00:29:51 · John Collison, Toto Wolff
[00:29:51] S1: 9¢ a message. [00:29:51] S0: Yeah. It was a lot. Yeah. And so I found out that this was run by a teenage boy in Austria in Graz. Visited him. And, basically, with the model, I'm gonna raise money for your company, which then was very successful. You wrapped it into a legal entity. When I said to him, how how do you do that? I mean, he said, I'm hacking. I'm hacking into the SMSC servers of the big tel... Telcos. I said, okay. And then... And I said, well, eventually, they find out that the data volume was bigger than, let's say, on normal days, and they shut me down. And I said, okay. And if that happens, what do you do? Well, I have a plan. So for example, today, I'm running on Nigeria Telecom, and next week, it's gonna be Norway. So, okay, we put it in an entity, and I started to visit Telecom Austria, the biggest Austrian and T Mobile then, the two biggest Austrian telcos. And they said we hate SMSAT. We absolutely hate it, but we can't shut it down. So what is what is it we can do together? And, eventually, you know, within two years, that nonexistent company was sold for 250,000,000 to T Mobile. [00:31:01] S1: For 250,000,000? Yeah. Wow. So This people forget. 2000? This is the year 2000? [00:31:06] S0: That is obviously the... [00:31:08] S1: Yeah. It was just... Was a different era. [00:31:09] S0: Different era. Yeah. You know, maybe the kind of 250,000,000 today, when you look at the AI situation, that's gonna be 25,000,000,000. [00:31:17] S1: But on a relative basis,
00:31:17 · John Collison, Toto Wolff
[00:31:17] S1: But on a relative basis, [00:31:18] S0: yeah, relative, it was unbelievable and enormous money and valuation. So... And this was the lucky moment, actually. Not only And they bought [00:31:25] S1: it to shut it down? [00:31:27] S0: No. They bought a large part of it and integrated it in... Took over the customers and integrated it in their systems. So what happened is we signed the deal in Bonn, which was Deutsche Telekom back in the day. T Mobile was a subsidiary of Deutsche Telekom. And I flew back with my CFO, Austrian Airlines, And he was fifteen years my senior and was running the m and a department of the Austrian National Steel Company. Mhmm. And we were sitting in Austrian Airlines and got a glass of cheap bubbly and said that was a good transaction. And he said something's going wrong here. And I said, why? He said that business with literally tiny revenue with a lot... But with a large customer base. That means with lots of potential, but no way of of actually knowing how to monetize it or how to repay the CapEx investment. There's quite some correlation to the current markets now. Was valued as... At this absurd... With this absurd amount. In... Compared to my specialized Alu business that he had that was generating 30,000,000 in in EBIT. So something's going wrong. And I said to him, nothing's going wrong. The Internet is gonna dominate, and can't you see the amount of customer... Customers that [00:32:46] S1: The new paradigm, your old fashioned.
00:32:46 · John Collison, Toto Wolff
[00:32:46] S1: The new paradigm, your old fashioned. [00:32:48] S0: Exactly. Exactly. And he said, no. No. I'm sure this is this is gonna collapse. The valuation's absurd. And we had a... We listed another company on the stock exchange, which was between pitching into the bankers that scratched the eyes out of each other to do this to the day of listing in three months. And and he said, I promise you, we need to look at that. I don't think this is sustainable. Mhmm. And that impulse that he gave me from this one hour flight from Bonn to Vienna was enough to look at our whole portfolio of nine investments. [00:33:21] S1: Mhmm. [00:33:22] S0: And we decided to exit all of them. And that was started end of ninety nine and went all through 2000. Obviously, when the market collapsed in spring two thousand, people were still hoping for a rebound. It was just a glitch. Yes. And then the the market never came back, and we exited all of those investments. They are one. Yeah. An Israeli startup that we couldn't exit. And and we were out. And what remained was a skeleton of a venture capital company, very much downsized Yes. To continue to look for opportunities whilst having the philosophical idea of this is not gonna come back for a long time. [00:34:05] S1: I think this is an underrated aspect of good investors is knowing when to sell. And I think there's an incentive in the investor ecosystem where they all like talking about, oh, we found this founder very early, and we, you know, [00:34:19] S0: bought the stock and, you know, it grew and grew
00:34:19 · Toto Wolff, John Collison
[00:34:19] S0: bought the stock and, you know, it grew and grew [00:34:21] S1: and grew, and, you know, we we want to be on the journey forever. I think all of the myth making tends to be about getting in early and being a very long term partner. I noticed a thing that doesn't get talked about, but is a very common trait amongst the most successful investors, is they have this spidey sense for... You know, it's like the movie Heat. You gotta you gotta know when to get out. And a lot of the very good investors have this very commercial sense for... Again, you're in this period, like ninety nine, two thousand, and it's an important moment to sell. And it doesn't get talked about because it sounds cowardly or it sounds like you, you know, you don't believe in this company that you made a lot of money from because, you know, you're you're now a seller, but it's, it's an interesting aspect. [00:35:06] S0: I came from a very financially or generally poor family background. No money. And financial safety and opportunity was always a very strong driver for me. And I owned 90% of that company. It wasn't a fund. I wasn't managing anybody else's money. [00:35:27] S1: It was a corporate entity. You had your own venture investors,
00:35:27 · John Collison, Toto Wolff
[00:35:27] S1: It was a corporate entity. You had your own venture investors, [00:35:29] S0: but it itself was all holdings. Yeah. So it was a private limited company from which I owned a 100%, sold 20% to someone, to some... To venture capital companies. And all of the 80% or most of it, we had some... One... Some of my dear friends and colleagues were... Had a few shares. All of it, I owned. So when the opportunity came of actually exiting and generating a vast amount of money, which was life changing Yes. Generational wealth opportunity, it became easier for me to do that because I thought, okay, I never had any any money. And now suddenly, I was able to generate so much that I couldn't even spend it at the at the time I made the call. I think it would have been probably more aggressive. It would... If it would have been other people's money, generating management fees, potentially carry upside. [00:36:33] S1: Yeah. Yeah. [00:36:33] S0: Yeah. But the fact was your money allowed you to be pragmatic. Exactly. Yeah. And have a certain sense of safety also or or or or a desire for being on the safe side. [00:36:45] S1: What was your best performing investment before the racing era? [00:36:48] S0: Mercedes. The f one team. But before the Mercedes era, I was invested in Williams, which was pretty successful. Before that, a company that I loved forever called HWA, which was a... [00:37:00] S1: Sure. But these were all racing companies? [00:37:01] S0: That was all racing companies. So before that, I would say probably that was the SMS company. Yeah. What's called UCP?
00:37:01 · Toto Wolff, John Collison
[00:37:01] S0: That was all racing companies. So before that, I would say probably that was the SMS company. Yeah. What's called UCP? [00:37:12] S1: Yes. SMS entrepreneur turned racing entrepreneur. [00:37:17] S0: No. I was a race driver before, actually. [00:37:19] S1: Racer turned SMS entrepreneur turned racing entrepreneur. [00:37:22] S0: So the the exact sequences. Racer turned Steel worker. Bank banking intern in Warsaw, turned steel sales manager in Eastern Europe, turned venture capitalist, although it was more venture than capitalist. And then turned young driver manager once I sold all of these investments. And then I started to invest in motor racing companies. [00:37:49] S1: This is Toto's new Twitter bio just for you guys. And so obviously, that... [00:37:55] S0: You know, have no social media. Well, I mean, you're you're you're kind of... [00:37:58] S1: You're... You you you have enough exposure. I think people know what you think without without tweeting. Do you get to manage the team in a different way? Because, I don't know, you're less worried about job security. You can take bigger swings. Or just... How is Toto managing the team different from all the other f one team principals managing the team?