About this episode

The Guild is looking to bring the 200,000-year-old hotel industry into the new age. In this episode, we highlight one of its co-founders, Brian Carrico. The Guild has over 600 units in 6 major markets and continues to grow. The Guild brings to hotels all the things you love about being home. The goal is to bring all the best of what we desire from a hotel stay and what we love about home into one vacation experience. It's an amazing model. Brian and his team are doing an incredible job scaling in a really smart way.

Today you will hear from Brian just how important it is to seize the learning opportunities that come in moments of challenge, or even failure. You will hear how powerful it is to surround yourself with people that are there to pick you up when you need it most. You will also learn how empowering it can be to fully understand your strength as a founder.

Are you one that can function at a high level as a solopreneur or do you perform better alongside a co-founder? Those nuances make all the difference as you move forward with your business. Of course, another nuance that matters is the very early lessons we learn during our childhood years. This is Brian Carrico’s startup story.

In this episode, you’ll hear

  • How he loved the experience and challenge that came from moving throughout his childhood as his father moved up in his career
  • A powerful life lesson from his mother that it’s never too late to reinvent yourself
  • How he went to college and graduated with an environmental engineering degree
  • His career path after getting his environmental engineering degree, including his starting out as a consultant, moving to Denver, and traveling a lot in between environmental consulting work
  • How in 2009 he and his wife sold their house in Denver, went to Honduras to work for a water nonprofit and traveled around Central America (and how his mom was terrified and horrified by the decision!)
  • Brian talks about the idea of the founder’s dilemma
  • His move to the Middle East to work as an engineer at a new international location and how it was during that move he experienced his first spark of entrepreneurship
  • the idea of moving from employee to entrepreneur adds so many more processes to figure out your mindset
  • How an invitation to come back to the U.S. to work in Brian’s wife’s family business (a cabin resort) and how it was a turning point for his journey as an entrepreneur
  • The most surprising thing about his transition from engineering in Oman to West Texas in the cabin business
  • His first-time experience pitching to investors, and then deciding to go back to college to get an MBA in business
  • Transitioning from the cabin business to The Guild, what that looked like, and how he went about transitioning from one entrepreneurial season to the next
  • Some of the lessons, challenges, and wins Brian has experienced through the growth of The Guild and the progression as an entrepreneur

Resources from this episode

Creedon: Legal partners you want as you build your business and brand. Listeners get a 30-minute brand consultation + $200 discount on a trademark application. Visit http://creedonpllc.com/startupstory

Brex: The credit card specifically for startups. Visit http://www.brex.com.
Listeners, use code StartupStory and get fees waived for life!

Brian and the team at The Guild are offering The Startup Story listeners 10% off your stay at any of The Guild properties. To book your next stay, be sure to visit: theguild.co/startupstory

The Guild: https://theguild.co/
Brian Carrico on LinkedIn: https://www.linkedin.com/in/brian-carrico-15317637/
The Startup Story on LinkedIn: https://www.linkedin.com/company/thestartupstory/
The Startup Story is now on YouTube: https://www.youtube.com/jamesmckinney
The Startup Story on Instagram: https://www.instagram.com/thestartupstory/

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EPISODE CREDITS

If you like this podcast and are thinking of creating your own, consider talking to my producer, Danny Ozment.

He helps thought leaders, influencers, executives, HR professionals, recruiters, lawyers, realtors, bloggers, and authors create, launch, and produce podcasts that grow their business and impact the world.

Contact him today at https://emeraldcitypro.com/startupstory

Special Guest: Brian Carrico.

Episode transcript

The Startup Story - Brian Carrico

Brian Carrico: Hi. I'm Brian Carrico, cofounder of The Guild, and this is MY startup story.

Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.

[00:26]
James McKinney: Welcome to our 60th episode of The Startup Story podcast. It has been an unbelievable ride thus far and it gets better every single week. Is that the same story for your business? If not, how would some free advertising sound to you? Well, if you'd like some free exposure then make sure you leave a written review on Apple Podcast. Even more importantly, make sure you plug your business when you leave that review. If you leave a written review, I'll read it in an episode and if you plug your brand, URL, or even your Instagram account or your Facebook account, you'll basically be receiving a free ad in an episode that will last for a very, very long time. It's just my way of saying thank you for leaving that written review.

Now don't get me wrong, I love seeing a new five star rating appear in our show listing on Apple Podcast, but the written reviews have a significant impact as it relates to being discovered within the new Apple Podcast platform. Climbing the charts on Apple Podcast is not just about listeners, but it's about engagement. Listening is one way Apple measures engagement, but written reviews have a multiplying effect. So please leave those written reviews. Now, let's jump into this week's episode.

Our guest this week is Brian Carrico, co founder of The Guild. The Guild is looking to bring the 200,000 year old hotel industry into the new age. The Guild has over 600 units in six major markets, and they continue to grow. The Guild brings to hotels all the things you love about being home. The reason that staying at The Guild is as comfortable as being at home is because their units are actual apartment units that are upgraded to give you the luxury experience of a hotel stay, but the comfort of home. Many of us love that Airbnb allows us to stay at someone's home for an affordable rate, but how many times have you been disappointed that the home or experience was not exactly like you thought it would be based on the listing you saw on the ad? Well The Guild wants to bring all the best of what we desire from a hotel stay and yet combine it with what we love about our home into our vacation experience. It's an amazing model and they're doing an incredible scaling in a really smart way.

In hearing Brian's story, you will hear how important it is to seize the learning opportunities that come with our moments of challenge or even failure. You'll hear how powerful it is to surround yourself with people that are there to pick you up when you need it most, and you will learn how empowering it can be to fully understand your strength as a founder. Are you one that can function at a high level as a solopreneur or do you perform better alongside a cofounder? Those nuances make all the difference as you move forward with your business. Another nuance that matters are the very early lessons we learn during our childhood years.

[02:55]
Brian Carrico: My dad was the first in his family to go to college, and he did it by working his way through in order to pay for college. My grandfather was a construction worker and so my dad was a construction worker while he was going to school to get an engineering degree at the University of Louisville. There's all this family lore about my dad writing down equations on his cast because he broke his arm one time, and studying while he's hammering in drywall. So I think that kind of ethos was kind of built into the family from the beginning.

He did the more traditional path I would say. He worked his way up through a company, starting out as an engineer at a chemical company. But I saw what could result from that I would say, in terms of he would have continued success and he was always willing to take these risks. We moved around a lot. He would move from one plant to the next, and then he would move from one division to the next. Ultimately, he actually in his late thirties went to get his MBA in Boston so completely uprooted the entire family. We moved to Boston for a year, and then we moved back. Then from Louisiana to Houston. So we were just moving around, doing whatever it took for him to be successful and he was really successful in his career path. He actually ultimately became CEO of that company.

[04:13]
James McKinney: Oh wow, okay.

[04:14]
Brian Carrico: But that was in like 2009, 2010 timeframe so at that point I was 30 years old. My path had already been well along the way, but I sort of saw what he did over the course of that 30 year path.

[04:27]
James McKinney: Did you want that though? Obviously, some entrepreneurial stories are that you're constantly moving. If you're in fin tech, you're moving to the UK because you want to be in that market. There's almost a nomadic lifestyle sometimes to entrepreneurship. Obviously, your dad was into that. It sounds nomadic. You were moving a lot. Did you want that as a child, like this is what I want my life to be like, or I just want to stay put?

[04:51]
Brian Carrico: No, I really loved the experience side of moving, and I liked the challenge of it. I went to a different school every year in middle school, which presents a lot of challenges. I think early in my, in high school I sold bicycles at a bike shop and I thought I was really good at selling bikes because I could just meet people and relate to them really quickly, and then figure out what their need was, and it was great. I worked at bike shops all through high school and college selling bikes. I found out I was really good at that, and I felt like it was that ability, kind of move around and be flexible and adaptable, and I saw how well that worked for my dad.

On the other hand, I also had my mom who, my mom she had four kids. Four boys in six years so I feel like I need to send her a thank you note.

[05:35]
James McKinney: Oh man. Mother's Day is very special in your house.

[05:41]
Brian Carrico: As soon as I had kids I was like oh my God, I didn't realize what we put you through. So she stayed home with us at first, but then when my little brother, the youngest, started going to school she was open to completely reinventing herself. She went back to school and got a degree to be a teacher.

[05:59]
James McKinney: Oh that's awesome.

[06:00]
Brian Carrico: And then she became just really passionate about teaching. It wasn't just that the money, because obviously teaching is not highly lucrative. Not only that, I would go with her to her classroom to help her setup in the summer time and she was spending all the money she made for her kids to be able to get them supplies or to be able to make her classroom better or whatever. But I just saw that reinvention. She went from stay at home mom to being a teacher. But then she did it again in her fifties. She went and got a nursing degree and became a nurse.

[06:29]
James McKinney: Wow.

[06:30]
Brian Carrico: She decided that she wanted to be a nurse. And at this point, again, it wasn't financial in nature. It was just this was something she wanted to do. I think that kind of was inspiring to me as well, to say you can pick something that you want to do and just reinvent yourself whenever you want. There's no reasons that you can't do that.

[06:46]
James McKinney: What a powerful life lesson, too, because I think so many times we go into college like I want to be an accountant or whatever the case may be, and you end up finding, well my story I found out I hated it. But at the end, you're like well I've got to do this, this is what my degree is. And you go on this path that you just absolutely despise, but because the cultural narrative is this is what you went to school for, you have to do it. I love hearing that you had parents that modeled the idea that you don't have to be stuck. You can constantly reinvent yourself.

[07:15]
Brian Carrico: Yeah, I think I was really lucky for that. I went to the University of Texas and my degree was in engineering. My dad was a huge believer in the reinvention. He said if you start out as engineering, there's this religion in my house around engineering. Start as an engineer and you can do whatever you want.

[07:31]
James McKinney: The temple of the cast.

[07:34]
Brian Carrico: He's like whatever you want, you can do after that. So if you understand how to solve problems in engineering, then you can go into business, you can be an engineer, you give yourself some opportunities. So he was kind of always about that optionality and sort of building a skill set that's transferable. So actually all four of us brothers started out as engineering majors at some point.

[07:53]
James McKinney: Really?

[07:54]
Brian Carrico: Yeah, and then two of us ended up with engineering degrees, and two of us ended up with business degrees, but we all started out in engineering because it was such a religion around that in my house. Then I got an undergrad in engineering in UT, and then I went and got a Master's in Environmental Engineering. So I went to North Carolina Chapel Hill. Part of that was I wanted to travel, I wanted to move somewhere else. I met my wife at the end of undergrad, and she was going to grad school so that was a little more motivation for me to think about it too. We both ended up going to North Carolina Chapel Hill for graduate school, and did environmental engineering. Something that was really interesting to me and I'm still really passionate about the environment, thinking about solving environmental problems.

[08:33]
James McKinney: What were you thinking? Well, one I would be remiss if I didn't ask this. So come March Madness are you Tar Heels or Longhorns?

[08:39]
Brian Carrico: Yeah, Tar Heels all the way in basketball season, Longhorns all the way in football.

[08:44]
James McKinney: I just had to ask that question.

[08:46]
Brian Carrico: It's an obvious one right.

[08:48]
James McKinney: What were you thinking at that time that you wanted your career to be?

[08:53]
Brian Carrico: At that time, I wanted to solve environmental problems. It became clear to me… At first I actually went to grad school thinking maybe I would get a PhD, and I was a research assistant so I worked in a laboratory. I published a thesis on drinking water treatment on a very obscure corner of drinking water treatment. I first pondered getting a PhD. A couple years into it I realized I liked research, but it wasn't really for me. I wasn't just going to stay and do a PhD, professor track. I started out my career as a consultant. So I went into environmental consulting.

It was that opportunity to solve problems that was really interesting to me. I've been into puzzles or putting things together. So consulting was a really great start to the career because I got to see a bunch of different things. Being a consultant naturally you work on a project for a while, then you can move onto the next. I took on these really, for me which were the best projects for me, were these ones where we had to build a miniature version of a treatment plant out in the field. And so it was putting things together, it was building, and then we would test everything and we would run the results. So I was out in the field, and I've always liked being out and active and working with people, not just sitting behind a desk. As opposed to some of the engineering you can do is just design work. I wasn't doing design work, I was doing what they call process work. It's funny how important process work would ultimately become in my career, but that was the thing. It was all about solving the process, figuring out a process that worked, and that was really enjoyable.

I was in consulting and then we moved to Denver after we graduated. My wife and I moved to Denver. Loved living in Denver. Got to ski a lot. This was pre kids.

[10:37]
James McKinney: What was the catalyst to going to Denver?

[10:38]
Brian Carrico: You know, we looked across the country and we were lucky at the time. It was 2005. You could get a job in a lot of places. Just took advantage of having like again, I didn't have real roots growing up so it was like we can go anywhere, where do we like? So we looked at San Diego, we looked at Denver, we looked at Bay Area, and ultimately we liked the mountains. We wanted to be active and outdoors, and so we moved to Denver. We were in Denver and I was doing consulting for about four years at that point. I was starting to get a little reckless.

[11:11]
James McKinney: What's the timestamp? Let's put a year on that.

[11:13]
Brian Carrico: It was 2009.

[11:14]
James McKinney: 2009, okay.

[11:15]
Brian Carrico: 2005 to 2009 I was doing consulting. I was a road warrior so I experienced travel a lot as a consumer. I was travelling all the time. Kind of the nature of that kind of work is that it's never in your backyard, you always have to travel. I had clients all over the country and I was gone most of the time. But we didn't have kids and it was fun. Then was still back on the weekends. Accumulated a lot of frequent flyer miles and points and stuff like that, which produced some benefits.

[11:43]
James McKinney: Yes, it does.

[11:44]
Brian Carrico: In 2009 though I think my wife and I both felt a little bit of restlessness, and so we decided we were going to sell our house and just travel for a year.

[11:56]
James McKinney: I want to pause on that for a second. Obviously, super risky decision regardless. But 2009 we are, I guess 2008 would be the worst year of the recession of our history, and 2009 is still incredibly bad. That makes the risk you took of selling the house and travelling exponentially great.

[12:18]
Brian Carrico: That's true.

[12:19]
James McKinney: Why? Were you not impacted by the recession? In the area of Denver you were in, did you not see it? Were you in the one city bubble that didn't experience it? It was bad everywhere.

[12:32]
Brian Carrico: Number one, our business that we were in, environmental consulting, was a little bit different, had a different recession cycle that would happen to it. These were big, public utilities that we were working for so their budgets had been set a long time in advance. I didn't feel it from that perspective. I think it's also just like the youth I guess, just sort of we want to do this, why don't we decide we're going to do it. The way we did feel it is we didn't actually sell our house successfully. Thought we were going to sell our house, we didn't. We took off to travel anyway. So we both were really involved locally with this group called Water For People, which is a non-profit that's building water systems in developing countries. We worked out an opportunity with them to go work for them in Central America. Even though we hadn't sold the house yet, we're like okay, we'll just do it and we'll figure it out.

[13:25]
James McKinney: Oh man.

[13:26]
Brian Carrico: So we had a very, very tight budget. We were living on next to nothing and just kind of travelling around Central America when we could. We went to other Central American countries, but we were based out of Honduras. Again, I don't know what we were thinking at the time. Honduras, San Pedro Sula, where we were based is probably one of the most dangerous places in the world. We were living in a little hostel basically and working for this water nonprofit, and going out to these rural villages and helping them design and implement water treatment systems.

[14:01]
James McKinney: There's so much. Because I remember where my life was at that time and things were unraveling in a bad way. What were your parents thinking? I assume you had a conversation like here's what we're thinking of doing. What was the external input in your lives upon this moment of decision?

[14:20]
Brian Carrico: My mom was mortified and terrified for us, and we started a blog. We were blogging about it the whole time and we were reveling in it. We were just loving the adventure aspect of it. I was just so enthralled by what we were getting to do, because it was so interesting and challenging, we were just loving it. The meantime back at home, our parents were freaking out like what are you thinking. There's a recession happening that you're not really thinking about, there's your own personal safety that you're not thinking about. But we didn't have kids and it was just something that we really wanted to do.

[14:56]
James McKinney: Has external input ever been an issue for you? Other people's opinions? Again, parental input of why would you do t his, you're crazy, don't throw away your career, all the things that parents want to say can have influence on us or it's dirt off our shoulder. Does external opinion matter at all to you?

[15:17]
Brian Carrico: It does matter to me, and it's actually it was always couched with love, you know, so I was lucky. I read a lot of books and there's one called The Founder's Dilemmas and it talks about three different types of capital. I've been extremely fortunate I've always had relationship capital. My parents, they were concerned but they were always sort of silently supportive of things that I wanted to do and I'm very lucky for that, and I was with my wife so I had a lot of support there. My wife's parents travelled a lot and done a lot of really interesting things in their life. They met in Turkey and got married in South Africa.

[15:55]
James McKinney: Oh wow, okay.

[15:56]
Brian Carrico: And so we've been very fortunate. So there is external input coming and saying like is this a good idea, should you be rethinking this. I don't think I ever just going to think completely discounting what people say, right? I think if anything, I do read a lot of books or I listen to a lot of podcasts. I am always looking for other ideas. Doesn't mean I'm always going to take them. Throw them all in the pot and think about what the best solution for me is.

So in 2009 while we're in Central America, it was clear we weren't going to sell our house so we couldn't afford to travel for the full year that we wanted to. The company that we had worked for before we went to Central America was setting up an international office, the first ever international office, in Muscat, Oman. They basically reached out to us because it was two of us, and they're engineering, so they're thinking we're going to get two for one here. Let's hire this couple. I would like to think that they thought we were both pretty good at our jobs as well, and so they said, "Do you guys want to come back and go to work for us in this international office?" We basically immediately said yes and then proceeded to Google Muscat, Oman to figure out where it was that we had just agreed to go to.

We made plans to leave Central America and move to the Middle East, Muscat Oman, and it was a great solution because we still couldn't sell our house, and then the company was paying for our living expenses because we were living international. It sort of solved that pinch that we put ourselves in financially coming out of that. So we move to Oman and I think that experience was the real entrepreneurial spark. It was the first time I was going to do something for a company or with other people that was totally entrepreneurial. No one in the company had ever launched an office internationally before, much less one in an environment that's as different as the Middle East.

My wife and I had completely different projects we were working on, but both of us were required to be very entrepreneurial just to figure out how to manage getting a visa, to just figure out how to manage renting a car, all the things that it takes just to set something up from scratch. We were there for nine months throughout 2009 and that's where the light bulb went off for me. I think that up until that point, I didn't realize that when you're doing something brand new that no one else can really tell you how to do that. There has to be a sort of figure it out mode that kicks in.

[18:11]
James McKinney: Which harkens back to the fact that you love processes.

[18:15]
Brian Carrico: Yeah. So for me I think it was while we were there, we could have continued to stay on with the company or taken another contract. They gave us the opportunity to take another… to open another office in Santiago, Chile. We really thought about it because we travelled so much and we loved it. The whole nine months we were there, we had to travel every 30 days. With our visas, we had to leave the country every 30 days and come back, and so we were just travelling all over Europe and the Middle East, and loving it. We thought we could take another job with this company and perhaps set ourselves another path of being expats that are working for the company, or maybe it's time that we started something ourselves. We thought about doing something much more entrepreneurial. So I think that's for me when the light bulb really went off. You know what, if we're going to do something different we have the ability to do that because we've done that now.

[19:05]
James McKinney: So for someone who loves solving processes and analyzing processes, the idea of moving from employee to entrepreneur adds so many more processes to figure out. What was your mindset in that shift? Was it simply we can do this for ourselves, or did you fully understand that there were going to be differences in this next chapter as you're doing it for yourself?

[19:37]
Brian Carrico: We knew there was going to be differences. We've never been overly motivated by material goods or money luckily, and so we've sort of always strove for something different and something new. Like I said I'm lucky to have that kind of relationship capital to work off of. So I think that ultimately we talked about this, and then the opportunity came up with her parents business. My wife had grown up since she was eight years old in the hospitality business. Her parents own a little cabin resort on the river in west Texas, 70 miles west of San Antonia. This specific opportunity came up where they said, "Do you guys want to come back to the family business and help out the family business?" So we were able to look at that and say is that something that's going to be new, it's going to be interesting, we're going to learn something from, and we think that… but knowing, like you said, that there's going to be major life changes. But we also knew that at the time that we took over that business, this was not going to be a financially lucrative endeavor for us to take over this business. We knew that we were going into a very small business that was experiencing challenges coming off the recession, because they were impacted by the recession. There was never a kind of if this going to totally turn over our lives type of question. It was a what can we learn from this, what's going to be interesting about this, what are we going to like about it, what's going to be hard. We had those kind of conversations.

[20:59]
James McKinney: As you move from Oman to west Texas, not a whole lot of similarities there.

[21:08]
Brian Carrico: They're both hot. They're very hot.

[21:09]
James McKinney: They're both very hot, yeah. This was end of 2009, beginning 2010?

[21:13]
Brian Carrico: This was 2010.

[21:14]
James McKinney: This was 2010 at this point. The objective for you was to take this business and I assume stabilize it coming out of the recession. What was your mindset going into this, being part of a family business, something that has been around for decades I'm assuming?

[21:30]
Brian Carrico: Yeah, they've been around since 1988 so 22 years in business at that point.

[21:35]
James McKinney: Going back to your high school years, you're great at sales, there's communication messaging in that. Your consulting season, also communication, messaging, processes. You can see all these things setting up for a really interesting story and moment as you go to this family business in the cabins. What was the most surprising thing for you in that transition from Oman to west Texas and the cabin business?

[22:03]
Brian Carrico: The most surprising thing was that running a business was way more complicated than I gave it credit for. In Oman or in consulting businesses, there was a combination of youth and confidence saying I should be running this business, I can do this so much better, I can do this differently. The reality of that was what was really challenging. Once you become the person that's accountable for the results it's a whole different ballgame, and something that I think just kind of blew me away at first. We took over that business. I was always doing more individual contributor type work. Having to manage people, having to make personnel decisions, having to think about who to hire, who to fire, what to do with the business, those things were all things that were a very steep learning curve on.

Again, I like process so I decided the best way to create more opportunities in the business is going to have to grow. But the first time I went to a bank to show them a plan to sort of ask for a loan to grow this business, because I thought that's what you do, you put together a business plan you go talk to the bank. I put together this business plan, I go talk to the bank, and they look at it and the banker says, "Your balance sheet doesn't balance." "What do you mean by that?" He's like, "You've got this value in here for the asset and it throws off everything else." What I had done was I just decided what I thought the business was worth and put that in as the asset on the balance sheet. I'm like the business is worth this much, you should give us this money. He was gracious about it but it was kind of embarrassing, and I realized pretty quickly-

[23:41]
James McKinney: That was your first pitch deck.

[23:43]
Brian Carrico: Yeah, my first pitch. It was so bad it was hilarious. Looking back, it was completely… I don't know what I was thinking. I showed him this business plan I just pulled out of thin air and financial statements that I just Googled quickly how to create a financial statement.

[23:57]
James McKinney: I love it.

[23:58]
Brian Carrico: And so I'm like oh this is not, I need to learn more about this. This is not going to work. This is not bicycle sales. I can't just work my way through it on my charm and personality. So I decided to go back and get my MBA. So I went to UT, the university of Texas, and it was a three hour drive each way. I did the executive MBA program so that I could drive in and do it on the weekends in the off season, because this cabin business was really, really busy during the summertime and it's really slow during the off season. So summertime we made 80% of our money, the rest of the year it's a lot slower. You're still busy, you're still doing things all the time. Again, for me process, I like frameworks, I like to learn from other people. I'm pretty sure I'm not going to figure this one out completely on my own. So for me what worked, and I know a lot of entrepreneurs that don't have business degrees, but for me I went and got a business degree and was running this business while I was getting my degree. I was going every other weekend, all day Friday and Saturday. Had two little kids at home.

[24:58]
James McKinney: How long was that period where you were running the business and going to Austin for your MBA?

[25:04]
Brian Carrico: That was 2001 to 2013. So I'm getting my MBA, running the business, and I think I got 1000X out of that program what anybody else in the program got because I would learn something about marketing and that light bulb would go off, and I'd go back to the business and we'd change the website. Or I would learn something about leadership or management style and go back to the business and immediately start to implement those things. Then I especially paid attention to the accounting and finance so I could figure out how to get that balance sheet right, and actually think about so one of my MBA projects was how to recapitalize the business in order to grow. That was big focus, one of the reasons why I was there. So we were able to do that successfully.

We went and were able to then put together a business plan with a balance sheet that actually worked, a pitch deck that actually worked. There's a lot of rejection in there. Talked to a lot of banks and got turned away, but ultimately we found a bank that would work with us.


[26:01]
James McKinney: Look, as a startup we know that legal concerns are necessary but oftentimes we table their importance because attorneys can be a challenge to work with and be so friggin' expensive, especially when it comes to IP work. All of us know that it's important to protect our brand. I mean, past guests we've had on the show even shared about some of their challenges as it relates to brand protection because they didn't prioritize it when they were getting started. In some cases, that misstep cost them hundreds of thousands of dollars.

All that to say, if you are a startup or an international brand, reach out the team at Creedon. They get all the challenges all of us face when we're starting a business from scratch, and that is why they're giving a 30 minute brand consult to all of The Startup Story listeners as well as a $200 discount on a US trademark application. Just visit Creedenpllc.com/startupstory. Now that's Creedonpllc.com/startupstory to schedule your consult today. Again, creedenpllc.com/startupstory. We'll also include a link in our show notes. But don't delay protecting your brand. I'm telling you, they're the ideal legal partners you want as you build your business and brand.

Just one more announcement from one of our sponsor partners. At the top of the show I talked about a game changer with a partner called Brex. When it comes to funding, it's really hard for us startups and the goal of The Startup Story is to unpack the real and raw journey of our founder guests because running a startup is different than anything else out there. For that reason, traditional banking and credit funding does not always work for us. Well, Brex is a startup credit card designed from the ground up for startup founders like you and I. Unlike traditional corporate credit cards, Brex does not require founders to secure their credit account. No credit inquiry is even required for founders. In fact, the credit limit is based solely on the stability and funding of your startup.

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[28:38]
James McKinney: A couple things before we get too far down the journey. In that process you said you had two kids. There are stages in life that change and reframe how we think of things. At the time now when you have two kids and you're getting an executive MBA, was the thought process this moment is just to make this family business better and we're going to grow the family business? Or did you have something different in mind, or had the kids kind of grounded you a bit? What was the mindset on what you thought your future was with all of these things happening in a short period of time?

[29:17]
Brian Carrico: I was trying to figure out a way to make that business work. I think there has always been a certain element of that for me, which is I always keep in mind optionality. I think maybe I always keep in mind that opportunity to reinvent one's self if the opportunity arises. Thinking back to the example of my mother, I don't think my mother ever said I'm going to be a teacher so I can become a nurse, but she knew that she liked to help people, and that was what drove her. I think for me it was at that point I'd said I'm going to work for myself for the rest of my life I think, and I'm going to find a way to make this business work. I'm also pretty competitive so it was a real challenge. I really wanted this to work. I wanted it to win, especially once you get people telling you that you can't do stuff. Bankers sort of laughing in our face and turning us away or all that stuff is all for me part o what drives me to say okay, this is a problem that's able to be figured out. This is a puzzle, a process, I need to figure this out.

I didn't have anything like The Guild ever in mind. There's no way if you were to talk to me in 2013 I would have said I'm going to start a venture backed business one day. Never would have crossed my mind. All I knew was that I wanted to solve this particular problem, that I liked hospitality, that I liked the kind of hotel business we were in, and I saw an opportunity to make it better.

[30:38]
James McKinney: So what was that transition from the family cabin business to The Guild? What was that a-ha moment for you? What happened with the cabin business as you started pursuing The Guild? What is that season and transition?

[30:53]
Brian Carrico: Yeah. So the cabin business, we were able to get it refinanced and we built new cabins. We built up the retail store. We kind of added some services, and ultimately we got to the point where we tripled the revenue in that business over a pretty short period of time, and it went from being a very strapped family business to a much more profitable, sustainable long-term business. Over that period of time, we lived upstairs from my parents. So while I was going to school… sorry, my wife's parents. We lived on the property, on the cabin business. Her parents lived in the house. Her grandmother lived with her parents downstairs. We lived upstairs with our children. It was four generations in one house, trying to figure out how to make this family business work.

The pride I felt in seeing that transition be successful is really hard to recreate in anything else you do in lie. It's sort of like the pride you see from seeing your children grow up, or seeing your children succeed. It's very, very similar. So we were able to make that business very successful from a cash flow standpoint. The light kind of went off, like okay, we can do this other places. At that point it was kind of time for us to move on. We'd been there for four years, we wanted to have our own house. We wanted to get a little bit closer to schools for our kids, because this place was so remote. It was 37 miles to the closest grocery store.

[32:15]
James McKinney: Oh wow.

[32:16]
Brian Carrico: So we decided we would start a hospitality business in Austin. Not The Guild, mind you, just a hospitality business. So we moved to Austin. My wife went back to consulting work to help us pay the bills and pay the rent. I started working on starting a new business in Austin, so we started a hospitality development company called Alexa Management. It's named after my wife's middle name is Alexa. So not that creative in the naming, but we said okay let's start this business. So we, along the way just a side note is we started a retail store while we were living in the cabin business also. We started a side retail store. We had some success with retail.

[32:59]
James McKinney: Not at the resort?

[33:00]
Brian Carrico: Totally separate, another town. Massive failure. Just didn't work out. Just learned from that though. Like okay. We didn't have the right partners, we didn't have maybe hadn't fully fleshed out the concepts or whatever. But that's the thing, there was always support for that. If there was a business that we started that failed, we didn't view that necessarily as we should just give up. We viewed it as okay, well what did we learn from that, what can we do differently.

[33:24]
James McKinney: But that failed store didn't have a financial impact on you? There was no-

[33:27]
Brian Carrico: No, it definitely had a financial impact. We were not making a lot of money. We didn't have a lot of money saved up and so we were kind of always pushing the chips back on the table to be honest with you. But we moved to Austin and did it all over again. Said okay, push the chips back on the table, really believe this is going to work. So we started this hospitality development company. The goal was to build a boutique hotel and then ultimately build a collection of boutique hotels. We wanted to do, in the hotel business, something like Bill Kimpton of Kimpton hotels. Over 30 years, he built this huge portfolio of hotels. There's another entrepreneur named Chip Connelly who built a company called Joie de Vivre Hotels that became one of the biggest collections of boutique hotels in the United States.

So I was researching this, figuring out how boutique hotels worked. We knew that we loved hospitality. We'd learned that business from her parents business, and so we started Alexa Management and spent a year getting this hotel project off the ground. So we had to go find the site, raise the money. I had to learn how to do real estate finance which I had never done before. Kind of all these different things. Pitch decks. And it was while I was working on that. We had secured a site and we were going to build our first hotel in Austin, boutique hotel, and we unfortunately lost a zoning case that was key to us being able to build that hotel, after we put a year and a lot of investor money into building this hotel. It was a huge blow. For maybe the first time in my life, I was losing sleeps for weeks at a time going into the zoning process and the hearings. I was doing everything I could, burning the candle at both ends trying to build support for this project and ultimately get us there. It was a huge blow when that didn't work out.

[35:07]
James McKinney: How old were you at that moment?

[35:08]
Brian Carrico: This was in 2015.

[35:10]
James McKinney: 2015.

[35:12]
Brian Carrico: So four years ago.

[35:13]
James McKinney: Four years ago. At that moment, did the thought cross your mind that yeah, I can't do this anymore?

[35:21]
Brian Carrico: There were definitely days. We had the retail store that hadn't worked out so there was a part of it thinking am I really good at taking something that exists and making it a little bit better, like we did with the cabin business? Did I just not have what it takes to get from 0 to 1? And that hotel project was so near and dear to both of our hearts, my wife and I both put so much time and effort into that, it was pretty rough. That was a pretty dark period when that happened.

There's always a combination of luck and timing. We were lucky that the lead financial partner on that particular deal, actually a couple days after we lost our zoning case, flew out and said, "I still believe in the vision in what you tried to put together here, so let's go find another site. I'll partner with you and you can develop it, but I'm going to put my own name and brand on it," because this financial partner had a vision for what they wanted to do as well. So that was one of these compromise positions. It almost kind of fit into that narrative of saying okay, well I can work with someone and take what they're doing and maybe make it better. So we did that. We were able to structure a deal that worked for us, that was able to pay us enough to pay rent and keep the lights on and still pursue this dream. That became the first ever project for Alexa Management, which is now an 83 room hotel in east Austin that's beautifully executed and really well done, and it's with that partner.

[36:52]
James McKinney: I don't want to run over that season, because I think there's something that is common among every successful founder that I've interviewed, and that is that moment where they question their ability to go from 0 to 1, to do it, to execute whatever that vision is. But then someone comes alongside and almost rebuilds or re-strengthens that founder who had that doubt for that moment. That partner that came alongside you who flew in and said they believe in the vision, we're going to keep doing this, can you remember that season? Was there a new perspective added to your lenses of entrepreneurship? Or was it just another step forward?

[37:39]
Brian Carrico: It was a different problem to solve. The first take at the hotel was us controlling everything, and having to raise the money for it and finding the site, and all this other stuff, and full control. It was almost just like a huge weight being lifted off the shoulders of oh, okay, we have a partner that can take on some of this. In this case, they were going to take on a lot of the raising money and they were going to take on a lot of the branding. They were kind of putting us back into something that we understood which was from our engineering backgrounds and process backgrounds okay how do I go find the right site, how do I get it permitted, how do I select the contractor and the engineers. These are things that I guess maybe, it was like a return to something that felt a little bit more comfortable.

I remember as we firmed up what a deal could look like just feeling so reenergized. Just coming off of just the absolute depths of one of the worst professional experiences of my life and then immediately kind of just getting that second wind, and then sprinting downhill again. I just remember we came back and started looking for new sites for the hotel, and just that energy returned. It's like okay, this is something we can execute against. Again, that ability to say I'm not thinking about the 30 years down the road. I have something I can now focus on and kind of grind on and work on.

It is like the puzzle. If you like puzzles, I always make the analogy to my wife. I played high school basketball. When I was a kid, I would sit in the driveway shooting free throws and practicing shots. I never thought I was going to make it to the NBA, I just wanted to be better at shooting free throws and practicing shots. That's an environment that I enjoy and feel comfortable in. it's like getting back in the driveway again and just shooting again for me, getting on this project and getting it going.

There's no time constraints to that. No one says if you love basketball you should only do it 40 hours a week. I think that's the other part is once you find something that you love and that you're really passionate you're going to go after, this is all consuming. Even if you're sleeping, for me I'm thinking about it or if I'm working out I'm thinking about it. I've gotten better now at kind of compartmentalizing when I'm with family and stuff like that, but it's still always there. It's this pursuit that kind of becomes all consuming.

[39:51]
James McKinney: Oh man, I love that. And I love that it further solidifies the need that entrepreneurship is not a solo journey, and those outside influences and partners can really help carry us forward. I love that you said you have an incredible 83 room hotel in Austin. But that's still not The Guild though. How do you go from that to The Guild? What is that step?

[40:19]
Brian Carrico: The first project failed, and there's a lesson in failure, right?

[40:23]
James McKinney: Always.

[40:24]
Brian Carrico: When the first project failed, there were a lot of articles written about it in Austin because it was a really tough beat. We tried to do everything the right way. We tried to engage the community. We tried to message what our values were as a company. And I think that we got a lot of credit for that, even though it didn't ultimately work out. People respected, like the partner I was talking about, respected that we were doing things the right way and we had a vision behind that. And so yeah, it's really funny because that failure became the catalyst for The Guild. My cofounder read one of those articles of The Guild, Chris Herdon. He was at Apartment List. He cofounded a venture backed company called Apartment List out in the Bay Area. He'd been at it for six years, he had two cofounders, really incredible story of their own just grinding and getting that to be a really successful business. It was time for him to move on and start something earlier stage, and he was already ready to move back to Austin. He and his wife were about to have their first child.

So he reached out to me because he read one of those articles, which he never would have read it otherwise. He never would have known who I was. We didn't know each other. We both went to UT at the same time but we didn't know each other. So he reached out to me and said, "I read this article about this hotel you wanted to build. " And we want to integrate tech into the hotel. We wanted it to be local and we wanted to create an incredible work environment where employees were treated with respect and got great benefits. He's like, "That really resonates with me and I have this idea." Coming off of Apartment List, he kind of had this idea related to apartments and hospital, and said, "Do you want to talk about that?"

Just to kind of double quick on the failure leading to opportunities, at the same time I had other people reach out to me about other hotel opportunities, saying, "I read the article." Not just the one partner who flew out and said hey let's do another deal together. We had other potential partners that came to us and said, "We read about what happened and we like what you guys are thinking about. Do you want to talk about projects?" So ultimately my wife runs Alexa Management now. She has three hotels and a pipeline of other projects to do now, and almost all of that came from that failure.

[42:36]
James McKinney: That's awesome.

[42:37]
Brian Carrico: All the projects that she's done have come from people that we met in the wake of that failure and new opportunities that were created. Then The Guild came out of that directly too, because Chris reached out to me. And so Chris came to me, he said, "I've got this idea where there's apartments, especially these large class A buildings, towers and high rises," where from Apartment List he had observed through the data that there's consistent availability within these apartments. If it's 400 unit apartment complex, maybe sometimes they'll operate in the high eighties or low nineties percent occupied. So he said you think about that, in a 400 unit building, there's 40 units just sitting vacant at any given time. Couldn't there be some way to repurpose that inventory and reutilize that? He was thinking about Airbnb and just how much people prefer to stay in apartment like inventory. That's as far as he had taken it because he hadn't worked in hospitality before. So he started telling me about it. Immediately, it's the same thing with the other partner. Oh, he has an idea that's a really good one and I think I know how to optimize around that. I know how to put the process around that and put together some of the pieces to make that work. So the light bulb went off. He came down to Austin to talk to me about it. We ended up taking a tour of some of the best bars all over east Austin, and just like immediately hit it off. The ideas were swirling and thought this was a really interesting idea, that is something I think could work. That's how it sort of started. That was mid 2015.

[44:11]
James McKinney: So at 2015, the idea for The Guild comes to be. How do you go from zero to one?

[44:18]
Brian Carrico: I'm still working on Alexa Management hotel projects at the time, and we decide that we're going to do kind of a minimum viable product test. If we could convince someone to lease us some apartments, we're going to furnish them and we're going to market test this hypothesis. We're going to test this idea of whether or not people will respond to this type of inventory.

[44:41]
James McKinney: What was it that was being tested? Because from an outside perspective, Airbnb already proves that out right? So what was being tested?

[44:48]
Brian Carrico: it proves that people will pay a price. So we started to do research on how these perform relative to hotels. One of the things for me, being from the hotel perspective, was the occupancy rate in Airbnb's is really great on the weekends and they make a lot of money on the weekends, but it tends to be much, much lower than hotels during the week. When you think about our business, we're paying a lease on an apt and then we're furnishing it, and then we're operating and cleaning it, and all that stuff. So you have to make enough to cover that lease payment as well. That was the question, was could you make enough of a premium to make that is a profitable business? A lot of Airbnb was homeowners that either own the home already and they're making side cash, or perhaps it's a vacation home and they're just monetizing that. Or some people were just replacing their rent that they would have made from a long-term renter, like I own the house and I'm putting it on Airbnb and I'm getting short-term renters instead of long-term renters. We have to be able to pay what it costs to lease the apt, plus pay all the operating costs, and then still make a profit on top of that. That was unproven.

Saunders, a competitor, they started a couple years before we did but we had not heard of them. There's another competitor called Stay Alfred. They had started again three or four years before us, but we'd not heard of them. This was very early in the days in that is space. We weren't sure that you could get enough occupancy and revenue. I had come in with this small conviction that you have to fill this during the week if you want this product to work. You have to figure out. So the other kind of bigger picture product market fit question, which now that I'm in a venture backed company I'm learning all this nomenclature, like product market fit. But the product market fit question was not would someone rent this on Airbnb, it was can you keep it rented enough at the high enough rates to make this model profitable, where you're going to lease space and release it to somebody else. We'd seen WeWork and WeWork at that time was just the darling in 2015. Was really an upswing of WeWork. They were not profitable either, so there were these questions.

We rented seven apartments and furnished them buying everything online. We're buying stuff from Wayfair, West Elm, and Ikea and all this stuff, and we're getting all these boxes shipped to the apartments. The apartment complex is just very patient in dealing with us. I remember just walking into these seven apartments and them just being stacked floor to ceiling with boxes that had come in from all of these online retailers. The boxes of your online purchasing life are much larger than the amount of stuff that you get. Just walking in and when we first had these seven units going, just being overwhelmed. It was myself, Chris, my wife, and then another friend of ours named Dylan who was one of the cofounders early in the business as well. We were just unpacking these boxes and building all the furniture ourselves.

This is going into, in Austin, South by Southwest is a really big, big time of year. We had to get o you're licenses. We decided early on we're always going to license our stuff. We're going to pay taxes. We'd seen what Uber and Lyft had done where they just kind of ignored local regulation early days, and we felt like that was not an option anymore, the world had changed already at that point, early 2016. So finally, we get our licenses to operate and we have our lease, and we've got mountains of just boxes of furniture and it's just in time for South by Southwest, just barely under the wire like yes, we can do this. The business across the street, whom we still work with very closely, a coffee shop, was renting out the entire coffee shop for South by Southwest to a big corporation to do a huge showcase, and they said, "Oh, I think that the team that's putting this on may need a place to stay, and you guys should talk to them."

So we reached out to this group, and they said, "Sure, yeah. We have a pretty good sized team. We could fill up your seven apartments for all of South by Southwest." I sort of cautiously was wincing as I sent the email and said, "Okay. We can do it for…" It was a really high rate. It was like $1,000 a night. All seven rooms for $1000 a night for seven nights. I hit send, just like cringing that I'm like I went too high, they're going to say no. then a few hours later they emailed back and they said, "Okay, that sounds good." I was just like oh my God. We just made $49,000. That's enough for our rent for the next three months. Now we have to furnish this place in less than a week and get it up and running. My parents flew in and watched our children for us so that for just a week straight we could build all the furniture, and put all the units together for this first ever group that stayed at The Guild.

[49:42]
James McKinney: It does benefit from being attached to South by Southwest. Did you consider that as your proof of concept or was it the once South by Southwest leaves can we still rent this?

[49:53]
Brian Carrico: I think that was just good timing, although it was deliberate. We talked about launching for South by Southwest. It wasn't really proof that it was going to work, but it was really, really nice to know that we could pay our rent for the next few.

[50:08]
James McKinney: Absolutely, absolutely. Huge win, huge win.

[50:11]
Brian Carrico: So we operated it, at that point still we'd gotten a little bit of money from family to buy the furniture. Again, it's so important to have support and access to various forms of capital, both relationship capital and financial capital. My dad was hugely supportive and helpful that whole time too. He just so believed in the vision because he'd stayed at Airbnb's. Despite he's in his seventies but he just so believed in it. So we decided that this was enough of runway that we could try it out. So we ran it with just seven rooms for about six months. We were just tweaking to see could we get business customers to stay with us. The technology we used at the time was we were kind of patching together a lot of different pieces of technology that were freely available on the market, and relatively inexpensive. If Chris was saying he encourages everybody to use things like Square Space when you're starting out a business. All these tools that are available to the entrepreneur now where you can put stuff together that costs $10 a month, and then put something together that still looks professional or professional enough at least.

So we were running it very much ourselves as a very small group for about six months, and we started to get traction with business travel customers which we believed was the whole key and lynchpin to the thing.

[51:30]
James McKinney: That's what I was going to ask is if the corporate side was the key to success, did you get them through sales cold calls? Was it all Facebook ads? How were you getting the eyes of the corporate businesses to look at your seven apartment portfolio?

[51:47]
Brian Carrico: People would find it on the channels online. They would find it on booking.com or expedia.com. They would find it on Airbnb. They would find it on any of the various channels.

[51:58]
James McKinney: So you weren't trying to avoid the platforms that were out there that had some eyeballs. You were absolutely wanting to be a part of that.

[52:04]
Brian Carrico: Yeah. It would have been a mistake to be too dogmatic about that in the early days, to say okay we can only do it our way. I don't think it's ever been my particular style either. We felt like let's use what's available to us, whether it's relatively inexpensive technology that can make us look more professional, or in this case whether it's channels that we can use to bring business in. then what we would do is we would try to create a relationship with the traveler themselves. If we saw that they had an email address related to a big company's domain, then we would specifically meet that person.

I remember Chris, in the middle of the night we had a lock that wasn't working. We were using electronic locks and we were programming them to every single guest individually, which at the time was very cumbersome. We didn't have the technology that we have now that does that in an automated fashion. I remember that there had been an issue with one of our electronic locks, so he went and met a guest at 1 a.m. This person had flown in super late. We knew they were a corporate account and we really wanted to impress them, and Chris goes and meets them in person, welcomes them into their room. Finds a reason to follow up with them the next day expressing regret at the issue and offering to buy them coffee or a drink, something like that. He ends up going out and meeting this person, and then that became for the first year and a half I think that was our most frequent customer, that particular guest. And it was just all very personalized selling.

So we were combing all the reservations to see who do we think could be a potential corporate guest. We were also cold calling, just knocking on doors. Austin luckily has a good startup scene and a lot of entrepreneurs, and I think people would feel some kinship towards that. They'd be like oh okay, yeah I'll try out your product. I've got people flying out anyway to come and visit us, we'll try out y our product. There was a combination of those two things that really… but it was just hustling. Chris, my cofounder, is just one of the greatest zero to one entrepreneurs I think I've ever met. I've met a lot of people, and I think that I was able to learn an immense amount from him on what it takes early stage to get something off of the ground, and really just hustle and grind until you start to get traction.

[54:18]
James McKinney: After a year, you know, or six months I guess you know now this model works. We've proven it with these seven units. What was that next chapter? Was it okay let's just open up another 10, 20, let's get this building, we need to get some VC backing? Or because of the business model, the only capital per unit was really the furnishings right, because you're leasing.

[54:44]
Brian Carrico: Right. So we didn't have to have capital to buy real estate which lowered the capital investment. So it was really buying furnishings was our biggest cost. We didn't have a very big team yet at that point either. So we went out to get angel investment I guess you would say. We did a seed round and that's where Chris' experience as an entrepreneur was really helpful. I didn't know anything about how to put together a seed round, convertible notes, what was a reasonable valuation. He had a lot of experience and confidence in that, and so we put together a seed round. It was people I'd worked with on real estate projects locally. It was people that had invested in his previous startup that had a good outcome. It was very much passing the hat around, a lot of angel investor type seed round.

That gave us enough to kind of pretty quickly jump from out to the first milestone was like seven units to 60 units in Austin, so we were able to kind of grab some scale. This was all in 2016. In 2017, we're able to reach a pretty reasonable scale where we did over $4.5 million in 2017.

[55:51]
James McKinney: On the Austin units only?

[55:52]
Brian Carrico: Just in Austin units, yeah.

[55:53]
James McKinney: Wow.

[55:54]
Brian Carrico: So top one revenue. So we did $400,000 something in 2016, and in 2017 10X, which was a big step, and really put a lot of strain on the business, and put a lot of strain on us personally because we were still running a lot of it ourselves, still very, very involved in the day to day.

[56:15]
James McKinney: So being that you're still involved, being that you had a 10X over one year, what was the catalyst for that growth?

[56:23]
Brian Carrico: We went into a space that was huge and just getting huger by the minute. It's one that we both really believed in. Hospitality market is not going anywhere. Hotels and tourism is one of the biggest industries in the world. At the same time, while it's already growing at a pretty good clip anyway just because people are travelling more, whether for business or leisure, this was the fastest growing segment within the space. We had a lot of conviction around that. As the business was starting to take off and you're forced when you're raising money to be able to learn how to articulate that vision, and then also sometimes put numbers to that for a pitch deck or whatever. So this is growing double digits every single year. So you're in a huge space that's growing double digits. There's just a lot of opportunity there.

Really it was kind of if you build it they will come. Then we had to figure out how to monetize the weekdays with the business travelers. Then we started to run into kind of new higher class problems, more sophisticated problems of how to optimize. Because maybe you would make a ton of money on South by Southwest or during big events like that, but how do you optimize the business to run during the slow periods of time, what are the levers that you pull, how do you get this business to work 12 months a year.

For 2017, we were really kind of learning how to run a business at scale I would say, how to start to get management in place and not do everything ourselves, which was a challenge for me. Because again, even running the cabin business, it was one location and I was in charge and I could have my hands on everything. Then the development business is very similar. If you're the developer, you get to pick everything that happens. You really have your fingers on every single piece of the project. Then to start to grow to something where it's okay, now I have to put more management in place and processes in place was a new challenge. In 2017, we made big strides towards that and near the end of 2017 we started talking about our series A, because we felt like we'd seen enough traction.

[58:27]
James McKinney: Was the vision for The Guild going into your series A to at this point get outside of Austin or to continue to just build out Austin?

[58:36]
Brian Carrico: I think we saw how big the space was an how huge the opportunity is going to be. Immediately felt like this is maybe the best professional opportunity either of us is ever going to have. For any entrepreneur, I think you'd be lucky to say that you got 10X anything in a year-

[58:56]
James McKinney: Yeah, no kidding.

[58:57]
Brian Carrico: … much less on the scale of going from half a million to $5 million in revenue. We were both just so all in at that point that we said this is maybe the best opportunity that we're ever going to see in our lifetimes. Just a combination of timing and the market, something that we love to do. It's an opportunity to build something the way that we want to build It, so we're going to go all in on this. That was the series A messaging. If you want to raise a series A from a sophisticated investor, you can't be that you're going to build a good business or a cash flow business obviously. You have to go in and be willing to say I'm in this for the long-term to build something that's really meaningful and matters.

The group that led our series A, Maveron, they were originally founded by Howard Schultz from Starbucks. They really had built their portfolio around companies that are building brands. They've got some great companies in their portfolio like Allbirds, Everlane, Perfect Produce just to name a few. We really identified with this opportunity to do something like that, which is to say I'm not just going to build something that's great for Austin that are known for Austin, which it can be good in its own right, but this is a unique opportunity to build something that's global in scale and scope, and we need to find partners and people to work with that can help us figure out how to do that.

[60:13]
James McKinney: Did you view The Guild as a brand at that time, or just a company of properties?

[60:20]
Brian Carrico: No, we firmly believed that The Guild would be a brand, and we would make decisions with that in mind. So while The Guild was not and still is not going to be a household name, it can be a brand in the sense that if somebody that stays with us loves it because of the brand, they can then recommend that to somebody else, or they'll come back and stay with you again. It sticks with and people say, "Oh, I need to stay at The Guild." I felt like that was the differentiator in hospitality. One hotel to the other is not that different to each other when you think about it really, and what makes it valuable and what makes it meaningful is the brand. It's how they treat you, it's the experience that you get. There's a ton of different flavors of that.

One of the favorite things that we talk about is over 70 hotel brands individually that are worth $1 billion, because it's such a huge space and it's this opportunity where there's a lot of different flavors. One person wants The Four Seasons, another person might prefer the W. Two brands and similar price points, but fairly different offerings and types of experiences. We had a pretty clear vision of what the guild could be, and that's why we went after the series A. We felt like this was going to take money and time to get it there.

[61:40]
James McKinney: To fast forward the growth of The Guild a bit, you've had your series A. I believe the end of last year you closed your series B I believe it was. How many units nationwide do you have right now?

[61:55]
Brian Carrico: Right now we're operating close to 600 units across six markets.

[61:59]
James McKinney: So really in two years, you went from 60 in Austin to 600.

[62:06]
Brian Carrico: Yes.

[62:07}
James McKinney: That's incredible.

[62:08]
Brian Carrico: Yeah. Then we're increasingly signing units during construction now. We're signing with the developer while they're constructing the building. We found that's oftentimes can create the best guest experience, because then we can take over full floors. A lot of our buildings now are full floors. We can do all the permitting work on the front end before the building is even built, so it eliminates the amount of downtime you have when you want to launch. Then we can also now developers and builders are starting to integrate this use into their buildings. They're thinking through where are you going to put your front desk, how's the lobby going to work with both hotel guests like The Guild as well as long-term residents. It just yields a better product.

Increasingly now we're always thinking about the future. We're signing deals that are under construction or sometimes haven't even started construction yet pre launch. When you take that into account, there's a lot of growth still ahead of us. We believe that the vast majority of our future has not been built yet. So it's all about setting ourselves up as a brand, not just for the guests but for the development community. We really focus on being we like to say like the enterprise solution for the multi-family community or the commercial real estate community.

[63:23]
James McKinney: I love that.

[63:24]
Brian Carrico: And it's the same thought process with the guest. Can we make sure they have a great experience, can we make sure it's great to their business so that they'll come back to us, and then we'll do more deals with them in the future. Versus just grow, grow, grow as fast as possible. Because while we've really had success growing, after we hit the $5 million mark we doubled in size every year since then. A little bit more than doubled in size. But there have been opportunities to grow way faster than that, and I think that's an important part of the story for any entrepreneur, knowing what works for your particular business and your vision.

We're really committed to the idea of a brand and meaningful service component for both the guest and the partners that we work with. So we said no to a lot of growth often times for that reason. We've said if we grow above this certain rate or we take this deal, this deal may be good for the top line, we may see a ton of growth on this deal, but we don't think we're going to be able to deliver the service level that we want, or it's going to be hard for us to maintain service levels, there are other markets if we open a new market too soon. It's a good problem to have, but in a space that's growing so quickly we've got competitors that are opening dozens of markets every year and we're still opening a handful of markets every year. But I think for us, we have a really clear sort of North Star as to what we want to accomplish. I'm lucky that Chris is not only a great zero to one entrepreneur, he has a lot of conviction and courage in that conviction to say we're going to be this type of company and we're going to make sure that we're building this type of company, not just sort of responding to the external stimulus.

[65:04]
James McKinney: As our time gets close to our end, there's a couple questions I have for you specifically before my usual wrap up questions. The first one being this is the largest company you've been a part of building. What has shocked you in both its complexity as well as some moments that were surprisingly easy?

[65:27]
Brian Carrico: The people part of the organization has shocked me in its complexity. Like I said, even just early stage getting to the level of having managers. Then going from a level where we had managers to then having executives and leaders. Putting those pieces together is just infinitely complex. I have a pretty good sense of where my expertise starts and stops, and so we're constantly trying to find people that have more experience and more talent, and more inherent ability within any part of the business than we have. Because what was good for getting from zero to one is not going to get you from one to a hundred. Putting those pieces in place is really, really complex and really hard, but we've been fortunate to be able to attract likeminded people that understand the vision and want to go with it. Like the growth story, you have to I actually preach patience on that. You have to hire slow I think, especially in those kind of key roles and that's been really complex. Sometimes we'll target a role and we'll say we're going to have this person in this seat. A month from now, it always ends up being six months or nine months, because that's just really complex.

In terms of what has been easier, once you get good people and process in place, seeing how the organization starts to make itself better is pretty shocking in its ease. If we can do a really good job of giving people a vision and then also giving them clear targets and what the resources are to do that. It used to be if we want something to get better in the business in the very early stages, we had to go do it that day. Now, the business is this organism that's working and getting better on its own and growing in front of your eyes, and doing things. Again, like I said, you have children and I have children. It's analogous to that. It gets smarter, it gets more capable, it gets stronger every single day. There are times when I look and I see certain metrics or certain things that we chose to focus on and prioritize, and I feel like I blink and all the sudden we're already past where I thought we could have been, which is pretty encouraging.

[67:39]
James McKinney: That's awesome. So you have a very clear vision on what the future looks like. If we were to have this conversation in three years from now, where is The Guild at?

[67:50]
Brian Carrico: In three years from now, The Guild is a much more well-known brand amongst our target market and demographic really. Three years from now, in addition to being throughout the US, we'll probably be in several international markets that make sense for our guests and our team. I think what really will be the hallmark three years from now though is just how much more we've added to the experience. People will say you have to stay at The Guild because they have incredible service, but it's so easy. Everything that you need is right at your fingertips.

We have a great, really dedicated team of people that are concierges that are customizing people's stay, so if you want your fridge pre-stocked we can do that for you. If you want your bar pre-stocked, we do that for you. But really pushing that personalization is where we expect it to be three years from now to where every time you stay, your room is setup exactly how you w ant it, with all the things there waiting for you. Plus we're also introducing new things to you. We really love that. We love the opportunity to get you to go check out the cool coffee shop down the street, or if you're into craft beer check out the local micro brewery. So I think that combination of comfort and discovery is really what our brand is about, and I think three years from now we'll just be way further along than we are right now.

[69:10]
James McKinney: That's awesome. I can't wait to have that conversation then. So thank you so much for your time. There's two final questions that I ask. Actually, there's three because my wife added one when she interviewed me a few months ago. One is about entrepreneurship. Do you believe entrepreneurs are born or is it a skill that you can develop and learn?

[69:29]
Brian Carrico: I believe it's a skill that you can develop and learn 100%. I don't think I was born an entrepreneur. I think there was external stimulus and influences, and then I think it's a mindset really.

[69:44]
James McKinney: What is unique to that mindset that makes an entrepreneur an entrepreneur?

[69:48]
Brian Carrico: I think that you have to believe that the payoff that comes with the discovery and doing things your way is worth the cost, because there are times when you experience a lot of failure. There's times when financially it's probably a much better financial return not to be an entrepreneur than to be an entrepreneur. So you really have to have the mindset of I'm doing this for me because it's really important to me. It's equally as much as why it's great for people not to be an entrepreneur. There's plenty of paths in life, but if you feel like that is your path then you have to be willing to do it for that reason, not because you think that you're going to have some multibillion dollar exit driving you.

[70:27]
James McKinney: I love it. One of the things that I share all the time is that entrepreneurship is not a solo journey. Sometimes, oftentimes we are where we are because we've stood up on the shoulders of people before us. So when you look at your entrepreneurial journey, who do you point to with such immense gratitude for their contribution to your journey? The reason that I ask that question is that I believe that if we lose sight of those people and their contribution, we begin to think that we did it on our own, and we isolate ourselves and inevitably leads to our failure. When you look back on your journey, who are the people that you point to with such incredible gratitude for their contribution to your story?

[71:08]
Brian Carrico: I would, if I could pick a couple-

[71:11]
James McKinney: You can pick as many as you want. This list can go on and on.

[71:12]
Brian Carrico: I would start to say for me it starts with my family, both my parents and my siblings, but then also my wife. I firmly believe in that theory that you have to have a certain level of relationship and emotional capital to be able to take on something like this. Because you have to deal with so many setbacks and so much failure inevitably, you have to have people there that can reassure you that you do have what it takes, and to get back up and try again. Then on top of that, my dad individually backed that up with financial contributions as well, because he just believed in these projects so much he was willing to do that. I think that can't be underestimated. You have to find financial partners that really believe in you. All money is not green. You want financial partners that are going to get on the ride with you and go with you, and they're not just asking you what their mark to market is every single week.

The second category would be I've had great cofounders. I do believe that I need to have someone to work with to work most effectively. My wife was a cofounder with me for Alexa Management, and she's had incredible success running that company, so I think it's obvious that she is also a great entrepreneur and can do it on her own. Chris had prior success with Apartment List and so that was really key for me, is having a great cofounder. I know a lot of people can be solo founders and maybe it's better for them, but for me personally I've benefited from having really, really great cofounders. I think that's just part of my process, how I work is I like to do a combination of innovation and optimization.

Last, I would say that really standing on the shoulders of people that will get on the ride with you because as much as it is a lot on the shoulders of the entrepreneur, we've got a really great leadership team. If you can find those early employees, I think the one thing that you should hire for if you're an entrepreneur is you should hire for people that just have the desire to see something built, that really jump out of bed every morning because they want to be part of putting something together. We've been lucky from the start of the business until now to have people that are like that, and you couldn't do it without them. You've got to surround yourself with people who are willing to work the extra hours, do things the hard way, do the extra work because it's not a linear path. You're sort of bouncing around all over the place. So yeah, I think that covers a lot of people for me.

[73:55]
James McKinney: That's awesome. I love it, I love it. But I love that perspective that we are where we are because of a lot of people. I love that you share that. The last question, we've been sharing your story with tens of thousands of listeners, just listening in on the conversation that we've been having. This last question I'd like you to have a one on one conversation with someone. Whether that be the entrepreneur who is just frustrated with a lack of traction that they're having. Maybe it's the want-repreneur who has got a book full of ideas but just some narrative as to why they can't move forward on it. Married, mortgage, whatever the case may be, there's a little fear and trepidation to move on those ideas. Or maybe it's the defeated entrepreneur who's had that gut punch time and time again, doubt that they can even do anything. What do you say to that person?

[74:43]
Brian Carrico: If you have the desire that is one of the most important ingredients. If you believe this is right for you and it's what you need to do in your life to be professionally and personally fulfilled. And then if it's not working right now and you've gotten a couple gut punches, learn as much as you can from other people. I had a lot of setbacks in my early entrepreneurial career, and I had a lot of failures in my early entrepreneurial career. To the extent that I've had any success in later ventures, it's because I did take the time to talk to people and learn from people as why that didn't work, and what I could do to make me more successful in the future. That constant learning I think is the hallmark of entrepreneurship.

I'm listening to podcasts constantly. I'm reading books constantly. But then those are one source of information for you. But I would talk to people that know or are more personally familiar with what's happening and just open yourself up to that feedback. Figure out was it financial, was it that you didn't have the right partners, was it maybe you didn't have the right cofounder, was it that you picked the wrong market at the wrong time. But you can learn from all of that. I started a retail store in 2010 so I haven't always picked the right market at the right time, or picked the right idea at the right time. But I learned from that.

[76:13]
James McKinney: Please hit me up on LinkedIn, Facebook, or Instagram sharing with me what was the most impactful thing you received from Brian's story. I hope you found some real value in Brian's startup story episode, and if you've been around The Startup Story for any length of time then you know how much emphasis I put the idea that entrepreneurs support other entrepreneurs. So as The Startup Story listener, Brian and the team at The Guild are offering you 10% off your stay at any of The Guild properties. So make sure to give them a try for your next business trip or weekend away. The pricing is more affordable than a hotel and much roomier as well. Just make sure you visit theguild.co/startupstory to access these special rates. And of course we will leave a link in our show notes for easy access.

All right, The Startup Story listeners. Let's show up for Brian Carrico and The Guild by booking a stay with them or even sharing their story with your network. Word of mouth matters, and it's the least we can do in response to all the value Brian brought us today. We'll include all the important links in our show notes. Remember, entrepreneurs support other entrepreneurs. And now, for my personal ask.

The Startup Story community has been so incredible about sharing our podcast with others, but we have more stories to tell and more people to reach. We too are a startup and word of mouth is everything, so please follow us on Facebook and Instagram @TheStartupStory or on Twitter @StartupStory_. If you're on LinkedIn, please search for The Startup Story and follow our company page. LinkedIn is a really powerful way to raise awareness of the show. But the most impactful way you can help us grow our audience is to leave a review on Apple Podcast. Or if you listen to the show via Spotify, then please simply share the podcast directly from your Spotify app or wherever you listen to the show.

These simple actions can make a huge impact in getting these amazing founder stories out to the masses. And please make sure to tag or mention The Startup Story when you do share so that we can connect with you and say thank you directly. I'm so incredibly appreciative of the fact that you listen to the show each and every week, and I look forward to sharing these amazing stories with you every Tuesday with hopes of encouraging and inspiring you to start your story.

If you like this podcast and are thinking of creating your own, consider talking to my producer Danny Ozment. He helps thought leaders, influencers, executives, and authors create, launch, and produce podcasts that grow their business and make a real impact in this world. You can contact him today at emeraldcitypro.com/startupstory.

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February 18 2020
Brian Carrico, founder of The Guild

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