-L-E-Y on Twitter/X. And yeah, I appreciate the opportunity to promote myself a little bit.

Of course. I just gave you a subscribe and people should do the same. And also, if you're listening to this, yeah, just subscribe to him right now. Open up your YouTube app, go to the website. He told you what to do. And if you aren't subscribed to @GregEisenberg on YouTube, well, that's crazy. So do that while you're subscribing to Michael Girdley. Thanks so much for joining. You gotta come, you gotta come back again sometime. And people, please, if you're listening to this. And you made it to the deep end. Let us know what you thought of this episode on Twitter, X, whatever you want to call it, and on YouTube. Thanks, Michael.

Thank you, man.