The Pomp Podcast - #765 Small Business Converts To Bitcoin Standard w/ Kevin McGarvey

Starting point is 00:00:00 what's up everyone this is anthony pompliano most of you know me as pomp you're listening to the pomp podcast simply the best podcast out there now let's kick this thing off kevin mcgarvey is the co-founder and president of all out parking lots kevin's built an awesome small business in america he employs about 30 people and the most noteworthy thing is that they recently have started to convert to a bitcoin standard that's right they put bitcoin on their balance sheet. He also pays out weekly Bitcoin bonuses to his employees. It's a fascinating conversation to understand how a entrepreneur in America who doesn't run a publicly traded company, nor a large Wall Street bank, has started to adopt and plug their business into the Bitcoin standard.

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Starting point is 00:03:46 are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. We have Kevin joining us. Now, I have, uh, I've been told that, uh, concrete Kev is a way that we could think about Kevin. Kevin, are you there? I'm here. Concrete Kev. Is that what people call you? That's what they call me. All right. I want to start with the first thing, all out parking lots. That is an all time name. Where did that name come from? And you're grinning. So I know, I know you and I are going

Starting point is 00:04:30 to get along. Where did that name come from? Thank you very much. So my, uh, business partner and I, my business partner is my best friend, Marco. And anything that we ever do, we go all out. So when we were starting this company, that's the name we came up with. Legend. You guys just said, I wish you could name the company. I don't know. We can go all out. Let's call it All Out Parking Lots. I love it. All right. Walk us through a little bit about the company pre-Bitcoin in terms of, you know, when did you guys start the company? How big is it? What do you guys do from a services standpoint? Then we're going to talk about this adoption of the Bitcoin standard. Sure. So we started the company 10 years ago. In summer, before we graduated college, we just went door to door seal coating driveways. In the Northeast, there's asphalt driveways. They need to be protected and seal coated. And so that's what we did. We had a beat up old van, some buckets, a squeegee, and we went from house to house, just seal coating driveways.

Starting point is 00:05:24 uh once we graduated we then uh went in um full bore we bought uh the bigger trucks bigger tanks we were doing driveways then led us to commercial we started getting into line striping uh then concrete and then eventually paving and now we do all commercial work and uh that's why we're all out parking lots all right so uh there's people who are watching this who may not know some of the stuff you just described so i'm gonna ask a couple of what may be elementary questions first is when you talk about sealing a asphalt driveway describe exactly what happens there and then once you get done with that talk about the actual line striping and what that means for like a parking lot sure um so seal coating you have asphalt sealer and you apply it with a brush

Starting point is 00:06:06 or a squeegee to the driveway or parking lot and what that does is it protects the asphalt so it puts a layer of sealer on top, similar to paint coats wood, right? It makes it look great, but it also protects it. And that's what sealer does. And then the line striping, obviously, you know, whenever you pull into a parking lot, you have all those stalls, you have handicap stalls, different stop signs, different things like that. And so you apply that with paint, obviously.

Starting point is 00:06:36 And that's what we do in the parking lots. You can't have a parking lot unless you've got the lines. Somebody's got to draw the lines, right? You know, that, that was always something I was like, all right, man, if, uh, if, uh, they tell you to draw lines at school, this is important because there's somebody somewhere who does it for a living. And I don't know if you've ever seen the viral videos on the internet where people go and they've got like the roller thing, like the hand cart or whatever.

Starting point is 00:06:58 And they're drawing like lines or they're writing stuff in the street. I'm like, dude, that guy just wrote stop perfectly. No stencil, no anything like that guy is way better than anyone, anything I could do. Uh, all right, let's talk about, uh, the adoption of the Bitcoin standard. So you guys are, I'll label it as a small to medium-sized business. How many employees, what were you guys doing with your balance sheet beforehand? And then why did you get interested in Bitcoin? Sure. So we have 30 full-time employees.

Starting point is 00:07:27 And we had, you know, we had a problem, right? March of 2020 hit, the pandemic, everything gets shut down. We had contracts that were pulled from us. And myself and Marco were discussing, hey, what are we going to do here? We're not sure, you know, how everything is going to shake out. So like most Main Street companies, you know, we had a down year. It was it was a tough go for us. We were working, you know, twice as hard, but kind of going backwards a little bit. And we it was January of this year where the second stimulus package came out. And I just said, this is crazy. You know, I you don't have to be a genius economist to know that what's going on right now is not right.

Starting point is 00:08:10 And our dollar is being devalued. So I was talking with my accountant, who's my cousin. And he said that his brother was very much into Bitcoin. At that point, I would have taken anything. I would have taken advice from anybody about anything because I was pretty desperate. So I said, this Bitcoin thing, I know nothing about it. But it's crazy what's going on in the economy right now. Set up the meeting.

Starting point is 00:08:32 I'll talk to him. So he was explaining it to me. And he was telling me this block, and then the next block. And there's this ledger, this guy, Satoshi. Nakamoto. It seemed like something out of a science fiction movie. But when he was talking about it, he said, hey, Michael Saylor just put $250 million into this. And for me, I look at everything through the lens of entrepreneurship. So when I heard that another entrepreneur had gotten involved in it, that intrigued me. So I went home. I Googled Michael Saylor. I see this

Starting point is 00:09:01 publicly traded CEO, very successful guy, graduated from MIT, is a technologist. OK, Hey, let me look into what this guy's talking about. So I see him on your podcast. I see him on other podcasts. I start watching your show and just start going down the rabbit hole. And, uh, I really haven't come out since then. Um, so when you start doing that kind of research, right, you start going down that, um, that path, what were the things that either sailor or other people were talking about that you kind of remember like, Oh, like that's what made it click in terms of, Hey, I should at least do something here. Right. It doesn't mean that I got to kind of go crazy, but like, are there certain things that you heard or ways that it

Starting point is 00:09:39 was described or whatever that stuck out to you as like, Hey, even though I'm not a publicly traded company, even though I'm not some big financial, you know, wall street bank, I own a business. I've got a balance sheet. I've got employees to kind of look after. And this may make sense for us. Sure. Um, so Michael Saylor gave a great analogy of, um, small, uh, of any business, right. And you're, you're in your rowboat and we're sitting, we're sitting here and we're paddling as hard as we can, maybe 10, 15 miles an hour, but you have a 25 mile an hour wind blowing in your face. So if you're a company and you can grow by 10, 15, 20%, like that's excellent. You should be awarded for that, right? But we're not in today's economy, right? We're going

Starting point is 00:10:19 backwards. And so what he said is you need to go ahead and get out of your rowboat, put up a bitcoin sale uh put it on your balance sheet and blow with the wind um so that when uh this uh economic uh all the monetary policy with the money printing you're going to go and get wealthier because of that because you have you know strong asset in bitcoin uh versus going ahead and just continuing to try to chase dollars that are being devalued got it and so when you think about uh doing this how did you first start did you go and put 100 of the balance sheet in bitcoin did you say, Hey, let's start out with maybe one or 2%. Like what was kind of the actual sequence of events or the execution that you took as a small to medium sized business to start to do this?

Starting point is 00:11:03 Sure. So we looked into a few services. We were actually very fortunate. We took a little while to get onboarded. In that time was that big drawdown in May. And so we were able to buy up a good amount when it was kind of at the bottom there in the thirties. So it worked out for us, But, um, we just looked into a couple of services and, um, we, we chose to, and, uh, and then we started buying from there. Got it. And then in terms of like the balance sheet, was this something that, uh, you guys almost have like a treasury policy, right? So using Michael Saylor as an example, he talks about his business in terms of they have a software business, a business intelligence, uh, you know, product, they go out and their job is to build great software, sell it,

Starting point is 00:11:45 drive a healthy financial performance, uh, in terms of revenue and profitability for that. They also have a second strategy, which is their treasury strategy, which is obviously all the Bitcoin stuff. Is that how you look at what you guys are doing in terms of, Hey, we've got the all out parking lots, uh, kind of as a core business and service, we're going to go out, we're going to drive top line revenue. We're going to drive profitability, but then we also have a treasury service, or do you have some other way that you kind of look at it from a framework standpoint? Uh, you just said it correctly there. So we have our P and L strategy, right? We're out there every day, paving parking lots, pouring concrete line striping. Um, and then we have

Starting point is 00:12:16 our balance sheet strategy. And so, uh, so we're, uh, taking those cash flows, those profits, um, and, uh, and going ahead and plugging them into Bitcoin. Got it. And then in terms of the employees themselves, uh, I don't know how aware they are that you guys are doing this. Uh, have you sat down on like, told them what Bitcoin is? Are they asking questions? Just talk to me about like what the employees, uh, kind of reaction as you guys started to do this was, uh, so what we did was we implemented a weekly Bitcoin bonus. I feel very strongly about this. And so I wanted everybody in the company to be able to adopt Bitcoin. And so when Strike came out with the pay me in Bitcoin feature, they made it pretty simple for businesses, right? You have your,

Starting point is 00:13:02 they give you a routing number, an account number, and you put that in, we use ADP for our payroll, you put that in through ADP. And so it's just a $5 bonus weekly. Everybody in the company gets it. There's nothing that's taken out of their paycheck or anything. It's just the benefit that the company is offering. And so our hope is that they're going to learn more about it. I've taught them some about it, but of course, you always learn more. Once you have some, you have some skin in the game and you tend to look into it more. And so it's funny. I was walking through the shop after we did it recently. And, you know, guys are talking, oh, Bitcoin's up today or, you know, Bitcoin's down today. This is what's going on. And so you can tell they're

Starting point is 00:13:42 paying attention. And we're trying to get the message across that we want everybody to be able to, you know, work real hard here. You know, they come out, they bust their ass and we want them to have, you know, savings at the end of the day. And, you know, it's early in the process. It's early in the case study, so they're just seeing it now. But I'm hoping they're looking back shortly and saying, hey, you know what? My employer was actually looking out for me and those guys are trying to take care of me. I love the Bitcoin weekly bonus. I think that's a great idea. And it doesn't even have to be a ton of money, right? It's just the act of kind of, hey, I'm going to help you dollar cost average to get started. Do you know whether any of the

Starting point is 00:14:21 employees after you've kind of implemented this have started to actually convert some of the other part of their paycheck into Bitcoin or any insights in terms of, uh, other actions that employees have taken so far? Yes. So, um, you know, that's my hope is that they see the $5 now they see it appreciating value and they continue to want to put more of their paycheck in there. But, um, yes, several employees have put their own money into Bitcoin. They know they've asked me, Hey, you know, uh, where, where else can I, you know, where else can I buy it? I just said, use, you know, use the strike app right there. And you can link that to your bank account and purchase and um so several employees already have and i'm sure more will to come here yeah it's uh

Starting point is 00:15:02 it's fantastic when you create uh not only one uh the environment where they see you doing it two is then you say hey look i'll help you get kind of jump started and then you're basically just unleashing them to the world right let them go get educated let them go figure out what they want to do uh my last question before my brothers ask you a couple questions is what about other entrepreneurs whether they're uh people that you guys do business with their customers their service providers, other people in the local community. Have you had any conversations with them or any inquiries as people hear that you guys are doing this stuff? I have. So I've presented to my Vistage group, which is a CEO group. And, you know, I've successfully orange pilled two of

Starting point is 00:15:40 the guys and they were pretty much the two that were giving me the most pushback when I presented. So that was really cool. And I just did that recently. That was last month. So we'll see how it goes here moving forward. But I am, you know, actively discussing it with my CEO group. Then I'm also in another mastermind group. I've been speaking to them about it as well. And so just trying to get everybody on board here because for me, my passion is entrepreneurship and I hate to see these entrepreneurs working so hard and to see that their businesses kind of get devalued like that. It just frustrates me. So I want to help them as much as possible. And I think this is the best route. Yeah. I love this in terms of one, you do it yourself. You got skin in the game

Starting point is 00:16:24 to, then you turn around, you try to help your employees. And then three is you then turn around and say, Hey, fellow entrepreneurs in the local area, right? Let me, let me explain to you what I'm doing. Uh, it's very similar to what we've seen other companies do, uh, where they basically say, listen, um, I remember the, the, uh, kind of infamous exchange now where Elon Musk basically tweeted, Michael Saylor responded. Elon was like, Hey, you know, what do you know, basically, or whatever he said. And Michael was like, well, I spent, you know, hundreds or thousands of hours studying this. And then I put billions of dollars in there. And Elon was kind of like, all right, maybe we, maybe, maybe I should figure out more about this. Right. So the skin in the game is,

Starting point is 00:16:58 is really important. John, what questions you have and Joe? Yeah. So my question would be around just how do you transition when you went from residential to commercial, you build up a book of businesses. What was that transition like going into the commercial industry where I'm sure the contracts are larger and everything that goes along with that? Sure. So we did both for a period of time. And when we were just in what I call the maintenance business, we were seal coating and line striping. And we formed a joint venture with a gentleman who had a paving concrete company. So we were doing the maintenance. He was doing more of the CapEx work. And so that got us into the commercial realm. And, and then we started buying the equipment on our own. And we started getting

Starting point is 00:17:44 into commercial ourselves, we were doing all that work was more profitable for us and a better avenue. So we then abandoned the residential side and went full commercial. Nice. Joe, what questions you got? So my question would just be around like challenges you faced with doing this, right? I think we've seen a number of companies adopt the Bitcoin standard and start to do kind of interesting and cool things around Bitcoin specifically. But there's also a lot of challenges. So if you could just speak to some of the things that you've you've seen while doing this, that might be helpful. Yeah, sure. I guess, you know, the first conversation with my business partner, right, like we had talked about it. And, you know, this is a newer thing. And, you know,

Starting point is 00:18:22 initially, Marco was on board, and then we had that big drawdown, right. And then there was some concern, which is legitimate, you know, and, and so we talked about it again, we discussed it, We said, Hey, you know, we still think this is the best, uh, avenue to go. Um, and so we did, and then we had our, uh, accounting manager, you know, he's a little bit older. So, um, and he's new to our company. So he was kind of like, ah, I was wondering what it's going to like, uh, be like work for a younger company. Um, you know, you kids today type of thing. And, um, but he, uh, you know, he got on board with it. And, um, and so when they were both on board we uh we went ahead and bought kevin i'm assuming that you haven't yet had an opportunity

Starting point is 00:19:03 but maybe i'm wrong in uh either getting people to pay you in bitcoin uh in terms of uh customers or any other types of ways for you guys to acquire bitcoin other than just hey we get paid in dollars it sits on our balance sheet then we convert it to bitcoin like is there anything else that you guys have thought about or tried to implement you know i thought about maybe like a bitcoin ira or something along those lines. Not a payment in Bitcoin yet or anything. We'll see how the space develops and we'll act accordingly. But the Bitcoin IRA is kind of my next thing that I'm going to look into here. I love it. The other thing that I think is really important about this with Strike, and as everyone knows, I'm super biased because I'm an investor,

Starting point is 00:19:47 uh, is just that like, you don't even have to necessarily get, um, you know, go buy Bitcoin, put on your balance sheet to then pay the employees, right? You can actually just send them dollars and it auto converts into Bitcoin. Same thing could be for your customers, right? Where instead of having to say, Hey, let me teach my customers about Bitcoin. They go figure out how to buy it. Then they turn around, they send it to me. You could basically just do the same thing and say, Hey, look, we want to receive, you know, 10% of our, uh, uh, customer funds. We're just going to divert it into Bitcoin or whatever. So you can start to do some pretty interesting things without having to actually buy in the other side of the transaction. But it seems

Starting point is 00:20:21 like what you've really done is once internally you guys were on board, you guys have really done a good job of kind of going out and educating folks on top of also being able to show them the skin of the game. Absolutely. And that's a great point. You know, if we get ACHs or anything like that, we can have them set it to strike and have a portion converted into Bitcoin. Yeah. John, what do you got? Kevin, what did that educational component look like for your employees? I'm sure you went down the rabbit hole first, it sounds like, and then you kind of brought them on with these weekly bonuses and kind of giving them monetary compensation. What did that education part look like for them? Really, it was just me talking, right? We were in the shop. I got

Starting point is 00:20:56 everybody together and discussed that, you know, we were going to do this moving forward. And I, you know, I was explaining to them, but, you know, they're not all going to get it in one shot here. So it's kind of just a gradual thing. Whenever I, you know, I'm down there and I see my mechanic working on the truck or something, you know, I'll talk about it. Whenever we're having an operations meeting, you know, afterwards, I'll talk about it with everybody and just try to educate them, you know, slowly point them in the direction of, hey, you know, here's a few things you can check out, right? You can check out the best business show. You can check out, you know, some other podcasts, some of those things. And so I think it's a gradual thing. That's what I've

Starting point is 00:21:35 been doing. Hey, Kevin, what are the odds that we could get a two hour 11am Eastern to 1pm Eastern break every day so that the employees could watch Best Business Show. Is that in the works? Those odds are slim to none. The all-out break. Hey, listen. Anyone who works at all-out parking lots, I'm trying for you guys here.

Starting point is 00:21:56 Don't say I never did anything. I just thought, you know, maybe a little two-hour break in the middle of the day. I got fake union members over here who they would love to take breaks. Kevin's not a fan of the union. Yeah. See, Kevin here's the thing is what they do is they only ask people to join the union who they think

Starting point is 00:22:14 don't know what unions do right but anyone who walks on here who owns a business or dealt with unions they're like all right we ain't gonna ask them about the union I don't want that all right you guys got any other questions no thanks for coming on Kevin Kevin what what can we do to help you guys right I obviously the audience I think is uh is super impressed by what you guys are doing I don't know I mean if anyone out there needs a parking lot sealed or or line striped or anything like that, that'd be great. But what can we do to help you guys as, as you continue to build the business? You know, really, this is just about me trying to help out. I've received a lot of advice and guidance and mentorship. And so,

Starting point is 00:22:50 you know, I'm just trying to pay it forward here and help everybody else out. So, I mean, if you want to send them to my LinkedIn and anybody can reach out and ask me questions and I'd be happy to help out. Awesome. I, I have your Twitter on hand. So I just put a, put people there to go follow you on, uh, on Twitter, but also, uh, LinkedIn as well. Um, and I appreciate it, man. This is super cool. I am, uh, I'm very bullish on this idea that, uh, public companies and large kind of wall street organizations are going to go do this. Obviously, uh, they've got access to capital markets. Uh, they usually are kind of more sophisticated financially. Uh, the executives, they're not as involved in the day-to-day like

Starting point is 00:23:30 actual operational, like, Hey, we got to go get this job done there. They have more time to kind to think because they've hired so many people they've got big uh teams they've got larger balance sheets etc but i do think that people are drastically underestimating how many small and medium-sized businesses across america which for those at home make up 50 of all jobs in america so maybe we should actually start treating those entrepreneurs a little bit better uh you know side note uh but i am very bullish that uh those entrepreneurs are going to do the exact same thing they're going to understand what's happening in order to say there's no difference between a publicly traded company doing this and myself uh and so the the one thing that you guys

Starting point is 00:24:03 are doing that i hadn't heard anyone do before is this like weekly bitcoin bonus uh so i'm gonna think about how to uh uh kind of have other people incorporate that but but i love that idea because it really just gets the employees involved as well and paying attention and it's not really that much money that you need to kind of spend in order to uh to get them jump started absolutely thank you so much for having me pop i really appreciate it guys uh have a happy new year and all the best in 2022 thanks kevin you know you know what you know my favorite part about kevin is what all out the only name better than all out parking lots would be relentless parking lots then we'd be like damn okay all right buddy thank you so much for coming on i appreciate you

Starting point is 00:24:40 all right see you guys bye

The Pomp Podcast - #765 Small Business Converts To Bitcoin Standard w/ Kevin McGarvey

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