Next Level Pros - #31: Xavier Helgesen: Founder Of Better World Books, Clean Energy Titan, Serial Entrepreneur

Episode Date: September 5, 2023

Join us for an exciting episode of The Founder Podcast as Chris Lee sits down with the one and only Xavier Helgesen, an extraordinary entrepreneur with a knack for building and transforming businesses. Xavier, the mastermind behind Enduring Ventures, takes us on a journey through his remarkable career. From humble beginnings in a small iron mining town to founding multiple successful companies, Xavier's story is nothing short of inspiring. He shares his early entrepreneurial endeavors, including running a mini golf course and a college social network. But the real game-changer came when Xavier recognized a unique opportunity in the used textbook market, leading to the birth of Better World Books. Discover how this venture became a multi-million dollar success by helping libraries and nonprofits while becoming one of the first third-party merchants on Amazon. Now, as the founder of Enduring Ventures, Xavier shares his current passion: acquiring cash-flowing businesses and nurturing their growth. Learn how he evaluates and shapes these businesses, emphasizing brand and sustainable cash flows. Tune in to gain valuable insights, entrepreneurial wisdom, and a glimpse into the mind of one of the most remarkable founders of our time. Xavier Helgesen's journey is a testament to the power of innovation, persistence, and the relentless pursuit of building enduring businesses. Enjoy this enlightening conversation on The Founder Podcast! HIGHLIGHTS "I remember the first day I made like 100 bucks, and like grimy dollar bills. And I was like, this is the best thing I've ever done in my life." "But then I stayed in school, which was the dumbest thing to do during the internet boom, like I should have dropped out after freshman year." "I'm much more interested in cashflow, like how much cash actually goes in the bank account after taxes after depreciation after capital expenses after all of it." TIMESTAMPS 00:00: Introduction 06:44: Lessons From Parents 10:11: The Age Of The Internet 16:53: Book Drive 20:09: Leader In Book Sales 26:30: Building His Own Brand 29:05: Early Lessons 37:47: The Right Person To Take Over 43:19: Turning A Company Around 45:29: Entrepreneurship  51:41: What Gets You Excited In Life? 🚀 Join my community - Founder Acceleration https://www.founderacceleration.com 🤯 Apply for our next Mastermind https://www.thefoundermastermind.com ⛳️ Golf with Chris https://www.golfwithchris.com 🎤 Watch my latest Podcast Apple - https://podcasts.apple.com/us/podcast/the-founder-podcast/id1687030281 Spotify - https://open.spotify.com/show/1e0cL2vI1JAtQrojSOA7D2?si=dc252f8540ee4b05 YouTube - https://www.youtube.com/@thefounderspodcast

There's probably more businesses to be bought, turned around, reinvented than there are entrepreneurs out there. And it certainly is. It's a lower risk proposition. The business model has already been proven. The price point's already been proven. And that gives you a lot of confidence to say, okay, this has been done before. We're not reinventing the wheel here. What's up, Founder Nation? Hey, I just wanted to, first and foremost, before we jump into this episode, just thank you so much for all the many listeners, all the many downloads. I cannot believe the response to this podcast. When I launched this thing two and a half months ago, I had no idea the momentum that this thing would create from the incredible guests to so many listeners. I've had so many of you guys reach out to me directly and thank me and give me so many great testimonials of what you've been able to take from this podcast.

First and foremost, thank you for being such a loyal listener. Thank you guys for bringing so much value into my life because the reality is the reason I do this is for you to hear the feedback. So if you aren't following me already on Instagram, it's at Chris Lee QB, like quarterback at Chris Lee QB. Make sure you go ahead and give me a follow. You're going to see all my different posts there. You're going to be able to see the little short clips from different episodes. So be sure to be giving me a follow there. Also October 17th, 18th and 19th, I am going to be hosting a remarkable mastermind right here at my house, right here at the founder studio. This is where SoulGen was launched, where it was nurtured and created for two and a half years before finally we left and eventually

had a nine figurefigure exit. So we're going to be doing this mastermind. We're keeping it to 10 people. Right now, I actually already have six seats filled. I have so many people that have been reaching out to me. If you are interested in knowing more and what a mastermind like this would look like, go ahead and just message me directly on Instagram, the word mastermind at Chris Lee QB, and we'll be happy to give you a little bit more information. So let's go ahead and dive into this episode. Yo, yo, yo, yo, yo. Welcome to another episode of the Founder Podcast. Today, I am joined by Mr. Xavier Helgelson. Man, I keep screwing that one up. Helgelson, Chris, we worked on this. Helgason, goodness.

I told Xavier I only have him saved to my phone as Xavier because he's the one and only. So Xavier is the ultimate coolest founder. I come across so many incredible guests, so many incredible people, but Xavier is by far one of my favorite. Xavier has founded many, many, many businesses. He currently runs a company called Enduring Ventures in which he goes and he buys companies and he puts in new management and he bundles them up together and he sells them off. And the guy knows business. He has been involved in all different kinds of things. At one point, had the largest book distributorship in the United States. Is that right?

Largest used bookstore. Yeah, largest used bookstore of all things. All right. I know you are, so I love walking the shelves of that business. Yeah, I love it, love it, love it. So, Xavier, welcome to the show, man. Chris, it's good to be here. It's good to be in the presence of one of my shareholders.

I will be on my best behavior. I appreciate you. We love our shareholders in this business and during Ventures because despite the name ventures, we are not a fund. So we don't charge fees. We don't charge carry. We're a company that buys companies, which I love and I think is a lot more aligned. So, yeah. And it's so cool, by the way, to see what you've built in media. I just knew you as an interesting dude on a Croatian island and apparently had a solar

business of some scale. And then you told me, I was like, holy, that's a giant business. So it's amazing what you've been building. Thank you. Thank you, man. Yeah. So for the audience, Xavier and I met. You guys, if you had a chance to tune into JP's episode, Xavier, JP, and I all met on this Croatian island doing a mastermind, 150 people out in the middle of nowhere. It was a super, super cool experience. One of the things that drew me to Xavier was just his sheer knowledge around all different types of business. And I was just intrigued with just his understanding of everything from sales, marketing, operations, and much like a guy of my, you know, definitely we are made from the same cloth. And so Xavier is an absolute stud. Xavier, jump in and like, tell us a little bit of your story. Like what got you into entrepreneurship? What were your first few businesses? How did it all get started?

Sure. So I grew up in a small iron mining town in northern Minnesota. There were 37 people in my graduating class. Oh, baby. Yeah, and that drew from about a 30-mile radius. So there were people who snowmobiled to school because it was the fastest way to get there. So I really did. I grew up in a place that I very much wanted to get out of,

and I didn't have a lot of money when I was growing up and so I was I had pretty well-educated parents but they they just moved there because it was a small town pretty small town on Lake Superior and um I I put my mind to earning my own money and getting out of there awfully early so I had started mowing lawns when I was 10 or 11. And then I leased a mini golf course, which was actually a good story. My old tennis coach, Mike Guzzo, is a great dude. Actually, the last straight on kicker in the NFL. He didn't kick soccer style like everyone does these days. Just a big square toe doc martin boot that was that was what guzo did and so so guz uh guz like saw my entrepreneurial spark i guess and he had this problem which was that the small town had a mini golf course that

lost money every year because they just had to pay some kid to sit there, but nobody ever went, but they couldn't really shut it down. So he's like, and I was just bugging him about it. I was like, what are you doing with that golf course, Goose? And he was like, hey, tell you what, I'll make you a deal. You pay me 10% of whatever you make and you can run the golf course. That's it. I'm not paying you by the hour. I'm not. And so man, did I throw myself into that one? We sold season passes, we had, you know, marketing campaigns, coupons, where you'd get a, you know, because the marginal cost of a mini golf game is zero, right? So I'd have a coupon that would be like, buy a can of soda for $ dollar and get a mini free mini golf game and you know and the soda would cost me 25 cents and i'd make my profit and i'd get them in the door and you also realized it

had to look busy because if nobody was there then like nobody else would want to go there and so we'd sell these season passes just so you would always parents would send their kids i remember one family the kids were down there like four hours a day the parents had the best deal of their life i think they bought the passes for 20 each for the whole summer and those kids were down there every day free babysitting free child care free child care and you know what you know what it taught me it also taught me like when you have responsibility for something like the windmill hadn't worked for years. And me and my dad went out there and figured out, you know, put in a little new motor and got it working. And like we did those sort of things, too.

So so very grateful for my parents and supporting me in that. But that was really the first time like I made, you know, I made my own money. And I remember the first day I made like a hundred bucks in like grimy dollar bills. And I was like, this is the best thing I've ever their wing and say, Hey, do this, this, and this, you know, my dad was a school teacher. And so I knew I wanted to make money and I, and I tried and failed at a lot of different things. But now that I'm a dad, you know, the biggest lessons that I can pass on to my kids is not my money. It's, it's the knowledge and the know-how. And, and so I've been, I've been working on similar things, like just ways that kids can go and create value other than just trade their time for money. And so, for example, this week, me and my son, we're going and picking up a 71-passenger school bus that we bought on an auction. So he's 15 years old.

I told him, look, I will buy the bus. I will, I'll charge you 10% interest for the money that it costs. And then on top of that, you got to give me 20% of your profits. And so what he's going to do is he's going to buy, he's taking this bus and he's going to make it into a tiny home and then resell it, uh, you know you know, as like a mobile tiny home. And but yeah, like these are like the things like that you were taught, like being able to like share in the profits and whatnot. Like I think it's so powerful that a kid can just understand value creation at an early age. And I think with that, it's like no matter how profitable, how successful, whatever, it will launch into an entrepreneurial career, much like you've had yourself. Yeah, I think that's really right. And so, you know, I did that every summer for a while. And then I got into Internet stuff, which would have been like 94, 95. And so I was really like, you know know i really came of age in the internet i would say

like i maybe got my first internet connection like ninth grade um you know i was i was in the nerdy crew for sure and so we were like well i remember we paid long distance calling to get on the internet one time you're paying like 10 cents a minute to call like duluth minnesota to get online i mean yes it was really a nightmare in the early days but it was so I'd never seen anything like it like these BBSs where people were trading pirated software and just everything was was wild and so I guess for me like I got what got me out of the small town was really like a scholarship to Notre Dame, academic. And so I tested well. And that was back in the days when your test scores were like what got you in because I was not a great student, I would say.

What did you score, ACT or SAT? What was it? So I think SAT, I would have been like, out of 1600, I would have been like a 1540 or something. Oh, my goodness. Okay. Okay. We got a certified genius on our hands here. That's awesome. I got a certified ASPY is what you got.

When I was four years old, I would just sit there and type numbers on a typewriter for hours. I was like the weirdest little kid. So that was always a thing. I've always been really, really good with math. I finished freshman college calculus in sixth grade because my parents were trying to look for a challenge for me. And so they're like, okay, well, let's just see how fast you can go in math. And it actually kind of backfired because I'd forgotten a lot of my math by the time I got to like junior and senior year

because I just hadn't been doing it in so long. So I did better on the verbal than I did on the math and all my testing because I'd just been out of it for a while. So, yeah, so I got into that. And then the other great gift was these guys taught me programming. I knew a little bit about coding before I got to college. But, like, this web programming design company in South Bend took me in because I lived next door to one of the guys who founded it's cousin basically. And so I,

I, they took me in and showed me like cold fusion, which was a way to build dynamic websites. And that was the other thing that just blew me away. I was like, Oh my God. So I can build like anything on the web now just with my own creativity. And,

and so I built this college social network at Notre Dame. That was at the time I graduated, we had like 80% of the campus on the opt-in email list for the whole campus. Wow. features like teacher reviews were the killer app. Everybody needed that. And then we had like chat boards with this poll thing where you could create a poll and everyone else could vote on it. What year was this? This would have been like 99, 2000 maybe. Yeah. Yeah.

So definitely, definitely early stages. And like, I mean, that's right before the internet bubble burst, but the internet bubble burst with like hardly any real tech, right? Like, and so you're on the- No, it was all bullshit. And I was actually like out there building stuff that people were really using. And I was, I think similar to you,

I was really, really naive about the business world and the entrepreneurship world. I really didn't know how to take and go from college and like go up in Silicon Valley and make something happen. Like I had this sort of abstract idea that I would try to do it. But then I stayed in school, which was the dumbest thing to do during an Internet boom. Like I should have I should have dropped out after freshman year and said, hey, I'm going to San Francisco for the next three years to see if I can make any money. Right. But, you know But I did what I did.

And so when I was going to like, okay, I'm going to go try to start something and raise money, I graduated and there was no money for anything on the internet. I couldn't even get a job as a programmer. I was willing to work for like $15 an hour as a programmer. I couldn't even find a job. Wow. Yeah. So yeah, so I drifted for a little bit. Like I, I tutored, um, I taught math to

athletes at Notre Dame. Like I, uh, had a, like, I got my only W2 job I've had in history. Like I found this one, like old school company that, um, you know, would, would give me a salary to write code. And so I did that for nine months. And then I was super bored. And so I got into selling books on the internet. I just got into, like, there was this huge demand for used textbooks. So how did you find that there was a huge demand, right? Like what initially, like, walk me through those first days. You're like, oh, you know, you were on eBay one day or, you know, what got you involved in it?

Well, I remember it so distinctly because I had one friend who was sort of doing the same thing I was, like hanging around the college town. Like a really good friend became my co-founder. And so we were selling off everything that our roommates had left. And we were just trying to get as much money as we could for it. And he was like, Hey, do you know any place you can sell books on the internet? Maybe we could sell these textbooks. And this was before you could sell on Amazon. And so I was like, hey, there's a site half.com. I have no idea if it works. But like, try listing some books on Amazon. And so I was like, Hey, there's a site half.com. I have no idea if it works. But like, try listing some books on there. Let's see. And so he went like was diligent and listed

all the books. And then he was like, Oh, my God, I got like $400 in orders last night. This is crazy. And so and so then that was like, and that was in the middle of summer that wasn't even like during term. And so he and I both had this like real powerful insight that was, oh, my God, there's value in all these textbooks and nobody realizes it. But it was kind of like, what do we do about that? We didn't have any money to buy textbooks. We didn't have like a textbook guide. So we wouldn't like know any way like which textbooks are being used, which are not and so it really like that with me for a while and i'm like i just think on these things sometimes for like months um you know and and the idea hit me of a college book drive and the idea

was oh i bet people would just donate their books at the end of term and if you partner with a charity then the deal could be that you'd sell them and the charity would get part of the money and the charity would be like the good cause and the reason people would get books and this worked way better than you ever could have anticipated like we we bootstrapped a 10 we bootstrapped a 10 million in revenue in the first three years just running college book drives with cardboard boxes and posters on them. Oh my goodness. And so you teamed up with the charity, you gave them a portion of the proceeds from the sales, but you've got... I mean, how many books is 10 million in books? I don't even know. How many...

Yeah. Let's see. Yeah, it was a lot of books. So let's say that would be, maybe we were selling them for $20 a piece at that point. So that would be like a half million textbooks or so you got to sell to get that kind of sales volume. You know, so it was a lot of work. I mean, I, you know, we bought these old cargo vans and we would drive around the Midwest, like just, you know, up the drives picking up the books um it was a it was a great job as like a early 20s like a great thing because you just spent all your time on college campuses super fun um and you guys are you guys are just targeting you're just targeting them at the end of every semester right like you're not really doing anything except for like right then.

Yeah. So it was, it was a super seasonal business because basically we had to do all of our work in like a month or two to collect the books. And then the sales almost all happened within a month or two when people came back to school. And so, so, and, and after, you know, winter term. And so we, we got really good. I mean, we would almost run out of cash every year in like july which is like our low point because it was like we spent all the money collecting all the books growing the warehouse buying shelves everything else and then we knew we had to wait until like end of august to really get the value for the books but we were just like down to nothing, you know, just running on fuel. Cash, poor, you had inventory rich, you were ready. That was exactly what it was. I was inventory rich. I knew these books would sell. I knew we weren't going to just go belly up, but God, did it suck. Oh man. Those are like the hardest times

in business, right? When you have something of value, you have sales, you have pipeline, you have everything, but you need cash in order to be able to fulfill. I think that's like an entrepreneur's both nightmare and dream, right? It is the hardest time of business, but it's also such a powerful position to be in, knowing that like, man, all I need is to fulfill on this and the rest will take care of itself. Yeah, I agree. Because, you know, it's going to work at that. You're not like, oh, I don't know if customers will want this.

I don't know if I can get supply. Like you have supply, you have demand. But, you know, you don't have cash in your bank account. And it's like you can see it, but you're trying to help everyone else have the same faith you have. Yeah. Oh, that's good. It's going to be see it, but you're trying to help everyone else have the same faith you have. It'd be a little more challenging. So you did this for three years. And how did this morph into you becoming the largest used sales book guy? So basically, we realized because of the seasonality, I was pretty obsessed with finding some non-seasonal business that we could do that would utilize what we were good at, which was basically having a huge warehouse full of books.

South Bend, Indiana was an incredibly cheap place to build out stores, especially at the time because it was before the e-commerce boom. So we could get warehouse space for next to nothing. We once had a meth lab blow up and take down our internet connection. I wouldn't say we were in the best part of town. Oh, man. Okay. You can't just say that. You got to tell us the real story.

So like this is in Indiana. So there's this giant foundry i'm talking like a million and a half square feet that was basically left to the city of south bend and i i assume that the best coming gone out of business no one would buy the facility um like it looks like doom if you ever played doom like it's basically doom so it's like steel doors like dark alleys leading to nowhere like really scary industrial lighting absolutely terrifying place to be in at night so they called it the um sample street um industrial accelerator or something like that and basically the bargain um god i want to, I'm trying to remember my math now.

It was absurdly cheap. I want to say it was less than $10 per square foot per year to have space in there. And really flexible terms. Basically, you could just take over part of it and just expand as you need it because they just needed someone in there at any price. They weren't trying to make a profit. Just help us with our property taxes. Yeah. And so one time we're in there working and we hear this giant like boom

and all the lights go out. We're like, what the hell happened? And we called the police. We're like, do we need to evacuate? What are we going to do with the books? Oh, my God. Sure enough, the police come and put out the fire. And some other, in the business incubator, someone had claimed they were doing light manufacturing.

And indeed, they were. They were just light manufacturing meth. Oh, man. The thing I love about entrepreneurship is in all the weird experiences that you have, right? Like the fact that you're warehousing in just this ghetto spot because it's the only way you can make it. And a meth lab blows up. Oh, dude, that is classic. That's a good one.

It really is, Matt. So look, I'll fast forward on the books. We got into serving libraries. That was our big breakthrough. So we realized that libraries had a problem, which is they have lots of books they need to get rid of. They also get donated lots of books, most of which they don't actually need. And so we could solve this problem. And we were sort of uniquely trustworthy that we already sold everything on consignment. So we had a already had a big consignment system set up from the charity book

drives where we could track every book and make sure that the entity got the credit. And we were already called Better World Books, We had a social impact. And so we went to all these libraries and said, hey, here's the bargain. Send us all the books. We'll just pay the shipping. We're not going to pay anything for the books up front. And we'll list them. We have this tracking system and we'll make a portal where you can see what they sell for.

So, you know, we're being honest. And then we'll give part of the proceeds to you and part of the proceeds to a literacy program. And it just turned out that that was a great value proposition for them. And so just like slowly but surely, we built these relationships with like New York Public Library, Brooklyn Public Library, Harvard's libraries, Stanford's libraries, all the way down, Peoria's libraries, about 8,000 libraries in U.S., Canada, Europe today. The Better World Books is still clipping along. I actually have not seen the P&L in the past three years since I'm no longer involved, but call it a 60, 70 million revenue business with a path to 100. That's phenomenal. Really good education in business. I couldn't ask for a better one, to be honest. That's phenomenal. first to be an Amazon reseller. Is that right? We were. So we launched the business within, I would say, three months of Amazon accepting third-party merchants on their website. So literally going from being everything they stock themselves to being open to third-party merchants.

And because I was a software guy, we built really good software to manage this. And so we were the first... We had the first multi-channel listing platform. So we could take, if we had one copy of a book, we could sell it on both Amazon and eBay and whichever one had the higher price, we could sell it there. And then as we went, we actually added books as sort of a unique category because there's actually a lot of sales channels. And so there's specialist websites like a Libris.com that actually push some significant volume that are only books. Then there's like Amazon UK, which is a whole different website. It's like a whole different API and everything than Amazon US. But because they're English

language books, a ton of them sell in the UK, and that can cover the shipping costs. So we got to the point where we had like 3 million unique SKUs listed on like 12 different marketplaces. And keeping those all up to date was always a nightmare because the APIs were not very clean. But that was what we were good at. So we were good at those third-party merchants. Honestly, the biggest screw-up in the history of the business, we probably left at least $200 million of value on the table because we didn't do this right, was we started building our own brand in 2006 because we saw that it was going to be a zero-sum game on the marketplaces. Everybody was going to compete down to the lowest dollar,

you know, to get those sales because low price wins on the marketplaces. And so we were very good at them and we never had like built our sales and marketing muscle because we didn't have to, we could just list the books and they would sell. Right. But then as you go, we started,

we got up to about 10% of our sales going through our own channel and had a pretty good trajectory on that. And I left really for personal reasons, like to do something different. So I kind of went out of full time. And we didn't have an e-commerce CEO for really ever after that. And so people were looking at it from like the framework of operations. Let's just get more books and let's ship more books and let's cut pennies out of our processing. But they weren't looking at it through the framework of brand and direct customer

relationship and unique value proposition. And so all that sort of atrophied. Better World finally got religion on this like 2018 again, but we'd lost eight years. And meanwhile, a competitor with an inferior brand, inferior model had really nailed the direct-to-consumer. And their margins were just 20 points higher, like straight to the bottom line, because there wasn't Amazon's cut. They had more pricing power, everything else. So that was also like, fast forward to my holding company today. The only thing I require our CEOs to do is get their brand work done to a top-notch standard. Like the second we take over. Because I don't want to ever go out there without something that is thought about brand and isn't working every day to build it.

So elaborate on that when you say that's the direction. Because I guess before you do that, tell us a little bit about what you got going on. You have Enduring Ventures, which you go and you acquire different businesses and then you get a CEO and you put them in and kind of what your target is, what kind of that whole process? For sure. For sure. And just to get there, I'll fast forward through. I was also a venture-backed CEO for eight years. So really went, changed somewhat dramatically what I was doing. I raised about $200 million to bring solar to Africa and a pay-as-you-go model. Yes. So, yeah.

We can't forget that part. That's a phenomenal part of the story. Yeah, yeah. And look, many, many learnings. I mean, I had an opportunity to either go back to Better World and likely step into the CEO chair, which i actually wasn't ceo i was sort of like i was the entrepreneurial guy who had the vision but we had brought in an experienced ceo which is actually a good move pretty early on because i didn't know anything about traditional business

like i would not have been respectable with a bank like i had long hair i played ultimate frisbee like i was you know i was i was that guy I, um, uh, I was looking at like, okay, I could be paid really well to run this company. I love, like, I have a clear vision for it. It's a solid mid-market company. I went off for a year to go to business school because I had kind of a unique opportunity to study at Oxford. And so I went and I said, you know what? Like, I really want to just try to test myself and take a swing. So I gave that up and I moved to Africa and moved to Tanzania, like made less than I made as a programmer out of undergrad with a young family and just started trying to build this idea of like, can we do can we do distributed energy in Africa? Like, what would this look like? And it was just so much fun, such a blank slate. I learned how to build hardware in that business, which was a real joy. And I think once again, I did like eight years of like, putting all my time and energy and attention into one thing. And, you know, I woke up and like, I was 40, I built two successful

businesses, but I felt like i didn't control anything like i didn't own anything because i you take investors you have co-founders you get diluted down their liquidation preferences all this stuff and i'm like man my buddies who have like small businesses distributing lawnmowers are like having millions of dollars to open their bank account every year and like i'm trying to build these like grand things that maybe will exit someday. But there's like so many things that have to go right. And so I really had to come to Jesus myself and said, Okay, I'm better. I'm a zero to one guy. I know that. And I'm really good at diagnosing the business and seeing like what's working, what's not because I've had to play

every position on the field. So let me build a platform for myself. And I always need a partner in things personally, because I have many, many bad impulses and vices that need to be countered by some sane person. And so I teamed up with a guy I've known for a long time who's very, very good and just said, okay, we're going to build the modern Berkshire Hathaway. And we're going to start small. We're going to start slow.

And we're just going to buy cash flow in businesses. We're going to conservatively reinvest the cash flow. And if we have a crazy idea, cool, we can start a startup underneath, but then it's got to go get its own funding. We'll do like the little first bit of funding, but we're not a venture capitalist, not a business model. No matter how much we believe in something, we're going to just be strict cash flow discipline. And it's turned into something really cool.

So we have 20 different businesses under the umbrella today, north of 100 million in revenue in the group. And some really cool startups that we've founded underneath it as well that may end up, you know, dwarfing the cash flow businesses in terms of value if they go well. And if they go poorly, like we don't have all our eggs in one basket. Right, right. So with these 20 different businesses, what are typically your buy box, your parameters in which you're looking and evaluating a business? How do you identify as an investor, as an entrepreneur that wants to go and help scale? What is your target? So my target is really like, let's call it like cyclically adjusted cash flows that are

predictable and protected by some sort of mode. I need to know that you're not just one of 20 hot dog shops in the town. We wouldn't buy small retail or a small food service, but that's just one of 20 commercial janitorial services with no differentiation in your market. I need to see some way that this company can win. That could be in local markets. That's typically brand is important. So you can have a strong local brand without having a strong national brand. So that's probably the most obvious one. Want it to be capital light. So want it to be able that if there are more customers, you can grow it without a ton of reinvestment.

Most manufacturing businesses may look decent on the EBITDA line. But I think EBITDA is a banker's number rather than an entrepreneur's number. And so I'm much more interested in cash flow, like how much cash actually goes in the bank account after taxes, after depreciation, after capital expenses, after all of it. And so we have to line up that with also the right leader, because we only want to make one binary decision, like, is this the right person to run the business or not? And if they if they are, then, you know, that we back them 1000% until we have extreme conviction that they're not, which doesn't happen too often if you pick the right person. But still, there's all sorts of things that happen as you grow.

And, you know, to own a lot of businesses, you got to be a good owner, which is different than being a good operator. Absolutely. So you kind of talked about like the things that you look for in a business. How do you typically find a business like that? Like, are you actively marketing? Is it networking? What have you

seen as the best way to create deal flow? Well, we do two things. So one thing we do is we do engage with, there's a huge world of business brokers out there. And so we like to let them know our buy box because their job is to sell businesses. And we're a really good buyer and people like to sell to us. And the only thing that doesn't make us an attractive buyer is probably like price discipline and cash flow discipline. So we tell them, like, look, if there's some private equity firm that's going to pay you eight times EBITDA for this business, you should sell to them because that's not our business model. And maybe they'll grow it and make it a home run that's just not what we do so but we have you know we find good businesses i mean we bought um this one called dolphin pools which has done really well um that we bought for three times earnings and it was doing 20 million in revenue you know so you don't have to pay these crazy multiples uh you know and and dolphin we knew

like the so again the owners came to us and said we have the guy who we think should run it he wanted to buy the business couldn't probably come up with the money himself um and so they really gave that to that one on a silver platter like they're just absolute class act the owners who sold us that business and that's kind of like we have cash flowed from that business more than our purchase price in the first three years. And so we're completely in the money and the business now runs at like 35 million revenue. And it's a bit of a cyclical business because it builds swimming pools. It's a bit like solar in that respect. It's about the same price point.

But we also know that the Southwest is not getting colder and having a swimming pool is really nice. And so we think with those fundamentals at our back and there's and continues to be a huge inflow of people into the Southwest. So this one's in Phoenix. So the business has been around for 30, I think 38, 39 years at this point, and no reason to believe it will go away. We think the Lindy effect is also really valuable, which is just that if something's been around for a long time, it will continue to be around for a long time. And that's surprisingly predictive. Wow. So you typically. So, so you typically, you go in, you identify the company,

you go and you buy it at a, you know, three times multiple is, is pretty standard. You're looking for these cashflow businesses or whatnot. And then do you typically traditionally bring in an outside CEO or someone that they know? I know you've kind of done both. How do you, how do you know, like, who's a good leader that you can put over something of a business like this? Yeah. So, you know, look, every time it's an art, that's definitely the art in the business. The art in the business is identifying good opportunities from bad ones because you can spend months on an opportunity and waste your time if you can't do that. And then it's finding the right person and just really understanding their

motivations, but also their skill sets. We don't like to take chances on someone who hasn't done a job before if they're taking over an established business. So we don't want to take a smart Stanford MBA student and say, hey, you're running a pool construction company now. We want to find someone who's proven that they actually ran a bigger pool construction company, ran it really well, and for a variety of reasons would like to come and build something here. Often the goal can be funding retirement. Sometimes the goal can just be running your own show.

Maybe you're, maybe these people are at a bigger corporate and their, their boss is annoying or they're just sick of the corporate bureaucracy or they work for some rich owner and they're kind of, there's always more motivations than you would think why people will leave what would seemingly be a great gig and come run something smaller than what they've run before. It's kind of like for every entrepreneur like you or I who goes zero to one, there's like 10 people or maybe 50 people who are entrepreneur curious who can't go zero to one, but they'll happily go one to three or one to four. Right. Now that makes a whole lot of sense. And so are you typically incentivizing these guys with earn out equity? Are they partnered with you on the project? How does that work? two examples which are actually different so what we find is in what i would broadly call like old economy blue collar businesses people are more cash motivated and less like less equity they

don't desire equity they don't fully value it um but they usually do have a number in their head they'd like to hit and so as to as much as we can we try to align their number with cash distributions to us because everything else is kind of noise. Right. It's like, did you send us money? And did we have to send any back? That's like that's like the truth. And everything else is like a made up number that we can gain. We can argue about all day long. But did you like did you send us money?

Like you can't can't really fake that. And so that's what we try to do. Now, sometimes we do turnarounds in startups. So let me give you a turnaround that we are doing right now. And those rules are a little different. Absolutely. So we just got into the publishing business. So I'm back in the book business as of last week.

Let's go. Yeah, so bought a company called Scribe Media. Really, really cool business. It's basically turned the traditional publishing business model on its head. So traditional publishing says, hey, we might give you a little advance author, but we're going to keep 90%. You keep 10%. We keep all rights to your book. We can literally change your book if we don't like it. We even change it after you republish it. And by the way, oh, marketing, you have to do that too.

Don't think we're going to do marketing for that amount of money. We're the publisher. We put our name on the book. And it's like, okay. But that's a PDF. And there's a lot of people that will print a book out there. So what Scribe has done is said, look, anybody can publish a book. They come to Scribe. They can just pay a flat fee. And that's it. They get a writer assigned to them and everything. So a writer actually flies to them, interviews them, gets what's out

of their brain into book format, and then goes back, drafts up the book, collaborates with them all the way to publish to Amazon, to Barnes and Noble, et cetera, to bookstores, whatever you want. So I think what Scribe has uniquely done is actually built a independent publishing brand that because it's done 2 000 books has some has some heft um but it's a it's a capex light service-based business model because the revenue stream is people paying to get their book done because a bunch of entrepreneurial people are like, well, I would rather just pay to get my book done. So that actually brings up a couple of questions. And in fact, I interviewed a guy the other day.

He's founded a business worth about a billion dollars called Bucked Up. It's actually being released. They're a supplement company and he's wanting to write a book. And I know I've interviewed people like this and I have a lot of listeners that want to write a book. What does something like that cost someone to have a writer, to have a publisher on board? What kind of flat fee are we talking about there? We're in the ballpark end to end, probably $50,000 to $150,000, depending mainly on the quality of the ghostwriter. Right. Yeah. Awesome. Awesome. So it's honestly, the people who have done it,

I'll give you the best ROI ever on that. There's a guy named David Goggins you may be aware of. So he did a book with Scribe, owns his IP 100%. So after cost, that man has probably made $30 million off his book. Amazing. Because he's the publishing house. It's unbelievable. That's awesome. So you're in the middle of turning this company around, right? You bought them. They were struggling for whatever reason. So walk us through the middle of turning this company around, right? You bought them. They were struggling for whatever reason. So walk us through the turnaround of these guys that you're working on. Yeah.

So this one, we went in there. We got a call because they were having trouble. They got a bank loan called on them. And sometimes we get called for these sort of messy situations because we can act fast. We have a balance sheet. So we got in there and we're like, wow, this is a really great business that briefly thought that it was a tech startup. And so it embarked on a huge hiring spree, built out a gorgeous giant office and never really got financial management in place to keep up with its growth. So it was actually its core business model was pretty good. Like

its gross margins are pretty good, everything else. And you just saw that spending just go up into the right, there was no check on it. And so it's sort of, it's crazy how quick it can happen where a business will run right off a cliff if they just lose control of their spending. And so we basically got in there and they had done a big layoff. And we, we started conversation with the bank conversation with the remaining team. And they're basically saying, Hey, if we walk away, this thing probably just goes completely to zero. Like, is there something we can do that's better than that? And so we, we got it to the finish line, struck a deal with the bank to pay them back, mostly over time.

Brought a lot of the core team with us, so back to the kind of basics, and went back to the customer base and said, hey, we're going to try to make this right. This thing blowing up has interrupted a lot of book projects. We can't make it all right at once, but we're going to do our best to make it right for everybody here and then also rebuild the business because it should do really well. And so that one, we're in late stages talks with a wonderful entrepreneur who actually identified the opportunity for us because they were a scribe author themselves, had had a successful book published through them and said, hey, I love this business model. I love this company. It seems like it's in trouble. And so they're going to co-invest with us and come in as CEO. And that's a dream situation for us. So cool. So cool. Yeah. So you brought know, you brought up a point that like, you know, there's some people

which I refer to as entrepreneurs that go from zero to one, right? And then the guys that go from one to three, you called them entrepreneurial curious. I always refer to them as intrapreneurs, right? They want to be an entrepreneur, but they work within inside an organization. And I think that's so key that for people to understand, like you don't have to be the zero to one guy, right? For my audience or whatnot. You don't got to be the one coming up with the ideas, launching or whatnot.

There are a ton of people out there like Xavier that can use your skillset and incentivize you very similarly to being an entrepreneur. It's just plugged into a different ecosystem of maybe a company that's struggling, a company that needs new leadership, management or whatnot. And there's ways to tie yourself and participate in the upside. And I think that's so important because we live in this day of like, oh, the only way I can make money is I got to go and launch my

business. And most people suck at zero to one. And that's why, and that's why, you know, 99% of businesses fail in the first five years, you know, it's like 90% in the first year and an additional whatever. And so, you know, that's what I would just encourage the audience is like, be truthful with yourself. If you're not as great as zero to one guy, that's fine. You can still be an entrepreneur. You can still go partner with somebody like Xavier out there. You really can. And honestly, there's probably more businesses to be bought slash turned around slash reinvented than there are entrepreneurs out there. And certainly it is. It's a lower risk proposition. The business model has already been proven, the price point's already been proven. And that gives you a lot of confidence to say, okay, this has been done before. We're not

reinventing the wheel here. We're just going to go out with something that works and we're going to make it work. And I think that's just both easier and absolutely can be as lucrative, certainly on a risk-adjusted basis than going zero to one. Yeah. Awesome. So obviously you got a lot going basis, then start then going zero to one. Yeah. Awesome. So obviously you got a lot going on, Xavier, you're like super busy. You got all these different businesses. Like what gets you out of bed in the morning? What like really pushes you and motivate you? Cause you've got the money, you've got the girl, you got the, all these different things. Like what, what is pushing you right now? You know, I'm a builder, Chris. And like, I, I get really fired up when we have something to build. If everything is working perfect, I get sort of bored. And then I'm like,

okay, what's the thing we can build? And I want to, I've just been thinking a lot about like, you know, generational aspects. So how do I make sure this company is around when I'm gone? Like, what does that look like? How do I make sure that, you know, my kids, like, I don't expect them to be as entrepreneurial as I am. Like, I figure like I'm a bit of like a genetic anomaly and like my like Norwegian family line of fishermen and then lawyers. Like, you know, this was not this just sort of happened with me. It didn't happen with my brother. I don't know whether it happened with my kids or not. And so I think about, hey, how can I raise really, really good kids? But then also, how can I set up a system where they have a little more economic freedom than I have? And this machine just keeps on cranking

long after I'm gone. So one, one thing that really attracted me to you the first time we talked was like, you had this great vision, right? A vision of like what enduring ventures would look like that you wanted to be the next Berkshire Hathaway, like walk us through that. What's your, what's your vision for this? Obviously the vision for the family is to take care of them and survive past your death or whatnot. But like But what do you see this thing happening? How do you see this thing playing out during your lifetime? So the biggest thing for me is most business buyers kind of suck. The business model of private equity has driven a whole generation of business house flippers,

essentially trying to buy and then resell three to five years later. And it's incredibly hard to double or triple a business in three to five years. So it's very stressful for everyone involved. It's a business barely recognizable to its founder. And then it gets flipped and flipped and flipped and flipped. And often it turns into a shadow of itself that has long forgotten about its customers or what made it special or any sort of culture. And I just think that that's not even good for society. Like it's not, not really good for anybody. And so I think like the big vision is like

restore like what I would consider classical private equity, which is actually closer to what Buffett did, which is own great business, buy great businesses, put great people in charge of them and leave them alone. And then, you know, do that. And so I think about it from an investor's lens as well. I think a lot about capital allocation. And I think most of the options I'm presented with, I don't like that much. It feels like an overpriced stock market. It feels honestly, T-bills are more juicy than most. And so I'm like, if I'm sitting here as like I live my life with entrepreneurs and capital allocation and I'm excited about T-bills. What's wrong with that? And so a lot of what I'm trying to build

for the next phase is, okay, how can people plug in at every bit of the capital stack? How can they invest in Dolphin Pools alongside us seamlessly, sharing the cash flows, be completely aligned? How can we do real estate together, invest right alongside,

sharing the cash flows, be completely aligned and try to build something that doesn't require – because I think most investors don't even want the flipping to happen. They want to hold for a long time and have a long-term stream of cash flow that doesn't require them to do any work or any thought or anything like that. So that's the only, I've written about this, but I really do think it's the only arbitrage left is long-term thinking because the whole industry of business buying is built around short-term thinking. And so if you can have

a bit longer view, you don't need to get everybody, but you can get capital allocated your way. You can get sellers who want to sell to you rather than the status quo and you can build a practice. And

hopefully over time, that turns into something pretty sizable. Very cool. Very cool. So obviously, I mean, you're a business savant. You understand all different types of things. What are your other passions outside of business? What gets you excited in life outside of work? I'm a big family guy, Chris. So I've got two kids. I've got one more arriving in the day. So that takes a lot of my time, and I don't mind it a bit. I also snowboard and travel, I would say, are the two other addictions.

Where are your favorite? Give me top three places on earth that you've been to that you absolutely love. Oh my God. So I love Italy. I love all parts of Italy. I can go, I've got friends there. I can go eat any time of year. I'll go there in the winter. I'll go there in the summer. I love the culture. I love Norway, my people's homeland, the fjords, the crystal clear lakes, just the natural beauty of Norway is amazing. I also went to Ecuador recently. I went to the Galapagos Islands with my son for the first time. Wow. What a joy. Because the animals there are not afraid of people because the whole place has been a national park for 50 years. And so you just like swim with seals and they play with you and you swim with sea turtles and penguins and everything else. And I haven't experienced anything like that.

So cool. So cool. If you could go back 20, like how venture capital worked as a young entrepreneur. Like I just knew I needed some money. And once I understood the game they were playing, then I could better understand what taking their money would mean or not mean. And I would say the same is true. And like, hey, this idea you have to build one thing and put all your energy into it. I'm not actually sure that's true. And I think that probably for like a creative entrepreneur, I think it's more, you have to think about how do I abstract myself out of this thing? Not how do I put myself at the center of it? And I think that

that was like, it's hard to know because I learned so much from being at the center of it. But at the same time, I spun my wheels for a lot of years when I had a ton of ideas that I didn't execute on, that I had the time and energy and skill to do so. And so I think if I had gone back, I would have said, hey, I'm going to try more things. I'm going to have a stake in more things. And if something really works, I'll dive headfirst into it for a while. But I won't just see something start to work and say, okay, that's the next decade of my life. That's such an interesting perspective because there are a lot of different perspectives regarding this exact thing, right? I hear

from some entrepreneurs, it's like the only way you hit oil is digging one hole a thousand feet deep not a thousand uh holes one foot deep but then you know a guy like you who's who's very creative and and has like a lot of ideas and everything like maybe it is better to to be in a bunch of different things and then just find those entrepreneurs that can that can take the idea over and you can partner with and and so it's it's great seeing and hearing different perspectives because like all philosophies seem to make sense when I hear them, but then, uh, yeah, so that's good stuff. Um, what, what are a couple of books that have changed your life for the, you'd highly recommend to the audience? Oh man. Um, so I would, um, I would say Thorndike's The Outsiders is a business book. It's really like a trainer

in capital allocation. That one is just remarkable. I also think, and these are going to be boring recommendations because maybe people have heard them, but Good to Great, I think, is probably the best operator book if you actually want to think, I think is probably the best operator book. If you actually want to think about what makes a company really, really tick. Um, let's see what else I, I actually love to read fiction. So I find that I, um, if I just get too much down the business book rabbit hole, I actually, I think reading history and reading fiction are, are, are things I probably learned as much or more from. So, I mean reading history and reading fiction are, are, are things I probably learn as much or, or more from. So, I mean, Hamilton's bio is great. Um, there's, there's

some really great bios, biographers out there that, um, you know, uh, JP Morgan bio is great. Um, I, I love those sorts of stories. I'm reading, um, I'm reading the, uh, Oppenheimer's, well, not only in Oppenheimer, but the making of the Atomic Bomb right now is a great book on that. Yeah. It's been out there for quite a while. Yeah, very, very cool. A lot of that actually took place right here where I live. A lot of the, well, not the atomic, the nuclear bomb.

So they did a lot of the nuclear type stuff here. Very, very cool. Xavier, man, I appreciate your time. Where is a great spot to be able to follow you either on social or get to know a little bit more about what you got going on in building Enduring Ventures? You know, I hide from all social other than X slash Twitter. So just Xavier Helgeson on X slash Twitter is the place to interact with me. Very good. Very good. If I have a good idea, you'll see it there.

Awesome. Well, thank you so much for your time. Thank you so much for your knowledge, sharing your story. It was absolutely incredible. Until next time.