The Exchanges

Q Okay, so, uh, we're at the end of 22, and I think around this time, you actually were like, Holy shit. Uh, I might have just like 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?

A So I bought the land in 2021, about 1500 acres. So originally I didn't plan on being a real estate. What we actually wanted to do was, uh, go out and build a media center connected to a runway. Cause I, uh, you know, If people are gonna fly in airplanes, remember, at the end of the day, the content for flying is all about the airplane. Like, 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 gonna 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, uh, 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 get, to build a media center.

AI assessment note: “So I bought the land in 2021, about 1500 acres. So originally I didn't plan”

Q great with risk. Like you, you're, you're going, you're taking more risk, I think. Uh, 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, flying magazine, 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?

A Uh, not initially. Uh, 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, uh, frankly, borrowing 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 risks. 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 gonna 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 and purposes, on my own at rock 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…

AI assessment note: “not initially. Uh, so I have not raised any, my father invested”

Q Wow. Okay. And what they use some card and do they get perks or something? What's the business?

A No, they, 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, US Press had 9000 truck drivers, um, 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 truck breaks down, you know, those things can be 10, 20,000 dollars on a breakdown situation, or could be, you know, thousands of dollars in tires, um, or fuel, and so, you know, a truck driver is responsible for probably Six to 8000 dollars of expenses per month when you look at total, what the total cost of an expense is, 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, um, on the, you know, all the maintenance and stuff.

AI assessment note: “No, they, it's for fraud management”

Q acquire customers profitably. And you do that by having a media arm that its own business. Or having a media company that's, is, is own business and makes a profit via subscriptions and advertising. Step two is to make sure the audience, I imagine, you'll have to correct me, you're, you're doing something in your head of like, will they spend a lot of money on something? Is that right?

A Yeah, essentially. But if they're, if they're enthusiast, if a, if a category is big and they're enthusiastic about the category, then the answer is pretty much yes. I mean, if they're, the thing you remember about magazines, and particularly magazines that are decade old magazines, is these things have survived potentially the great, we own magazines that are over a hundred years old. They've survived multiple wars. They've survived multiple pandemics. They've survived, uh, the great depression. Like the audience truly cares about the content. Enough to subscribe. And if they've, 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.

AI assessment note: “Yeah, essentially. But if they're, if they're enthusiast... the answer is pretty much yes.”

Q I've been following you for a while, and when I think of, like, a, a good media CEO, you are one of the people that I think of. Uh, what attributes did you have that made him think that you would be a bad CEO?

A Yeah. Well, I had ran a business, a payments business. They fired me in 2014, uh, because it was a tech business, and tech, technology businesses, while they generate a lot of margin, as they scale, they actually run 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 would, 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, is that's one of the most valuable assets in the family's portfolio now. Um, it just got a five hundred million dollar valuation last, you know, sold some stock in September of last year. So, uh, it's done well, uh, but I, you know, I've been out of that business for many years.

AI assessment note: “he fired me because he didn't think I could run a business that would be profitable.”

Q That's awesome. Okay, and then you said, I think this is going to get to a billion in revenue by 2030. Is that what you said?

A That's our goal. And we can do that through both organic and organic growth. I mean, here's the reality is there's 4500 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, uh, 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 a, you know, business about a minute and a half revenue, um, About 600,000 dollars, and, and when you take out all the expenses, all the owner expenses, about 600,000 dollars a contribution, we'll, 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, uh, business meets venture capital, because ultimately, VCs want the Asymmetric hundred X 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-com…

AI assessment note: “That's our goal. And we can do that through both organic and organic growth.”