Buyers and Builders
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?
00:51:32 · Eric Tan
[00:51:32] S1: Yeah, I think definitely, I think when we first started out, it was, the reality as we, we first started out was, that, we were a lot more risk on, because we are trying to get momentum, right? So what that means is that we did smaller deals, but higher risk appetite. It's almost like buy, find the best asset we can buy and get things going. So that that that is like maybe four, five years ago, and we were more willing to take on kind of riskier assets. Today, it's a little bit more measured as in the sense that we are thinking about relative return against different opportunity that we have. As an example, we might be comparing an acquisitions against funding organic growth in a business that we already own. Another example would be maybe comparing a bolt on acquisitions against launching something that we, in the space that we have, so that's one thing that has changed a little bit, so now we have more comparison point, we will be looking at this company and say, hey, is this the same as the past acquisitions that we have done? What have we learned from that and how do we structure an acquisition such that it will work out in the longer term given what we have known. So a lot of learnings has helped us and a more recent example is that we were looking at one VMS company in the banking space and today, because of what we learned in some of the other deals that didn't happen, we quite quickly can really pinpoint, hey, here are the three things that matters, Really figure it out. But it's the deals and the lesson learned over the last few years that allows us to be able to do that. So it it... So because of that, we also understand our sector a lot better now. And because of that, these days, we tend to favor and concentrate within the sectors that we know, like digital media, b two b expo, rather than to spread the capital to tinges to look to diversify. So to us, we are diversified enough in the few three... In three pillars. Now let's just go deeper and deeper in in the pillars that we have. And our view is that once we actually understand the industry playbook, the knowledge really compounds, right?