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Wagyu Wealth: Cracking the Vertical Integration Code · Big Talk About Small Business

0:00
SPEAKER_02: My first restaurant, I started off with a Quiznos sub.
0:03
SPEAKER_04: Did you?
0:04
SPEAKER_04: Okay.
0:04
SPEAKER_02: And I ended up with six of them.
0:07
SPEAKER_02: And then I learned how not to make money in restaurants.
0:11
SPEAKER_02: So that was our first experience.
0:14
SPEAKER_05: But welcome back, everybody, to another episode of Big Talk About Small Business.
0:30
SPEAKER_05: I'm here today with Dave Dryling.
0:32
SPEAKER_05: We're really lucky to have this guy.
0:34
SPEAKER_05: He's got quite an interesting background and has been very, very successful in different endeavors.
0:44
SPEAKER_05: And I'm going to have Dave tell a little bit uh about himself here to get us uh kicked off.
0:51
SPEAKER_05: But uh I was very impressed with your background, Dave.
0:54
SPEAKER_02: Well, thank you, Mark.
0:56
SPEAKER_02: Now, as to whether you and the reader and the listeners are very lucky, I let's wait till the end and they can be the judge of that.
1:02
SPEAKER_02: But you know, glad.
1:04
SPEAKER_05: You've probably been on a million of these podcasts and interviews, I'm sure, over the years with everything that you've done.
1:12
SPEAKER_05: But uh so tell us all a little bit about you, though, and and what you're doing.
1:18
SPEAKER_02: Yep.
1:18
SPEAKER_02: Um, well, you know, growing up, um looking back on it, um, I would now be described as a hardcore entrepreneur.
1:27
SPEAKER_02: And um now I'm old, I was born back in the 1900s, so so uh uh I don't think that word was even invented then, or if it was, nobody could spell it.
1:39
SPEAKER_02: But you know, I my parents, I grew up in a town of 2,000 people, my parents had a small family department um clothing store.
1:48
SPEAKER_02: And so, you know, looking back on my childhood, I really wasn't that happy because I just hadn't found myself, you know.
1:54
SPEAKER_02: I wasn't one of the cool kids.
1:56
SPEAKER_02: Um, I tried to be an athlete, I wasn't very good at that.
1:59
SPEAKER_02: Uh, but I love business.
2:01
SPEAKER_02: And so um when I came to Manhattan, Kansas uh to and then um went to school at Kansas State University.
2:09
SPEAKER_02: I joined a uh fraternity and and uh had an opportunity of starting my first business right out of college.
2:16
SPEAKER_02: And by then, I mean, like my first business was I was six or seven, I started a worm farm.
2:21
SPEAKER_02: Um, and so I've just always always done things, and uh I get it.
2:26
SPEAKER_05: Yeah, I was the same way, dude.
2:29
SPEAKER_05: I was out selling bicycles on my mom and dad's street corner for you know the time I was eight or nine years old.
2:35
SPEAKER_05: So I'm the same.
2:36
SPEAKER_02: I I did that when I was about 15.
2:38
SPEAKER_02: We had DB Bike Company.
2:39
SPEAKER_02: We'd go to garage sales and buy old beat-up bikes and then refurbish them and sell them.
2:45
SPEAKER_05: So yeah, that's awesome.
2:46
SPEAKER_05: So a lot of I think a lot of entrepreneurs showed those tendencies early on.
2:52
SPEAKER_05: Now, you went to K-State.
2:53
SPEAKER_05: Did you get your degree in business or did it get it in something else?
2:56
SPEAKER_05: I'm curious.
2:57
SPEAKER_02: No, it it it was business.
2:59
SPEAKER_02: Um, I would tell you, I wasn't a great student.
3:02
SPEAKER_02: Um, I love business, I love to party, I love to chase girls.
3:06
SPEAKER_02: Uh I just wasn't into studying.
3:09
SPEAKER_02: So I think my GPA was a 2.9 or something.
3:13
SPEAKER_02: I just wanted to get out.
3:15
SPEAKER_02: And uh, but um the uh fraternity I was in, I was um social chairman.
3:23
SPEAKER_02: And so one day this guy stopped by and he had a uh sweatshirt, it said Fidel State Athletic Department.
3:30
SPEAKER_02: And he said, Hey, would you pass this around your your chapter meeting?
3:33
SPEAKER_02: And here's a sign-up sheet, and I'll stop by next week and pick up the order.
3:37
SPEAKER_02: And I said, Great.
3:38
SPEAKER_02: And uh there were like 30 guys that ordered this sweatshirt, and I was doing the math, and it was a$900 sale, and he was only there for five or 10 minutes.
3:47
SPEAKER_02: So I I asked him the next time he stopped by.
3:51
SPEAKER_02: I said, uh I just had more questions about his business model.
3:54
SPEAKER_02: And he was just driving around what was actually the big eight at the time, and uh um I was just intrigued with it.
4:03
SPEAKER_02: And so um I asked him, Well, is anyone doing this in any other universities?
4:07
SPEAKER_02: And he said, I don't know.
4:08
SPEAKER_02: So we found a book in the University of Illinois in Champaign, Urbana, at that time had the largest Greek system in the world.
4:15
SPEAKER_02: Yeah, and so we made a deal where he fronted me all those sample sweatshirts, and one weekend I drove out there and I dropped them off, and it took about a month for the orders to come in, and he was gonna pay me five five dollars a sweatshirt, and I sold about 200 sweatshirts, and so I made a thousand dollars, which was big money for me at the time.
4:34
SPEAKER_04: Absolutely.
4:35
SPEAKER_02: So he approached me of when I graduated.
4:38
SPEAKER_02: Uh, it was his idea that at that time in the Greek market, if you wanted to uh get a sweatshirt like with your letters on it, you could go down to your local spirit shop or you could order out from a handful of companies.
4:52
SPEAKER_02: Balfour was one of them that you would order from a sample and it would take about four to six weeks.
4:58
SPEAKER_02: And his idea was that we would make up this inventory ahead of time for the national sororities, and then we would travel around and we would visit your house on meeting night and we'd bring in a look like a body bag, only bigger, full of sportsware just for your individual house.
5:17
SPEAKER_02: So if the girls wanted to try it on, they could, they could buy it right there on the spot.
5:21
SPEAKER_02: And no one had ever done anything like that.
5:23
SPEAKER_02: And so um that was the start of about a 28-year endeavor.
5:29
SPEAKER_02: Um we built the Greek the uh Greek market up to about$7 million in revenue, and then we were having troubles getting traction beyond that.
5:40
SPEAKER_02: Um and then uh and then I looked at the high school market, saw some things that I liked there.
5:45
SPEAKER_02: So we changed our model from um selling into fraternity and sorority into high schools, and along the way, I developed a supply chain.
5:55
SPEAKER_02: I'd love to tell you that I masterminded this, and I'm just not that smart.
6:00
SPEAKER_02: Uh, it took about 10 years.
6:02
SPEAKER_02: Um, but I ended up with a factory in China that I was the only, their only customer, and I would bring this sportswear into Manhattan blank.
6:11
SPEAKER_02: Um, we would decorate it, and then we uh we would sell it directly to the coaches.
6:17
SPEAKER_02: So I bypassed all these other layers, the distributors and all that.
6:21
SPEAKER_02: And right um, we built that company up to we were pretty close to 80 million in revenue.
6:27
SPEAKER_02: Uh about nine 900 employees here in Manhattan, and um uh ended up selling that to Haynes Brands that owns Champion in 2016.
6:38
SPEAKER_02: So that was pretty much my day job for 25 years.
6:42
SPEAKER_02: Um we'll start dabbling in restaurants and uh just just sold that last month.
6:51
SPEAKER_02: We had uh um there's a franchise called Freddy's Steak Burgers and Frozen Custard.
6:56
SPEAKER_05: Love them.
6:58
SPEAKER_05: Love Freddy's.
6:59
SPEAKER_05: I've got a friend that that's got uh, I don't know, he's got 15 or 18 steak and shakes now.
7:05
SPEAKER_02: Okay, sure.
7:06
SPEAKER_05: And you know, honestly, I think Freddy's has a better offering.
7:11
SPEAKER_05: It's you know, it's it is similar in some ways as far as the offering goes, but the Freddy's burgers are a little bigger and a little crisper, and the fries, you get more fries and they're a little tastier.
7:24
SPEAKER_05: I love Freddy's.
7:25
SPEAKER_05: It's so how you built up a group of Freddy's.
7:29
SPEAKER_05: Uh I understand.
7:31
SPEAKER_02: We uh and I just sold that last month.
7:33
SPEAKER_02: Um we had uh 43 of them.
7:37
SPEAKER_02: Wow.
7:38
SPEAKER_02: So uh uh I didn't spend much time on it.
7:41
SPEAKER_02: Um, I had a really good CEO.
7:44
SPEAKER_02: We would meet weekly, uh, supposed to be for an hour and about five or ten minutes into it, I would say, Cam, that's great.
7:51
SPEAKER_02: But can we just talk about cows?
7:52
SPEAKER_02: Uh because my latest passion has been this vertical Wagyu beef company.
7:58
SPEAKER_05: So yes, yeah, I want to get into that in a minute, but just to go back to the franchise ownership.
8:05
SPEAKER_05: Yeah, how did you like that?
8:06
SPEAKER_05: I mean, you created your first business from you know, uh uh the way you wanted it, obviously.
8:12
SPEAKER_05: Yeah, and then you got got into this franchise business where your prices are set and you know they they micromanage your location selection and facility design and everything else.
8:27
SPEAKER_05: Yeah, how do you like that?
8:29
SPEAKER_02: Um, I'm pretty bullish on the franchise model.
8:32
SPEAKER_02: Um, in fact, in in the falls at K-State, I teach a class on entrepreneurship and I do a whole class just just on franchising.
8:40
SPEAKER_05: And um I need to have you come visit my classes.
8:44
SPEAKER_05: Oh, sure.
8:45
SPEAKER_05: I teach entrepreneurship here at the Walton College.
8:48
SPEAKER_05: Oh, yeah, yep.
8:50
SPEAKER_05: And franchising is something that is not really covered by any of our classes, and it is a doorway to entrepreneurship that people I think aren't fully aware of.
9:02
SPEAKER_05: It is, yeah.
9:03
SPEAKER_02: Well, I'd be happy.
9:04
SPEAKER_02: Um, I don't know if I want to make it down, but you know, we could do it, do an online thing.
9:08
SPEAKER_02: But sure.
9:09
SPEAKER_02: What I share in my lecture is that um if you're willing to work hard and you're good with people, franchising is a great model.
9:18
SPEAKER_02: And the success rate with franchising is very, very high.
9:22
SPEAKER_02: So I'm pretty pretty big on it.
9:25
SPEAKER_02: Now, having said that, um, because my first restaurant, I started off with a Quiznos sub.
9:31
SPEAKER_04: Did you?
9:31
SPEAKER_04: Okay.
9:32
SPEAKER_02: And I ended up with six of them, and then I learned how not to make money in restaurants.
9:38
SPEAKER_02: So that was our first experience.
9:42
SPEAKER_02: But what I shared in the classroom is that every franchiseur will tell the respective franchisee their number one goal for you is to make money.
9:52
SPEAKER_02: They all say that.
9:53
SPEAKER_05: Sure.
9:54
SPEAKER_02: And in reality, there's a spectrum between the ones that really mean it, and for the most part, Freddie's meant it, all the way over to like the exact opposite.
10:04
SPEAKER_02: And you know, a good example with Quisnos was at one point they called us, and at this point, there were 5,000 restaurants, 5,000 Quisnos.
10:15
SPEAKER_04: Yeah.
10:15
SPEAKER_02: And they said, Hey, we want to fly out.
10:18
SPEAKER_02: They flew out on their corporate jet and give you this award for uh national multi-unit operator of the year.
10:26
SPEAKER_02: So it's a pretty big deal.
10:28
SPEAKER_02: Sure.
10:28
SPEAKER_02: And so we met, and the the VP of something, and all of his cronies was there, and we met at my sportswear company, and I was giving them a tour, and about halfway through, I couldn't stay anymore.
10:41
SPEAKER_02: I put pulled the guy aside and I said, You you have access to our financials, and he said, Yeah.
10:47
SPEAKER_02: And I said, You know, you held us up as the very best, and we lost money last year.
10:54
SPEAKER_02: I said, How are the others doing?
10:57
SPEAKER_02: And he pulled me a little further and he said, They're losing their ass.
11:00
SPEAKER_02: So, so um um, you know, it goes back to people and and the rules that I have in deal making, and I've done so many partnerships and deals my whole life.
11:12
SPEAKER_02: Is rule number one is who's the deal with?
11:17
SPEAKER_02: And then my rule number two is see rule number one.
11:23
SPEAKER_02: And I've done most of my deals have turned out pretty good.
11:26
SPEAKER_02: Uh, I think the thing I'm most proud of is every deal I've ever done.
11:30
SPEAKER_02: I can pick up my phone right now and I know they would take take take my call.
11:34
SPEAKER_02: Sure.
11:35
SPEAKER_02: Um, you know, partnerships are hard.
11:37
SPEAKER_02: My my crude joke in the classroom is partnerships are even tougher than marriage because there's no makeup sex.
11:44
SPEAKER_05: Exactly.
11:45
SPEAKER_02: No, it's speaking for myself, so um well said though.
11:51
SPEAKER_05: It's true, it's like being married in so many ways.
11:55
SPEAKER_05: Yeah, yep.
11:57
SPEAKER_05: So, so, but uh you say good with people, and uh how do you uh apply that to the franchise world?
12:05
SPEAKER_05: What is what are the implications of that?
12:07
SPEAKER_02: Well, depending on the franchise, you're probably gonna be managing people.
12:12
SPEAKER_04: Yep.
12:13
SPEAKER_02: And you know, I've I've done startups and and acquired businesses in probably 10 or 12 different industries, and every every industry will have their own two or three unique things to that industry.
12:24
SPEAKER_02: But the common thread in almost all of them is you've got to be you've got to be good with people.
12:30
SPEAKER_02: You you you know, you've got to, and some of this can be learned over time.
12:36
SPEAKER_02: Uh, it helps if you have some natural talent with it in the beginning, but you've got to be able to lead lead people, you've got to be able to communicate well.
12:44
SPEAKER_02: Um, so that's the common thread.
12:48
SPEAKER_05: Yeah, I don't know about you, but I'm 68 years old now, and I think I've gotten a little better at that over the years.
12:55
SPEAKER_05: When I was young, I was probably a lot less tolerant and maybe not quite as uh diplomatic.
13:02
SPEAKER_05: Absolutely.
13:04
SPEAKER_05: If is that your experience?
13:06
SPEAKER_02: Yeah, I yeah, I I'm fairly direct.
13:09
SPEAKER_02: You know, I I think I think age can tend to, you know, kind of knock some, you know, some rough edges off of everybody.
13:16
SPEAKER_02: Um but um I think that would I'm sorry, go ahead.
13:23
SPEAKER_02: Well, I think um and there's a personality profile system that I use that I've used for 25 years.
13:31
SPEAKER_02: Okay.
13:31
SPEAKER_02: Um and it'd be like um, you know, Briggs Meyer, Myers Brig, Disc, Colby, all of those.
13:37
SPEAKER_02: Uh I'm not saying that's that's any better.
13:40
SPEAKER_02: It's better for me because I understand it well.
13:42
SPEAKER_02: And uh, you know, looking at my personality, you know, I'm I'm naturally extroverted, um, I'm naturally impatient.
13:50
SPEAKER_02: Um, my conformity, I don't have any conformity.
13:53
SPEAKER_02: I mean, any rule I see to me is just a you know a suggestion.
13:58
SPEAKER_02: Uh so so some of those things just naturally lean in towards entrepreneurship, you know, a little bit better, I think.
14:05
SPEAKER_02: So yeah.
14:06
SPEAKER_05: Now, when you did that the restaurant group that you had, did you have any other partners in that?
14:12
SPEAKER_02: Yeah, yeah, yeah.
14:13
SPEAKER_02: I had gee whiz, three or four different partners.
14:16
SPEAKER_05: Okay.
14:17
SPEAKER_05: And so um why did you do that initially, or was that something that evolved over time, or how did that come about?
14:26
SPEAKER_02: Um, it was a combination of like one of my partners, Neil, he was just a good friend.
14:31
SPEAKER_02: And it was literally almost like, hey, I'm gonna run down to the C store and grab a Coke.
14:36
SPEAKER_02: You know, you know, do you want anything?
14:37
SPEAKER_02: I'm like, hey, Neil, I'm gonna go open this restaurant.
14:39
SPEAKER_02: He went in, sure.
14:41
SPEAKER_02: You know, so you know, so he jumped in.
14:44
SPEAKER_02: Um uh kind of unique, and this goes to my impatience.
14:49
SPEAKER_02: I discovered Quiznos, it was either Anchor Entrepreneur magazine, they had the list of top 100 franchises.
14:55
SPEAKER_02: Quiznos was number three.
14:57
SPEAKER_02: I'd never even heard of it.
14:58
SPEAKER_02: You know, the little verb was toasted subs.
15:01
SPEAKER_02: Um, the following week, my wife and I were out skiing in Colorado, and and one day she turned out ski and she was shopping.
15:08
SPEAKER_02: And and that that afternoon she came back, she says, Hey, that Quiznos thing you were talking about, they had one.
15:13
SPEAKER_02: I ate there for lunch and I loved it.
15:15
SPEAKER_02: And so literally driving back from Colorado, I I I started the process of buying that franchise.
15:22
SPEAKER_02: I'd never even eaten one.
15:25
SPEAKER_02: I mean, which is kind of crazy.
15:27
SPEAKER_02: I I tell my students, do what I say, not what I do.
15:31
SPEAKER_02: Um, and then while we were getting that built, that was for a store in Manhattan.
15:36
SPEAKER_02: Quisnos called me and said, Hey, Lawrence is open.
15:40
SPEAKER_02: And we've got a guy that wants it, but we really like what we see with you.
15:43
SPEAKER_02: Do you want it?
15:45
SPEAKER_02: And I said, Well, let me visit with Brian.
15:48
SPEAKER_02: And so I I called the guy that wanted it.
15:50
SPEAKER_02: We ended up doing a 70, 70, 30 deal where he owned 30 and I own 70%.
15:57
SPEAKER_02: And um, so I I just do deals like that all the time.
16:01
SPEAKER_02: So that's how I end up, you know, with those original partners.
16:05
SPEAKER_05: So I was always afraid of businesses like that because it seems like your workforce, you have to, you have so so many limitations on what you can do for the people in terms of pay because the margins are so thin.
16:21
SPEAKER_02: Absolutely.
16:22
SPEAKER_05: You know, that it just wasn't it was a lot easier for me personally to deal with professionals that are highly compensated, where I've got you know a lot more flexibility and all, and what you can do for people, and just the turnover that's inherent in that kind of a business seems really like a really tough thing.
16:41
SPEAKER_05: Is that something that we discovered as well?
16:44
SPEAKER_02: It is a challenge.
16:46
SPEAKER_02: You know, what we learned with Freddy's, and I think when I sold it, we had 1,700 employees, and a third of them are 16 to 18-year-olds.
16:54
SPEAKER_05: So yeah, that's a challenge, man, as far as that can be a challenge.
16:58
SPEAKER_05: Yeah.
16:59
SPEAKER_02: Yep.
17:00
SPEAKER_02: Um, what what we found, and this goes back to kind of my philosophy, any business that I get into, especially if I don't know anything about, um, I usually go find a person or a few people that I think are really smart, that our values align, and then I I treat them how I'd want to be treated.
17:17
SPEAKER_02: And they end up doing all the heavy lifting, even in in my company today.
17:22
SPEAKER_02: People ask me what my job is, and I say, well, I just kind of walk around and act like I know what's going on.
17:27
SPEAKER_02: So that's my job.
17:30
SPEAKER_02: But you know, related to Freddy's, what we um discovered is um local store leadership is everything.
17:39
SPEAKER_02: And yeah, and so our what the industry would refer to as general managers, for us, it was restaurant operating partners.
17:47
SPEAKER_02: Um we had a very robust financial system where in three years they could make a you know a it's based on profits and a little bit like the Chick-fil-A model.
18:00
SPEAKER_02: But if you had a a great um person on the ground that that was a good leader that that aligned, you know, our our turnover was oh, a third probably of what the Freddie's average was, which is even below the national average on you know restaurants.
18:19
SPEAKER_02: So I mean, you're still dealing with drama and problems of 16 to 18 year olds, but for us, um, that was one of our strengths.
18:27
SPEAKER_05: So yeah, that's awesome.
18:29
SPEAKER_05: Yeah, I'd seen McDonald's that had as high as 300% annual turnover, which is insane.
18:34
SPEAKER_05: I mean, yeah, how can you run a business like that?
18:38
SPEAKER_05: It just seems very difficult.
18:39
SPEAKER_02: Yeah, I think ours was 140%.
18:42
SPEAKER_02: So it, you know, it's still a lot, but sure, yeah.
18:45
SPEAKER_05: Sure.
18:46
SPEAKER_05: Well, you got 16 to 18 year olds who are gonna have that.
18:48
SPEAKER_05: It's yeah, yeah.
18:50
SPEAKER_05: So tell us about your current business.
18:52
SPEAKER_05: I'm fascinated with that.
18:54
SPEAKER_05: Of course, I love Wagu, who doesn't?
18:57
SPEAKER_05: But uh tell us, tell us about this.
19:00
SPEAKER_02: Well, um initially, um, I had an uncle that was raising seed stock wagu, and I bought a half the beef from him, and I had never even heard of it, you know.
19:12
SPEAKER_02: I was like, wow, what?
19:13
SPEAKER_02: And I tried the beef and I loved it.
19:15
SPEAKER_02: I was like, I know one thing, this is what I'm gonna be eating the rest of my life.
19:18
SPEAKER_02: And yeah, that was like 2017 or 18.
19:22
SPEAKER_02: And then spring of 2020, he called and he was reducing his herd.
19:28
SPEAKER_02: And um, I already had about a thousand-acre ranch just 10 minutes north of Manhattan that I had bought for the deer hunting.
19:36
SPEAKER_02: Yeah, and I was so naive, Mark, that I thought, well, I'm just gonna buy a few cows and then um and I can put them up on my ranch, and then I'll just have great beef for friends and family.
19:48
SPEAKER_02: And so I bought 10 cows from him, and then um a month later he was having an auction, and so I went there and I started drinking the Kool-Aid and I bought two bore two bowls and four cows and 28 embryos, and then I just the rest of that summer just studied study the industry.
20:05
SPEAKER_02: And I felt like there was an opportunity to create a vertical Wagyu beef company right here in the Midwest.
20:13
SPEAKER_02: And um, by vertical, I've I've heard the industry described really like four legs of a cow.
20:20
SPEAKER_02: So you have the the actual ranch where the calves are produced, that involves your genetics and all that.
20:26
SPEAKER_02: You have the feedlot, and feeding wagu is much different than commercial cattle, so that's a whole separate business.
20:34
SPEAKER_02: Yeah, you have processing, which is uh converting them into steaks, yeah.
20:40
SPEAKER_02: That that's its whole other beast, and then you have sales and distribution.
20:45
SPEAKER_02: And because of my days with my sportsware company, I was always leaning in towards vertical, cutting out those layers.
20:52
SPEAKER_02: So uh it was August of 2020 when I said we're gonna start a vertical water beef company.
20:59
SPEAKER_02: And um, you know, so that's that's what we've been doing ever since.
21:05
SPEAKER_05: So tell us about how that evolved.
21:09
SPEAKER_02: Um yeah, well, for six years now, if I'm awake, that's what I've been thinking about.
21:15
SPEAKER_02: Um what I've learned is that each one of those elements, it's a very exciting time to be in agricultural right now because there's so much technology pouring into ag.
21:28
SPEAKER_02: Um the industry itself, and I don't mean to be demeaning, but um the industry itself, there's a lot of guys that are in it that uh they don't adopt the new technology very well.
21:41
SPEAKER_02: Your typical rancher is somewhat cynical, you know, they've seen everything come and go.
21:48
SPEAKER_02: Um they're also very self reliant.
21:50
SPEAKER_02: You know, it's an industry that if you have a calf with the sniffles, you don't call a vet because you can't afford it, you figure it out, and so those same attributes.
22:00
SPEAKER_02: That that have made ranchers uh people that I really respect um have kind of held them back.
22:07
SPEAKER_02: And so um I I could literally speak for 30 minutes on each one of those segments, things that we're doing that's different than what we're what we're seeing in the industry.
22:19
SPEAKER_05: Um so well, it's kind of like general contracting.
22:24
SPEAKER_05: I had a design, build, development contracting company, and in that field, it's the same thing.
22:30
SPEAKER_05: The all the small contractors, they never adopt any new technology.
22:35
SPEAKER_05: Everything is seen as too risky.
22:39
SPEAKER_05: Um you know, things can go wrong.
22:41
SPEAKER_05: New means risk, therefore, avoid all new, and they're very, very inefficient as a result.
22:48
SPEAKER_05: And there's always an opportunity when somebody comes in and does things differently in those kinds of very fragmented industries that have lots and lots of players.
22:57
SPEAKER_05: And clearly that's what you've done there.
23:00
SPEAKER_02: Yeah, absolutely.
23:01
SPEAKER_05: Yeah, yeah.
23:02
SPEAKER_05: So so now who do you sell your beef to?
23:06
SPEAKER_05: Um is that so difficult to develop a distribution uh outlet for it?
23:13
SPEAKER_02: No, well, you know, we're still working on it.
23:16
SPEAKER_02: Um, our three channels now would be we have our own retail meat markets.
23:21
SPEAKER_02: We have four of them.
23:22
SPEAKER_02: Uh we have two in Kent City, our original meat market in Manhattan, and one in Wichita.
23:26
SPEAKER_02: And then we're getting ready to open up one in Fort Worth, Texas next week.
23:31
SPEAKER_05: So that's our what are those called?
23:36
SPEAKER_02: Uh they're called Booth Creek Wagu.
23:39
unknown: Okay.
23:39
SPEAKER_02: Meat market.
23:40
SPEAKER_04: And okay.
23:42
SPEAKER_02: And the industry hadn't really done that.
23:45
SPEAKER_02: When when you go into our store, all it is is our own Wagyu product.
23:50
SPEAKER_02: And um, we sample heavily.
23:52
SPEAKER_02: I mean, the minute you come in, we're taking a little chunk of of a of a rib eye steak and we're grilling it real quick, and we're gonna let you sample it.
24:02
SPEAKER_02: And um, which is pretty unusual, but um, that idea came from I I think I shared in August of 20, is when I wanted to start a beef company.
24:11
SPEAKER_02: And in March of 21, we were selling at a farmer's market in Manhattan, and I was realizing that nobody knew anything about Wagu at the time.
24:20
SPEAKER_02: You know, we would say, if you ever had Wagu, they're like, Wow, what?
24:24
SPEAKER_02: And then number two, if they hadn't tried it, and so it was fun to give someone a sample and their jaw would kind of drop, and they would just get quiet, and you could tell their mind was like, Hey, do you realize what you just ate?
24:39
SPEAKER_02: I mean, it's just so special.
24:41
SPEAKER_02: So that sampling is a big part of our retail markets.
24:46
SPEAKER_02: Um, the other channels is we do e-com, and then our third one is we sell wholesale into um make mainly restaurants and other meat markets.
24:59
SPEAKER_02: What I think what's interesting about our model is a lot of times when you have different sale channels, you can have what we call channel conflict, right?
25:07
SPEAKER_02: If you're trying to sell retail and wholesale, um and they don't want to yeah, I understand that.
25:13
SPEAKER_05: You it if if you're if you're selling retail, then nobody wants to buy from you wholesale, right?
25:18
SPEAKER_05: Exactly.
25:19
SPEAKER_02: Yeah, what we found is these three channels build build on each other.
25:23
SPEAKER_02: And I say, um, you know, like when we opened up our first meat market in Kansas City, our e-com from that area went up.
25:32
SPEAKER_02: And and you know, our restaurant business and you know, your steakhouses, they get hit with sales reps every day, you know, from your US foods and your Cisco and all that.
25:43
SPEAKER_02: And the guy that runs it's a Gordon Ramsey restaurant in Kansas City, he stopped in our store and he's looking around and he's like, These guys know what they're doing with WaGu.
25:54
SPEAKER_02: So he he called us and said, I really want you on the the menu.
25:59
SPEAKER_02: So where we're headed with this, and I'll use Fort Worth as an example.
26:05
SPEAKER_02: Once we have our retail store open, then e com is going to go up, then we can start selling directly into the restaurants, and I don't have to go through distributors because every week I'm shit I'm shipping you know a load of beef down to my store.
26:22
SPEAKER_02: And so if you're a a a steakhouse and you want Booth Creek on your menu, you have to buy directly from us.
26:28
SPEAKER_02: I I'm not gonna trust any kind of a middleman for it.
26:32
SPEAKER_02: So that's that's kind of where we're headed.
26:35
SPEAKER_05: You know, I love the idea of a business where if somebody wants it, I'm the only one place they can get it.
26:42
SPEAKER_05: It's always a better position to be in, isn't it?
26:45
SPEAKER_02: Absolutely.
26:46
SPEAKER_05: So it's interesting though that the way you started this, you know, there in in Manhattan and some of these other cities here in the Midwest and all.
26:57
SPEAKER_05: Um now Fort Worth may be an exception, but you, you know, and and people were so surprised at the at the flavor of the Wa Gooo.
27:05
SPEAKER_05: I guess if you were in New York or Chicago or somewhere, it wouldn't have seemed uh as unique to them because people there have sampled it.
27:15
SPEAKER_05: But in this case, the sampling method was probably the brilliant idea to get people exposed to it.
27:23
SPEAKER_02: Absolutely.
27:24
SPEAKER_02: Yeah, yeah.
27:25
SPEAKER_02: Well, the other thing is there's so much confusion over Wagu in in the US today.
27:31
SPEAKER_02: Um, I mean, literally six years ago when I started, half the people hadn't even heard of it.
27:36
SPEAKER_02: Uh, I'm sure if we did a big uh rigorous survey today, you know, probably 80 or 90 percent of people have heard about it, that there's a lot of confusion.
27:47
SPEAKER_02: And so what we did is we developed our own system where every animal that goes through my plant, we get them up, get the hide off, chill the carcass, cut it in between the 12th and 13th rib, which is just like what USDA does.
28:02
SPEAKER_02: And then we have this system where we take this picture of it, of that ribeye, it goes up into the cloud, it goes over to Japan, they look at it and grade it out for us.
28:12
SPEAKER_02: And it comes back over and it tells us the specific percentage of marbling.
28:18
SPEAKER_04: Uh-huh.
28:19
SPEAKER_02: And that's the key.
28:21
SPEAKER_02: The problem with USDA grading is even USDA prime goes up to about 16 or 18 percent, what we'll call DMP or digital marbling percentage.
28:33
SPEAKER_02: Um so our stuff starts there, but you you've probably heard of Japanese A5.
28:39
SPEAKER_02: That's way up in the 60 percent.
28:41
SPEAKER_02: Wow, so you have all this range, and so we have four grades.
28:45
SPEAKER_02: We have BC, which stands for Booth Creek 10, BC 20, 30, and 40.
28:53
SPEAKER_02: And those numbers um signify marbling percentage.
28:58
SPEAKER_02: Yes, and we even print on the stake that, like, if I'm looking at a at a ribeye, that the animal that this was harvested from, this is a 33% marbling.
29:09
SPEAKER_05: I see.
29:10
SPEAKER_05: And um nobody else offers these uh that kind of control, I guess, over the quality and the selection of the product, right?
29:19
SPEAKER_02: Yeah, and and it's really important because it's funny to me when people come in and you see them arguing about wagu, and they're like, well, it's got to be Japanese A5, or it's you know, it's too fatty, or it's this, or whatever.
29:32
SPEAKER_02: That's like arguing about beer or wine or bourbon.
29:36
SPEAKER_02: It's based upon our own taste buds.
29:38
SPEAKER_04: Sure.
29:39
SPEAKER_02: No one's wrong.
29:41
SPEAKER_02: But what this does is help people dial in, you know, right.
29:45
SPEAKER_02: Where in time you could say, Yep, I love a Booth Creek uh 30 to 35% marbling strip.
29:51
SPEAKER_02: That's my that's my stake.
29:53
SPEAKER_02: Or maybe my wife doesn't like as much marbling, so she wants a BC20 fillet.
29:57
SPEAKER_05: So uh Well, I'm sure the the real chefs that run these uh you know uh high-end restaurants must love that because they're quality.
30:11
SPEAKER_02: Well, it's all about consistency.
30:14
SPEAKER_02: And yeah, well, one of my mentors, when I first got into this, he said, Dave, figure out how to make your product consistent.
30:20
SPEAKER_02: And he said, even if your quality is poor, make it consistent.
30:26
SPEAKER_05: Exactly.
30:27
SPEAKER_02: Yeah.
30:28
SPEAKER_05: Did you I'm curious now, has did owning the franchise restaurants that you did influence how you do your business today in any way?
30:41
SPEAKER_02: Yes, it did.
30:42
SPEAKER_02: That's a really good question.
30:44
SPEAKER_02: Um, what helped me was because I had all the infrastructure of a pretty big company.
30:51
SPEAKER_04: Yep.
30:52
SPEAKER_02: So as I launched Booth Creek, I didn't have to have my own IT, I didn't need my own finance, I didn't need accounting, I didn't need HR.
31:01
SPEAKER_02: I already had all that built.
31:03
SPEAKER_02: And so that's what I called scaffolding.
31:06
SPEAKER_04: Yeah.
31:06
SPEAKER_02: And so I could just focus in on how do we create the best genetics and the best feeding and the best, you know.
31:12
SPEAKER_02: I didn't have to put all together all those other pieces.
31:16
SPEAKER_02: Now, I just sold that company this last month, and we have 12 months now to wean ourselves off of that.
31:23
SPEAKER_02: So currently we're going in and now hiring our own HR and IT and all that.
31:28
SPEAKER_02: But um, I think that helped help me a lot.
31:32
SPEAKER_05: That's interesting.
31:33
SPEAKER_05: Yeah, I don't know if you saw, I'm a motorcycle guy and I'm an owner in a motorcycle manufacturing business.
31:39
SPEAKER_05: Um, Indian was just spun off from Polaris to a private equity firm.
31:45
SPEAKER_05: And that's one of the challenges they have is you know, carving that thing out when all those support services basically have been provided by Polaris is creating a lot of challenges.
31:57
SPEAKER_02: Yeah, absolutely.
31:58
SPEAKER_05: Yep.
31:59
SPEAKER_05: And so they have to recreate some of that.
32:02
SPEAKER_05: I mean, it has its advantages too now, as they can.
32:05
SPEAKER_05: Exactly.
32:07
SPEAKER_05: So have services that are very specific for what they're trying to do and maybe not replicate all the excess overhead or problems associated with an established business like that.
32:20
SPEAKER_02: Exactly.
32:21
SPEAKER_05: Yep.
32:22
SPEAKER_02: Yep.
32:22
SPEAKER_05: How do you how do you deal with so you've grown these businesses and been in different industries clearly?
32:31
SPEAKER_05: How do you deal with, you know, as you build these businesses, um, you've got to bring experts in, people who are discipline experts or people who, you know, have some particular skill set in IT or marketing, or things maybe that you don't consider yourself the expert in.
32:53
SPEAKER_05: How do you deal with that in terms of not um I it's hard for me to articulate, but a lot of times these people come out of larger organizations that are very bureaucratic.
33:07
SPEAKER_02: Yep.
33:07
SPEAKER_05: And and the tendency may be to come into your company and say, well, at ABC, we did it like this.
33:14
SPEAKER_02: Exactly.
33:15
SPEAKER_05: And then they want to try to make you like ABC.
33:18
SPEAKER_05: And how do you how do you counter that or how do you deal with that?
33:23
SPEAKER_02: Um, I found for the most part it doesn't work very well.
33:28
SPEAKER_02: Um with my sportswear company, we we had about a two or three year period where I felt like we'd kind of outgrown our team.
33:38
SPEAKER_02: And so I started bringing in some of the big guns.
33:41
SPEAKER_02: Yeah, it didn't work.
33:43
SPEAKER_02: Um, it was not a good culture fit, it didn't work.
33:48
SPEAKER_02: And so um there's a study that Harvard did, uh kind of going off on a on a little tangent here, but I think it's really important because it applies to about any and all business, and um that showed that when we hire people, typically the number one thing that people are hired on is experience, and that's what you're talking about.
34:09
SPEAKER_04: Yep.
34:09
SPEAKER_02: And if we follow a typical search, that's how it works.
34:13
SPEAKER_02: You know, you gather up their resume in in the in the interview, you're going through their history, you're talking about experience.
34:21
SPEAKER_02: That's the number one thing that we hire for.
34:24
SPEAKER_02: That same study showed that if on down the line it didn't work out for any reason, it was hardly ever experience.
34:32
SPEAKER_02: It was fit, it was culture, it was values, it was do they have grit?
34:38
SPEAKER_02: Do they, you know, all of that stuff?
34:40
SPEAKER_02: Sure.
34:41
SPEAKER_02: So if we think about that, why is that so messed up?
34:44
SPEAKER_02: And my theory is this it's much easier to discern someone based upon their experience.
34:51
SPEAKER_02: You can walk through their resumes, you can talk about gaps, you can even behavioral, you know, based interviews, you can say, hey, who is your best boss?
34:59
SPEAKER_02: That part's easy.
35:00
SPEAKER_02: It's hard to dig in to the other side of it.
35:05
SPEAKER_02: So with that in mind, um, I don't hire on experience, man.
35:11
SPEAKER_02: I I go for the other stuff.
35:13
SPEAKER_05: Um interesting.
35:15
SPEAKER_02: And and and then this is the other thing that I teach in in the classroom that I think that's really important is you know, the old adage is slow to hire and quick to fire.
35:26
SPEAKER_02: Yeah, we tend to be the exact opposite.
35:29
SPEAKER_02: You know, I'm in pain, I just need somebody.
35:32
SPEAKER_02: And so, you know, we hire someone quick.
35:35
SPEAKER_02: And then uh I I enjoy kind of sharing this experience in the classroom.
35:40
SPEAKER_02: Um, if we made a bad hire, the best thing for us is that we made a terrible hire that is obvious in a short amount of time.
35:47
SPEAKER_05: We move quickly, yeah, exactly.
35:49
SPEAKER_05: Instead of waiting two years to figure that out, right?
35:52
SPEAKER_02: It usually doesn't work out that way.
35:54
SPEAKER_02: It usually starts with a little ping in your gut, 60 to 90 days in, you're like, Eee, I'm not quite seeing the behavior that I expected.
36:03
SPEAKER_02: And then we always we always look look inward and we always say, Well, you know what?
36:07
SPEAKER_02: I didn't spend enough time training them, I didn't spend enough time communicating with them.
36:12
SPEAKER_02: You know, we put it on, you know, we put it on me.
36:15
SPEAKER_02: And the the reason, the psychology behind it is because we don't want to face the fact that I may have just made a bad hire.
36:26
SPEAKER_02: And if if I have to have that conversation and let that person go, number one, if a conversation like that doesn't bother you, then we got bigger problems.
36:37
SPEAKER_02: You know, yeah, you're talking about someone's breadbasket, they probably have a family, so that's a pain, painful conversation.
36:46
SPEAKER_02: Yes.
36:47
SPEAKER_02: Number two, then you're going to be faced with going out and trying to make a a decision on something you just failed at.
36:55
SPEAKER_02: Um, and and uh and number three, sometimes by then you're really in pain, and and you're faced with this of well, this isn't person, isn't quite what I thought, but my goodness, if they're gone, then I'm even in more pain.
37:10
SPEAKER_05: That's the thing.
37:11
SPEAKER_05: It's like I have to do their job on top of all the other jobs I'm doing, right?
37:15
SPEAKER_05: And you don't want to go there if you can avoid it.
37:18
SPEAKER_02: That's right.
37:19
SPEAKER_02: So here's the big miss, though.
37:21
SPEAKER_02: And um Jim Collins, you know, who I'm a big fan of, uh, this was in his book, Good to Great, in chapter two.
37:30
SPEAKER_02: He's the one that coined the term of getting the right people on the bus and the wrong off and all that.
37:35
SPEAKER_02: And you know, what what he's laid out is it's easy for us to visualize the pain and suffering of let's say having to let someone go, and then uh what's it going to look like in the organization?
37:49
SPEAKER_02: That's easy, easy to visualize.
37:51
SPEAKER_02: What is much more difficult to visualize is if we're trying to populate our company with the A and B players and get A and B results, and we've got a C or a D, then what's the collective pain for the rest of the company that's trying trying to get results, and this person or this department is holding them back?
38:13
SPEAKER_02: And collectively, that's usually a lot greater.
38:17
SPEAKER_02: And if we if we let it go long enough, then eventually our A players are gonna leave anyway.
38:22
SPEAKER_05: So yeah, the A as I always said, HR problems, if ignored, will go away.
38:28
SPEAKER_05: The people will go away.
38:30
SPEAKER_05: That's the problem.
38:32
SPEAKER_05: Yeah, but uh yeah, I've been critical.
38:34
SPEAKER_05: I mean, uh there's a lot of good stuff in good to great, but I've been critical of it only because sometimes I think, you know, particularly things with like um level five leadership as an example, doesn't necessarily apply to smaller entrepreneurial organizations.
38:52
SPEAKER_05: True, you know, yeah.
38:54
SPEAKER_05: We can't all just be institutional leaders that nobody even knows that we're there and we're working behind the scenes or whatever.
39:01
SPEAKER_05: Exactly.
39:01
SPEAKER_05: In smaller companies, we need level four leaders still.
39:06
SPEAKER_05: Absolutely.
39:07
SPEAKER_02: Yep.
39:08
SPEAKER_05: But if you have you found in any of the companies now, uh you know, so this uh restaurant group that you sold, uh, you know, I assume that you're just completely out of that now, or do you are you still involved with it for a period of time?
39:21
SPEAKER_05: I'm curious.
39:22
SPEAKER_02: Nope, I'm out.
39:24
SPEAKER_05: You're out, yeah.
39:25
SPEAKER_02: Yep.
39:25
SPEAKER_05: Have you found in in any of the businesses uh that you've been involved with where you stick around that you know they start doing things that drive you absolutely insane?
39:36
SPEAKER_02: And oh, absolutely.
39:39
SPEAKER_02: Yeah, how do you deal with that?
39:41
SPEAKER_02: So when I sold GTM Sportswear to Haynes Brands, uh-huh, um, I wasn't contractually obligated, but I stuck around for 18 months.
39:52
SPEAKER_04: Okay.
39:54
SPEAKER_02: And on day 38 post-sale, I called my boss, uh, and he was a great guy, but I said, John, this is not working for me.
40:04
SPEAKER_02: Um, it's just so much different.
40:06
SPEAKER_02: And uh at the time I was on for the College of Business at K-State, I was on an advisory council, and Randy Sims was a good buddy of mine that he was chief legal counsel for Cerner, which is a big, big player in the um, I think it's medical software space.
40:24
SPEAKER_02: And for years they had been on an acquisition spree, and I was telling Randy about my sale, and he said, Well, what are your plans?
40:31
SPEAKER_02: I said, Well, you know, I'm gonna stick around, and and I stuck around for two reasons.
40:35
SPEAKER_02: One is we were the largest employer in Manhattan, and you know, I wanted to make sure that we got off to a good start.
40:43
SPEAKER_04: Sure, you care.
40:44
SPEAKER_02: Number two, two, I had never really been an employee before, especially a big corporate employee.
40:49
SPEAKER_02: I just wanted to see what it was like, so I said, Well, Randy, you know, I'm gonna stick around and I think we can do some really big things for Haynes.
40:57
SPEAKER_02: And he said, Well, Dave, I can share with you my experience.
41:00
SPEAKER_02: We've done about 50 deals, and on half of them, the founder was gonna stick around.
41:06
SPEAKER_02: And on and to date, there's only two of them that are still there.
41:10
SPEAKER_05: It's such a different world, isn't it?
41:12
SPEAKER_02: Yeah, yeah.
41:13
SPEAKER_02: I'm not saying it doesn't work, but the odds are really, really, really low.
41:18
SPEAKER_05: Yeah, yeah.
41:19
SPEAKER_05: It's it I've experienced that myself.
41:22
SPEAKER_05: I sold my my primary business to a private equity firm and just watched them destroy it.
41:27
SPEAKER_02: Yeah.
41:28
SPEAKER_05: They not understanding why we were successful.
41:32
SPEAKER_05: I mean, they threw out everything that we did that was good, like the shared bonus program and open book management and you know, things that were just fundamental to the business.
41:44
SPEAKER_05: And instead of, you know, we're gonna put pit each manager against the other ones, and they each have their unique bonus program, and now they don't cooperate with each other, and you know, you can just predict what happened after that.
41:58
SPEAKER_02: Yeah, that that's absolutely been been my experience, you know.
42:03
SPEAKER_02: GTM again, 10 years ago I sold it, and and I think at that point we had about 700 employees, and then last year they sold off Champion to a private equity company.
42:15
SPEAKER_02: And when I sold that, I retained the the uh real estate, and so across the street from where I am now, I've got a building that's sure 180,000 square feet.
42:23
SPEAKER_02: It's it's it's a big building.
42:25
SPEAKER_02: And they ended up calling and saying, We're we're you know consolidating things, and you know, they ended up leaving early.
42:34
SPEAKER_02: Um, I mean they basically ran it into the ground.
42:37
SPEAKER_02: And uh related to Haynes, what I learned was that our culture at GTM Sportsware was we were a sales company, we were about selling sportsware.
42:47
SPEAKER_02: So I ended up with a robust supply chain, and I ended up with like our embroidery department.
42:53
SPEAKER_02: I think we had 250 people operating 24-7.
42:56
SPEAKER_02: I did all that stuff because I had to to sell more sportsware.
43:00
SPEAKER_02: Yeah, Keynes is a really good supply chain company, but they didn't really value sales, and so um, just you know, a completely different look.
43:09
SPEAKER_02: Uh we haven't even brought it up, but uh six years ago I was intrigued with the pet hospitality business.
43:16
SPEAKER_02: Okay, so doggy daycares, and so I got in that and we opened up nine stores in less than two years, um, and really got after it.
43:27
SPEAKER_02: Uh, I wouldn't recommend going as fast as we did.
43:30
SPEAKER_02: It was rocky, but we managed to somehow live through it.
43:34
SPEAKER_02: Um, and then three years ago I sold that off to I'm a private equity, and they're they're doing a roll up and uh um you know I visit with some most of the people that I had are gone because you know the culture changed, you know.
43:48
SPEAKER_02: It's it you know, private equity.
43:51
SPEAKER_02: And I hate to label an entire industry, but yeah, we know how most of them operate.
43:57
SPEAKER_05: Yes, I do.
43:58
SPEAKER_05: Too many, I mean, and This sounds terrible because I've got an MBA and I believe I benefited from it tremendously.
44:06
SPEAKER_05: But too many MBAs in there microanalyzing everything and not seeing the big picture is a big part of the problem, in my opinion.
44:18
SPEAKER_05: It's like, well, we looked at this aspect of the business, and this doesn't make any money.
44:22
SPEAKER_05: So we should get out of this.
44:24
SPEAKER_05: But they don't realize how that impacts everything else that the business does.
44:28
SPEAKER_02: Sure.
44:29
SPEAKER_02: Yep.
44:29
SPEAKER_05: Not seeing the totality of it is a big problem, I think, for many of these acquirers that have lots of number crunchers and they want to do all decision making is not data driven if it's good, in my opinion.
44:44
SPEAKER_02: Right.
44:45
SPEAKER_02: Absolutely.
44:46
SPEAKER_05: You know?
44:47
SPEAKER_05: Yeah, I've got a friend who's in that business here, and they have the biggest one in Northwest Arkansas.
44:53
SPEAKER_05: It's very successful, but they sure have to spend a lot of they they have like uh swimming pools and for the dogs, and all their their grounds are astroturf, you know, um video.
45:09
SPEAKER_05: So when we go out of town, we can look at our doggies and where they're playing and who they're playing with and all that.
45:15
SPEAKER_05: And it seems, I mean, she would tell you that if they hadn't gotten their real estate when they did for the price that they paid for it, there's no way it would be financially viable today.
45:25
SPEAKER_05: Yeah.
45:26
SPEAKER_05: Yeah.
45:26
SPEAKER_05: Yeah.
45:27
SPEAKER_05: Just because of the continued, you know, the investment in the infrastructure that it takes to run and and limitations.
45:35
SPEAKER_05: I mean, they charge a lot, but there's only so much you can charge, I guess, at some point.
45:39
SPEAKER_02: Yeah.
45:40
SPEAKER_05: Well, you know, it's difficult.
45:42
SPEAKER_02: Out of out of every business I've been in, that was the most profitable for me.
45:47
SPEAKER_05: Was it really?
45:48
SPEAKER_05: Uh-huh.
45:48
SPEAKER_05: That's interesting.
45:50
SPEAKER_02: Yep.
45:50
SPEAKER_02: Um, it was an interesting model because it was a high fixed cost model.
45:55
SPEAKER_04: Yeah.
45:56
SPEAKER_02: And then, like comparing contrasting that to a Freddy's.
46:00
SPEAKER_02: So, you know, let's take a Freddy's, for example.
46:02
SPEAKER_02: Our average weekly sales are were about 40,000.
46:06
SPEAKER_02: But your first week, you would do over 100.
46:10
SPEAKER_02: Well, with a doggy daycare, you know, you open up on day one and you don't have someone driving by saying, Oh, there's a doggy daycare, I'm gonna go buy a pop across the street and get over there.
46:20
SPEAKER_02: You know, so we have a slower buildup.
46:22
SPEAKER_02: Oh, yeah, you wouldn't even get break even until about year three.
46:27
SPEAKER_02: But once you were above break-even, every dollar that came in, about 75 cents, would drop to the bottom line.
46:34
SPEAKER_05: Wow.
46:35
SPEAKER_05: So that's interesting.
46:37
SPEAKER_02: We ended up with about a hundred percent ROI within three to four years on every on every new store, where like with Freddy's, we were about 25%.
46:48
SPEAKER_02: So if I were in life just to make money, I'd still by now I'd probably have 30 or 40 of those things and I'd still be shurning and burning.
46:57
SPEAKER_02: But I, you know, um, I have this cow habit, so you know, so I'm all stuck on that.
47:03
SPEAKER_02: So yeah.
47:05
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47:20
SPEAKER_05: Well, we're almost out of time, but I mean, what so I'm sure lots of people come to you and say, you know, I want to you to mentor me, I want you to help me with my business, give me some insight, give me some advice.
47:36
SPEAKER_05: What advice do you have for either new or aspiring business owners today that you think would be helpful?
47:46
SPEAKER_02: Um, well, first of all, I'm really big on a mentorship.
47:50
SPEAKER_02: And there's a story behind that.
47:52
SPEAKER_02: When I started uh before GTM, it was called It's Greek to Me, um, right out of college.
47:59
SPEAKER_02: I realized like day two that we were in over our head.
48:03
SPEAKER_02: And I was in over my head for like 10 years.
48:06
SPEAKER_02: I mean, I was like, man, I should have studied more, and you know, we didn't have any equity.
48:11
SPEAKER_02: I mean, we bootstrapped that thing bad.
48:13
SPEAKER_02: I mean, for two years we lived on the road and there were five of us, and we'd only get two hotel rooms.
48:19
SPEAKER_02: And if it was if sales were good, then we would do like a super eight.
48:25
SPEAKER_05: And sometimes we would that discipline had to help you though.
48:30
SPEAKER_05: I mean, let's face it.
48:31
SPEAKER_05: Oh, yeah, yeah.
48:33
SPEAKER_02: Yep.
48:34
SPEAKER_05: That carried with you, I'm sure, probably to this day.
48:37
SPEAKER_05: Oh, absolutely.
48:38
SPEAKER_02: Yeah, yeah, yeah.
48:40
SPEAKER_02: Um, but so so I did two things.
48:43
SPEAKER_02: I turned into a voracious reader, and so in the evenings, I'd spend two hours a night reading a business book, and then I reached out to people that had been there and I put together a network of mentors, and I think that that was the difference I mean making or not.
48:59
SPEAKER_02: So uh at any given time, I'm mentoring probably two to five students, and then probably six to eight other business people, and uh so so I'm huge into it.
49:14
SPEAKER_02: Um, with all due respect, Mark, I don't like your question though.
49:18
SPEAKER_02: Okay, and the reason why is it's too broad when we say what general advice would you give?
49:25
SPEAKER_02: Sure.
49:26
SPEAKER_02: Because unless I would know a little more about where are they at in life, where are they wanting to go, it's it's hard to give advice if that's general.
49:36
SPEAKER_02: Um so good.
49:38
SPEAKER_02: Now that I rained on your parade on your question, I'm still gonna try.
49:42
SPEAKER_02: Um and probably the first one I would say is that life is a journey.
49:48
SPEAKER_02: And I recall at one point with GTM where in a five-year period we went from sales of eight, eleven, fifteen, twenty-eight, forty million.
49:59
SPEAKER_02: So we went from eight to forty million in five years.
50:01
SPEAKER_05: That's a lot of growth, man.
50:03
SPEAKER_02: So clearly the market was saying we were doing a lot of things right.
50:07
SPEAKER_05: Yep.
50:07
SPEAKER_02: But we still had a long list of things that I thought we could be doing better.
50:12
SPEAKER_05: Sure.
50:12
SPEAKER_02: And instead of running around doing high fives all the time, I was running around with that list.
50:17
SPEAKER_02: So, in other words, I didn't smell the roses.
50:21
SPEAKER_05: Yeah.
50:22
SPEAKER_02: And it's a quandary for entrepreneurs because it's that dissatisfaction with the status quo, is what makes us good at what we're doing.
50:32
SPEAKER_02: Yeah.
50:32
SPEAKER_02: Um, but looking back on it, I should have enjoyed the journey more.
50:35
SPEAKER_02: Those were some special times.
50:37
SPEAKER_02: And I didn't know you're right, I didn't acknowledge it because we still needed to make this better.
50:43
SPEAKER_02: So that's probably one thing that I could give everyone.
50:46
SPEAKER_02: We don't even know if we have tomorrow.
50:49
SPEAKER_02: And so if we're not living every day, and then the other part that I would add is I heard this quote and it stuck with me.
50:56
SPEAKER_02: The value of our life is directly proportional to the value of our relationships.
51:02
SPEAKER_02: Yes, it's about people.
51:05
SPEAKER_05: I believe that.
51:06
SPEAKER_02: And so our relationships with our family and our close friends and trying to turn into a servant, what can I do to make people around me life better today?
51:18
SPEAKER_02: That's success.
51:20
SPEAKER_05: Yes, absolutely.
51:21
SPEAKER_02: A lot of times they have to be they have to be old, hairy-legged old men like you or me to figure that out.
51:27
SPEAKER_02: And a lot of people still still never figure that out.
51:30
SPEAKER_05: So um no, you're so right.
51:32
SPEAKER_05: I mean, it seems I've I've said it, you know, and I'm sure you've known people like this.
51:38
SPEAKER_05: I know people who are very, very successful.
51:41
SPEAKER_05: And all they think about is how they can make more and more and more money.
51:45
SPEAKER_05: And there's a certain personality type like that that do really extremely well.
51:51
SPEAKER_05: Okay.
51:51
SPEAKER_05: I mean, I've, you know, I know some people who are billionaires, okay, and some of them think like that.
51:57
SPEAKER_05: But they in some ways they're smart enough to be that successful, but they're dumb enough that that's all they care about.
52:05
SPEAKER_05: And they miss out on the relationship aspect is what makes life worth living.
52:12
SPEAKER_02: Yes.
52:13
SPEAKER_05: You know, and you're that's I think that's such a good point, um, Dave.
52:19
SPEAKER_05: And you're such a wise person.
52:22
SPEAKER_05: Um, you're you're you've learned a tremendous amount, obviously, over the course of your lifetime that that has um helped you be successful, build businesses, and help all the families that you help.
52:36
SPEAKER_05: And now you get to do it with students.
52:39
SPEAKER_02: Yep.
52:40
SPEAKER_05: And that's a great thing too for people like us, because you know, they I think they push us, they keep us young, they they keep us where we have to keep learning.
52:50
SPEAKER_03: Absolutely.
52:52
SPEAKER_05: Yeah.
52:52
SPEAKER_05: Whereas, you know, otherwise we maybe we wouldn't learn that.
52:56
SPEAKER_05: You know.
52:57
SPEAKER_02: Absolutely.
52:58
SPEAKER_02: Yep.
52:59
SPEAKER_05: Yep.
53:00
SPEAKER_05: So that that makes for a very rewarding life.
53:03
SPEAKER_05: And and obviously, um, you've done that.
53:06
SPEAKER_05: Well, it's really been great talking with you here today.
53:10
SPEAKER_02: Well, I've I've really enjoyed our time together.
53:13
SPEAKER_02: And uh, you know, if you want a guest lecture in your class sometime, you know, just give me a shout.
53:20
SPEAKER_02: So I will.
53:21
SPEAKER_05: I'll take you up on that because I I I think you have so many lessons for people.
53:26
SPEAKER_05: Um, unfortunately, I don't know what your experience is.
53:29
SPEAKER_05: My experience is that out of every class, I have probably 15 to 20 percent are highly engaged.
53:36
SPEAKER_05: And then the rest are are really there just trying to get their ticket punched, unfortunately.
53:41
SPEAKER_02: And is your class a is it a requirement?
53:45
SPEAKER_02: It is it for like entrepreneurship majors or minors?
53:49
SPEAKER_05: Yes, if they if they are an entrepreneurship major, um, I I teach uh new venture development and then small enterprise management.
53:57
SPEAKER_05: So they would have to take those, otherwise, they're electives for a lot of people.
54:00
SPEAKER_05: And we got rid of the prereqs, so non-business majors can take these classes, which has been good.
54:07
SPEAKER_05: You know, engineers and architects and clothing designers and people like that, which I think has helped the class, frankly.
54:16
SPEAKER_05: Some of my best students are engineering majors.
54:19
SPEAKER_02: Absolutely.
54:20
SPEAKER_02: Yeah.
54:21
SPEAKER_02: Well, um, I helped start the entrepreneurship program here at K-State about 15, 16 years ago and funded it for a while.
54:29
SPEAKER_02: And uh at one point we lost an instructor, and so I taught three sections of the intro to entrepreneurship.
54:35
SPEAKER_05: Did you?
54:36
SPEAKER_05: Uh huh.
54:37
SPEAKER_02: And um the class I teach today, I love it.
54:40
SPEAKER_02: And and I think they call it T-Vows, it's where the students evaluate the classes.
54:45
SPEAKER_02: Um it's the number one rated class in the College of Business at K-State.
54:50
SPEAKER_05: Man, that's fantastic.
54:52
SPEAKER_02: It's called the Entrepreneurial Experience.
54:55
SPEAKER_02: Um, it only holds 46, and there's always a waiting list.
55:00
SPEAKER_04: Yep.
55:00
SPEAKER_02: And it's taught by myself and two other adjunct uh entrepreneurs.
55:06
SPEAKER_02: We each take about six weeks.
55:09
SPEAKER_02: We don't even have a course book.
55:11
SPEAKER_02: We just get up and tell stories, and we share our experience, and then we each bring in other guests lecturers.
55:19
SPEAKER_02: And uh, I've done it for 10 years now, and I just love it, you know.
55:23
SPEAKER_02: Um that one and even with that, we have a little bit of that bell curve of the highly engaged and then middle, that it's not very many that just are trying to punch their their clock.
55:36
SPEAKER_02: Most kids are there and and I get all up in their business, like like um like my first one.
55:44
SPEAKER_02: I talk about relationships and my homework assignment is if your mom's still alive, I want you to call her this weekend.
55:51
SPEAKER_02: If she's not someone else close in your family, and have that conversation with her and don't make it about you.
55:58
SPEAKER_02: You ask your mom, how is she doing?
56:01
SPEAKER_02: What's working in her life and what's not working in her life?
56:04
SPEAKER_05: And great assignment.
56:06
SPEAKER_05: I love that.
56:07
SPEAKER_05: Yeah, that's gonna help them be successful out there in the real world, right?
56:13
SPEAKER_05: They whether there's selling or doing anything.
56:16
SPEAKER_02: Yeah, it's about that relationship and teaching them how to give, you know.
56:21
SPEAKER_05: So uh yeah, that's brilliant.
56:23
SPEAKER_05: I love it.
56:24
SPEAKER_05: Well, I'd love to talk more about your class and and see your syllabus, and I can tell you about some of the things I do because it's very similar.
56:31
SPEAKER_05: I don't have a textbook, I bring in lots of people who are business founders, people who took over businesses, people who bought businesses, people who own franchises, try to give them an exposure.
56:43
SPEAKER_05: I think if I was to be critical of a typical business school education, the problem is that they get all these discipline experts, but they don't ever have any integration into a sort of a hole that that's what we can provide is the is the integration of all this stuff.
57:02
SPEAKER_05: So there's a context, there's a context that makes it so much more memorable for them.
57:07
SPEAKER_02: Absolutely.
57:08
SPEAKER_02: Absolutely.
57:09
SPEAKER_05: You know, yep.
57:10
SPEAKER_05: Because we're all sitting there making the judgment all day.
57:12
SPEAKER_05: We all get bombarded with information, and our brain is like, store this, don't store that.
57:18
SPEAKER_05: And if it seems like it's not useful, if I'm sitting there talking to you about macroeconomics or debits and credits, and you think I'll never need to know this, you know, then you don't store it.
57:30
SPEAKER_05: But if you knew that there was an application for that, absolutely, then it it seems so much more likely that it'll have relevance to you and you'll you'll keep it.
57:41
SPEAKER_05: But anyway, we could talk about that all day.
57:43
SPEAKER_05: Dave, wonderful show.
57:45
SPEAKER_05: Thank you for donating your time here, and we really appreciate it.
57:50
SPEAKER_05: If anybody needs to reach out to you, do you have an email address that you would be willing to provide?
57:56
SPEAKER_02: It's simply Dave at, and it's all one word, and it's Booth, B O O T H Creek, C-R-E-E-K, Wagu, W-A-G-Y-U.com.
58:10
SPEAKER_02: So Dave at Booth Creekwago.com.
58:14
SPEAKER_05: That's awesome.
58:15
SPEAKER_05: Really appreciate that.
58:17
SPEAKER_05: And hope we get to talk again, and I'll get you in my class, hopefully.
58:21
SPEAKER_05: And this has been great.
58:22
SPEAKER_05: Thank you so much, Dave.
58:24
SPEAKER_05: This is another episode of Big Talk About Small Business.
58:35
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58:39
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58:53
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58:57
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