My First Million - He Got Fired By His DAD… So He Built a $60M/yr Empire

Episode Date: June 13, 2024

Episode 596: Sam Parr ( https://twitter.com/theSamParr ) talks to Craig Fuller ( https://x.com/FreightAlley ) about how he turned dying hobby magazines into a cash flow machine.  — Show Notes: (0:00) Intro (2:45) Economics of long-haul trucking (3:36) Getting fired from the family business (5:30) Fuel cards for truck drivers (6:40) How FreightWaves hit $20M ARR in 2 years (9:08) Acquiring FLYING for $3.5M (12:14) Opportunity: Depressed media properties (16:02) From losing $8 per subscriber to profitability in 1 year (20:31) A media side hustle becomes a real estate main hustle (22:55) Craig's tolerance for being leveraged (25:32) Pre-selling $28M units pre-construction (28:51) Diversity, Asymmetrical risk, and generational security (31:11) Teams to diversify your time (34:21) Building a portfolio of hobby magazines (37:20) Content to commerce playbook (47:03) The story of William Randolph Hearst (51:32) What's the chase? (53:15) "The best thing to give a founder is an enemy" — Links: • FreightWaves - https://www.freightwaves.com/ • Knight-Swift - https://knight-swift.com/ • Firecrown - https://firecrown.com/ • The Chief - https://tinyurl.com/36khrt8y — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano

All right, my friends, today's episode, it's special for me. And it's going to be special for anyone out there who's a creator or who owns a media company. Let me explain. So I've got this friend named Craig Fuller. Craig Fuller runs this company called Freight Waves. It's a data business, but they have a media arm. And it's a huge company. They've raised tens of millions in funding and they make tens of millions in recurring revenue.

Huge business. However, on the side, he ended up buying a bunch of magazines, including flying magazines, a bunch of boating magazines. Very weird of him to do that. And I wanted to do a podcast about that. Turns out, he's bought all of these niche magazines for a very small amount of money. And he's only about three years into business. And the company's doing around 60 million in revenue and 12 million in profit. And it's his prediction that by 2030, it's going to do a billion in revenue, which is, A, insane that that's someone's side project, that they're doing that. And B, I wanted to learn all about it. I wanted to learn about the model that he's doing.

where he's basically buying these magazines and then he's selling the audience different products and services, including like building an airplane hanger and selling space in that hanger for a flying magazine, things like that. So if you have an audience, if you want to build an audience,

if you want to build a big business on top of that audience, this podcast is for you. All right, check it out. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. Well, we're live. This is just how we just get right into it.

Why? But it's not often that someone's side hobby becomes almost cooler than their main thing, particularly given that your main thing is this like massive hit. So you're Craig Fuller. You've got this thing called freight waves, which is a data business, but you guys also have a popular media arm. And you just you display most of your financials online as if you're a publicly traded company almost. And I don't know what the revenue is, but it's somewhere in the high tens of millions in recurring revenue. And then you also have, you've raised, what, $90 million for that? 65 in venture capital, but we raise some debt on top of it. So total about a little bit under 80 million or a little bit over 80 million. And then your latest kind of side project that is not

really the size of most people's side projects is fire crowd media where you've bought dozens of magazines and you've parlayed that into like you've turned flying magazine into like a country club, but for flying enthusiasts. And so you've bought, you know, thousands of acres of land. You've built an airport. And now you're buying even more pieces of property and more stuff. And I think what Firecrown does, what, 50 million this year in revenue? 60 million of one, right.

So is where we'll finish this year. Golly, man. And what I didn't realize, I was doing research, I didn't realize that trucking kind of runs through your family, right? Yeah. My father started what's now, or he sold the business last year, but it came to the fifth largest tracking company in the U.S. And my uncle started the eighth largest.

What's now the eighth largest tracking company in U.S. Were your uncle and father competitors? Oh, yeah. Yeah. They're pretty dire competitors. But are they tight? Are they good family members? Nowadays, they're much better.

You know, they do get along now. But there was a period of time where they just absolutely hated each other. My family is in the, my father's a produce broker. So I grew up with truckers. And it's an interesting industry because the people who own the business, can be pretty wealthy, but they're still rednecks. Like, they're still like blue collar guys, but they're not necessarily always traditionally educated and they're still rough, even if they're quite wealthy.

Was your dad like a blue collar guy, even though that he ran this huge company? Yeah, I mean, he's a blue collar guy. I mean, he, you know, he looks presentable in a suit and he's talking to Wall Street investors. I mean, he certainly is, you know, he's presentable. He's not going to embarrass himself in front of folks. But he is, you know, he's a finance guy. I mean, ultimately in trucking, you're operating a business that operates with single-digit margins, you know, one to three percent margins.

And so you've got to know how to operate that business. It's an owner-operator type business. And so he certainly is an operator. And he eventually, I think recently sold that business for like $800 billion, right? Yeah, he merged it into Knights Swift, which is the largest. It was the second largest trucking merger in history. the company did about $2.5 billion when it sold for $800 million. And you were working for him.

And I read that you worked for him starting at a young age. You kicked ass, but for some reason you butted heads with the executive team. You got fired, I think, in your late 20s or early 30s. And you started shockingly, which I can't believe you did this, day trading. And you were like, I got to build something. And so at 36, I think, or 34, you were like, I want to do almost like day. trading but for freight stuff. Is that right? Yeah, I mean, I got fired twice. So I got fired from my father's trucking company at U.S. Express in 2005. It was actually my older brother who became the

CEO of U.S. Express that had to be fired in 2005. And then my- Dude, your family's a bunch of assholes, man. Pretty much. But I love them, but they're, this is, this is a family tradition. You fire and you go out and start your own business. And then they had a payments company, a fuel card company that they had incubated that I took. took over and scaled up, and then we sold part of that, the U.S. Bank. And we were doing both fleet card processing and debit card processing, payment processing for banks. What's a fuel card? I know that truckers have them, but I don't entirely know what they do or how they make money. When truckers want to buy fuel, you figure 200 gallons if they're truly

topping off their tank, they're going to fill up with, you know, $1,200 to $1,400 to $1,400. Wow. Okay. And what, they use some card, and do they get perks or something? What's the business. No, it's for fraud management because what will happen is if you don't manage, I mean, think about it, you've got, you know, U.S.S. Press had 9,000 truck drivers and you're giving them all an expense account that effectively, they

they're buying fuel, but they're also doing over-the-road maintenance. So if they need tires or they need a truck breaks down, you know, those things can be $10,000 on a breakdown situation or could be, you know, thousands of dollars in tires or fuel. And so, you know, a truck driver

is responsible for probably six to $8,000 of expenses per month when you look at total what the total cost of expenses. And so you have a lot of fraud that ends up happening. And so fleet cards are there to manage the fraud, both on the fuel spend, but also on the, you know,

all the maintenance and stuff. Got it. I never knew what those did. All right. Cool. So you're growing this thing, whatever. It's working out fine. And then you get into freight waves, freight alley. That works out good. how long did it take to kind of get into the tens of millions in revenue?

It's about $20 million dollar business in two years, three years, something like that. How did it grow so fast? The formula, right? Like, timing was great. This was when a lot of venture capital investment made into the space. And then you also had this digitization that was taking place where companies were trying to digitize the supply chain. And then, you know, at the end of the day, I had relationships.

It's funny because my dad didn't put any money in the company. He told me I'd be a bad CEO and refused to invest to the business. And so I had to go raise venture capital. Dude, are you in your family close? Oh, yeah. My dad and I talk, he's now, like, after he sold US Express, he's now one of my largest investors in Firecrown. He actually is my largest investor in Firecrown.

So we're actually really tight. I've been following you for a while. And when I think of like a good media CEO, you are one of the people that I think of. What attributes did you have that made him think that you would be a bad? at CEO. Yeah. Well, I had ran a business, a payments business. He fired me in 2014 because it was a tech business and technology businesses, while they generate a lot of margins as they scale, they actually burn a lot of capital. You know, trucking's a cash flow business. He didn't understand that, you know, a tech business as it would scale would actually consume capital.

So he got really mad and he didn't want to raise any money. So he fired me because he didn't think I could run a business that would be profitable because that's not how technology companies typically work in their early phases. What's funny about that business is that's one of the most valuable assets in family's portfolio now. It just got a $500 million valuation last, you know, sold some stock in September of last year. So it's done well, but I've, you know, I've been out of that business for many years. That's all right. So this is the main thing that I wanted to talk about. So there's this blog that I love. It's called Flash and Flames. I'm pretty sure that, like, like only maybe 10,000 people a month read Flash and Flames. So if you're listening to this and you're a

fan of like media businesses, this is my favorite blog on the internet. It's written by this guy named Colin Morrison. He's based in England. He wrote this article that I think it was called why magazines are the new trophy asset or something like that. And I read that you saw that article and you're like, I'm going to go out and buy magazines. Is that right? Yeah. I mean, I was reading it and I was, you know, it was essentially the trophy asset. And he was using the example of Martin Beanieff, buying Time Magazine and some others. And it was really interesting because I was like, you know, I could never buy Time Magazine. You know, the two media businesses that I would own that would be trophy assets far beyond it would be like Bloomberg would be number one. And, you know,

owning something of CNBC scale would also be another. Obviously, there's a way outside my league. So they're not happening. And I was thinking to myself, I had just taken up aviation, taking up flying, and I was reading Flying Magazine, and I was pretty uninspired. And so I was like, it would be cool to own like an aviation magazine to own Flying magazine, because that would be my trophy. I'm a pilot, and that's sort of what I would like to do. And so it inspired me to reach out to the owners of Flying Magazine and asked that they would sell the magazine. And they said, it's not for sell, but we're happy to talk to you. And I made an offer, and they ended up selling it to me. And that sort of, it was started out of,

I started off as a side hustle. I didn't actually intend. I thought print magazines were dead and dinosaurs read print magazines. And I became very skeptical of the whole print magazine business model. But when I bought it, I fell in love with the not just the content and what you could do with it, but also the value what print brings to an audience. And so what I found is that really these print magazines are completely undervalued, that nobody will touch them because they have had the same philosophy that I have.

have the same philosophy that I had about them dying, yet they own these fantastically great communities and audiences that have been around for decades. And typically as you get into sort of the older populations that grew up with magazines, is they still have these really important sort of connection to the brands. And we found that that's a really interesting opportunity. Were you liquid when you decided to buy it? Or were you like, if they, if the price that they want is in the millions, I'm going to have to go get money from someone else. No, I had enough money to pull that off. With your money, do you keep a large percent in like the S&P 500 and this was just a fraction of it? Or was just like a meaningful amount? It was a, I mean, it was a meaningful amount relative to my

liquidity. I mean, in terms of my total, that worth, not significant. But I have a lot of paper worth as a pincherback founder tends to be. But you don't have a lot of liquidity. So relative to liquidity, yeah, it was a big number. Then what was a lot of paper worth? Then what was a lot of thinking is I'm going to have to buy this and I'm not to spend some hours per week to making sure that it doesn't lose money. Well, it was profitable. I mean, it was generated about half a million dollars of EBITI a year as a standalone entity, about two and a half million in revenue. So it was a small, this is a small business. And we buy businesses at three to five times EBITAs typically the number of these things trade out. So we're not talking about a huge,

like this wasn't a huge capital outlay. So it's like one point five to two point five million is what it was about, you know, total purchase price is about three to a half million when you look at cash and some deferred expenses and deferred payments. So he made to about three and a half million dollars, uh, which, you know, seven times by, you know, two and a half being up front and a million deferred. And, uh, yeah, but then you got to deal with like, dude, journalists, a lot of times I hire journalists. They're fucking pains in the asses. And like, when I think of like all my potential side hobbies, I'm like, I'd rather be a beekeeper than like, own, uh, freaking magazine to deal with these employees. Or I'd rather get to like,

going for walks or hikes. I don't know about this. Well, look, I mean, I had, you know, Freightways has 40 or, if you look at total contributors that are journal, qualified as a journalist or contributors, we have 40 to 50. So I knew what the, you know, I knew what the rodeo was going to look like for running, you know, having teams of journalists work for you. What was different, though, with magazines is these are different the sort of younger sort of digital native journalist or journalists that have been sort of working in newsrooms, is magazine journalists don't do it because they make a lot of money. They do it because they love the content. And they're also, there's a sense of defeatism that has existed across all publishers. And I've seen this in the multitude of acquisitions I've done is where the editorial teams feel like the the owners of the magazines don't love them and aren't willing to make investments in them. And they almost look at you and I use this term. is almost liberators of their business because in some ways,

they love the content, they love the subject matter, they have the relationships, they tend to be sort of micro-celebrities in their own communities. So these are the old-school influencers, if you will, and yet they get no love from corporates because what's happened is the whole magazine business model

has collapsed in the last 10 years because the way that magazines made money in the past, the internet has destroyed that business model. And rather than sort of digitizing their business model or sort of evolving their business model, they just started to cut cost. And so that was the way they sort of fend off the inevitable. And the problem is at some point, the value that the community gets and the audience gets is diminished. And these things are just, it's a, it's sort of a death circle. And so what we do is we come in, we buy them in some ways we liberate them from this sort of

inevitable decline. And they feel really encouraged by that. We upgrade the paper. We upgrade the quality. We make investments in the editorial team. You know, Flying's editorial team went from three folks when we bought it to 30. So you have three primary full-time employees, and then you have contributors that are submitting an article that goes in the magazine. Very different from the world you and I sort of come from, digital media, where you actually have a full-time staff that's writing content on a daily basis. They're writing, they're contributing to a piece that's once a month. And so it may be an airline pilot or a flight instructor or someone who really knows the jet market or the turbine market. And so you want subject matter expertise. And typically writing is a

second is not their primary job. They do it as a sort of a side hustle to make a little bit of money. And that's why these businesses have operated. But what they've, what they've also done is they've, they've not made investments in like print quality or online assets or any of that stuff. How much revenue did you do in the first year of owning it, revenue and profit? In 2022, I think we were about $7 million in revenue, $6.5 million, something like that. Oh, so you aggressively grew it, yeah. How? Because we invested in, so a couple of things we did was we invested in the magazine.

We raised the price. The magazine was losing $7. So the magazine was taken in $8 per subscription, but a cost of, them $15 a month. $8 a year was the net revenue. I know. For folks that are listening, but your face is exactly what mine was.

They were generating on average $8 in revenue per subscriber per year. And it cost them $15 to fill that subscriber. They were losing and have since as far back as our data went to 2006, losing $7 per subscriber. And I said, So Fly Magazine costs $8 a year to subscribe to? On average, the average yield, the average across the whole subscriber base, the magazine generated $8 on average per subscriber. And when you say yield, that's not revenue minus the hard cost.

That is the revenue. That's the top line number. Oh, that's stupid. They were losing, Sam, they were losing $7 per magazine per subscriber per year. Yeah, so like a flying magazine subscriber is definitely going to pay $50 a year or whatever. You would think, right? That was my reaction to it is essentially our communications to the staff were to the sales team was basically you're going to raise the rates of advertising sales because we want to go to people who so on the ad sales we raise the cost of ads but we also just subscribers basically said look if somebody's not willing to spend 30 or 40 dollars a year then they're not really they don't care about the content. I mean think about this to buy an airplane you're going to spend you know minimum 50,000. That's an old aircraft. To buy a, most of the folks are buying, you know,

quarter of a million to a million dollar aircraft. And some of our audiences, 75 to 100 million airplanes. And so you have a, you have a natural audience that is going to spend a lot of money because they care about the hobby or they care about their careers or whatever it is. They're, if they're not willing to spend 30 or 40 dollars, they're also not going to buy advertising because what happened is in the old days. And how many subscribers? So when we bought that, it was about 108,000 subscribers. That's pretty great.

We actually, when we raised the price, we raised the 30 initially, it actually went down to 32,000 subscribers. No shit. We bled it out, but that's okay. Like, we wanted to do that. We wanted to get rid of, and there was a lot of what we call freeloaders. They were essentially targeted for advertising purposes. Or the people, like, you may remember this. When you were younger, is your, like, your skulls.

would have a fundraiser and you would bring home a form and your parents would sign. Like, buy a magazine they didn't care about. There was a lot of subscriptions like that where the people that were actually subscribing didn't care about the content. I basically said, I don't want any of them. I want people who actually care about the content. And we were very successful in doing that. And so we saw subscriptions grow substantially in terms of actual full paid subscriptions. And subscription dollars, we were basically doubled the subscription revenue over the course of a year, yet still had like a third of the subscribers. We went down to 32,000. We're now about 45,000. We've drawn it cents. And are you able to manage this growth

off the cash flows of the business, or did you have to put more capital in? I put more capital that I wanted to put more capital in. Like, I could have ran it tighter, but I didn't want to. How much should you put in? You know, look, we total invested about $40 million in the business, but that's not flying. That's all the acquisitions we've done and everything we've acquired. point in the store, you've not raised outside capital. No, no, I didn't raise. I actually had a, I had half a million dollars in from two brothers of early investors in freightways that bought in, they got 15% of the business for $500,000. So you grow it to 7.5 in how much profit? The business was about break even at 7.5 million because we were not, we were not optimizing for profitability.

We were optimizing for growth. Who'd you hire to run it? So I was, I was doing a lot of poor day to day, and I recruited a team to come in to run the day-to-day operations. Okay, so we're at the end of 22, and I think around this time, you actually were like, holy shit, I might have just hit on something interesting.

I should go out and buy more and do this again, or did you first come up with the crazy idea to buy all that land? So I bought the land in 2021, about 1,500 acres. So the ridge, Originally, I didn't plan in being a real estate. What we actually wanted to do was go out and build a media center connected to a runway. Because if people are going to fly in airplanes, remember at the end of the day, the content for flying is all about the airplane. People care less about the pilot. They care a lot about the airplane. And this is no different than a car magazine where you're going to look at the Lambo or the Ferrari. For the aviation audience, they want to see the newest aircraft being produced. And so we wanted to create a video center connected to an airport. The problem was that none of the airports in the community,

five regional community airports around Chattanooga, were willing to sort of do anything. They said, you know, basically you have to go from the state, the municipality, the state, and the FAA have to approve it in order to build a media center. When you say media center, you mean? Yeah, to take video, we wanted to have a hangar that had basically a video studio and photography studio that we can bring airplanes in. But you have to build that. Because there's no hangar, there's a national hangar shortage across the country. And because what happens is nobody wants to, municipalities who own all these airports don't want investment in private hangars for small aircraft.

They want the big airplanes. And there's just a problem of allocation. So we decided to go build our own headquarters. And I was looking for land, looking for about 50 acres. And I came across this piece of land. It had 1,500 acres. and it was priced at 3.65 million. And I drove up there and it reminded me of this resort in East Tennessee called Blatbury Farm.

My wife absolutely loves. It's sort of back to farming agriculture. So I show up there and I'm like, this looks and feels a lot like Blackberry Farm. And that was sort of the original aspiration is we wanted to create a fly-in community with a runway and home sites that are connected to the runway that had that Blackberry farm. inspired sort of experience. How much should you pay for that? $3.6 million. Did you pay it or did you raise money?

No, I borrowed from the bank. I mean, real estate is one of those things that you can go borrow money. And so remember, I have a relatively high net worth. I don't have no liquidity. This is why I'm asking these questions because your net worth is

significantly higher than mine because your business is bigger than mine. but I'm liquid. And even me, I'm scared to make some of these bets. You don't seem to have that same fear. You seem to be way more offensive and you seem way more. I mean, look, it's not like we're inventing like electric cars or going to Mars. And so I don't want to like grandize it.

You can make it too grand. But like, you're outlaying a lot of cash on some really crazy ideas. You're like, I'm going to build and I'm going to buy an old magazine. and I'm going to spend more of my money and build an aviation community. Like, that's, like, really weird. And that's really balzy. Why, what do you think you have? What's that gene inside of you that makes you think these wacky things are going to work?

Because of the data, like, my experience suggests that it will. But, you know, it's taking more shots on goal. Like, yeah, I got three and a half million dollars in an investment for a real estate project. But if it goes to zero, I still own three to a half million dollars. of land, right? The end of the day. Yeah, but that's a huge project to get into because do you know anything about real estate? No, but you can bring in teams to go

run those things, which we have. So, like, Sam, it's a matter of scaling businesses and hiring teams to run these things. Yeah, it's risk, but... Yeah, I agree with you. This is just outside your expertise and you've made it your expertise very quickly.

Yeah, I mean, but media was outside my expertise. Running a data business was outside my expertise. but real estate is actually frankly, I wouldn't say it's easier. It's a, it's a different playbook that frankly can be learned. It's not as if, you know, building a SaaS business, a building a data business, there's a very small number of sort of models to follow. There's a very few companies that you can sort of model your business. I think the risk is lower for that, though. The risk is lower for software. I disagree. I think real estate is so much less

riskier because you actually have finite assets at the end of the day. That's true. True. The difference, though, is when I can start a software, I can start an internet or data company with significantly less money than it costs to purchase a meaningful piece of property. But I own the land. Remember that land at 1,500 acres at $2,400 an acre has value. You can sell that land for something else. You can partition it out. If you looked at that at what an acre would go for in that community, 50 to 60,000 if it was subdivided. It just wasn't. And so we knew the land had some underlying value. But we didn't know there would be any demand for pilots. We advertised it. In January 22, we actually took out ads in our own magazine to test the market.

What did you say in the ad? You know, it was written as if it was written to my wife, effectively. Like, my wife was the target audience, which is your Blackberry Farm audience. And we wrote a story about we're building a resort. And we didn't focus on the aviation, which is really what you would expect this to focus on. We focused on the amenities. around the experience that we were going to build. We vision shaped it. And we didn't expect to get a lot of response. We had over 300 inbound inquiries on that one ad we took out in our own magazine.

And we were able to get people to sign contracts to basically reserve their spot. And we knew then we had a winner. Did you like make a joke about the fact that you're new to this or were you like more professional? No, I mean, I didn't make a joke about no, but we, I mean, like, we were very transparent about the fact this was a new a joke, not a joke, but being lighthearted.

You're like, who knows what's going to happen? I mean, ultimately, Sam, it's about, we recruited people that actually had experience

and during, you know, the development, the master planning community, there are groups that actually take on a lot of the burden to do the work that you need to build these things.

It's not as if I'm having to, 1500 acres is a huge project. You're not going to do that yourself. You're going to want teams to deal with zoning issues, environmental issues, engineering issues. And we brought in airport planning consultants. We brought in development consultants.

And so it's not as if I'm doing all this work myself. I have a whole team who's running these projects. I have a team that's running them that's managing all the different pieces of it. And people wrote in and they basically said, if you're able to build this, count me in for buying a $800,000 home on that property. No, that's the lots or $600,000. So the homes are probably $2 million to $3 million.

And did they sign? And what did they give to you that the bank took as? They signed a contract and they put a deposit. So $40,000 an acre on a $600,000 purchase price, but they put $40,000 in per acre, or $10,000 per lot. And was it like you basically, quote, pre-sold, was it like $15 million worth of these properties? Yeah, we actually got up to about $28 million. and total bookings.

Yeah, total reservation deposits. But we thought we were going to get through this process for environmental approval, Quetro zoning approval. We actually thought we'd break down by the end of 22. So we had some churn out. We've refunded their money because these are refundable deposits. It's not as if they're giving you money

that you get to hold on to. It's no different than if you bought, you put a deposit on an airplane or put a deposit on a car. These are fully refundable, but we're about $15 million in, total reservations right now. So this project alone is awesome. But then it gets even crazier.

And like, I'm just fascinated by you because I view you a little bit as a peer and that we're both like media nerds. But the way that we're different is that you're doing great with risk. Like you're going, you're taking more risk, I think. But it doesn't, it's all working out. And this is where it gets interesting is you're like, all right, this thing worked for flying magazines, what happens if I go out and get more of these titles and do this whole content to commerce thing? And did you raise money for that? Not initially. So I have not raised any,

my father invested when he sold his trucking business last year. So he's my only outside investor other than the initial round. Everything was done by myself. And I was just using bank debt, frankly, barring money from banks and liquidating my portfolio. because I felt like I would rather invest in myself than invest in the S&P. I think the difference between Sam isn't necessarily that I'm like I am willing to take more risk. I'm also willing to take more shots on goal. I just think fundamentally like an asymmetric mindset that I have is, is I may lose, let's say the real estate project went to zero. I'm going to lose three and a half million dollars. That sucks. But you know what? I had been, my dad cut me off.

My dad fired me in 2014. I had basically like no job, nothing. Like it was, I was for all intents of purposes on my own at right bottom. I had to figure it out. I've done that before. And so I'm not afraid of losing it all. And I know that I can get it back. And so we've applied that rule to everything that we've done.

And we make acquisitions under the philosophy that it's asymmetric risk. It's like, let's say that we buy a business or buy a magazine. that we spend half a million dollars or a million dollars. And let's say it goes to zero. Let's say that we're completely wrong about our thesis, and the thing is just a dog. Well, then we write off that half a million or a million dollar investment. But if we're right, and we get a three or five or 10x multiple on that business,

that creates an enormous amount of value for us. And so that's how we've approached our acquisitions. And I'm willing to take bank debt because bank debt is frankly pretty cheap. By the way, I think about money differently than you. And I think it's cool to hear your perspective because I think I should do it more. But the way that I think about it with privately, as an entrepreneur or private companies, I think if most of my money, if most of my net worth is illiquid, any liquidity that I get, whether it's annual cash flows or it's from selling,

I sold one of my companies, I take all that money and I stock it away in like a safe thing where it's like, if all else goes to shit from whatever I have, that is enough forever. And so, So that's how I view it. So like, whatever, how much money I have, I stick it away. And I'm like, that doesn't exist basically. And I'm going to go and use a very much smaller sum to go start more companies. And I'll try to live off of my income from those companies. And if they sell great, if they don't, hey, I still have this other thing that I have.

What you're doing is different than me. And I like what you're doing because I think it's bolder and I think it's probably a bit more fun if it works, which is you're like, even though I've got this private, this other private company that it's doing quite well, so it's not going to go out to nothing. But I have some liquidity. I'm going to pile that liquidity into more interesting but potentially risky things. Well, like freightways at some point will sell. Like it will show and it will do be an exit. That to me is the nest egg like for for my long term. Like I know it's going to sell. Who knows what it sells for? But there is value, fundamental tangible value in the business. So for me.

And it's big enough that it's slightly derelict or very dearest. Yeah. I mean, it's totally de-risk. And there's a lot of value in that business. And I have a salary. It's not as if I'm not like the board takes care of me. So for me, I have that asset. Everything else is that will set my family up for, you know, for at least a generation. Like my kids would be able to college, be able to buy a house and so forth. So I'm not worried about like my ability to survive if everything else falls down. But I do think diversifying my risks through all these other projects, actually enhances my long-term returns, particularly if I'm using my balance sheet to borrow money from the bank at frankly, relatively low cost.

But what about diversifying your time? That's probably that what- Well, that's what teams do for you, right? Like you hire people to run it. Like, you know, Preston, who I think you know, we brought Preston in to initially run flying. He's now running a finance business that we've got that is doing aircraft financing. We brought in a team to run. We have Reese that's running our race. real estate project. So again, and I fired myself from almost every functional role I had at Freightwaves is I like, are you, are you chairman or CEO? I'm CEO, but I, the day to day, day to day, day functions inside that business. I have, Spencer Puyland, who's my CFO and CFO is

is running most of the day to day. Most of the day to day decisions are going through them. I'm working through strategy and thinking about the long term prognosis of business. So I can run and do deals and look at additional ways to lever this business up without getting caught up in the individual sort of minutia running a business. So how many titles has Firecrown acquired at this point? We're about 54, I think, is the number. Did you buy them in batches? Like you bought like- We do. You typically, I mean, publishers in the magazine business, it's hard to get scale with one title. Just because there's a finite audience that will care about that content. And so typically a publisher, And here's the thing about magazines is that only 25% of the content,

20% of the operations of that business actually is value added to a customer. You have audience development, you have magazine production, you have layout. Like a customer doesn't experience that. Only about 25% of the cost structure is the editorial product or the photography. So you need a lot of infrastructure to run a successful magazine or frankly, media business operation. I think you know the media side. magazine.

It was insane. Basically, the hustle. We could have, I mean, we were out about 2 million subscribers when I sold. Now, I don't know what it's at, let's say three or three and a half. Basically, three people on editorial. If we were selling ads, so when I ran the company, three people on editorial and 37 people selling ads and managing ads and making it grow. Yeah, and those three people bring all the value.

It's crazy, right? I mean, it's just how these. media businesses work is you have a couple people that are up front and the rest of it is infrastructure. And so what you typically see when we buy a magazine is we're having, we're buying a portfolio. We're buying not just one title, but three or four titles that come along with it. And so we've done a, you know, maybe two, maybe 20 different acquisitions that have made up that portfolio, but some of them have been really big. We bought Bonnier, which is like the, the largest publisher in Sweden, the sort of a Rupert Murdoch family of

Sweden. And they owned a bunch of boating titles, which we bought last, in last fall. And really, we owned boating, yachting, selling world, fish, saltwater sportsmen. And so really this large marine title. And aviation, we bought a number of aviation titles through various portfolios. And then we just recently bought model trains, a bunch of railroad titles and astronomy titles. So bringing that all together, that puts us the whole portfolio. Just whatever 12-year-old Craig is into, boats, planes, RC trades. So it's almost like my five-year-olds, like dream. I mean, think about it's boats, it's airplanes, it's trains, and it's space.

It's pretty cool for, you know, like a five-year-old boy, it's pretty magical. You know, but what we're buying are these audiences that love the content. They're, they're enthusiast and effectively by owning the magazine, which we finance through the, the P&L of the magazine itself, subscriptions and advertisements, we make money in media, but we're ultimately buying the audience itself to offer some other product or service to them.

Yeah, so let's walk through this playbook. So the playbook is to acquire customers profitably, and you do that by having a media arm that its own business, or having a media company that is his own business and make the profit via subscriptions and advertising. Step two is to make sure the audience, I imagine, you'll have to correct me,

you're doing something in your head of like, will they spend a lot of money on something? Is that right? Yeah, essentially. But if they're enthusiasts, if a category is big and they're enthusiastic about the category, then the answer is pretty much yes.

I mean, the thing you remember about magazines and particularly magazines that are decade-old magazines, is these things have survived, potentially the great, we know, magazines that are over 100 years old. They've survived multiple wars, They've survived multiple pandemics. They've survived the Great Depression.

Like, the audience truly cares about the content enough to subscribe. And if these magazines have survived the internet age and multiple phases of it, they're going to be around for many, many years. And so essentially, we're buying it because they care deeply about the content. And then ultimately, they can buy another product or service. And then is step three, like, raise prices and sell ads better? or like do you think about that? Well, I don't think we look at it in the same step, right?

So like we do, we treat these, we have a media business which runs the media operation. And then as we go find commerce, so let's say aircraft finance, we find essentially an executive, a CEO, if you will, that can run that business through its own P&L. That's separate than the media business. But in order to finance that, like these people wouldn't be selling you these businesses if they were kicking ass. but you've been able to make them kick ass a lot better. And so you must be doing something just on the media side that they didn't do. What are those things? Yeah.

I mean, effectively, you're fixing a lot of their cost structure and looking at it and in terms of the spend opportunity of that audience and create data that can, you know, really look at data from the perspective of intent for someone that wants to buy a product. So if you're reading flying magazine, you're either a pilot, an aspiring pilot, or an aircraft owner or somebody who wants to own an airplane. It's the four prime. I mean, there's people who read flying because they like airplanes, but it's a small piece of the audience. And so we know each of those categories are going to spend some money in each of their outcome. So a student pilot's going to take flying lessons.

It's going to cost him $10,000. If he's going to be a career pilot, he's going to make $15 million over the course of his career. A lot of opportunity to help him along his journey. If they're an aircraft buyer or prospective buyer, they're going to buy an airplane. They're also going to buy insurance and finance out of that. They're also going to have a lot of expenses to own that aircraft throughout their life. And so these are the journeys that we have, and that's ultimately what we're doing is we're optimizing the magazine, the advertisers, based on intent, not based on the fact that this is a number. And what we've explained to the owners, the advertisers is,

wouldn't you rather reach the 100 people that are going to buy your airplane versus the 100,000 people that, you know, 99% of those people are never going to buy any of your products? That's what we need to do is actually get into that intent data. And we do that through digital. Like print is just one aspect of what we do, but it's drive an intent data to actually be able to demonstrate to them

there's a value to that customer. That was a very good pitch. And then when you hire these guys to create, so I guess airplane financing means you help people get loans to buy a plane. And then I think you have like a classified section. So people selling planes. And then now you have the real estate one. I don't know what you've done with the other titles,

how you've done the same content to commerce type of play. But I want to hear more about what those are. But when you're hiring people to build these businesses on top of an audience, So do you how much do you decide to invest in them until, invest in their new business until they're able to make a profit? You know, we have a, we're pretty patient. I mean, it depends on the business itself. If it's growing and it's hidden's KPIs, then we'll continue to support it.

You know, every business is different. Obviously, the real estate business has, you know, we haven't broken ground yet. So that, that is going to take many years to sort of generate a profit. It has its own sort of journey. The finance business is a finance brokerage business. and it should generate profitability much quicker than some of the other projects. We buy e-commerce businesses. We've now on six e-commerce businesses.

What are you selling? We own the largest NASA or the largest space merch store on the internet called the Space Store. So it's like collectibles. The aviation nerds and the space nerds are the Venn diagram for both of them is pretty tight. So if you want to, if you want like a model of a rocket or a patch from one of the missions, we can sell that, whether it's SpaceX or NASA. And so what are somebody like what are you going to do with boating? Are you going to build a harbor? No, I don't think we're doing real estate because I think real estate's a, like, the arbitrage in aviation is that you're taking a piece of land that has beauty. It's a beautiful piece of land. But it's not next to a body of water to build a lakefront home. And so essentially what you're doing is you're taking this land and you're arbitraging because the runway itself is the arbitrage. Right, right, right. The fact that pilots want to be there. And so with boating, it's not as if I can arbitrage a lake front property or an ocean front property.

Because that's already awesome. Exactly. And the market's already priced that in accordingly. So for us, we're looking at financing. We're looking at e-commerce. We're looking at other categories that we think we can be successful. So probably won't be real estate. But it will be in other categories that we'll look at commerce.

I think you said 40 million that you've raised for this whole thing. Yeah, I didn't raise. I mean, in between, I mean, my father funded. has invested the money into, we haven't used outside capital, if you will, or family office. Of that 40, how much have you spent on acquisitions? No, that's been the predominance of the investment, has been through M&A. But you're going to do 60 million in revenue this year. I think on the tweet, you said 10 or 15% profit?

It's about to do our profit in March was 18%. And we think we can sustain 20 and we think ultimately it sort of like levels out around 30%. So you're going to do 60 million in revenue, I think you said. So that means 12 million in profit. Yeah, remember that's a run rate number. So that's not a run rate full. But yeah, 60 million in revenue rent, a little bit over 60, with 20% margins. And then what do you think that would be worth?

You know, if you look at sort of public comps, you're probably talking 12 to 15 times earnings. Okay. If it was a public, our goal is to get to a billion. A guy I have no plans to sell this business. I like having cash flow. Sam, I do appreciate cash flow. So it's not just taking risk. I actually love cash flow.

You know, it's funny as a venture-backed founder. You're kind of jealous. You've talked about this on your podcast before. You get jealous of the cash flow guys. Yeah. The cash flow guys get jealous of the valuation and venture. And the venture guys, almost every founder that I know, are super jealous of the cash flow guys.

Because, like, wait, we built this fantastically high-valued business. but we don't see any of that money it goes ultimately until exit. But you have both at this point, but you have so on 12 million in profit, 10 times is 120 or no, sorry, you said 12 times.

Yeah, I mean, you can look at if it was a private trade, probably 10 times is a fair number. So the business is worth at 60 million run rate, 12 million profit. I don't know if it's trailing 12 months revenue, whatever, but roughly 120 million to 180 million dollars. that's what the business is worth. And you started this in 22 or 21. That's awesome. Okay. And then you said, I think this is going to get to a billion in revenue by 2030. Is that our goal? And we can do that through both organic and organic growth. I mean, here's the reality. Is there 4,500 magazine publishers in there and say there's no exit for these guys. I mean, a lot of them are, they're either owned by large corporations, which frankly want to divest their print.

products because public comps are challenging for them. Or they're, you know, family-owned businesses where they've been running the business for multiple generations or perhaps they started it 50 years ago, whatever. And they don't have an exit. And so we can go find, I mean, we're doing a deal right now where it's in a business about a million and a half revenue, about $600,000. And when you take out all the expenses, all the owner expenses, about $600,000 of contribution, we'll pay less than one time for that business. And so there's just not a lot of folks buying in this category. And ultimately, you're buying the audience.

I mean, that's really what it's all about is, yes, we own and generate profit, and that's great and cash flow. But ultimately, so I like to say we're a private equity business meets venture capital. Because ultimately, VCs want the asymmetric 100x return. We're going to incubate businesses that can potentially bring those high-level returns, but using the audience, which we already own. And so, I mean, e-commerce is never going to hit that mark. But you have an aircraft finance business.

You have a real estate project that very well could. And we'll find other business models as we grow. You're basically building a Hearst business-style company. So, Hurst, have you read the chief, the biography of William Randolph Hurst? I have not. You should, man. It's awesome. So William Randolph Hearst, he had a successful father.

His successful father was a minor, I think, or like gold, gold. And in a gambling bet, he won, I think, the San Francisco Chronicle. And he goes to his son and he goes, well, William, you've got the Chronicle. Hopefully you can make it into something. You've got a year to make it not lose money. And so he does that. And he does it by creating what's called yellow journalism, which is like clickbait of the late 1800s, early 1900s. And he kicks ass and he crushes it.

And he starts buying another thing, another thing. He starts buying all these titles and he's killing it. He's crushing it. This is like a cable business before a cable where it's recurring revenue subscriptions, massive margins. And then they get so big. So they do a bunch of things. One, they invest in this new sports network called ESPN. So now Hearst owns something like 30 or 40% or 50%.

I forget the number of ESPN. They've made a billion off of that. Then they buy Finch ratings, I think, which is a data business, which is exactly what you're in. And they start buying all this stuff. At this point, Hearst is owned by the family. It's one of the largest family-owned businesses in America. They own this massive building right in the heart of New York City. My in-laws live literally five.

I'm on my wife's bedroom that she grew up in. And I can reach out the window and touch the Hearst building. And I remember that was funny because I almost sold my company to them. And I was like sleeping in that room when I was visiting New York City. And anyway, they own this massive building that I don't think they got a loan on. I think they own this like multi-billion dollar building. They own a ranch in like Wyoming or something like that. They own everything.

And it's owned by this family. And it's kind of sick. And it's been around for a hundred years. That's sort of what you're doing. You know, Hearst is amazing because it's 10 billion or 12 being of revenue. No debt. Like that's what's pretty astounding about a hurt. Not even on the real estate.

They're no debt. They actually have a very large venture capital portfolio. They're an investor in freightways, by the way. So that's one of the reasons. Oh, so you know all about them. I forget who I met with there, but I learned a lot about them. But they're like older guys. They're like they wear suits.

They're like the Mad Men era where they like, you know, so it would have been a bad fit. But that's what you're building. And it's awesome. Look, I think media businesses are underappreciated. I think what's happened is the, you know, Hirst, during Hirst is they own a bunch of newspapers as well. But I think what we're seeing now is this, if you own a strong sort of thesis around a media asset and you can build products that take that audience, that's ultimately the playbook.

It's like, we have these audiences. They love the content. They're subscribing paying for a product, which is a print magazine or a digital experience. They're already the audience. We can offer them products and services that they can. naturally would buy anyways. Yeah, that sounds like when you say that, I'm like, yeah, that's so obvious. But like everyone, not everyone, a lot of people have tried this. Few have succeeded. Hodinky, I think, is succeeding. There might be a couple others. But like when BuzzFeed says they're

going to do it, it's shit. It never works out. I think it doesn't work out because they have like a committee deciding on these things, whereas you can be a bit more of a kind of a monarch where you're like, this is what we're going to do. Well, I think BuzzFeed along with a lot of other publishers have sold out to programmatic and have relied upon the platforms, the Facebooks and the and no one really like loves them too much. What is BuzzFeed anyways? It's like a realistic like and I think the difference is that we're folks, we're buying magazines and media properties that had been around for decades where the audience like the people

talk about their father or the grandfather and they, you know, reading Trains Magazine or model railroad or or flying. Like, they, they, they, they, it has a lot of affinity to it. And then effectively, we just have to find services. So we make money in media, but then we have to find services that we can offer on top of that. Uh, how many hours a week you work in? No, I don't, I don't count my hours.

You think, but like, maybe like a normal nine to five, 40 hour a week. No. I mean, I, I do, when I wake up at six in the morning, because my kids wait me up till midnight, I'm pretty much either with my kids or working on the businesses. But that's not work to me, man. Like, like,

to me, this isn't work. These are, this is a game in some ways. I mean, I, you're still, you're in grind mode. It's not like this is all like awesome. Yeah, I'm not sitting on beach. Like, I do it to myself, too. Like, I end up getting overwhelmed, but then I'm like, I don't have myself to blame. What's your goal?

You want to be a billionaire? You want to just do cool shit. You want to create something that lasts for a hundred years. What's, what? No, I mean, one of the reasons I like media businesses is because you're, you're always learning something new, and you get intellectually stimulated by a new challenge. It's a new audience. It's a new product. I don't know. To me, it's, you don't want all the power, fame, sex and drugs that comes with owning spacemagizing. Trains magazine is going to give me an enormous amount of power. Yeah. Our model railroader. No, it's not that at all. And it's not even the wealth. It's more than, chase. It's the putting up the score in some ways of solving problems and learning about a different.

I mean, we have a business that I pay $10,000 for. It's called Aeroswag. It's an e-commerce business. It will do $100,000 this year. I spend more time on that business proportionally than any other one just because I think it's cool. It's a print-on-demand t-shirt shop for pilots. I frankly should not be spending as much time as I do, but I enjoy the, to me, it's a hobby. It's a tinkering kind of thing. I bet it feels awesome to make your dad regret firing you. It was fun proving that I could make it work, but I had a lot of that. I mean, a lot of doubters when we first started the business. Yeah, look, behind most successful people is a girlfriend or boyfriend that broke up with them or a father that made like one rude comment or like, in my

case, it was a media executive who like, he like half hazardly like in passing was like, man, these newsletters will never make more than a million dollars a year. And I was like, you motherfucker. And you thought about that every day, right? Every day. And I see this guy on sitting floor seats at the Knicks. And I'm like, you son of a bitch. So I would say the best thing to give a founder is an enemy.

So at Freightways, I had a guy. He was a CEO of our largest competitor. And he really pissed me off because he told me I couldn't compete against them. I like to see you try whatever products. And I woke up every day thinking about him. He got fired. And I tell you, the motivation, it wasn't as fun anymore because I needed him to be the guy. All of a sudden, the company became nice to me.

And it was like, no, I want you assholes. Like, please go back to be an assholes because I wake up more, slightly more motivated every day. I was like that with the founders of Morning Brew. I was like, I want to kill you. I'm like, if I see you in public, I want to like get a fight. now they're like my their family to me they're like my best friends well you are doing a you're hosting a pot one of the podcast on their platforms uh you know people say uh uh you know don't don't don't be hateful towards this person and in my head i'm like you rage is like the greatest

fuel ever it completely i don't you know someone what's told me if you got hate in your heart let it out i'm like no i'm burying that deep let it go nowhere that's feel i need that Sam, you know, it's also, it's good for the team. Because if they also have the hatred of the enemy, then they will go much further and fight harder than if you don't. Yeah, I love that. And it's sort of like a sport where you know, like, once the whistle blows, you're like anything goes.

But once the game's over, like, it's like, all right, nothing but love, nothing but respect. But while we're in between those, the lines, like, we're getting after it. Yeah, exactly. And so I think it's good. Dude, thanks for doing this. Yep, enjoyed it. Craig Fuller, that's the pod.

I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On a road, let's travel, never looking back.