Michael Girdley has become a well-known advisor, commentator, investor, and authority on all things San Antonio business related. He has a huge Twitter following and has a lot to say about our city and what we need to keep progressing.
Justin Hill: Hello and bienvenidos, San Antonio. Welcome to The Alamo Hour, discussing the people, places and passion that make our city. My name is Justin Hill, a local attorney, a proud San Antonian, and keeper of chickens and bees. On The Alamo Hour, you’ll get to hear from the people that make San Antonio great and unique in the best-kept secret in Texas. We’re glad that you’re here.
Michael Girdley: How long do we go?
Justin: One hour. Welcome to The Alamo Hour. Today’s guest is Michael Girdley. He’s kind of all things. I’m going to hit some of the points from his website. His bio, he’s currently Chairman and Co-founder of Dura Software. He’s a partner at Geekdom Fund. He’s been involved in co-founding and leading multiple different ventures in San Antonio and around Texas.
He was Man of the Year with San Antonio Business Journal and Geek of the Year with Geekdom, right, in 2016. He’s passionate about San Antonio’s future. If you follow him on Twitter, you know how much San Antonio and the future of our city matters to him. He’s a perfect kind of guest to have on here, so thanks for being here.
Michael: Yes, excited. Thanks for having me.
Justin: You’ve listened to a few of my really compelling episodes, so I appreciate it.
Michael: Yes, four actually. [unintelligible 00:01:10]
Justin: That’s more than most people. I start a lot with just some general questions about San Antonio I wanted to ask you about.
Justin: All right. Do you have any pets?
Michael: We have two cats.
Justin: Okay. What kind of cats?
Michael: Four-legged ones, simple.
Justin: Like alley cats?
Michael: Ones we got at The Humane Society.
Justin: Okay. Some people are into like Persians or these bald cats.
Michael: Yes, we’re not.
Justin: None of that?
Michael: We’re not fancy.
Justin: All right. Favorite hidden gems in San Antonio?
Michael: Oh man. I definitely like just the normal taquerias that are like all over the place.
Justin: Do you have a favorite?
Michael: Man, I don’t want to hurt anybody’s feelings. They’re all my favorites.
Justin: I had a judge on here who wouldn’t give me a single restaurant she liked because she didn’t want to endorse them.
Michael: I love that we have Tex-Mex. To be totally frank with you, I don’t enjoy eating it that much. When my wife and I have options to go out or we go out for dinners like we’re ended up at Bliss or Cured or those types of places. We lived in California for a while and we still brought that taste back with us. We want to eat that kind of food and have that kind of dining experience.
Justin: Bliss and Cured do it for you.
Michael: They’re definitely fancy. We love going to the Pearl Food Hall as well. I will be unabashedly snobby about where I like to go.
Justin: I like the Food Hall now that you can just sit at your table and order on the QR code and it comes out. I appreciate that, especially during the pandemic. Do you have any odd hobbies other than your Twitter?
Michael: Twitter is definitely one. I’ve really gotten to pasture into plane tracking. Yes, it’s a really interesting hobby.
Justin: What’s the goal of this?
Michael: What do you mean what’s the goal?
Justin: I mean other than just see where planes are going.
Michael: How could it not be obvious that plane– we live in the flight path underneath San Antonio International. The runways are aligned in a way to orient towards the natural flow of air, which is either coming off the Gulf or going towards the Gulf. We get lots of planes taking off and landing all the time. Every plane that flies, whether it’s general aviation, so like private planes or the commercial ones, they emit a repeater signal with their ID and location, speed and all that kind of stuff.
Michael: That’s not encrypted, you can actually see that however you want. Probably last year, I got really big into it, but a couple years ago I set up an antenna over our house. I could see planes going from Mexico City to Frankfurt in the middle of the night and that sort of thing. We have a whole setup that [crosstalk]
Justin: Just curiosity.
Michael: It’s just fun.
Justin: Do you look up the tale numbers and see like, is this a business plane or a personal plane?
Michael: Yes. It’s cool. Yes, and it’s fun you can actually see like– you’ll look up certain names or certain private planes fly over and you can go look, okay, what address is this registered to? Then you can figure out who that fancy San Antonian was that flew over my house. I’ve never been on a private plane. I’d like to do it someday, but I can see the fancy people go over.
The other fun thing is when you can see some of the corporations in town will hold their national conventions here. You’re like, “Why are there 40 private jets in San Antonio International.” You can figure what they’re all here for. There’s actually even more fun stuff when like the Final Four is here and you see all the private jets like taken off one after another right after the game ends. It’s pretty nerdy.
The other weird ones that are super cool is there will be ones that fly over my house that are not registering. They’re not sending a signal. They don’t show up-
Justin: Is that military?
Michael: -because they’re military. A lot of times, you can tell when some really big wig is going over because two fighter jets will take off first, then you’ll see a plane go, and then two fighter jets will go.
Justin: Okay, this sounds more fun than originally.
Michael: Yes, it’s cool. It’s super cool.
Justin: My first boss had a private plane and the first time I rode on that, I just remember that, as we were taking off, he played Flight of the Valkyries as loud as it would play and that just– memories seared into my head. That plane was nothing but a flying cooler, is what it really was. It was just tons of Miller Lite, not the pilot. He wasn’t flying himself. I’m going to tell you some other stories about those experience.
Michael: You have enough money for a plane and all you get is Miller Lite?
Justin: He was a Diet Coke Miller Lite guy.
Michael: Well, okay.
Justin: He knew what he liked.
Michael: Whatever makes you happy.
Justin: Yes. We’ll talk about it in a second, but you have a history as a CEO of Alamo Fireworks.
Justin: I too, as a very young 7-year-old, 8-year-old to 12-year-old boy worked at a firework stand. Did you have a favorite firework?
Michael: Yes, whichever one was the easiest to sell. Actually, my favorite as a business person is there’s these assortments that are already assembled.
Michael: Somebody walks up, they give you their money. You say, “Here’s your assortment.” They walk away happy, you walk away with their money. You move on to the next customer. I grew up running those firework stands. That’s how I learned a lot about business, a lot about people.
Michael: Running a firework stand, you do it as a partnership with the company. The people that run those aren’t actually our employees, they’re independent contractors. They get paid on commission. They have an investment in running those things.
Justin: That’s for like Alamo Fireworks, right?
Michael: For Alamo. Yes. For our company. It’s a great way, when I was 18, 19 years old, to learn the fundamentals. You have to learn how to staff your thing. You have to learn how to merchandise it. You have to deal with personality issues on customers and employees.
Justin: You have to stay there overnight, right?
Michael: You have to sleep there. You have to develop resources. You have to develop grit to do that because nobody sets up the firework seasons during the nice time of the year. You’re either-
Justin: Hot as hell.
Michael: -freezing your butt off around New Year’s or cooking in a camper at around the 4th of July [crosstalk]
Justin: You didn’t get one of the big air-conditioned steel buildings?
Michael: We did not– they were not legal at the time when I was running stands.
Justin: They couldn’t be permanent, right?
Michael: Yes. Those came around only in the late ’90s, early 2000s. By then, I had already moved on.
Justin: Was this still 10 days the whole time you were there? 10 days before both holidays?
Michael: Yes, yes. 10-12 days.
Justin: The one I worked at was independently owned and he had to order himself. We had to write down what to order. I just remember it was like a 10 times markup or something on all the stuff.
Michael: Yes, it’s not quite that good. People talk about, “Well, these fireworks are so expensive,” or whatever. First of all, in the past couple years, all the Chinese and supply chain problems have hit the fireworks industry huge.
Justin: Okay. Last time I went, it seemed barren, and I didn’t know if that was just a crappy firework stand or what.
Michael: It may depend on who you went to or which companies you went to or when you went, because they’re designed to run out of fireworks on the big days because we don’t get to sell anything again for six months after. Also, a lot of the competitors had supply chain problems over the past few years. We did a pretty good job of navigating that, but some people didn’t.
Justin: Right. You’re out of it entirely now?
Michael: I don’t work in the business, but I work on it a lot. We have a great team running the business. My brother and I are very much involved in it.
Justin: I couldn’t tell, it was a family thing?
Michael: Yes. It’s started by my great-grandfather.
Michael: Incorporated formally in 1962. My dad worked in it for 35 years or so.
Michael: We’ve been in San Antonio area forever since [crosstalk]–
Justin: Just Bexar County?
Michael: No, we’re all over the state, so a couple hundred locations. We just passed our 32nd, 33rd indoor store. We have a location in Nevada, one in New Mexico, and then we go as far west as El Paso, as far north as Amarillo, and then down in the valley [unintelligible 00:08:31].
Justin: What do you do with the big buildings in the off times? The other 345 days a year.
Michael: They mostly sit dormant.
Justin: Is that right? They’re not used for storage or something.
Michael: Yes. Yes. They just mostly sit dormant. You might leave leftover merchandise there for the next time. The way those locations are set up, where they are, there’s really no other businesses that make sense to be in there. We did Halloween for a while. Amazon destroyed that business.
Justin: Hell, yes.
Michael: I don’t know if you’ve tracked that, but 15 years ago, there were tons of pop-up Halloween stores. Except for Spirit, they’ve pretty much all gone by the wayside.
Justin: Now, JV with Spirit. I mean because y’all are not really in the city though with those locations?
Michael: Correct. Though that’s changing, this city keeps growing. We had Spirit at one of our locations this past year, and I think it went well.
Justin: If city annex is where one of those permanent buildings is, are y’all no longer allowed to sell fireworks there?
Michael: It used to be different, but there’s a law now where, if you’re annexed, if you have a building there, you get 20 more years before [unintelligible 00:09:33].
Justin: Oh, nice. Okay. All right. Well, that helps.
Michael: Yes. There’s been a good migration of pro-fireworks legislation the past decade or so. Thank you.
Justin: [chuckles] What’s the state with the least rules on fireworks? It used to be like Oklahoma, you could go get cherry bombs and stuff.
Michael: Yes. Nationally, there’s been just a recognition across everywhere that you’re better off just regulating fireworks than [unintelligible 00:09:53] them. Almost every state has gotten more permissive except for New York, Massachusetts and California. Florida, Alabama, Florida used to be closed, that opened up. Michigan. All these different states have become more permissive over time. Wyoming, New Mexico, it’s getting friendlier nationally for the fireworks business.
Justin: You said you moved to San Antonio from California. When did you move here?
Michael: I grew up here, left for college when I was 18. I was like, “I’m never coming back to this place.” That worked. [laughs] See how that turned out. Then moved out to California because I wanted to be in the tech business, and so got out there in ’97 when I graduated from college and stayed out there until 2004 and moved back here with my wife.
Justin: All right. Moved back, did Alamo?
Michael: Yes. That was the draw to bring us back to San Antonio, and I was CEO there for going on eight years.
Justin: Then we’re going to talk a little bit about– your Twitter’s very business advice. Do you have favorite business books that you recommend people to read?
Michael: Yes, I got a whole ton of them.
Justin: Yes, about top three.
Michael: Usually, when people ask that question, I ask what they’re trying to solve for because people will typically have a specific thing that they’re [crosstalk]
Justin: What about a small business law firm owner like myself?
Michael: What is your biggest problem right now?
Justin: Ooh, I think things are pretty good. I don’t really want to grow. I’m pretty happy with the size and all that.
Michael: Are you making as much money as you’d like?
Michael: Then maybe you don’t need to read any books. You need a plane with a Bud Light in it.
Justin: Oh, it was Miller Lite.
Michael: Oh, I thought it was a classy plane.
Justin: It wasn’t Miller High Life though because that would be real good.
Michael: Oh, yes.
Justin: Generally, what are some of the go-to books you think-
Michael: Yes, for sure.
Justin: -really do a good job for small businesses?
Michael: For small businesses, for sure, a huge fan of a book called Traction. It’s about the entrepreneurial operating system. It’s business paint by numbers for running your business. Number two is, there’s an interview methodology I really like called Top Grading. It’s what I use for all team building on that sort of things. There’s a third one and I’m totally blanking on it, but it is basically a recipe for how to be a first-time manager. I’ll tweet whatever it is when I can remember, but I could see the cover but I can’t [crosstalk]
Justin: Have you read The E Myth?
Michael: Yes, E Myth is good.
Justin: I’m reading it right now. It’s really good. It makes a lot of sense to me.
Michael: It’s nice, it’s how do you create systems and get out of your own way in terms of making your business repeatable.
Justin: Yes. Just because you’re good at being a lawyer, don’t think you’re good at running a law firm.
Michael: Where a lot of books and almost all those books fall apart is it’s very easy for them to be theoretical. You look at most of those books and they’ll give you theory and principles. Then when it’s like, okay, what do I do with this in terms of my– what do I do today? What do I do this month or this quarter? I’ve gravitated totally towards loving these books that just give you recipes, so you can follow those systems out of the book.
EOS for example has exactly that kind of stuff. How do you document your core processes? How do you systematize them? How do you make them? Instead of you having to figure out, “Okay, I know this principle and how do I put this into practice,” it’s like, “Oh, here’s this worksheet I just fill out.” You can go back to figuring out how to be an amazing lawyer as opposed to figuring out how to be an amazing creator of some business system that some expert already created, so just use that.
Justin: I think professional services are so different as opposed to somebody that’s making and selling a product too.
Michael: I’m a big believer all business tastes like chicken.
Justin: Okay. Well, you talk about processes and I’m like, “I don’t even know what our processes are here.”
Michael: There are the stuff you got to get right to really be a successful business. It’s pretty much the same stuff. I think you look at my career and what I do now, people are like, “You’re involved in all this different stuff. You’re involved in a hospitality venture. You’re involved in an educational venture. You’re involved in importing and retailing venture. How do you deal with all that stuff?”
It’s because the stuff you got to get right, how do you have the right vision, how do you narrow that down to where you want to be three years from now, how do you narrow that down to what we’re going to do right now, document all those processes and the principles behind it, those are universal. They don’t really change.
Michael: Anyway, soapbox. I’ll get off.
Justin: No, I don’t remember who it was, but there was somebody I was talking about. It was a business coach. I don’t know who was it. I think they were on the show. That was a discussion we talked about, just come on the show and break down my business and let’s talk about it. I never did that because I just forgot to do that.
It’s also like I think about it like doctors. Doctors almost never become multi-city, multi-national, and I don’t know if it has to do with licensing or just this E Myth problem of doctors shouldn’t be the one running their business and figuring out to scale it. You asked me what do I want to change? “Eh, that’s fine.” I’m sure if there was a good business mind who came in and said, “Well, you’re out on this and doing that.” It’s just one of those things. I think some people–
Michael: That’s the right thing. A lot of people let their business make themselves servants to their business. You have to remember this business exists to serve you.
Michael: If you’re telling me you’re totally happy with the way your business is and you don’t want it to be any different than it is, I might [unintelligible 00:15:01]
Justin: Well, now I’ve thought about it. The one thing I want to do is be able to have release the reins somewhat.
Michael: Oh, you’d like to be able to delegate more?
Justin: I don’t know if that’s the answer because, if it’s legal service, it’s my legal services, but yes, I think I’d want to have less stress about the job. Which I think a lot of it is all the admin stuff is the stuff that stresses me, which I’m sure I could hire a COO or whatever you call them, operations person, which a lot of my friends have done. It seems very like-
Michael: It seems like a lot of work.
Justin: -big time to me.
Justin: Have a COO.
Michael: I mean check out that EOS book. Maybe you’d like it.
Justin: Entrepreneur what?
Michael: It’s called Traction. There’s two really good books called Traction. One’s blue and one’s black. You want the black one for this purpose?
Justin: What’s EOS stand for?
Michael: Entrepreneurial Operating system.
Justin: Okay. All right.
Michael: Business Paying By Numbers.
Justin: Favorite fiesta event?
Michael: Definitely King William Fair. I was the chair of it for a couple of years.
Justin: Nice. I just re-upped my sponsorship to be the sponsor of the First Aid Tent.
Michael: Oh, nice. Thank you very much.
Justin: I feel like it matches being an injury lawyer, it made sense to me. Under the radar companies in San Antonio that maybe people don’t know about, but are really like making waves and changing and growing here in the city.
Michael: I’m a big fan of what’s going on with people building tech companies here locally. We have a company that I helped incubate called Dura Software. It is the fastest-growing tech company in Texas-
Michael: -for a while. Then they just won the Business Journal award around that.
Justin: Cool. What kind of software?
Michael: If you think about the life cycle of software, they do B2B software, but they find it generally once it’s pretty mature and the owners are ready to get out of it. They acquire that software. They move the headquarters to San Antonio. They’ve done that 9 going on 10 times now. They run those businesses and hold it forever.
Justin: Who’s behind it.
Michael: I started it with a couple of former Rackers, so me, Paula Salsbury and Chris Bernie. Started that back 2018 and we went and bought our first company, and then we raised a little money and bought some more, and then we’ve bought some more after that.
Justin: Would that be considered a conglomerate if it’s a bunch of different?
Michael: Yes. Typically, that’s not a conglomerate, so you have different ways that serial acquirers like that get defined. We’re more of what’s technically called an accumulator. You accumulate these things and it’s all about how much you centralize things based on where you are. At one of the spectrum, you have Berkshire Hathaway, so Warren Buffett’s Company, which has-
Michael: -hundreds of billions of dollars, but really like 20 people at headquarters. That’s a massively decentralized thing. We centralize some stuff because the businesses have common things.
Michael: Then hold codes and stuff like that, we’ll often centralize more stuff. Anyway, we’re an accumulator of this type of software.
Justin: Big Laurie’s group here in town would be more like the Berkshire because they seem to have four employees.
Michael: I don’t know.
Justin: You know him though, right?
Michael: I don’t know him at all.
Justin: You know who I’m talking about?
Michael: I do.
Justin: Oh, okay. Well, he used to run around with some of my buddies, so we always heard the stories, but I’d be like, “How many people work there?” Five or whatever 10,000 in Steak ‘n Shake, but that’s all above my–
Michael: I agree.
Justin: I was looking at your website and you’ve got a very robust website about all the things you work on and your story and all that.
Michael: We’re going to come up with a new version that doesn’t look so janky. Hopefully, [unintelligible 00:18:32] about that.
Justin: Everybody’s got fancy on the internet, then they went back to just plain– it’s fine.
Michael: Maybe, I don’t know. I may be behind the times, but I want it to look good. It doesn’t look [crosstalk]–
Justin: It looks fine.
Michael: It doesn’t look good. I don’t like it.
Justin: Well, if you do too much, then you walk the line of self-aggrandizing though. There’s somewhere. If you’re going to have a flashlight with you with a shirt off and a cape, maybe, whenever you get on there.
Michael: It’s actually a huge challenge. San Antonians, the culture here is like, we don’t self-promote. A lot of the things I have to do, I have to get on the phone with people or in calls or going on social media and be like, “Let me make this thing bigger than it actually is.” My business coach and stuff is like, “Look, you need to start telling people how it is and stop de-mirroring and stuff. Self-promote.” I got to break out in the mold, man.
Justin: You have a big Twitter presence, like what? 50,000 followers or something?
Michael: About to break 60, yes.
Justin: Yes, okay.
Michael: Pretty fun.
Justin: That’s a lot for a San Antonio guy who’s given business advice.
Michael: Jason Dady said I was the best follow in San Antonio, so there you go, self-promoting.
Justin: I went to Two Brothers barbecue recently. [laughs]
Michael: Thank you, Jason Dady. I needed the confidence boost.
Justin: I think I saw that. That maybe is what made me start checking your Twitter out. It actually probably got you a follower.
Michael: Yes, there we go.
Justin: I think I have like 30. I think that’s pretty good for only being on Twitter like nine years.
Michael: Okay. Are you happy with that?
Justin: Yes. I’m pretty happy with that.
Michael: There you go.
Justin: There’s never been a moment where I’m like, “I wish I had more followers.”
Michael: There you go.
Justin: Ryan made a comment about how you had so many followers, and I could tell in his brain that he didn’t know how you did it.
Michael: Oh, yes?
Justin: Yes. Maybe you need to give him like Twitter coaching. I’m going to tell him that over beers that you’ve volunteered to give him Twitter coaching. [laughs]
Michael: Okay. Let me know where to report for that.
Justin: Your website’s– it’s very informative and people should check it out just to see what’s going on in San Antonio. I think it does a really good job of giving some background information about this growing startup tech scene in San Antonio, that I consider myself a pretty big reader of the news and follower of what’s going on. You just hear like, “Startup got some funding,” and it’s a byline in these newspapers, but there’s not a lot of information about who those companies are, what are they doing, why does it matter to our city.
It seems like you try to bridge that gap with your website, which I do appreciate. One of the things you talk about is you do some investing in companies where you try to, not only invest financially, but also get involved in a leadership style. You call it Cupid investing, and I’d never heard that before. Talk to us, what is Cupid investing and how do you go about doing that?
Michael: There’s a lot of people have heard of angel investing. The reason you’ve never heard of Cupid investing is because I’ve made it up, so whatever. Angel investing is typically like, hey, somebody comes to you, they have an idea and then you need to raise this much money to reach their next milestones. Then maybe they’re going to raise some more money, or things get profitable by then and they sell the company.
You’re very passive. Typically, what happens there is you’re often doing things like writing a bunch of little small checks. You’re checking in with them once or twice a year. You’re not deeply involved in the company. You’re not emotionally committed it. Your strategy there is often the best thing to write a bunch of little tiny checks in the hopes one turns into big money someday.
Justin: You mean spread it out among different projects?
Michael: Spread it out, yes. Mathematically that’s the right thing to do as an investor. For me, like I’m very much emotionally driven in terms of fulfillment. I discovered that just wasn’t that fulfilling. I wasn’t enjoying it at all. I also really enjoy being closer to being the man in the arena or the woman in the arena. How do you get more emotionally attached to it? How do you get more involved? How do you have that feeling where you’re just starting something and you’re like, this has zero chance of failing, and why? Because I’m going to, will it to succeed.
Michael: There is just no way we’re failing here. I found that type of investing, where you’re very passive, just is not fulfilling to me. At the same time, after 20 odd years in business, I’ve learned I’m actually not that great of an operator because I’m too shiny object attached. I’m too curious. That’s where I do this for them now, where I spend time incubating companies, helping the right people get into those seats in the companies, getting them to the point where they’re mature enough and then letting them fly and run and be supportive of that.
Justin: Some of this stuff is pretty esoteric, I think. What is a business incubator? It’s another one of those terms that people hear. I think, unless you’re not more into that world, you just generally understand what it means. What does it really mean day to day?
Michael: Part of the confusion is a lot of different people have different definition of that stuff. Incubating businesses means typically like how do you– the equivalent is like incubating a chicken. You have an egg, which is your idea, and then the egg hatches, and then it’s not self-sufficient. You got to make sure it gets fed right. Then eventually, that thing turns into a juvenile chicken, and the juvenile chicken can go figure out life on its own. Same thing for business, really.
Justin: A chick.
Justin: A chick. I mean I own chickens. You can incubate business, get the chickens.
Michael: Chickens sounds like a lot of work, man. Same idea. If you draw the parallel there, like you take an idea or a concept. You start to assemble the team and start to build those repeatable beneficial cycles of the business. It’s like, how do you take a customer problem? How do you solve it? How do you get paid for that? How do you repeat that?
How do you make it scalable? That kind of stuff.
Then you get it to a point where it can support, say, an entire leadership team, can support a sales team. It can start to be something that maybe other investors are interested in. That incubation process happens that way, where you take things from a nascent, nothing to viable.
Justin: Does incubations start at just idea or is it after you’ve got proof of concept and maybe some sales? At what point does a business end up in a Girdley incubator situation?
Michael: I enjoy most working at stuff from the idea concept phase. That’s just where I do best. I like making decisions around imperfect information. If you think about poker versus chess, like I like poker better just because I’m comfortable making probabilistic choices like that.
Other people incubate things in different other ways. There’s people that run incubators, where they do what I just talked about, but they’re helping people start up franchisees. I’m going to incubate these people to become franchisees or these people to be service providers. All those are kind of things that incubation can happen around. It’s all just really a style fit for what interests you and where your skillset is.
Justin: Particularly yourself, you prefer to stay on once incubation goes into like a real running concern and be part of leadership and all that.
Michael: Yes. Leadership in terms of like being a passive supporter or semi-active supporter of them through board roles and governances and stuff like that, I’m good at that. I like that kind of stuff. I like being on a board because, especially for companies, you get called in when there’s interesting problems. You get to deal with the psychology of the leadership. You get to help them be their best selves.
For me, like one of the things I watch for is when do I light up when I’m talking about stuff. I have learned that I find a ton of joy in helping other people become them their best selves. There’s people that there’s a gap where their best self is running a business or being a CEO of something or being a founder of something. There’s a divide that they can’t get over, that they can’t jump over. The joy I get is how do I help that person tap dance to work every day. By helping craft the right role for them and the right mission that they’re inspired to be a part of and the team they get to lead and then be there and support them, that’s [crosstalk] [unintelligible 00:26:23]
Justin: A lot of businesses will outgrow the people that created them. Sometimes the business gets too big for the personality that made it possible.
Michael: Well, there’s different philosophies around that. The one I like most is the Netflix metaphor that every business is the Yankees. The Yankees, I don’t know if they’re any good anymore, but it’s baseball. It’s the idea that a company evolves and there are really right personalities, right people for given seats at given times. That extends from top to bottom that, if you’re a high-growth company, you need a different personality CEO, say, from one that is very mature and is shrinking. You want to get a different personality type in there, because those are two very different things that can happen.
A company that’s growing versus one that’s flat and farming its opportunity. Those are two very different things that you want in terms of, not only the CEO, but all the people top to bottom. The same thing applies to me. There’s going to come a time where, if we’re building the Yankees, which is the best possible team that could be on the field at this particular moment for this opportunity, it may be time for me to be realistic about where I’m good and where I’m bad and exit stage right or exit stage left, whichever is the appropriate one.
Justin: I don’t remember either.
Michael: That to me becomes a really powerful awareness when everybody realizes, oh, like the mission is what matters here. The best thing for the mission is sometimes I’m not the right person to be in that seat. You approach that as human beings and treat them like humans and do it from a place of kindness and help them be there as part of their journey through life.
Justin: Your approach is very hands on, it sounds like. How many things can you be involved in with that much attention and that much intense involvement in these things?
Michael: I don’t want to overblow. Being on a board is important, but the surface area of what you do on a board, like the time consuming stuff, like is it getting done by other people, or repeatable processes. Think about how much of your business and law practice is doing law or managing client relationships or building your team. I don’t have to do any of that stuff and it’s [crosstalk]–
Justin: Doing a podcast.
Michael: Yes, we could dig into that. It’s actually being on boards is relatively a scalable thing to do. You have board meetings. You have an interactions with the CEO. You have data gathering of things that you need to know.
Justin: You get to vote.
Michael: Get what?
Justin: You get to vote.
Michael: Yes, for sure. Every company has a governance set up that’s appropriate for where it is in its life cycle.
Justin: How many things do you have your hands in these days? 20 companies, 10 companies?
Michael: Directly, like seven. Then there’s a couple being incubated.
Justin: Do you feel like that’s a good use of time or do you think stretched then?
Michael: I am not that stretched right now.
Justin: Okay. I’m going to ask you, so we trended off. Any other businesses you think in San Antonio people listening to this should just look up and see what they’re doing, because they’re going to be around and they’re going to be one of the next big things in town?
Michael: Definitely look up a company called Jungle Disk. They’ve been around here for a while. They were spun out of Rackspace.
Justin: They used that one picture of that guy, Piatt. Is that who’s there?
Michael: Right. Yes.
Justin: It’s the same picture every time. I always see it and I’m like, “What is this?” I always read it’s Jungle Disk, but all in my mind, it’s the one picture of him that’s in the Business Journal every time.
Michael: He’s a great guy. Great guy. Came to San Antonio as part of– for AT&T, went to go work at Rackspace, saw an entrepreneurial opportunity when Rackspace wanted to get Jungle Disk out to their portfolio businesses, led a local family office funded buyout of Jungle Disk, ran it for the past six years, huge community supporter, great guy. In this past fall, I partnered with him and another individual, Matt Morris, to go basically five X the size of that business by acquiring some assets out of a public company and relocate them all here to San Antonio.
Justin: What does Jungle Disk do?
Michael: Jungle Disk does backup and disaster recovery for businesses all the way down from two people up to hundreds, so all the way from kind of micro, nano business up to mid-market. They’re actually the largest private tech company in San Antonio now.
Justin: Is that right?
Michael: Yes. Pretty cool.
Justin: Wait, is Rackspace private anymore?
Michael: They’re public. They’re public [crosstalk]
Justin: Didn’t they go private for a minute?
Michael: Yes. They got bought by Apollo.
Justin: Then they’re already public again?
Michael: Yes, well, it was like four years, but three years they held it, and then they flipped it to the public market.
Justin: Seems pretty fast. [chuckles] I remember it was a big deal when it went private, because there were all these discussions it may leave town and all that, and then I guess that didn’t happen.
Michael: They didn’t really leave town. Rackspace is a different company than it was when Graham and Lou and those were guys running it. It was much more of a San Antonio company and now it’s a company that happens to be located in San Antonio.
Justin: Oh, okay. Is Jungle Disk located downtown or–?
Michael: Yes. They’re right across from Geekdom near the Western Centre.
Justin: What building?
Michael: 425 Soledad.
Justin: I don’t know.
Michael: There’s these buildings Downtown that were built in the ’80s and ’70s that, if I showed you a picture of it, you’d be like, “That’s downtown?” I’d be like, “Yes, it’s right there.”
Justin: Well, I worked in that Bank of America building for six years, so I know it pretty good. Some of those old dumps are finally getting renovated. It’s starting to look so much better. What do you think the future of Downtown is?
Michael: Downtown is really tough with COVID stuff. I think Downtown is going to have to reboot a bit once COVID is over. A lot of the amenities that made– increased hassle being Downtown went offline. Rosella left, Pinch moved out. These are different restaurants Downtown. I think we do have an opportunity for it to rebuild. I think post-COVID should surely be a good opportunity.
Justin: Well, Mayor Castro, that was such a big thing to him and he did– that deal, whatever they did, the fines for the buildings that were dilapidated. It’s been great for Downtown. It’s forced redevelopment, and it’s just forced them to sell some buildings that were being just sat on, but now it seems like it’s kind of stagnating Downtown again.
Michael: Yes, I’d agree with that.
Justin: Geekdom and some of these tech companies moving down there, that’s a good sign for Downtown.
Michael: Yes, you have Geekdom which has been a good anchor of the Downtown community for going on, I guess, 11, 12 years now. Codeup’s down there, which is another business that I hope start and is going really good. They’re on Houston Street. Then Pathwire which just got sold a few months ago to a big conglomerate out of Sweden, I think.
Justin: Are they leaving?
Justin: Codeup’s the coding school, right?
Michael: Yes. Codeup is a career accelerator coding school.
Justin: Is it just here?
Michael: They are here and they’ve expanded here and Houston and Dallas. [crosstalk]
Justin: I thought Houston had one.
Michael: Yes. They are a five-month career accelerator. It takes people who typically are well prepared for life, but not well prepared for careers. They graduate from college, got English degrees or philosophy degrees. If I name your degree and you get insulted, let me know, but things that are typically not very employable because colleges don’t do an amazing job of teaching job skills. Then it gives them a five-month really finishing program, and then gets them a job as a software developer, data scientist or systems engineer in tech where they’re a good employee. If they don’t get a job within six months of graduation, we give them back all their money.
Justin: Oh, wow. Is Ron’s Ready to Work doing anything with Codeup?
Michael: I don’t know.
Justin: He was on the podcast when that came out. I remember us talking about Codeup, and then I don’t remember following up with it. It’s a great program.
Michael: Yes. We’ve had a great partnership with Workforce San Antonio. I’m totally blanking on our other great partnership, but there’s another parallel organization with them that’s been fantastic to us.
Justin: Is Workforce through the city?
Michael: They are county, I think.
Justin: Do you all do anything with Restore Education?
Michael: I don’t believe so.
Justin: I’m on the board of that. They have job training.
Michael: Oh, cool. Tell me more [crosstalk]
Justin: It’s great. It’s the most successful GED program in the city.
Michael: That’s great.
Justin: They also have job training.
Michael: That’s great.
Justin: All right. If you look at your website and I read your post, you’re really focused on tech and you’re really focused on trying to grow tech in San Antonio. What do you think are some of the things that San Antonio needs to do better to get us to what you see as maybe the tech nirvana that maybe we can be? What are the things you think we really are already excelling at?
Michael: Yes. I think we’re doing a great job with having a perception that San Antonio’s a good place to be able to do that. We’re still behind the public perception of what you can do in Austin or New York or San Francisco. It’s always going to be that way. In the past decade, I’ve really seen us go from people thinking that nothing can happen here or it’s impossible to do a tech company in San Antonio to really where we are today, where people see examples of doofuses like me or other folks that are creating things, and they’re like, “If those people can do it, San Antonio is a place where it can happen.”
There is that big transition, and I don’t want to diminish that at all. That’s been enormous in terms of perception. If people used to think it was impossible and now they see it’s possible, that’s pretty darn good. I think the other transition that’s happened and people are seeing is companies like Pathwire, they deploy dozens if not hundreds of people. Dura has 300 people worldwide, it’s three years old.
These are real corporations. Jungle Disk is in the hundreds of numbers of employees and that’s not even counting– Codeup I think is up to 60 odd people. These are real tech jobs that are reasons that, if our kids grow up and want to move back to San Antonio and work in a future-oriented industry, there’s options for them here.
Justin: They’re better-paying jobs, generally.
Michael: Definitely. Yes, paying good money. We still have the San Antonio factor, which a big thing that holds San Antonio back is it’s hard to recruit people here, because they don’t see a high level of opportunity and perception there that you have in a Denver or in Atlanta or in Austin. Also like [crosstalk]–
Justin: We’re second to Atlanta?
Michael: Atlanta’s like a really good tech hub.
Justin: I know, but– Denver, nice city.
Michael: Yes. They’re all great places.
Justin: Is it?
Justin: Atlanta. All right. There’s the perception issue. I think we still have the perception of being Tex-Mex, Riverwalk tourists. There’s still a lot of that.
Michael: Yes, for sure. Military.
Justin: Yes. Fair.
Michael: If you talk to your typical person who’s a high performer and try to get them to come here, you can often win over somebody with kids. They’re like, “Okay, great. I see the benefit of San Antonio. I can get this amazing house out on the Northwest side with a water fountain and a third of Austin or half of Austin and 20% of the cost or 10% of the cost of one in California, like sign me up.” That’s why a lot of those people are moving here. It gets tougher when you’re trying to recruit somebody who’s of dating age. They don’t [crosstalk]
Justin: I moved here in ’07, of dating age and single. The city’s just so different now than it was then.
Michael: Yes. I’ve recruited and been deeply involved in trying to recruit young people to move here, hired them, move them here. During the pandemic, I’ve lost most of them, they’ve all moved away.
Justin: Last I checked, we were one of the biggest cities for millennials over the last few years to move into. We do have this very large millennial scene. Is it just, we haven’t been able to get out the information about what is available here sort of in that respect?
Michael: I don’t know. I think a lot of them open up Tinder here and then they open up Tinder in Austin, and they’re like, “Why am I not in Austin?” I don’t mean that in a bad way, but like I dig into like [crosstalk]–
Justin: I’m not even sure Tinder’s still the thing anymore.
Michael: They do–
Justin: I’m sure there’s a new thing.
Michael: Yes. There’s some app that would–
Justin: Ben Affleck got busted on one, and I was reading an article and I thought, “I’ve never even heard of that.”
Michael: There’s some app that– When I got married, there weren’t any apps.
Justin: Were there phones?
Michael: Yes, there was even electricity.
Justin: Was it the Razr or the Nokia?
Michael: I think we were still Motorolas at the time, big old brick phones.
Justin: What year did you get married?
Michael: We got married in 2004, but–
Justin: No, they had the Razrs and the Nokias and all that then, they had flip phones.
Michael: We were dating in exclusive since ’99, ’99 or 2000.
Justin: I got my first Razr in 2000.
Michael: All right. We’re cool.
Justin: I’m sure you had a phone then.
Justin: You kind of said the things we do good are the changing perception that doofuses like yourself can take off-
Michael: Yes, absolutely.
Justin: -but also some of the things we do bad or the perception is not where it needs to be to sort of attract new talent.
Michael: Yes. I just wish we had– We have the Riverwalk, which can attract like a certain clientele, a lot of the folks that are excited to drive in or that sort of thing. They’re still missing the infrastructure here or the sense of place, where somebody who is a person with options and choices would want to stay here and want to come make a life here. There’s no equivalent of 6th Street. There’s no party scene. We don’t really have the festivals or that kind of it factor.
Justin: Fiesta, come on.
Michael: Fiesta, yes.
Justin: It’s more than any festival in Austin or Dallas or Houston.
Michael: None of the people I’ve recruited here are excited.
Justin: You don’t know about Fiesta being Fiesta until you live here.
Michael: Yes. I do think it has a cool-up opportunity to be more than just a local party for folks here, but that’s not what we’ve chosen to do, which is fine.
Justin: San Antonio is very like– just like you’ve said, people are like– don’t self-promote and people don’t show off and it is going to have to overcome that idea of, we don’t want people to think we’re showing off to convince people that we are what we are maybe.
Michael: Yes. Here’s the other part of it, right? Like San Antonio– you’ll see it over and over again when somebody proposes a change, and then when they realize the change requires pain by at least one small entity in the community, no matter who that entity is, it just dies [crosstalk].
Justin: We’re saying that with the amphitheater right now.
Michael: Yes, I’ve been watching that stuff too.
Justin: I saw you prodding somebody on Twitter asking them their, “Why do you feel that way?” And they answered and you just said, “Thanks” [laughs].
Michael: No, I did believe wanted to know. I think that’s also how you win on Twitter, when I really know something and I believe it, I’m totally interested in it, but also, I approach Twitter and social media as a place to learn. I’m not going on there trying to change anybody’s mind, which makes social media so much better. Just don’t try to change anybody’s mind but I generally was curious as to why, I think it was Chad. Carrie was like, “This sucks”, and I was like, “Okay, well tell me why it sucks”.
Justin: People are nasty on Twitter too. There’s just so much trolling and nastiness. That’s why I don’t really post anything. I just like, I’m a creep who just reads stuff.
Michael: It’s also like, I take it as a personal challenge. How do you never not be nice?
Justin: You’re a better person than I am.
Michael: It’s interesting. It makes you a better person to set a rule like that and be like, “I am never going to lose my temper”, like an angry– anybody?
Justin: Yes. I should do more of that. Probably not, I’m not good at that.
Michael: I just find it interesting. I have found it that I have a level of enthusiasm about it if you don’t, who cares.
Justin: This is a good segue into some of the things that I think matter to me and things that I personally think would help the city. I think having a big amphitheater right off 281, where people drive by and see the lights and the sound and know that there is this vibrant music scene in the middle of the city instead of way out in an amphitheater in Selma. I think those things are good for the city. I think it just creates an energy and of course, there are people that won’t be happy, but there’s always people that aren’t happy.
Michael: Yes. First of all, number one, like two years ago I made a big shift personally. I’m a total homer, I want San Antonio to be better. What I changed in terms of how I approach stuff, is I just picked how very specifically I’m going to change stuff.
What I did is I quit being on any nonprofit boards, I quit on being on any like, “Come to my meeting, we’re going to have a community forum”, I just don’t go to any of that stuff, I just say, “No, I’m not doing that.” I just said, all I’m going to do is, I’m going to bring the types of companies to San Antonio that I want to be here to create jobs that attract the type of people that I’m excited to spend time with.
Justin: You don’t take positions on anything.
Michael: That’s all I’m doing. Now we can talk about this amphitheater, but I’m just going to tell you, I don’t even pay attention to this stuff.
Justin: Let’s not talk about the amphitheater. Just generally the amenities you think would be helpful for San Antonio and attracting talent.
Michael: I think you need to start to shift the city to attract those people who have choices. They want to go to someplace where they can ride their bike and walk in the shade, and there’s trees.
Justin: We have a ton of trees here.
Michael: Have you ridden a bike in this city?
Michael: I ride every Sunday, at least 20 miles, so I ride through the corridor, but we are a very shaded city. Statistically, we are.
Michael: You need to go Downtown and walk down Navarro Street in front of that embassy suite that’s there on the corner.
Justin: Why would I want to do that? That’s parking lot. Hell is the problem down there.
Michael: That is where the people I’m talking about who have choices. They want to spend time in urban and semi-urban environments. Not like you and me because we have kids and we’re parents, and we spend time in our mini band.
Justin: I don’t have one of those yet but I get it.
Michael: You should get one, they’re cool.
Justin: They’re the fastest cars on the road, I’ve decided. Okay, so Navarro that park in front of Pinkertons is a good example of us moving in that direction.
Michael: Yes. I mean that’s great. That’s one part of it, but nobody’s talking about what are we going to do about the nasty two parking lots that are right in front of it that are heat deserts.
Justin: How owns those?
Michael: One is owned by– well, you’re never going to redevelop them because the people that own parking lots make such [crosstalk].
Justin: So much money. Does [unintelligible 00:44:36] own one of those, he used to own a bunch Downtown?
Michael: He does not own that one. It’s owned by a family that lives, I think in Floresville or something and they just collect their a hundred grand a month.
Michael: [laughs]It’s the fun thing you could think. One of the interesting things to do is just think about, if you could go back and talk to your ancestors, I don’t know what your ancestors did, but I know what mine did. Mine sold explosives on the side of the road, out of shacks. Like, if you could go back to-
Justin: One of mine bombed a train station in a union uprising.
Michael: Yes. If you could go back to them and be like, “Look, let’s have a little chat. Whatever you’re doing now, this isn’t good for you. You should consider– let’s talk about some good stuff. Car dealership, mini storage development. Let’s get you into something that’s going to really create some generational wealth here”, and I think it’s a pretty interesting thought experience.
Justin: Now they don’t even need a human there. They just have the machine.
Michael: Yes. It’s beautiful.
Justin: Tree cover, mobility, accessible.
Michael: I think we need an entertainment district, for sure.
Justin: In terms of like clubs and bars?
Michael: Yes. For sure. Where do you go–? My wife used to have her girlfriends from college come to San Antonio and be like, “Okay, let’s go out. Get a limo.” Where do you go?
Justin: I think it’s a strip, right?
Michael: You go to Rainey Street?
Justin: If you’re in Austin.
Michael: Yes. We have basically regulated ourselves out of Venus. I think you talked to the St. Mary’s people, at least on St. Mary’s Street people on Twitter. You can’t do anything on that street as [unintelligible 00:46:01]. Where do you park?
Justin: Right now, yes. We can’t park in Rainey either, can you?
Michael: Yes, I don’t know. I don’t go there, I’m old.
Justin: Yes. I went there one time. Maybe one of the hotels has a parking garage.
Michael: I think that’s one of the amenities I would definitely like to see. Then density is super important. We have such a cool opportunity to change the policies, to make San Antonio’s Downtown stronger, but the parking situation, I have no idea why we’re still charging for street parking down there. It’s just unbelievably dumb.
Justin: It was like Sunset Station too. Without saying who, that thing was held hostage because somebody wanted the city to pay for park, create parking for everybody. You have this just beautiful development, close to everything, close to our biggest tourist stuff and it’s just sat there with parking for maybe a hundred cars at the best.
Michael: Yes. I don’t know. I would love for us to stop being the city that over and over again, chooses short-term sprawl. We put UTSA in the wrong place. No offense to UTSA, it should be Downtown like they have in Austin.
Justin: We do have the big facility coming Downtown.
Michael: Now we’re addressing that, that’s great, so that’s decision.
Justin: Real close to the jail.
Michael: [laughs] Yes. It’s a bus stop shop. You have that and then we had the Alamodome complex, and then we decide to split that level of density, we don’t have the things that you see in other cities like Kansas City and Denver where those types of amenities are Downtown around those types of options.
Justin: Yes. The baseball field going Downtown. That really should have happened.
Michael: I was for that. Soccer stadium. Why the hell do we have a soccer stadium in the middle?
Justin: I have no idea where it is.
Michael: [crosstalk] nowhere. Take some of these Downtown park-
Justin: Where is it?
Michael: It’s at Wurzbach Parkway & O’Connor.
Justin: Is that right? I had no idea where it was.
Michael: There’s a Starbucks across the street.
Justin: Okay. All right.
Michael: Yes. It’s nice and it’s fine. The other thing they do with the soccer stadium, which I don’t understand, is they pointed the stands at the sun, and then they hold the games in August. Everybody is like-
Justin: Jerry Jones taught him how to build a stadium sounds like.
Michael: “Oh, guys, maybe you should call me on” [unintelligible 00:48:06].
Justin: Yes, right? We have AT&T over there, we have Nelson Wolff, Southwest. No, it’s just a mess.
Justin: It’s our mess, those things aren’t going to be changed.
Michael: Look, I understand, for the first 150 years of the city’s existence, Downtown was a flood plain. It made no sense to put anything that, but we’ve got flood control now. Let’s change and really put focus back on Downtown. Mayor Castro, I think was great about really doing the hard choices to make focus around Downtown. We haven’t been doing that the past six or seven years. Nobody talks about Downtown. It’s been getting [unintelligible 00:48:39].
Justin: Just two personal questions I have. Do you think the cybersecurity focus–? It does sound like San Antonio really is taking off in that direction and has a lot of opportunities. To me, it seems like that can be our future high-paying jobs if we really focus on that and create this industry around it.
Also, our proximity to what’s happening in Austin should provide some spillover, especially with our cost of property being lower, our cost of labor being lower, our cost of living being lower. Shouldn’t we get some of that spillover with the Tesla plant and all that? There’s going to be a bunch of component part suppliers and manufacturers that are going to be needed.
Michael: Yes. I hope so. There’s really two things you ask, cybersecurity. Cybersecurity’s great. I think it’s also important to remember with cyber, there’s really two different things. There’s cyber services where you’re actually in there securing computers and you’re making sure that servers are locked down and people do that work. That’s where San Antonio is incredibly strong now.
There’s the second part of it which is cyber products where you build products that are sold and those are technology services, so code or hardware, that stuff. We’re doing great on the services side, you’ve got millions– not millions, you got tons of people that are coming out and especially out of the military and all the different programs that are good at that stuff. We don’t really have a cyber startup scene at this point. There are few and far between, we did have a company info site, it was here, they moved to Austin.
Justin: We seem primed for that. If you’ve got the one, they’re complementary, right?
Michael: Not necessarily, they’re really different businesses. If you think about it, fundamentally, if you have a product startup where you’re doing an innovation, those run capital negative. Cashflow negative for some period of time, while they’re growing and building their business to capture their market opportunity. That requires venture capital. That requires an ecosystem of people to support that and requires the right founders to go after that stuff.
That is fundamentally different than when you build a services business, which can be bootstrapped where you go and say, “Okay, well, I have two people here I’m going to sell, it cost me X per hour, and I’m going to sell them for two X per hour.” That is a different business and a different ecosystem in a different ethos as well between those two different things.
Justin: Those two people might be installing and using these softwares to secure everything, right?
Michael: That they bought from some company in California or Munich, or whatever. How do you start making more of that stuff here? We’re exporting things rather than just people’s time.
Justin: Ryan did a really good job of discussing that when he was on the podcast, was how some businesses are so different here because they create only money in almost. His product sells so much around the world and that money comes here and I never really thought about what businesses are better for the city, but it made me reevaluate the way I think about what sets some of these businesses apart in terms of how they provide for the city. It was interesting.
Michael: The equivalent for countries is trade imbalances. If you’re in Austin, you want to have a trade-in balance. Where you’re importing more money from exporting products. Ideally, you’re exporting product that has zero marginal cost. It costs you zero dollars to make a new one, like code, software, and that sort of thing.
Justin: How much of the talent you all are working with is imported talent? People that come in on the visas that allow for high-tech jobs. Because I know the USA a for a long time had a lot of people that came in on visas for tech jobs. Is that something that some of our companies are pursuing? Because I feel, and I could be wrong that those jobs aren’t going to be turned down due to lack of entertainment district and some of those things.
Michael: Well, at least in my world, hiring has totally shifted in the past 24 months. I used to be super-hardcore about, “You have to be in the same room to be a highly successful team. You have to have an office. The last couple of companies I’ve worked on, they didn’t even have an office. Incubating the thing and everybody’s at their house. That sounds great. We’re going to stay remote forever. Hiring has really shifted, and I’ve seen it happen amongst companies who were hardcore, like, “We need you to move to San Antonio to do this role.” That was the way Rackspace was for decades, two decades.
You’ve seen that shift now where companies, by and large, the default is not that it is, “Okay, we’re going to be location agnostic. We’re going to treat you if you’re in Mexico City or if you’re in Argentina or if you’re in Phoenix, or if you’re in San Francisco, we’re going to treat you like a first-class citizen of the company.” I’m doing a lot of hiring now and we don’t even talk about it. You’re so desperate for talent right now because it’s so hard to hire. You’re just, “Okay, well, you can work here and I can afford you and you’re great”.
Justin: You think this is short-term though? Or do you think that’s the future of all business?
Michael: I think it’s totally shifted. Those companies that we started without a headquarters or without an office, they’re not– Why would we start spending money on an office?
Justin: Well then what’s the answer for San Antonio if attracting talent’s no longer a problem?
Michael: That comes back to the talent gap that I think we still do have, which is you need more people that are taking that first leap and starting companies from nothing.
Justin: Is venture capital or seed capital or whatever you want to say, is people willing to part with cash in San Antonio some of our problems?
Michael: I’m in the minority on this. I don’t think money is our problem. I don’t think.
Justin: Because I’ve heard other cities that, San Antonio, it’s a lot more tight fist of a city.
Michael: Yes, people here, by and large, haven’t made their money from high growth opportunities, they’re not as comfortable investing in them. There are seeds of it happening here and people doing it. [unintelligible 00:54:30] fund as one of them. There are a couple of other funds as well, people running around doing it. The real gating factor is every time I’ve seen high quality with a high-quality idea with good traction go out to raise money, they’ve had no problem whatsoever.
The people that haven’t been able to raise money, there’s an implicit insult in what I just said, so they disagree with me. If you have a good idea and you’ve proven you can get some traction and you deserve to have capital and you give people a good deal, money is fungible. You can get it wherever.
Justin: I think some people are just not good at selling their own product. They might have a good idea and good everything, but some people just don’t do as good one convincing people.
Michael: You should ask yourself, is that right or wrong? What people realize as investors is this same skill set and muscles that you were going to use as a fundraiser are the same ones you’re going to use to go sell new employees, and customers, and partners. If you can’t sell me, somebody who has made a bunch of money in the stock market or oil or whatever, that you have a good deal, how the heck are you going to get somebody to pay you money? There’s logic to that thing. Maybe if you can’t sell your idea, maybe you shouldn’t be starting a company. That was just the meanest nicest thing I’ve ever said.
Justin: No, I think that’s fair, but you do hear horror stories of founders that are complete who go on to found great successful companies.
Michael: You could be an asshole and you be good. It’s not mutually exclusive being an asshole and being able to raise money. It’s also not mutually exclusive you could be nice and raise money, but you have to be able to sell a vision. You have to be able to sell a plan. You have to be able to inspire confidence in other people because those are things you have to do both externally and internally to build a business.
Justin: If you were all-knowing and all able, what would be the three things you would do in San Antonio to make us a more attractive environment for higher-paying jobs?
Michael: Is this a wave magic wand thing?
Justin: Yes, wave magic wand thing.
Michael: If I could wave a magic wand, I would have a hundred people that are startup founders that are really capable here running around with pitch decks and trying to raise money and build businesses.
Justin: Get the entrepreneurs here?
Michael: That’s number one, big challenge. Number two, I think we should make some hard decisions about how to make San Antonio a more fun place to live for people that have choices. That means getting rid of some of these dumb parking requirements that we have that makes it so hard to build high-density stuff, make it so it’s easier to build stuff in San Antonio. You look at the permitting process and it’s just unbelievable how slow it is to build things.
That’s because of COVID, but also because these departments are overwhelmed and being asked to capture all the fees that they can. Then number three, I think that increasing the focus on more university and more educational type opportunities in San Antonio is really a good thing.
We have Trinity, which is really an amazing school. If you think about it has changed San Antonio because there’s a direct line from Trinity to the Rackspace founders to Graham Morris like finding those guys in a building and then it’s transformed the city. Because I can draw a straight line all the way back to Graham Gitam and then Rackspace and Trinity and it’s probably why I still live here. I couldn’t live this life I’m living now without them. How do we have and attract more of those Trinity-level kids? I would love for Trinity to be five times the size it is right now. Nobody over there said this idea, by the way, this [unintelligible 00:58:04].
Justin: Why did they put them.
Michael: Who cares? Built some buildings, I don’t know. Let’s put them in some of the downtown buildings. But how do we attract more of those type of folks, to yes, we’re bringing the numbers of people, but how do we bring in more of those people who are the real 1-5 to 10% who are going to have an outside impact on the community? Because they’re just those people. There’s a barbell distribution of who really brings the most to a community. How do we attract more of those people through a combination of those things that I just laid out?
Justin: We were talking off record. I’ve become really good friends with the Trinity professor. One day he just walked through all the Trinity success stories in the city who’ve stayed here, and it was pretty shocking to me. I didn’t realize that. We do have UTSA, that’s now a higher research facility. It’s growing and getting better, Code Up is providing educational opportunities. It seems on the educational side you can actually walk out and see those changes. You go to Texas A&M, which is now going to serve a completely underserved hundreds of thousands of people, those things. There are some 1 and 5% in there that just never have had the opportunity before.
Michael: We still have the situation where I’ve watched over the past decade, young people who had a choice to go to that were super high performers. They went to Rice or MIT or Yale. These are some of the brightest, of the brightest. Watch and see who comes back and they don’t. We’re exporting those people, but we’re not importing them and we’re not creating them here. How do we solve for having a really good distribution that reflects the entire part of society? Because right now we’re losing those people who are up creating the next Dell computer or the next Rackspace. They’re not being attracted here right now.
Justin: Do you run into many people with your passion about building these around San Antonio?
Michael: No. They admire it.
Justin: What about from an elected standpoint?
Michael: I don’t spend much time working in that.
Michael: It doesn’t give me any joy.
Justin: Then I’m calling you? Or tweet you?
Michael: No, that’s fine.
Justin: All right. Well, even Graham is a New Braunfels guy.
Michael: He’s amazing.
Justin: Yes, but he doesn’t even live in San Antonio, right? Well, last I know he did not.
Michael: He may have moved to San Antonio. I don’t know.
Justin: I know he’s got all that going on, but some of the people that are even big here don’t even live here.
Michael: Some of [unintelligible 01:00:32] Randy Smith is here now, and folks like that.
Justin: One of the big Rackspace guys, the one that married Wendy Davis and moved to Austin?
Michael: Yes. You want to know why?
Michael: Because all of his kids moved to Austin.
Justin: Oh, fair enough. We do have even the older executive types that have done great things here. We have some of that [unintelligible 01:00:52] as well.
Michael: Yes. If you look at the big successes in tech in San Antonio, in the past decade, it’s the people that wanted to be here and decided to create things here. That’s interesting, right?
Michael: You look at Scaleworks downtown, which is a huge success with Lou Morman, former President of Rackspace. He wanted to be here and he decided he’s going to build something here. The Pathware guys. Will Conway in [unintelligible 01:01:15]. I talked about them, one of the fastest-growing software companies just sold for almost $2 billion. Decided to do that in San Antonio, decided to be downtown, CodeUp. We were here first. Decided we wanted to keep living here and we build the business here, Jungle Disk, [unintelligible 01:01:29] PR, “I want to be in San Antonio.” There’s this thematic thing, once you get highly capable people that want to be in San Antonio magic can happen.
Justin: Well, it sounds like a lot of them spun off Rackspace.
Michael: Yes, Rackspace is a hub there.
Justin: Well, hopefully, some of those new Rackspace babies will create more people that want to stay here and build those out.
Michael: Yes, sure.
Justin: Your website is what?
Justin: Your Twitter handle?
Justin: You really try to, it sounds like, you don’t take hard positions, but you address economic issues, you address small business issues. You talk San Antonio. It’s not one that’s going to piss anybody off, but I think it does a good job of touching what you hold yourself out as. A San Antonio lover who wants to help small businesses and wants to help our city.
Michael: Yes. For me, Twitter, I write there. Really this is my venue to give back and it helps me do that at scale. One of my core values as a person is always be scaling. Like, “How do I always be scaling the things I’m working on, on myself personally?” Twitter is a forum to do that. I can write once and tens of thousands or more people see it and see value from it. I do that with the understanding that if I give like that with no expectation of return, no quid pro quo, it always pays me back 10 times, over and over again. It’s pretty fun. I really enjoy it.
Justin: Well, just getting ready for this was really interesting for me. I consider myself a San Antonio nerd, but I learned a lot. I learned a lot about a bunch of companies I never heard of.
Justin: We’re right at an hour. Michael, thank you very much for doing this. People should follow your Twitter, see what you’re up to, because it’ll be a good way to learn about stuff that’s not covered in the paper, that’s not covered in The Business Journal. I think it’s encouraging for people that live here to know that that is happening under our noses.
Michael: Yes, it is. Thanks for having me.
Justin: All right. Appreciate it.
Justin: Thanks for joining us on this episode of The Alamo Hour. You are what make the city so great. We hope you join us next week. In the meantime, subscribe to our podcast. Check us out on Facebook at facebook.com/alamohour or our website, alamohour.com. Until next time, Viva San Antonio.
[01:03:57] [END OF AUDIO]