How to Build a Business That Supports Your Dream Life with Mike Brcic
How do you design a business? We sit down with Mike Brcic, a serial entrepreneur and the leader of a company called Sacred Ride. Mike takes us on his journey of how he built a successful business to an international level. Listen in as he helps you discover what you want your business to be, how it will impact the world, and changing your goals to focus on what’s important.
“This is the type of life that I want, and how can I build the business to support that?”
Mike Brcic
Timestamps:
2:33 - Introduction to Mike and his background
6:00 - How Mike shifted his mindset about his company
8:40 - Why are you scaling your business? What’s the reasoning?
14:14 -Two pivotal moments in what changed Mike’s mind shift
17:49 - Changing his company to focus on profit vs growth
24:00 - Dealing with shareholders and investors to focus on profit
27:06 - How Mike’s business has become more agile and adaptable
32:45 - The culture behind running his business
37:48 - A couple big tips to starting up your own business and your team
Resources:
Connect with Mike:
Transcript:
Jon Voigt: Welcome to Agile Living, the entrepreneurs journey. The show dedicated to discovering how entrepreneurs and digital leaders are doing more with less. I'm Jon Voigt, your host and CEO of Agility. And we're on a journey across the country to learn from top digital entrepreneurs on how to live a more agile, adaptable, and fulfilling life. Thank you for joining me today, and let's dive in.
Jon Voigt: Hi there, to celebrate the Agile Living podcast launch, I'm doing a massive giveaway and giving three lucky winners the chance to win some of my favorite things I use frequently. The first step in being agile is your mindset, and these prizes all help you with that process. First, a box of Bulletproof InstaMix. These are high octane oils to fuel your day. I add it to my coffee or my tea almost daily. Second, a Fitbit Charge 3. I don't even have one of these yet 'cause they're not even released, and they look pretty cool. So it's coming out soon, and that'll be the second prize. Third, a microbiome test by Viome. This is a leading test in the US that tests your gut biology, and tells you exactly the foods you should be eating. It's pretty cool stuff, I did it about a year ago and saw the results, and it was really amazing the things I should and shouldn't be eating. Please note this contest will open to those in Canada and the US, I'm really sorry for anyone internationally.
Jon Voigt: And to win, you have to do the following. Subscribe on iTunes to the show. Go to theagilecommunity.com and enter your email so we have a way to contact you. And share the show with a friend who wants to start living a more agile lifestyle on twitter or Facebook with the tag #BeMoreAgile. That's it, pretty simple. Can't wait for you to hear some of the episodes, and hopefully you can start living a more agile life.
Jon Voigt: Today I'm very excited to introduce my good friend Mike Brcic. A serial entrepreneur and a great adventurer, I've known Mike for over four years. I think we met back in EO at one of the board meetings or something, I can't remember exactly. But I'll let him introduce his businesses and adventures. But to set the stage, I think what we're going to talk about today is building your business by design. We rarely build our businesses by design, often just thrown into it and have to just jump onto things because demands or just the way things line up. But what we want to talk about is how building a business by design can really make your business work for you, and probably give a better solution for your customers as well. So Mike maybe perhaps you can just jump into talking about where you're at right now, a little bit about your story, and how you got to where you are.
Mike Brcic: Awesome, great to chat with you. So I'll keep it brief. On a work front, my two main projects are I lead a company called Sacred Rides, been doing that for 22 years. It's a mountain bike adventure company, and we run high end adventures all over the world. And that has been my primary focus, work focus for the last 22 years. There've always been lots of other projects on the go at various times. My wife and I run a charity, I ran a business incubator. At one point, I did a whole bunch of stuff for the Center for Social Innovation, all that kind of stuff. So probably for the last eight years or so, there's always been some kind of other side projects. And lately that side project has been a company called Mastermind Adventures. And in a nutshell, also an adventure travel company, but focused on entrepreneurs.
Mike Brcic: I put on these four to seven day events for entrepreneurs that makes adventure, learning from each other, connecting with each other, and just having a blast. And you and I spent some time on one of those events in British Columbia. On two of them, and in Utah.
Jon Voigt: I've loved them. Yeah, they've been amazing.
Mike Brcic: Really fun. I'm really passionate about that. And I guess the context of what brings us here today and why we're chatting partly is my experiences with designing both of those companies around my desired lifestyle, rather than an approach that most entrepreneurs take which is go all in on your business and try to build that and scale it and whatever. Any little scraps of free time that are left over that, that's the 'rest of your life.'
Jon Voigt: If there's any time left over.
Mike Brcic: Exactly. And I know people, I think we both know James Wallace and he's been very open about it. It's an incredible story, but he for five years straight worked 12, 14 hour days, seven days a week. Did not take a single day off for five years and his wife corroborated this. It's almost too incredible to believe how anybody could even physically pull that off. But I think that's more the rule than the exception with a lot of entrepreneurs I know, it's all in. And I was in that boat as well, and I just got to the point where it's like, this is madness. I've got a got a wife and three kids, and they-
Jon Voigt: That you've never seen.
Mike Brcic: Yeah. I think I was better than most people at being careful about my time because when I wasn't careful enough about my time, my wife certainly let me know about that. But now I've gotten a lot more intentional about that and about my time with my family, and my time with my friends. And even alone time with myself, that's the primary focus. And then I look at what does that leave? 20, 30 hours a week roughly. What do I want to focus my 'work energies' in that time? And that's a different approach and it leads to different decisions in a different methodology. And all that kind of stuff.
Jon Voigt: And if we look at Sacred Rides as an example, from our discussions, it sounded like you were running full steam at the beginning, but you changed the design of that company, right? Halfway through, which is something a lot of people can't even do, sometimes you have to start from scratch. Can you talk about that a little bit?
Mike Brcic: Yeah. Well that's been a bit of a roller coaster in terms of how I approach that business. And I started the company in [inaudible 00:06:36] British Columbia. Other side of the province from where you are now on the coast. And for the first 10 years, it was kind of, I describe it as a hobby business. Our season ran from end of June to mid September, and there were certainly plenty to do in the off season, that was when we did the most of our marketing and sales. But it was really, and my cost of living back then was virtually frictionally zero, it was so cheap. I bought my house for $90,000 and I got free bikes from my sponsors and ski passes were super cheap. I was happy not really working on that business that hard at all.
Mike Brcic: But then I moved to Toronto, back to Toronto. I grew up here. I was ready to actually pack in that business. I didn't really understand why I would hold onto a seasonal business in BC and live in Toronto. But I ended up deciding instead to expand the business. And we started running trips internationally, very quickly over the span of a few years expanding to all kinds of destinations around the world. That was a lot of work. And that was around the same time my first child was born. It was definitely a challenge balancing the two of those. And then in 2013, I brought on investors for the first time, and the whole point of bringing them on with so that we could scale up the business as quickly as possible.
Mike Brcic: And I did it again in 2014, and again in 2016. And in late 2016 was the launch of this fairly ambitious Airbnb type platform, and that was a colossal amount of work. And that was going all in. And then early 2017, I kinda hit a wall and really questioned why am I doing this? And it's really leading to some outcomes that aren't healthy and aren't positive. And it really had went through a reassessment of why I was doing this. And at the end of the day, it just kept coming back to my ego. And I have copies of Entrepreneur Magazine kicking around and I'd see people on the coverage that I want to be on the cover of Entrepreneur Magazine. And then I started actually meeting people who've been on the cover of Entrepreneur, Anchor, whatever your favorite entrepreneur type magazine is.
Mike Brcic: And realizing that a lot of them actually didn't seem to be very happy about where they were at. And I realized that rapid scaling, growing massive companies generally didn't seem to lead to the type of outcomes that I was looking for. And so since early 2017, it's kind of really been a shift in how I approach that. And we already talked about that, it's designing intentional design of my life, which then leads to intentional design, and how I approached my businesses.
Jon Voigt: Right? So I think that flow with Sacred Rides is very common though. A lot of people start a business to fit their lifestyle. And then when they decide I want to really grow this whatever time that is, whether it's early or late or whatever, I want to grow this, I want to grow hard. Time to go all in. And then they do that, and burn themselves out or burn the business out, or something. Because it's just not designed to be that way, or just when you want to grow, you got to put a lot of time in or bring the right people in to do that. And then you've redesigned it now to be more around your lifestyle, including the other businesses you've started.
Mike Brcic: Yeah. And there are cycles to this. And of course unless you're VC funded or have a significant amount of startup funding, you're going to be grinding it out for the first year or two and, often that's just you on your own with zero employees. And if your market timing is right and you kind of know what you're doing at some point, the business is going to start to take off and you're going to need to bring on some staff. And when a business reaches that initial sort of maturity point where it's got a relatively solid and steady marketing and sales and it's got some good staff in place. That's kind of an inflection point, and most entrepreneurs approach that from let's keep this rocket ship going, throw more fuel on the fire, and just wrap up this growth.
Mike Brcic: But one of the conversations that I've been getting into lately is why is that the unquestioned assumption that we're just going to keep growing incessantly? And by growing, I mean revenue typically growing revenue. For a lot of businesses, there's an opportunity at that point. There's a sweet spot where you can reach a certain level of maturity, and there's an opportunity for you to look at it differently and say, "Hey, how can we build this as a beautiful sustainable company that provides a lot of meaning and joy and happiness to the founders, and to the staff?" Is consistently profitable, and that includes customers. It's really good at serving its customers. And that's different than just constantly throwing fuel on the growth fire. And often those two things act against each other.
Jon Voigt: I agree. Most sustainable business have the happiest customers because they've done something to make it an actual viable business where the customer gets what they want, and the business gets what it wants. And that creates a sustainability, that value.
Mike Brcic: Yeah. I don't want to come across as an anti-growth or an anti-scaling guy because I'm not. I think there's perfectly valid reasons sometimes to scale. But what I do question is when people just scale without questioning why they should scale, or their reasons for scaling. And if you have a product that you really, truly believe in and it's changing people's lives for the better, and it's changing the world for the better, and you really believe in it and you want to see this affect as many and touch as many people as possible. By all means, right? If you've got investors that are pushing growth hard, well okay then you've got to do what you gotta do. But you should have had that conversation before you've raised all that funding and know what you're getting into. And so scaling and growth is not inherently bad. It's just doing it for the wrong reasons.
Jon Voigt: Well that could be considered another design, right? So you could say for the next three years we're going to grow like crazy and that's the design I'm drawing out. And part of that design is I won't have any spare time. But you have to be willing to know that that's what I'm going into, and be willing to say in three years I want to get that time back. Then you got to design that into it.
Mike Brcic: Exactly, exactly. And just taking the time to reflect on what it is that you actually want from your business and what you want your business to do and how it impacts the world, and how it impacts you and your staff. Those are conversations founders often aren't having with themselves or with their co-founders or investors or whatever.
Jon Voigt: Yeah. So you went all in and really grew up Sacred Rides. And in the beginning of was it 2017, kind of had that realization that you wanted to kind of shift things. Can you talk about a little bit of that because I'm sure there's people out there who wants to kind of shift and bring back some more of their personal life or look at other things in life. And how do you change the design of a business when you're already in it?
Mike Brcic: Yeah. Yeah. And I already mentioned in 2016, we brought on another round of investment. That investment was primarily to facilitate the launch of this new sort of marketplace, Airbnb type platform. And essentially in a nutshell, I won't go into too deeply, but we created a technology platform whereby people around the world, passionate mountain bikers who knew their area well, if they wanted to become part of this program, they could get their own website, their own booking system, training, materials, all that kind of stuff. Sort of like a micro franchise program, and they would pay a monthly fee and they would get all this stuff, and they can run one and two day trips on their local trails under our brand with their own platform to do that. I thought really cool idea, but was a little bit naive about how much work it would take to get that.
Mike Brcic: And it was over the winter of 2016, 2017, it was a colossal amount of work. Just the insurance piece alone almost killed me. I got to the point by spring 2017 where I was getting really burnt out on that. And it was really affecting all kinds of other things in my life. And there were two pivotal moments in that mind shift. And one was reading a book called Ego is the Enemy by Ryan Holiday. Fantastic book. And it really helped me understand how much of what I was doing was being driven by my ego and by this hungry little child in me wanting validation from the world.
Jon Voigt: You don't realize how much that's probably driving a lot of our decisions.
Mike Brcic: Exactly.
Jon Voigt: That's crazy, yeah.
Mike Brcic: Exactly. And the other one was, both you and I were at last year's Mastermind talks event put on by our friend Jason. Philip McKernan put on a round table there, a workshop. And in that workshop, one of the questions he asked was where are you seeking validation. It basically just underscored what I'd already been shifting from reading that book and realizing that I was so much seeking validation from my business and wanting that recognition, wanting to be speaking on stages, and wanting to be on the cover of Entrepreneur. And realizing how hollow all that stuff is. Especially if I asked myself the question if that came at the cost of my relationship with my wife or with my kids, would it be worth it? And of course, the answer to that is a big resounding no.
Mike Brcic: But it's one thing to be able to intellectually say no, and it's another thing to on a deep level, feel that emotionally resonate. And I definitely felt that and realized how much I was jeopardizing a lot of that stuff. And then started to reframe that and think, "If that's not the goal, what is?" And one of the things I realized, we'd been pushing growth at Sacred Rides for several years, and pushing rapid growth. And one of the things that, that does when you're pushing revenue heart is you're typically taking on a lot more expenses. And then the other thing when you're taking on a bunch of investor money, you've got all their money sitting on your account. You're really not that worried about cash flow and a bunch of money sitting in your account. And I would look at our PNLs and see revenue growing but see our profit plummeting.
Mike Brcic: And then our profit becoming negative and we're losing money. And we were getting to the point where like holy shit, we're going to hit another crisis point. And I thought do I go back and try to raise money again? And after doing that three times I was just like, "Oh God, I can't do that again. It's a lot of work. I don't like that type of work."
Jon Voigt: Growth does chew a lot of cash though. It just does.
Mike Brcic: It just does it chew a lot of cash, and basically said no more, we're getting off this hamster wheel. What needs to happen in order to create a different type of company that isn't so focused on growth? And I realized if we could get rid of this need for constant high revenue growth and shift our focus towards profit, that, that would be a very different company.
Mike Brcic: And that led to all kinds of decisions. So we ended up increasing our prices by 20 to 25 percent across the board, and we wanted to focus on a higher value customer, people who could afford to pay more for whom we knew we could provide a lot of value. That meant we could also run significantly fewer trips and have fewer customers in order to meet our profitability targets. So we were able to cut our total number of departures by 40 percent. And that was partly because our margins very, when we run a trip for three people, we break even. If we run a trip for 12, we make awesome margins. So if we cut back the number of departures, hopefully we'll take all those people that we've for years been spreading out over too many trips and put them on fewer trips, have better margins.
Mike Brcic: So that was the other thing we did. And then the final thing was I cut our operating expenses by about 40 percent. Because I just realized our margins aren't there to support these big monthly operating expenses, we're getting really bloated. And in order for us to be able to meet those expenses and then have money left over for profit, we got to make some crazy sales targets, which I'm not really sure where we can consistently make those targets, and it's stressful trying to make those targets all the time. Some of that stuff was really easy, right? We went from one two full time developers to one half time developer and just sort of put the brakes a little bit on all the software development we were doing.
Mike Brcic: There's a whole bunch of expenses that, I started looking at our credit card statements like, what is that? That's a piece of software we haven't used in a year and a half. We've been paying $80 a month for that thing. It's crazy.
Jon Voigt: $80 doesn't seem like a lot, but you add that times five or 10, whatever.
Mike Brcic: It's death by a thousand cuts. And then there were some tougher decisions, right? Our monthly payroll was too hot for a company like ours. And I ended up laying off our operations director, and moved someone else to halftime. And those were tough conversations to have and tough decisions to make. But at the end of the day, our expenses were 40 percent lower, our prices were higher, our gross margins were way higher. And at the end of the day, we basically arrived at a point where we could afford to make 40 percent fewer sales and still be profitable.
Mike Brcic: Almost 50 percent fewer actually. We could afford to cut our revenue in half and be profitable. And it was like this breath of fresh air. The pressure's off. And all this stuff took time to implement. But we're nine days away from closing at our fiscal year end here. And we're going to have our most profitable year ever.
Jon Voigt: And I imagined with less trips and more focus on less trips, you're able to provide a better trip, right? Because you don't have so many you have to deal with, so when you do have them, you can focus a little better so the experience for the customers that are probably better as well.
Mike Brcic: Yeah. And all our metrics for operations are ... They've been high for years, when we take that stuff very seriously. But for this fiscal year, we use a one to nine. So we survey our customers after every trip, and basically when the trip is done, we stick a tablet in front of them and say, "Hey, would do you mind?" So our submission rate is pretty high. We use a one to nine point scale for reasons we won't get into, but over the course of this year, I think we're at about 8.45 out of nine. And nine on the survey, nine is ranked trip of a lifetime, a little piece of text next to piece that says trip of a lifetime. And so that's our metric. When somebody is giving us a nine out of nine, they're saying this was a trip of a lifetime. So we're setting the bar really high. We've been pretty high, for years we were like 8.1, 8.2 kind of stuff, but going from 8.1 to 8.45, it doesn't sound like a lot, but it takes a lot of work to get that extra little bit. Because that just means that many more people instead of putting eight, where they're like, "That was a great trip. But it wasn't a trip of a lifetime." Now there's significantly more people who are just saying, "Holy shit, that was a trip of a lifetime."
Mike Brcic: And delivering that level of customer service and satisfaction is really hard when you are on a rocket ship that's trying to head to the moon. And it's nice to be able to just slow down a little bit and be able to focus on delivering that level of service and happiness, and joy and all that kind of stuff.
Jon Voigt: So how do you deal with shareholders and investors who often look at the valuation of a company through revenue, and are always shooting for growth in terms of revenue? How do you deal with that whole side of things in terms of saying we're going to focus on profitability? Which I would assume some shareholders would really like. And other ones would be looking at the revenue side.
Mike Brcic: Yeah, good question. I'm actually pretty lucky when it comes to investors in that I never took any VC money, private equity money, anything like that. It was primarily through people who were either customers or had followed the company for a long time. And there's a few friends mixed in there too. And I've been careful not to take too much money from friends because I just don't want to be too beholden or feel responsible for their money too much. But for the most part, it's people who really admire the company and what we're doing. And of course, before any of these people give me their money, there's in depth conversations that happen prior to that. Some of these people I might've had five hour long conversations with before they wrote their check.
Mike Brcic: So almost all of them have said, "On paper, this isn't a great investment. There's far better investments that I could make. This is kind of risky and it also doesn't provide for the VC style of huge return. I'm not going to scale this company a hundred times." Right? And they've said to me, "I just really believe in what you're doing. I love to mountain bike, I love what your company is doing. I just want to support you. And if I make some money in the process, that's great. If I don't, whatever, I've supported a cool company and an entrepreneur that I admire." So they generally don't put too much pressure on me for revenue growth. And I send up my shareholder updates, and sometimes over the last few years, the shareholder updates have been pretty tough to share, but they're always supportive. I get emails back like, "Whatever you decide is great. If you need any help just let me know."
Jon Voigt: I guess that kind of links back to the whole thing about choosing your investors wise, where you have the same vision of how you design the business. And it sounds like you have good investors to work with. One big topic or are part of this podcast is how do you become more agile in life, adaptable, things like that. How has going into this new direction with the business major life more agile? I know you're doing a lot of other things now. You've been branching out ever since that mindset shift in your business. Can you talk about that and why it's enabled you to be more adaptable and do more things that you'd like to do?
Mike Brcic: Yeah. So part of that process that started in spring of 2017, objective number one was how do we shift our attention towards profit rather than revenue and revenue growth? But the second part of it was recognizing that I've gotten to the place after in 21 years in the company that I was getting pretty burned out, particularly because I'd put so much of myself into the company over the previous six to eight months. And I realized, and I told my staff, "I really need to take a break from this. I need to step back." And then looking at if I'm going to take a step back and my staff are going to take on more, what needs to happen in order to facilitate that? And there were all kinds of things that happened over the course of the next four to six months that facilitated that.
Mike Brcic: And I've written extensively about those on my blog. But things like putting really good systems and structures in place, writing playbook for all of this stuff that I do. Outsourcing or delegating, or eliminating, or automating stuff that I do. Because I can't just step back and just hand off everything that I was doing it at the time to my staff because they're already busy. So it was putting a lot of stuff in place. And since about November of 2017, so almost a year into it, I've gotten myself to the point where my week with that company basically consists of, on Tuesdays we have an hour long team huddle. I have a couple half hour one on ones with my key staff, and I have a half hour meeting with my chief operating officer and my bookkeeper.
Mike Brcic: And then on Monday and Wednesday, we have a seven minute team check in, in the morning. And that's pretty much it. And I'll pop in every now and then and I'll help with our Facebook ads campaigns or something like that. But that rarely amounts to more than an hour or two a week. So as I wrote about in my blog, I read The 4-Hour Workweek several years ago, and actually have lots of really cool concepts in there and it sounded cool. But I'd never met anybody who had pulled that off.
Jon Voigt: Yeah I'm not sure it's totally the right idea either until you get your business in the way you want it.
Mike Brcic: Yeah.
Jon Voigt: Yeah.
Mike Brcic: But I'm almost a year into it now where I've actually managed to pull that off.
Jon Voigt: Yep. Yep.
Mike Brcic: And there's still a lot of mental energy. It's not like four hours a week, I'm thinking about the business, and the