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Coin Stories with Natalie Brunell
Mike Coffey: How One Small Business Owner Used Bitcoin to Transform His Company
00:25:59
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- [00:00]
Mike Coffey
We took $30,000, we gave out the money and two years later I said, hey, do you remember when we gave that money away a couple years ago? And he's like, yeah, I remember. I said, how much did you get? And he said, I don't remember. It just flew all over me. I was like, we gave away $30,000 and you don't even remember how much you got? What could I give them that they would never forget? Personally, I was pretty far down the bitcoin rabbit hole and I thought, what if we give them bitcoin?
- [00:29]
Natalie
Hey everyone, welcome back to the show. Joining me this week is Mike Coffey. He is the founder and CEO of Blue Cotton. We're going to be talking about how bitcoin actually impacts real life, people, not just Wall street and all these institutions and big balance sheets. We're going to be talking about real world people. So Mike, thanks for joining me.
- [00:46]
Mike Coffey
It's great being here. Thanks a lot for having me.
- [00:48]
Natalie
So let's talk a little bit about your background for those who maybe are unfamiliar with you and what you do. Who are you?
- [00:54]
Mike Coffey
So I started Blue Cotton out of college. Blue Cotton is not a high tech business. We are a custom scre printing and embroidery company. We do like screen printed hat shirts, you know, those kinds of things for clubs, groups, organizations, teams, those kinds of things. So it's not a high tech business. But in 2022 we decided to start mining bitcoin to give to our employees. And I can talk to you in a minute about how we got to there but like we started doing that and it has changed my whole business. And one of the reasons I wanted to talk to you is because I know you have such a big audience of business leaders and owners and I just think the more people that can be that can have this kind of information because I know a lot of people want to do something like to help, but maybe they don't know what to do. And so we tried this thing kind of strictly. It was just an experiment and it has changed our business completely.
- [01:48]
Natalie
Well, how so tell us more about that.
- [01:50]
Mike Coffey
So in 2020, during the pandemic, we stayed open and kept our business going. And so that summer, as a way to say thank you to our people, we had some PPP money and so we took $30,000 and we said we're just going to give it to our, the people that have come in every day. We're like, we're just going to give that to them. It just as a bonus. So we called everybody together on the Floor, I've got about 130 people, maybe at that time, 110. So it's a pretty big operation. And. And we gave out the money. And of course, you know, everybody just cheered and they clapped and, you know, it was all great. And so two years later, we wanted to do something for our people again. Covid was tough on our business, so we'd kind of gone through a trough. But by 2022, things were looking up. Hey, let's do that again. So I went to one of my most financially responsible people and I said, hey, do you remember when we gave that money away a couple years ago? And he's like, yeah, I remember. I said, how much did you get? Because I couldn't remember the specific number. And he said, I don't remember. And it just flew all over me. I was like, we gave away $30,000 and you don't even remember how much you got. So I walked down to my partner's office and I say, hey, listen, we're not doing that again. And so I started thinking, like, what could we do? What could I give them that they would never forget? And at this point, personally, I was pretty far down the bitcoin rabbit hole and I thought, what if we give them bitcoin and we can. And we can give them bitcoin? And so what we decided to do was to. We actually bought mining equipment. I wanted to learn the mining side, just like where bitcoin comes from. So we bought mining equipment, invested in mining, in mining equipment on their behalf, started mining bitcoin on premises where they could see the machines, hear them, see them.
- [03:27]
Natalie
In Kentucky.
- [03:28]
Mike Coffey
This is in Kentucky. Yeah, we're in Bollinger, Kentucky.
- [03:30]
Natalie
By the way, I think that Kentucky is actually like a top five state in the US for mining, which a lot of people might not know.
- [03:35]
Mike Coffey
There's a lot of energy use in Kentucky. There's a lot of hydro and coal, and so there's a lot of those things. And so. But we're just doing it in our, like we have a 60,000 square foot warehouse where all the work's happening. And we've got them sitting out there where people can see them and hear them. And like, I'm like, that's your money right there working.
- [03:48]
Natalie
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- [05:22]
Mike Coffey
really just because I wanted to give them something like I said that they would never forget. And then secondly I wanted to do a little financial education. I thought you know what, I only need to teach my people to think like they need to think long term. Like how do they get past just like things that are this week or this month or whatever and how do I teach them to, to withstand the ups and the downs of investing? Like, you know, let's think a little bit long term. And you know my people are especially prone to inflation because a lot of the people that work for us, they're high school graduates, maybe not a lot of college education, a lot of college educated educated and they, they're, they're hourly workers, you know, and we pay a good wage, a competitive wage in Bowling Green. But inflation hurts those people the most because they don't own assets. And so they can't ride the, the wave of infl. Of asset inflation. So they really get left behind and they, they know it. Like they know that there's a problem but they really don't know what the problem is. And so I talked to him a lot about inflation. And, and then like, the fourth thing was just give them some equity. You know, in your book you write about, John Adams says something along the lines of, you know, property leads to liberty or property leads to freedom. And, and I wanted to give them some equity, something that they could count on. And so, so we did that four years ago. It's almost been four years before, years ago this summer. And of course they look at me like I was just crazy, you know, because, like, very few of them knew what I was talking about. And why can't we just give us the money again like you did in 2020? But here's what I, here's what I want your, here's what I really want your audience to know. And first of all, we did this just to be nice. Like, my partner and I made an agreement. We're not going to do this for, for us. Like, we want to do something to be good to our people. But what I didn't realize was what it would do for our business. And I'll just cut to the chase, but our turnover in 2022 was 108%. And turnover can be kind of hard to understand. I mean, I was in business a long time, didn't really understand how, how those metrics worked. But let me break that down. We had 130 people that met in 2022. We hired 142 people for those 130 positions. And of those 130, 60 of them don't really go anywhere. It's the other 70. So we were really hiring 140 people to fill those 70 spots. Last year, Natalie, our turnover was 17%. We went from 108% turnover to 17% turnover. And the impetus to get all that started was us making an investment in Bitcoin on behalf of our people. And I would have never imagined that that would happen. And so what that's done to our culture is crazy. What that's done to our level of employee engagement is crazy. What it's done to, like, the performance of the business and the P and L has been amazing. You know, you don't write a check for turnover, so you don't really know how much it's costing you, but I can tell you it's costing people a lot. And so when we made this investment, like, we got their attention with, with the, with the investments, we said we're going to commit three years, $40,000 a year. Well, that was, you know, $120,000. I mean, that was a Lot of money to me. I mean, for many, many years I didn't even make that kind of money. You know, I started this thing out of college. I've been doing it 35 years. And so I got their attention with that. We since have added two more years on. So we've committed 200 grand over five year period. And the way they get it is they have to stay five years. If they stay five years, they get it for free. So we will make our first payout in 2027 and we will pay it in bitcoin. Part of the whole education part was the adoption also. And so actually this year we're practicing with wallets. And so all bonuses that get paid this year at Blue Cotton get paid in bitcoin. That way they get a year's worth of having a wallet, getting some transactions in it and getting used to it. Because when we give them The Bitcoin in 27 and 28 and 29 all the way through 31, at this point we want them to be comfortable with it.
- [09:22]
Natalie
So, so they're learning about it as they're working and they're incentivized to want to stay in order to, to get it at the end. Have you had any pushback or like frustrations about the price volatility?
- [09:35]
Mike Coffey
You know, that's part of the education and that's also part of the reason why we wanted to do a five year vest. Because I thought, well, if we do it one year and it goes way up, they'll be elated. If it goes way down, they'll be, you know, they might get discouraged. So they're learning that and they're learning it right now. Now of course, I told you, we started it in the summer of 22. Well, by Christmas of 22, we were down close to 16,000, $15,000. So they like immediately we saw it go from 42 down to, you know, below 20. But then they watched it go to 126 and a lot of euphoria. And we have a monitor in the warehouse that's got the bitcoin price, it's got the per share for every employee. So they know how much they have out there that's coming to it.
- [10:13]
Natalie
And are you adding to it as well?
- [10:14]
Mike Coffey
We add to it. So we made a three year commitment. We end spending all 120 in the first year because the price got low and we were able to get better mining equipment. More mining equipment.
- [10:24]
Natalie
Wow.
- [10:24]
Mike Coffey
Since then we've added, we added two more years onto it. So we've now done it for. We've got a five year commitment so far. So we start the payouts in 27, but they're learning to ride this way.
- [10:36]
Natalie
Wow. And just to clarify, you're not buying the bitcoin, you're mining it?
- [10:39]
Mike Coffey
We're mining it. Yeah, we started mining it. We have bought some since then, but the first three years we bought and the equipment's there, they can see it. And like, you know, we get new employees and like, what, what is that? I'm like, well, that's the bitcoin initiative that we, that we talked to you guys about.
- [10:52]
Natalie
Oh my God.
- [10:53]
Mike Coffey
And so, and so what? But what we had to do, I don't want your audience to think like, oh, just buy bitcoin and your business changes. We bought the bitcoin that got their attention. But what that really led to was, you know what, in five years they're going to get access to this asset that's likely going to be much more valuable. And then what are they going to do with it when they get it? Like if they don't know, it doesn't matter how much money you have if you don't know how to handle it or what to do with it. So we started, it was just such a domino effect. We started and then the next thing we do, I'm teaching personal development classes at Blue Cotton every week to three groups of people, 20 people in each group. And we're just talking about how to get better at life. So it revolves around six things. Read, walk, save, give, connect and eat whole. We talk about those things. I feel like if you do those six things, you get a lot better life. And two of those things are financial, the saving and the giving. And so part of our, we do this from March through December and eight weeks of that is financial education. We start with macro things like gdp, debt deficits, a whole week on inflation. Then we get into like the different levels of investing, 401k Roth traditional brokerage accounts. And I spend three weeks of those eight weeks on Bitcoin. And so like I'm creating believers.
- [12:11]
Natalie
That's incredible over there.
- [12:13]
Mike Coffey
And so it's been almost four years. And like I said, the engagement alone and the culture alone would have been worth it, but the fact that we're making a real impact, you know, in your book, at the end of your book, you talk about hope. You know, I think that might have been the name of one of your chapters. We're giving them hope, we're giving them equity, we're giving them something that they can hold onto and it matters to them.
- [12:35]
Natalie
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- [12:49]
Mike Coffey
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- [12:56]
Natalie
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- [14:49]
Mike Coffey
It almost sounds too good to be true. I know, but we're doing it in
- [14:52]
Natalie
Bowling Green, Kentucky and you're showing that it's possible. I have so many questions you can you share maybe like an interesting story of one of your workers whose life has been transformed in a positive way from all of this. And you've seen that evolution.
- [15:06]
Mike Coffey
So I've got lots of stories from 18 year old kids that have now started buying bitcoin on their own. We had an 18 year old kid that was in one of the classes and one of the classes that I do on was with the financial calculator. And I'll pick people in the class and I'll say how old are you? And I'll say, well, let's just start with you. Let's just do 401k, three buckets, 401k, the Bitcoin that's out there on the board out in the warehouse and I need you to save $200 a month. Of course they always say, well, I can't save $200 a month. And I show them that they can, you know, and then I use this financial calculator and I show this 18 year old kid that if he does this until he's 65, he'll have $6.3 million. And I'm just using the S and P return. I'm not using bitcoin returns, I'm not inflating it 10.1%.
- [15:49]
Natalie
Wow.
- [15:50]
Mike Coffey
Pre inflation s and P returns over the last hundred years. So a very, very standard rate of return. And the kid looks at me and he's like, but I can't have that. And I was like, yes, you can. Now part of the reason he can is because he's 18, he's young. I've got other people in the classes that are 55 or 60 and I tell them, well, you know, you don't have quite the same opportunity because you don't have the time. But we teach about compounding and we teach about how the investments, you know, they compound over time and get bigger and bigger. So that's one illustration. Another one that I love is my wife was getting her hair done in Bowling Green in town and there was a lady sitting next to her and she was talking about Blue Cotton to the hairdresser that she was working with. And my wife just leaned over and said, my husband is Mike and he owns Blue Cotton. And she goes, oh, she goes, well, I was just telling my hairdresser I was going to retire and move to Florida. But when they started the bitcoin initiative, I decided I was going to stay and get my payouts and I'll Move to Florida after I get my bitcoin. That's awesome. So it like, it really is impacting, like I said, real people and the people that really need it so badly.
- [16:59]
Natalie
Where does this wanting to give back come from? Because so many companies today, especially when you think of our largest corporations, they're associated with greed and profit and this whole fiat mentality that, you know, you have to just keep as much as you can earn, reinvest it, maybe grow, but it's really kind of a self reinforcing greed machine, if you will. Right. It's all about profit at the end of the day. And today you rarely see companies doing things for employees. No one offers pension funds anymore. No one gives back. So where does this come from with you?
- [17:39]
Mike Coffey
You know, I was actually reading in the book of Proverbs and in Proverbs 3, it says, don't withhold good to those whom it's due when it's in your power to give it. And my partner is the daughter of a Baptist minister for a long time, and so that wasn't a hard sell to her. And I said, you know what, we actually have resources and we could actually help our people and we could just do it because it's just the right thing to do for so long. And really, this is the part that I hate to admit, but for so long in my career, I treated employees like transactions. Like, why can't they just come to work, do what they said they would do, I will pay them, and we'll all just be happy. But we're not created to be transactional. We're created to be relational. And when I started treating my people in a relational way, in a way where I invest in them for the purpose of helping, you know, I almost feel stupid saying it, but who would have thought that it would do so much good for your business? That's not why we did it. We did it just to be kind. But it has paid back unbelievably to us. And so now it's just like this snowball that keeps going. We keep investing in them, they keep being more engaged in what we're doing.
- [18:56]
Natalie
Why do you think?
- [18:58]
Mike Coffey
And that impacts our customer, right? Our customer gets shirts that are on time. They're correct. Not as many problems because we have a workforce that's experienced and trained and committed.
- [19:08]
Natalie
Why do you think more companies don't do this? Including some of the public companies out there that are now synonymous with, you know, just laying off and just, you know, making the biggest margins possible. And they don't really find ways to give back to their employees.
- [19:22]
Mike Coffey
I think, I don't remember the phrase, but something about like, you save a dollar to make a dime or whatever. I think it's because I did it too. I just didn't think big enough. I thought, oh, it's too expensive. I mean, look, a $40,000 investment per year into Bitcoin for our people, that's not small change to me. I mean, as I said earlier, there were years I didn't even make $40,000 when I was young. So I think people think, well, that's a lot of money. But doing the right thing for your people almost always comes back to being good for you. And I don't want to encourage, like, your audience to do it for that reason. I want them to know there's a lot of return for the employer. But taking good care of people, that's good business. I mean, what wouldn't I do to take care of my customers? Well, now it's like, well, what wouldn't we do to take care of our employees? And it's just made all the difference in the world.
- [20:21]
Natalie
Do you think it's our broken money that has incentivized the opposite?
- [20:26]
Mike Coffey
I mean, we could talk about Fiat and broken money and all that stuff for a long time. Yeah, because it's such hot. It's high time preference. It's high time preference. Right. It's like Fiat leads to that. It's just everything's right here, just right in front of you. And I'm trying to teach low time preference to people at bluecon. Like, let's just think out a little. But you know what? You can't think out a little if the money that you have is being devalued. If it won't buy in five years what it buys today, there is no incentive to save it. And then you got to get so far out on the risk curve to make it to where you at least stay even with inflation. It just puts people in a really, really tough spot.
- [21:07]
Natalie
What do you say to not just your workers, but anyone out there who's listening, who's just really nervous about all this volatility. They see it as an asset class that how could they save for the long run when the value can be cut in half in just the span of a couple months?
- [21:24]
Mike Coffey
I say to those people the same thing I say to the people that I work with every day. There's only 21 million. That hasn't changed. And governments are still debasing money. That hasn't changed all the up and down is just noise. Like there's a reason we got into this. We're committed to it. We think it's got potential for the long run. It's going to be around for a very, very long time. And if you can learn to stomach the ups and downs and have patience, you can do very, very well.
- [21:54]
Natalie
I think really small businesses are the backbone and so many have been at a disadvantage, especially over the past few dec. Your message out there. For those who either run a business right now and they feel like they're struggling, or maybe they really want to start one and they feel like it's just out of reach, what do you say?
- [22:10]
Mike Coffey
You know, you don't have to do exactly what we did, but however much focus you have on the customer experience, find a focus on the employer experience, on the employee experience. You can teach for free. You know, if you, if you have a financial mindset, you can set up classes. Your employees will come. Our employees. Did you know we've got a new group of 20 that's starting on March 1st and I'll have them from March through December. You just got to make the commitment to get to know your people and to root for what they want and to give them a. Like we're not making the. We're not changing our people. We're just giving them a platform from which they can change. Like, like we're not like all the things that our people are doing, we don't take credit for those things. What we take credit for is we provided a platform for our people to grow. And you know what, we're committed to that. And I thought it would cost me money, but it actually didn't. And we actually made it back even more. And so that. But you know, but that's like, that's self fulfilling. So we can do more and we just continue to do more.
- [23:17]
Natalie
That's fascinating. So everyone must know you guys in the town, huh? Are you guys like local celebrities?
- [23:22]
Mike Coffey
You know what, here's what's crazy. We're actually in the running for best company to work for in Kentucky.
- [23:28]
Natalie
No way.
- [23:29]
Mike Coffey
And we're a screen printing company. And our employees are the ones that are driving that effort to make that happen by filling out the surveys and giving all the information. And you know, and you would think that might go to like a law firm or an accounting firm or some high tech firm. And here we are going to a bitcoin. And here we are in a screen printing and Embroidery Warehouse. 60,000 square feet. And yet we're making a difference for people. And we're really, really proud of it. As you can tell. I'm very enthusiastic about it. As I said earlier, how do we take this really, it's almost kind of a highbrow technology, but how do we take this really great technology and just use it to impact regular people? Because as you know from your own story that you, that you relate in your book, people are trying to get by. They're not going to spend their evenings and their weekends diving into monetary theory, monetary policy, government spending. I'm going to bring that to them. I'll do that work for them and I will educate them. And I'm willing to bet that a lot of people that are listening to this today are willing to do the same thing. And together we can make a huge impact in bringing this technology to the regular people.
- [24:35]
Natalie
What a great note to end it on, Mike. This was such a fascinating story. I wish you guys all the best. You'll have to keep us posted. And it sounds like your employees are getting a lot more than just a paycheck from your company. Thanks for sharing it. Where can people find more information?
- [24:49]
Mike Coffey
Yeah, well, thank you so much for allowing me to come talk to you about it. Our business is bluecotton.com and you can go there and you can order shirts and our stories there as well.
- [24:59]
Natalie
Bitcoin shirts.
- [25:00]
Mike Coffey
You can reach me@mikelcontentin.com if anybody wants to email me directly to get more information on how we did it or how we're going to actually make all this come together, I'm happy to talk to anybody about it. We really want to promote. We really want to promote and spread this message.
- [25:13]
Natalie
Do you offer bitcoin apparel?
- [25:15]
Mike Coffey
We have a, we have one blue cotton logo that's got bitcoin built into it and we gave those to all of our people. I love it.
- [25:21]
Natalie
Well, thank you so much. This has been great.
- [25:22]
Mike Coffey
Thanks a lot.
- [25:23]
Natalie
Thank you so much for checking out this episode of Coin Stories. Make sure you're subscribed to the show so you don't miss any new episodes. If you can, turn on those notifications and leave us a positive review, they really help the show grow organically with new listeners. We have a free weekly newsletter. You can sign up@thenewsblock.substack.com this show is for educational and entertainment purposes. Purposes only. Nothing should constitute as financial investment advice. And you should always do your own research. I'm always open to feedback and guest suggestions, so please feel free to reach my team@infoalkingbitcoin.com I'll see you next time.