00:21:51 · Toto Wolff
[00:21:51] S0: So the unfortunate part of it is that your business is far more complex, in my opinion. Why? Because you deal with the end customer or whoever the customer is, an organization, an entity, or or a or a person. Because are you... You know, you can define technical specifications that you believe make the process better or more efficient or successful. But there is someone at the end that actually needs to buy your product, and that person or that organization is gonna measure whether the humans that are actually his customers or her customers Yes. Are gonna like it. Yep. How how can you predict that part? With us, it's all data and the simulation. It's much more measurable. It's much more measurable. That at a very early stage, we will define what is the lifetime contribution that we that we imagine of that part. Yes. And that all starts in the virtual world. It's all simulation, whether it is CFD Yes. Or whether it's the wind tunnel in the way we we measure it or we attribute downforce and drag, or whether it is mathematical models that we have. And all along the process, you continue to correlate with your expectations. And there are rare occasions where you believe that something eventually when it ends up in the car is gonna be a tenth of a second in average overlap quicker, and you realize it's not. Or you realize that the driver doesn't feel comfortable with it and isn't feeling, you know, isn't feeling Yep. Safe enough to Yep. To drive it. So we need to consider also if the end customer, which we know exactly Mhmm. You maybe not, will be able to extract from that virtual, let's say, theoretical lap time benefit. But it's much more measurable.
00:23:41 · John Collison, Toto Wolff
[00:23:41] S1: Engineers like to fall in love with their ideas, and I just need one more simulation run, or I just need one more, you know... We don't have that. So... But do you have to kill people's ideas because they're [00:23:51] S0: they're in love with them, but they're just not gonna work, [00:23:53] S1: or you just don't have the resources to staff it? [00:23:55] S0: I think we have we have people like this who, if they are also forceful, they might put the organization under pressure to actually continue with the experiment beyond the, you know, reasonable point. But they are not part of the organization anymore. This is this is one of the personality traits that that we hold dear [00:24:13] S1: Mhmm. [00:24:14] S0: That you need... It needs to fundamentally contribute to the overall target of lap time Yes. Rather than what we discussed before to the department's target. So there will be a decision within the group and then in the wider technical management to say, we're stopping this now. So so if I was to talk to [00:24:34] S1: an engineer at Mercedes, I would find them surprisingly dispassionate and analytical where they're not falling in love with a particular technical approach or they're not falling in love with their idea. Yeah. It's either it works or it doesn't.
00:24:34 · John Collison, Toto Wolff
[00:24:34] S1: an engineer at Mercedes, I would find them surprisingly dispassionate and analytical where they're not falling in love with a particular technical approach or they're not falling in love with their idea. Yeah. It's either it works or it doesn't. [00:24:46] S0: Exactly. You fall in love with the result. Yeah. It's that these extreme emotions and gratifications that you feel when you win a race Mhmm. Or a championship. And therefore, the kind of rational part of the engineers, I would hope is superior against, like, let's say, an emotional falling in love with your development part. I wanna ask a bit about [00:25:13] S1: your investing background because, obviously, that is how you ended up in the position that you're in in racing. First off, were you a private equity or venture capital investor? I've heard it described as both in accounts. [00:25:27] S0: None of that, [00:25:28] S1: I would Because [00:25:31] S0: how it all started is that when I decided to stop my racing, I had a short period of time where I was an employee in a in a in a steel manufacturing company, didn't like that. And then ended up reading about Internet companies in The US. And I know you had Marc Andreessen here. So one of the first companies that I got interested in was Netscape. Mhmm. And then you had Yahoo! [00:26:00] S1: AOL. And these were the star companies
00:26:00 · John Collison, Toto Wolff
[00:26:00] S1: AOL. And these were the star companies [00:26:02] S0: of the companies of the time. Exactly. And I thought... You know, lived in Vienna, and I thought, okay, I understand now what they were doing. Yeah. And I looked at the, let's say, the German speaking countries to say, who is doing that in Austria and in Germany and in Switzerland? Yes. And I found out that these... That that existed, but sometimes it was just little startups that weren't even in a in a legal entity. [00:26:30] S1: Yes. [00:26:31] S0: Young people working out of their children's room or kids' room. And what I did is then, you know, obviously, the effect of the Nasdaq started to to kick in Yes. With absurd valuations for no revenue companies. Then in in Germany, was the Neuemakt, which was the equivalent, but even crazier in terms of process of being able to list. Yes. There was no boundaries. You can call it like this. And so I found out about all of these companies, got myself into my car, went there and said, I like your business. I'll... I want to help you to raise some equity or list your company on the stock exchange. And if it was successful with the first or the latter, I would like to have 10, 50% of your company. And that led to some... To to to some, you know, shareholding because some of some of the people said, well, my business is worth €10,000,000, and I knew it was not worth it. But I said, okay. If it is 10,000,000, then I'll raise 5,000,000 for you, or we IPO for 20. Can I have half of the company? And they said, of course. You know, there was a
00:26:31 · Toto Wolff, John Collison
[00:26:31] S0: Young people working out of their children's room or kids' room. And what I did is then, you know, obviously, the effect of the Nasdaq started to to kick in Yes. With absurd valuations for no revenue companies. Then in in Germany, was the Neuemakt, which was the equivalent, but even crazier in terms of process of being able to list. Yes. There was no boundaries. You can call it like this. And so I found out about all of these companies, got myself into my car, went there and said, I like your business. I'll... I want to help you to raise some equity or list your company on the stock exchange. And if it was successful with the first or the latter, I would like to have 10, 50% of your company. And that led to some... To to to some, you know, shareholding because some of some of the people said, well, my business is worth €10,000,000, and I knew it was not worth it. But I said, okay. If it is 10,000,000, then I'll raise 5,000,000 for you, or we IPO for 20. Can I have half of the company? And they said, of course. You know, there was a [00:27:38] S1: win win. Almost like an investment banker to some of these dot com companies. You probably wouldn't have described it that way, but you were helping them with financing.
00:27:38 · John Collison, Toto Wolff
[00:27:38] S1: win win. Almost like an investment banker to some of these dot com companies. You probably wouldn't have described it that way, but you were helping them with financing. [00:27:45] S0: I was wearing cufflinks, an Hermes tie, and a pin striped double breasted suit, but eventually put it in in a cave and never wore it again. But there was another experience. But, no, it wasn't. It was it it it was actually a hybrid between sweat equity, early stage micro investments Yes. And equity kicker or options related to success. And that's how it worked at the beginning. And then eventually, we raised capital, not fund like structure. It was still my company, but we got two private equity, two venture capital companies in that each owned 10%. So we got real money and then Yes. Deployed some of that. [00:28:34] S1: And you also importantly had good market timing. Right? Because, I mean, for people who weren't around, the ninety nine, two thousand period was crazy, whereas you say, the valuations just became fairly disconnected from reality, and then they crashed hard shortly afterwards. And so a lot of the people who did well in that ninety nine, two thousand era were people who were optimistic enough to get into these companies, but then skeptical enough to sell some of the proceeds rather than just watching the account