He Sold at the Perfect Time — Business, Investing & Economic Lessons from Mikey Taylor

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0:31members of the Board of Trustees, including Martin Luther King Sr. It's the true story of protest and rebellion in Black American history that you'll never forget. I'm Hans Charles. I'm Menelik Lumumba. Listen to The A-Building on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Black history lives in our stories, our culture, and the conversations we still have in today. This Black History Month, the podcast I Didn't Know, Maybe You Didn't Either, digs into the moments, perspectives, and experiences that don't always make the textbook. Let me tell you about Garrett Morgan.

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2:12Hey, man, how's it going? What a show I came into, huh? FedCheers, SwitchUp, When to Sell Profits. What's going on, guys? Hey, brother, how are you? Mr. Mayor, how are you? I'm doing well. Thank you guys. Yeah, man. Mikey Taylor, entrepreneur, investor, former professional skateboarder turned civic leader. He built and exited a nationally recognized brewery. We're going to be talking about that. Selling a company, transitioned into commercial real estate and private equity, et cetera, et cetera, et cetera. Extremely accomplished athlete now and extremely accomplished entrepreneur and investor.

2:51Thank you for joining us. Appreciate it. Thank you for having me. God's been good. All the time. How's that? No treating you, man. You know, it's, uh, it's busy right now. Um, it's going well though. We got it under, we're doing a pretty good job. We're, we're, we're safe. We're clean, got good jobs. We're just trying to maintain and push forward. Amen. So I want to, um, we're going to talk about your transition from an athlete to an entrepreneur, but I want to just go right into it as far as your decision to actually, uh, well, the idea, right, as far as going into entrepreneurship, your company got acquired.

3:29So we just, actually, this is perfect timing because we just got finished talking about selling, like when to sell, when to sell, when to sell a stock, but also like, you know, very few people have insight on when to sell a company. So what was the thought process in selling a company? Can you walk us through that journey? Yeah. So first and foremost, we had investors. So anytime you're going to bring on investors, you're going to have to answer the question, how are they making money? And you're either going to build a business that pays a dividend or you're going to build a business that exits.

4:03And so what we did was we got a handful of offers on the table and then we had to make the decision on if we should take more capital to grow the business to a larger position than to potentially exit in the future. And that calculation just didn't really make sense for us. And secondarily, we were looking at the industry. And at that time in the beer industry, all the big giants, your Miller Coors, your Anheisers, your Constellations were buying. And so we definitely were concerned that once the big players stopped buying, the multiples went down. And so we made a calculated decision. And then in hindsight, we were correct at the timing side.

4:43So sometimes it's timing, sometimes it's luck, And sometimes you're able to see some of the data and then make a maybe educated decision. Yeah. After you make the exit, right. A lot of times people are looking for the next company to build. You kind of made a pivot and went into real estate. Like what was that process like for you? All right. So I know this is a little bit contrarian, but I was a little bit scared of lightning striking twice. space and we went into an industry where we were a little bit of disruptors and we found a model that worked and then a lot of the other companies came in and started using it so over time it it wasn't special anymore and so I was definitely scared that if I did it again in the you know beer space I was gonna flander so I just switched it went to another industry tried to take that model into something nobody had seen before and then all of a sudden it was blue ocean again so that was more my framework i was just scared of doing the same thing twice before you ask that question because that's actually it that's what you just said ian as far as if you option trading don't try to run the gambit of hitting lightning in the bottle twice right take your profit put it to a more conservative index fund so across disciplines it's a lot of the same practices.

6:10So I just wanted to kind of highlight that because that's actually in line with what you just had mentioned earlier. Look, at the end of the day, investing should be boring, right? We just want to make it exciting. But when you guys were talking about your buy-sell disciplines, at what point am I a seller? It's really important to establish that and then hold to it. If you just do that, you're going to look back and you're going to be in a pretty good spot. Why do you think most people don't stick to that discipline of when to exit and for you personally, what habits as an athlete did you have that made you incredibly successful as an entrepreneur that carried over?

6:44Okay. So why don't we do that? Because we're human and, you know, we see opportunity and we get dollar signs in our eyes. We want more. And that's just something we have to fight is that side of us for me as an athlete. You know, number one, I was doing something I loved and I didn't want it to end, but the reality was it was going to end. And how I looked at it was I had sponsors that paid me while I was relevant. And I just felt like they controlled my future. And I did not like that feeling. It's probably similar to just having a job and your boss basically is the decision maker on your future.

7:21And there's something that's uncomfortable with that. And so I just tried to put myself in a position where I didn't have to rely on my sponsors anymore. And really what that meant is if I can move out of a position where I was completely dependent on income and start owning assets that eventually paid me, well, I felt like I was taking power away from them and putting them into kind of my future, which I love that feeling once I accomplished it. So you led a life that you can write a book on, you know, you're a legendary, uh, professional athlete in the realm of skating. Then you, um, you know, had a business that was actually successful enough to actually exit then you start to invest in real estate and you know you're the mayor of a city yeah i am so how how'd the politics then come into play oh that's a good question huh um we're gonna get to know each other real good huh boys you know the the you know the politics for me i was always frustrated by politics every time i looked at politicians they didn't seem like real people to me They always sold.

8:28They never delivered. It was completely opposite from what you have to do as an entrepreneur. So I really had no interest in going into that world. But the only caveat is if you get involved in the local level at the city, it's completely different than a lot of the things we talk about or argue about on the national side, because the decisions you're making are things that you, your family, your residents are feeling. And it's actually, it is political in some regard, but I mean, think about what we're voting on. It's budgets and sidewalks and real estate. It's things that we actually feel and touch every single day.

9:07And so I felt like I would get involved there, but that was going to be my ceiling. I never wanted to do more than this. And so I think that's probably going to be it. I do this run and then step out and keep building more companies. You heard us talking about the new Fed chair. You recently put up a post that Trump's Fed pick could reshape real estate faster than rate cuts. Can you break that down, Spatio? Okay, so it really comes down. Now, we will see. What I will be completely transparent with everyone here on, you don't know what somebody's going to do until they start acting. So if Walsh gets in, we'll see.

9:49but at least his idea is a little bit different than what the fed has been probably over the last 20 years which the fed has become the stabilizer it's like they come in and they go okay how do we protect the market how do we protect unemployment and what that means is when bad things happen they come in and save the day 2008 was our most recent well you could call 2020 our most recent example but 2008 was a big shift and what should have happened is a full-blown crash A lot of those banks should have completely gone under for the decisions they were making. And the Fed covered them. And so the new potential Fed chair has a different outlook.

10:30We'll see if he acts on it. But what it really is, is stay out of it and be the referee. I'm not going to be the stabilizer. I'm going to be the referee. And what that means is more potential volatility. It means things could crash. but if things crash you don't have a lot of bubbles created that are held up by ultimately easy money printing and so that does mean there's going to be some pain so I want to be careful in saying this I recognize pain and that sucks I don't want things to hurt but usually what happens is we try to protect pain on the front end and then we put ourselves in a situation where it's worse for us on the back end.

11:09I mean, look at millennials and Gen Z and ask them how everything's going. They're going to tell you it's not going very well. And I think a lot of that is because we put ourselves in a situation where things are so out of reach for so much of us, so many of us. And I think that's because we've artificially held up the market beyond what it's actually at. That's at least my outlook. We'll see what happens from all of this though. Do you think we're too far in the rabbit hole to fix the changes and the pain that Gen Z may be feeling? I hope not. I really do. I think probably the most fair way to say this is there are some things that could come into play that change everything.

11:50Like, you know, you're looking at AI and everything going on there. the potential for how productive this could be and what that could mean for GDP growth could put us in a position where if we course correct on some of this other bureaucracy and you know support that we've had we could right-size this thing that could right-size our debt issue that we're struggling with but I'm naturally more of an optimist I try to find the potential pathway and focus on that. But there's some things that could come into play that make it worse as well. I just know where we're at right now is not healthy. That's at least my view.

12:29What do you guys think? You guys feel like we're in a healthy spot? Well, really quick, you said there's some things that could make it worse. What are some of those roadblocks or financial asteroids that the audience may not be aware about that could make it worse? Okay, so I'll keep this kind of high level and I'll try to make it pretty simple. if you viewed America as us as individuals, we all bring in a certain amount of money, we all spend a certain amount of money, and there's some debt component potentially. We are spending way too much, and we are borrowing like crazy. And the inevitable outcome of that is bankruptcy.

13:08And so there's a choice that we have to make, right? If you're in debt, you have two options to get out of it. You either cut back your expenses and put more of your revenue towards paying off your debt or you increase your revenue and pay more of your debt elsewhere, right? So it's either growth or pullback. For us, I don't think we can save our way out of this. I think it has to be a combo. And we've got to be in a position where we're not giving away the farm. And I think we've just given away too much and we've outsourced everything. So I think that's the challenge. If anyone's a reader in this audience and you want to get caught up on this, read Ray Dahlia's books, The Debt Crisis and everything he's forecasting.

13:50That is a potential for us that we have to avoid. Well, how do you think that we have an opportunity to get out of that? Because nobody wants to, well, at least the Republicans, they don't want to raise taxes. The Democrats don't want to cut programs. and the Republicans don't really want to cut programs too, if you're really honest about it, because I mean the major programs as far as military and health benefits and things that really, really cause trillions of dollars to get taken out, there's no real solution on how to cut that from that. So if we're not going to cut anything and we're not going to raise taxes, I mean, what can we actually do?

14:33Okay, so it's actually really interesting that you brought that up because I would say that has been a recent shift on the Republican Party that there's no appetite for cutting programs there either. I think the fascinating part is it's the people don't have an appetite for it. If you're an elected official, what you're supposed to be is a representation of the people who voted for you. And if you ran on a platform of we're cutting, you're not getting elected. And so we're in a tough spot, right? I think probably knowing that the only real shot is control expenses where they're at and grow our way out.

15:11And I think you could make the claim that AI could get us there, but if the politicians aren't willing to do it, the only option is growth. The caveat to that is, are you guys seeing the percentage of people that are moving into the independent party? Yeah. It's massive. It's the largest group we've ever seen in history. that could be a tell for what's what's coming politically that the majority of people don't have faith in either side and if we saw a situation where the two-party system didn't control everything that could be something totally new for us but with that said if i'm trying to pick the most likely outcome it's grow your way out of this when you say hold just for clarification When you say grow your way out of this, what does that actually mean though?

16:04Like as far as on a corporate side, just to have more corporate profits, because that's not coming back if we don't tax corporations. So when you say - Yeah, that's a good question. The large corporation scenario we're in, that's a whole separate talk for us. Just look at it as total revenue into the government, right? So every single revenue stream that the government has, how do we increase that? And now, you can definitely make the case, and I get it, that this is nuanced and there's not enough time for this. But if companies are growing and taxes are coming in at a larger dollar amount, well, there's the potential for growth.

16:49The large corporations not paying taxes, that's nuanced and there's caveat to it. The corporations are paying taxes. It's, you know, at what portions are they taking loss that covers a lot of it? And, you know, where do R &D go? Where's the incentive go? That's a separate combo. You mentioned something. You said after this political run, you're going back to finding companies, wanting companies, which is interesting because it makes me think of where do you see or what excites you? What type of company would you be looking at of the future, right? It's going to look a little bit different than when you started your entrepreneurial journey.

17:29What companies are the wave of the future? Which ones excite you? What are you looking for when you're trying to find one? Yeah, that's a good question. Now, I heard somebody say, I'm not sure who it was, but one of you guys said that you want people to win with their money, right? If you're new, we want you to grow your wealth. We want you to succeed. That outlook is very much in alignment with me. I want people to understand how to manage their money, how to invest it and put the, you know, let's grow the middle class and let's grow it upward. So if you're not in the middle class yet, let's get you there.

18:04If you're in the middle class, let's try to extend it up. That's really my focus. That's why we built the business we have now. You know, all the content we put out is financial literacy. We have opportunities for people to invest in real estate with us, whether you're accredited or you're not. So you can grow your wealth that way. the next business I start will probably be in some way aligned with that. I won't tap into a, you know, maybe a tech platform or AI. It'll probably be around how do I help more people grow what they own. For the entrepreneurs listening tonight, what matters more to you, the idea or the operator?

18:45And if they're looking to scale, like what are some must-haves in business now that will allow them to scale? That's a phenomenal question. Okay. So number one, this is not to take away from the idea because the idea is incredibly important, but there are more good ideas out there that don't get executed than bad ideas that people try to drive forward. So there is a pairing. You have to have a good idea. You have to have an operator because if you can't bring the idea to reality and then you can't scale it, the idea is almost worthless in in some regard. So if you're a visionary, pair with an operator, bring an operator or a team of operators into the business so that you can actually track your momentum forward.

19:31And then it just becomes a game of right person, right seat. What seat do you need? Find the right person and fill it and then track the progress. The beginning stages are the hardest. So if you're a solopreneur, it's the hardest to go from one person to three and then from three onward. And so what you're going to have to wrestle with is when you're the solopreneur, you're making all the money. And for a time, you're going to make less than because you're going to pay somebody else to get involved. You might have to give somebody equity to get involved. But two people can go further than one.

20:07So the idea is take the hits on the front end, delay your gratification, build the team. and what you're going to experience on the back end is going to be much larger um so let's talk about real estate you went into commercial real estate so you're a real estate investor but you're also a politician so i was interested to see your thoughts on this is commercial real estate dead because we've been seeing even in new york the chrysler building that they that's in shambles right now like so many office buildings when you think of commercial real estate at least on the office side, but a lot of other commercial, whether it's even businesses, they're going online and people are not coming in the same and everything has changed.

20:50So what's your thoughts on commercial real estate in 2026? Okay. So commercial real estate, just for anybody who doesn't know, is a lot of different asset classes. It's office, it's industrial warehouse, it's retail, it's commercial multifamily. Office is definitely getting hit the hardest. That will reshape. It will survive. Even though we're going digital, we have not mastered how to work as an organization and maintain culture digitally. And so it's probably going to become somewhat of a hybrid. And I think that hybrid is going to hold. So I think there's a buying opportunity on Office where you can buy it at extreme discount.

21:29Industrial is going to be here. You know, retail, I think, is going to still be here as well. A lot of us wrote that off in 2009 to 2014 as e-com started pumping. I think retail is going to stay because at the end of the day, we're emotional creatures that like community. We like seeing and feeling. And so there will be a footprint for that. multifamily in a lot of markets is correcting hard right now. It's a lot of the markets where the regulation is low and they actually added supply. But here's the thing to know about commercial. Commercial real estate values are tied to interest rates. So when the Fed drove rates up 3x, you watched prices come down because of that.

22:11That's very different than how single family works. So we're just in a moment where there's a buying opportunity. I think you probably have a year or so of that. And then we'll, we'll see things tighten. And then we'll go through the beginning of the cycle again, and it'll happen again and again after that. The most important thing is that people will need capital. And you had this thesis on the millennial career crisis that we're in. I had a conversation about that earlier today and just where we're headed. What's your thoughts on how we combat it? What can we do to, you know, put a dent in it?

22:46Because it's a real thing, When we talk about the amount of jobs that are going to be replaced, yes, some will be created. But if we don't have income, then we're not going to be able to invest in residential real estate or commercial real estate. Okay, so there's two parts to that. The millennial career crisis is real 100%. What AI does and how we're going to make money, I actually think there's a higher probability that we experience something similar to the industrial revolution where we see a lot of new jobs created because of AI. I don't know if we're all just going to be jobless and something like UBI is going to turn on.

23:26Not saying that doesn't happen. I think that's lower probability. I think the big issue with the millennials and Gen Z is it's housing. It's like we've got 50 % to 70 % of our income going towards housing and the price tag for a first-time purchase is so high. the American dream is taken off the board at that point. And so I think the conversation for housing is more what happened and why are we here? I think that goes back to the old outlook of the Fed. We have allowed a bubble to be created because we are trying to artificially support people in and through. And so what does that mean? Number one, you got to add supply.

24:10If our population grows and we're not adding supply, you're going to watch asset prices increase. You know, some of the other things is, it's regulation and politicians. You know, if you're looking at the housing crisis, right, I think both sides can agree that prices are too high. Now it just becomes what's the solution? And I would say one group looks at the solution as being the government. The government needs to come in. They need to build more regulation. There needs to be rent controls. There needs to be, you know, eviction moratoriums and that will bring prices down. The other side views it as government get out of the way.

24:50Let us build. I promise you, we will build too much. And when we do, you know, you're going to experience something like Texas is right now. Prices are dropping at a crazy rate. The true answer is it's going to land somewhere in the middle, like the private market and the policymakers need to come together and actually speak the same language. They need to get aligned on what the desired outcome is, which is more housing, which will bring prices down. And you haven't seen that happen yet in a lot of the markets. Some you have, but the majority of markets you haven't yet. We all have one story of an investment that we missed out on that we wish we would have been a part of.

25:30Is there an investment that you missed investing into, whether it's real estate or a company and what's the lesson that you learned from it? 2011, one of my friends started talking to me about Bitcoin. And he's telling me about this digital currency on some website that you could buy and it was going to be the future. And instead of me asking him questions to learn about it, I looked at him and went, bro, you are crazy. That's some black market stuff. You're going to lose all your money. And he made an astronomical amount of money. And I waited until 2019 to buy it. And so the moral of the story is if somebody is talking to you about something, treat it as if they have information that you don't have and ask questions for you to learn.

26:22And that message goes actually beyond investments. I think we should talk to everyone that way. um private equity for people that may not be familiar like explain you know how is it what's the the real metrics and and private equity as far as how companies are evaluated who gets money like you know what's what's been your experience of private equity okay so what private equity means is that you are getting your capital outside of the public markets you're not going to the stock market for capital. And so that can look like a bunch of institutions or pension funds are giving you money all the way down to like what my company is.

27:02You can invest with us for as little as$5 ,000. So there's a lot of different ranges of it. Traditional private equity means that you're buying businesses. The real estate I do is technically called private equity real estate, but investing in real estate as a syndication is different than what you're seeing with a business. And what you're seeing over there, the multiples on traditional private equity are typically going to be three to five X. And what they're doing is they're buying a bunch of businesses inside of a certain industry, and they're trying to create efficiencies in it. They're trying to drive revenue up and they're trying to cut expenses back.