Ali Davoudi: Crypto Journeys and Aviation Ventures

I'm Phil Ermin. I'm Ali Davoudi. And I'm Douglas Borthwick. And this is Old Men, New Money. And this is an exciting episode for us today because we've got another old man joining us and this is going to be on the permanent crew. Ali Davoudi. I've known Ali going on about 30 years. We went to college together at Carnegie Mellon. Ali, why don't you introduce yourself? Yeah. Hi. Nice to be with everybody here. Let's see. I got into crypto back in about 2011 sitting in my bed reading about the TARP Act, the Troubled Asset Relief Program Act. And they were printing up about $740 billion new dollars.

And I was reading that article and I sent it over to my wife and I asked her what she thought about it. I sent it to a bunch of friends in college and asked them what they thought about it. I sent it to a bunch of oil and gas guys in Houston, Texas. And I asked them what they thought about it. And in about two weeks when I got feedback from everybody, it was unanimous. It's a Ponzi. And if anybody knows how a sports bet, usually when everybody's loaded up on the Patriots, I'm going to go take the points the other way. And so I liked it at that point.

And I thought to myself, if anybody did this to me in a company with a share count, I'd be screaming bloody murder if there was a billion underlying shares and somebody just issued $740 million. But when it came to currency, nobody really seemed to care because Starbucks coffee was still about 350. And I think we all know how that story ends now, sitting in 2025 and looking at Starbucks and what a carton of eggs costs and everything like that. So I really got into it not so much from a technical angle, but mostly from a, I don't trust the central banks and the way monetary policy is being created to take care of my store value angle.

And that was really my intro to crypto and Bitcoin. What's that? Crypto or Bitcoin? Yeah, no, I'm a maximalist. I think a lot of the other tokens out there are crap coins. I think as far as store of value goes that the killer app on the blockchain for that, there can be only one and you've got Bitcoin for that. I think everything else is a utility token. Just think about it. When you go to Harvard, what do they teach you? When your company's name becomes synonymous with the product or service that you provide, you've arrived, give me a Kleenex, Google it, Xerox it. So what do we have in crypto? In crypto there's Bitcoin.

What's everything else called? Altcoin. What's it an alt to? It's not an alt to Kleenex. It's not an alt to Google. It's an alt to Bitcoin. So for me, Bitcoin is the old new money and everything else is just trying to catch up. So just like somebody doesn't want to buy a thousand shares of Amazon for $275, they want to buy 10 million shares of some crap stock you've never heard of at 12 cents simply because they like that higher number, but you really should be buying quality. And so many people ask me if they should still be looking at Bitcoin here at a hundred thousand dollar plus level.

And I tell them absolutely, because you're not looking for it to go from a hundred thousand, 150,000. You're looking for it to go from a hundred thousand to 11 million. And a lot of times they ask me if I'm crazy and I just tell them mathematically, what do you think is crazier for it to go from zero to a hundred thousand or for it to go from a hundred thousand to 11 million. Last time I checked the second one's only a hundred X. All right, doing your day job. What do I do in my day job?

Let's see after Carnegie Mellon, I did my law degree in my MBA here at the university of Houston and being one of the most thoroughly unemployable human beings. I know I knew I could pretty much not go work for somebody in a traditional role. So I went to go run up a star software company that someone Douglas and my fraternity brothers had started out of Carnegie Mellon in Tampa, Florida. And that led me to taking our first company public.

And I joined a venture firm for there for a couple of years and then moved back to Houston when I was getting married and did a couple of different startups in the technology space and online education space. And then when people mostly know me about now is private jets and private airports. I'm a minority owner in the parent company of millionaire. We have about 45 locations throughout the globe. We're the only US carrier with a flag in China. We have locations in Canada, Latin America, United States. And I have another charter brokerage called Osprey jets. We have Sky Harbor, which we took public a couple of years ago.

So most people identified me with the private jet space, but I've got my hands in a variety of different businesses, be it cement and gravel business. And I'm a serial entrepreneur, so I invest in a lot of privately held companies. So anytime I can see a situation where I can disintermediate something and get the fat out, I like, I take a look at it. I have a lot of swings and misses, but a lot of swings and hits too. Not too many people are in aviation. How in the world did you get into aviation? Yeah, that's a great spot. So I was lucky enough. My partner started Roger Woolsey started this business back in about 40 years ago.

We had our 40th year anniversary now and he was a pilot for the grateful dad for Elton John, for Stevie Nicks, you name him. And he was the youngest flight improvement rated pilot in the US. He was so young that like when he was flying U2 overseas, he could fly the plane, but then the roadies would have to rent him a car because he wasn't 25 years old. And as he was going around to the different FBOs, he noticed how terrible they were. And one day he was taking one of his acts to Dallas and he lands at millionaire, which was started by Mary Rogers, who the rest of the world affectionately knows as Mary Kay and Mary Kay cosmetics.

And she had done such a first rate job and Roger being charming and aggressive about what he wanted to do at that point. He was young. He was like 19, 20 years old. And he convinced a Mrs. Rogers to give him the name and perpetuity for commercial business. And that was the start of millionaire 40 years ago. And so the way I got into it, I've got a mentor who is like a second father to me. And I don't say that lightly. Douglas knows how much I love my first father. And he has been an excellent influence in my life. He was civilian aid to the secretary of the army. And we used to have these dinners and it was called bill and bill dinners.

There were two guys in Houston. They would always take out note. The whole rule was nobody sells anybody, anything else. It was just a way where we could get together and discuss current events and things like that. And he asked me one time, he asked me if I'd ever met Roger and I apparently had not had an overlap with Roger in one of these.

And because I had also been in the online tobacco business in my previous careers, I had started up drop shipping of tobacco from North Carolina, Kentucky, and Virginia when dot com 1.0 first came out because if tobacco is an interesting product, there's three states that keep it artificially low, North Carolina, Kentucky, and Virginia. And so when the internet came out, if you're buying a carton of marbles in New York city for 130, $140, most of that cost of that carton was state excise taxes.

And so what we did was we took advantage of the fact that you can drop ship from tobacco growing states where they had tax stamps and they were absolutely legal. And it was a gray area that because you're not sending unstamped cigarettes to people in the other states, you're actually sending them that. And because you don't have a physical presence in their state, it was pretty strong argument that you're not responsible for their state excise taxes and stuff like that. So anyway, that's a long way of landing the plane and going back to what was it that led me to millionaire.

So my, my mentor asked me if I'd met Roger because he had heard something at a dinner that Philip Morris is Northeast headquarters were up there at white plains in New York. And in our 45 locations, probably a good two third of them are franchisees. So they play millionaire royalty to use our software, to use our branding, to use our expertise. And they had asked if we could purchase our New York location. And so anytime like one of our affiliates gets an offer to be bought out, I think signature had come in to buy them out. The parent company of millionaire gets a roper, which is a writer first refusal.

And so at that point, my mentor bill had put me together with Roger and he explained the deal terms and not knowing anything about aviation. What I loved about that business is it's got such a severe moat around it. It's hard for just any Tom, Dick and Harry to get up and go and start a new FBO. And my mentor got me involved in the purchase and refinance of the only hotel on the grounds of the U.S. Military Academy called the Thayer Hotel. And so I own a minority piece of the Thayer Hotel and I own a minority piece of millionaire.

And I always joked that after 9/11, it was very important for me that someone with the name Allie was still allowed on to a U.S. military base without too many guards. But really the main reason I got into it was because when you're in the private aviation space, you are talking to the best in their respective fields because you have to be able to spend that much money on private aviation because really, even when it's my own, like flying to New York would cost private $38,000. Whereas you could probably fly first class if you plan it well on United for $600.

So depending on how mad you are at your money and how much that additional two hours means to you, you may flip for that. But to me, I thought this is just going to put me in the best position to succeed because I will get put around the top people in their respective fields. And everybody that knows me knows I just need a foot in the door. Once I get my foot in the door, I try to figure things out from there. I'm pretty good at it after that. So what year was that? Was this pre Bitcoin? Yeah, yeah, it wasn't pre purchase of Bitcoin, but it was pre 2017, which is when Bitcoin had its first run.

So I got involved in a millionaire in 2014 and it was the biggest risk of our life. I had to come tell my wife that I had to take every penny essentially that we had that was free, that we had to take it all and give it to the sky. But my theory was that you're not going to build a business over 2829 years to fail in year 30. And now I look like a genius because the company is thriving and doing so well. But really, that's just a testament to the people that are there working it day in and day out.

Everybody hears the name millionaire and it thinks about private aviation and everyone thinks it's all it's popping bottles and it's all celebrities and stuff. But the truth is that in the state of Texas, we're the fixed wing division for all the organ donor flights. So if you're getting a lever transplant or something like that, chances are better than not a lot of times if you didn't get there with the helicopter, you got there on one of millionaires planes and until we figure out a way to tele transport and stuff, this is still the fastest way to move necessities and essential items to places and disaster areas and things like that.

And so it's, it's been very satisfying to be involved in watch and learn and see how aviation affects other aspects of our life that we wouldn't necessarily really do pictures on Instagram. When you think private aviation, you're thinking celebrities, mega moguls. And I didn't even think about saving lives. Yeah. Yeah. I didn't either until I got involved in the business. So then what we're talking, what we'd like to talk a lot about blockchain and things like that is blockchain going to enter anything.

Is there any use cases within aviation or these other type of businesses that you've been a part of over the years, tobacco and aviation and like things like that. I think blockchain is going to permeate every business process. As far as aviation goes, no, I haven't seen too much of it yet, but I think invariably when there is the immutability of data where you need something with the inability for somebody to go back and change it unilaterally, but rather requiring consensus, I think invariably things like that will get adopted in that industry.

If you take a look at that Senator from Ohio, Bernie Marino, if you look at his background, like he took the blockchain and used it for basically doing car titles and things like that and tracking it that way. And so I think you will have pioneers in the different fields that bring it up. But as far as blockchain and aviation goes, I haven't seen too many use cases as far as that goes yet. Getting ticketing, you can get ticketing on the blockchain. And yeah, I think that would make a lot of sense. That's the easy, the low hanging fruit. Yeah, but I haven't seen anything yet. Like you're not seeing a lot of talk about it.

You're not really getting much talk in that direction. Like aviation seems to be one of the last ones talking about anything having to do with blockchain. Speaking of titles, California announced that they onboarded all car titles to Avalanche. Is that right? Yeah, yeah. That's massive. Typically, California waits a little because they were one of the last folks to approve video notarization, obviously, which I tracked. But normally they're they wait a little bit, but they jumped on this. I think everyone now knows who Ali is. And we'll catch you guys in the next episode. Thank you very much.