· David Senra, Alexander Taubman
[00:00:00] S0: Hold on, I got to tell you a funny story about that. So, I've spent a few times with a lot of people that know these European private family dynasties, right? The companies aren't public. They don't seek publicity. They're essentially hidden, but they're extremely wealthy. And somebody who told me one of their family mottos was, "To be, to not be seen." So we want to be, but not be seen. I just love that idea. [00:00:00] S1: Yeah. I think, look, I was very inspired growing up in Michigan, in the Midwest. There's some unbelievable entrepreneurs and businesses that have been built that are worth billions of dollars doing unsexy things like construction or distribution or whatever you might. And people are very low-key. They're totally normal people. So our view is we want to be the best possible partner to those kinds of business owners. They've built, in many cases... Amex GBT is a great example. It's an iconic franchise. It predates the invention of the airline. That's the brand that we want to sort of partner with and let them shine. Long Lake is just here to be sort of a deep, long-term, permanent capital partner who's going to help you bring AI into the company, make your team members faster, better, smarter, make your customers happier. [00:00:00] S0: But say specifically why you think there was such an opportunity even three years ago to bring AI into the real world.
· David Senra, Alexander Taubman
[00:00:00] S0: But say specifically why you think there was such an opportunity even three years ago to bring AI into the real world. [00:00:00] S1: The sort of diffusion problem is a really hard problem. Several years ago, there was this question of, will intelligence work? And obviously it's worked, and we're seeing that now, and to crazy levels and faster. And I'm super AI-pilled, always have. That's why I left my old job to co-found the company. But it's happened even better and faster than even I expected. It's no longer a question of does the technology work. Now it's a question of now the markets are very concerned about how are we going to finance all this? And I think the real answer is we need to demonstrate... You can borrow against future cash flows in order to finance this stuff, and people are now just running into the trillions of dollars of investment to be able to scale the models to really where we want them to be in 10 or 20 years. In order to finance all of that, you need to see a return in the real economy. So actually, one of the things Long Lake was formed to do is actually take those frontier innovations, deploy them into really high ROI use cases, taking away toilsome work from our team members, mundane work, data entry, process-oriented stuff that really a lot of people don't like to do. And taking that away and freeing up human capacity for more impactful work, dealing with the customers, focusing on growth, that's super high ROI.
· David Senra
[00:00:00] S0: Focusing on growth is really important. People think, "Oh, you take some technologists, match them with some PE guys. They're going to buy a bunch of existing businesses, gut it, replace all the humans with AI, essentially cut costs, and that's the value creation." And that's not the thesis of what you guys are actually doing. You actually think that, and you're demonstrating that you're increasing revenue growth and you're actually not cutting people.
· Alexander Taubman
[00:00:00] S1: Yeah, absolutely. So this is a contrarian take that we had in the beginning as well. We're very positive sum. We really believe in this concept of AI abundance, and if you look throughout history, most innovations that lead to big productivity gains are actually good for the economy, good for wages, good for consumers. And we think this is just a sort of like a mega productivity gain. It's going to be good for everybody. And so what we're seeing in our companies, and we started in HOA management, and we've now bought, I think, 20-something companies in that space. We've bought close to 40 companies now in total across this. Travel makes it our fifth service line. And what we're seeing across industries and in our businesses that we've owned for longest, like HOA management, what we're seeing is significant job growth. We're actually adding heads. Because if you think about it, if your people are 50% more productive and can handle 50% more clients and with better customer service, so you're retaining customers better, you're growing faster, so the people are much more valuable. Do you want more of them or less of them? You obviously want more of them. It's like a salesperson. If you have a salesperson with AI that's now doing 3X quota, do you want to have one-third the salespeople? No, you obviously want as many of those people as you can have. And so I think this is all going to be very good for jobs and very good for US GDP and the economy. And that's a big part of our mission as well, is basically bringing this positive sum AI revolution to the economy, 20 trillion plus dollar services economy in the US and obviously millions of people.
· David Senra, Alexander Taubman
[00:00:00] S0: Wait, so you said you're in five different verticals now? [00:00:00] S1: Yeah. [00:00:00] S0: What are they? [00:00:00] S1: So we started in homeowner association management, which is a actually really big business that people don't pay a lot of attention to, but there's tens of millions of homes managed in association. And so we're providing a now market-leading service, one of the fastest-growing companies in that space. We then moved into HR services, specialty tax, infrastructure services now is a big area for us. So we have architecture, engineering. We're looking at other sort of businesses in that broader infrastructure space, and now travel.
· David Senra
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