SaaS Interviews with CEOs, Startups, Founders
This Entrepreneur Served 10 Years in The Army, You Won't Believe What Happened Next with Michael Slavin EP 237
15 Apr 2016
Chapter 1: What is the main topic discussed in this episode?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base.
Chapter 2: What inspired Michael Slavin to write 'One Million in the Bank'?
You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per talk.
Chapter 3: What challenges did Michael face after leaving the military?
Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark. And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner of the 100 bucks is Rhett Gillins. He's in the restaurant industry and he feels stuck. He wants to start his own software business. So congratulations, Rhett, for your guys' chance to win 100 bucks every Monday morning.
Simply subscribe to the podcast on iTunes now in order to enter and then text the word Nathan to 33444 to prove that you subscribe. Coming up tomorrow morning, Top Tribe, you're going to learn from Gina Tost.
Chapter 4: How did Michael raise funds to start his business?
And I basically said, no one is talking about this multi-million dollar tech company that she's built in Barcelona. It's unbelievable. Okay, Top Tribe, good morning this morning. You're going to enjoy our guest. His name is Michael Slavin, and he's the author of One Million in the Bank. He's held positions as CEO of an oil exploration company, CEO of a title company,
M&A consultant, salesman, and commander of two Army aviation units.
Chapter 5: What is the business model of U.S. Emerald Energy?
Michael is a 1975 graduate of West Point and lives in Houston, Texas. Michael, are you ready to take us to the top? Sure, I'm ready to go. Let's do this. First things first, thank you for your service. We appreciate it. I loved it. Loved every minute of it. Good. How many years did you do that?
uh 10 years i was in the army 10 years wow well hey thank you again let's jump right in to the book you know michael people always tell me they go nathan you don't write about it takes a lot of time you lose a lot of money it's never worth it to write a book why'd you decide to write the book 1 million in the bank
I decided to write the book because I wanted to give back. I love the military, and I was in for 10 years, recruited out. And when they recruited me out, the folks that brought me out didn't quite treat me right, and I was on the street. So I struggled badly for seven years, lost everything, bankrupt, foreclosure, the whole nine yards.
Chapter 6: What were Michael's biggest losses in the oil industry?
I knew I could do anything, but I just didn't quite know how. And finally, I started my own company after those seven years. And three and a half years later, I had my first million dollars in the bank. And so how did you get that first million dollars? The first million dollars was, well, first of all, I didn't like the company I was with again. Which was who? They're no longer around.
It really doesn't matter. But they were an oil and gas company. Okay.
no it was a much smaller company all right but uh i didn't like the way they were doing business i wrote a business plan over the weekend and in the next week and a half i raised two hundred and three thousand dollars and that was from four people they weren't friends or family they were business acquaintances and one was a complete stranger i didn't even know a week before i met him at a gas station told him what i was doing and he gave me sixty thousand dollars and about a week later
And I talk about that later in my Undiscovered Investors. But I raised that money, started my own company. And three and a half years later, I had the million dollars. What was the name of the company and what did it do?
Chapter 7: How did Michael's book perform in terms of sales?
My company was U.S. Emerald Energy and it's still around. U.S. Emerald Energy is an oil and gas exploration company, but...
we really bring investors together with the best deals we can possibly find i did go through a phase or for seven years i had a operating company which was an extreme headache you know i had a staff of about 40 people geologists geophysicists land people very difficult to work with people to get their leases and to keep them happy but That was a headache. I raised about $4 million to do that.
And about seven years later, I had $4 million. So I just shut that back down. But Emerald is a company I've had for over 23 years now. And how does it make money? You know, it makes money. Like specifically? Yeah, it brings people into the deals. What deal? We keep a piece into the oil and gas drilling program. What does that mean? Like, I don't understand what that means.
You give me $25,000, $50,000, whatever you want to participate in. You've just bought a little piece of an oil well that we've researched and leased and we're ready to go drill. We go drill the well. You get 100% tax write-off. Once the well is flowing, you start getting checks every month off the well. If it flows, right? Of course.
Chapter 8: What advice does Michael give regarding starting a business?
What's your hit rate?
We have hit about, well, there's two stages in my company. The first stage, I was doing very wild stuff, which I really was on a learning curve myself. And we probably hit about 30% of those. But I switched over about 10 years into my company. I started doing wells only with what's called PUD, proved undeveloped, and only with 3D. And our hit rate went up to about 85% to 90% after that.
And for average one of these wells, how much would you raise from all the investors going in? And then what would it actually cost you to drill the well?
Oh, we would raise anywhere from a few hundred thousand to a million dollars. And we never had 100% of a well. We'd only have a piece of the well. And that would pay for all the drilling. And we turnkey to completion. So we assumed all the risk and the overrun stuff.
But, you know, we'd make about 20% there, but then where we really made our money is off the pieces of the wells that we owned ourself or put our money into those. Every time we had a joint venture, we also bought a piece of the well for our own account and were along for the ride with our own money.
And how do you help me understand how you buy a piece of the well? Is this like Exxon owns it and they're looking for private companies to go in with them or what?
Well, Exxon would never do it. There are tons of smaller companies. And when I say smaller, I guess they're pretty large. They may own 50, 60, 150 wells or more. And they may be revenue of... 30, 40, 100 million a year, but they're smaller.
And they're always looking for partners because almost everybody in the business, except the huge guys, they're looking to bring partners in to offset the risk. So what's it cost to drill well? Depends on the kind of well you're drilling. I mean, you can drill a tiny little well that's, you know, just very shallow with no pressure for a million bucks or so.
And of course the huge wells offshore and stuff can be just multi-millions, you know, $30 million and that kind of thing.
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