· Alexander Taubman
[00:00:00] S1: Exactly. Sometimes we like to say, I think the greatest gift that you can have in a partner is someone who makes you more ambitious. And I think our partners today really make us more ambitious. And when we started the company, we talked a lot about how if we do this right, we can really help change a lot of industries and change the economy, and it sounded kind of lofty. But now that we're operating in 15% of the services TAM and with tens of thousands of team members, it's starting to feel like it's coming alive. And so I think that's really exciting, which means we're able to... I remember in the beginning, convincing some of our earliest founding partners to leave their sexy jobs in technology. I was talking to people's parents about why they should drop out of school and come work on Long Lake and stuff like that. And it was a long process because I had to explain all of this, but now it's getting much easier. So, people have seen what we're doing, they're inspired by it, they want to join and be part of the mission. And so I think the team's getting better and better every day. Our rule is the incremental hire has to make us better, raise the average. And we've been able to do that, which is really extraordinary. And so, team's getting better. We're getting much more experienced. We've now bought close to 40 companies across five industries. We've built a process. We built a playbook. We have the Nexus platform, which we can redeploy. So our ability to drive impact is better. Our team is getting better. And so I do think our ambition level of, if it's not Long Lake that buys Amex GBT, who should it be? It should be us. That's kind of how we think about it. And frankly, we're thinking there could be other big things we can do. We're not going to stop, obviously. We want to keep doing this for the next 50 years.
· David Senra, Alexander Taubman
[00:00:00] S0: Give us some details about the size of the business today. [00:00:00] S1: We haven't disclosed valuations yet, but- [00:00:00] S0: We don't need to [00:00:00] S1: ... you'll get the first exclusive at some point. But I can tell you that including Amex GBT's big business and the scale of our other businesses is also compounding and getting meaningful. And so, if you combine, we're expecting to do over four billion of revenue next year. It's amazing revenue base. It's very stable, 100% dollar retention type business. I mentioned we have a lot of employees now globally, and we're very profitable, as you highlighted, because our strategy is to buy established, profitable businesses that already are making 20, 25% plus EBITDA margins. And so our view is we actually never need to raise capital again, which is nice. We're going to be generating enough cash flow on our existing assets that we could compound just on internal reinvestment for decades to come. [00:00:00] S0: Yeah, but you have a line of people out the door. [00:00:00] S1: We've had tremendous support and interest from investors to help inspire us to do bigger and bigger things. One of the nice things about being able to access capital is it allows us to think bigger and move faster. [00:00:00] S0: I was at dinner last night with Rick and Zach, your main partners, and they made the good point where a lot of founders fuck up because they optimize for valuation. And Zach and Rick made the point, it's just like, "Well, if we're going to be working together for 20 years, this is a long-term partnership."
· David Senra, Alexander Taubman
[00:00:00] S0: I was at dinner last night with Rick and Zach, your main partners, and they made the good point where a lot of founders fuck up because they optimize for valuation. And Zach and Rick made the point, it's just like, "Well, if we're going to be working together for 20 years, this is a long-term partnership." [00:00:00] S1: Mm-hmm. [00:00:00] S0: This is not a bidding contest. It's just like, who can you work with? [00:00:00] S1: Yeah. [00:00:00] S0: And who actually, to your point, not only do you get along with, you actually want to do life with, because we're all going to have more money we can spend anyways. So it's like, who do you get to spend your time with? Shouldn't that matter? And then the second part of that is, are they actually helping you on your mission and increasing the size of your ambition? [00:00:00] S1: Yeah. No, listen, I 100% agree. I think it's about having the right partners. And so, I mentioned kind of growing up and in our family in the real estate business, my father and grandfather had partners for 50 years in some of their real estate deals. And so being a partner was almost higher than being family. It was like someone that you treat with the highest respect.
· Alexander Taubman, David Senra
[00:00:00] S1: Yeah. No, listen, I 100% agree. I think it's about having the right partners. And so, I mentioned kind of growing up and in our family in the real estate business, my father and grandfather had partners for 50 years in some of their real estate deals. And so being a partner was almost higher than being family. It was like someone that you treat with the highest respect. [00:00:00] S0: You guys are loyal guys. This is what I like about you. You know what I mean? You're fucking way too humble, and you're always going to be like that, so nothing I'm going to tell you today is going to change that. But there's an army of people trying to put more money into your company that would probably you'd get obscene terms. And it's just like, "Yeah, but I like these guys. These are already existing partners." My version of this is every fucking company comes and is like, "What you have with Ramp, we want that, and we'll pay double." And I'm like, "You think this is like a bidding thing?" It's like, these are some of my closest friends. They're the easiest people to work with. Fucking they backed me, and at the time, it was the biggest deal in business podcast, is the partnership we had. This is just because they had intuition that this is fucking valuable. You think I'm going to exchange and destroy that fucking relationship for money? [00:00:00] S1: Yeah. [00:00:00] S0: Come on.
· David Senra, Alexander Taubman
[00:00:00] S0: Come on. [00:00:00] S1: Exactly. I agree. It's one of the things we're super grateful for. When we first met with Hemant about this, and he was our GC-led, our first round of outside capital, gave us our first 100 million bucks, basically, when... Remember, this was three or four years ago. That was a lot of money back then. And by the way, they've given us a lot more since then and been incredible partners. From day one, they got the thesis. They believed in us almost in a way before we even believed in ourselves. And that's such a gift that we'll always be grateful for. And I just want to keep working with these guys, our investors that we have. And obviously, we like bringing more people into the mix, and there's been some extraordinary people that have come in recently, like many great people that you know. And so we want to keep building that. I do think continuing to kind of expand our world a little bit is very valuable. Each time new people come in, they add a lot of value to our thinking and all that. But yes, it's about much more than capital. It's really about how do they help us execute, and the biggest way they help us execute is by believing in us and inspiring us to move faster and think bigger. [00:00:00] S0: Does Long Lake have to be public? [00:00:00] S1: It doesn't have to be public, no. [00:00:00] S0: But you think it will be? [00:00:00] S1: I think the maximally ambitious path is to be public. [00:00:00] S0: Why? Why is that maximally ambitious?
· David Senra, Alexander Taubman
[00:00:00] S0: Why? Why is that maximally ambitious? [00:00:00] S1: Because I think we'll have ultimately deeper and lower cost of capital, and just the public markets are the biggest stage in terms of deepest pools of capital. And I do believe, and one of the things about some of the great holding companies and people like Henry Singleton and others, and John Malone, they've all proven this over time, is that if you execute over a long period of time, you earn a currency that trades at a lower cost of capital, and then that allows you to do even more ambitious things. And so by getting access to that over time, we can think even way bigger. So I think there's some, potentially to scale our impact to even larger and larger businesses and industries, over time I think having that currency will be very valuable. [00:00:00] S0: What else did you learn from Singleton? You and I have talked about Teledyne a bunch. [00:00:00] S1: Yeah. I mean, he's probably, like of all the holding companies, one of the people that's inspired us the most. And first of all, he was a math genius. He was on the Putnam team at MIT. He was in Office of Special Services. I mean, you sent me the book, I think- [00:00:00] S0: Yeah