The Charlie Kirk Show - The Joy of Entrepreneurship with Venture Capitalist Vic Keller

00:00:00.000 Charlie, what you've done is incredible here.

00:00:01.000 Maybe Charlie Kirk is on the college campus.

00:00:03.000 I want you to know we are lucky to have Charlie Kirk.

00:00:07.000 Charlie Kirk's running the White House, folks.

00:00:10.000 I want to thank Charlie.

00:00:11.000 He's an incredible guy.

00:00:12.000 His spirit, his love of this country, he's done an amazing job building one of the most powerful youth organizations ever created.

00:00:19.000 Turning point USA. 0.65

00:00:21.000 We will not embrace the ideas that have destroyed countries, destroyed lives, and we are going to fight for freedom on campuses across the country.

00:00:29.000 That's why we are here.

00:00:32.000 Brought to you by my friends, Andrew and Todd at Sierra Pacific Mortgage, 888, 888, 1172 or Andrew and Todd.com.

00:00:44.000 Welcome back, everybody.

00:00:44.000 We live in a great country, and in this country, we have amazing stories of success.

00:00:50.000 One of the pieces of feedback I receive from young people is how can I be successful?

00:00:54.000 All I hear is this negativity on campus.

00:00:56.000 Well, we want to introduce you to one of the most successful entrepreneurs in the country, Vic Keller.

00:01:01.000 Vic, welcome to the program.

00:01:02.000 Thank you, Charlie.

00:01:02.000 Glad to be here.

00:01:03.000 You have several businesses, and I mean, the success could go on and on and on.

00:01:08.000 Tell us your story.

00:01:10.000 Man, my story is one of coming from humble roots.

00:01:14.000 I just remember being 14 years old and trying to convince McDonald's I was 15 years old so I could get a job.

00:01:19.000 And from there, I just had a bunch of jobs.

00:01:22.000 And then by the time I was, I think, 23, 24 years old, I really understood that I wanted to be an entrepreneur.

00:01:28.000 I was working at JP Morgan and was learning some great stuff, but I realized I was on the wrong side of the table for really how I was wired.

00:01:35.000 I wanted to be that entrepreneur that was, you know, controlling those commercial banking accounts and building enterprise and being capitalistic.

00:01:42.000 We live in the greatest country in the world.

00:01:45.000 And we're losing part of it, but boy, there's so many great stories that come out of a free market.

00:01:49.000 Oh, it's, I mean, the free market enterprise we have here is unbelievable.

00:01:52.000 So just really at 23, 24 years old, started thinking about it at 25, pulled the trigger, started my first business.

00:01:59.000 And, you know, it sounds complex and daunting when you think about starting a business, but it wasn't.

00:02:04.000 I talked a couple of my best friends into joining me and went online, formed an LLC and got a website, and I was in business.

00:02:12.000 What were you selling?

00:02:13.000 You know, my first business was in the automotive industry and I was selling products and services in the automotive industry.

00:02:19.000 And it was an absolutely fast-paced, high-energy.

00:02:23.000 A lot of hustle, but high margin, high margin, a lot of room for error.

00:02:26.000 I learned when I was young.

00:02:28.000 I like high-margin businesses.

00:02:29.000 Okay.

00:02:30.000 And they really provide a lot of opportunity for fun, expansion, growth, and stuff.

00:02:34.000 If you find those two, they're the best.

00:02:34.000 High margin, high volume.

00:02:36.000 It's the best.

00:02:37.000 You just need good people as well.

00:02:38.000 So you were 25.

00:02:40.000 Did you go to college?

00:02:41.000 I did.

00:02:41.000 Got it.

00:02:42.000 I did.

00:02:42.000 I went to an Ivy League university called Texas Tech.

00:02:44.000 Lubbock, Lubbock, Texas.

00:02:45.000 Lubbock, Texas, man.

00:02:47.000 That is the Dartmouth of the South.

00:02:50.000 No, it's not.

00:02:50.000 It's actually wonderful.

00:02:51.000 I love Lubbock.

00:02:52.000 Great people there.

00:02:53.000 So you're 25 and you just say, I want to start a business.

00:02:57.000 Did you have that from a young age, kind of that entrepreneurial mindset?

00:03:01.000 Did somebody nudge you?

00:03:02.000 Was there kind of an attitude change?

00:03:06.000 Or do you always want to be the guy in charge?

00:03:08.000 You know, so my parents are both just blue-collar workers and work really hard to this day.

00:03:14.000 My dad is an automotive mechanic, and that's my stepdad.

00:03:18.000 My real dad's an electrician.

00:03:20.000 My mom sells flooring.

00:03:21.000 And so that was kind of the roots I came from.

00:03:23.000 But I had a grandmother that always told me I could do anything.

00:03:27.000 And she said, you can do anything.

00:03:28.000 And I listened to her and I believed it because it was so encouraging and empowering.

00:03:31.000 And she was a custom home builder.

00:03:33.000 And so I had a little bit of a taste of seeing what it looked like to be an entrepreneur.

00:03:37.000 And I really studied all my friends' parents and what they did.

00:03:41.000 And I noticed the ones that had really boring corporate jobs weren't having a lot of fun.

00:03:47.000 And the ones that were having a lot of fun were the ones that were taking risks and living for the mystery of being an entrepreneur.

00:03:51.000 And I said, this is what I want to do.

00:03:53.000 So that was my motivation.

00:03:55.000 And I said, let's go.

00:03:57.000 You know, I felt like I didn't have much to lose when I was 24, 25 years old.

00:04:00.000 I did have a young family, yes.

00:04:02.000 Young family, but was wow.

00:04:04.000 Okay, that's even harder.

00:04:06.000 So, you then went from automotive parts to what?

00:04:10.000 You have a whole portfolio of businesses now, but walk us through the story.

00:04:13.000 Yeah, so the story is this: I started my first company in the automotive industry, and I learned the concept of vertically integrating.

00:04:20.000 So, what I learned is that if I could really get to know my customer and what their problems were, that there were plentiful opportunities to start additional companies.

00:04:28.000 And so, over the course of about 10 years, I started 10 different initiatives, which really turned into 10 different businesses, all the way from products and services to the last business I launched in the automotive industry was a B2B e-commerce technology company.

00:04:42.000 But all of that was by studying my customer and really understanding what their problems are.

00:04:48.000 And that alone gave me just more fuel than I would ever need to start businesses.

00:04:53.000 When you started, especially in the first couple of years, did you have a business plan or did you just have desire and energy?

00:05:00.000 Because that's young people, all these students say, Well, I'm studying entrepreneurship in college.

00:05:04.000 I think it's the greatest waste of time ever.

00:05:06.000 Yeah, I don't think you study entrepreneurship.

00:05:07.000 I mean, having been an entrepreneur for 10 years, in my own regard, you do entrepreneurship and then you adjust and you adapt.

00:05:13.000 Do you agree with that?

00:05:14.000 100%.

00:05:15.000 Yeah, I, my business plan, if I ever had one, was on one piece of paper.

00:05:18.000 I remember it well.

00:05:19.000 It had about five spheres on it, and uh, it said I was going to do these five different things.

00:05:24.000 But ultimately, I never sat down and wrote out a plan.

00:05:26.000 It was really about tenacity and drive.

00:05:28.000 And, you know, entrepreneurs always talk about taking risk and it and entrepreneurialism being wired for the risk.

00:05:34.000 I really saw it as being more about the mystery of you really didn't know what was going to happen, but you were going to go after it and you were going to be passionate and driven.

00:05:40.000 And I learned early on that I was going to be as good as the people I could surround myself with.

00:05:45.000 And the cool thing about being an entrepreneur is you can surround yourself with the smartest people in the world and you still get to keep your job because they're on your team and they're working with you.

00:05:54.000 There's talk about how you select people on your team because that's a question a lot of young entrepreneurs give me: how do I select people and understand the different types of personality?

00:06:04.000 Not everyone wants to be in charge.

00:06:06.000 Some people want to be operators.

00:06:07.000 Some people are relational.

00:06:08.000 Some people have a lot of love of process.

00:06:11.000 I'm sure you learned a lot very quickly as soon as you're the one that has to assume all the risk.

00:06:16.000 You know, the best way I've found to assess people is just always be interviewing, always talk to people.

00:06:21.000 I had a great business partner when I was very young, very successful multi-billionaire.

00:06:24.000 And I remember he spent most of his time interviewing and talking to people, and I took note of that.

00:06:29.000 And so I've tried to emulate that.

00:06:31.000 But ultimately, I'm not looking for a college degree.

00:06:33.000 Yeah.

00:06:34.000 I'm looking for someone that is tenacious, that's driven, that's committed, that's really a curious, ferocious learner, someone that just wants to keep learning, that's diving into education, whether it be through podcast, whether it be through having great mentors, whether it be through reading, whatever it is.

00:06:50.000 I'm looking for that mindset.

00:06:51.000 I totally agree.

00:06:52.000 And ultimately, I look for people that are outcome-driven, right?

00:06:56.000 I mean, in business, there is a scoreboard.

00:06:58.000 Participation ribbons really don't matter.

00:07:01.000 There's a scoreboard.

00:07:02.000 You know, if you're winning or you're losing, it's called net income.

00:07:04.000 It's your profitability.

00:07:05.000 That's your insurance.

00:07:06.000 It gets success.

00:07:07.000 And so I try to find people that truly understand how to deliver outcomes.

00:07:12.000 People that are competitive, I love people that have a background in sports is very interesting to me.

00:07:18.000 So I've always looked for people that are just driven and motivated.

00:07:22.000 And you sold some of your companies to Warren Buffett.

00:07:24.000 Is that right?

00:07:24.000 You know, I was in a very unique situation where my companies were successfully acquired by Berkshire Hathaway.

00:07:31.000 When?

00:07:31.000 In 2015.

00:07:32.000 Did you own a railroad?

00:07:34.000 No, I did not own a railroad.

00:07:36.000 No, I actually founded these businesses that ultimately became part of a much larger business in the automotive industry and just very fortunately had the companies acquired by Berkshire.

00:07:48.000 And so what did you learn in that process?

00:07:50.000 Oh, well, I learned a lot.

00:07:52.000 So when I was about 14 years old, I started reading business books.

00:07:55.000 Yeah.

00:07:55.000 And I did all I could to study Warren Buffett.

00:07:57.000 The Oracle of Andrew.

00:07:59.000 Yeah, and really understand how to build a business that has enterprise value and what that looked like.

00:08:04.000 I never in my life had any idea that this set of circumstances would come together.

00:08:08.000 But is what I learned is that if you build a business that is driven on profitability and truly building enterprise value and you're playing the long game, and you can align that business with super smart people, you never know who's going to knock on the door.

00:08:22.000 Let me ask you about that.

00:08:23.000 And I don't actually know the answer because this is debated.

00:08:26.000 If you're trying to drive profitability, what matters the most?

00:08:30.000 Your employees, your customers, or your shareholders.

00:08:35.000 So I'm going to give you a fourth.

00:08:37.000 Oh, okay.

00:08:38.000 So the fourth is you really have to be missionally focused.

00:08:41.000 I mean, everybody's.

00:08:42.000 It's mission above the profit.

00:08:44.000 Of course.

00:08:44.000 Yeah, missionally focused.

00:08:45.000 I mean, ultimately, you've all got to be heading in the same direction doing the same thing.

00:08:49.000 For me, I measure the success of every business I have based on profitability.

00:08:54.000 I have no idea how to spend revenue.

00:08:57.000 I know how to spend that income, and I like that.

00:09:00.000 So profitability is definitely the outcome.

00:09:03.000 Yeah, I'm just curious.

00:09:05.000 I love learning about this.

00:09:07.000 So let's take one of your businesses you sold to Berkshire.

00:09:11.000 Can you give an example of what were you making or what were you doing?

00:09:14.000 Yeah, the businesses I was in, they were not sexy.

00:09:17.000 So one of the companies that I started when I was in that 25-year-old range was an automotive specialty chemical business.

00:09:25.000 That is niche.

00:09:26.000 Yeah, it's called Zach Products.

00:09:28.000 And I founded that company.

00:09:29.000 And just to give you some high-level economics, we made a product that cost a couple dollars to make.

00:09:36.000 And we sold it for $12 to $15 a piece.

00:09:40.000 And that left, by the way, a lot of margin, very high profit margins.

00:09:43.000 So we were able to really invest in the education, the people, and the process that went around the product together.

00:09:49.000 I can see why Warren Buffett bought that company.

00:09:51.000 He loves companies like that, that are stable, that are kind of annuities, basically.

00:09:56.000 You're never going to not need it, right?

00:09:58.000 And he does an amazing job, you know, buying companies that most people have.

00:10:01.000 Well, it's a great compliment to you.

00:10:03.000 The diligence, he doesn't make, he doesn't buy bad companies.

00:10:06.000 I mean, so it's he has he has done a couple bad bets.

00:10:10.000 I shouldn't say that.

00:10:11.000 Like he thought he thought Apple was a waste of time for a couple years.

00:10:14.000 Well, he came around.

00:10:15.000 Eventually, yeah, and then he put about $200 billion behind it.

00:10:22.000 Look, it's kind of a confusing time right now to be in the housing market.

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00:10:56.000 I got to buy a home.

00:10:57.000 And that's the thing.

00:10:57.000 If you might say, Charlie, the interest rates are too high.

00:10:59.000 Yeah, they are high, but you could always refinance.

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00:12:04.000 That is AndrewandTodd.com.

00:12:09.000 So I asked you, and it's a tough question, right?

00:12:11.000 Because all of them matter, right?

00:12:13.000 So, but in your particular business, it was about driving profitability.

00:12:17.000 How do you balance that with quality?

00:12:19.000 You know, I think every business, their greatest risk is to lose quality.

00:12:26.000 Quality is number one.

00:12:28.000 So you have to have quality.

00:12:30.000 Obviously, profitability is a derivative of quality in many cases.

00:12:35.000 But for us, every business I've ever been in, we just have not had the luxury of having subpar quality.

00:12:41.000 So we've always focused on quality.

00:12:42.000 And as I said earlier, I love margin.

00:12:45.000 I love margin.

00:12:46.000 Yeah, so how do you balance margin with doing something beautiful?

00:12:48.000 Well, the more, I mean, my experience has been the better quality product you make and the better brand that you can deliver to the marketplace, the higher price you could charge.

00:12:56.000 And ultimately, the more margin you're going to have.

00:12:58.000 So I think your greatest insurance against protecting margin is to have undeniably the absolute best quality product or service that you have in the marketplace.

00:13:07.000 And if you have that and it's undeniable, I don't think you get beat up on pricing as much.

00:13:11.000 Yeah, and that's contrarian to how some people try to flood the market with cheap nonsense, right?

00:13:18.000 Or they try to, you know, erode the quality, you know, do things overseas and all that sort of stuff.

00:13:26.000 So let me, so you, you, you're, one of your life's calling is to raise up other world-class leaders and innovators.

00:13:33.000 We have a massive crisis in our country of a decline of entrepreneurship.

00:13:39.000 We do.

00:13:40.000 I think it's because we're sending too many kids to college.

00:13:41.000 You can feel free to disagree.

00:13:43.000 I think that college kills entrepreneurs.

00:13:46.000 But why is it happening and how do we fix it?

00:13:49.000 Yeah.

00:13:50.000 So I think it's happening because the education system that's in place is definitely not aligned with the skill set and the tactical knowledge that someone needs to have to be an entrepreneur.

00:14:03.000 Quite candidly, the education and the information that you need to be an entrepreneur is far less complex and complicated, in my opinion, than what you learn in traditional academia.

00:14:15.000 I also believe that your vision needs to be based on your knowledge.

00:14:20.000 And ultimately, we have a lot of people in our country that unfortunately have a vision based on hope and aspiration, and they really don't have the knowledge behind what it takes to deliver that.

00:14:30.000 So look, I had a great experience in college.

00:14:33.000 I'm glad I went to college.

00:14:34.000 I worked 80 hours a week, waiting tables, and somehow found time to go to college and may have had a few cocktails along the way.

00:14:41.000 We don't drink in Lubbock.

00:14:43.000 Yeah, we didn't drink in Lubbock.

00:14:44.000 I don't know what else we did, but I met my beautiful wife there.

00:14:47.000 So, you know, I had a great experience, but I would tell you that based on what I do today, the four years that I spent in college were not a great use of my time as it pertains to what I was doing on campus.

00:15:00.000 I just don't think our academic system is aligned with what people really need to understand to be an entrepreneur.

00:15:06.000 And I think you're a rare breed. 1.00

00:15:08.000 You are going to become an entrepreneur no matter what, based on the story you're telling me.

00:15:12.000 It's in your blood.

00:15:12.000 It's in your DNA, right?

00:15:14.000 I'm afraid of the people that are right on the edge, the people that could become entrepreneurs, and they might get saddled with debt and bad ideas.

00:15:21.000 We need a society where we have more entrepreneurs.

00:15:24.000 We have more people that are rising up and more people that are taking risks.

00:15:28.000 It's a great life.

00:15:29.000 It's an unbelievable life.

00:15:30.000 I mean, not only do you provide well for your family, but you provide well for other families.

00:15:34.000 You build a community.

00:15:35.000 And we live in the greatest country in the world, even despite our challenges.

00:15:39.000 We live in the greatest country in the world when it comes to free enterprise and capitalism.

00:15:42.000 And listen, there are some things that are challenging that right now.

00:15:45.000 But I could tell you, if entrepreneurs rally together and rise up, that's what's going to win this.

00:15:49.000 Let's, but I want to talk about, yes, it is great, but it's not for everybody because tell me, I'm sure there was a time that was a fork in the road, or maybe you had nothing but success, but where you had to probably say, I don't know if we're going to make payroll or talk about that because that's also not for everybody.

00:16:04.000 Gut check time.

00:16:05.000 Gut check, heart check, anxiety, blood pressure.

00:16:09.000 You know, I mean, any asking the banker to extend the line of credit.

00:16:12.000 All of them.

00:16:13.000 Check, right?

00:16:13.000 Yeah, yeah.

00:16:14.000 I mean, being an entrepreneur is not for everyone.

00:16:17.000 Being involved in an entrepreneur.

00:16:20.000 Yeah, being involved in an entrepreneurial environment, I believe, is for everyone because it's healthy, it's invigorating, it's life-giving, and it's opportunistic because as the business grows, it creates opportunity for everyone involved, unlike big bureaucratic organizations.

00:16:34.000 So, you know, I cannot tell you.

00:16:37.000 I mean, I remember in probably 2007 or 8, we were in a hurry to ship some product to one of our customers at an automotive dealership, and we were shipping it from Dallas, Texas, trying to get it to California.

00:16:50.000 And we couldn't get it there fast enough.

00:16:52.000 We thought we were going to lose the customer.

00:16:54.000 And I had a shipping manager that had the bright idea that we were going to put these highly flammable chemicals via an overnight flight.

00:17:02.000 And sure enough, the product leaked, didn't cause any damage, but the plane had to make an emergency landing.

00:17:08.000 You're kidding.

00:17:09.000 No, and it was a bad situation.

00:17:10.000 Well, then you had to pay, probably.

00:17:12.000 Was it not on you?

00:17:13.000 Or was it insured?

00:17:15.000 I can tell you, people always say they don't want the IRS knocking on their front door.

00:17:18.000 The FAA knocking at your front door is even more anxious-ridden.

00:17:22.000 I think that's exactly right.

00:17:23.000 Yeah, so they came to my office and they wanted to meet.

00:17:26.000 That's not a civil investigative demand.

00:17:28.000 That is, it was a very dynamic story.

00:17:30.000 People don't know.

00:17:31.000 The FAA has arrest authority, too.

00:17:33.000 They do.

00:17:33.000 They have handcuffs.

00:17:34.000 They don't use it a lot.

00:17:35.000 So we had about a million-dollar fine that we had to deal with.

00:17:38.000 And the good news is.

00:17:39.000 Right before 08.

00:17:40.000 Yeah.

00:17:40.000 The good news.

00:17:41.000 Yeah.

00:17:41.000 Literally 07.

00:17:42.000 The good news is that we were able to settle.

00:17:45.000 Wow.

00:17:45.000 And the guy that made the mistake, the FAA shows up.

00:17:50.000 They give us, they scare the heck out of me.

00:17:52.000 We have a big fine.

00:17:54.000 We end up negotiating it down.

00:17:55.000 And then I had to deal with my shipping manager that decided, you know, he was going to put some product on a FedEx plane that only needed to be shipped around because it was a highly flammable, combustible chemical product.

00:18:06.000 And so I had a big decision to make.

00:18:09.000 And you talk about what allows businesses to succeed.

00:18:12.000 And I think a big part of what allows businesses to succeed is not giving up on people and making the investment and growing and developing people.

00:18:19.000 So the guy that made this horrible move, I put my arm around him.

00:18:23.000 It may have been more like a headlock, but I put my arm around him and explained him the mistake he made, told him what he cost the company.

00:18:30.000 And he said, I guess I have to quit.

00:18:31.000 And I said, you know, this was a very expensive education that we just paid for for you.

00:18:36.000 No way we're going to let you out of here that easy.

00:18:38.000 And to this day, he's still with wildly successful.

00:18:41.000 But yeah, it was tough.

00:18:42.000 And I have, you know, Charlie, you ask about these stories of making payroll.

00:18:47.000 You know, there were definitely a lot of tough days of knowing if we were going to make, not knowing if we were going to make payroll or not.

00:18:52.000 But we also had some product failures early on where customers really could have given up on us.

00:18:58.000 I remember we had a product that we launched in 2003, 2004 that measured the tire pressure of automobiles.

00:19:06.000 And we pre-installed this product on 400 vehicles.

00:19:09.000 That's 1,600 tires.

00:19:12.000 And our commitment with this product was that tires were going to stay properly inflated because of this product that we brought to market.

00:19:19.000 And we installed these products in Phoenix, Arizona in July.

00:19:24.000 And there was a plastic seal, and we had 1,600 flat tires.

00:19:29.000 So the very opposite of what we said we were going to do.

00:19:32.000 We had a customer call us that had 400 vehicles on their dealership lot and they had 1,600 flat tires.

00:19:38.000 And there was a lot of screaming and yelling that was going on.

00:19:41.000 But ultimately, you know, I got to.

00:19:43.000 I didn't know it can get to 132 degrees.

00:19:45.000 Yeah, exactly.

00:19:46.000 I had no idea, right?

00:19:47.000 And then on asphalt, it gets hot hotter than that.

00:19:49.000 Hot, hot.

00:19:50.000 And so ultimately, we had to re-engineer that product overnight.

00:19:54.000 We ended up keeping the customer.

00:19:55.000 Wow.

00:19:55.000 And we sold that product into the marketplace for another 10 years, and we never had that happen again.

00:20:00.000 But, you know, I have found that customers that you collaborate with, that you work with, that you bring into the fold of what you're trying to do, that they're not only your best customers, they become your best friends.

00:20:12.000 And I had a lot of people as I was building businesses that, you know, there was no work-life separation.

00:20:18.000 We were friends.

00:20:19.000 We did life together.

00:20:20.000 And I would sit them down and say, hey, what can I do to do better to serve you more?

00:20:23.000 And let me tell you, customers are willing to tell you what you can do to serve them better.

00:20:28.000 And that is something you should listen to.

00:20:30.000 You have a company here.

00:20:31.000 Tell us about it, Christensen Arms.

00:20:32.000 Yeah, Christensen Arms is an outdoor sporting good company primarily in the bolt action rifle space.

00:20:42.000 And we're kind of the hottest firearm in America right now.

00:20:45.000 Beautiful stuff.

00:20:46.000 Yeah, we focus on hunters.

00:20:48.000 We focus on people that are out in the field, whether it be women, men, children, families that are out hunting.

00:20:55.000 And we build highly sophisticated rifles that are built around accuracy, primarily built on a carbon fiber stock chassis and with carbon fiber barrels.

00:21:05.000 But an amazing, amazing company.

00:21:08.000 I have some great, great partners in that business with me.

00:21:11.000 And we had the opportunity to make an investment in the business just about three and a half years ago.

00:21:17.000 And today we're kind of the hottest thing that's in this space that we're in.

00:21:20.000 And we're pressing hard every day to make sure we keep that spot.

00:21:23.000 So mostly bolt action long.

00:21:25.000 Yeah, most both, yeah, bolt action, long-range hunting rifles are really our specialty.

00:21:30.000 We make a few other products, but that's really what we focus most of our time.

00:21:33.000 And business is pretty good?

00:21:34.000 Business is great.

00:21:36.000 We have amazing people.

00:21:38.000 We have amazing customers and business is really good.

00:21:41.000 You know, obviously during COVID, a lot of people learned about the outdoors, all the way from taking on shooting as a sport to hunting to just being outside.

00:21:50.000 And it certainly helped our business in a big way.

00:21:53.000 But we've been able to maintain the momentum.

00:21:54.000 So let's talk more broadly, more macro.

00:21:57.000 You're involved in a lot of businesses.

00:21:58.000 One of the ways that I think the three enterprise system is being put in jeopardy is inflation and the central bank policies.

00:22:05.000 What are your thoughts?

00:22:06.000 You know, I think that we are in an environment right now where government's trying to be big and they don't exactly know where their place is and what they need to do.

00:22:17.000 But one place that I feel like government does have a place, if any, is in helping us have regulatory systems around banking.

00:22:26.000 I think that's really important that we have that.

00:22:29.000 As Americans, I know we want to make sure we have a sovereign, strong banking system in place.

00:22:34.000 And I think that's a place the government can help us.

00:22:36.000 And they completely failed.

00:22:38.000 They completely failed.

00:22:39.000 So the one place that, you know, we really need our government to take a hold, being good fiduciaries, make sure that there's compliance across the banking institution network, and they completely failed us.

00:22:51.000 So I think it's a tragedy.

00:22:53.000 I think it's sad and it's completely unnecessary.

00:22:57.000 You know, the bank that was a catalyst that really caused all of this to start, which obviously is nowhere near over, we're just beginning, had very poor management systems and processes in place.

00:23:09.000 And, you know, I think the victim of what's happened with the banking system over the last few weeks are not the banks.

00:23:18.000 It's the tens of thousands of entrepreneurs and the hundreds of thousands of employees that are that are missionally driven, that are trying to build extraordinary businesses.

00:23:26.000 And who to think in the United States of America that we could have a bank that fails?

00:23:30.000 And it's happened before, but it's so rare.

00:23:32.000 We've had three.

00:23:33.000 Yeah, three.

00:23:34.000 Signature Silicon Valley, there was a third, but yeah.

00:23:37.000 Unbelievable.

00:23:38.000 And we had, you know, I mean, as early as this morning, another big bank stocks just cratering.

00:23:42.000 It looks like they may be in trouble.

00:23:44.000 I think it's, I don't, I don't want to say the name because I don't remember it, but it's big.

00:23:47.000 It's big, big, big in the headlines.

00:23:49.000 But the reality is that's something in our country we shouldn't have to worry about.

00:23:53.000 And we're worried about it because the government just, quite candidly, didn't do their job.

00:23:59.000 I mean, and it's, and the fact that we have all of these bailouts in place and now we're bailing out the bank.

00:24:05.000 But are we really bailing out the bank?

00:24:06.000 I don't know about you, Charlie, but I'm excited to get my stock certificate for what I'm going to own of these banks since I know my tax dollars are towards buying it.

00:24:15.000 So I can, maybe I own a bank.

00:24:16.000 Well, I'm afraid we're going to nationalize the bank soon.

00:24:20.000 And the whole thing is so messed up in so many different ways.

00:24:23.000 And it's a buy.

00:24:25.000 The central bank just, we've had way too much money created in the last couple of years.

00:24:29.000 Asset prices are out of control.

00:24:31.000 Inflation is out of control.

00:24:33.000 And these banks, they were able to get drunk on the sugar high of low interest rates.

00:24:38.000 It does not take a genius to make money in low interest rates.

00:24:42.000 It takes geniuses to make money in this market.

00:24:44.000 I mean, absolutely.

00:24:45.000 And to navigate this.

00:24:47.000 Now, we're going to see who's really a good business person.

00:24:49.000 When you have the lowest interest rates ever, everybody's making money.

00:24:53.000 Okay.

00:24:53.000 Money's cheap.

00:24:54.000 Ideas look great.

00:24:55.000 It's flowing.

00:24:56.000 Which kind of is a segue.

00:24:58.000 Where do you see the opportunity in this current market?

00:25:01.000 Because you have KLV capital, right?

00:25:03.000 I'm just kind of going to the website now.

00:25:04.000 It's super interesting.

00:25:06.000 Are you in a passive posture, a neutral?

00:25:09.000 Are you in retreat?

00:25:10.000 Are you leaning in?

00:25:11.000 What do you see as an opportunity right now?

00:25:13.000 Because some things are getting less expensive.

00:25:15.000 Some things are getting more expensive.

00:25:17.000 Valuations are really confusing right now.

00:25:20.000 What sectors do you see opportunities in?

00:25:22.000 So from a macro perspective right now, I am very bullish on where we're going to be in the long term.

00:25:30.000 How long is that long term?

00:25:31.000 You know, I think when I think about it, I probably think of 10 years.

00:25:35.000 Okay.

00:25:35.000 That's very, very long term.

00:25:37.000 Yeah.

00:25:37.000 So I probably think of 10 years of where it's going to be.

00:25:40.000 So I'm looking for where the opportunity, you know, it's much like Buffett's mentality, right?

00:25:44.000 Is really when the markets are down is when the time is to buy or when things are.

00:25:49.000 But are they even down yet?

00:25:50.000 That's the we don't even know.

00:25:51.000 You know, I don't know.

00:25:53.000 I'm not an economist, but I can tell you this: I don't think it's going to be as bad as some are suggesting.

00:25:59.000 I don't think it's going to be 08.

00:26:00.000 I don't think it's going to be 08.

00:26:01.000 I think housing will be regional.

00:26:03.000 I think Sunbelt will go down 10, 15, but maybe even have a little bit of an uptick soon.

00:26:08.000 So I'm looking for opportunities.

00:26:09.000 Where are you across the board?

00:26:11.000 I'm looking.

00:26:12.000 I love, here's what I love.

00:26:14.000 I love experiential businesses that have great profit margins.

00:26:19.000 Experiential.

00:26:20.000 So like amusement parks, you mean?

00:26:21.000 No, like not.

00:26:23.000 Something that those are great businesses, by the way.

00:26:25.000 No, they're incredibly high margin.

00:26:27.000 And the real estate is the real business.

00:26:29.000 A business where you can really differentiate yourself in the market and you're not a commodity where you can do something different, right?

00:26:35.000 And you could think about, you know, a great story as there were, you know, hundreds and thousands of coffee shops around before Starbucks came.

00:26:41.000 But as Starbucks came to market, they really took a blocking and tackling business and they made it experiential.

00:26:47.000 And it's been wildly successful because of that.

00:26:50.000 So I look at opportunities to innovate and really where you can take products and you could innovate.

00:26:55.000 You could take services and innovate is what I'm so passionate about.

00:26:58.000 And so I love, I love a lot of different sectors.

00:27:01.000 I love tech, but I also like hard products.

00:27:04.000 I like services companies.

00:27:06.000 And so for right now, there's two things I'm looking at: businesses that are great value buys, which, by the way, there's some that are starting to come available because the economy is a little off.

00:27:14.000 And the ERC is drying up.

00:27:16.000 All this COVID bridge money is gone.

00:27:18.000 It's gone.

00:27:19.000 You're going to start to see real businesses from not so real businesses.

00:27:21.000 Oh, it's happening every Sunday.

00:27:23.000 I'm sure you're getting calls every day.

00:27:24.000 Every day.

00:27:25.000 Is what I'm most excited about is extraordinary talent.

00:27:28.000 I am hired.

00:27:29.000 People.

00:27:30.000 I love amazing people.

00:27:31.000 I love creative people.

00:27:33.000 And so right now, as I read this morning that Facebook's laying off, I believe another, or no, it's Amazon.

00:27:39.000 They're laying off another 10,000 people.

00:27:40.000 And, you know, and I'm like, who are they?

00:27:42.000 I want to know who they are.

00:27:44.000 I want to know their background.

00:27:45.000 I want to know who's a top performer.

00:27:48.000 I want to know everything I can because every business that I'm in today, our growth and our success is totally dependent upon having extraordinary people that make the business grow.

00:27:57.000 So I'm bullish on the talent that's out there.

00:28:01.000 And I'm definitely bullish on, I think there's going to be an opportunistic time to buy.

00:28:05.000 But in our companies right now, let me tell you what we're doing.

00:28:08.000 We are absolutely sharpening our pencil.

00:28:10.000 We're building the tightest models we ever have.

00:28:13.000 We're trying to gain operating leverage.

00:28:15.000 And operating leverage is really hard.

00:28:16.000 So when you have margin contraction and you have supply chain issues and you have costs going up in every area, it's hard to really optimize your operating margins.

00:28:27.000 But we're working really hard at it.

00:28:28.000 And yesterday I was with one of my teams all day and we were going through our model figuring out how can we protect this business and protect our margin in a down economy.

00:28:38.000 And so it's gotten hard.

00:28:40.000 You know, it's funny, we talk about banking and they require, in businesses that I'm in, some of them have leverage, right?

00:28:46.000 Some of them have leverage, some of them have debt.

00:28:48.000 Hopefully good ratios, but great ratios.

00:28:50.000 But the reality of it is the banks require us to have the most extraordinary models in the world to make sure we're well protected.

00:28:58.000 They don't even have that for themselves.

00:28:59.000 That's what I was going to say.

00:29:00.000 It's unbelievable.

00:29:02.000 It's unbelievable.

00:29:03.000 Such frauds.

00:29:04.000 Yeah.

00:29:04.000 So at any rate, that's what we're doing.

00:29:06.000 But I'm excited about the opportunities that are going to be out there.

00:29:09.000 And for me, every business I've ever been a part of has been about having extraordinary people.

00:29:15.000 And so I think the more of a bench I can have of extraordinary talent gives me more opportunity to go seek opportunity, to go buy companies, which I love to do.

00:29:26.000 And you're going to be getting a lot of calls to buy companies and start companies.

00:29:30.000 And you're right.

00:29:31.000 At this time, it's somewhat about surviving and outlasting your competitors because there's so many goofy market signals.

00:29:39.000 It's really hard to forecast this moment.

00:29:43.000 It changes every day.

00:29:44.000 Well, yeah, I mean, over the weekend, I called some really smart rich people I know and asked them just about real estate because things are starting to go down a little bit here.

00:29:53.000 And I said, what do you think is going to happen?

00:29:54.000 From the range of spectrum, I'm talking about really rich, smart people.

00:29:57.000 They go, okay, Charlie's going to be worse than 08.

00:29:59.000 It's going to be Nicaragua to actually, I think high-income housing is going to pick up over the summer.

00:30:04.000 And it's all, you know, I think that the buyer's market, if you blinked, you already missed it.

00:30:08.000 I'm like, that's a really, you have two really smart rich people that are completely disagreeing.

00:30:14.000 So I just think it's guessing is where we're at right now.

00:30:17.000 Yeah.

00:30:18.000 Oh, I've got great friends that are in the multifamily home business.

00:30:21.000 And, you know, that's gotten really challenging here in the last couple of months.

00:30:24.000 No kidding.

00:30:25.000 But the luxury market does continue to prevail.

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00:30:55.000 That is what his life is all about.

00:30:57.000 Make sure you guys are sleeping well.

00:30:59.000 It's a major part of life.

00:31:00.000 Check it out right now, relieffactor.com, relieffactor.com.

00:31:07.000 So, Vic, I want to talk about ESG.

00:31:09.000 I think this is a big threat because I am bullish on the future of America Economic.

00:31:12.000 We have so much pent-up talent.

00:31:14.000 We have so many entrepreneurs.

00:31:15.000 We have so many assets.

00:31:17.000 At the same time, we got so many problems.

00:31:19.000 I mean, we talk about the problems all day long, but I think ESG is a structural problem that if we don't sort this out and put this to bed, it could be a massive hindrance on our growth.

00:31:29.000 Do you agree?

00:31:30.000 I fully agree.

00:31:31.000 I think it is very politically driven, obviously.

00:31:37.000 It is hard to make sense out of.

00:31:40.000 If you're someone that is held accountable and responsible for building businesses that are going to financially support the economy and financially support families, and you think about profitability and you think about the long game, it's really hard to figure out where ESG comes into play.

00:31:58.000 Obviously, we all have, as Americans, we have tremendous responsibility to be good stewards of this earth, of the people, of everything that we want to talk about.

00:32:07.000 As capitalists, we're charged with that as well.

00:32:11.000 But to have such a nebulous, strange policy in place.

00:32:16.000 It's a social credit system, isn't it?

00:32:18.000 It just makes no sense.

00:32:19.000 It makes no sense at all.

00:32:20.000 And I have businesses that it affects more than others, but I can tell you when I look at whether it be net income or whether I look at EBITDA, it's not like EBITDA plus ESG.

00:32:31.000 Well, let's give an example, right?

00:32:33.000 So you have Christians and Arms.

00:32:34.000 Yeah, great company.

00:32:35.000 If somebody that does the ESG rating is an anti-gun person, they could just say you have a bad rating because you don't have social governance because I don't like that you make guns.

00:32:44.000 It's very unfortunate how our political system seems to be very lenient towards people that are on their side and quite the opposite for others.

00:32:55.000 So ESG is a big problem.

00:32:57.000 Let's talk just in closing about the opportunity.

00:33:00.000 A lot of young people in this audience, what is your advice?

00:33:03.000 I know that's a big question.

00:33:05.000 Words of wisdom, things to share for a young person right now in the country.

00:33:10.000 Yeah.

00:33:10.000 So first of all, it's a challenging time, but with adversity comes opportunity.

00:33:16.000 And I believe that the generations right now that are in school are going to have an unbelievable runway of opportunity because of, quite candidly, a lot of misfits that are in place right now that'll go away.

00:33:28.000 So my motivation is learn things that are practical, that are practical, that are real.

00:33:35.000 Gain knowledge in areas that ultimately are real.

00:33:40.000 If you look at businesses that are just driving revenue and are hype, you know, go look at their financial statement.

00:33:47.000 Go look at their financial statement.

00:33:49.000 There's a lot of hype.

00:33:50.000 Get away from the hype.

00:33:50.000 Yeah, yeah.

00:33:51.000 I can tell you right now, I'm not a profound intellect.

00:33:55.000 I didn't spend a ton of time in academia.

00:33:58.000 If you are creative, if you treat people well, if you work hard and ultimately do the right thing, this company is really rewarding.

00:34:05.000 But you need to be educated.

00:34:06.000 That's my concern with a lot of tech companies, though.

00:34:09.000 It should be.

00:34:10.000 Users is how they generate, but that's how they have value.

00:34:14.000 Have no have no idea how to monetize that.

00:34:17.000 They haven't figured it out in a lot of cases.

00:34:19.000 And, you know, I'm not, I love tech companies.

00:34:22.000 I'm an investor in tech.

00:34:23.000 I own some tech companies.

00:34:24.000 Tech's great.

00:34:25.000 But at the end of the day, be a part of a business that makes a profit, that makes a real profit.

00:34:31.000 It's the best insurance you could ever have for success.

00:34:35.000 And if you're, you know, a young emerging business person, whether you're going to be a professional or you're going to be an entrepreneur, so you're going to work for a company or you're going to be an entrepreneur, you want to be entrepreneurly-minded.

00:34:46.000 Yes.

00:34:46.000 And so we spend a lot of time.

00:34:48.000 I have a program today where we train up young professionals and entrepreneurs on how to really go tactically execute in business without having to go to college.

00:34:57.000 Get rich slowly.

00:34:58.000 Yeah.

00:34:59.000 And that's the best.

00:35:00.000 Build wealth.

00:35:01.000 That's the best advice somebody gave me, Charlie.

00:35:02.000 Get rich, slowly.

00:35:04.000 And it's like, okay, that, you know, the issue about a profit-driven business is it's not going to get a 10, you know, 1,500 times, you know, EBITDA or earning valuation or user valuation, right?

00:35:16.000 No, it's going to have a nice, you know, profit and it'll pay the bills and you'll have low debt and you'll be able to then build a life from that.

00:35:23.000 Try to be a workhorse, not a unicorn.

00:35:25.000 Yeah.

00:35:25.000 And that's where they say, I want to be the next Jack Dorsey.

00:35:27.000 I want to be the next Mark Zuckerberg.

00:35:29.000 You're not.

00:35:29.000 Yeah.

00:35:30.000 Right.

00:35:30.000 But you can have a nice profitable business and then you can do other things.

00:35:34.000 And that's actually the stable.

00:35:35.000 I think we're going to hope.

00:35:36.000 I think we're going to have a whole market signal back to legitimate value creation.

00:35:40.000 Completely.

00:35:41.000 Because there's a lot of vapor.

00:35:42.000 I mean, look at a lot of the crypto.

00:35:43.000 I love crypto.

00:35:44.000 I'm an investor.

00:35:45.000 Same.

00:35:45.000 And I've actually done pretty well despite all this nonsense.

00:35:48.000 But a lot of people have lost money because a lot of it was vapor and smoke screen and all that.

00:35:52.000 I think banks are going to get smarter as well.

00:35:54.000 Well, they better.

00:35:55.000 I mean, they have no choice or else the entire financial system will collapse.

00:35:58.000 Vic Keller, thank you so much.

00:35:59.000 This was great.

00:35:59.000 Thank you, Charlie.

00:36:00.000 Check out the website.

00:36:01.000 Also, Christensen Arms.

00:36:03.000 Go buy a rifle.

00:36:05.000 And I know that I don't know if I have a Christensen Arms yet, but I will.

00:36:09.000 Well, it's great.

00:36:10.000 I love shooting, so it's great.

00:36:11.000 And hunting as well.

00:36:12.000 So go to vickeller.com.

00:36:14.000 Great wisdom.

00:36:15.000 Vic, thank you so much.

00:36:15.000 Thank you, Charlie.

00:36:16.000 Email us freedom at charliekirk.com.

00:36:18.000 God bless you and God bless this great country.

00:36:20.000 Thanks so much, everybody.

00:36:21.000 We'll speak to you soon.

00:36:26.000 For more on many of these stories and news you can trust, go to CharlieKirk dot com.

The Charlie Kirk Show - March 23, 2023

The Joy of Entrepreneurship with Venture Capitalist Vic Keller

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