156: How to Make Big Returns Without Swinging for the Fences: Blair Drenner’s Investing Secrets – 8FE

How do you balance risk and reward while building wealth? 

In this episode of Beyond A Million, Brad sits down with serial entrepreneur and investor Blair Drenner. Blair’s journey started in the high-stakes software world, where he learned the hard truths about high-risk, high-reward ventures.

Over time, he transitioned into more stable investments like real estate and high-end appliances, creating a diversified portfolio that balances steady cash flow with growth opportunities.

Interested in the secrets behind his raging success?

Tune in!

Inspiring Quotes

• “Hitting a home run in software once in your life is rare. Hitting it two or three times is almost impossible.” – Blair Drenner  
• “I wish I had started buying and improving existing businesses much earlier in my career instead of building from scratch.” – Blair Drenner
• “Do less better.” – Brad Weimert 
• “Markets aren’t driven by fundamentals—they’re driven by people’s perceptions of those fundamentals.” – Blair Drenner
• “I deliberately started looking for ‘mailbox money’—passive income that wouldn’t require me to spend three to five years gambling on the chance of hitting a home run in software or another venture.” – Blair Drenner

• 00:00:00 Intro 
• 00:03:38 Blair’s varied business background
• 00:10:53 Buying vs. building 
• 00:13:14 Breaking away from the corporate handcuffs 
• 00:22:04 Can you time the market?
• 00:24:44 Strategic decision-making in business
• 00:33:11 Strategic risk-taking 
• 00:44:29 Fear-driven decisions 
• 00:53:57 Strategic partnerships 
• 01:00:11 Blair’s real estate ventures
• 01:09:08 Outro

00:00
Blair Drenner
One of the larger advices I can give to younger people that are starting out don’t go do everything. I wish I would have bought things and improved them much earlier in my career rather than started from scratch. My entire investment, time, money and everything wise was too much in high risk, high reward. Where’s mailbox money, right? Where’s some passive income where I don’t have to spend three to five years of my life gambling to hope to get a home run?

00:26
Brad Weimert
Congrats on getting beyond a million. What got you here won’t always get you. This is a podcast for entrepreneurs who want to reach beyond their seven figure business and scale to eight, nine and even ten figures. I’m Brad Weimert and as the founder of Easy Pay Direct, I have had the privilege to work with more than 30,000 businesses allowing me to see the data behind what some of the most successful companies on the planet are doing differently. Join me each week as I dig in with experts in sales, marketing, operations, technology and wealth building and you’ll learn some of the specific tools, tactics and strategies that are working today in Those multi million 8, 9 and 10 figure businesses can get exciting beyond a million. This episode is unofficially sponsored by Maker’s mark. Cask strength 109 proof. 109.4 proof.

01:14
Brad Weimert
It’s actually one of the things that I like about bourbon is it’s one of the only liquors that has wild variants in their alcohol content.

01:23
Blair Drenner
I did a bourbon tour and I actually went to Maker’s Mark and I had a really good time. I went to Angel’s Envy, Maker’s Mark, bunch of those guys.

01:31
Brad Weimert
It was fun.

01:32
Blair Drenner
I just learned way more than I would ever expect out of bourbon considering I don’t usually drink it.

01:36
Brad Weimert
I really want to do that tour and I have yet to. And you almost did a tour of Jalisco.

01:41
Blair Drenner
I did.

01:42
Brad Weimert
But you didn’t.

01:43
Blair Drenner
That’s correct. And I’ve been looking forward to doing that trip for a very long time.

01:48
Brad Weimert
Me too.

01:49
Blair Drenner
And the day before that I was supposed to leave at roughly 6:20 in the morning to go to my long earning for Jalisco. I got a stomach virus and I did. And my wife, it’s so funny, my wife said she knew I was absolutely really sick for me to miss that.

02:06
Brad Weimert
So. Yeah, well that’s what you get for trying to do that trip without me.

02:10
Blair Drenner
You have a point. And I’m trying to think how you could have finagled that or made that happen, but I’m pretty sure you have the wit to do it.

02:17
Brad Weimert
Haven’t seen you in a long enough duration that it couldn’t have been me. Would have had. I would have had to be significantly sneakier to premeditate that poison knowing that it’s been a few weeks since I’ve seen you.

02:27
Blair Drenner
I don’t underestimate you. That’s all I have to say. That’s good.

02:32
Brad Weimert
So, Blair Drenner, thank you for carving out some time.

02:37
Blair Drenner
Good to see you as always, Brad.

02:38
Brad Weimert
Definitely good to see you. So we just got back from your 50th birthday on a pretty ridiculous yacht in Croatia where I learned that I am in fact a yacht person or aspire to be one. I’ve like, I’ve known you for a few years. God, it sounds really pretentious to say all this because I met you in Antarctica a few years ago.

02:58
Blair Drenner
That’s true.

02:59
Brad Weimert
And it turns out that what connected us right away is I met you on a boat in Antarctica and were only allowed to have 50 pounds of luggage on this trip because of how you get there and you have to take little planes and stuff. And in the £50, despite the oh so temperate climate, you elected to not bring clothes and instead pack bottles of tequila and mixers so you could make Mexican martinis while in Antarctica.

03:25
Blair Drenner
I just figured they wouldn’t have a good Mexican martini on the shores of Antarctica. But yeah, liquid has basically bonded us. We had lots of water around the boat and lots of liquid that we consume together that we enjoy the same sentiment around tequila and other stuff.

03:38
Brad Weimert
So, yeah, so par for the course of my life, I frequently get to know people without having any idea what the fuck they do professionally. And in some cases I really prefer that it doesn’t always happen, but it did with us. And the only thing that I knew about you was that you had a multi eight figure appliance company, high end appliance company in town and in Houston. That’s all I knew. And so I knew you as the appliance guy.

04:07
Blair Drenner
Yeah, I sell microwaves.

04:10
Brad Weimert
And you graciously have outfitted now a couple properties with appliances which I mean not free, but good buddy hookup, which I love. But there’s this whole other story behind. So first tell me why the fuck you’re in appliances and then we’ll backtrack. But the appliance stores in and of themselves are doing very well. So why did you pick appliances after a long road of other things?

04:30
Blair Drenner
That’s a great question. There’s a couple different answers. One primarily because my entire career path, and you’re right, most people that know me just from the last, say, four to five years know me as owning that, because that’s what I’ve invested some time in. It’s just interesting to me. But before that, it’s not my career at all. It’s just kind of random. But my entire background scholastically was computer science, software engineering, the whole tech world.

05:00
Brad Weimert
So, like you premeditated being a dork for your whole life is what you’re saying.

05:04
Blair Drenner
I’ve definitely been a dork. My whole. I don’t know about premeditated. I was, I was like Lady Gaga.

05:10
Brad Weimert
You were born into it?

05:11
Blair Drenner
Yeah, yeah, I was born into it. No, I’m kind of geeky, but no, I went into computer science, did the old school Austin software thing, but then quickly went and did some companies in Boston and some other things. So I’m kind of a software guy. So the first answer to the question is I realized that software has a lot of really smart people and it’s really hard to get right. I was doing companies from ground up or investing in, you know, doing angel investing from ground up. And to hit one of those things two or three times in your life is kind of rare. To hit one once in your life is really rare. And so I just realized that my entire investment time, money and everything wise was too much in high risk, high reward.

06:03
Blair Drenner
And I wanted to split that up into some medium risk, medium reward, and then some low risk, low reward. And so I deliberately started looking into, hey, how do I. Where’s mailbox money, right? Where’s some passive income where I don’t have to spend three to five years of my life gambling to hope to get a home run in the software world or some other venture that you’re trying to find product, market fit and the right channel and the right sales and marketing and all the other things that go, you know, that most of your listeners and you know about. I decided why not do something a little easier? Maybe not the potential, but a little bit easier. So I started looking at different things. I got into some real estate investment stuff and some other things I was looking at to buying businesses.

06:50
Blair Drenner
And it just so happens for years and years, my best friend in the world that I grew up with, Justin Hawes, he had run this appliance company. He had kind of built it in his own right and the right hand guide of the owner, and the owner got old enough and was ready to pass it on. And he was kind of like A son to him and said, hey, do you want to buy this thing? Well, Justin built it from the sales side, so he had the sales acumen and he had the relationships. But he’s not an operator. Right.

07:21
Brad Weimert
Really good salespeople are not good at running businesses.

07:24
Blair Drenner
I’ve seen it happen, but not really.

07:27
Brad Weimert
No, that was.

07:28
Blair Drenner
Dude.

07:28
Brad Weimert
When I got into business in the first place, I came from a sales perspective and I’m not gonna say it was a disaster, but I got hit in the face with the reality of the rest of business. I thought, oh, I can sell this shit. And then once I sell it’s just all good now. Oh my God. I mean, sales is, you know what, I don’t know, some percentage of business, but like 10 or 15, I mean, it’s really important and the business has to operate. So he did not have the capacity to do that.

07:56
Blair Drenner
He probably, I don’t know that he doesn’t, but it’s not his forte. It’s not something he enjoys. Yeah, I’m more. Well, first of all, I had a little bit more financial means and also I’m a numbers guy. I like, I like, you know, I like being an operator. I like the financial part and even just the process part, just reorganization and blah, blah. So he invited me to take part and I’m like, oh, this fits in this low risk, low reward category. This, I mean, it’s a well run business, it’s profitable. I’m, you know, it’s not high growth, it doesn’t really grow. It just kind of sits there and. But there’s some cash flow involved. And so we did that five years ago. So that’s. Yeah.

08:33
Blair Drenner
So the multi prong thing is one, I, yeah, I wanted some diversity and diversity in my risk portfolio and two is opportunistic to do something with great friend of mine and a totally different realm or industry than I’ve ever played with.

08:48
Brad Weimert
Well, I would think that most people that are kind of, certainly people that have grown up in the digital era would think of an appliance store and think in no way is that low risk or staple at all. And fuck, you have these huge things that have massive inventory, they get dented and shipping, they’re expensive to move. Like there are so many things about that sound like a fucking nightmare to me.

09:13
Blair Drenner
There’s definitely a learning curve. I was a little confident. I wouldn’t go as far as arrogant, but a little confident because in my world I sold into ID departments primarily. So really geeky stuff, right. Things that Monitor large enterprise systems. If you had thousands of computers around the world, how do you know when there’s a problem? How do you diagnose that problem? How do you secure it? How do you back it up? How do you ensure performance? And you’re talking about American Express, American Airlines, Nordstrom, these big companies, very complex. But I work cross industry and by being on the IT side and understanding and rolling into the BI side, the business intelligence side and understand business processes, which is what eventually converged over time.

09:59
Blair Drenner
Yeah, I got to actually see different industries on really great companies and how they ran and you see a commonality. And so I, I guess I wasn’t afraid. I wasn’t afraid of something. You know, for me running a business seemed very easy. Now I completely underestimated the logistical part. You know, how important because. Because the company ran well and has run well for. Since 1954. I kind of took for granted that when Covid hit and we had very different things that no one in the industry new. Right. A massive explosion of inventory and all this other stuff. I didn’t know how to handle it. And I underestimated how important those boxes are, you know, and take it for granted that you can’t damage them, you can’t lose them. What do you do when you don’t have enough storage for them?

10:44
Blair Drenner
You know, all kinds of factors. So it’s. It was kind of a fun like problem solving. Putting my problem solving geeky hat back on. But definitely some things that I underestimated.

10:53
Brad Weimert
Would you have embarked on a high end appliance store company as your first venture?

11:01
Blair Drenner
Looking back, yes, absolutely.

11:03
Brad Weimert
Oh, interesting.

11:04
Blair Drenner
Yep. I honestly think.

11:07
Brad Weimert
Or buying into it like you did.

11:08
Blair Drenner
Buying in.

11:09
Brad Weimert
Okay.

11:09
Blair Drenner
Matter of fact, I would say I wish I would have bought things and improved them much earlier in my career rather than started from scratch. I think there is a huge learning experience that I am grateful for. But doing that for 20 plus years, you know, it’s a little masochistic. I mean people love being, you know, I, you know, hear the word serial entrepreneur. I love the term. I like to build, I like to innovate, I like to grow. And that’s why I did it. But just financially and just path of least resistance to. To have like larger companies and grow them and scale them. I definitely would have done other things, at least on the side of that earlier.

11:49
Brad Weimert
Well, I think that I don’t know anybody actually. I’m sure there are people. But the common theme in my life is that when people start buying companies instead of starting them, they Basically always say that. They’re like, I don’t know why the fuck I would start another company. Why wouldn’t I just go get one? Of course, capital can be a limiter there.

12:09
Blair Drenner
Sure.

12:10
Brad Weimert
It’s a different proposition to go get something, especially if you have no capital you have to raise to go buy something. Do you think there’s a use case for you starting something from scratch again or would you always look for somebody that’s already got the foundation running?

12:19
Blair Drenner
I recently started something from scratch, so yes, I think that’s always in my veins and my blood.

12:24
Brad Weimert
Did you or did your wife.

12:25
Blair Drenner
Well, she did as well. Yeah, you know, we. I don’t know again, we’re a little crazy. But yeah, she started a pickleball line of clothing called Zozos, which kind of fun. I mean, it’s her fun project and she’s passionate about it. So the answer is yes. And I’m a part of a legal tech company, still software. So it just wouldn’t have been my end all. End all primary this long of a time. I would have always had some more diverse things that I wish I. I wish I would have brought some more stable passive income earlier and that would have allowed me to have this little sandbox of. Of some startup stuff and whatever I did the reverse. I did only startup stuff.

13:05
Brad Weimert
Right.

13:06
Blair Drenner
Which I think I. I wouldn’t say I regret it, but I would. If I were to do it again, I would have definitely got some more stable income.

13:14
Brad Weimert
The way that I internalize that is that I needed stable income or enough money present. I needed enough security to allow myself. You used the term sandbox. But I needed enough security to allow myself to make decisions without being emotionally bound to financial security.

13:37
Blair Drenner
All right, so I’ll share. There’s a couple things that I’m thinking about when you say that I’ll share because I do talk to a lot of people in the same. These couple scenarios. Number one, I did the whole corporate path by necessity because I had a very young family. Right, yeah.

13:58
Brad Weimert
You married your high school sweetheart.

14:00
Blair Drenner
I did.

14:00
Brad Weimert
And started having kids when you were 20.

14:02
Blair Drenner
I did. And no idea why she would have done that, but I’m grateful that happened. And so, yeah, I married my high school sweeth. We had a child in college. So I was kind of in the boat of.

14:13
Brad Weimert
You had a child when you were in college.

14:15
Blair Drenner
Correct. Right.

14:15
Brad Weimert
You didn’t have a child that was in college? I just.

14:18
Blair Drenner
That would have been super weird some. Some crazy adoption laws there. Yeah, I had. Had a. Had A child while were in college. And yeah, and so I, I, fortunately computer science was blowing up and IBM, Tivoli things, people like that who normally wouldn’t hire anyone without a degree. I was a junior and got a full time industry job but because I wanted to provide for my family and I couldn’t take risk at that time. I stayed in the corporate world for a very long time. I actually had a startup before or kind of at the beginning of the infancy of me joining Tivoli and kind of got called out and said, you have to make this choice. Well, I had to gravitate to the corporate world. But my point is, would you have.

15:02
Brad Weimert
Made the other choice if you had not been in a.

15:06
Blair Drenner
Absolutely, yes, don’t regret that. But yes, I would have. If I would have had very little risk or you know, been single and kind of on parents dimes or something or some way of sustaining myself through college, then yeah, I probably would have taken a lot more risk and not done that. But I have a lot of people that ask me, you know, how do you break away from the corporate handcuffs, especially if you’re doing well and high achievers, you know, if you’re, if you have the propensity to own your own company or buy companies, all that stuff, you know, I was working my way up the ladder. They were rewarding me enough to keep me there.

15:41
Blair Drenner
And then you always have that equation, yeah, I’m making X, but if I leave I can make a lot more, but it’s a risk and I know a lot of people that are in that situation and that’s difficult. So it took me almost 12 years to fully get out of IBM and make that plunge. But in the meantime, that’s when I started investing in real estate. Which brings me to the other point that were talking about of kind of having capital to start your own thing and why I mentioned what I mentioned about maybe doing it earlier. We invested in houses and we built as much as we possibly could because we saw that Austin was a high growth market and relative to other parts of the country, east, west coast, et cetera, was super low in value.

16:25
Blair Drenner
And so we ended up in our mid-20s building a multimillion dollar house which back then was quite a bit of money. Now it’s like, I don’t know, starter home or whatever. Maybe not that, but you know what I mean.

16:36
Brad Weimert
Depends on your audience. But I feel you. But we shocked at how expensive it is for me to get into Lakefront Austin right now?

16:42
Blair Drenner
Oh absolutely.

16:43
Brad Weimert
It’s obnoxious.

16:44
Blair Drenner
So. So we built this house for 1.2 million. It was a, it was extremely.

16:50
Brad Weimert
What time frame is this?

16:52
Blair Drenner
What era expensive home for the time. That was my cost because I put all the sweat equity into it and all that and that. So what is this was 1998, I believe.

17:01
Brad Weimert
So inflation adjusted, that’s probably 2, 5 at least.

17:07
Blair Drenner
Yeah, I’d say, I would say more than that because real estate in Austin has doubled in the last five years.

17:13
Brad Weimert
Yeah, way more. Yeah, I was thinking inflation in general, but in terms of real estate inflation, significantly higher.

17:19
Blair Drenner
Yeah.

17:19
Brad Weimert
Yeah, you’re right.

17:20
Blair Drenner
So Julie, my wife, was working for a law firm as an attorney and I was working at IBM. And our salaries were enough to somehow get some mortgage, that and construction loan to build the house. So anyway, we built it, we lived in it for two years. We could barely afford it because we stressed ourselves to the limit even with both of our decent salaries, but still corporate salaries. And after two years where the tax advantages kick in and you get half a million dollars of tax free capital gains, we sold it and we doubled. It was 2.4, so we sold it for 2.4. So that $1.2 million profit after realtor fees, call it 1.1 or so. Half a million is tax deductible, or not even tax deductible is tax free, and then the other 600 is long term.

18:12
Blair Drenner
So we paid 120,000 in taxes. So we basically had a million dollars to start.

18:18
Brad Weimert
Amazing.

18:19
Blair Drenner
Yeah. And so that’s when I should have probably started taking more risk. And that enabled me to be a little bit more, you know, confident in leaving IBM and all that kind of stuff.

18:30
Brad Weimert
Oh, wild. So, okay, so you wanted to leave corporate the whole time. It sounds 100% okay. You had the entrepreneurial bug from the beginning. Yes, before the beginning. Couple of questions on that one. There is a. I grew up in a upper middle class home. My father was a doctor, my mom’s a nurse, anesthetist. Everything. I was sort of taught not to talk about money, not to focus on money. It’s not important. I really value my upbringing. My parents and I love them for a lot of the things that they brought to my life. That’s not one of them. And actually I shouldn’t say that because parts of that I think are those lessons were really valuable to me and there are some major asterisks there.

19:15
Brad Weimert
I bring it up now because one of the things that I was taught was don’t Let yourself be house poor. And so they had this mentality of don’t overextend yourself on a residence. And I think that the idea, it’s sort of some Dave Ramsey shit. It’s kind of like this idea of like pinch pennies and make sure that you can put things away and save. But you illustrated a really good reason why that might be really dumb. And that is that if you overextend yourself in a high growth market, overextend, as long as you can cover it, then you’re going to have a significant tax advantage which allows you to leave with a chunk of money which can be really good seed capital for something else.

19:54
Blair Drenner
Right. And the real estate or any market really, it applies. I mean, part of it is a little bit of fortune and maybe hopefully foresight and luck. But yeah, it depends on what the market does. Now if you remember 1998, 1999 was a, a little bit of a bubble burst we called it. But I mean Austin honestly felt it less than most of the country.

20:16
Brad Weimert
It was a massive bubble burst. Just not in the Austin real estate market.

20:18
Blair Drenner
Exactly. And that’s my point. And so, you know, in Michigan, you know, the sentiment of save, don’t invest in real estate makes a lot more sense maybe, and especially in certain periods of time. Where in Austin, no one on Austin that’s lived here for 25 years would ever say that. Because we’ve had the best market in the world. A matter of fact, I, I kind of pity the people that have seeing a good market because they’re going to make some really stupid decisions investment wise because we’ve taken for granted the fact that it’s always good. Yeah, right. So a lot of it’s market condition and that’s with any market. Right. I mean if you overextend yourself, you can win big, but you do it at the wrong time and you can get absolutely screwed, Crushed.

20:58
Brad Weimert
Yeah, that makes sense. I think that’s a really, really important lesson for people. And if you talk to, if you study anybody that’s done real estate at all for any period of time, they all have stories.

21:10
Blair Drenner
Yep. Well, can I parlay on that for a second? Because I do want to plug an individual. So Julie’s father, Harvard grad, he got his MBA from Harvard. Super smart guy, real estate developer. And he was frugal, he was a penny pincher. He could have made a ton more money than he did and he did really well. But he could have done even better. But he was super conservative and all of that and there were so many when the market crumbled like two or three times during his career, he was able to sustain and saw pretty much everyone else go down. I mean outside of. He worked for Gerald Hines for a while and then until he broke off in his own deal. But hi. And some of the big guys that are not over leveraged were fine or okay and sustained. But.

21:58
Blair Drenner
But anyway, to the point, lots of people that are over leveraged go down really hard.

22:04
Brad Weimert
Well, it’s interesting because I think that there’s a well informed general construct that you can’t time the market. And seems that some people do. And I don’t really know what to do with that other than say with risk assessment, with deep understanding, things become less risky. And so you can understand a market, you can understand your industry, whatever it might be, and maybe that mitigates risk for you. How do you feel about timing the market from a real estate perspective with more expertise.

22:41
Blair Drenner
I mean expertise will help. But I am of the sentiment and maybe this might be naive. People may be thinking this is absolutely crazy. I think timing markets, it doesn’t matter. Real estate or stock markets, whatever. I think it’s extraordinarily difficult. I don’t know. For instance, I mean Covid, almost everyone I spoke to would have not guessed that the markets would have skyrocketed with COVID Exactly. I mean, and throughout. I mean in general.

23:13
Brad Weimert
And it would happen.

23:15
Blair Drenner
Yeah. Right. And yeah, who knew that Covid would happen? Who knows what’s going to happen with. Yes, of course we can anticipate and there’s risk around, you know, certain world powers right now in current day 2024. Right. But no, I just think it’s really hard to assess that one because we don’t really know what’s going to happen. There could be massive surprises tomorrow. But the second more complicated thing, markets aren’t driven off fundamentals, they’re driven off people’s perception of the fundamentals. And I think that’s incredibly more complex because we have no idea how people any. Anytime you think your fundamentals are right and you think something’s going to go up or down, unless you have some ins or you’re way on top of your game, it’s already baked into it because it’s all about the perception of whatever is going around it.

24:01
Blair Drenner
So anyway, all that is, I maybe I overanalyze this stuff, but I’ve given up on almost entirely. Not entirely, but it’s really hard to predict markets.

24:12
Brad Weimert
I think it’s worse than that. One of my favorite quotes is the stock market is a reflection of rich people’s emotions and I think it’s worse than their understanding in any capacity. It’s literally, just. Not literally. It is a huge part of it is just emotion. Right. Because yeah, you have the people that actually have an understanding that are making decisions, but then you have a shitload of people that are just looking at that and they’re like, oh God, I should do that.

24:35
Blair Drenner
Well, that was a much shorter and Mark Twain version of saying that. But yeah, absolutely. Thank you, Brad, for making my statement much clearer.

24:44
Brad Weimert
It’s my job. It’s my job. And it’s the. It’s just points to the efficacy of the maker’s mark 109.4 proof cask strength bourbon. I wish I was getting paid for this.

24:57
Blair Drenner
Me too.

24:58
Brad Weimert
Yeah, so I want to talk about kind of the other ventures that led to. I want to talk about real estate more, but because it clearly played a big role. But I want to talk about the other ventures that led to the appliance store or that led you to the point of the appliance store. But you said something before that I want to hit on, which is me chasing squirrels here. But you were talking about working with massive brands with software, right? With IBM and interacting with these huge brands and solving problems. And the narrative that you gave was that it allowed you to understand a bunch of different business models.

25:32
Brad Weimert
And one of the things that I love about Easy Pay Direct and being in the payment space is exactly that, which is that we get to see the financials and the money movement with a ton of different industries. And it is incredibly helpful for me in my own growth to just have understanding. But the other thing that surfaced to me that I’m just curious about is when you were working with all these different massive companies. I’m not at, you know, I’m not in the appliance store is not at the scale of a multi billion dollar multinational organization. When you’re problem solving for them, when does it make sense to address an edge case versus totally ignore it and say, hey, yes, I realize that’s a problem and it’s totally not relevant to you.

26:18
Blair Drenner
That’s a good question. You know, I wasn’t in the boardrooms of these larger companies. I wasn’t in financial decision making. I was more trying to influence. Of course I understood. And I would ask questions around, you know, how much are you? What, what are your most critical applications? How much does that make for you and how can we optimize that what does it cost if you lose certain amounts of that? Like if you have an E Commerce, you know. You know I worked with Target in Australia which is actually not Target here. They just rebranded it but.

26:54
Brad Weimert
Oh, interesting.

26:55
Blair Drenner
But they are dabbled in this online sales thing and it skyrocketed and they were making 30 million their like second year doing it and we went in and they realized that they had so much traffic, they were hitting slowdowns, they were losing revenue because people would not convert online and so forth. So I mean I knew a lot about their business in that realm. Now I didn’t know their overall business structure corporate down. So it’s, you know, I didn’t know everything. Right. I just knew about their online stuff. I knew what they were doing, I knew they were losing. I knew what their growth rates, I knew they were highly profitable and were optimizing that.

27:32
Blair Drenner
Now what I did do though that was kind of interesting that might correlate to that, you know, software startup when I left IBM and joined the first major company after Site Screen that I started that I joined and I wasn’t the founder, I was one of the first few executives though and had equity is a company called Dynatrace and it had a great ride if you look it up. But we got acquired by Compuare and just seeing how startups run and how you know the grind for the startup world, which I had done a couple times and then seeing what happens in a much larger financial environment. There’s so much more efficiency because of the scale but there’s so much more waste because you can. Right. So there was so much more of fat that we could take off the table and optimize that.

28:23
Blair Drenner
And fortunately and credit to Compuare when they purchased us they didn’t squash all the innovation and squash all the leaders. There was three or four of us that were really and, and I will give accolades to the group I worked over there. Not only the business experience through the different industries and companies I worked with, but having hand picked Bain Capital guys that were the best in the nation in my opinion to work with. Obviously that’s a huge advantage. Right? Yeah. But anyway I got to see that financial equation on a much larger company that was doing, you know were doing I think 1.2 billion a year and our APM business unit was doing about 365 of that. So that’s a very interesting thing to compare.

29:08
Brad Weimert
What I like about studying really large businesses is that small problems get magnified, they become more apparent and you know, a grain of salt turns into a pile rather quickly. But that’s relevant to me because I’m curious how to avoid chasing shiny objects inside of my own company. When I see something as a. I refer to myself as a recovering perfectionist and I’m only kind of recovering. So I see something that’s wrong and I want to go chase down that rabbit. How do you, inside your current ventures, look at things that, you know, need to be fixed but aren’t as important as the bigger things? And how do you prioritize that? And have you pulled any lessons from the enterprise world to do that?

29:55
Blair Drenner
That’s a great question. And I think there’s two things that are relevant here because one hand there are certain. If you are a perfectionist, you tend to want to solve all the equations instead of just let’s get a minimal product out there and go forward, etc. I think that’s one part and we can talk about that. And then the second part is if you’ve become somewhat successful, you’re not in the red anymore, right? You’re in the black. You’re making half a million a year, whatever. Then all of a sudden you think everything is rosy. Then you start these little micro investments and growth. But a lot of people tend to do that. Too much old saying in startups.

30:38
Blair Drenner
I don’t know if it’s totally true anymore, but just taking your eye off the ball, just keep it super simple and stay the course of your primary deliverable. You don’t want to slicer and dice or you don’t want anything else. Just, just stick to your primary. But you know, once you have resources, you want to grow the company, but a lot of people don’t stick to cores and gradually feel out tertiary income streams. They, they like start making larger investments because they have the resource and I think that’s detrimental.

31:09
Brad Weimert
Larger investments in other things and other.

31:12
Blair Drenner
Even, yeah, other things, unrelated things, complications that will bring organ, you know, organizational complications that are unneeded. Yeah, what I’ve seen work really well and it’s usually, you know, everybody wants this great innovative idea, you know, the new iPhone idea or ipod or whatever back in the day. But honestly the best thing is just to at the point where you have a customer base and you’re making that much money. And it seems so dumb to some people, it seems dumb to me. But simply asking your customers what they want or taking some innovation and just asking and doing just A great product market role and just building on little modules. Don’t over invest in that. The old school way of doing too much with those resources I think is fundamentally horrible.

32:00
Brad Weimert
I try to get framework and theme and structure whenever I can for my own sanity. Our theme this year is do less better. And what I heard just now, I think was as you make more money, look at the thing that you’re already doing well and do it better instead of deploying the money into new ideas that are additional things that may or may not work, but are certainly additional. Mental lift and structural lift and bandwidth.

32:27
Blair Drenner
Lift, or at least do it very deliberately in control. Strategic risk. Everybody’s heard the term, so strategically dedicate a certain percentage of funds to do these things. I just see the filter and litmus test of those things not being nearly as high as when you start. When you do a startup and you have your first idea, it has to pass muster because if not you fail. But over time you start lowering those bars. And I’m just advocating keep the bars high, keep your investment minimal. And yes, you should definitely try to do other things and do the other markets, other ideas, other functions, all that stuff. But I just think don’t overdo it.

33:11
Brad Weimert
One of the challenges that I personally have with that is that as there’s more and more profitability in capital, there’s pressure to make use of that money. And I remember when I was starting in business hearing the phrase deploy capital and not really knowing what the fuck it meant. And it just, there’s all sorts of language that gets used that’s confusing out of context. And it’s out of context if you’re not there, right? But how do you use your money when you have it? And I just, when I was younger I thought what a dumb problem, or what a dumb question. But the reality of the situation is if you have a plan and all of a sudden you have a lot more money, this is the situation we’re talking about, right?

33:59
Brad Weimert
Do you go try to find a new thing that you’ve been thinking about doing that could be distracting? Or do you try to figure out a way to spend more money that you have into the core thing that’s working? Or do you take it outside of the business altogether to invest in another asset for the future and also potentially handle taxes? How do you think about that equation relative to like what you take out of the company, what you put back into the company? What is the core focus? Because you mentioned risk distribution, you used a different term that was fancy, but I forgot It.

34:34
Blair Drenner
But strategic risk.

34:35
Brad Weimert
Strategic risk. It’s super fancy.

34:38
Blair Drenner
Very fancy.

34:40
Brad Weimert
How do you think about that breakdown? Because you talked about being deliberate about it and I think that I’m interviewing CFOs right now and I was talking to a candidate today who is just coming off of working for. He’s heavy in the payment space, but he’s had a non compete. So for three years he’s been working for this guy that exited for almost a billion. He is now worth a billion. And he was talking about his kind of running his financial world and he was saying his decisions are not strategic at all. He kind of thinks they are, but he’s focused on all this other stuff. And so he’s deploying capital into a bunch of areas. But he has not thought about the asset allocation of the entire portfolio, at least not well. Right.

35:27
Brad Weimert
So how do you think about your asset allocation inside the company or outside as an individual once you’ve gotten to that level?

35:33
Blair Drenner
So I hate to pass and not answer this directly, but I think it has a lot to do with context and the industry. So for instance, if you have no competition and you’re just trying things and whatever, there’s no reason. And this kind of goes back to your other question that I didn’t fully answer, which is about being a perfectionist. Obviously there’s. If you know you have to test yourself, right? And know how much of a perfectionist you are and ask yourself, hey. And maybe even have someone else in your team to counterbalance you that says, hey, will this decision make us money or not? Or are you just trying to do this just to, you know, click a box or make your OCD head Okay. Right.

36:15
Blair Drenner
So I think having people that you trust that are counterbalancing that to make sure that it’s all about the bottom line or at least as much as you want it to be. It doesn’t all have to be about the bottom line, but someone that is all about the bottom line or about your culture or about whatever you care about as a company. And that part is in check number one. But now I’ll go to the illustration I was going to talk about. So you look at like Nvidia, right? Nvidia. Wildly successful. They realized in order to keep up with a highly competitive market with intel and everything that was going on, that they had to double in speed every year. So they pumped enough money to do that as good or better than their competition.

36:56
Blair Drenner
That would be a very different environment if they didn’t have that competition. If you’re in an environment and you kind of have a small amount of a monopoly for a time being and you’re already best of breeding. It’s going to take two years for people to catch up. Well, why in the world would you overinvest? Why wouldn’t you have kind of treated as a cash cow for a little bit? You know, everybody’s seen the bell curve for cash cow businesses and how you grow. You take the cash out overall, you sometimes have. What you don’t want to do is lose your best of breed advantage. So I really think it does depend on where you are in the market. I think it does depend on your competition. And that’s why you need really smart people.

37:35
Blair Drenner
You and your staff has to be smart because these things. There is no box answer for this stuff.

37:40
Brad Weimert
Yeah.

37:41
Blair Drenner
They have to be smart every single week in and week out, making these decisions.

37:45
Brad Weimert
I hate that answer.

37:48
Blair Drenner
I know you do.

37:48
Brad Weimert
I agree.

37:49
Blair Drenner
I knew you were gonna hate it.

37:50
Brad Weimert
It’s brutal. I agree with you. I mean, I think that’s exactly the problem is that one of the things that I disdain in life is when people say, well, it depends. And I’m like, yeah, it all depends.

38:01
Blair Drenner
Everything depends.

38:02
Brad Weimert
Of course it depends. You’re like, but we have to somehow consolidate to a general direction of where we go. Now, you mentioned the first of all, you said everybody knows the bell curve of cash cow businesses. No, they don’t. So you have something in your head. Nobody knows what the fuck you’re talking about. So generally speaking, I think what you’re saying is that as the business grows, it produces a lot of cash. But at some point you’re going to be on this other side of the curve. And if you’re on the other side of the curve when the cash diminishes, you could either have foregone clearing all that cash out from the cash cow and then the business is dead, or you could have taken all the cash and then you have all the cash. Was that the nutshell?

38:40
Blair Drenner
Pretty much, yeah.

38:41
Brad Weimert
Okay.

38:41
Blair Drenner
And you know, it can obviously, if you do a really. There’s great companies that have sustained that cash cow portion for much longer periods of time. I’m not saying that. Right. But it’s still, you know, quite a good model of. Yeah, yeah, you can take a lot of cash out of a company for a long period of time, but at some point, usually the value of whatever product or whatever thing is going to be deprecated. Right.

39:05
Brad Weimert
Yeah, I agree with you. And I think, and I have largely operated from that model and we talked about a little bit before, but, like, I needed to be financially secure before I was willing to take a bigger swing. But then I look at people like, and this is a terrible comparison because he’s such a fucking anomaly. But I look at Tesla and I look at Elon and there wasn’t competition at all in the electric market, really now, different scale, different character, et cetera. But at no point was he like, you know what? I’m going to build to the point of just being. I’m going to take the space to be the EV leader and I’m going to charge a premium and clear it, and as long as I’ve got everything went back into it.

39:50
Brad Weimert
And maybe it’s just a product of scale that was needed for that model. Maybe that model’s not relevant to your example. But I think that. I think it depends on the kind of swing you’re taking, maybe.

40:02
Blair Drenner
Well, first of all, it depends on what you mean by taking on a company because there’s two different, you know, there’s, you know, year to year, do you just, you know, do you pay out, you know, contributions or dividends or whatever? And then there’s also, do you sell a share or all of that company to invest in other stuff, Right. And start new? And so a lot of that has to do with growth and multiple, you know, potential. So, for instance, when you’re small, you’re able to grow faster, typically, right? I mean, at a certain mass, you can’t keep on doubling or tripling or whatever. You know, you see these software companies and unicorns. But in general, though, it’s a lot easier to go from 1 to 2 million in revenue or 2 to 4, even 4 to 12.

40:44
Blair Drenner
I’ve seen, you know, I’ve seen that like those multiples. But it’s really hard for going from 1 billion to 2 billion in a year. Like, that’s. I don’t know if it’s ever happened. I’m sure someone can prove.

40:55
Brad Weimert
Nvidia maybe.

40:56
Blair Drenner
Yeah, someone, yeah. But my point is, you know, as you grow in mass, that slows down. And of course, you know, perception, unless you have a great opportunity, your multiple will go down if you’re lowering growth. So at what point would you sell a portion or all of the company? Because you’re now at a. If you think you’ve reached the maximum growth, if you’re doubling every year and you’re hitting this thing where you’re like, I can’t keep doing this it’s going to start slowing to 60% a year. 50, which is great. I mean there are worse problems in the world. Right.

41:30
Blair Drenner
But if you see that as slowing, there’s a point where you might be like, yeah, but I actually have something else that I could keep growing at that amount and why don’t I sell a portion or part of that to keep that going? Right, because if you slow down enough, you’ll get a seven times multiple instead of a 10 or a six or a five, you know, like an appliance business. So I think there’s a lot of decisions around that and just realization that when it’s good and if you have to be really honest, unless you just love the company and it’s just your lifestyle business, there’s a point where you need to decide financially that this growth is at its max. And I have a great opportunity to sell right now.

42:10
Brad Weimert
Yeah, I like that. I think that’s another layer of complexity which I think is an important one to hit on, which is the exit value of the company, I’ll call it, versus the existing operating value. And what I mean by that is what are you actually taking off the table every year versus what is it worth? And doing the math on that stuff, I think it’s really common for bootstrapped entrepreneurs to not think about the exit value of the company because they’re not living in a world where exit is the goal necessarily. They’re in it for cash flow or for the operation. And if you are a funded company, the premise of taking on money to fund the company is exit truly. So the frame of a funded entrepreneur and a bootstrap entrepreneur, just different.

43:01
Brad Weimert
But I think that’s a really good point because it’s something that I don’t think about enough. And I have thought about more as time has gone on and it’s certainly a front and center right now. And I don’t have a immediate desire and I think here’s part of the problem for a lot of bootstrapped entrepreneurs is that is my problem, which is I don’t have an immediate desire to sell. But to not build, to sell is super foolish. And if you’re not building in a way, if you’re not building through that lens, I think you’re missing a huge opportunity.

43:32
Blair Drenner
Yeah, I think that’s a great point. Well, I mean again, if you talk about most non high growth companies and you have this generalization of like maybe it’s worth five times ebitda, right? So if five times ebitda. If assuming you’re not the operator and you’re paying yourself as part of that or some weird, you know, if you literally have all expenses covered and you just own it and it’s just mailbox money and you really don’t have to devote hardly any time in it, that’s a 20% return. Right. So there’s not a lot of guarantee. As long as, and you know the business.

44:04
Blair Drenner
And you know, as long as you don’t think there’s some crazy inflection point in the market that’s going to cause that business to fail and maybe you have a little bit of upside, you’re not trying to grow it, you don’t think it’s going to fail. There’s not a whole lot of reasons why you would risk selling that off to go do something with the potential for hire. But there’s a risk, higher risk. Right. To me, a 20% return would be great.

44:29
Brad Weimert
Okay, look, I agree with you, but this goes back to the conversation around starting versus buying, et cetera. So I think that you mentioned after working in corporate and getting to look at all these major companies, moving into appliances didn’t scare you at all. What you actually said was, I wasn’t afraid. And that language is beautiful because it is fear for most people that drives a shitload of decisions. The fear to invest more, the fear to move to the next thing, the fear to quit corporate and move to entrepreneurship, the fear to move to the next stage of your company, all of those things are driven often by fear moving into a totally different space. Selling your company for most entrepreneurs, specifically bootstrapped entrepreneurs, is a terrifying proposition.

45:23
Blair Drenner
Absolutely. I mean, yeah. Even though. Thank you for the compliment. Even though I wasn’t afraid, it was still a different endeavor. And looking back, it was more risky than I thought because there was some things I underestimated. Right. Which was kind of my point. I mean, a 20% return on an industry that you’ve gotten to know and you’re invested in, you know, how it works, is great. But the other equation that I didn’t talk about that does change things is leverage. Because if you own a company outright and let’s say you own a company making 1 million a year, you could, you can sell it for 5 million a year because it’s not high growth, you can sell it for 5 million. Well, you can turn around and take that $5 million and let me clarify.

46:08
Brad Weimert
That real quick and say that when you say making 1 million a year for anybody, that’s not Tracking net, making a million a year. EBITDA. Yes.

46:17
Blair Drenner
Netting.

46:17
Brad Weimert
Great.

46:18
Blair Drenner
Yeah. Let’s say you’re netting 1 million a year and let’s say you can sell for five times EBITDA, so you can sell for $5 million. So what if you were to leverage that and go buy a company that is making 5 million a year. So if you want to make 5 million a year, if you want to make five times that, in theory you find a similar company but much larger. And if you’re making $5 million a year, it costs $25 million at a five times EBITDA. Right now you don’t have 5 million. I mean then all of a sudden it’s 25 million and you put 20% down, which is your 5. So you sell your company, take your 5, put 20% down, leverage the other 80%.

47:02
Blair Drenner
Now you’re not making any money because you’re paying the bank back over the course of the loan. But then once you do now you’re making 5 million a year instead of one. So I mean leverage does equate to, you know, some of this risk and whatever, but it’s a new business. But you also have to analyze if there’s upside to that business. If you see it’s a family owned business and it’s not very well and you think you can optimize it, which would pay it off quicker. I mean again, these decisions are kind of interesting, right?

47:31
Brad Weimert
They are interesting. And I think the other is the non compete consideration. Right. So I, I, I mentioned before that I was talking to this CFO today who is, has been in payments his whole life, but he had a non compete with his last exit. And so the non compete was, hey, I’m going to leave. And if, and basically if you want to keep your stock options, you can’t work in the space for three years. Three years is a long time.

47:55
Blair Drenner
It’s a long time.

47:56
Brad Weimert
Right. And that’s real when you look at it. But if you don’t have a non compete, when you sell something, you can sell and then go buy something else in the space and keep going with your area of expertise.

48:09
Blair Drenner
Yeah, great point.

48:11
Brad Weimert
I’m still afraid of that.

48:14
Blair Drenner
You could do it and you could, you know. Yeah, but that leverage, you could, especially if you know what you’re doing, you could probably grow exponentially faster.

48:24
Brad Weimert
Well, I’m going to take this opportunity to go for, oh, flavor over proof and we’re going to experience the iron root Promethean which is only 100 proof?

48:37
Blair Drenner
No.

48:37
Brad Weimert
Okay, we’re dialing it back from 109. Are you ready for a different flavor?

48:41
Blair Drenner
I trust you emphatically. It’s a lie. It was just for the show.

48:46
Brad Weimert
Just kidding. I love it. I love it.

48:48
Blair Drenner
Yeah. Thank you.

48:49
Brad Weimert
So the Promethean, actually, I was talking to. There is a. Do you know what the Wizard Academy is?

48:55
Blair Drenner
I don’t.

48:56
Brad Weimert
It sounds mystical and ridiculous, and it is, kind of. But the Wizard Academy was started by this guy, Roy Williams, and Roy is dubbed the wizard of Ads. Roy has done some of the most iconic advertisements in American history for. I’m not going to cite them, because I’m going to fuck it up. But major Fortune 50 brands that we all know from the 80s, 90s, 2000s. Roy functionally retired and started a nonprofit on the highest topographical point in Austin, which is far out. It’s on the edge of Austin by dripping. But this nonprofit is super bizarre. It has all sorts of crazy features, but one of them is that it has a spire in the middle of the property, which, for those that aren’t as dorky as me, it’s like the tower in a castle, right?

49:53
Brad Weimert
So it’s just this cylindrical tower, and it has all sorts of crazy shit going on. There’s an Excalibur sunk in the top. And if you stand at a certain point on the property, there are brass shoes, and you stand there, and it serves as a sundial from Excalibur. I mean, there’s all sorts of crazy shit, but it’s a marketing academy. Inside of the marketing academy, nonprofit. Inside of the marketing academy, there is a bookshelf. Behind the bookshelf, there is the second largest whiskey collection in Texas. And there is a whiskey sommelier there that teaches whiskey classes. He told me that Promethean was his favorite bourbon that he had ever had. And he’s actually a Scotch person. He’s trying to convert me, but I hate Scotch.

50:38
Brad Weimert
And he actually has taught me that not all Scotch is peaty, and so I should respect the other Scotch. But he told me that Promethean was basically impossible to get. And so I hunted it down and found the ironroot Promethean, which has won all sorts of awards. And that’s what we’re sipping on.

50:55
Blair Drenner
That’s amazing. So you just keep it behind there and wait for someone to say something somewhat worthy to give me a little sip. Like, I’m not sure if I. I probably don’t deserve that. I probably deserve, like, just give me your, you know, barrel stuff.

51:09
Brad Weimert
No, you don’t. Man, you deserve all sorts of stuff. Absolutely. Cheers.

51:12
Blair Drenner
Cheers. Thank you. Hey, that’s a great story. It makes it much more worthy when you have a good story, doesn’t it?

51:18
Brad Weimert
Yeah, it’s amazing how the story matters. Okay, so let me just go back to like some of the basics of. Because I want to know about creating a software company, how you did that, and I want to kind of wrap with some of the real estate stuff because you also have built these like fucking ridiculous, mega, I’m going to call them mansions, and that word is really bizarre. But 10,000 square foot plus places that you built yourself. And I don’t mean like you swung the hammer, but you were the general contractor and you actually facilitated the entire build, which is unique. Anyway, but before we get to the build part, tell me about the software company.

51:58
Brad Weimert
So you leave corporate, you had a million dollar seed basically that you got from flipping real estate, buying something that was a little out of your reach, living in it for two years, selling it in order to get your capital gains reduced so that you had a million dollars out of it. Meaning. And so the rule for anybody that doesn’t know is that if you live in a primary, so your primary residence, once you’ve lived in it two years, what’s the tax benefit?

52:25
Blair Drenner
It’s $500,000 of the capital gains. So your cost basis, whatever you purchase the house for, whether you purchased it or built it, same thing, whatever your cost was, and then what you sold it for, minus expenses, that difference you get, let’s say that’s $800,000, $500,000 of that you don’t pay taxes on at all.

52:48
Brad Weimert
And then the next 300, you pay long term capital gains, which currently is 22%.

52:53
Blair Drenner
Correct.

52:53
Brad Weimert
And will change, but Trump’s in, so probably won’t change that much.

52:57
Blair Drenner
We hope.

52:58
Brad Weimert
Yes, we hope.

52:59
Blair Drenner
We don’t know.

52:59
Brad Weimert
Right?

53:00
Blair Drenner
We don’t know. But yeah, but yeah, it’s a huge advantage. And actually the reason I even mentioned that and those specific numbers was that I started equating even though I, you know, back in the day, that was a long time ago. I had a decent salary, my wife had a decent salary, but by the time you pay taxes and pay all your expenses with a family at home and all that, to save a million dollars would have taken a long, really long time.

53:27
Brad Weimert
Yeah.

53:27
Blair Drenner
Which is more compelling to, you know, to think about, hey, investing and owning your own thing and doing this kind of stuff is, might be a good idea. So that’s why I mentioned it. I Actually didn’t take most of that. And that just gave me some, you know, some grounding or some stability. I didn’t take all that and just throw it into a software company. So just to clarify. Yeah, yeah. And nor would I advise anyone to do that.

53:57
Brad Weimert
Yeah, well, we’re in a. I mean, we’re in a weird ecosystem now because. So you’re recently 50, I’m 44. We are the generation that grew up without the Internet and experienced the rise of the Internet, and both participated in the rise of the Internet. But the generations that are growing up now have. Because information has been democratized, as have many industries, the ability to go from zero to a lot quickly has totally changed. We have clients now at Easy Pay Direct that go from 0 to 10 million routinely. We see these kids do this quickly. So I think the capacity to do that is different now than it was.

54:47
Blair Drenner
Are there any patterns of industry or patterns of what they’re doing?

54:53
Brad Weimert
I’ll tell you the biggest pattern. The biggest pattern has been figuring something out, spending too much on advertising, having no margin, getting to 10 million, and then exploding and not knowing how to do it again. That’s been the big pattern. But I think now we’re seeing a different pattern in. I think as media has gotten democratized and you look at the ability to drive through social and build audiences through social, you have a lot of people that don’t know what to do with it, but have been able to build. And I think we’re slowly starting to see people figure out how to monetize. And I think the parallel, the historical parallel are athletes, rappers, movie stars, corporate money got behind. And what I mean by that really is that a smart money person got behind and monetized for them.

55:41
Brad Weimert
So that’s, you know, George Clooney with tequila, that’s Eminem with clothing, that’s Jay Z with actually Jay Z’s part. Jay Z’s unique because Jay Z’s partners from the beginning saw Jay Z as a brand. So they actually built Jay Z as a brand from the beginning. So that’s a little different. But I think today those lessons are being pulled to the social kids and they’re saying, hey, Jake and Logan Paul, you have a massive audience. How do you become a boxer, launch a beverage company and monetize immediately? So I think now it’s converting and we’re seeing that a little, but that’s a whole rabbit hole and I don’t totally understand it.

56:20
Blair Drenner
No, it’s great. I will actually parlay on this because it’s something took me a really long time to learn. I’m sometimes dense, but I mean, yeah, if you know someone at that caliber, leveraging the name can explode your marketing and not a lot of people can do that. Or I, you know, not the masses. Right. But I will say one thing. You know, when I grew up in the software world, in the infancy of computers or whatever, the traditional way of growing a company, you did it all, you created a great idea. Well, first of all, I way overestimated, you know, the idea versus the people and the execution of the idea and the operational aspects of the idea. But and also that a company isn’t built on an idea. It’s actually a company has multiple products and can make many things successful.

57:05
Blair Drenner
But anyway, all that to say traditionally you built everything. And I think much newer approach and much better approach is do what you’re good at, but find other things. For instance, you have a great product. Find partners that already have distribution and sales channels. Don’t go do everything. That’s the biggest, one of the larger advices I can give to younger people that are starting out. Do not try to do every single functional thing of your company from scratch. Find ways to partner with people that, and find an incentive model where they can, a large group of people can sell things. It’s just like Yeti, right? Yeti got started and they sold through boat manufacturers that their 500 or $1,000 cooler wasn’t a big deal. And they made partnerships and they had this huge distribution thing.

57:58
Blair Drenner
They didn’t have to figure out and hire salespeople and understand how to scale all over the nation.

58:02
Brad Weimert
Oh God, yeah, highlight that. So first of all, I think what I heard, I think what you just said was answer to the question, what’s a reasonable way to go from a million to 10 million or 50 million without doing it all yourself? Also, the Yeti Cooler example is so beautiful because if you just from a marketing perspective look at it and think, okay, I’m going to sell a thousand dollar cooler. Who the fuck, by the way, when.

58:36
Blair Drenner
YETI did it, no one did it.

58:38
Brad Weimert
No one did it.

58:39
Blair Drenner
No one did it.

58:39
Brad Weimert
There was no thousand dollar. The coolers were 150 bucks. So how do you sell a thousand dollar cooler? And that example is so good because the answer is partner with somebody where 1000 bucks doesn’t matter relative to the price point. So when somebody’s buying a boat, that’s 50 grand, 150 grand, 500 grand. A thousand dollar cooler is nothing Exactly.

59:00
Blair Drenner
Yep.

59:00
Brad Weimert
And that’s a. That’s beautiful. I love that.

59:03
Blair Drenner
Yeah. And I mean, part of my, you know, when I used to do diligent due diligence, I never did due diligence. I. When I did due diligence. When I do due diligence. Anyway. Yeah. Whenever I did due diligence on companies, that was never part of my litmus test, but now it is. Now it’s, hey, are there other means of people that would care about this and sell it? I’m working on a. On a enterprise solution software deal, and there are a lot of ERP systems that they can just sell this as a module, and I can scale that up very quickly. That means a lot to me.

59:41
Brad Weimert
So before you get into something, now you look at what the distribution channels are and if there are strategic alliances that you could have, that would quickly move it.

59:49
Blair Drenner
Absolutely. And I’ve seen lots of people that build things specifically with larger companies that have those channels in mind, and then they most likely end up selling through them and then to them happens over and over again.

01:00:02
Brad Weimert
Oh, God.

01:00:03
Blair Drenner
And it’s so much easier than the approach I took for a long time.

01:00:06
Brad Weimert
Oh, God.

01:00:07
Blair Drenner
Yeah.

01:00:07
Brad Weimert
Oh, God. I’m just beating my. Beating myself in the head right now. People that are starting in entrepreneurship and even people that are well into it are still conditioned for the dopamine hit related to checking a box. And sometimes that means how many sales you make in a day. If you can defer that or you can change your association with what success means or what makes you feel good, you can create better leverage for sure. And if the win is not the sale, but is the partnership, for example, in this example, maybe there’s better leverage.

01:00:45
Blair Drenner
I don’t know. I also think there’s a feeling sometimes of if it’s not extremely smart and innovative, that it won’t work. Sometimes simple things that are easy work way better. It doesn’t need to be. You don’t need to create the next rocket ship. Right. Anyway, it doesn’t need to be super complicated.

01:01:09
Brad Weimert
Yeah, I love that. Okay. Well, I have a strong desire to walk across the street to the new place, Loudmouth. Have you been to Loudmouth yet?

01:01:17
Blair Drenner
I have not. I would love. I mean, it sounds intriguing, so it’s.

01:01:20
Brad Weimert
Super intriguing for a lot of reasons. So Austinite’s paper boy is a super trendy pop in brunch spot in Austin. Slammed. Can’t get a reso line out the door every time you go there. The guys that own it launched this place, Loudmouth which is a really good craft pizza spot. I don’t even like pizza, really. I just want to see my abs. So I don’t eat pizza very often. I know you don’t have that problem.

01:01:48
Blair Drenner
I don’t want to see your abs, and I don’t have that problem.

01:01:53
Brad Weimert
But interestingly, tech entrepreneur sold his company, got into real estate. His buddy from high school was a restaurateur that had a food truck called Paper Boy. He invested in them to launch Paperboy, Brick and Mortar, and also bought the real estate under it and next to it. And now they’re launching Loudmouth together, also on the real estate. So, yeah. So there’s a super interesting real estate play. Before we do that, let’s wrap with the real estate proposition here. So you use. And we didn’t get to get into the software, but that’s okay because the real estate is what? Well, actually, I mentioned all of it. God damn it. But the real estate side of it. So you house, number one, you live in for two years. It’s your primary. So you clear a million bucks out of it.

01:02:38
Brad Weimert
It allows you to get out of corporate and do your own thing. You launch a software company or you buy into one. I don’t want to go down that rabbit hole.

01:02:45
Blair Drenner
I had equity and, yeah, I was part of the executive core, executive staff and part of that. And then I took some of that and kept on investing in real estate.

01:02:54
Brad Weimert
Yeah. Tell me about the real estate path. And here’s what I want to know is, was it about your primary properties? Was it about investment properties? And what I mean by that is secondary or tertiary properties? Was there an investment strategy outside of doubling, tripling the size of your primary and moving? How did you think about the real estate growth and leveraging money? Because you came from making money from your primary.

01:03:17
Blair Drenner
So real estate were twofold. One, being in software, especially when, again, historically, traditionally, a long time ago, sometimes you worked on software for years and it didn’t come to fruition. It didn’t help people. It wasn’t very. I don’t know, I guess software is creative in its own way, but it’s not. It’s a different kind of creative. Building houses and building very large, custom stuff with waterfalls and things. And it was a different challenge for me. And I just like the creative aspect, and I also like the practical aspect.

01:03:50
Brad Weimert
Flaunt your waterfall on your entryway.

01:03:51
Blair Drenner
Yeah. No, but I also, I like the fact that. That, you know, software. I sold software into companies. I mean, it was great. It was very rewarding. But selling, making a house where people invite their friends over and have special bourbon to the few elite people that get the story behind it, that was. That’s just a different kind of reward for me. So I really did it because I enjoyed it. And I also saw Austin as a huge growth market. For years and years. I, you know, I kept on thinking that was going to grow.

01:04:20
Blair Drenner
So, you know, I would keep on doing it for my own houses, but also friends would ask me to do it because what you could build a house for, if you truly looked at the markup of subs and GCs and materials and the way it all works, you could build it so much less than just going and getting a GC at the time. Probably now, too, but anyway, so, I mean, I just enjoyed it. And I really did enjoy something physical. I. I love going around Austin and looking at something I built a long time ago and thinking, oh, wow, I created that thing. It’s a very different reward than software.

01:04:58
Brad Weimert
You know that you and I are both on the same page with that. Yeah, yeah.

01:05:01
Blair Drenner
You’re super creative. I’ve seen your innovation. It’s amazing in the real estate world. It’s great.

01:05:06
Brad Weimert
My desire to build physical things is intense and I can’t let it go. I love it. Even the silliness of the studio, like.

01:05:16
Blair Drenner
I just, I think it’s great.

01:05:17
Brad Weimert
I. I just have so much fun with it.

01:05:19
Blair Drenner
I, I honestly, you know, I. I have some friends I’m looking at you doing some stuff with, and drone spaces and other stuff, and I actually, I mean, I haven’t done a lot of that and I, I really want to. I mean, the taking things up in the air and people up in the air and cargo up in the air, things like that are really intriguing to me. And again, very not something I did at all in software. So that was intriguing.

01:05:42
Blair Drenner
And financially it made a lot of sense to me because if you can take a canvas that is a lot a piece of property, especially if no one can see the value of it and it’s slightly unique or has a view and you can’t really tell, and you create something beautiful where someone can look onto something pretty and you create an environment with glass that exposes that or an environment that’s comfortable and some other people see the value and they pay for it. It. That’s a. That’s a great thing. And in several dimensions. Right. So that’s why I did that.

01:06:13
Brad Weimert
And it creates economic value for you.

01:06:16
Blair Drenner
Exactly.

01:06:16
Brad Weimert
Yeah.

01:06:17
Blair Drenner
Yeah.

01:06:17
Brad Weimert
Is Austin still a growth market in 2024.

01:06:21
Blair Drenner
Going back to our thing about predicting markets. I have to defer on that one. I. I don’t know. Thank you, Brad, for. For trying to corner me. And I have no idea. I think we’ve been stagnant for a little bit. I do think.

01:06:37
Brad Weimert
Yeah, because were at that. Because, I mean, we had a little Covid bubble thing going on there.

01:06:41
Blair Drenner
Well, we had Covid, which went crazy. And of course, all things that go up must come down. I think we’ve been a little bit more resilient. My appliance deal is actually doing really well compared to most companies nationwide. So that’s great. I think it will sustain or kind of maybe rise a little bit. I don’t think we’re going to have some massive explosion and probably not some huge downfall unless some catastrophic thing happens with what’s going on elsewhere or what might happen locally. We never know. Right.

01:07:13
Brad Weimert
How do you think the election of Trump will impact real estate in 2025?

01:07:18
Blair Drenner
I think no matter what your political affiliation is, I’m not making a statement on that, but I think the perception of Trump being in office, people are more favorable economically. So I think it’s going to better than if. If Harris would have been in office. So, yeah, I think that’s good. And I do think. I still think they’re. And I’ve thought this for a long, long time. And eventually it is stabilizing and it will continue to stabilize. But I do think Austin has a lot to offer. I’ve traveled a lot. I’ve talked to a lot of people that complain about unions and real estate and all kinds of things and other areas and taxation. I still think Austin has a lot to offer. And as long as that’s true, there will still be some growth.

01:08:02
Blair Drenner
Don’t know the rate, but it still will be attractive.

01:08:05
Brad Weimert
Yeah, I tend to agree. Do you think Elon is going to fire 80% of our Congress? No. Do you think Elon’s going to fire 80% of the rest of the government? Not Congress?

01:08:16
Blair Drenner
I sure hope, no offense, if you work for the government, we definitely need to trim the fat. Because if you ran your business like the federal government runs their business, quote, business, you would absolutely be cost cutting right now. So I think it’s needed. I think, you know, it’s unfortunate that there are going to be some hardships with that in order to make ends meet. People will. There’s going to be some suffering or whatever, but it has to be done. I mean, to be healthy. The politicians can’t continually gratify the public just because they want to be reelected. We have to say no. We have to get our stuff in check. And I think this is the right thing to do. Honestly, I don’t know the details. I think it’s. I actually think it’s a good move.

01:09:00
Blair Drenner
And there might be enough people crazy enough to work 80 hours a week for free, and I think it’s. I think it’s what’s needed.

01:09:08
Brad Weimert
Okay, Blair, I’m looking forward to Loudmouth. I really appreciate you carving out time.

01:09:13
Blair Drenner
Yeah, it was fun hanging out.

01:09:14
Brad Weimert
It is fun hanging out. We. We intended to have this conversation. I intended to have this conversation on this 160 foot yacht in Croatia, but were in no state to do that at any point in time.

01:09:26
Blair Drenner
Probably not now either.

01:09:27
Brad Weimert
No, that’s probably fair.

01:09:28
Blair Drenner
Yeah. But anyway, appreciate the time. Hopefully it helped.

01:09:31
Brad Weimert
That’s awesome, man. That’s awesome. Well, big ups to makers Cast Strength and Promethean ironroot. All right, Blair. Love spending time with you, man.

01:09:40
Blair Drenner
You too, brother.

01:09:41
Brad Weimert
Until next time. Okay, that’s a wrap for today’s episode. Please subscribe and most importantly, leave us a review. It takes, like, 30 seconds, and it makes such a big impact. It helps other people find us. Also, you might not know this. You can watch over 100 episodes of Beyond a Million with guests like Grant Cardone, Wes Watson, and Neil Patel at beyondamillion. Com.