Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy, Daniel Schwartz
[00:00:00] S0: Just don’t bother. [00:00:00] S2: It's negative payback. You're giving them a lot more than they're giving you. Those people 15 years in now run the business. Or France. The first couple of few years in France, the amount of money we had to invest to get things going, the amount of time we had to spend. As I mentioned before, there was one restaurant in the south of France that was open. You only do that if you're taking a long-term view. And so even though it wouldn't pay back in the next six months or a year, or a few years, we knew if we're going to be long-term owners of this business – fast forward, 10-15 years, we'll be well-off, having this 2 billion plus euro sales business. And you see this in the family businesses, especially these multi-generational family businesses, where you look at David Sonnenberg buying small businesses 10-15 years ago, which wouldn't make a dent on the size of overall Hunter Douglas back then, but today contribute hundreds and hundreds of millions of dollars in sales. Those are some very tangible examples of the benefits of thinking long-term.
· Daniel Schwartz, Patrick O'Shaughnessy
[00:00:00] S2: It's negative payback. You're giving them a lot more than they're giving you. Those people 15 years in now run the business. Or France. The first couple of few years in France, the amount of money we had to invest to get things going, the amount of time we had to spend. As I mentioned before, there was one restaurant in the south of France that was open. You only do that if you're taking a long-term view. And so even though it wouldn't pay back in the next six months or a year, or a few years, we knew if we're going to be long-term owners of this business – fast forward, 10-15 years, we'll be well-off, having this 2 billion plus euro sales business. And you see this in the family businesses, especially these multi-generational family businesses, where you look at David Sonnenberg buying small businesses 10-15 years ago, which wouldn't make a dent on the size of overall Hunter Douglas back then, but today contribute hundreds and hundreds of millions of dollars in sales. Those are some very tangible examples of the benefits of thinking long-term. [00:00:00] S0: My friend David Senra, who runs the Founders Podcast, is obsessed with this style of entrepreneurship, this lifelong commitment, "exit strategy is death" type builders. What are these people like as people? You've engaged with so many of them, not just the ones that you've bought their businesses, but dozens and hundreds more, probably that you haven't bought the business. How are the people themselves characteristically most different from other people and entrepreneurs?
· Patrick O'Shaughnessy, Alex Behring, Daniel Schwartz
[00:00:00] S0: My friend David Senra, who runs the Founders Podcast, is obsessed with this style of entrepreneurship, this lifelong commitment, "exit strategy is death" type builders. What are these people like as people? You've engaged with so many of them, not just the ones that you've bought their businesses, but dozens and hundreds more, probably that you haven't bought the business. How are the people themselves characteristically most different from other people and entrepreneurs? [00:00:00] S1: Just how deeply they care about the business. Business is part of their lives, their persona, their families, their pride, their aura, everything. They really have that relationship with the business that they created and that they developed. And I think it's something you need to understand if you're going to engage with them. You need to understand where they're coming from on that. [00:00:00] S2: Yeah. Well said. I mean, they're passionate about the business. They genuinely care. You hear this in Senra's podcasts all the time. [00:00:00] S0: Do you feel like there's anything major that we've missed about what makes 3G 3G that's important to cover? Or do you feel like we've covered it well?
· Patrick O'Shaughnessy, Daniel Schwartz, Alex Behring
[00:00:00] S0: Do you feel like there's anything major that we've missed about what makes 3G 3G that's important to cover? Or do you feel like we've covered it well? [00:00:00] S2: There's a lot of patience as well that's required here. Because we're only buying one business every many years. And so, for those of us who have had a little bit more experience, that's fine. For some of the junior people, it's a little bit harder. And so, we definitely have to work with them. And over-communicating the benefits of being patient, establishing real trust with everyone we work with as well. I mean, we talk about trust as being a scarce asset in this world. And building trust with everyone we work with, be it our partners here, or people with whom we'll transact in the future, knowing that we're gonna be good partners. [00:00:00] S0: What keeps you guys motivated to keep working as hard as you do? You could easily have stopped. Why keep going? [00:00:00] S1: I love what we do here. I'm proud of it and I'm highly focused on making sure the firm continues. We wanted this to really be something that has a long, long, long life. And that's something that brings me great satisfaction, to see all those younger partners grow and take more and more responsibility in the business. I think that's something I'm highly focused on and that highly motivates me still.
· Alex Behring, Daniel Schwartz, Patrick O'Shaughnessy
[00:00:00] S1: I love what we do here. I'm proud of it and I'm highly focused on making sure the firm continues. We wanted this to really be something that has a long, long, long life. And that's something that brings me great satisfaction, to see all those younger partners grow and take more and more responsibility in the business. I think that's something I'm highly focused on and that highly motivates me still. [00:00:00] S2: Yeah, same. One of the most fulfilling parts of this job, and of running a restaurant business, was seeing the growth of so many of these people throughout the organization, inside the organization, and now many onto doing other things as well. And I want to see that continue here at 3G, with this next generation under us, successfully running our businesses and then down the road, successfully running the firm. [00:00:00] S0: I think, you know, my traditional closing question for everybody. What is the kindest thing that anyone's ever done for both of you?
· Patrick O'Shaughnessy, Alex Behring, Daniel Schwartz
[00:00:00] S0: I think, you know, my traditional closing question for everybody. What is the kindest thing that anyone's ever done for both of you? [00:00:00] S1: Lots of people did kind things to me. If I had to highlight one, I would highlight my co-founders having given me the opportunity to go and run that railroad in Brazil. I was 30 years old, hadn't really had more than a couple of people reporting to me in an investment office. And making a bet that I could go and run a company with thousands of people that needed a very deep, operations-driven turnaround was a big bet and bold bet to make. And, of course, they helped me in every way they could. But that was something that we did well as an investment in. But what I've learned from that enabled me to come out to New York and start this firm. And I must thank them for that. [00:00:00] S2: You could substitute "Railroad" for "Burger King" and apply the rest of everything he said. [00:00:00] S0: Simple and beautiful. It's amazing how this is the most common answer. Someone did a quant study of it. We've got like 500 people that have answered this now. And by far the most common is someone that made a bet on me before there was evidence that they should. [00:00:00] S1: That's exactly it. [00:00:00] S0: Kind of beautiful. And you guys do that a lot as a firm. [00:00:00] S2: And we find ourselves strongly encouraging the people and the businesses that we're involved with to similarly do that in their organizations. [00:00:00] S0: A beautiful place to end. Thank you guys so much for your time.