Al Doan: $100M+ Quilt Mogul Who Bought Two Towns
You're so bad at telling your own story.
Well, you just said the intro. This isn't my story. You want me to tell?
Well, I would say, yeah, I would say I started a quilting company called Missouri Quilting.
Missouri Star Quilt Company.
Missouri Star Quilt Company.
It's a behemoth of a quilting company.
Can you say what the revenues are?
Yes, it's the biggest. Let's first start with that. It is the biggest.
We're live, by the way. This is it. This is the pod.
Okay. Okay.
How, wait, how did you meet him?
Well, you got to keep the Hoobastank story in.
That needs to be like one of our, can you just get it?
Or should we say it again?
Yeah.
Say it again funny.
And we'll laugh. Exactly. The joke was when we started The Hustle, we would, for some reason, I picked Hoobastank as the band that I liked.
Like, you don't have to pick a band when you start a company.
There's no form you got to fill out. Like, what's your band that you like? What country? What flower? What band are we?
It was like our insider's joke. And we, in the email, we would be like, you know, like this young kid who just raised a bunch of funding, like he's gonna be one of the greats, like Elon, like Steve Jobs or, or Hoobastank or, you know, like Slipknot.
People notice. Would you get replies? They're like, what the crap are you talking about?
Every once in a while. So I put it on my LinkedIn. I put that I'm the webmaster of the Hoobastankfanclub.com.
When you endorse a skill, it's like good at hooba stinking.
Well, and when I wanted to like make a joke with someone, I would email them from sam@hoobastankfanclub.com.
You own that?
Yeah, yeah, I still have it.
I still keep renewing it just in case.
That's $9 for a great joke. That's still going.
Wait, so dude, you got to give your intro. Who are you? What do you— what would you say you do?
Oh yeah, yeah, uh, I'm Al Doan. What do I do? I, uh, Uh, not, not as much right now. I just shut down a, a software company I own. Or I'm the owner and the executive chairman of, uh, of Creativity Inc., which is, you know, it's got a quilting company, a big quilting company, and a knitting company and an art company. A lot of, a lot of stuff in that space.
Dude, you're so bad at telling your own story.
Uh, well, you just said the intro. This isn't my story you want me to tell.
Well, well, I would say, yeah, I would say I started a quilting company called Missouri Quilting—
Missouri Star Quilt Company.
Missouri Star Quilt Company.
It's a behemoth of a quilting company.
Can you say what the revenues are?
Uh, yeah, it's the biggest. Let's first start with that. It is the biggest.
It's the biggest. It's the biggest. It's, uh, let's see, we're 400-some employees, over $100 million in revenue. Like, it's a, it's a big old— it's a big old boy.
You own the largest quilting company in the world. It does over $100 million in revenue. And you also have now bought two towns.
It was so— the quilting company in Hamilton, right? We, we bought the entire downtown district. So 27 buildings downtown.
Because you had to, or because that's awesome? No, this was the—
so like When we started this quilt company, the challenge is like, there's 3,500 quilt companies in America, right? Like, they're in every little city.
And you're saying that like we know that.
Yeah, you're like, right, you know, you're with me, right? So 3,501 doesn't really pull the eyeballs in. And so I like, there's no ESPN for quilters, right? I can't just go advertise for this. And so I'm like, how are we going to get this? And so our, uh, like, we were in this little town, we, uh, we We grew big enough online that we had to like, like we couldn't fit all the inventory in our space or in our, in our store. And because like we could either go open a warehouse, which would have been the normal sane thing to do, or we were like, we're like, man, it's awesome. Cause when people come to our town, there's normally no customers. And so like the impression you get, if you walked in there, it was just retail is like nobody's here and this is really sucky. And so instead we had like 12 people cutting and fulfilling fabric. So you'd walk in and there's like this energy, this buzz that was happening in the shop. And so we split it out and bought the next building over and put fabric in there. And then I was like, man, who has the most quilt shops of any town in the world, right? Like, that was like, it's the biggest wooden nickel in Minnesota. This was going to be my thing. And some town in Germany, I think, had 4. And I was like, we're going to take it to the States.
You wanted to create a tourist destination for quilting.
Just be a novelty, right? It was just supposed to be a novelty. And so then we ended up—
Dollywood or whatever.
It's like, that's our thing. So then, like, if you're driving by on the highway, you're like, The most. Are you kidding me?
All right, let's go.
Yeah. And so in that process, dude, we got like, we, people were coming to town, we only had like Subway and the gas station for food. So we started restaurants, we've got a sleep-in, so we're like, it's a slumber party for ladies to come.
So you're saying it right now, like, it's like, you know, this is a natural thing to do, but like the first part of the idea, which is like, let's create the town with the most, let's create a tourist destination. That's not what most companies do. So you have this idea from where, and then aren't people saying, yo, this is crazy. We don't have to do this.
And you know, do you and your family own the whole thing?
Yeah.
Yeah. So you're able to do crazy shit like this.
So if you do $150 million in revenue, how much EBITDA can you do?
Uh, so we're like a normal e-commerce, or like e-commerce business. So our goal is about 20%. We're not there yet, especially this year, right? But like, well, like, that's where we— that's where we'll end.
But then you take the profits out and buy—
yeah, I've made like 7 nickels. I pay myself a fine salary. But like, but like all the money goes back in, right?
Next purchase order. Next purchase order.
Well, because, because we're growing by significant amounts every year and most of that gets tied up in inventory.
In 2 years, what do you think you could sell the business for?
Well, our goal right now, man. Well, I, I think we can get 20% growth, uh, for a couple of years, right? Which should move our valuation to like a 5x revenue.
So like a billion dollars.
Yeah. That's the, that's the idea.
How many, uh, is your, like, is it like your wife or your sister or your mom? Who, who all is the shareholder? So like your whole family's going to get. Yeah.
So it's me and my sister, and my buddy Dave are the, uh, are the, are the main ones. And then like all of our family, just this year, just this year we cut in like all of our employees that have been there for any kind of time. And that's a cool feeling.
But you started it with your mom or your mom started and you know, tell that little bit.
So the idea, like me and my sister have been talking about starting a company for a while. I was, I was like a year out of college. Right. And so like, I, I was, uh, I don't know, everybody's sort of an entrepreneur right out of college. That's what I'm gonna do. And, and we were sort of that same way. And my mom had taken a quilt into the quilt shop. You sew the top together and take it to a lady that's got a big $40,000 machine, and they're going to stitch all the backing and the fluffy stuff in the middle and the top. They're going to stitch it all together. And this lady was out a year, and she's like, I made your sister a quilt. I took it in. I'll get it back in, you know, 2008. And I'm like, nothing takes a year to do. Like, you can build a house in less time than it takes to get this quilt done.
And so either she's terrible or there's a lot of demand.
Well, by the way, that was literally my market research. I was like, there is going to be a market here for this. Are there others? She's like, yeah, everybody's backed up.
And when you say quilt, like, literally just a blanket, right?
Shut up. Okay. How dare you? Yeah, it's a quilt.
But I mean, like, quilt, like, because I know some people, like, hang shit on their walls.
Yeah.
Yeah. And then some people have, like, a decorative quilt. And then some people, like, I had a quilt like comforter.
Yeah, yeah, it's, it's exactly that. And like, my mom's shtick, uh, is she's like, she's like the McDonald's of quilting, right? Because quilting, like most of these hobbies, are very like, I don't know, like very defined. You know, there's, there's a quilt police that's going to come and get you if the, if the seams are off or whatever, right? If your points don't match. And every— I feel like getting into any hobby, there's that sentiment that you're like, I can't go to the group yet, I'm not good enough, right? And so, uh, Mom's like, ah, no, finish is better than perfect. Look, well, and our big innovation, do we made like, uh, the, the Lego blocks of quilting, right? So it's a pack of 5-inch squares and pack of 10-inch squares, and you sew them together and cut them like this, and whack, it makes it this. And so like really simple tricks and techniques. She was a costumer, uh, when we were—
you're saying McDonald's because he like kind of made a process out of the burger-making process where it's like anybody can make this burger.
Well, no, I'm saying McDonald's because it's like, it's like not fancy, right? It's not— you're not spending a lot on it. It's like, it's— you're trying to do it to get to the serving the purpose of filling you with food, right? I mean, I mean, it's funny because like quilting, I never thought that, uh, you know, quilt— my, my business buddies and stuff, they'll sort of laugh at like my whiteboards. Like, Layer Cakes up 17%, turnovers down, you know, Jelly Rolls, we gotta get these back, you know. It's like, it's, it's all sort of, uh, you know, goofy terms for people that aren't in the space. But like, man, it's, it's a 45 to 70 year old demographic is the majority of my customers.. And there are so few people building awesome experiences for them that I feel like a lion among sheep being in there just like, we're going to build amazing, great experiences for these people.
Sam's phrase for that is a dwarf amongst midgets. Is that your phrase?
Yeah. No, everybody normally says that. A dwarf amongst midgets. That's very clever.
It's not allowed anymore, but we're both Missourians. We probably grew up in somewhat similar environments, and that was a phrase. Like that.
And like, it's the same people, right?
That's why it's hilarious. No one understood it. He just—
dwarf among midgets. It's like a dwarf is like a tall midget. Look, like, that's just a phrase. I didn't even realize it was like—
don't cancel them.
All right, I didn't realize it was bad. Another one is tough titty, said the kitty, but the milk's still good. Have you heard of that one?
Yeah, yeah, sure.
So anyway, what do you think it's gonna be like in 2 or 3 years if you ever sell? I mean, are you guys Like, you're going to be the richest person in, like, by hundreds of miles. What are you going to do, just buy thousands of acres?
No.
Well, I mean, what do you— what do you do?
Crazy question, because that's what he says. This feels very aggressive, the way that you're phrasing this. I'm just going to say that right now. Uh, uh, the, the— well, the idea is not to— like, I don't know if— I don't know if we'll sell it, right? But there's a big question in my head of, like, of, like, I don't— My mainstay is like, I don't want my kid to grow up and say, I got to be a quilter because Pop was a quilter, right? It's like, it's a business. You got to get in here.
Tale as old as time.
Tough titties with the kitty and the milk and the goods. But so I'm trying to figure out how to navigate around that. Like, is there— how do you maximize value and create the most opportunity and all that kind of stuff? I'm very attracted to a finish line. Right, which an IPO or a sale or something would be, but also, you know, get to the point where it's shedding off EBITDA and it's a very good one to just keep running. 12 years.
Yeah.
You didn't know, were you even like into quilting before that? Like, were you into it?
No, my mom makes me, she's, she made me make one quilt. She's like, you can't run this company and not be a quilter. So I've made one. I'm making another right now, a nice bear paw on point.
So what did you know how to do? You didn't, you worked at, you were a software guy.
These are such mean questions.
No, I, uh, The funny thing is at this event, Sam's basically been having an intervention because he's asking questions that he thinks are completely normal questions that everybody's been like, wait, and women don't hate you?
That's so weird.
Yeah, people are like, Sam, when you ask questions, it's like a full frontal attack. He's like, what do you mean? He's like completely oblivious to the fact that these questions are outrageously aggressive.
So like his mom is like the face of like their YouTube and he was explaining to me what she was like and I I looked up the YouTube, I'm like, oh, she looks exactly like I expected.
And he was like, what the hell?
I was like, what? I expected her to be like a nice—
he's like, that was a compliment. Very rarely is, oh, she looked exactly how I thought she would be a compliment.
A lot of misunderstandings going on.
I was like, I thought she sounded like a lovely, nice woman.
Yeah.
And she was cool. And I was like, and she looks like it.
Sweet Dorothy Manson.
But, uh, well, and, but he also said that you own 200 acres and you like—
I I do own, so I like, like this sort of—
what do you do in Missouri when you become that?
I'm 100% hillbilly rich, right? Like, like give me $100 million tomorrow. My life doesn't change at all.
Right.
Uh, I've got, I've got a, uh, a car that I like to drive. I've got a house that I like to live in. I got 3 beautiful boys and a wife and, uh, beautiful wife also. I mean, beautiful extends to all of them. And, uh, and like I'm, I'm done. Right. And so it's sort of a weird spot where I don't need, I don't need the finish line. The, the only value that a finish line would offer is like the pass the mantle, right? Like, I no longer wake up and, and have to stress about like, what if we ruin it all tomorrow? What if the person that we hired to do this like screws it all up?
What were you good at?
Oh yeah, yeah.
What skill? What, what attributes did you bring to the quilting table?
Great question, great question. Yeah, uh, not a lot. Like, like, uh, I mean, I— so I came out of, I came out of college, uh, and my first job was with Symantec. I was a really good kind of networker, right? And not networker, but I like people that I like and I hate people that I hate. And I like some guys that were doing this stuff.
You're the most popular guy in the house right now, by the way. I don't know if you know this.
For real?
There's like 25 people here. There's some famous people. Everybody's like, big. Everyone's got a different nickname for you.
It's like Big Al.
Then somebody's like Big City because he's buying cities. And other guy's like, oh, Al, don't.
Big City's good.
And so Big City's a cool name.
It's like, you know, Tom, big city. Yeah, man, it's like, it's like calling like a really tall guy shorty or something, you know? This is perfect.
It's better than big country. I get big country a lot, but big city—
no, it's not funny when you are.
Oh, you'd have to be like tiny country or something. It'd have to be some opposite thing.
Yeah, no, big city's good.
Okay, thank you.
But anyways, you're super likable. I was calling out there like, what did you go—
you go, he's like, he's rich, he's smart, and he's, and he's funny.
And I was like, yeah, you need to be the next Bachelor, dude. You know, like, this is amazing. You meet him Well, I mean, I don't even know.
Patrick was on the podcast, came on the pod.
That was the first time I thought about the word quilt.
It's in like 12 years. Well, he was telling my story and all my buddies were like, dude, you were on this podcast, dude, you got to check this out. So I'm like, what the crap? And then I DM'd you and I was like, oh man, that's my story.
Like, if you want to hear it, there's this, there's this niche market of quilting that's way bigger than people realize. And I was like, what, really? We remember we were like blown away. And then we were like, what's— he's like, yeah, there's companies that are huge.
The conversation was great because you're like, oh, that's rad, man, love to hear it sometime. Do you ball? Do you want to come?
Yeah, I think I ghosted you for like a month, and then I was like, oh hey, by the way, yeah, I do want to talk about that, but more importantly, you want to meet up in person and play basketball?
You didn't know anyone here, right?
No, no, no, no. Yeah, this is, this is great.
Did you even know Patrick?
No.
Oh wow.
No, I'd never met any of these guys.
You took an amazing leap of faith to show up, dude.
And I turned out to be like 6'7" and love playing basketball.
And, uh, yeah, did He kicked my ass on the court.
Yeah, he was a bit—
no, except you, dude, you smoked us for the championship game. Drained 3 threes in my face.
Yeah, I had like the greatest moment of my life today, so, you know, it's all good. So, okay, so you do the quilting thing.
No, wait, wait, wait, my skills before this, uh, just buddies that like connected me up. So I was working in a software company, lost that job, uh, in dramatic fashion. I'd never been without a job at the time.
What does that mean, you like got fired?
Yeah, like me and 20,000 people got laid off in 2008, right? And, uh, and so I'm I'm consulting and trying to, like, just— how old are you? I was 26.
In Missouri?
Yeah. But, well, I was living in Boston at the time. They moved me out there, and I was visiting my buddy up in Toronto. And then I moved in with him and his wife and their new baby, you, me, and Dupree style. And it was like, we'll start a company up here. Let's do it. So we tried, like, 3 of them. We tried an ozone cleaning technology that we'd sell to real estate agents. And that was, like, a terrible time to sell to real estate agents. It's 2008. And we tried to do a little wealth management thing because he wanted to be a wealth management advisor. And so we tried to start that. And then the Quill Company we had already, and I wanted to do like a Daily Deal version because at the time it was hot, right? It was like Woot.com and Steep and Cheap and just talked all about Woot and like Chain Love and all that stuff, man. I loved those in college because they were great. And I'd wait up till midnight, which in Hawaii where I was going to school was like was like 7 o'clock, right? And I'd be like, wait to see what it is. It's cool. It's cool. But like, I— but like, it hooked me as a college kid. And like, every site was built for like, for like, are you a dude that loves riding bikes? Get chainlove.com. And there's a new thing every night. But like, nobody was building them for the 45 to 70-year-old demo. And so when I did the Quilter's Daily Deal, I think it was literally the first time anybody had done a daily deal site for my demographic, which is like a, uh, discounted fabric. Well, I mean, it was discounted items, right? Okay. And like, dude, at the beginning it was so funny because like I was the guy doing it all. We were just scrapping our way through it. So like, I'm not a good writer for my mom, right? Where like I'd write these stories and it would always say like, hey ladies, like, hey fellow women. No, no joke. So we started a forum and the first 6 months of the forum, because nobody wants to join an empty forum, I was Jeannie B and Sarah Sue, and my buddy Dave was Carmen and Elizabeth. And we just have these, like, chatting all day. Yes. What kind of quilt did you make? Oh, that's so cute. That's the brother. And eventually now it's like 90,000 members and, like, it's a great old thing.
Wow.
So that's really— so you—
but your mom had—
must have had some following or something. Is that how it started?
No, she had zero following.
No, I literally started with the forum.
No, no, we launched— so the, the chronology, we launched with the website that I, like, sat and built. We launched with the store that we started. She was doing quilts. And then I, I built this website on, uh, oneandone.com. If you remember that old shared hosting, man, it was a disaster. They lost my site a couple times. Like, I'll start over, thanks guys. And, uh, built this site and, and it was a daily deal site that I would change at midnight. I didn't have any automation and I would just like go in, you know, be on a date and be like, hold on a second, I gotta log into my quilting website and change it up.
Tens of women are waiting for this. Yeah.
And we, we do— we launched it. I still have the Facebook post in like February 2009 and it's like, hey, I made a quilt shop for my mom, check it out. 2 likes, right? Like zero orders the first 3 weeks. And, and, but like every day I'm going in there writing these stories. You didn't give up? Didn't give up, didn't give up. Personally, I just like, uh, well, I mean, it was, it was a marketing challenge at that point, right? Like we knew, we knew that we had a product that was interesting. Oh, like, like we're selling fabric online and like the other sites were like, were like built on Yahoo Stores and crap. And I'm like, I can like, there's a way better experience for this and we're just gonna we're going to take better pictures. This is our novelty. We're going to sell it better. And so we kept working at it, just thinking we had to figure out how to find people. And dude, I would write these deals every day and be like, they were always some version of the Pinocchio nightmare scene. I'm like, and then he turned into a donkey, and then he was in the whale's belly, and Jumbo Rickrack is $3.99 today. It was like some weird thing because I was just trying to be creative.
That's how Woot did it too.
They were pretty funny. Well, dude, I was modeling after that and just trying to be humorous. And turns out My mom was like, this isn't good. You need to stop doing this.
This is weird.
My buddy Dave ended up doing it for the next, the next while, and he was much better than I was. But, uh, so we, we went 3 weeks without a sale. Finally, my cousin Jennifer ordered something. And so, you know, we're like, oh, that's all right. Thank you, Jen. That's very nice. And, uh, and we'd get like an order or 2 a day. And one day, one day we meant to price something at like $2.88. It was the Crazy Eights charm pack. We meant to price it at like $2.88, accidentally priced it at 88 cents. We sold like 11 of them, but, but shipping was $5, right? And so like our cost on it was $4 something. And so we're like, we still made money. Like this works. And the average order size was actually like $28. Like, dude, a loss leader. We should lose money on this in a meaningful way and we can build this. And so it turned into like, the deals are, are great deals. People love them. And, uh, but that's what ended up building our business.
And then as we went, like, where were you getting the fabric and supplies from?
We buy them from vendors. So like even, even a day there's probably 40 vendors that we buy from. And then to grow it, we started, uh, making videos, like the, the education stuff. YouTube was only a year and a half old at that point. And so like, you know, late 2008, early 2009, and, uh, there's like, there's like this guy Quilting Buck on there and it's like a webcam that he'd show on his quilt. And it was cool, people were trying to do stuff, but nobody had like done it well. And so I bought like a Canon Digital Elf that was like the best resolution at the time. And just like held it in my hands and, and, uh, you know, the manual zooming stuff. But like, got mom to start doing these tutorials. And because I'm a 30-year-old bearded guy, I'm like, don't say your lingo, right? I need you to talk to me so I can understand. I'm not a dummy. I have no idea what, what a wof is, right? Right. With the fabric. But like, I'm like, because normally teachers, when they try and start teaching, they'll try and like, like give themselves some, uh, some validation by like Look, I know all the cool stuff and I'm, I'm, I'm nerdy like you guys. And I just wouldn't let mom do that. So she had to speak in a way that anybody could understand. And we became this very approachable, if you've never made a quilt, you start with Missouri Star. And because we were making this content every week, we'd put it in our emails that we'd send out. And it was so like, we'd lead with that. It was like, we made this great new tutorial for you with all these cool tricks and tips and stuff. And, uh, and we, we'd ended up with like a 70% open rate on our promo emails, which is just the magic that we built around.
And you're 12 years in, you're like $100,000, $150,000 or something like that revenue. What were the first 5 years, do you think?
And then did it— we kept growing at that rate.
Yeah. But again, man, bootstrap through that was intense.
At what point were you able to pay yourself and make money?
So we paid mom after 3 years. It's crazy because I have 7 siblings in my family and 5 of them work on the quilt company. We couldn't have done it if they couldn't have just just like worked for free for the beginning. And like, I mean, it's, it's like volunteers, right?
Well, what year was it making enough money where you're like, fuck it, let's buy a town, you know, let's do this?
Well, so, so, uh, 4 years in, we, we bought our second building, right? Or 3 years in, we bought our second building. And like, we remodeled it all ourselves, we did all the work. And then we bought, you know, we, we piecemealed the beginning one. Like, it's— we can look back on it now and be like, oh yeah, well, we got, we got everything, this is great, we did a good job. But like, that was never the intent in the beginning. My thought was that people would see that we were bringing more people to town and they'd start these other businesses and do stuff. And by the time, because we were running so far ahead of our own curve, we just ended up with our whole downtown. And now we have, like, there's a few other businesses in town.
And is there like, because what normally happens if you start to buy everything in a town, there's always one or two people who are like, I'm going to hold out and we're like, negotiate. Because you need to complete the set.
I cannot promise you protection. Did you guys run into that at all? Like, the average price for a building in a small Missouri town like that was about $20,000. And by the— our last building was about $80,000, right? So I just bought this other town down the road from us, Kingston, right? And so, like, 7 miles down the road is our county seat.
Like, with the really nice— like, they have a huge— is that on the way to Mizzou from St. Louis?
No.
I'm thinking of Kingsland.
Yeah, yeah, yeah. No, Kingston is up by me and, uh, the other side by Kansas City. It was 7 miles from our town. And, uh, and so we bought— it's, it's, I think it's 8 buildings and it's like, it'll be like $70,000 for all of them, right? Wow. And so they're just these old like condemned sort of overrun buildings. We'll put $2 million into them to get them fixed up, right? But like, but like the, the real estate is cheap and the fact that it's already there and we're just kind of fixing what's there is—
do you, uh, it's I mean, I lived in St. Louis, which is way bigger than where you're from, but even then it's not a competition. But even St. Louis, I felt like, oh fuck, no one gets me. I feel like a freak here because I'm building this internet shit. And so that's why I left and I moved to eventually San Francisco. And there's a reason why like a lot of companies are started in San Francisco or New York or Chicago or Austin, like these like bigger cities, because you, you meet people and you like spread ideas and you like are inspired by one another, whatever, and it like rubs off on each other. Other than the internet, which is, I mean, where were you learning how to do all this stuff? And did you ever feel like, what the hell, man, I need to get out of here.
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Oh, so after college— I actually left this part out, this is a cool part. After college, I, uh, when I, when I lost my job, this was, uh, let's see, 2009, I, I declared my year of the MBA, right? I was looking at like going to back to, to Harvard. I'd lived in Boston, was like, I should, I should really go. And it was like $200 grand to get us to get an MBA there. And I was like, man, that's, that's too much money for this broke farmer. And, uh, and so I declared the year of my MBA, emailed all the guys who were like successful in business and were like, what are the 3 books that you'd recommend I read And I got like a constrained list of, uh, of like 37 books. Right. And so I bought them all on Amazon for like $200. And, uh, then I had a bunch of buddies that were like doing cool stuff that I wanted to try. Like a guy was doing import export out in Hawaii and another dude was doing like venture capital in Salt Lake. And, and so I was just like, let me come work for free for you guys for like 3 months. I just want to, I'll shine your shoes and make your coffee. I just want to see how you run your business.. And so I hopped around to some of that and then I got to be an intern in Techstars in 2010. Right.
Which one?
Colorado? Boulder. Yeah. So it was only Boulder. It's Boulder and Seattle, but it was David Cohen and Nicole Galeros, 2010. And so while I'm building this quilt company on the side, we've got these world-class mentors coming and they'd mentor these companies doing cool robots.
You're listening to all these office hours.
Yeah. Dick Costello, that's super interesting. What would you do if you had a quilt company, man? I'm just curious. I was like, how would you, how would you move? How would you like a deal daily?
You like deals, right?
Does that do anything? Okay, great. So like, I was getting like this way— I noticed you reached for your phone when I said that.
Are you trying to tell somebody about this?
Talk to me about what, what's, what are you feeling right now? Yeah, no, so I was getting this way outsized like brain for, for the internet stuff. And I, I always thought that I would do something like, like I thought it was going to work for Microsoft or Facebook or something, right? And, uh, and, and in the end, in the end, like, I just took all the learnings that I had from this and my desire to sort of be an internet tech entrepreneur and, uh, and shoveled all that into, into this quilting company, which is, you know, again, like, it's, it's very technology focused, uh, way, way early adopters on a lot of stuff. And like, it's given us a huge advantage as we've, as we built this stuff, because there's no other, like, dude, there's no kids coming out of their MBA school trying to take my margins.
And that's That's the, except for Patrick, once Patrick told all your listeners, how do you have peers and how are you, do you have like peers in the internet world or e-com world who you're like, you're chatting with on a regular basis to be inspired by or learn from or share ideas?
I got buddies, right? Like I'm an angel investor. I'm in 50 companies doing stuff. We, I have an early stage fund that I run with some buddies. Like, like I'm still like, these are still friends. We still talk, but. But, uh, there's like, from an e-commerce standpoint, honestly, man, like I think I'm world-class. I think I, like, I think I'm one of the best brains at selling stuff on the internet. And that's awesome. Yeah.
That's also the, the, the MBA, the like give myself an MBA thing, the way you approach that, that's like, that is so smart. But also once you hear that story, you're like, of course this person's gotta be successful as a hustler.
Right.
Cause you, you basically do the math.
You're like, okay, what do I want?
What's the normal way to get there? Oh, this like kind of long 2-year really expensive way. Can I just get that?
Like, that was my reason.
9 months for $250. And you're like, oh yeah, what if I just emailed all the smart people, asked them what are the best 3 books, I read all those books, and then I like go shadow, you know, the 3 smart people for free for a dude for like 3 months?
Like, like Cohen and Glaros, these guys, they'll still go to bat for me to this day, right? Because that 3-month investment that I made of like— and dude, I was the first one in, the last one out. Like, I knew I wasn't getting paid, but like, I was trying to soak it all up. And I mean, you do that and they'll open every door you ever need to get through.
What was the most game-changing book of all those that you read?
Honestly, dude, it's this book that's out of print. I didn't read any business books that changed my life, right? Once you get through 6 or 7, I quit reading them because I'm like, it's the exact same thing. The principles for business are the exact same, just told in a different parable every time. And whatever your parable is, that's what you glom onto. Say, oh man, it's Good to Great. That's the best one. This one, it's your Bible. Um, but for me, like, the most impactful was this one called Coming Out of the Ice by Victor Herman, which is this, uh, this dude that like, uh, went over to Russia and like ended up being an amazing Olympian athlete, but like Russia wanted to take credit for it. And he was like, no, I'm American. So they throw him in jail for like 50 years. And it's this crazy story that I'm like, this guy's an American hero, somebody should know this story. But it's, uh, like, dude, reading that while I felt like my life was so hard, it was like, oh Oh no, I'll be fine.
I do the exact same thing. I'll read—
It's like better than therapy.
Yeah, for sure.
You want the fast version of therapy?
It's David Goggins back in the day.
Totally. I'll read a book about Navy SEALs or about— I just read about the Cherokee Native Americans.
Oh man.
Your problems are so small. I'm such a punk. You know what I mean? I do the exact same thing. It's way better than business books too.
No, it's my favorite one out of that whole list because just a buddy of mine was like, oh, Oh, this is the best book I've ever read. Read this. And I was like, all right, I'm in, man. And, uh, that one still to this day is like great. But, but like, dude, the books— and this is my problem with college is like every marketing class I sat through or something, I'm like, oh, this is your great idea? You say sell it for more than I bought it. Oh, you guys are clever. Thanks. I'm glad I'm paying for this, right? And it's all these professors that used to be in the industry that you want to get into that no longer are, that might have connections that could open the door for. And so when I was looking at an MBA, I was like, this, this feels like, what if I just go to the people that are in the industry right now and somehow network with them? Like, that's going to open way more doors for me.
How many did great? How many people do you have? 450 employees. But how many of them are doing like, uh, like white collar jobs, like SDR work or like internet, internet related things?
Maybe 100 of them.
100 of them. How many of them live in the town?
Uh, gosh, I, I, I don't know.
I mean, how many of them are, are on site in Missouri?
I think we have like 40 remote, like fully remote. Like our engineering team is remote. Like, where are they? Like all over from Seattle to Serbia, right? Um, and then we have, then we have like our design team is mostly remote. Like a lot of, a lot of the ones that make sense to be remote are remote. Um, but then like in town, there's probably 250 of them that are like right there in town.
Is buying a town with good business besides— like, you had, uh, you have a business and this is kind of like, uh, adjacent, helpful. If I didn't have that, but if I was like, oh, there's this kind of like abandoned-ish town, really cheap real estate, I could buy it up, I can reinvigorate. Is that a good idea or no?
Well, like, I think, I think every company should have a town.
Well, like they did. Wow, dude, that's like, uh, you know, so we can list a few.
Ford, uh, Henry Ford tried doing this in, uh, Pella Windows is up in Iowa. They have their own, like, like there's, well, a lot of Bethlehem did, and when a lot of towns were built around like that big like a coal mine or something like that. But my thing is like, is like every dumb internet brand should, should have one, right? Like, like a, a buddy of mine does, uh, well, this, this is my thought pattern here is like, is like if you're a 10-year-old girl and super into baking, where in America do I have to take you? Nowhere, right? But somebody, if they could just take that opportunity, they're grabbing— they're like, and we're gonna have Dutch ovens in this store just going and cooking stuff. And then the KitchenAid mixer— you come and have the experience. You're gonna come and spend 2 weeks here, try everything they've got, and you're gonna learn how to make all this cool stuff and then go home. And your mom's gonna be stoked to spend 3 grand to give you the experience because it's magic. And the whole town is built around that.
And that's what you're doing for quilting.
That's what we're doing for quilting. That's exactly what I'm doing.
Are people doing this for everything? Like, if I wanted to go— they should be cooking. People are like, oh, like, I need to go to Paris. To get that experience. But like, if I'm into like cooking or—
like, let's say cooking, right? And you go to Paris, you go to Paris and you take a class, but it's like you have not gone to the cooking mecca. Yeah, right. The, the cooking mecca looks like we bought every building on the street and, uh, and walk in this one, we have, we have all the cake decorating stuff in here, and then we've got all the baking stuff in here, and then we got all this.
So you'll give tours, or I don't know what you want to call it.
Well, no, you sell the stuff. You're a retailer, right? Yeah. And like tours, tours are part of it. Like people, people— well, because when I go there, I'm all of a sudden a part of the community, right? It's kind of like if you go to a Comic-Con, right?
So you go to a brewery, you could buy the stuff, or a winery. It's like, uh, like Napa is a good example of this.
Sure.
Like wine, it's like Napa.
When— if you're a consumer of it, yeah, right? And it would be cool to go and take the wine tour and do the whole thing. If you're a beer maker, where in America do you have to go? There's no— somebody should do it, right?
I was—
I forget who I was talking to, but they're like, oh, uh, Patrick, right? He's from Wisconsin. I was like, it's crazy, man. If I want to get into cheesemaking, give me the town that like it'll teach me. It has, it has 20 stores and I buy the cloth and you have every kind of cloth and I'll buy the basket and every kind of basket. Like somebody's just going to take that branding and go build their, their town around it. And like it's the biggest wooden nickel in Wisconsin now. And I gotta go see it because it's not—
what is this example you're giving?
Yeah, you said that like real country.
So in Iowa, dude, driving down down— what is it— I-70. Iowa City has the biggest wooden nickel in Iowa, or in the world.
What is a wooden nickel?
What do you think? It's like a giant 16-foot buffalo nickel that's like— you don't even know what a nickel is. In the olden days, Washington was on the quarter.
Yeah, a buffalo nickel is just a nickel that was made before—
like, I love that I'm looking at you like, how do you not know?
Buffalo, like, 1905. What was it like?
I don't know what they stopped making it.
Any nickel made in the 1800s, I think it had a picture of a buffalo. Yeah, that's right.
That's it.
The nickel used to have a buffalo.
It's Topeka has the biggest ball of twine, right? Like, it's, it's all the just the roadside novelty. Come see the biggest whatever. The biggest pecan is in like Minnesota, I think, or something, right? And you're like, all right, I'm just gonna get off this highway and go look at this stupid huge pecan. Take a picture by it and like then buy back.
So what are the economics?
Let's say somebody does this, like what's a vertical where you're like, or like a category where you're like somebody should definitely do it for, I don't know, beer.
So like we just had twins a couple years ago and I want it like, where do we have to fly to if you're going to have a baby and they have the coolest experience? You race the, the, the, you know, the stroller around the track and then you try 15 different cars in America. Yeah, yeah. It should be in like Lehigh, Utah or something, right? We're right with the Mormons.
Baby nickel you've ever seen.
But like, but like the novelty of They have 20 stores and you're going to go and spend a week there and come out with $8,000 worth of baby stuff is, is the draw, right? You're going to, all your shopping is done there. Every baby product's represented. Like that's, that's the novelty of it. And, uh, the economics, the economics are going to vary by like, like interest to interest.
Where's the money made? Is it in the retail, the sales, or is it in the land appreciation? Because you now made a destination.
Is it just, just more, is it just a retail business that has higher than normal volume?
I, I worry that I'm doing a bad job explaining this, and if I am, like, let's keep digging on it because it's great. But like, we're just— so, so for, for, uh, an internet business, right, that like our company, there's a bunch of no-name warehouses on the internet that sell fabric, right? But we are a little quilt shop in Hamilton, Missouri. In fact, we're, we're a cool quilt shop with all this branding and all this cool stuff that we've done, and we'll never be the nameless, faceless warehouse, right? So if you're starting, if you're starting, uh, you know, whatever, whatever goofy company you're doing, right? Like, the second you open up a town— so one of the guys here, he's doing like Firebrand Tea, right?
Yeah, uh, David Siegel.
And I'm like, I'm like, bro, like, go, go open up a retail store, because the second you do that, I'm not just buying from your crappy warehouse where you're importing and trying to resell.
Because you're like, we're a real place, it's a brand, it's a real—
it's a branding play.
And people like this, you'll never come here, even if you'll never come here because 99% of your traffic never goes there. You're saying that, that stands you out against every other e-com DTC brand.
And our split, our split, like, we get 90% of our revenue is online, 10% in store, a little less than that, like 8% in store. But, but like, our marketing is 98% the town. Let me tell you the story about what— oh, Suzy Brighter Quilting, oh, look at this new display we did, oh, all this stuff. Right. And that's, that's the story that we tell. Uh, while most of our traffic or most of our revenue comes from online sales. Right. And so that's why I'm saying like, dude, if you're, if you have a brand, that's fascinating. So, so many of these guys are just trying to flip Shopify stores and like, oh, we import and it ships out of ShipBob and it's great. And it's like, yeah, but like people know they're just getting like scammed by, I mean, you're just buying to resell and try and make a profit. And, uh, the second you build a little bit of a, of an experience around it, right? Like do the work to to build the physical manifestation of your brand, it's the, the company all of a sudden is much, much more interesting in my mind.
Let's say you, uh, you sell the company in 2 years. You're, you're, you or your family collectively are maybe a billion, uh, worth a billion. You're not working with quilting anymore. What, what do you want to do? What do you want to start another company? And what type of company? What do you want to do with your time?
I have no idea. I started a company I love called Pretzel this last, like, 2 years ago. And, uh, it was the, it was the photo roll meets the credit card statement, right? So we itemized all of your transactions and show you this very beautiful, like, oh, here's all the stuff I bought. It was— I thought it was super cool. And like, the dude, the SKU-level data aggregated around the user was so interesting to me. And, uh, couldn't finance it, ended up shutting it down. And so like, that was, that was my, my big play at it. And now I've, I've got some major PTSD of like, I never want to raise money again. I felt, dude, Would you take somebody else's money and like, don't give them a return? I'm like, I'm an investor. I know it's fine, but I felt so bad, dude. So bad.
So what do you want to do then?
Well, so now I'm just doing lemonade stand stuff, right? It's like, my therapist says, she's like, I think you want to be Da Vinci. You want to like design a bridge and then a helicopter and then go paint a chapel. And I'm like, yeah, I think that's what I want to do. I just like, I'm going to do little lemonade stand style businesses, just like little things that can't scale.
What's an example? What do you mean by that? Like, I want to do a barbecue place.
Right? And I'm like, oh yeah, it'd be great. And I'll have the meat, the pickle, and the sauce. Right. That'd be cool. And I could do the branding amazing. And as long as I was cool to let it die in 4 months, I think I'd really enjoy it. As soon as it turned into like, oh, now I built this thing, I got to grind it out, I'd be miserable. And so I'll just try little stuff like that. I mean, at some point I'll get into another thing, but right now—
When you're in your early 20s and late teens, did you think you were going to be wealthy?
No, dude, that's interesting. No, not at all. Right. And it's kind of jacked. It jacks with your head a little bit. And I never dreamed in my wildest dreams that I would be where I am today. Right. And so I was talking to my wife a couple of days ago. I was like, I think I might need— can we do a vision board? I've never dreamt of what else is out there, what else I want to do with my life.
You overshot what you had pictured.
Yeah. You never repictured. Sometimes you can overplan. I didn't expect this to work. And so landing here, landing here, I mean, it's a big thing in my head of trying to navigate in a very serious way of like, I don't know, when you remove the motivation of money, what do you do with the rest of your life? Because so much of our world is built around like, got to get money. In the same year, dude, I stepped back from my company. So the day-to-day work, I got married, I bought a house, and we got pregnant with our first kid. And I was like, every milestone I imagined I ever wanted to work for, And like, dude, when you're dating, it's very— it's a great reason to go to the gym. You're like, I gotta look good. And all of a sudden I'm married and I'm like, screw it. You don't care how many push-ups I can do. Like, I'm not going anywhere. And it was like, it was a full-on funky depression. Like, not, not like a depression like a lot of like grown-up people have. It was like a baby depression for me. But, but, uh, like just figuring out what I was supposed to reach for was, uh, was a really hard walk for me.
And where'd you like What was the— how'd you get out of that?
Uh, yeah, I, I don't know. Well, so like doing like any man, I just buried it inside and moved on. Yeah, I leaned in heavy with the Reboot guys. I don't know if you know, like, Jerry Colonna over at Reboot.
He's like the, like, the big exec coach.
Yeah, coach. Who do you go—
Steve Jobs or something like that? Who's he coaching?
I, I don't know. He's a nice man though, and I like him a lot. He's like—
he coached somebody famous, like, you know. Yeah.
Yeah, it was—
they do like a retreat now for CEOs.
Yeah, well, so I— like, when I was running the company, dude, well, because I was running the quilt company and it had grown to like 400 employees, and I was like, I was like 30, 32 or something. Like, I didn't know what I was doing. And when you, when you scale that fast and you don't, you, you don't scale your own capacity to lead, uh, I found myself like, you know, sit down in a room and, and I was immediately like trying to make to make these other people feel stupid so they wouldn't notice that I didn't know what I was doing, right? And you're throwing bombs in your own business. You're like, dang it, Rick, I can't believe you did this thing. And then like, afterwards, I'm not a yeller, Rick, baby, I'm so sorry. You know that's not me. We're on the same team. And, uh, and like, like, I came out and I was like, man, I'm hurting the people around me. I gotta fix this. So I went on a, on a boot camp retreat that they do, and like, I came out of that and I was like, I either— I, I need to fire my co-founder which was one of three co-founders. And I came back, it was like, I gotta fire you guys. They're like, no, that's not gonna happen. And we're like, oh, what should we do? So then we're like, oh, well, I'll step back and like, we could, we can manage this transition. But, uh, but like, to get to that point where I could sort of say those words out loud, like, man, I can't keep doing this because it's a family business and it's all, it's the town. Like, I felt all that weight on me and I couldn't get out. And so went, did a lot of the therapy stuff And at this point now, psychedelics— no, dude, I'm so, I'm so intrigued by psychedelics, but like, I, I'm, I'm Mormon, right? And so like the idea of doing— you're Mormon? Yeah. Yeah. Wow. Oh my God, you look just how I thought you would look. No, you don't.
You're the coolest Mormon I've ever met.
And you know Mormons here, so that's nice. Yeah, thank you. You didn't have to say that.
That was one like in the room.
But the, uh, but, but, uh, no, like, I, like, I I think because the stance is very murky in my— from the religious standpoint. So I'm like, I've got, I've got a bunch of mushrooms capsulated in my medicine cabinet that I'm like, Dre— my wife— I'm like, Dre, someday I'm gonna go walking on the land, and I just don't know where I am yet, but I'm gonna go over.
I've never done it. I'm completely sober, but I'm totally into it. I'm trying to convince my wife to do it.
My fear is like, I just don't want to be the one guy like, oh, he took it and then his brain snapped.
And I'm like, no, I don't think that will happen with you.
Thank you. I don't think it would either because I've got a good brain. But if it did, I'd be very sad. Do you drink? No, I don't drink.
Never touched it. Well, fuck. I always thought like, if I'm— because I don't drink either, but I'm like, if I freak out, I could just get super drunk and I'll be okay. So you don't have that.
This playbook feels made up on the spot. Did you? No, that's what that— is that science, Max? Well, what is science?
No, I just thought like, that's like my parachute. Escape hatch.
I was, man, I don't, I don't know at what point I'll feel okay with it, but like at some point I'm just like, wait, so you bought it or you have it? Yeah, no, a buddy of mine, a buddy of mine is very, he's like, I'm good at onboarding people into psychedelics. I got you. And I'm like, all right.
And so I've never done it.
No. And I meet those people and they're like, dude, it'll be so great. So controlled. So safe.
He, I'm just like, uh, he's emotionally stable though.
Yeah. I'm like, I don't need this. I'm like, you know, what?
I was like, do I need to get sad? The interesting part is just like, is just like the guys are like, I have my greatest ideas in there. And I'm like, can I just, I just want to see what some of those ideas would be.
Yeah.
I don't, I don't think I need the whole, like, I don't need the trip.
You're only using 12% of your brain right now.
Then you got like your barber that's like, I saw Jesus. Yeah. He was there, bro. And I'm like, ah, that could be cool too. I mean, all right.
I don't know.
Well, dude, this is awesome. Uh, you came here not knowing anyone. We got you on the pod. This is pretty sick. You're the most popular guy here. Did you enjoy meeting some of these people?
Oh, this is a blast. This is a blast.