Michael Girdley, Dura Software

I’m 45 years old now. Squarely in the middle of my life. It’s a good age, I like it. I liked my 30s, I think I like my 40s better. The 20s were definitely inferior to all those things put together. Long story about how I got to where I am today, professionally. I grew up here, in San Antonio, I was always a computer kid. Did from the time I was nine years old, or something, I got my first computer for our family. My parents paid three grand for an Apple IIE, which is probably 10 or $11,000 in 2019 dollars.

I was always interested in them and always came back to that. They were always easy, they were always fun. That led me to take a lot of computer classes in high school. When I was in high school actually, I went to a great high school, here in town. We were doing everything on IBM PC’s. Writing code on those, you can do all kinds of crazy stuff back then in terms of erasing your code or formatting your disks and that sort of thing.

And so, stuck with that. I decided I wanted to get as far away from San Antonio as possible at the time. And was very methodical about the type of college I wanted to go to. I wanted to go to a small school, far away from San Antonio, with a good swimming program, possibly a Greek scene. I applied to 30 colleges that fit that, ended up going to a college in Pennsylvania. It’s a very good engineering school, called Lafayette.

Graduated in four years, swam for four years, it was great. And then decide well, if I want to do something, I should go get into the computer business and the software business. And that really gravitated me to move out to Silicon Valley. And at the time, all my friends were going to get consulting jobs, at Anderson Consulting or PWC, or whatever. And I had no interest whatsoever.

Ended up out in San Francisco. Slept on friends’ couches, kind of typical story of the kid moving to the big city. Worked in jobs there. Found out very quickly I didn’t want to be an engineer anymore, but I liked people and marketing much more than sitting in front of a computer all day. And then did that for about five years, until the dot com crash happened.

Met a lady along the way, who has since become my lovely spouse. And that’s when an inflection point happened in life that brought us back to Texas. My father, who was getting up in age at the time, decided he didn’t want to fund the family business anymore. And asked me to come back and take it over as a, at the time, a 26, 27 year old young man. And I didn’t want that. We moved to San Antonio. Got out of the Bay Area, which a lot of people do.

And I ran that business, which is a fireworks distributing and retailing business for almost a decade. Learned how to be a CEO, learned all the good stuff and bad stuff to do, mostly through trial and error. Now I’m in the third phase of my career where I am spending more time working on businesses than in them. I enjoy the process of working with other CEO’s, or working with the people that work for me and with me, much more than I want to be a CEO of a company at this point.

I think about it as supporting them from behind, if that makes sense. I don’t need to be in the hot seat. I feel like I can add a lot more value, delivering insights, coaching and assistance to the folks that are running the businesses.

Since you have the operational experience, but maybe not the deal and transaction background, how has it been transitioning into more of having that role in your life versus beforehand?

I’ve always been somebody that likes to think about business much more than somebody that likes to actually do the business, if that makes sense. I’m actually not very operationally strong. I’m relatively weak at multitasking. If I do get involved in multiple things, I actually have to have systems to be able to do that. And I watch peers, or CEOs that I work with who can keep 30 balls in the air at once, and I just can’t. I’m not very good at that, I can focus on one, two, maybe three things. And I can do those really well. I’m a serial mono-tasker in that way.

I think that the lesson that I learned there was that I would be much more successful if I can find people whose super power was operational things. And keeping things going and grinding it out, because I’m too attracted to shiny objects. I’m too much of a mono-tasker, it’s just not who I am. That’s always caused me to gravitate towards this thinking about business rather than doing it, if that makes sense.

And I think in terms of, am I happy in my career now? I totally am. If you gave me an operational role, I would not be a happy camper right now.

Are there a few stories or examples where you struggled as an operator?

Oh, yeah. The thing that was really eye-opening to me, and if you’re a weak operator this will happen to you. You’ll go on vacation for three weeks and you come back and you’re like, wait a second, everything ran better than when I was here. There weren’t distractions, I wasn’t bringing in the eureka moment idea of the day. And dragging the whole staff one direction or another, and going through this whipsaw thing.

I can remember going on vacations and coming back and being like, I think the universe is trying to tell me something. When it was like these people did better with the business seeing less of me, than more of me. And that pattern has continued on.

I did have one of the companies that I’m an owner and in control with my partners. They asked me very nicely, hey, would you not come around so much? I was like, okay, not problem. If you’re asking somebody to do less work, I’m your guy. Literally, it was just facing reality about where I’m good and where I’m not good.

I think it’s the biggest evolution I’ve gone through over the past decade.

Has that influenced how you work with your companies with Dura then?

The way Dura is organized is that we logically them as companies, but we all sit together. We’re all in the same space. And the CEO’s, they’re much more integrated than say a typical holdco model, or even a very distributive model, would be our CEO’s running these business can look across the office and see the other CEO’s. They have meetings, they have problem solving sessions, that’s all by design.

What that does is, it gives us an opportunity to have them feel like they’re ultimately responsible for what they’re doing, but they have partners in terms of me and Paul and the other headquarter staff, in their corner, helping them out. First of all it does that.

Secondly, I think it gives us a lot of empathy about how hard being a person that owns a P&L is. It is not an easy job to do. Having been there, I feel a lot of empathy for these folks that are dealing with what are existential challenges on a regular basis. Anyway, I think those are the two things.

One is, treating them like a peer, treating them like they’re essential to what’s going on. And then secondarily, having a lot of empathy for their plight and what they’re going through. It’s not easy.

Yeah. I’ve heard it can be a bit of a lonely job at times. How has having a few companies that they can go to, underneath the Dura umbrella to just bounce ideas and questions off of them? And then just having a small community of operators that helps ease some of that stress of the job.

The cool thing is we are very mindful of the profile of person we want to have run one of our business units, run one of the companies. We’re looking for a person who is mid career, has managed people and is just on the cusp of being ready to be in the hot seat, but nobody has really given them a chance to be a CEO yet. And what that means is, typically we’ll be bringing in somebody who has a very high level of depth in one or two functional areas, but hasn’t been exposed to the rest of it.

As an example, one of the candidates might have worked in operations and then secondarily in support for all their career and risen up the ranks to a middle management or an executive level role there. But they haven’t been exposed to things like, how does real estate work, how do leases work, how does finance and accounting work, how revenue recognition or sales work?

Really, our role there is to bring in these people who are very deep in their specific functional areas of the business and then give them an opportunity to learn all those other areas to become a well-rounded CEO.

The cool thing about that model it, sometimes you bring in somebody who’s coming from a sales background. Or, you bring in somebody who’s coming from a marketing background. Or, you’re bringing in somebody who’s coming from an engineering background. In our case, we have three CEO’s on the team right now, they each have complementary and different strengths to where they can help each other. If one CEO is having trouble with sales, well just happens one of the other CEO’s comes to us from a sales background. He can go in really deep and help solve that individual problem. And we do that actually by design.

I don’t go to these meetings intentionally, but we do have regular meetings where they get in and they deal with peer to peer helping each other solve the biggest business issues that they’re facing. There’s economies of scale, efficiencies of scale, but we see by running it with that model.

After then acquiring these companies and bringing them underneath Dura. What sorts of things can you offer the CEO’s, or shared services and support after a acquisition?

We deploy our own people to run these businesses. Core to our model is that the people who are running them now, need to move on to their next thing. We’ll have fundamental ideas about how we want to run the business, that are sometimes different than what they sellers or founders of that business had done. We really deploy a handful of core principles and tools into each one of these companies.

Number one is, we’ve defined a standardized playbook that we ask everybody to use in order to run the business. And what that does is, gives us a common language for everything around how hiring works, how visions, planning, strategy, marketing. We have a playbook that we have laid out and said, this is how we’re going to do hiring, this is how we’re going to do all these aspects of our business. That’s fundamentally number one. And we have to do that in order to make sure the businesses are monitorable by us. We want them to be worrying about really important stuff, like how do I delight my customers and not like how do I run a visioneering session at my offsite.That’s element number one that we deploy in these companies.

Number two is, we have economies of scale around bringing them into a larger umbrella. We become a single purchaser of things like PEO, healthcare, employee benefits, real estate and that sort of thing. And we do that as a company and we get scale that you normally wouldn’t have for an individual two to $5 million software company.

And then a third thing we do is, we centralize services where there’s no strategic advantage to having them distributed, finance, HR, facilities. All of that stuff is centralized and we have a division underneath the CFO of the company, who runs all those things. Those are the three major tenets of that stuff and then there’s a bunch of minor stuff that we do as well to make things more efficient and optimize them. And get benefit from having them be under our bigger umbrella.

In our first phone call you talked about how software is becoming a popular place for investors to invest in companies, but that more people are generally talking about it than actually doing it. Where do you see opportunity within acquiring software companies? It seems like a place that has higher than average multiples for other types of businesses. Where are you finding opportunity?

Yeah. I think where we play is in two specific portions of the market. As we go out and we go look at the market for the two to $5 million a year software companies, we think there are four buckets. We’re getting ready, we’re putting together a white paper, we’re going to have on our Dura website in the next couple of weeks that details these. And where they trade in terms of multiples and stuff like that. Really the four buckets are, at the top end you have VC businesses, those are the ones that are rocket ships, they’re going 100% year over year. They’re huge markets. VC’s pay huge multiples for those. Eight, nine, 10, 20 times revenue for sure. We don’t play in that space.

There’s a second category, which is, we describe as good businesses. Typically, these are high margin, slow growth, meaning 15 to 20% year over year growth. Nice niche software businesses. Typically in small total addressable market and stuff like that. Those things are already pretty much fixed. They’re running really well. The kind of surgery that we want to do, to help a company really get on the right track has already been done. We don’t play in that space either.

Then there’s the two last categories. Where we tend to play, and we see opportunity and our acquisitions today fit in those buckets. And the next one is, one that we would describe as slightly underperforming. And we’re still working on naming that, because we don’t want to insult people. But, typically it means it’s a relatively small market. It’s a niche play. It fits the revenue characteristics, but it’s got some stuff that needs to be fixed whether that’s accounting needs to be done better, there is no sales model. All those kind of things are things that we want to go in and figure out for that kind of company. Usually they’re kind of breaking even, they’re growing maybe a little bit, or they’re flat. And that’s where we can go in and we deploy our operational model and expertise and help there.

That’s one bucket where we play and then there’s at the far end of the spectrum, the opposite of VC is more distressed companies. Ones that have some sort of challenge, whether they’re overstaffed or they’re losing money and they need to sell, and needs some changes to really work. We play in those two buckets. And I think what you’re seeing now amongst those four categories, you have VC, good businesses, slightly underperforming and distressed. What you’re seeing in the market these days is all of the different software lenders that have come out, means that a lot of the distressed companies, or companies that should be distressed, they’ve gotten a reprieve. Because they’ve gotten this debt that has allowed them to enter for maybe longer than they should have.

I do think we’re coming to a point in the market where we’re going to start to see more distressed companies as some of this debt financing options start to run out.

What are a few things that investors should be cautious of when looking to acquire software companies that are distinct and specific to software compared to other industries?

Interestingly enough, the document that we’re working on is actually going to show up on the website. We wrote a whole white paper on things that are things that are relatively specific, but also endemic to the software space in general. I think category one, you see a ton of just basic business hygiene issues. Things like, have you been doing your financials correctly? Been filing your taxes? As a funny example, we were close to acquiring our company and we’re going through diligence and we discovered that they owed almost three times in taxes what their annual revenue was. And that’s just state taxes, we hadn’t even looked at the Federal ones yet. There’s a lot of fundamentals around that.

In terms of software specific, I think the thing that’s relatively frustrating as a buyer is most sellers have a hard time really understanding how a buyer is going to make an investment or a purchase of the company work. There is this weird folk wisdom where people are like, hey, software companies are worth three times revenue or five times revenue. And I know why that happens. It’s because brokers, VC’s, bankers, dead people, they’re all incentivized just to talk about how high multiples are. And use the one thing that they’ve seen in TechCrunch to explain stuff.

I think the painful thing there is, most sellers, especially if they’re technical people who have built a business. And are not that business savvy, they have a hard time putting their mind into understanding how a buyer’s going to actually profit from their business, at a reasonable level.

What causes those factors are all kinds of things that I think are really very interesting like, what kind of sales model do you have? Just as an example, if you have a direct sales model where real people have to sell the business, that is inherently risky for a buyer than a self-service model. Let’s take two business that both have $4 million a year on revenue. One is self-service and one is direct sales where you have staff selling it. Worse case for you, if it’s a self-service model, you just turn off all selling, all paid advertising, all everything. You just turn into an ATM machine, you can definitely do that. The down side is more limited in the self-service model whereas if you get rid of all of the sales team and you don’t invest in that for a direct sales model company, you end up with a business that starts shrinking very quickly. And eventually reaches the point of no return to where it can’t come back.

There’s all kinds of factors around those types of things that people, just because they have no experience and no exposure to it, they don’t know. And it creates a lot of challenge, because folks like that, that’s like being in the seller education business a lot of times. Okay, well let me explain to you why this doesn’t work, or why your neighbor is telling you that software companies quote unquote are trading for five times revenue isn’t always true. It’s more complex than that in many different regards.

Which of those hygiene issues within the business are you willing to take on as a buyer and which are you when you see them in a business, you want no part of them?

There’s a good quote and I didn’t make it up, but I think it’s really smart, is these small stage business or early stage investing, there’s always red flags. It’s just up to you to figure out which red flags are okay with you. And giving there’s probably a thousand different ways for business to go wrong and three, or four or five ways for it to go right. It’s hard. There’s lots of ways for it to go wrong. In terms of things that we will avoid, we have a core checklist. We want to buy mission critical products. And the fundamental thesis there is, if something’s a nice to have product, it’s the first thing to go in a recession.

We will avoid things like employee engagement software, or hiring software. The first thing that happens in a recession is nobody hires, therefore nobody needs hiring software. We will avoid things that have really challenging revenue models. If per use revenue models are harder and less attractive than say a recurring revenue model, where somebody pays you a subscription. Other than that, we evaluate each business that we’re looking at individually. And beyond the core checklist things around size, geography, mission criticality, B2B versus B2C. We don’t do B2C just because it’s not interesting to us or direct sales B2B people. Beyond those checklists, we’ll tend to look at almost everything.

Gotcha. And then how do you find these software companies? Are you going through brokers primarily? Do you have a direct outreach to owners, strategy or plan? What are your main methods?

Yeah. We do everything. There’s direct outreach, we’ve built a database of about 30 000 software companies. And we run an outreach process around that. We have a referral program, which we just rolled out last month. We pay people $25,000 if they refer us a deal that we do. That’s actually been pretty successful, we get about one or two referrals a week, from that. We’ve gone on an interface with most of the brokers in the industry. I think we’ve got a pretty good reputation with those folks as well.

And then we do a bit of everything else in terms of just trying to be the corped up team here just describes themselves as an octopus. They’re using every outreach method to try to find things. We also network to PE folks, we go to conferences. Just generally just do everything that you do at a higher end MNA or PE shop, we’re just doing that on a smaller scale here for this micro end of the spectrum.

I’m curious about the referral program then. Sounded like it’s been fairly successful. Is this something that you’re asking just your close-in network to refer, or this something that you’ve been a little more public and upfront with?

Yeah, we’re public about it. We spend probably 20 bucks a day or so on Twitter ads. Probably our most popular Tweet is, tell us about a business that you know and email it to us. We’re in the process of putting it up on the website. We talk about it publicly. We will pay referral fees all day long, we’re happy to do that.

How helpful Has Twitter been for you? Just out of curiosity.

Twitter is okay as it comes to helping our company. Where I think Twitter has helped a ton for me and my colleagues getting smarter because of Twitter. I think Twitter offers perspectives and because of the nature of it, there’s such a competition amongst everybody to produce the best content. And whether you’re in BC Twitter, or you’re in financial Twitter, or real estate Twitter, the beauty of Twitter of each of these places is optimized that the people who contribute the most and have the most value to the community and the discussion, are the ones that get the most followers. And therefore, get the most connections and get the most respect.

For me, it’s taken a while to learn that. I’m not naturally good at social media and I’m still working on it. But for me and my colleagues, Twitter as a learning tool, is a million times more powerful than conferences. And it’s up there right with reading books and blog posts about how to make yourself better. I wouldn’t get rid of it for the world.

Obviously you with Dura want to be around for many, many years as a software acquirer. What sorts of things are you doing today that you expect will not pay off for at least five years?

I think there are a lot of fundamentals that we’re starting to invest in. We talked about this playbook that we use in terms of operating the businesses. And that’s the best breed system of systems that we’ve created. What we use is totally all my personal, I’d say. We keep no secret about what those systems are. And it’s constantly evolving.

And I think deploying that is really huge. I think the second thing that we’re doing that’s really interesting is, the next generation of people that will be able to run these software businesses, they’re already here.

They’re in number two and number three and number four job positions in all of these companies. And we can already start to see those folks and see how they’re getting groomed to eventually be leaders three, four, five years down the road.

And then I think the third thing is, we’re really building a brand. People want to come work at Dura. It’s a great place to be. They like that it’s a situation where we have the upside of a startup, but the downside risk is limited, because we have revenue and we have profits. All that is pretty exciting. We’re starting to build that brand, we’re building that following where people are telling their friends like, hey, this is a great place to work. And that will continue to pay off. Especially as we get to a new scaling in the future.

So those out there who are thinking about building a similar permanent capital or small acquisition fund. What sorts of things do you think they should be doing to start to build that foundation for themselves and their scale?

It’s really interesting. I think the number one thing is to be really mindful about exactly what you want your model to look like. I had a conversation on Twitter with a guy who wants to do it for main street type businesses. And the feedback there was to make sure you’re really thinking about customizing the model that you’re going to use internally into the market of the types of businesses that you’re going to have.

And the challenge there is, if you’re not mindful about that, but everybody just employs the holdco model. That doesn’t work for everything. Be very mindful about that. Think about what types of things your businesses need. Think about what ways they can leverage each other. Think about what sort of economies of scale you can build. All those things together, flow down to what types of businesses they are.

If you’re going to build a holdco or a company that specializes in public infrastructure, the things those businesses need are totally different than what small software businesses need. And even more particular, what small software companies and products need are totally different than what medium sized ones need. We’re very intentional at this point and not getting into 10, or 15, or $20 million acquisitions, just because we think that’s a different set of problems that we don’t know about yet. And we’re going to stay in the niche that we’ve carve out. And what our model is optimized for.

Since you run more of the holdco structure, what have you found to be some of the pro’s and con’s to that structure? Compared to that of like an independence monster where you raise deal by deal or out of a fund.

One of the things we did, which I think is proven to be very attractive to people is holdcos offer better tax advantages in the US, compared to other models. There’s opportunity zones and more an opportunity zone company. And that works basically because we have a captive fund that gives people tax free gains, who invested in our last round. Assuming a 10 year hold period and assuming we do the things we’re supposed to in terms of meeting the criteria. Holdcos and what not, offer you also at the very least, even if you’re not an opportunity zone company, you can get QSBS. Which is Qualified Small Business Stock, which gives you slightly less tax advantages in terms of Federal income tax, but is still good.

Those are definitely the pros of being a holdco. The other thing that’s also about being a holdco, or an operating company versus a fund is you don’t have the same kind of time pressure that a fund does. A fund has a deployment period that they have to get the money out. And they just got to pay whatever the prices are at that time, or they get to give the money back to investors. For us, as a holdco, we always have the option to say, hey, we’re just going to sit here and build up a cash position if we can’t find any deals in a particular situation. All that’s good.

There’s downsides of being a holdco. There’s obviously C corp taxes that happen in a little more complexity that people don’t necessarily understand that versus a fund model or a deal by deal model. If you go to a family office, or you go to a high net worth individual, they’ve all done funds, so they understand how those work. If you’re a holdco model, or a permanent capital model, they’re harder for people oftentimes to get their heads around. The lesson I think learned there, is if you’re going to go out to raise money for this sort of stuff, being an investment type that people understand and that’s one of the mistakes we made early, was being too complex. And too fancy. You’ve got to be simple so somebody can understand and is familiar with the structure. And then all they have to worry about is, are you the right people and is this the right opportunity to execute on that. But, innovating on structure and getting super creative on that, it makes it hard to raise.

How did you raise money for Dura Software then?

For us, you just run it like a normal sales process. You try to find a compelling value proposition for investors and then you go out and you do the usual play. Which is, try to find a lead or a lead and a first follower. And then, at that point, once the terms are set and you have validation around that, then other people come in.

For us, the key things to do were number one, that. Get a first believer willing to put some skin in the game, leverage that. Hopefully into other believers and then it’s easy to go past after that. And just to give you an example of our path, we raised pretty much the whole round in about three weeks. We ended up raising $10 million over the last summer. And we did that using strategy.

And then, the second thing we did, which is really compelling is, we had proof points. At that point when we were going out to fundraise, we had found the first handful of deals that we wanted to do. And we had the one that we already had, that we had done with our own money. And then we had the three more deals that we had ready to sign and ready to close on. And when you walk into an investors office, and you say, hey I’ve got these other believers, I’ve got a structure that’s simple that you understand. It’s tax advantaged. And oh, by the way, I know how I’m going to deploy your money and here’s the pro-forma for it. And here’s the historical financials, and here’s the LOI signed.

That basically checks all people’s buckets. The boxes get checked. There’s validation. People know that you’ve got a plan to deploy the money, so you have validation around that. And then basically, it becomes relatively straight forward. Oh, and there’s tax advantage and it’s like, okay. Check all the boxes. Where do I sign my check?

In the end, you come up with a compelling value proposition, then you execute on it. And that was our strategy.

What’s something that you believe about software companies, or investing in them that you think few other people do or recognize?

If you do a personality test on me, I’m a natural contrarian. Probably most of everything I believe is a contrarian view. But look, I think you go look in the press. Here’s a good one, if you go look in the press about what is sexy and cool and everybody wants to bet on the next Uber or Salesforce or rocket ship, or whatever. I subscribe to a lot of Silicon Valley Twitter and it’s all sexy boom time and stuff like that. And I think there’s a growing sub movement of small people who think that boring is really sexy. And I think there’s a wonderful place in the world for nice software businesses that never make it in the press. That never gets in the front of TechCrunch, that are sexy as all heck.

I’ll take that kind of stuff all the time. And I think there’s a small set of people out there that are a minority that find that stuff really cool. And I think it’s great.

If you could teach a class in college about anything you wanted, what would you teach?

I would totally teach an entrepreneurship class, but I would do it totally different than the way the schools teach it. To illustrate, my different philosophy about entrepreneurship should work, is I think that most colleges teach entrepreneurship like it’s playing Bach. Like here are the rules, you play allegro and you do it this way. Here’s the recipe and you play exactly this and this is how it’s perfect.

When in reality, entrepreneurship is more like Jazz. Which is like, well, here’s kind of the direction we’re going. Figure it out and get there. And the unfortunate reality is you go and look at some of the stuff that comes out of MIT or some of these things that are very formulaic. Like go interview five customers, then go do this, then go do this.

Entrepreneurship does not work that way, at all. But, everybody wants to translate that kind of approach into how they teach entrepreneurship classes. And the way I would actually run an entrepreneurship class is totally different than that. I would run it much more like a venture capital playground. Where I would do things like, just sit in the front of the room and tell everybody congratulations, I’m an investor. I will invest up to $500 in each of your businesses. And then here’s the deal, at the end of the six weeks or the nine week period, I want $1,500 back. Anything above that, you can keep.

What that does is, it suddenly makes teaching entrepreneurship become a practical exercise and not a formulaic exercise. Because by teaching people that entrepreneurship is formulaic, you end up with a bunch of people who end up going to get jobs, because they think entrepreneurship just doesn’t work.

And it’s a different mindset, it’s a different mentality. And I would create an entrepreneurship class that actually had people totally in a playground that gave them a safe space to fail. So then, they can work on their second and third ideas that would hopefully be better than that first one. Which I guarantee, everybody’s first ideas are always terrible.

I would love that class. That would be a lot of fun.

It’s awesome. By the way every time I get invited to go talk at an entrepreneurship class, I’m like, here’s how they should redo your whole class. And then I don’t get invited back.

What’s something that you used to believe strongly earlier in your career, or when you were younger, that you have since changed your mind on?

I think the biggest evolution that I can point to is about eight years ago. And I started with a couple partners, we started a coding bootcamp here. It’s called Codeup. Recently just expanded from San Antonio to add a second office in Dallas. Very successful, run by one of my partners who’s a CEO now.

And I think early on in that process I was very negative about people going to college and doing that. And I think the transformation I’ve made is, whereas before I thought college as a concept was terrible. I think the transformation I’ve made now is that I think college is hardly implemented. And I think we need to have something better than college, but I don’t think there’s a better choice than what college provides as an opportunity to invest in yourself to be more successful in life and be more educated. I think that’s the evolutionary change that I’ve made.

My kids are going to go to college. If people ask me, I’d say, you should go to college. And go to the best one you can get into with the best reputation. Because I think college, in many regards, is too cheap and also too expensive. Your University of Phoenix degree is a total rip off. But, if you go to Trinity University here, or Reed where you are, or Brown on the East coast. Those are a bargain. Anyway, I would say that’s the big evolution, it’s just how I think about college. And really how my mind has changed on that.

I love that answer. You don’t think there’s a positive option or better way to implement college in your opinion?

I think there’s tons of changes I would make if I ran a college.

What have you got?

Just remember what happened with the entrepreneurship class talk and think about the whole school. I think fundamentally, the number one thing I would change about college is I think they should all have to publish outcomes. One thing that has quietly happened in the past five to eight years is, the Department of Education tried to actually make colleges track and publish their outcomes. And make that public. All of the colleges went in and fought that. Saying it would stop them from being able to do their job.

I think that would be the very first thing that I would totally change. With Code Op, our business, we’ve actually put our money where our mouth is. We publish results for everybody. We’re part of a reporting group where we submit all that and it gets reviewed. And then the last thing we do is, if you don’t get a job after leaving the coding bootcamp, we give you back all your money.

I’m practicing what I preach here. Anyway. Number one, colleges should publicize and track and produce statistics on outcomes. Period. And they should do it by major, they should do it by year, all that should totally be done. I think that would then translate into all of these ancillary things that would get changed, because if those colleges either had to give you back your money if you didn’t get outcomes. Or, that they didn’t produce for you, or that they had to have some light on what they produce as outcomes for people. You would totally see a scenario where everything about college would start to change.

The 10 year system would start to be recognized for what it is, a stupid idea. You would stop having these really crazy faculty overheads that get produced, yet the career placements offices are almost always underfunded. You would start to see the curriculum get changed to be better in terms of outcomes. All of that stuff would cascade back down to making college and the whole experience better.

Heck, you might even go to classes for more than six months a year.

I love that answer. What’s the best business you’ve ever seen?

The business I talk about, which I’d really like to tell you about is called Buc-ee’s here in San Antonio. It’s in Texas as well. I’m assuming you’ve never heard of it. What I think is cool about Buc-ee’s is, they’ve taken the convenience store model and really found a blue ocean in what was a red ocean market for sure. And they’ve created almost these travel stops that people love to go to. They’re packed every time I go to one. There’s one here, halfway between San Antonio and Houston. And people love to go to Buc-ee’s. It’s almost like Cirque du Soleil is for Circus or what Southwest Airlines is for an airline. They’ve just found this niche and totally exploited that in a great way. And they’re cleaning up, they’re making huge amounts of money. They’ve got a whole branding thing going on, that’s really neat around this beaver thing, called Buc-ee. You see people with Buc-ee’s merchandise on, who would ever thought you would see a convenience store branded T shirt as part of a business? And I think it’s just amazing, what’s going on with those guys.

Thank you very much for coming on the show. This is one of my favorite episodes so far. I really appreciate having you on.