Buyers and Builders
00:42:22 · Eric Tan, Mikk
[00:42:22] S1: year? We We six events throughout the years. [00:42:25] S0: Okay. So while I was reading it, okay, guys, you are you are managing a company in in a event space. I immediately thought about the interview, which I was listening with Ari Emanuel, and he's the he's the American businessman and runs the... I think it's TKO TKO Holdings. And he said that he had a meeting with Elon Musk, and and he said during that dinner, they were talking about AI. And Elon said to Ari that live cannot be disrupted. So... And that made Ari like, okay. He's the the smartest entrepreneur we have, and this is what I'm going to double down. And and in your case as well, what have you seen when it comes to, okay, you have this digital media, people spending, like, all their time on their phones. That's one side. On the other side, you have this physical event. You said one was it, like, four days or something? Do you see this you you need, like, a larger expo area soon because more and more people would like to get this experience? And do you see the attendance numbers going up? What do you see? Because it's so interesting. You see both sides. You see the the data, how much people are spending on their phones, and then you see, like, you're simply selling more tickets because more people would like to get this in person experience. So maybe I'm wrong, but maybe you can give some data there.
00:43:54 · Eric Tan
[00:43:54] S1: Sure. Sure. I think how we actually came into the tastefully business and a couple more subsequently was quite organic. So, how the relationship come about was they they came to us and say, hey, guys, like we attract, at the time was, I think, maybe seven fifty, zero people a year. We would like to incorporate some of the online packages, digital media packages of yours to and offer it to exhibitors. So, not only do they come to our exhibitions as an exhibitors and get access to the live audience, but we could also tell them there is continuity of your brand awareness online if you become part of our group, right? Part part of the exhibitions. So that's how the relationship came about. And as we study more and more into the space, we we noticed a few things. One, like you said, especially though in the world today, people or consumers are craving live experiences because the... There's just so much you can doom scroll on on social media, and there's, like, a trend of, you know, people kinda moving away from online to offline. And two is that we see that as quite a synergistic business to our media... Digital media business on on online, where the spending for advertisers always move towards where it attracts attention. So we want to, in many ways, diversify our business or hedge our business against one or the other. Right? So so today, our digital media business has kinda gone offline in in some ways. Right? It's kinda integrated in the in the offline ecosystem, and we like that because it it puts us into a less, I guess, volatile environment where... Because the good thing about online is it can scale really fast. Bad thing is that when things change, it also change very fast. So having experiences on on on ground or as you mentioned from Ari Emanuel, that life events cannot be disrupted. That's really the overarching thesis. Right? We don't expect all businesses to to perform the same or or or even better on on a year to year basis for the next thirty years. So, when we look far ahead enough, let me say, hey, if one day, the, the consumer behavior change, what would it look like, and how do we put ourselves in a position such that, we don't subject ourself to to unnecessary swing, and we are well diversified against the single sector risk. And that's how we think about about the event space.
00:46:14 · Eric Tan
One, consumer trends moves all the time online and offline. We wanna make sure that we capture both so that advertisers will move along with consumers. Two is that it's actually a complete opposite of what we do. And because what we're aiming for is steady 20, 25% growth across our businesses, we don't need to bet on one thing and make sure it works right. We rather bet on a few things that semi independent, semi unrelated, so that if something get hit, the other would be fine. And I guess it's a bit like managing a diversified portfolio of stocks where you don't want them to be so correlated. And ideally, in a bad market, there's something that works out and something that don't. And that's how we generally think about it.
00:46:58 · Mikk
[00:46:58] S0: Okay. Now maybe a few questions about your again, those conversations we had on on Stockholm. It was, like, eye opening what you guys are doing and Patrick himself as well. So for guys who don't know Patrick Grove, I think on this region in this beautiful world, He's a he's a pretty well known guy. So I was following him before this event, and I recognized he was there. So I just came and and say... Said hi, and he immediately introduced me to you and said, like, okay, Eric, come to the podcast. And so maybe you can can share a bit, like, how is it working with with Patrick? Because he's this charismatic, high energy guy. He immediately said to me, like, Mikk, you should come to you should come to Singapore in a in a first week of October. There's this f one event. Everyone's there. Let's just do a quick event. Let's talk about serial acquirers and bam, bam, bam. I was like, we just met, man. He was like, no. No. Let's let's let's do it. So what what have you learned? Because you you had this start up experience, which, again, didn't go that well. But now you you guys are doing so well. The the company is growing. So what have been some of the some of the lessons from from from his experience?
00:48:13 · Eric Tan
[00:48:13] S1: Yeah. I think I have known him for, I'm trying to think, since 2017, so it's almost nine years now, and starting from working for him as an analyst, and I gradually, I, I left and he became my investors, and now, he's my investors and my chair, I think what worked quite well with the both of us is that I think in many ways, we think quite similarly in that one, we we try to think as big as we can, but at the same time, we try to execute small, right? So so we try to think big and and start small and treat failure or or lesson learned as a badge of honor rather than a a sign of, you know, incompetence. And I think that has worked out very well for us over the years, and especially in the last five, six years, I think we have gotten the opportunity to, to really understand the strength and the weaknesses of each other, and Patrick as a chair, works very well for, for me, as a, as kind of the CEO of the, of the business, because he is very clear around what matters to the business and really is three things. One, he said to me, Eric, like, three things. One, don't buy shit business. Two, make sure they perform. Three, make sure the profit becomes cash. So it's always very clear. And it works out very well because it's very clear that, hey, here are the priorities. And then the day to day is really me driving it. And I think because of the dynamics and the trust as well that is built over time, it's just a a well oiled kind of relationship where I know exactly what what he can expect of what I can expect of him and he know exactly what he can expect of me and as a a mutual trust and and build But but it's been it's been a while ride. Like, I treat him as my mentor. I think I've learned a lot from him personally, and he's been nothing but generous to to to us and and the team as well with his time and experience.
00:50:05 · Eric Tan, Mikk
And and I think finally, he's also at his stage of his life where, like you said, he's quite well known, he's quite well-to-do, he's very experienced, he has resources, and and I think once, this is a while back, and he said something that I thought was quite interesting, he said, I've got all those things, right, but I don't have the energy of a 25 or 30 year old anymore, hence, I'm working with you guys, right, so that, you you guys can bring in the consumer insights of what people want and what people need tomorrow, rather than someone like like himself that has kind of gone through it in the past. So, it's very clear that what we bring to the table and then we trust each other working towards a common goal and and hence, I think, we we work quite well together overall. [00:50:54] S0: Okay. That's awesome. Thanks thanks for sharing this. This is good stuff. And Patrick has found a a killer operator. We can say that. Looking at the numbers. I hope so. One thing I forgot to ask, it's it's about capital allocation and and because you're now allocating capital across various businesses, various industries, we can say. So how has your thinking being changed maybe over the years? Because you see these digital media companies, you... From six to 25, expo maybe more stable, but doesn't grow that that quickly. How do you think about capital allocation? Has it changed over time?