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?
00:38:14 · Toto Wolff
[00:38:14] S0: I have had this opportunity... Immense opportunity given to me by the board of management of Daimler back in the day led by Dietrich Zetsche, the CEO. But actually, all of the board members were very supportive of the idea. So what happened is they bought a small team, Braun, that won the championship in 2009, expecting it to be a dominant force in Formula One. And it was the first Mercedes Grand Prix Mhmm. Owned team with its own engines and its own chassis. And it underperformed. Year after year, the results were really not satisfactory. And until 2013, they won a single race only. Yeah. And I was at the time running Williams with the founder, and we also won a race. So one of the board members approached me and invited me to Stuttgart. And he said, how can it be that your private little team can win a race? And we, Mercedes Mhmm. We can't do any better than that. So I said, I don't know. So they they gave me the opportunity to look at their, you know, setup, their numbers, and everything. And I came back and said, what is your aspiration? And they said, well, winning world championships because we bought the team that did that. And I said, okay. Then one of us is wrong because I'm working on the same budgets, and I'm thinking about finishing in the top six. And they said, no. No. No. No. No. It's not the same budget. Look. We we spent a 100,000,000 more. And I said, yeah. Those 100 millions, you spent on Michaen Schumacher and Nico Rosberg. I have a paid driver from Venezuela who won the race, by the way. Pasta. That's the main difference. So they didn't like that situation at all. And so I'm just a mess... Messenger. You know? Don't... And I'm gonna go back to William. So eventually, they came back and said, we think our model, corporate running a Formula one team doesn't function. Because this... It needs to be much more entrepreneurially led. You need to empower... You need to be empowered to take decisions on the spot, and we want you to run this. And I said, I need to pinch myself because, you know, being the head of Mercedes Motorsport is probably one of the best jobs in the industry other than being Ferrari, the Ferrari guy. And and I I had to say no because I was a shareholder in Williams, and I have been always an entrepreneur. And they said, funny that you say that because we've just bought 40% of the Abu Dhabi sovereign fund.