Invest Like the Best with Patrick O'Shaughnessy
· Alex Behring
[00:00:00] S1: It's predicated first and foremostly on this desire to be a great place for the best talent. And one of the things that we think is appealing to this sort of cohort of people is to go to a place where they know that there's a decent chance that someone is going to make a bet on them early. Earlier than probably anywhere else. Then, of course, just making a bet on them earlier than anywhere else is not good enough if they don't have a real chance of succeeding. And the real chance of succeeding comes from surrounding them well when you make these bets. For instance, as Dan said, when he was running Burger King, I was there as an executive chair for him. I had done it before. I was trying to help him everywhere, each and every way I could. And also, we brought people on the team at Burger King that had been involved in prior instances, at the brewery and the railroad and other places, in senior operating functions on sort of the same processes or things that we wanted to implement there. So that sort of, that combination of things sets you up for success. Nothing guarantees your success and you have to be prepared, but some of these things will not succeed. Some of these risky promotions won't succeed. But you have to maximize the chances that they work. So my co-founders, who were on the board of the railroad and were still helping me. One of them was on the board, Beto, and taught me a lot in that period of time. And my other co-founder, Marcel, gave me all these people from the brewery that were well-trained that could help me. So that's a key element into attracting some of the very best people – that you're going to make these early bets and you're going to maximize the chances that they will succeed. And from there, some of them will have, actually, a shot at becoming investors again. Some won't. Some will prefer to be at a company. But that's a key element of our modus operandi, if you will.
· Daniel Schwartz, Alex Behring
[00:00:00] S2: We're lucky because I think we both grew up, work-wise, in these extremely pure meritocracies, that genuinely valued talent over tenure. And I think Alex benefited from that when he led the acquisition of the railroad and the co-founders gave him a shot to be the CEO of the largest railroad company in all of Latin America at age 30. So that was normal to him. And after working together for, I guess, what, five plus years or six years. He knew me, he trusted me, and he knew I'd give everything that I had, and I wouldn't let Burger King fail, which is why he was comfortable similarly giving me a shot as CFO and CEO – because someone gave him a shot. And when I was in that role, I spent a disproportionate amount of my time focused on recruiting, and recruiting who I believed would be the best, best, best people. Not the best people who would be willing to go to work in a burger chain in south Florida, but just the best people, period. And whether it's like the rising star at McKinsey, or at Blackstone, or Goldman Sachs, or at another company, I'd want the best, best, best people. And I, similarly, was willing to give them shots way earlier than they get elsewhere. Both more responsibility and more economics. And one of the early examples of that was Josh Kobza. Josh was 25, and when Alex promoted me to be CEO at 32, I think Josh became CFO at 26. [00:00:00] S1: Over time, people like Sami Siddiqui... [00:00:00] S2: Sami, who was the next year, and Thiago, and David. [00:00:00] S1: All these guys.
· Alex Behring, Daniel Schwartz, Patrick O'Shaughnessy
[00:00:00] S1: All these guys. [00:00:00] S2: All these guys. And I remember at the time when I was getting promoted to CEO, Alex asked me, "Josh is kind of young. Is that okay?" I'm like, "He's much better and more mature than I was at that age. And so you guys gave me a shot. I'd like to give him a shot." So when you grow up in this environment, you get more comfortable making a bet on someone who has a little less experience, but who you genuinely believe in. And we're not just shooting from the hip. Alex, I worked for you for six years before you let me go be CFO. [00:00:00] S1: And again, you set people up for success through people to mentor them and people on the team to help them with the stuff that they don't yet know. So you have to set it up for success as well. [00:00:00] S0: I'm thinking about your mentors and your co-founders. I'd be curious if you go one each from Beto, Marcel, and Jorge. What lesson stands out that each of them taught you?
· Patrick O'Shaughnessy, Alex Behring
[00:00:00] S0: I'm thinking about your mentors and your co-founders. I'd be curious if you go one each from Beto, Marcel, and Jorge. What lesson stands out that each of them taught you? [00:00:00] S1: So, Jorge has this incredible ability to see very far. So, he really understands the potential of a business, the potential of a person. And his vision, I think, is unique. He's unique that way. He thinks very clearly and is able to chart a path out of any situation. Beto has this incredible ability to relate to people and lead people, and get people, even at the "shop floor" of a business excited and enthusiastic, and is someone that's completely fearless. And Marcel is probably, of the three of them, the one that really honed this business model that we all liked the most at the brewery when he ran it. And he was able to basically create so many good people over the years in a very clear process. Of course, what we do and what the companies do have their own different flavors that evolved from it, but he was the most involved in creating that operating model. They're all very complementary. If you put the three things I said together, super complementary.
· Daniel Schwartz, Patrick O'Shaughnessy, Alex Behring
[00:00:00] S2: I had the benefit that I was with Alex, so I got all three. And then one of the things that Alex brought to me in this was – when you get to the company having this massive sense of urgency. Because companies have a tendency of moving slowly and don't operate as quickly as things operate on the investment side. But if you're going to do something, just do it this quarter. If you're going to do it this quarter, do it this month. If you're going to do it this month, why can't you do it now? And that sense of urgency, getting stuff done fast, really, really matters. Because companies, I think, are 5-10% strategy and 90-95% execution. And execution is getting stuff done quickly, right? [00:00:00] S0: How do you inject that? Very tactically, how do you constantly inject a sense of urgency into a company? [00:00:00] S2: I think it comes down to two things. One, hiring the right people who want to get everything done yesterday. [00:00:00] S1: People that are wired that way already.
· Alex Behring, Daniel Schwartz, Patrick O'Shaughnessy
[00:00:00] S1: People that are wired that way already. [00:00:00] S2: People who you have to hold back and not push forward. You yourself as the leader constantly keeping this expectation of wanting to move quickly, never showing any level of complacency whatsoever, wanting to get stuff done very, very quickly. My guess is you see that, you Patrick, see that in the tech startups that you invest in. They're building new products that are disrupting new categories that every minute, hour, day count. And they need to move quickly to either get to the next round or get to the next customer. And you try to bring that same sense of urgency that exists if you're a tech startup with finite amount of cash to a mature business that's highly cash flow generative. [00:00:00] S0: If I were to ask everyone that worked directly for you how you did this, would it round to clear strategic communication and constant check-in? Is that the operating system of this method?