Tactic
Chase businesses where customers pay before you deliver
After fireworks, where all cash goes out before any comes in, Girdley was stunned that his coding bootcamp collected tuition before teaching the class. Prepaid revenue makes a business feel easy by comparison.
“like when we started the coding bootcamp was the second business and I was like, you mean they pay us before we teach them the classes? Like, this is amazing. I thought it was the greatest thing ever. So every other business feels like it.”
Steal thisFavor businesses with negative working capital where the customer pays upfront before you incur the cost to deliver.
Tactic
Chase businesses where customers pay before you deliver
After fireworks, where all cash goes out before any comes in, Girdley was stunned that his coding bootcamp collected tuition before teaching the class. Prepaid revenue makes a business feel easy by comparison.
“like when we started the coding bootcamp was the second business and I was like, you mean they pay us before we teach them the classes? Like, this is amazing. I thought it was the greatest thing ever. So every other business feels like it.”
Steal thisFavor businesses with negative working capital where the customer pays upfront before you incur the cost to deliver.
Take
Know when you're the wrong person to run your own business
Girdley realized six years in that he's terrible at the inch-by-inch optimization a fireworks business demands; he lives at 80,000 feet on strategy. The business exploded once he stepped out and put the right operators on the field.
“I actually really suck at optimizations. Like I want to live at like 80,000 feet with big ideas and strategy and do what we're doing right here. Right? Like I want to live in an idea space. And what I realized about 6 years into running that business was I am precisely the I'm the wrong person to run this business because what you're talking about is this like game of inches where you have to be like optimizing stuff all the time.”
Framework
Never raise money for a deal you haven't put your own money into first
Girdley's rule for syndicating deals: he puts a substantial slice of his own net worth in before asking outside investors. Otherwise it feels 'yucky' — and the skin in the game keeps him honest about which deals he truly believes in.
“You know what I've learned and I only do is I hate raising money for stuff unless I'm putting my own money in it. So I'll put a substantial amount of my net worth in new stuff. And then when I go out to raise money, I feel like not yucky. Otherwise I feel yucky.”
Steal thisPut a meaningful chunk of your own net worth into a deal before you raise a dollar of outside capital.
Story
Girdley started a coffee chain after watching a drive-thru print money outside Walmart HQ
Bored during COVID and biking past Walmart's Arkansas headquarters, Girdley parked for an hour watching a drive-thru coffee shop mint cash, then called a friend and pitched starting a coffee business off the photos. His method: stumble around like an idiot until you spot something printing money.
“I was riding my bike around Arkansas and I'm like just riding outside the Walmart headquarters because like I'm a business nerd and staring at the Walmart headquarters and like there's this like drive-thru coffee shop there and it was COVID and I was bored and I— so I just sat there for an hour and these guys were just printing money.. And I came home and I called my buddy who I'd wanted to work with for years, and I was just like, hey, we should start a coffee business.”
Framework
The 'associate' entrepreneur-in-training program
Girdley hires young people as salaried 'associates,' mentors them past the 12 bad ideas every 27-year-old has, then builds one good idea together. At the end they can co-found a company with him (he's on the cap table) or leave for a job.
“So I hire these, um, people, I call them associates, and it's basically an entrepreneur in training program. So I like mentor them through, I pay them a salary. Um, And then I help them, like, get out of the, like, 12 bad ideas that every entrepreneur has to get when they're 27 years old. I help them, like, think through all those, and then we work on a good idea together. And then at the end of it, they can either start a company with me or they can go take a job or whatever.”
Steal thisHire ambitious young people on salary as 'associates,' filter their bad ideas, then co-found the good one and take a cap-table stake.
Framework
Running a holdco is the exact opposite of being an operator
Girdley argues a holdco demands inverting every CEO instinct: when a portfolio company has a problem, you don't rush in to fix it — you say 'that sucks, what are you going to do about that?' Most ex-operators aren't wired for it.
“Like everything that you do and all the habits and skills that you learn when you are a CEO running a business, which is where most of these people are coming from, or you're a senior exec in a company, like everything you do in a holdco is exactly the opposite. Like, like when there's a problem, you don't rush in and fix it for your company. You actually say, man, that really sucks. What are you going to do about that?”
Steal thisAs a holdco owner, resist fixing portfolio problems yourself — push the question back to the operator.
Story
How family-owned H-E-B crushes Walmart and Trader Joe's
When Trader Joe's came to San Antonio, H-E-B flew its product and store execs to California on a private jet and told them not to come back until they'd matched the best of every TJ's product. When Walmart entered, the family simply lowered profit targets rather than lose — a long-term mindset only private ownership allows.
“There's an anecdote that they just packed up all the senior executives who were in charge of product selection, location selection, interior store experience, all this stuff. They put them on a private jet and they flew out to California and said, don't come back until you have the best of every single one of their products because we need to up our game. There's another anecdote when Walmart came to San Antonio. That H-E-B went and lowered their profit targets because they're just like, we're not losing to Walmart.”
Take
Black Rifle isn't a coffee chain, it's a lifestyle brand
Girdley points out Black Rifle Coffee's stores are mostly t-shirts and swag with a small coffee counter on the side. The coffee is almost incidental to selling an identity — and it works even on people outside its demographic.
“you would think it's like a coffee chain and it's actually just a lifestyle brand. It's all like, you go into the stores and there's like a little coffee thing on the side and then it's like all t-shirts and swag and it's good looking stuff. Like I'm not like their demographic obviously, but like it's super fun to like go in there and be like, man, these guys, like I'd wear that even though it doesn't represent me.”
Number
PopSockets: $200M revenue, $90M profit on one patent
PopSockets sold 30,000 units in 2014 and 60 million in 2018, hitting roughly $200M in revenue and $90M in profit — almost entirely on the strength of a patent on a simple phone grip.
$90M
Annual profit (2018) · USD/year
“So supposedly in 2018 they had $200 million in revenue and $90 million in profit, all because of a patent.”