On this episode of Building Billions, I sat down with Mike Brown, the visionary founder and former owner of Death Wish Coffee, the world-renowned brand that took the coffee industry by storm. Mike takes us on a thrilling journey through his entrepreneurial path, culminating in a jaw-dropping 9-figure exit from his beloved company.
As Mike recounts the challenges he faced along the way, including scaling up production, building a dedicated team, and navigating the fiercely competitive coffee market, listeners will gain valuable insights into the realities of building a successful business from scratch.
But the true highlight of the episode comes when Mike delves into the thrilling tale of his 9-figure exit from Death Wish Coffee. Discover how he strategically positioned the brand for maximum growth, attracted investors, and ultimately sealed a deal that exceeded even his wildest dreams. Mike's entrepreneurial journey is a testament to perseverance, innovation, and seizing opportunities when they arise.
Whether you're an aspiring entrepreneur seeking inspiration or simply intrigued by the world of business, this episode is a must-listen. Join us as we uncover the captivating story of Death Wish Coffee's incredible success, as told by the man himself, Mike Brown.
Hey, everybody, it's Brandon Dawson. Welcome back to another episode of Building Billions. Today, we're going to be talking to Michael Brown, who sold his coffee shop, Deathwish Coffee for hundreds of millions of dollars, a company he founded and built and then exited. So this episode of Building Billions is going to be the interview of Michael Brown. I hope you enjoy this. And you know, the most important thing for me is that you leave a review or any questions or comments, please leave them in the comments line. Thank you for listening to another episode. Building Buildings. So introduce yourself, tell everybody, tell everybody who you are and what and what what you did in your business. So my name is Mike Brown.
I was in the coffee business for ten years. I 12 years. But I owned on Deathwish Coffee and I was the founder and I sold the company last in 2021 also because I'm like like some people here maybe, I don't know, I was broke. I was like, I have negative way, negative dollars. And about 12 years ago, like I was living behind my mom's garage. Like, I was like, she's like, pay my bills. It was very embarrassing for a 30 year old. And I don't know, I just, like, put my. I stopped hanging out, my friends and I just put my nose to the grindstone and I, like, ran the business and, like, did what I had to do and grew the company. But until the exit and the exit was like. And it was unbelievable for me. It was like what I was waiting for. But at the same time, I didn't realize. I didn't realize it at the time. I thought about it. I didn't have that like the exact dollar amount written down, like in my notepad or anything. But I did have like some like, inkling of, all right, if this number comes across like my desk, I'll probably like, I'll cash out a little. So. It's been it's been great ever since.
So. So did somebody come to you and say, hey, we want to buy your coffee or did you decide to shop it?
Good question. So I started getting annual evaluations of my company about three years prior just to see like and it wasn't until like, see what the company was worth. It wasn't or slightly an ego thing. Also slightly a. How do I make my business better? How do I make my business, like, more valuable? And that's what they told me. They're like, okay, Mike, here's where your business is at and here's what you can do to make it more valuable. So and I took those considerations. And I and I structure my business to. To basically did what they told me. I'm great to following directions, which is awesome. Also, if if I can give anyone anywhere device just follow directions it's if listen listen listen to Brandon like I wish I wish I like found Brandon like before I started like Deathwish because it would I have sold it for a billion just love rebellions but it's just following directions and. I guess what I'm saying is. That I did not. Well. Yeah, it was a it was a lot of. It was a good time for it was a good time to sell a business in 2021.
So do you. So you start one coffee shop. How did you get it going?
Yeah. So as an accountant for the New York State. Horrible job for a while. And I went to school for accounting. Decided I quit my accounting job and hung on coffee shops with all the other losers there. I'm like, I can run one of these things. So I started a coffee shop and man, I like ran that place into the ground. Like, give me like a great, great thing and let me ruin it. And I did. But while running, I did learn a lot like lessons about business in terms of like. How to treat the customer, how to like what they're asking for. Like don't give them like a thousand options. Like, let's just keep it simple and. Once I finally heard what they were asking for. I gave it to them. So every every customer became was like, Mike, give me a cup of your strongest coffee is like. What? What do you mean? Like, what do you mean? Your strongest club? Like, do you want the most caffeinated coffee? Do you want the strong. Do you want like, something that taste strong? Do you want like something dark? Do you want like. I don't know. So once I found like zero that in, I'm like, I can't believe no one's like, marketing this right now or like, trying to sell the world's strongest coffee. So that's what I did. I'm like, all right. I being in the coffee world and running my coffee business into the ground, I knew like because I do constantly study, I do constantly like work on myself and work on like the business. It's not like it's everyday I did find out, like what the strongest beans are like, what the. And what the coffee beans are that like. The coffee industry is looking down upon. And at the time they're all looking down on this robusta bean, which honestly is the best coffee we had on the planet. But the whole coffee industry fucking hated it. So it was like one of these things where I was like, Oh, I have a coffee bean nobody wants. It doesn't cost anything. It's like so cheap. So but it has more caffeine, it tastes stronger, It's easier to grow, It's better for the environment, it's more organic. It's like it had all those like, positive qualities that like, you would want in a in a in any product you're like putting in your body. So I basically grabbed it, took hold of it when no one else would and like blew it up and like, made it like, this is my coffee, this is my like, that's where coffee roasting is. Coffee. Like. And I can't believe how many people like resonated with that. Also, I called it Deathwish Coffee because. So people asked you this like, why don't you call Deathwish Coffee? And it's like, Well. I had a coffee shop. It was called Saratoga Coffee Traders, and I wasn't very inspired to work on it. Once I called it Deathwish Coffee like it woke me up every day. And I every day I woke up and I wanted to work on it. Like I have so much energy. Still want to hear the brand, like the brand name. So if you're like, have something. That's why I love Grant do and you brand new like with the ten x I'm excited you want to hear that man So excited. Sorry I'm like in a million different directions, but you know what I'm saying.
So. So you so literally you took your coffee shop that was failing? Yeah. You honed in on this one product and you said, I'm just going to own that space in the world. Yeah. Created a cool brand. Like, honestly, Deathwish coffee just sounds badass, right? I was trying to figure out how to use that brand in some of our health products, but I couldn't figure out how to put the two together.
I have so many ideas. Ideas are yes, So.
So look. So. So it took a problematic business. Listen to his customers. When I saw an opportunity in the marketplace and literally took something that nobody else wanted. Created the brand known domain on it, figured out how to sell it online. And and so by the time you sold, how many stores did you have versus what your revenue were from online sales?
Honestly, I here's like one of the things that like I. Underestimated. I didn't underestimate how powerful. Having your. Business where people are buying is, you know what I mean? Like, I was selling online for a while. I was like, Yeah, sweet. Like I'm making like 20 or $30 million. I'm not making revenue like profit, but profit is pretty good too. But I was like doing like 20 or 30, $40 million. But it was like once we got into Walmart. Holy shit. Like Walmart is. First of all, I've never dealt with a more fair like company in my life. Like, I love them. They're like the third best and like, they're so massive. You know, my people go to Walmart, I don't know, but resold so much, so much coffee and we still aren't like in Walmart. It's unbelievable. And same thing with Amazon. We sell so much shit on Amazon. It's like one of those things like get in front where you're where your customers shopping. Be there. You got to get there because guess what? If you're like trying to like, work on like the, I don't know, on the outskirts of where your customers are shopping, like you're not going to make any money. You need to like be and you need to be on Main Street. You need to be in like Broadway. You need to be on like it's all location. And that's. Wow. So powerful.
So all of a sudden it starts taking off.
Taking off.
What were your revenues that you sold?
I think 60 million. 60 million. I sold I still had a good time to like. Like, the multiples are, like, super high.
Yeah, It sounds like.
You got 20, 21.
Or 60 million. Yeah. So you sold it five times revenue. Six times revenue?
Yeah. As well. And I'm not the smartest guy, you guys. But I have a big belief system. Like, it is, like, non-stop. Like every. I mean, you everyone who's talked to me here, like, you guys know where my head's at because I'm always, like, thinking about the next thing. And I'm always like, big belief. Let's go. Let's get it accomplished. Because I don't know. It's there's no limits here. There's no rules in this world. There's no rules. We're just. What is going.
So you can see when you're when did you do the assessment? What's your name? Badge. Let me look at it.
My three.
Hours. Yeah.
Your three. Yeah, I'm I'm not. I'm very high on the analyzer side. I'm very high in the driver's side. It makes total sense. And it's. And it's a curse. It's a blessing and a curse because I'm always doubting myself. I'm always like, Oh, we have to do all this. And then it's like, let's go. But I'm like, Let's figure it out first. That's like such like, honestly, my girlfriend hates me and it's very stressful. I don't say that.
Right? So he's got guys. So he and I have a call and I see he's at like a campground and I see a satellite disc behind him and I'm like, Where are you? He goes, I'm a little nowhere, but this. The startling thing is amazing, and it works better than Wi-Fi at home. And I go, What are you doing? Oh, for the next month or two, we're just going to go and stay in all these parks and go. And I'm like, uh, I said, Well, I'll see you in Arizona. And. And I hung up the phone and I said, I'll bet you by the time he gets to Arizona he ain't staying in a trailer, parks or something. And so that was true. I see him when I'm like, Hey, man, how are the parks going to go? So I bailed on out a couple of weeks ago.
It was, yeah. Okay. Yes, this is. This is a very true story. And how long.
Did you make it?
Like a month. It's pretty good, right? With a with a girl and two dogs like my girl, two dogs and a camper. Like, I need my space. I need my space. It's. Everyone does.
So what's life after the deal for you? Like, all of a sudden, you know, you go from totally broke. To to now.
You have.
Now you have more money than you probably ever dreamed of having. His Your mom still alive?
Yeah, she is.
Is she like is she like you owe me rent for staying in the back? No.
Like I try to give her money. She doesn't want it. She's like, no, I got my security. She's sweet. She's like, the sweetest woman. But yeah, no, I have, like, a lot of money, a lot of time vacation. I want sweet house, lots of cars, like, all like dumb shit, but, like, it doesn't for me. Like, the reason I don't know if you guys know is the reason I reached out to Brandon is because after a year of fucking around with, like, dumb money, I was like, I was so unfulfilled. I most wanted, I. I just. I. I'm a business person. Like, I need it. I. What you guys teach and learn here is it might as well be gospel because it's like my church. This is what I go to. This is what, like, brings me back to like the to being like, I don't know, like a human in a way, just because it's such. It's what? I mean, it's me, I guess, in a way. I'm talking around a lot. Let me try to say. Let me start to say that clearer. I'm not great with words, by the way. I really missed not having something going on in my life when I did not have the business. Working on the business is. It brings. So I actually bought a business because I didn't have my business and I'm working on it every day and it doesn't make any money, but it brings so much joy to my heart because I'm helping others and I'm like and I do feel like that it keeps you in the game, you know? Imagine if you're like a professional athlete, right? And like, guess what? Like, you're not Jordan. Obviously, I'm not him. But like, let's say you're a professional athlete and then you retire. I imagine they're going through the same mental things that I did when I like sold my business and then I needed to get back into it on some level.
And I think when I met you, you said I saw a video you did, Brandon, where you talked about after you sold your business, you hit an all new low and you had to find something to replace it because you're just spending money. And it was it wasn't fulfilling anything because the thing that really fulfilled me was building and impacting lives. And you came to a bootcamp. Nobody even knew who you were. And then somebody said, Hey, this guy wants to meet you. And you're like, I came here specifically to talk to you.
Yeah, I mean. You know, once you've like ran the course like ten years. I devoted my life to, like, running a business. You know, when you see someone speak. If they're talking the truth or not. And I've watched like I've been through the game, like I have been all I've been all the Tony Robbins courses, I've been all the Gary Vee things like I met all whatever. Everyone who was like like paid a lot of money to get their name out there. I've been like, I've been there. I've been on the course like Brandon, you like dude, you speak the truth. And it's not like it's. And it hits It hit me on a level. I was like, Oh. He knows what he's talking about. Finally, finally, I found someone like. So this. This is like. So I had like, my whole one of my this was like my plan after I like so my business. I was going to take everything I learned because I take meticulous notes and I read a ton of books. Like my library is nuts. And every book has like underlines and like fucking tabs in all those books. And I was just like, I'm just going to write the best business book ever. And I watched Brandon and I started like, listening to you or you're teaching. I'm like, And he put it together. Brandon You put together so much better than I ever would. And I was like disheartened that at one point I was just like, Fuck, Like he already did it, like he's God. But at the same time I'm like, He's my guy. He's my guy from now on, You know what I mean? Like, I wanted to be the guy, but whatever. He's the guy. Like, I was just following.
So you guys here when I say, you know, because he just said it and we've never had this conversation, but when I started listening to Grant, I'm like, okay. It's like it's like being a world class piano tuner. When you hear when you walk in a room and you hear one tone or one, what do they call it? One, one note. You'll know if that piano is tuned, right? You don't need to listen to a whole bunch of notes, just one note and be like, It's in or it's out or it's close or it's off. And when you actually this is why when I say to you guys, there's a lot of people that talk about it and a lot of professors pretend like they're going to teach on it and all these things. But the truth is, if you've never done it. It isn't the big idea that works or doesn't work. It's the little granular nuances. At some point in time that you're going to encounter at each one of those break points where you have to make a really good decision or you make a bad decision and you either catch yourself or you don't, and you either recover or you don't. And there are little tiny granular nuances that no one's going to tell you in advance. Oh, by the way, these these are the things that are probably going to happen. And so when someone's like, oh, build $1 billion business and and blah, blah, blah, you know, you can tell right away if they're full of shit. Based on the words they're using. And if they've ever done it or not done it. So. Appreciate you saying that. You started watching and you're like, I can tell by what he's saying. He's been there and he's done it. And I went on the same journey because I listened to the Tony Robbins stuff, the Gary Vee, because when Natalie put a list of the top ten influencers together and said, Hey, you know, maybe somebody in this influential category, the only person that I found that actually spoke business truth with specificity relative to components was Grant with marketing and sales. And I'm like, okay, he's got that nailed that when I went to Growth Con, he had other people talking about all the other things. And that's where my epiphany was, is that he doesn't do all those other things. So if I do those eight things and he does the two, we'll have 100% of everything. And, and that's what propelled me into partnering with Grant. And so. You can see now I'm starting to bring some friends in that I've developed relationships with. With Ken yesterday. With Mike today.
Ken of school is awesome.
And he was like, Isn't he amazing?
He's like a master class and like.
These are cool as a cat. He's he's. Yeah.
I don't know if we resonated, but he is cool calm.
He said to him.
I'm.
Crazy. He said I don't. You're just so calm and composed. There's different. I want you guys to meet all these different people that I have the privilege to me because you're going to meet people that are quirky. You're going to meet people that are, you know, crazy. You're going to meet people that are calm. You're going to meet people that are humble. You're going to meet people that are remarkably intellectual because those are the people I like to spend my time with all those people. Because really what it reinforces to me is there isn't a defined way. It's the resilience of the business owner to get creative. And to pursue greatness. And for him to be working a coffee shop that was busting but decide this ain't going to work, I got to figure something else out. Make a pivot to something that was actually easier than trying to serve 50 different coffees.
Right. So easy. So easy. Yes.
And you got known for it and it blew up.
I mean, I wouldn't say it's so easy. I mean, it took a lot of work, but thinking back, it's like, yeah, there's like a handful of steps that you guys I mean, you teach here, like. It's like, just do the just. Just do it. Just copy it. Copy. You guys are teaching. Follow the directions. And that's what I'm probably the best at is. Putting my nose like in my books and like, following directions, like just doing what people tell me to do.
And it works well from a business standpoint. What were some of your most impactful or favorite books?
Ooh, that's a great one. So there's one called the. Called like I'm Brian I can't get the the title of it right but it's called. Something like gazelles or something like. Not massive growth, but like. It's like the gazelles group or something. Scalia Thank you so much. Scalia. Yeah, the gazelles dude. Follow that. That's priceless. Jim Collins A good degree.
That's so that was my go.
To easy.
Like the, the just stunning the whole good a great great by choice how the mighty fall the flywheel all those business concepts were for me it's kind of what him and Maxwell pushing it together hey give me.
A system like a lot of those systems work and don't go around. There's like, you don't have to follow up. There's more than one way to to succeed in business. And that's why, like now that I have the private equity group running the company, it's like. Sometimes I'm like, Oh fuck, I wouldn't do that. But it's working. It's working. There's more than one way to do it. As long as I think their principles are sound and they're like following honestly, Brain is teaching the principles they're in the they're in their in their in the course or in the BMP. Like, I've been going through it and I was like, I wish I had this. I wish I had this before. So I'm sorry, I'm getting emotional again. I wish I had this before because, man, it would help me out so much. So many like tears and so many days and so many like arguments I had on my team. Man, if I would have had what you guys are learning right now beforehand, fuck, it would be so much easier. Don't get me wrong, I'm okay, but it would have been easier.
Yeah. Question.
Yeah. Hi, Michael. So impressive. Exit 100%. I want to ask about the buyer. So the buyer had to see something way, way bigger, you know, in your company to pay five times. It's it's a less, you know, valuation, right. Five times revenue. So that means we saw something. Are we trying to go to the multi-billion dollar brand or.
Something like that? Yeah, I'd like to say with my personality, like I made them on the you know, I met him. I gave him like they saw my team, they saw me. But honestly, we because we had those early valuations done and because I was given. Things basically a to do list of like how to make my business look more, not look even be more valuable. And I just did those things. So, so when I finally started talking to the buyers, it wasn't like it was like a three years, three years coming in a way. And what I mean by that is I had already like my accounting is, was so sound like my analytics, like unbelievable. Like I knew every number from the in the company like I only focused I'm very good at like with I was an accountant beforehand I'm very good at numbers. I'm very good with analytics and very good with like that's all I do right now from this other company. And it's. I geek out on it. So they like saw that what they probably saw. Where the weakness is because you want to like, how do I say so? You don't want to like. It was. I wasn't the best company in the world, obviously. But they saw opportunity for growth. And I think if you like, you give them a great company with opportunity for growth like that to them is just like. I'm trying to think of a good word that's not pervasive. That made them very happy.
Like so is that growth was kind of projected in your valuation reports or some type of analytics like what you projecting, like how fast the company can.
Yeah. Yeah, yeah. So yes, exactly.
And by the way, for all of you, I hope you're taking some notes here. When we platform your business, we do five different valuations. When you're in the strategic business unit, every year we revalue your business. Remember how you guys hear me talking about this? Because what it does is it starts drawing your attention to not just your income, because a lot of business owners are like, I went from paying myself $1 million to a million and a half dollars. They're not thinking about the fact that that extra half a million just created 3 to 5 million of equity value in their business. So all of a sudden you stop doing silly stuff and you start thinking about how do I grow my business by 10 million a year in value? And so you start asking people questions, quality of your questions, always. Determine the quality of your impact. So as you're as you're doing your revaluation and someone's giving you advice, here's what you need to put in place. Because the way you get a high value in a transaction is the more confidence that you can give to a buyer, the more money they're going to pay. So if you're running a dirty operation, they're going to pay you less because they know that there's a lot of problems. But if you have if you have and remember, I tell you guys, if you're if you're if you're documentations clean, if your numbers are solid, if your projections are being hit year over year, then when they come in, they're like, okay, you've hit your projections three years in a row. So we're going to project out ten years and we can see what this value of this company is going to be because we believe you versus randomizing like one year. We do. We work hard and we did 10,000,001 year. We kind of took a lot of vacations and we did 8.5 million. And then one year we decided to go to Europe for 90 days. So we did 6 million because we were just it's a lifestyle business. And then we went back to 8 million. And then you show someone this business that's like this and oh yeah, but we run our cars and our our boats and our guest homes and all of our vacations to the business and all our meals and, and we take cash out of the business. And buyers are like, you can't do that. Don't want any part of that. Because they know that the minute they buy you, you're not going to change your behavior. So super.
Clean.
Super clean.
And they check all that shit like I like. I got adult chicken pox during the whole process. What is that call? Yeah, the shingles. I was so stressed out because I was like, they ran. They run you through the wringer. It's not like.
Quality of earnings.
Audit. It's like, not it's not like a, Oh, we believe you. It's like a get ready for your proctologist exam, whatever it is going like, it's fun.
While you're awake. Josie, can we get the camera to Jose or the camera? Sorry. That's good, dude. That's a good grip here. I have a question based around.
Like, those big stores, like Walmart, Costco, things like that that you went into. They're awesome. Like, did you negotiate those deals where you like? How did that conversation go down and were you afraid of them leveraging you as a company? You know, ordering a bunch of product and then, you know.
Walmart is the best vendor I've ever dealt with in my entire life. And what I mean by that is like, they have they have this thing, they they have an open call every year or they like invite or you can you can even write yourself down to like Bennington and you can you can go down there and like meet with the buyers and they, they let you write your own check. And guess what if you. Because a lot of vendors do. If you were like, Oh my God, thank you for like, I want to like be in a 6000 or whatever. I don't know how many stores I got. I want to be in 3000 stores. You can't deliver. Yeah, they're going to like. They're going to like. I'm going to fuck you because. But you made the commitment like they let you make your own commitment. If you can, like, do it, do it. But if you can't. So we started in 300 stores, and then we moved to a thousand stores and we went to 2000. So. So it was like a progression. And they held our hands the whole way. Walmart is a great vendor. Honestly, I don't know how much stock on those guys, but they like. I love that company. They like they made they made our company in a.
Way, and they really changed because, you know, they went through they, they and Costco went through a period of time where they were saying they were predatory predators for small business because you'd show up because the people that would overpromise couldn't deliver, and then that would bankrupt the companies because they'd they'd say, you didn't deliver. So it was a contract and they'd either send the product back or they cut them off. And it was their only business because the bad business decisions. And so I always tell you guys it's okay to have it's okay to have Walmarts and Costcos, but you better have your shit in order. Yes. Because they'll eat you up and gobble you up and they'll equally spit you out if you don't. So fair.
They're so fair, though. I mean, it's it's like I think they're fair in terms of like, you agree to something if you can agree if you do it great. If you can't live up to your obligations and they hit you.
You're in like my next guest. That's coming this afternoon because he was groomed by Sam Walton and then became the chief CEO of Sam's Club. And then he went on and he.
Was a great person.
That he. Yeah. So you like him. There's a question back here. And this is my buddy here from Washington State. They own a coffee business.
We bought a failing coffee shop. Our first day of business was $68.
You know, I love it. And now we're I can relate.
We related with some of some of your stories, too, like, what are we doing here? Right. It was a side business. It was just, you know, something to do. It was cheap. Of course, it's $68 in sales. But my question specifically was, what point were you in business when you decided that, you know, getting your own canning equipment so that you could sell Cold Brew and sell other liquid drinks? Yeah. What what point in your business were you when you decided that that was something you should do? Revenue wise.
Yeah. I mean the. The Cold War was a nightmare. The canning. Canning coffee is a nightmare for me.
That's why I'm asking. Yeah.
It was nuts. I mean, just because, like, we had a we had a big ass recall, and I'm like, I don't know if. Have you ever had. I mean, if anyone here has ever had to go through a recall on a product, it sucks. Like every like Ellen's just like, you know, Ellen, like TV show host. She's, like, talking shit about me. And it's like one of those things. It's like, Oh, God, Like, so what point did we.
Try everybody talk about her later? Yeah.
What point did we like? What point did we decide to do?
Was it after you already had your dry products in?
Yeah.
Well, no, I think it was like in the middle. I had a very ambitious team and they were always just like tons of ideas. Right Idea, idea, idea. And I think, like, that was like, our biggest. I don't know. Hindrance. It's like, All right, guys, let's stop with all the all the ideas and let's just focus on what's making us money and get this get it done. Because at the end of the day, there's three things that, like, drove all of our profits. It was like bagged coffee and coffee mugs, believe it or not. And like, what else did the other one single serve cups like? The Cold Brew was the biggest fucking waste of money in terms of like all the money went out the door and nothing came. I mean, some came back, but not a lot. And it was like, what if I could, like, turn back the hands of time? But I would have never gone down that road because it's too expensive to ship. It's too heavy, You know, you can't, like, ship it anywhere. And. No, I mean. Yeah, beverage products are tough. I have a lot of, like, bad feelings about that. As you can tell.
My general manager has a question. So is that okay, Brandon? Yeah.
Sorry. This is expensive.
Well, tell him a little bit. Explain to him how many locations and what your revenues are now. Okay.
We have eight locations. And we did our first franchise in December and we're at 10 million revenue. Right. You want to get to 125 and three locations.
Eight and you're doing 10 million. Yes.
Wow. We have two companies. We have our distribution center, our roastery and our bakery that is on one company and then the eight stores. So together combined, we're at 10 million this year. So my.
Question, are you guys doing like a. Private label.
Say that again.
Are you doing private label or you're.
We have red leaf organic coffee. You got it. Cool. Yeah. We have two that are private label. Got it. So my question, Michael, is, are you joining us for lunch today? And if so, can I make a reservation for three of us at your table?
Yeah.
Also you guys. Of course.
Thank you.
Remember, we're partners, so no sidestepping. They actually they. My daughter literally goes to their location every single morning when I sent a picture. Hey, do you know these guys? She goes, I get my coffee there every morning.
That's awesome. Yeah.
I do miss it.
Hey, I appreciate this so much.
When we had dinner at the last. You told me a story about you won some contest. It sounded like it was a big pivotal point. Oh, my God. Mean, it was you sharing that?
Yes. I'm, like, the luckiest motherfucker I like not only. All right. I want a Super Bowl commercial, which was a big boost for my business. Like, I like I joined the I entered the small business big game competition with into a QuickBooks. Everyone's used into it. Everyone should use QuickBooks anyways, that's that's my side. But yes, so I went to super commercial, which is Wow man was like a $7 million commercial and I want it. I mean, during Super Bowl 50. But there is one lesson to be learned here. It's not just like entering the random competitions, but like we were 100% focused on winning this competition in terms of like all we had to do is get people to go to our voting link and vote for the company. But what we learned during that time is because we were so focused as a team to getting people to that voting link, like imagine your whole team aligned to one to do one thing and a simple thing not hard. Like your whole team. Everyone that's working with you is only for the whole year. Just focus on one thing and. Super Bowl commercial design, which is great. We did make a lot of money off of that, but our business grew probably it doubled before the Super Bowl commercial even hit, which is, wow, just because we are all like aligned and doing the the the right things, which is like promoting which grass is all the time promote as all we did. We just promoted it that whole year. Then answer it. He's writing.
He's taking his notes. So GLAAD said Promote, promote, promote.
That's all we did.
Always be promoting until you get somebody's attention, right?
It was.
Yeah.
I wish we could do it now. I've never been more angry when I see us not hit our numbers now. And I'm like. Or what action did we take? Because guess what? Usually it's less than we need to take. It's always action. There's always action items we could take to hit our numbers. And when we when we fall short, guess what? We didn't do enough action. We didn't do we didn't like set enough emails. We didn't send a text. We didn't like go out and beat people, businesses all just about like going out, introducing yourself. Hi here, this is. My name is Mike Brown. I sell Deathwish coffee or the world's strongest coffee and then making the ask, This is who I am. This is what I sell. Please buy my product. It's simple. That's it. Those two steps. Introduce yourself. Excuse me. And ask two two things. And if you do that more than your competitors, you'll win every time. Every time. And. I can't believe people don't understand. That sometimes frustrates. It frustrates me.
Well, what happens, I think when business owners, they get under pressure and they start promoting what's wrong. Like, you could have spent all your time promoting that the coffee shop is going out of business and everything sucked and people don't want and it's hard to get the cold brew and everything's wrong and why would I do this? And I can be doing other things. And you get into this promotion of what's wrong and then all you can see is what's wrong.
Yeah, but imagine if just instead of that, you just walked. Let's say there's the Internet wasn't wasn't a thing. And I just walked around everyone's doorstep and I knocked on the door and introduced myself. I am like brown coffee. I have a coffee shop down the road. Nice to meet you. I would love if you were a customer of mine. Come on in. Like, if I did that, I'd still have a successful business. I know.
I would see how simple.
So simple.
And then you guys overthink it and you get to do that. Now here you get to do it now, here. Right? You can do it right here. And you can get people, thousands of people to see it, share it.
Our.
Social media, the power of social media. So you notice the book I'm putting out the nine figure mindset. So I'm working on a trilogy. The next book that I'm already about halfway through is going to be think of like Traction or something like that. It's going to be kind of the operating system. It's going to it's going to break down the research. I did the studies on the different verticals that were went through consolidation, roll ups, some current trends in the marketplace, what we predicted ten years ago, what's happening today, and then it's going to go into from the break points, then it's going to go into the ten elements and then it's going to go through each ten elements, going to have about 12 specific things. In each ten elements, there'll be 120, it'll be those 120 things to get 125 million basically. And it's the how to. And then the third book that's going to come out because by the time that book comes out and we progress a little further, we will have created $1 billion valuation in this company. And my next book is going to be the ten figure mindset. So it's going to show how I got to the nine figure mindset and then how I progressed in the ten figure mindset. And so I'm going to own that space because it's like he said, there's so many bullshitters out there and I just feel like it's a completely free run right now. There is nobody that's painstakingly for 25 years figured out block by block, person by person, contribution by contribution, result by result, measurement by measurement. There's nobody in the marketplace, not one have I seen that has actually done anything like this, nor do they have the skill set to do it. Even when I signed up for How to Build a Unicorn business. Sponsored and produced by Wharton. So I go on the first thing, and it's being taught by a dentist with a $3 Million business.
Can I tell them about your like. How do you push my beliefs?
Yeah. Tell em whatever you want.
Like.
So when I talk to Brandon sometimes, like, my beliefs are. Mean, you guys know, like. Like you, you basically, like, you're limited to your beliefs and. Some of that sounds like bullshit, but at the at the end of the day, there's so much truth to that. Every time I talk to Brandon, he's like, Mike. Stop, stop, stop, stop, stop. Where is your head? And he like. He takes my brain from like. Like, from this tiny shell. And he, like, blows it out. And, like, honestly, after I talked to him, like, free. I like, look at my notes for months. I'm like, oh, my God. Like. Sometimes. I don't know what he's talking about. Other times I'm like. It just. It just. It just brings, like, it makes me think bigger every single day. And I think if you, if you like, surround yourself with people who make you think bigger and and give you like the. View of what's the vision of what's possible? Like, really like it's life changing. So anyways, whenever I talked to him, that's what happens to me, which is a great experience. And so obviously that's why you guys are here. But yeah.
So I want to share.
That, Appreciate.
That. And, and for me, what it does when someone's had so much success and now I made it a point to get in front of as many billionaires this year as I could. I've gotten in front of 28. I've made it a point to start accumulating. Business owners who have completed the cycle because about 80% of businesses that go to sell fail because of the when they crawl up there and do all the stuff, they realize it's all bad. And so it's one thing to grow your business is another thing to grow it correctly, and then it's another thing to create massive value intentionally. And those are different mechanics. And so, you know, the whole thesis and the building billions, I'm saying is that when you say I want to build something that's a billion, you're talking about multiple things. It could be a billion in market value. It can be a billion in revenue, It can be billion in liquid value cash. There's multiple ways. So when you say a billion and you've got to like define, what does that mean to you? Because you can build a $100 Billion company or in his case or my case, I mean both are valuations in the traditional sense are absurd. At a $35 million company that was paid 150 million for. And he he had a $60 Million company. These paid five and a half times revenue. We both were five and a half times revenue, basically, I guess. And so there's not a lot of entrepreneurs that they can create a $100 million company or $200 million company and they will not get that much money. My other buddy Greg, he built 138. We started at the same time. He built his to 138 million and when he sold it, he got 82 million. And so I built mine to 35 million. And when I sold, I got 150. We both busted our ass. What he didn't do is he kept dragging a partner along with him that wasn't working. And and he spent 50% of his time fighting with his partner from 600,000 until he sold for 100. That's like. And then he still had to pay the partner half. So he spent all those years bitching every time I'd see him about his bad partner. And I'm like, Dude, man, I kill you, exit the guy, get rid of him, or just forget about him and just build your company. And so what reference point did that give me? Well, when I meet Ephram and he's got. Potential partnership issues, it's like let's confront it right now and then we do. And what does your partner say? The guy that you thought was going to be there forever. And we confront the situation and almost immediately. What did he say?
Yeah. So he left. He had different goals and aspirations at that point, so he exited out. And then we've I.
Mean.
We've done way more since he's been gone in the last two and a half years than we did in the eight years that he was there. So he wasn't a bad guy, but he just wasn't. The alignment piece is that core value.
And you know what happens? It actually is a phenomenal guy. Yeah, right. But and but, but what happens let me just tell you guys what happens. You tend to start to become reliant on people you're close to and then you don't want to confront that. They're not really as ambitious or want to be developed or as have as big a appetite as you. So you start spending your time acquiescing to the people around you versus owning the direction you're going to go. And that's when you guys hear me say when people start polling, polling. What do you think I to do? Do you think we should do that? Do you think we should use this brand? Do you think we should add this product? Do you think we should call this? And everyone's sitting in the room in a conference room. I don't know what their opinions. And that's what drives you. Me crazy because we've got driver.
Yeah. At the end.
Of the day.
There's systems and processes. The business is not like ideas. Ideas or whatever it is. Everyone has that thousand ideas.
You know he said it. I don't know if you guys caught it, so I want to reiterate it and then we're going to go to lunch here. He said when the teams were all swirling with their ideas and they're all trying to figure out what to track, I said, Look, let's stop the madness. Pick the three things that create the most value for the company. Let's perfect that first. So getting down to the 8020 rule. Or the 2080 rule, 20% of what you do that creates 80% of your value and and at least perfecting that because then it's easier to systematize. It's either it's easier to put data around it and then the other 50 or 100 things that you're trying to do and measure like that's fine, but that takes second and third priority over the 80% that drives most of the value. Yes, Michael.
Hey, Mike. So great having you in the room and loving Mike and in the ecosystem. It's awesome. Um. When? When you sold your business, it sounds like you were in what Brandon calls Breakpoint six integrated technology.
Yeah.
Was there a relationship with you selling your business at that break point? Like, okay, I'm going to spot where. I don't know how to smash through this. And it's going to be easier, like sell it. Now I've got someone on the hook instead of pushing to his next break point, which is the platform company.
I feel like that technology was a benefit like they, the private equity group saw it as a as a big like benefit like it was a. They saw that is very valuable.
Because you had got to the point.
We had got to that point and they even though it wasn't perfected and. Like I was earlier on. And when we started this, I was like, It doesn't have to be perfect. Let's just make it okay. Like good enough to work. Like we caught that. They were good. Guess what? It was good enough to work. And because it was good enough to work, the private equity group is like the most beneficial thing ever, so it doesn't have to be perfect. It just has to be like, Oh, it's like, oh, they have a system and it's keeping, it's tracking and it's keeping track of the accounting. It's keeping track of the inventory. We we have like solid financials. Our accounting firm can come in here and check everything. Our legal team can come in here and check everything. Like because we had a a system, not the perfect system, but a system that is what matters.
So it was almost like you, you you gave them a softball pitch to turn it into a platform company and let them do the work. And you got paid.
Yeah. You know, it's. It's a platform company. Think about that. A platform. Companies are usually 120, 100 to 125.
They're Yeah.
They weren't, they weren't there yet and and and so let me ask you this.
Probably are close now but we're in war and then.
You knew though that from the valuation at that point in time because of the way things are being valued and the credit markets were so low, see, today, you wouldn't most businesses aren't going to get that value because it's the private equity group has to access capital where they can leverage something. Five turns a debt, six turns a debt a year and a half ago. Today it's going to be 3 or 4 turns a debt. And instead of doing it at 3%, it's going to be at 7 or 8%. So that immediately cuts down on the valuation because you can't afford to pay that kind of money and afford that kind of debt. And the banks aren't extending that kind of debt because it's high risk now and they're all nervous. Right? So so now all of a sudden all deals are different. I have to presume that some advisor told you, dude, you can triple the size of your company and still not get this much money.
I. Spent a lot of no. No adviser did that. But I did spend a lot of time. Does this sound weird? Like walking through the woods and thinking about this decision and every like I had like this thing called the decision deck. And I went through every possible angle of this decision of my life because, I mean, it was the biggest decision I ever made. And it only took me like a week to make it, but at the same time it was like, I've never thought like I've never like gone back on it and been like, Oh, I made the wrong decision. I've known, like since the day I made the decision because I spent so much time being like very intentional and thoughtful about it that it was the right decision. And. I should share that with you. I'm going to send you guys all the questions that are in this decision deck because it's fucking wild. Like, it makes you think through everything. It makes you think through every different like aspect of a situation. And then you're like, Oh, and then at the end of the day, there's no like, gut check, you know? It's like, I did it. I made the right decision. I'm pretty happy with it.
And I think I think, you know, like like to me, I mean, just from a I asked myself this question all the time, but what would be the amount of money if somebody walked up to me right now and said, well, buy what you built because it's so amazing. And I can tell you that, you know, hundreds and hundreds of millions of dollars when you came from nothing is really difficult to say no to yes.
Plus, I wouldn't make the I'm not making the decisions that the private equity group is making right now. And and that's a negative on me. Like I was the founder, the owner, the I financed the whole thing, just reinvesting into the business. And like so I had like so many different like every decision I made, it's like, okay, am I making this from my founders perspective, from a from like a fiduciary perspective or the CEO perspective and having those like three roles, like way in my mind, it was like each one of those roles may make a different decision and always pull me in a different way. Having these guys have the. They just have one goal in mind. It's very, very clear, very focused. And that makes a big difference in a business where you don't have to, like, think about like like. You don't have to like. You don't have to make a decision from three roles. They're just making it from one roll. And it's it's working. I love it. They're like, they're good.
Last question, and then we'll go to lunch.
Thanks so much, Michael. I got a quick question when you. I'm sure you were getting offers all the time to buy your business. How did you kind of land on these guys and what was it in the negotiation process? Did they did they come in with a certain offer? And you said, I'm not even willing to talk unless I get this number. How did you get that high EBITDA or how did they consider it.
So to speak, better on this? Because he's probably gone through the process more than I have. I've gone through it once and it is a it's a process in terms of like more of that. It's like, I mean, process slash system in terms of like you, you, you hire a you hire a investment banker and they bring companies in. I mean, luckily along along the way, I was able to meet with a lot of private equity groups and trade shows and things of that matter. I had great relationships. I felt bad saying no to like some of these guys who like were my like homies who are like, we've been like together for years. Like, we went out drinking and playing basketball together. Like, we did a lot of cool shit together. And like, at the end of the day, yes, they they got a seat at the table. You know, they got a seat at the table. And some of them, I mean, somebody said, no, she was really uncomfortable. But what made me pick the company that I went with, the private equity group, I went with the people. It was the people, not just the people on their team, but like their. The way they reacted with my team as well. And what is they reacted. I mean, like they kept they kept my team on staff. They kept everyone employed. They. Every promise that they made, they kept. It's like and they're big and they're big group too, which is nice. But like, they kept their promises, like just good people. And I said when it came down to it, just like, yeah, we had to find like the right people. It wasn't, it wasn't an auction. If that was to mean, you know, sometimes, like it's an auction, like highest bidder wins like that, wasn't it? Like if I wanted to do the highest bidder wins, like, I probably would have went with a different, different group. But these guys were right and they were like, in the Northeast, I'm from upstate New York, they're from Boston. Like just good people. And I like enjoy doing business with them.
Did you have any piece of your business that you had to roll forward or was it just a straight deal in? You're out.
I mean, it's radiating out, but I mean, I don't have like a. Like any don't have to hit anything or anything.
So they didn't say keep 20% of your equity in. No.
So my biggest asset by far.
So you do have equity in.
Yeah. Yeah. So I'm like, Yeah. So I'm like still like the biggest shareholder of Deathwish Club.
So, So you had another you get another bite of the apple?
Yes.
Yeah.
Yeah.
It's great coffee, by the way.
All right, one more, then we got to go to lunch. Don't you love it when we have such interesting, successful people in the room with us?
So one very quick question. Hello, Michael. Um. When you knew you were exiting, did you set up like a compensation plan for your team and what did that look like?
Great question. So I had I had a phantom share plan set up beforehand. Also, what a pain in the ass it was to set that up like you just need to find. Honestly, I've talked with so many lawyers and I went through so much. I probably spent so much money until I found the right lawyer. I don't know if Brian. I don't know if you know people, but like, there's only a handful of people who can do it right? Do it and do it right.
And you guys. How many times have you heard that from me?
Jesus, It was nuts. It was like spent so much, so much money and time getting the wrong plans in front of me. I'm like, this is the opposite of what, anyways? So, yes, I had a phantom share plan in place for my key people and. So that was nice. Everyone, like, got like everyone got everyone in cash. Everyone is happy. However, I mean, when I sold the company, I did keep it like under wraps for a while. Like I didn't like going around, like, shooting for like, shouting from the rooftop rooftops. I was selling it like my team didn't know I was on the company until, like a day or two before, which kind of felt a little shitty to me, but at the same time I knew it was necessary because. It was like one of those. It's a weird. It's a weird thing. I don't.
Know. Let me tell you what happens.
It's weird. I didn't want to. I don't want to read jump and shit.
Yeah, let me tell you what happens. When people find out you're in the sales process, they start trying to figure out what they're going to get out of the deal.
Oh, yeah. People don't give a shit about me. They give a shit about themselves and they should like it.
That's.
And they should. That's why, unfortunately, that's like one of, like, the weird sides of it. I don't really keep it to yourself until it's like, done.
Well, so what happens is they start thinking about themselves. Then they start posh posturing with you as a business owner and wanting to know, Hey, what's in it for me? If they don't get the answers, they start to get disengaged. Sales process is going on and now you get a group of people that are like, Hey, we've got enough leverage here that we can go in and actually pull what do you call it, a star? Like they come in and all sudden 12 of his big P hey, we know you're doing a deal. They're asking us a lot of questions, too. We see the activity. We want to know what we're going to get out of it. We helped you do it and they start putting the screws to you. And if you're not conforming, then they start trying to figure out they trying to show you the leverage they have in the deal. So I'm just telling you that if I'm working with you outside of the inner circle of whoever absolutely needs to be involved, like your finance person for getting the numbers or maybe an operations person they're going to want to interview, It's going to be a tight circle. And outside of that is nobody's business because say he goes to that whole gyration, tells everybody and let's say everyone knows they go home and they check their phantom stock option plan and they're like, oh my God, when this deal goes through, we're going to have $1 million or 2 million. And then they go tell their wives and they're all spinning the money in their head and then the deal doesn't happen.
I made a.
Lot of now they're going to say, now they're going to say he screwed it all up, even if it wasn't the right deal. And so the less you tell people because once they start cashing the eggs, they're checked out. That's true. You don't want people to know you're going through a process. When we sold ADG. What we did very aggressively is told everyone in our company, we were going to go out to the marketplace and add three new suppliers to our business. So all the activity and all the meetings we were taking. Everyone assumed it was because we were going to add new suppliers in our supply channel. And so when we announced boom, we sold the company. I flew home, everyone because there was a public company that bought it. So you can't say anything until they say something. So I flew home. They announced on Sunday night in Denmark, which was Monday. I had a Monday morning meeting with all of our team and said, This is what I told them. I said we were out shopping for suppliers and unbeknownst to us, a couple of the suppliers in order to be our suppliers, also asked if they could maybe buy our business. And so we found we got an offer we couldn't refuse, so we took the offer up. And that's how I presented it to the team, because the truth is, it's none of their business. I was the sole owner of the business besides my clients I gave equity to and I had an equity.
Pool.
That was done correctly for our team. And it's true, most lawyers screw all that up. And and and I just believe somebody has to be the adult. And nobody on my team has ever sold anything, nor did I want them distracted counting. They're counting how much money they were going to get. But we also gave every single employee in the company. We paid out $15 million to our employees. So the fun part of that morning meeting was you can go look at how many years you've been in the company and how much money you are making, and it showed you how much you're going to get. So if my if I was true. Heather So if I was my first day on the job ever, I might have got a check for 3500 bucks. But if I had been there for 8 or 10 years and I was a director, I don't know what we paid 30, 50 grand. And if you were a senior director or we just went up that a m, how much should we pay the senior directors? 75 and then somebody got 125 and then you got up to a VP. You got a million.
That's life changing.
Yeah.
And then. And then my president got 12 million. Because he'd been there for 14 years, had eight bosses, and he was the president by the time he had the highest pay. So I just took the pay. The years that are there created a matrix and it wasn't like me. I like that person. Don't I didn't even know half the people that were getting paid. And we just ran it through the the model and that's what it was. So everyone got checks, you know, everyone was excited to get their checks. But one of the things I did do is I took. I took half of my earnout. And I took that same model and I put half of my earnout on top of that model. And I said to the key all the way down to the director level. And I said, Hey, there's still 5 or 6 million earnout. In fact, actually there was 10 million earnout. That's how my president ended up getting 12 million is he got half the earnout and the other 4 million went to everybody else that stayed on the team. But the buyer said to me this, We've never had a seller do this. I engineered all that to the buyer and I also did the waterfall for my customers who are partners. So everyone in the whole company, from our customers to our employees, were all tied into the five year earnout, which is why we hit all our numbers in blue and the way. So knowing how to sell a business and setting it up properly is more important. Then even your numbers.
Everyone loves you, right?
Well, I don't know that everyone does.
They should.
I was talking to Toby this morning in the gym like Toby. So we're like. The mentality of an entrepreneur is not the same utility as someone who works for an entrepreneur. And it took me a long few years to learn that. So what you did and yes, I mean what I did when giving those employees like that bump, it mean not the bump like that equity at the end or like all of a sudden they they get hit with like a waterfall of cash. It like changes their lives. It like, gives them. It's not like it's it's man like people cried. It's cool. It was cool.
Awesome. Well, listen, guys, thank you very much. Let's go to have a great lunch together.
We'll see you after.