Jay Vasantharajah - Things I wish I had learned 10 years ago about Pricing Power - The Michael Girdley Show Episode 31

Hey, Michael here. Uh, welcome to another episode of the Michael Girdley Show. Uh, today I had my Twitter buddy, uh, Jay Vaz. Uh, also, I'm not going to try to pronounce his last name correctly— Jay Vasantharajah. Uh, I just outed myself as a total stupid American, by the way. But, uh, Jay's a super smart guy, um, somebody that, you know, as I watch him, uh, do his work, uh, on the allocator side, investing in different private companies, public companies, and real estate. Thinks through a lot of stuff really deeply. You know, I had a great chance to chat with him today over about an hour. We covered a wide range of stuff, mostly around business topics. Everything from pricing power, how that affects businesses, whether you should tell people you're in it for the money or not, and is that a taboo? Hiring top talent, does that matter? Should you hire overseas? Yes or no? And then of course, being good Twitter users, we spent some time talking about the platform as well. So Jay's a super smart guy, really loved his energy, you know, just enjoyed this one a ton. So here it is. Oh, Jay, man, thanks for being here. I'm so excited. And, you know, appreciate you doing this. You know, I thought you and I prepared some topics to talk about beforehand. I thought I'd really love to talk about something we were going back and forth on Twitter. Which was, you know, this idea that money or like wanting to achieve wealth is becoming like more and more taboo in like North American culture, at least as far as I'm concerned. I see people like going out of their way to like not like say that they're in it for the money. And it's like, it's very interesting to me. I was curious how you thought about that.

Yeah, Michael, thanks for having me. Big fan of yours. And, you know, I rarely say yes to coming on podcasts. I probably get about a handful of requests that are asked each month. And so I usually say no, but I couldn't turn down a chance to chat with you, Michael. So thanks for having me. So yeah, into the first topic here, money and like kind of goals and whatnot. I find it's— I think it's funny because I think it's really prevalent in the tech space. Like if you were a tech entrepreneur or, you know, you're like a VC-backed, you know, VC, you're running a VC-backed startup, it's really taboo to say you're trying to make money or you're in it for the money, you're trying to build wealth for yourself, your family. And I honestly, it's funny because I think it's at the end of the day, I mean, you know, most people are genuinely just in it for the money. They want to get rich, they want to build wealth and provide a better life for themselves and their families. And I really don't think that it's a bad thing. I mean, to admit, right, to say, hey, listen, I'm really trying to build XYZ company so I have more money to my own name or my family name. And somewhere along the line, obviously, it's become kind of taboo to have that as one of your goals or admit that you're doing it for the money. You need to have— we're kind of in this world where you need to have some sort of grandiose vision of changing the world or this business is going to completely disrupt this. And you need to have some sort of bigger vision than just building money. But yeah, I don't know. Me personally, just from the beginning, right from the very start of my journey through entrepreneurship and investing, I mean, I've admitted the whole the whole way through. Like, I'm— my goal here is to build wealth, right? Like, it's build more money and, uh, more, more kind of, you know, options and freedoms for myself, my family. And it's so far, knock on wood, it's, it's worked out quite well.

Yeah. Well, I mean, do you think it's— you know, there's this California culture that permeates a lot of tech, right? Where like a lot of California people, like, they'll get mad at you if you like kind of talk about like, I'm in this for the money. Like, Like I run into these people from California and the workers I think are that way too. They're like, oh, why aren't you like, this is about social causes for me. This isn't about making money. I mean, do you think that's different in Toronto tech or Texas tech versus California tech? Or do you think it's just permeated everybody?

I think it probably originates in my opinion would be that it originates in California, but it's kind of permeated through pretty much all. The different tech ecosystems. I probably don't see it as much here in Toronto as I would if I lived in Silicon Valley or something. But yeah, I think it kind of permeates throughout. And, you know, a lot of it is kind of just virtue signaling, right? Like deep down inside, I think people want to make money for themselves, but they can't, you know, they need to kind of virtue signal that they're in it for something kind of bigger or they're trying to actually change, you know, the way things are done or whatever it might be. And so, but yeah, I've seen it pretty much all over, but especially in tech for sure.

Yeah. Well, and these CEOs are having to like fight so hard to win over people to come work at their startup, right? Like the economics of going to work at a Facebook or an Amazon— well, Amazon's a terrible place to work, but like a Facebook or a Netflix or a Google, Like the economics are, are Twitter even like are so good compared to what you're going to get being employee number 20, you know, at a high-risk startup. So I don't, to some extent, I don't blame the CEOs of those startups because they can't compete on, you know, and, and I've been on the other side, right? Where you're like some developer that's making $220,000 a year all in, you know, at your company gets offered $650,000 to go to Amazon. Of course, he, she doesn't look very closely and realize that only the, you know, two-thirds of that is stock and it only vests 5% after the first year. But like, you have to figure out a way to compete in a way that's going to be non-monetary because you just don't have the money that, you know, Zuckerberg or those guys do. So I wonder how much of that is that in addition to this California culture stuff.

For sure. And it's hard to obviously sell the story. If you're like, you know, people like to buy into the vision or, you know, whatever the, you know, whatever disruption you're trying to bring into this world in order to raise capital, attract talent and all that kind of stuff, you kind of need to, you kind of need to have some sort of like big grandiose vision. And I think like, you know, out of like, you know, let's say like 10 founders or, you know, 10 people kind of starting businesses, maybe like 1 are actually not in it for the money, are actually legitimately, like, genuinely trying to, like, do something, like, uh, um, to, to, to bring big change into this world, like 1 or 2. And then the rest of the 8 are really just, you know, they're trying, they're trying to get rich, right? And so they're trying to make money. And, and I don't think that's a shameful thing. I really don't think that's a bad thing. And I know it's kind of gotten to the point where it's kind of taboo to admit that, but, uh, But yeah, so data point for you.

This is, this I found very interesting. As you know, I've been a part of a couple venture capital funds on the sponsor side, right? Where we're running the funds and I'm still doing that because those funds take a long time to sunset. But like, as we looked back on which companies ended up doing the best, like postmortem them, there was a dichotomy between the founders that came in and they were about a mission that wasn't building a great, big, profitable company. Like, they wanted to change the world. And I refer to them as like missionaries. And they would like come in and say, hey, what I really want to do is bring this particular methodology to all of business. And that's all that matters. And we're not, we're not straying from that. Um, or they had some social mission and it was about that social mission, not about like, how do we build a great business? And invariably those people who are those missionary types, they never built a great business. Like they were all creators on venture for us. And taking that even further, like they were incredibly frustrating too because we'd be like, hey, you know, let's do this over here 'cause we could make a lot of money. Here's the suggestion. They'd be like, no, no, that strays from our mission. I'm here to change the world. And it's like, well, wait, no, no, we're here to build a business. That's why I gave you money. Like, how does this work? So anyway, that's just the data point of, yeah, I really want somebody to come in and be like, okay, number one is make a lot of money. And then if number two and three, we change the world along the way, like totally cool. Otherwise, you're never going to get a return on your investment.

For sure. For sure. And I saw that you liked that TransDigm CEO reply. And I'm curious about— so basically, to give people context, TransDigm, this multibillion-dollar company, went public like a decade and a half ago. Yeah. And the, um, one of the investment analysts kind of asked the first thing the CEO did was like sell a bunch of shares, right? Like millions of dollars of stock. And then the investment analyst that's covering TransDigm was like, how am I supposed to believe in this company when the CEO just sold like, you know, millions of dollars worth of stock? And the CEO basically like stands, like puts his, leans in and is like, hey, this might be a surprise to you, but I'm in it for the money, right? My wife wants a beach house. I'm going to get her that beach house. Like, you know, I don't know how else to prove it to you, but I'm in it for the long run. But at the end of the day, I need to take some chips off the table. And so I really like that. I think that was really, you know, I find a lot of people kind of get spooked when CEOs, especially like kind of founder-led CEOs, take some money off the table and the companies go public and things like that. I think this was just such a great anecdote to be like, hey, listen, there's a million reasons why someone might sell, you know, stock, or you don't know what their personal goals are, what their personal finances are and things like that. And so, but I want, I'm curious to hear, so you had mentioned that you kind of ran into somewhat of a similar scenario there about when someone's kind of asking about your goals. But yeah, I'm curious to hear your take on that, Mike.

Yeah, well, I mean, there's stuff going on with me, so like I'm very, you you know, very pro-San Antonio to, and very out, uh, cheerleading for the comp— for the city. So a lot of times people will assume what I'm doing is something that is about making the city directly better, right? Like, oh, you're doing this, it's a charity. And it's like, no, no, no. Like, that doesn't, that's not sustainable. I'm in this, I'm in this thing to make money. And so, you know, there's been times where I go in and say, we're, we're syndicating a deal or raising money for something or, you know, trying to find a partnership and they're like, oh yeah, okay, well this is about like, like you doing something nice for the city. And I'm like, no, this is about us making money. Like making us money, making you money. And along the way, if the city gets helped, that's great. And like, like that was a hard, you know, lesson kind of to learn. 'Cause I would get halfway through like talking to somebody and they'd be like, well, you know, you're not really in this to make money.

I was like, whoa, whoa, whoa.

This whole thing is totally coin operated. So that's where I've become much more like open about it. The other thing is because people are so scared to talk about being in something for the money now, if you express that to somebody, like, you just come across as so real, um, to a potential like investor or business partner. They're just like, oh, like, you wouldn't be saying that unless it was really, really true. So yeah, so that's why, that's why I love this guy being really really super real. I mean, I think the other thing is like people underestimate how much being post-economic changes what you, how you think about stuff, right? In your timeline. Right. And so like this Transdigm guy, like he gets it that once he's pretty well set for life and he doesn't have to worry about paying for his kids' college, he's going to think much longer term and actually be a better CEO than he is if he's one that's worried about like Well, what happens if I get fired here? Um, so yeah, so, and then you can tell on the analyst side, the analyst is definitely not post-economic and is probably pretty young. It doesn't get it. So, uh, it's, it's, it's a fa— it was a fascinating, like, interaction. That's why, like, I wanted to click the like button, like, 3 times.

Very cool, very cool.

So let's talk about, um, let's talk about this talent thing, because I think of all the lists we put together, this is the one I was like, oh, like, I have the strongest opinions on this. So I think you and, and my buddy Nick were talking about this idea of everybody's hunting for top talent for their business, and somebody said top talent is overrated, like as their contrarian thing. And so I'd love your take, and then I'll give you my hot take on it.

So basically my take is that basically top talent is overrated. I think companies that can survive decades are built on systems, systems of continual improvement, systems that could turn kind of B and C players into A players. And I think the need for top talent is— like, every company needs top talent, but I think the percentage of people in the organization that are actually genuinely top talent are like less than 5%, or that's, you know, the quota or the target for kind of top talent should be around like 5%, and the rest of the remaining 95% has to kind of be average people put into well-built, well-defined systems. And it's also funny because every company claims they have the best people. Every company kind of claims they have the best talent. Like, what's the reason for your success? Oh, our people. Our people are the talent that we have and can attract. But I mean, mathematically, that just can't be true. Every company can't have the best talent, right? I mean, by definition, half the people are average, and then, you know, or whatever, and then there's below people that are below average, right? So it just doesn't make sense. It's like that, it's kind of like that, you remember that survey that went around where it asked everybody how good they are at driving and everybody, like 80% of them respondents claimed that they were an above-average driver. Right. And so that obviously is not the case. Right. And so, um, so that's kind of my take is that the, you know, really good organizations are built on systems that can kind of, uh, develop people and enhance people.

Yeah.

Average people.

Yeah.

No, I love that. Love to hear your take.

Yeah. Well, and then also I think you're riffing on that. You also get to where the best businesses have things that go well, or businesses that go well, no matter really what the talent does to it, right? Like there's the old Buffett insult where it's like, I want to own a business that a ham sandwich could run, you know? And it's like the great businesses get that. I think he's walked that back, by the way, because it's so mean. And that's one of the, you know, that's one of the tough things about being out in public as like an active business owner. You have to be very careful what you say. Like you, you gotta think, not only am I gonna get canceled by the generic audience out there, but like you also have to think like, okay, if I say that my business is so good, it could be run by a ham sandwich. How does the CEO of that company feel when I describe them as a ham sandwich? Right. So yeah, anyway, I think, I think that's, that's to riff on your idea like that, because all that stuff becomes like super important. So I think that, you know, I think there's two kind of ideas. About this. So number one is I think this is a false dichotomy, right? I think this is like, people are like, oh, like, could— is top talent overrated or underrated? You know, I think the reality is, is that there are a multitude of different roles inside of an organization. And when you talk about, like, I hear you talking about these systems being things that are put together, like, that totally makes sense. But in those systems are people that are A-players to be their cog in the machine. Right? Just like, just like somebody has to be an A-player running HR for the Topeka office for your particular company. Like, like everybody looks at the top talent kind of spectrum as like, oh, like who's the top end, you know, top 10% computer programmer. And the reality is, I think my lens on it is there are A-players for particular roles. And your job as a company is to find that A-player, like in the right place and the right time to do that job. And then, you know, I do agree that there are roles where top talent is always like important, right? Like the CEO role is one where, you know, the numbers have shown over and over again, like a high-performing, give-a-shit CEO beats the crap out of, you know, a bottom quartile bad CEO. Like that's just the nature of it. And so, you know, to some extent, I think it's a false dichotomy. And then to other, you know, to other situations, I think it's entirely true. Like if you can get the best CEO in the world, and I see it over and over again, Like good CEOs just outperform average ones, like just over and over. So I don't think in those cases top talent is overrated. I do think in other situations like you're talking about where, you know, you have a more limited role, like top talent is totally overrated.

Interesting. Do you think that—

Interesting? Is that like interesting you disagree with me or interesting you didn't understand what I said? No, no.

Interesting is I hear your point for sure. I think I liked your comments on, um, your goal as an organization is trying to figure out where to kind of suit people to play to their strengths or their talent. Um, I think it's okay. So I think it's kind of like a little bit, um, okay, let me walk this back a little bit. So I think a lot of roles and a lot of, uh, a lot of different departments and a lot of things that people do with an organization can be really broken down to the point where judgment is removed from the process. You can make it into a step-by-step process where basically you could, to put Warren Buffett's kind of phrase back in here, ham sandwich could run, meaning that you've effectively removed the judgment out of the process and you could literally slot anybody. You could take a bench player, and put them into that role, and they'll be able to kind of learn which levers to pull on the machine in order to get the output that you're looking for. And I know that's a really kind of rudimentary way to kind of look at the whole thing, but that was kind of basically the gist I was getting at in terms of systems. Like, a specific example is, like, you know, we're both in the software industry. So Constellation Software, for example, like, I'm sure you're probably familiar with their org structure and kind of how they operate, but they can basically slot in very kind of, you know, either junior or people that just aren't, you know, definitely not considered star talent or top talent that, you know, is typically attracted to places like, you know, large private equity like Vista Equity or whatever it might be, but they can kind of develop them. They've kind of gotten a systemized process where, you know, someone junior or someone kind of not considered top talent can come in. They understand which levers to pull, which buttons to push, what, you know, what to look for in order to get the IRR output that Constellation Software so famously delivers to its shareholders. And so I think the crux of what I was trying to kind of articulate there was that these types of companies that are kind of, kind of are successfully removed as much judgment from the process as possible so that the only things left is is the actual just process, I, I think are the ones that can survive decade after decade, as opposed to companies that rely on having to attract and retain top talent all the time. Yeah.

So are you talking about a scenario— let's take Constellation for example— like a scenario in which the systems and the framework for how those people do the things that they're doing on a regular basis how those things can take an average player and make them a high performer, right? You're taking a, you know, a 60% player, let's say, or 50% player and turning them into a top 20% when, when all effect is coming through. Is that kind of the argument?

Yeah, exactly. If they were to follow the exact playbook process to a T, you know, they would go from being, you know, wherever they started. So let's just say like a B or C player. And then by the time they've actually mastered the actual, you know, step-by-step process here, they've turned into an A-player or, you know, as close to an A-player as possible. Yeah.

So, I mean, it's very Girdley, but it sounds like we're violently agreeing, right? Like you've created a business environment in which the right person for that is somebody that's going to cost a third of what you're going to pay somebody in Silicon Valley to take an equivalent kind of talent role, but you've created an environment around them and a job. You've crafted the job for them where they can thrive at a higher rate than, or higher level of output than they would just without any of that stuff. So, or are you arguing something different?

Yes, I think so. I think we're basically saying the same thing here. So yeah, well, Agree to agree.

Well, you know, I do, I do think it, I do think it brings out a point, which is a lot of managers think that they can abdicate creating systems, or business builders think they can abdicate creating systems by just throwing more money at having more talented people who will just figure it out. And I think you're, you know, the, the, the secondary effect of what you're saying is like, you can't do that, right? Like, unless, unless you have infinite money. You just can't. You have to, you have to be doing that. You know, and you see me like on Twitter and stuff, like hammering the, like the EOS, like business methodology and all that kind of stuff. And the cool thing about it is that pro— that methodology like forces you to sit down and document processes and systems and even forces you to hire somebody in the form of the integrator. So your COO whose whole job is to build systems to document them and tie everything together. Because entrepreneurs don't like to do it. I don't like to do it. It's really boring. But there are people out there who think it's great.

Yeah, and that's a great point, by the way, about kind of— but the managers kind of being thinking that you just hire top talent and then, you know, be done with it. I think there's also— it's also— we, we see this in, um, so in, in, for example, this industries like manufacturing, which are kind of their legacy, they've been around for a long time, they've been through the whole boom and bust cycles. Businesses are very process driven, right? They're very like the phrase kaizen, right? And continual improvement. They've kind of gotten everything down to a complete science, like lean manufacturing, just in time, all these things. And I think that those types of changes. So basically in those environments you could basically put, you know, the B, C players, they follow specific guidelines, processes that have been kind of developed and done over the years, remove judgment from the process and you get the output you're kind of looking for. I think software and tech is kind of, it's going to go through that same phase eventually, right? Like we're kind of at a stage where everyone's trying to focusing on attracting top talent. But as software matures and tech matures, we're going to go through a phase where, like, kaizen. And if you think about, like, you know, the development of software as well, like the actual R&D process and things like that, it's, you know, it's similar to manufacturing. Like, there's this process that you can be very process-driven. You can be in terms of your inputs and outputs. You can have a measurable approach, get more predictable with how you kind of you know, ship out different functionalities, modules, and features and whatnot. And so I think like we're still kind of like software and the tech industry at large is still not there yet, obviously compared to, you know, manufacturing, but we'll get to a point where the process-driven systems approach will be kind of widespread implemented throughout the tech industry. But would love your, your take on that.

Yeah. So you, so what do you think is precipitating that? I definitely have a different take, but what's precipitating that? Is it the continual evolution of how programming and building software and selling software has been, it continues to get easier and easier every year. Is that kind of the driver of what you think's happening?

Yeah. And the influx of cash as well and capital, right? I mean, like, you know, at a certain point in history, like manufacturing was considered tech, right? That was the tech industry back in the day. And being, you know, when you have excess when you have a ton of cash from investors and a lot more capital flows into your industry, like you don't need to be as like, you know, stringent or capital efficient or whatever it might be, because there's always more capital. There's always another, you know, more investors to get money in from. But now obviously manufacturing is not tech anymore. You kind of have to be very, you know, these industries that have matured over years, they've gotten really process driven, very systems driven, very kind of you know, very disciplined. And so I think the, to answer your question, like what's kind of driving the, like the, like I'll say quote unquote the slack in the tech and software is capital. It is basically the influx tech, you know, software and what we kind of consider tech right now obviously has a large amount of capital influx and, you know, a lot of dollars chasing the industry. So you don't really need to be as disciplined. You can focus on just kind of hiring the top talent and worrying about, you know, systems later. Someone— that's someone else's problem down the line today. But for a lot of tech executives, like, just kind of— there's more money to go around. And so I think that's what's kind of driving the— what we see right now in the tech industry.

Yeah, I wonder if it's really— what we're going to see is like a non-uniform evolution, right? And like, where you're seeing like how much things getting developed are actually R&D right, versus just like stitching things together and, and going down kind of well-trodden paths, right? Like, so your typical, your typical CRUD app, like create, read, update, delete, right? Your, your typical kind of web app that most, most enterprises have huge teams building and, and stitching together. Like, those are one thing where I think, you know, I wonder how much that continues to get standardized and also easier, right? Because you're seeing more just kind of drag and drop builders for that stuff. Versus, you know, the continual kind of new development of pushing the envelope, right? At the high end, everything from, you know, high-frequency trading to kind of drug development and stuff like that. So I wonder if it's one of those situations where it's, you know, as things get more mature, then we'll kind of see that repeatability and that systemization, but we're always going to have that frontier-level tech that's getting deployed. That will always involve that level of creativity and super high talent. That's my gut feel on it, but I don't know, what do you think?

For sure, for sure. I, I think that's a good take. Um, we'll always have an industry that's considered like tech, right? Like today it's software and internet apps and all that kind of stuff. Um, not sure what that will be in the future, but, um, in these types of industries, I think the game is attracting and retaining top talent because you need kind of that creativity and you can't systemize those kind of processes yet, at least, right? But I think if those companies want to survive over the long term, right, the decades upon decades, they're going to eventually have to go through that evolution for sure, where things become more systemized and output becomes a bit more predictable.

Yeah, dig it. All right. Well, you put on here another topic, which was offshore labor. It's one near and dear to my heart. So What, what, uh, do you have a core thesis around offshore labor or something that some, what aspect of it, like the right and wrongness of offshoring jobs? What, what are you thinking?

Yeah. Uh, definitely. I think this is, this is a topic I think we'll, we'll disagree on. So me, me, I'm a, I'm a, I'm a strong believer in offshore labor. Um, I think since the beginning of my career, uh, even back at my, uh, you know, when I first saw. Offshore labor being really effective is actually when I, my first job out of school, I worked at Deloitte Consulting and I was actually shocked to see how much work we actually, Deloitte in Toronto was outsourcing to Deloitte in India basically. Right. And so, and like, I didn't even realize that was like part, like, you know, like I didn't realize that was like kind of part of the job, how the job kind of functioned. But a lot of it was just managing a bunch of offshore people to crunch Excel sheets, put together numbers and all that kind of stuff. And I realized how powerful it was because one hire in Toronto that was being paid a Toronto wage could manage a team in India that could produce 10 times. So it's really about leverage, right? It's really about labor leverage. And I think over the years, I remember back in the day, There was like oDesk and then oDesk combined with Upwork, and I got Upwork as a big platform. Now there's a bunch of niche-specific outsourcing platforms. I think the talent for outsourcing and offshoring jobs to lower-cost jurisdictions like India, Ukraine, Russia, Belarus, Philippines, the quality of talent has significantly improved and what you can outsource outsource today is way different than what you can outsource, like, you know, 10 years ago, 15 years ago, right? So it's kind of almost like a network effect as like more people look to outsource jobs, more jobs, more outsourcers or freelancers are kind of coming to the market, right? And so with different talents and whatnot. So I think in today's day and age, I think every business owner should have outsourcing and some— they should be outsourcing something in their business for sure. And then the— and I think that gets exacerbated by the fact that like local talent is one expensive— it's a massive administrative burden as well for like small business owners, like hiring someone locally, we get health insurance, payroll taxes, all that kind of stuff. Like it just becomes like a repelling force to kind of shift jobs overseas. And now the last kind of macro force, I guess, here is the whole pandemic thing has kind of made companies that were thinking about outsourcing or maybe not even considering it. And now everyone's working remotely where the barrier to kind of outsource, the platforms, the methods to pay people has just made it so much easier to hire people remotely to do jobs, to do tasks that were done by local people before. And so So I'm a big believer. I've only— I've had very positive experiences using offshore labor. Obviously, I have a few negative ones as well, but you learn from those and then kind of do better. But yeah, I'm a strong believer in offshore labor. And I think my guess here, my kind of forecast prediction is over the next decade or so, a lot of the knowledge worker jobs that we employ people here for So things like, you know, things that people that are involved in the M&A process, like real estate investing, accounting, tax, finance, you know, legal even, are going to shift overseas. And while the judgment and the critical thinking work will remain onshore, everything else will go offshore.

You just described the way our software private equity firm is put together. We have. And but so I would put a twist on that, which is a lot of the higher-level, like, stuff that you're talking about, like deal analysis, sourcing, you know, even some of the, the LP relationship stuff, like, like offshore folks are doing that as good or better than, you know, domestic folks are. Like, it's, it's even going further, I think, than maybe at first blush what you said, like, The, um, the English competence, the— and then the other thing is like a lot of times you deal with these folks overseas and they don't know how Western business works. Like you'll see them do oddball stuff. We're just like, oh, like you're from Colombia, like that's the way things work in Colombia. That doesn't work that way in America. Like we don't, we don't lie about that stuff, that sort of thing. Um, so, so yeah, so I, I think that's the other thing about it. I'm curious, uh, you thought that You said at the beginning of the way you described it, you thought you would disagree with me. What did you think you would disagree with me about on that stuff? What do you think I would think differently?

Okay, so because I've seen that you're obviously a big cheerleader for San Antonio and bringing jobs to San Antonio, right? And I would've figured that you were more a proponent of hiring locally and having more jobs kind of within the US or, you know, I guess Canada. Borders as opposed to shipping them overseas. So that was my gut feel, but I guess maybe I'm not right there.

Yeah, no, no, no, no, I totally dig it. You know, I think there has been a transition for me of thought on that, right? Where I think starting 12 years ago, 14 years ago when I was really getting started bringing tech and stuff to San Antonio, like I would be like, yep, We need to hire here. We're only hiring here. That's the way it's going to work. You know, and over time, the, you know, the boiling frog, so to speak, the, like, the more I go through it, the more I realized, you know, hiring where the best talent is and just building great businesses here is what's going to be great and what's sustainable. Because every time I saw people doing things like, oh, we're only going to hire local labor, right? Or we're going to invest VC money, but only in deals inside of our county. Like, it just never worked, right? Because it, it started to do what I was talking about earlier, which is it would pervert, pervert things away from kind of the, the way they should work, right? So like, there's the law of the jungle in capitalism, right? You need to have more cash coming in than goes out, and the owners need to profit, and everybody's interests need to be aligned. When you start to put weird rules like that on a business, you end up perverting your purpose and your mission. And you end up with these things where it starts to act more like a charity and less like a business, and charities aren't sustainable. So now I'm, you know, you heard how I just described stuff. Like, I am like, whenever I do anything now, I run a global search. Like, if the best person to do the job is in Venezuela, like, we do it there. If the best person's in San Antonio, like, I do it there. And, you know, primarily the idea being, okay, well, if it's good for San Antonio, like, what'll be best for San Antonio is to build a great business here, and that'll mean some jobs here. But like handicapping ourselves to say we're only going to look at part of the labor pool, like, that's just dumb. Like, I just don't think that's— I don't think that's smart. So anyway, that's— I would agree with you. 12 years ago, Michael would totally agree with you. We should just hire in San Antonio, and that's how we change San Antonio and make it to make it be its best self. Uh, 2022 Michael is like, now you just built a great business.

So, so yeah, fair, fair enough.

So you don't hire Canadians. That's pretty much the secret, actually. So, so my experience with Canadian labor is really different depending upon which end of the country it's in, and I feel like there's this barbell distribution where it's like you have, uh, the, like, the Windsor to Toronto corridor where, like, I feel like that is very, like, American-style work hard, try hard type people. Every time I have dealt with a company in the kind of Nova Scotia or BC, so the Vancouver area, it is a total, total different scenario. So, you know, we were, we were looking at buying a business in Vancouver and we went up and we did the we did the, the, like, the visits, right? And, um, so we're there and like, like I noticed like everybody's like super quiet in the office. I'm like, why is everybody so quiet in this office? And then I realized there was a dog like sitting in the middle of the office asleep. And everybody had decided the company dog was taking priority over business that day. And I was just like, this is the craziest thing I've ever seen. Like, it was just like, so anyway, that's why, you know, to some extent when I look at Canadian companies, I'm like, Toronto, great. Vancouver, I just, I want to double-click, I got the right group.

That's funny. I'd say that's pretty accurate. Toronto, you know what, there's actually a lot of good finance talent in Toronto. We're kind of like a mini slash cheaper New York for talent. And so there's a lot of good finance folk here. East Coast, I've had honestly very little interactions with. Like, it's very, very kind of low-key. Um, I mean, there's not a lot of people that live out east anyways, right? So it's a very kind of— there's not much to choose from regardless. Yeah. Um, West Coast, BC, yeah, I would say they're pretty laid-back as well. Kind of like the— see, if Toronto is kind of like New York, you know, BC is kind of like, uh, California in a sense. Yeah. And so, and then you have Calgary in the middle. Calgary is kind of like, like Alberta is kind of like our Texas. And so we're there and there's a lot of hardworking people in Alberta as well. Different culture compared to Toronto, definitely. But, but yeah, that's kind of like my summary of Canadian talent. But yeah, you hit it on the nail. I'd say it's pretty accurate.

I think I would revise the Windsor to be Calgary. Too. And I went up to, you know, my college roommate lives in Calgary and he's a great guy and, uh, we're still in touch. And, um, I went up to visit him once and we're going around all these neighborhoods and he lives like in a pretty nice neighborhood. And, uh, he's like, yep, he points out this house and he's like, okay, those two, that, that those people came from Poland. They came here in 1962. Uh, you wouldn't know it. They're worth $400 million. They came here and started with one truck. And like started an oil company and like have been driving around petroleum and now they have 4,000 trucks. You know, it's just like there was just story after story of that. And so anyway, I thought it was, I thought it was, I thought Calgary was cool in that region. And except for the fact that you can only go outside like 3 days a year, it was pretty great. Yeah. So I think the problem with Vancouver, like when we would talk to people there, Like there was just so much to do. Like the whole city seemed to have selected for people who just wanted to kind of like split their time between Whistler, being out on the water, like running around, like hiking, you know, going up whatever, Grouse Mountain, like all that kind of stuff. Like it's got the California problem here you're talking about, which is like the, I call it San Diego-itis where like you go to San Diego and like, and like you walk around and it's like. Wait a second, it's 2 o'clock on a Tuesday PM. Like, why are you guys outside drinking mimosas? Don't you have jobs? Like, go do some work. So there's something to be said for being in a place like Toronto or New York where it's like, well, like, you can either look at that pavement or you could get in your office and do some work. Which would you like? Those are your two options today.

Perfect. Yeah.

Um, so the other thing I'm curious about your take on it, every time I look at a Canadian tech company, it seems to have like 50 to 100% more people than it should have. Like the people get paid less, but there's like fewer workers in all of these Canadian companies. Like, is that just sample size bias or like confirmation bias on my perhaps on my side? Or do you see that the average Canadian worker in some of these markets is more or less same as productive as say like an American worker for, for like say say, like, on a revenue per employee measurement for a tech company.

So, so wait, you're saying that Canadian— from what your experience, Canadian companies have less or, or more headcount ratio?

More. So like, let's say you have a, a tech company that's a, a random niche vertical software company that's $5 million in, in revenue.

Okay.

In the US, um, let's say it's all US people and they haven't offshored anything. Let's say your, your revenue per employee might be $200,000. Okay. So you might have whatever, 25 people. If you go look at the exact same company in, in Canada, they'll have 35 or 40 people and the revenue per employee is $120,000 or $100,000. So I'm just curious, is this sample size bias or confirmation bias, or have you seen the same kind of phenomenon that it's kind of like the, well, like you, like the India thing, right? You see a tech company that's offshored to India and they're like, we have 400 people. And it's like, well, it's because you have to hire 300 people in India to get kind of the same productivity as the, you know, just it's just the work culture there. I'm not saying Indians are less productive, but it's just when you see the companies, that's what it looks like. So I was just curious if you see that phenomenon in Canada or if it's just me being a stupid American.

No, no. You know what? I hadn't really considered it geography that, that closely like that. But now that you mention it, a couple of companies I looked at in Canada, I think you're definitely onto something. I think there's a few forces driving this, but yes, I would actually somewhat agree with that sentiment. I think that from the English-speaking world, I think the gold standard for productivity is American companies for sure, and American workers. Canada is probably like somewhere behind for sure compared to America, but nowhere near as laid back as UK or even Australia. I think that Canada is somewhere in between, whereas on the very leisure or very laid back in terms of productivity, I'd say is from my experience, again, if you have any listeners from the UK or Australia, I don't want them to cancel me over this, but from my personal experience, which is a very narrow view of the world, I've seen that Canada is somewhere in the middle. Now, I think there's also an interesting phenomenon. I don't know if the US has this, but Canada has a very generous R&D credit program where you can effectively get like a refund of like up to about 50% of a software developer's salary. If, you know, there's like a bunch of criteria and there's, you know, you got to do the whole filing and things like that. And so I don't know if the US has that, but that, that, that's a, that's a pretty funny incentive because then if you think about it, that that basically means that you can hire basically 2 people for the price of 1 in Canada by using that credit. And so with that incentive, it's almost like you might as well kind of hire more people if you're, you know, if that's kind of— you're looking to get more productivity or whatever, what have you. And so that might be driving it as well. But, um, but yeah, I think that— I think the productivity— the productivity being a bit lower in Canada compared to the US, I think that's accurate assessment.

Well, the company I talked about on the West Coast of Canada, like, I also remember like we were tiptoeing around the dog taking a nap, but then like we were like there and it's like 3 o'clock in the afternoon and everybody like hauls ass. I'm like, where are you going? What's going on here? Like, get back to work. We didn't know that. We didn't end up buying the company, so it was kind of one of those things. But, um, so on the tax credit, we have in America, you get an R&D tax credit So it's actually done against how much you spend and not against how much headcount you have. So it may be the same thing, just done kind of inversely. Like they're not, they're not motivating you to have more bodies that way. And also the R&D tax credit, it's the stuff like those Main Street guys do out of California.

Yeah.

That startup that's all over Twitter. It's also like a total pain in the ass to submit it. Like it's, You know, we, we did it for one of our businesses and you're like, oh, like, I don't know if that was worth it. Like, it was just a lot of work. Um, 'cause you have to go like do a bunch of segregation of what's actual R&D versus maintenance and all that kind of stuff, which at the time we weren't like going through and doing that work, so it had to be all done manually. So anyway, we do have it, but it's not, it's, I don't think it's as impactful as when I've seen Canadian like startups be like, hey, we just got a quarter million dollars in free money from the government 'cause we have 4 engineers.

Yeah, exactly.

I'm not exaggerating. I'm an exaggerator. That was not— that's not exaggeration. Uh, and it keeps, it keeps startups in business. Like, I, I saw our startup that we invested in, and they're in Toronto actually, um, just keep getting hundreds of thousands of dollars every like few months. I was like, it was either that or they would go win, uh, win startup competitions. And y'all's startup competitions pay like a lot of money, which is awesome. Like, they'd get like $100,000 Canadian, like, sort of real money. Like, cool. So I did want to talk— you and I went back and forth, uh, about pricing power. So it's funny because I went out and I put this, uh, I was driving down the road, pulled over to the side as a good, as a good person does. I put this, this, uh, question on Twitter, which was, give me your most contrarian opinion. And two things happened. One is something I'm very thankful for, which is people didn't start writing a bunch of racist, like, stuff on there. So I was super excited that didn't happen. Uh, so thank you, Twitter, for whatever's going on with the algorithm. But the two thing— the number two thing is, um, or no, no, this wasn't the contrary opinion. This was, you can only ask one question to decide if a business is a good investment or not. And you and I had the same answer, which was, can you raise prices? Do you have pricing power? Um, and then there were a bunch of answers that I thought were really bad. So I don't want to shame people for those, but there's just like You know, how's the CEO compensated? Like, well, it's, it's okay, but it's not good. Um, so anyway, I definitely wanted to dig with you about your thoughts on pricing power and, and how you think about it, because it's a very confusing thing for most people. Like, they have a hard time getting their head around it.

Yeah, I'm, and I'll admit I'm still learning every day, right? So, um, it's— so if there was one thing someone could have whispered in my ear, like, back, like, 10 years ago when I started getting into business and investing is pricing power. Like, get good at— only get involved in businesses that have pricing power and avoid pretty much anything else. And okay, so that question, can you increase your prices, or what happens if you increase your prices? It tells you so much about the business's positioning because there's a few things it tells you. One, it tells you what kind of a moat you have over your existing customers or potential new customers or market share, right? Because if you don't have a moat, well, if you increased your prices, everyone would switch to your competitors, right? And so, so it kind of shows you where you're, where you stand between you and your competitors. It also shows you your supplier's power as well, because, and I think James Trentham or Trentham Griffin has this concept called, always talks about the concept called wholesale transfer pricing. It's when basically your suppliers have a lot of power over you. You. So anytime you increase your prices or you do really well, they increase their prices too, and that value gets kind of drained to your suppliers. So that happens a lot too, where you may have a lot of pricing power over your, you know, over your customers, and, you know, the threat of new entrants is low, and you can't, you know, they won't switch to new entrant. But if your suppliers have a lot of power over you, well, you could increase your prices, and then next year what happens is your suppliers increase your price, and then that value gets sucked into your into your supplier, right? And so I think it's super important in businesses that really— I think all businesses that do really well over the long run have some form of pricing power one way or another.

Yeah, I'm totally with you. This is a very Buffett-type idea, right? He and Charlie Munger would say like, what's a good business? It's one that, you know, you're You're not terrified to raise your prices by 10%. Like if you're terrified to raise your prices by 10%, you're in a bad business. That's what Munger, I think, would— the direct quote from him. So I think the interesting thing is how do people build the skill to be able to identify pricing power? Like it's one of those things for me where like you show me a business at this stage in life and I'm like, okay, yeah, like no, you can't raise your prices. That's a bad business. Like, and I just, I can, I can kind of have a feel for it. Like how did you get to the point where you are now? Where you can actually talk through a business, look at how it works, and then understand if you have pricing power or not?

Yeah, good question. I think, okay, so when I'm looking at like a publicly traded company, it's really tough because I don't have access to the management and like, you know, I'm just investing out of my personal account and I can't tell, I can't ask those specific questions. But if you're looking at a private equity deal, I'm looking at a software privately held business that's looking to sell their business. It's hard to ask them directly. I find like, I look during DD and, you know, or during the, you know, initial process, like, I, like, we typically don't just ask like, hey, can you increase your prices? Because you often get, I, I, you often, from my experience, either get people that are just, just, they just don't know the pricing power that their business has. Yeah. Um, so their default answer is like, no, like, we've always charged this much and, um, you know, why would we increase our prices? We're profitable, kind of thing, right? And so like, they don't even know if they have pricing power or not. Or they're— it's the opposite end where they're just like, like you said, they're terrified to increase their pricing. It's like, oh, if we increase our, our prices, everybody would quit, which may or may not be true, right? If they haven't— if they don't have a consistent program of increasing their prices year over year, um, then they, they did— again, they don't know. They might be kind of, um, underestimating how much pricing power they have. So I think there's things like you want to kind of look at the, the competitors Right? Like, what is— what are they offering? Things like switching costs, choosing an industry. Like, you know, like me and you and I are in like a vertical software where the switching costs are very high. Like, what would it take for a customer to actually leave this product and go to a competitor? Like, even if the competitor had a much better compelling product, like how risky and how expensive it is to switch, I think makes a really big difference. Right? And so I think that's part of it too, like seeing what the competitors offer. How costly is it to switch to a competitor? Seeing your like suppliers, supplier concentration is pretty important too. You know, like where do you get your, you know, for software suppliers are basically like hosting for SaaS delivery and things like that. You know, is how much power does AWS or whatever hosting has over you? Typically for most software companies, it's pretty low, right? I mean, it's a commoditized product and it's, you know, there's a lot of options out there. Obviously AWS being the most scalable from my experience at least. And so kind of looking at things like suppliers and customers will give you a good kind of understanding of pricing power and competitive positioning. But yeah, I'm curious to hear how you kind of sniff out pricing power in a business.

It's really interesting. I think you're totally right. Like you can't just ask the people like, so what would happen if you raise prices 10%? Like for most people, their head would explode.

Yeah.

You know, and that's to some extent, like I end up talking to a lot of sellers that are You know, they're not, they're not at the beginning of their career, right? They're at the tail end of their career and the business is small for a reason, right? I think Brent Burchard talks about that. Like most small businesses are small for a reason. A lot of times it's because the business got to a size where the seller is just happy with what they're making, right? San Antonio is full of people making $400,000 a year and they're just happy as clams because you can live like a king here. Like you're going, you don't need to grow your business anymore. Yeah, I talked to a friend who has a law firm here and great guy, and he started asking me for business book recommendations. I was like, well, what's your big vision for your law firm? He's like, what do you mean? It's fine just the way it is. I'm making a lot of money. I work some. I was like, okay, well then I have no business books for you. Read Sun Tzu or something.

I don't know.

Anyway, so yeah, so I mean, I think for me I have to, start to— that means you can't just go, like you're saying, go in and directly ask the business owner or leader, like, what's going on? And with the ability to raise prices, you have to go in and try to build the picture of the business from first principles. For me, like, you have to understand, like, okay, what is the core economic value chain that's happening here? And then from— once you understand that, then I'm in a position where I could say, Okay, well, if we raise prices by 10%, what do we think is going to happen? And you can, and you can build a hypothesis around that. So you start to ask yourself questions around what are the moats of the business? What are the alternatives? What do the switching costs look like? You know, to your point about AWS, I think people actually really underestimate how much switching costs are to get off of AWS or any hosting provider. It's always an order of magnitude more expensive than they think and more risky as well. Anyway, that's just a long-winded way of saying that. But the, um, for me, it's like if you understand all of the aspects of that value chain of the business, everything from supply side to supply, you know, making the customer happy, that's where you can start to put it all together. And then you, in my mind, I game out, okay, well, what, what happens if we raise 10%? Like, and you run that scenario in your head and you say, okay, well, if we raise 10%, we're going to churn 2% more people. Um, and, or, or we're not going to churn anybody, or, or because people can't leave. Like, those are all the kind of the game theory, like, way I, I play it out in my, my brain. But I totally agree with you, you can't go, um, you can't go directly, like, a frontal assault, because people are never going to give you a straight answer. Um, one interesting question is, like, Uh, when was the last time you raised prices? What happened? And invariably the answer is, raise prices? Question mark. So, um, yeah, there is actually, uh, and not to go on a rant here, but there is a, uh, there is a firm that I know of that acquires software businesses and the first thing they do is double all the prices with the expectation they're gonna lose about 25 to 30% of the customers. And basically what that does is increases your top line by like 80%. Like if you do the math on that, it's pretty, it's a pretty, pretty fascinating approach to doing private equity.

I think I know what firm you're referring to, but we'll leave names out.

I'm sure there's more than one. It is, as I just described it, it is not a very complex strategy. So cool. So you want to close talking about Twitter a little bit?

Yeah, yeah, sure. All right.

You wrote down the word usefulness. I'm curious, do you find it useful?

Yes, I do. I do. I think Twitter by far is— I made the conscious decision probably about 2 years ago to basically just delete all social media from my phone except for Twitter. And it's made a massive difference. I think like just the ability to network, the information that's on Twitter, You know, just, it's just, you'll find that nowhere else. It's just, it's, if you follow the right people, high signal, low noise, and it's just, it could truly change your career. Even if, which kind of goes to my next point about monetizing, even if you don't monetize, even if you don't directly make a single penny from people following on Twitter or people kind of, you know, whatever you're looking to sell people on Twitter, even if you don't make a single penny, it was, it will still change your career. Like, it will still, you know, like, I've learned so many new perspectives, you know, met so many interesting people and, you know, people that I've actually worked with, right, and stuff like that. So I think that it's super useful, and I don't know how long it's going to last. Like, it almost feels like it's kind of like a temporary thing. Like, it's almost like we're in, like, the golden age of Twitter, I find, because who knows, it might change, and, you know, algorithms change, and it becomes like a It's funny, actually, my kind of, my theory on why Twitter is so useful is because it's such a terrible company that like it actually makes the platform really fun. And you kind of, you know, because if we're being like peppered with ads and like, you know, it turns into like a Facebook kind of thing, then obviously it probably would stop being so useful as an actual platform, right? So, you know, if they own, if the management is just trying to milk every penny out of its users, it might, you know, and it becomes a profitable enterprise and a good stock to own, then it may not be a good, you know, platform for users. So I think part of the reason why Twitter is so good is because it's a terribly managed company. But yeah, love to get your take.

Well, I mean, do you think— let's say you're the CEO of Twitter tomorrow, like your name is now Jay Musk, uh, what, what, what do you think there are things they could do that would generate a ton of revenue that would obviously not impact the, the platform? One thing that comes to mind, for example, is like, please, like, charge me $5,000 at to get a blue checkmark. Like, I'll pay, I'll pay for it. Like, it's worth that much. But it's unbelievable to me that there are things like that, that they don't, you know, or Twitter Blue being like $2. Like, who priced that? That is like the, like, I want to go, I want to go find the pricing analyst for that and be like, what is wrong with you? Like, that is just the dumbest price. Nobody has SaaS products that are $2 a month anymore. Um, so like, I mean, do you think there are things like as CEO of Twitter, you could install as features that would generate a ton of top-line revenue, but show, but not screw up the platform. I have zero chance of screwing up the platform. That's kind of where my brain goes on all this, which is just like, yeah, I can't believe it. Also, the second thing I don't believe, I don't understand about Twitter is what do 8,000 people there do? Like all day, like I don't, I don't understand it like this. So, you know, you need 1,500 people to make this a scalable platform. You need 1,000 people to sell ads. You need 500 managers. What do the other 5,000 people do? Like, I don't understand it. I don't know what they do.

It's so true. I'll start with your last point. It's funny because I had to, you know, I had Facebook like way back in the day. Yeah. And, you know, I deleted it like probably like almost like 10 years ago or 8 years ago or whatever. But I had to log in recently to grab like a photo or something of myself just for whatever. And I logged in and it just looks completely different. Like, I didn't even recognize it. Like, there's all these new features and like all these new modules and the marketplace and all that kind of stuff. It looks completely different, like way different. It's funny because if you time travel back and look at Twitter the way it was 10 years ago, it's almost exactly the same. There's not really that much happened. I mean, I know they implemented Spaces and they got this whole group, but it's largely the same platform that it was 10 years ago. There's no real evolution or development. So good question. I don't know what people at Twitter do, those 8,000 people or whatever. Are you—

I'm sorry to interrupt you, but I want to come back to your thought. Are you old enough to be an AOL user? Were you around for AOL's heyday and stuff?

Uh, I used to use AOL Messenger. I think that was the extent of my AOL usage.

So when you have a chance, so I'm 47. Uh, I, when I was growing up, AOL was a thing, right? It's like 1988, right? Like, and so you dial up and the modem goes. But literally, Facebook now looks like AOL did. Like, that's basically that level of like Web 1.0 barf that we went through. Facebook is now a $250 billion version of AOL. Just when you have a chance, like it.

Yeah, I'll have to look it up. There's just so much going on. Like, I logged in and I'm looking at my home feed or whatever. And it's just like, just stuff everywhere. Like I was just overwhelmed. I'm like, I'm not even sure where to click right now to find my pictures. Like, yeah, it was insane. Yeah.

Well, I mean, and I think you're— anyway, I interrupted your second point. Go on to your second point about what everybody at Twitter does.

Yeah. If I was CEO of Twitter, honestly, I hadn't really thought about it. I don't know if— probably something around better ad targeting, maybe. Okay. Actually, no, your question was without ruining the experience, because I think that would actually probably ruin the experience, right? If you're just kind of— Yeah. Being kind of, you know, peppered with ads. Yeah, I don't know. I'm not really sure, actually. Like, yeah, I think your ideas are pretty good, like paying for the blue checkmark and increasing price on Twitter Blue. But yeah, honestly, I'm kind of drawing blanks on what I would do. I'd have to think about that one.

Yeah, it's really, it's really interesting. Well, I think it also reflects the dichotomy in the way your, your lenses on stuff versus mine, like in terms of being an allocator, like you feel like you have much more of the allocator's sensibility, like of looking at stuff, whereas I have much more the operator sensibility. And I think we're both kind of in the middle of that operator allocator, like, um, spectrum, but I'm like two, two notches down to the operator stuff. And you could see it in your tweets versus mine. Like you and then why the pure allocators still follow you and all the pure allocators like generally ignore me now because I'm talking about things like hiring methodologies and stuff like that. And it's just the notch there. But yeah, I thought that was just reflective of kind of the difference of lenses and they're both valid. Don't get me wrong, I'm not criticizing yours. It's just you have a different lens than I do, which I think is awesome.

So 100%, I would agree with that take.

Then, so you have here that thoughts on monetizing content on Twitter. What do you think about that?

Yeah, I think I've seen a lot of people, you know, do the course thing and like do like the Substack and ways to monetize. I've, so, and I think you have a couple things going on as well. I want to get your thoughts on like monetizing on Twitter, your experiences, and is it useful, not useful. Like to this day, I've never made a single penny off anyone on my Twitter following. Like I have a blog and I'm trying to get people to subscribe to my mailing list. That way I'm not at the mercy of Twitter. And, you know, if I get shut down or canceled one day, at least I have a way to communicate to my followers. It's kind of my main goal is try to get as many people on Twitter onto my mailing list as possible. But I never wanted to monetize on any of my content. I write at least once a month. On my long form on my blog and then, you know, usually chop it up or do stuff on Twitter. And the reason why I don't monetize is because it's right now, it's fun hobby. Like I actually really enjoy writing and I'm doing it just for, you know, for literally my personal— actually there's two reasons. One, I really enjoy it. And two, it's funny because a lot of people like compliment me on, oh, you're so nice and you're writing and you're putting all this free content out there. But in reality, the truth is I'm actually writing for myself and being able to kind of reflect on my thoughts and organize them because I find that's the best way to actually think is to actually just write it down and see if it makes sense and put it out there. And so I'm actually really writing for myself. And so I've never thought to monetize my content. I don't think I ever will. I'd want to kind of avoid because then I feel like that would change my fun hobby. Into a job, right? And now, okay, or a business, which means I gotta think about, you know, systems and processes and like, you know, whereas this I could just kind of— we're right now, what I have right now without monetizing, I could just kind of do whatever I feel like. And that's basically it. No one's kind of holding me accountable for anything and it remains a fun hobby. But would love your take on monetizing a following on Twitter.

Yeah, well, I mean, I think there's no wrong way, right? Like I think that if somebody wants to do the course thing and like make that, you know, what they're doing and they get on Maven and teach cohort-based stuff, or they do, you know, the Podium thing where you're— or Podia, whatever it's called— where you're charging $100 to watch some videos of you talking. Like, I think that's all fine. Like, I've got— I have no problem with that. I used to feel like— I used to feel like that would diminish from Twitter because the way I was using Twitter was bringing my whole self, right, and using that as a way to scale relationship building. And that's relationship building, not just for new people and random strangers, but also for the people I work with. Like, one of the things that surprised me the most about Twitter is how much people that I'm friends with or our business partners, our colleagues, are getting updates from me via Twitter because I'm putting my whole self out there. Like, like my business coach told me, he's like, yeah, something changed since you got really big on Twitter. Everybody feels like they know you more. And I'm like, whoa, like, that's crazy. And it's not just random strangers. It's like colleagues. So the problem, if you're doing that approach with like selling content, is that suddenly it, for me, it creates a bias of bringing your whole self, right? So if you're, if you're like, I'm going to be the foremost expert on being a manager or like a strategic planner or whatever. And like your whole thing is like, here's my shtick and I'm going to sell it to you and, and try to convert you at the end. Using ConvertKit or whatever to, to get somebody squirted out the other side as a paying customer. Like, that cheapens that idea of bringing your whole self. So for me, I'm really in the position where I feel like, okay, well, you know, it's somewhat easy because the money you can make from courses isn't that much relative to opportunities I have elsewhere. So like, it's more profitable for me not to do that kind of direct monetization and sell like $150 courses. Like, okay, yeah, this is not worth the time. So yeah, so that's kind of the long-winded way of thinking about it is you can be in that category of people that brings your whole self and then you just have indeterminate payback. For me, like, like the universe just keeps paying me back 10x, whatever I put into Twitter or putting out content and like it all turns out better.

So I don't know.

I don't know if I didn't answer your question. That may have been a misdirected answer.

No, no, that was good. That was good. And that makes sense. Um, yeah, it's funny you mentioned that because it, you know, this is the first time you and I have spoken, but I feel like I know you. Like, I literally feel like I know Michael Girdley. He's like my friend.

Yeah. Yeah. We're bros.

Even though we've never spoken. Just cause the, the, um, amount of kind of personal content, which by the way, I, I really do appreciate the, uh, knowledge and wisdom you put out there. I've learned a ton from you, uh, from the, you know, 2, 3 years I followed you for. But it's really helpful. And I agree that, you know, you put content out there for free and you'll, you know, the universe will find a way to pay you back in the long run one way or another.

Yeah.

Even without direct monetization or anything like that.

Yeah. Yeah. And I totally dig it. Well, good. I've really enjoyed speaking with you. Is there— we're running up on time. Is there anything else on this list that you want to make sure we talk through. There's some fun stuff in here, but maybe that'll be good for our next get-together.

Yeah, you know, maybe we'll save it for our next get-together because I feel like all the remaining stuff on the list, we could probably talk for like another hour. Like, there are some juicy topics there, so maybe we'll save it for our next one.

Yeah, well, awesome. You know, watching you on Twitter, I've been so impressed by your intelligence. It's clear you're a good person. You could just tell. That's the other powerful thing about Twitter. You could you could just tell who's smart and who's a good person just from the way they talk and the things they say. So you, you were consistent with that today, and I'm so grateful you spent some time with me. And, you know, I hope we get to do it again in the future. In the meantime, is there anything my audience can do to support you or help you in your journey? I know you have a newsletter. I know you're doing deals. I know you have your Twitter. What sort of things could we do to support you?

Yeah, Mike, thanks again for having me. This was great. Really enjoyed our convo. If anyone wants to follow me on Twitter, @javasdigital, as I mentioned earlier, I would appreciate if you signed up to my mailing list. It's funny because I find it's really tough to get people from Twitter to sign up to the mailing list. It's another action that people have to take. And so my mailing list is a fraction of what my Twitter followers are. I think I'm at 24,000 Twitter followers and my mailing list is pretty small compared to that. And so would appreciate if you just signed up for my mailing list in case one day Twitter decides to cancel me or the algorithm kind of moves against me. So yeah, JVast Digital, my mailing list is like in my LinkedIn bio kind of thing. And yeah, that's basically it.

Awesome.

All right.

Well, thanks. We'll click stop and look forward to getting this out.

Sounds good, Michael.