· David Senra, Alexander Taubman
[00:00:00] S0: What about John Malone? Anything from him? [00:00:00] S1: Yeah, I mean, he was amazing. I was studying him at Oaktree, and actually we invested in a number of his stocks over the years. I think just creativity on structuring and creativity on financing and things like that. He was kind of top of his class. And another thing, I read in "Cable Cowboy" that he was a very first principles thinker, which he would do, like ask why five times, get to the root cause. Like, he was a big root cause thinker, and that's something we try to also embody in our investment process, now capital allocation process. We want to always understand why is a business good business? Because we do plan on doing... You talked about permanent capital. We want to be doing this for decades. And so it's actually very hard to think out 20, 30 years on what's going to still be a great business, especially now. [00:00:00] S0: Yeah, especially now. [00:00:00] S1: So first principles thinking about why a business is going to be great post-AGI is really important. It's maybe the most important thing in capital allocation right now. And I think stock selection, they used to say it's a stock picker's market, meaning there's going to be winners and losers, a lot of dispersion. I think there's going to be a lot of dispersion in the next 20 years between the best assets and mediocre assets in terms of a post-AGI, you think about how industries are going to shift. [00:00:00] S0: The gains of the winners is going to be even more extreme in a post-AGI world. Is that what you mean?
· David Senra, Alexander Taubman
[00:00:00] S0: The gains of the winners is going to be even more extreme in a post-AGI world. Is that what you mean? [00:00:00] S1: Yeah, I think there's just going to be a lot of dispersion. I think the gains to the winners is going to be extraordinary. [00:00:00] S0: Yeah. [00:00:00] S1: And businesses that are well-positioned, that are high-quality services, that are going to preserve their place in the ecosystem and expand it, which we think our businesses all fit that mold, can become orders of magnitude more valuable. But businesses that are lower quality, easier to disintermediate, aren't providing a sort of enduring value-added service, and really are more of like a tax, some of those are just going to go away. [00:00:00] S0: Yeah. [00:00:00] S1: And that's good for the economy, by the way. Less friction is good. But I think thinking through businesses holistically and sort of thinking about what makes a business sustainable or not, enduring or not. [00:00:00] S0: Have you guys bought any businesses that were weaker than you expected? And have you sold any of them, or no? [00:00:00] S1: No. We've never sold anything, and we don't plan to ever sell anything. You never say never. [00:00:00] S0: Yeah, of course.
· David Senra, Alexander Taubman
[00:00:00] S0: Yeah, of course. [00:00:00] S1: It's more about are we adding value to the business? Is it a business that Long Lake should be in? I think that's the bigger question. If you're going to invest all this time and energy to get into a great business with a great team, build that partnership, build nexus to deploy into that space, create the best technology in the space, the best people, the best team in the space, and then you're going to sell? You want to let it compound for a long period of time. [00:00:00] S0: So wait, I just had a thought, and I don't even know the answer to this question. You guys are acquiring businesses. Have you guys had any acquisition offers for Long Lake itself? [00:00:00] S1: Everybody knows we're not a seller, so we haven't really entertained or had any of those conversations. My plan is this is what I want to be doing forever. [00:00:00] S0: Okay. I'm on a run right now, so a bunch of these episodes aren't even out. Thorsten from Helsing, he sat in the same chair, and he's legitimately mission-driven. He's just like, "I'm building a great European defense company because..." He's already rich. Like, he was rich when he started the company, and he's just like, "Because Europe has to be able to protect itself too." This is a mission-driven company. He's like, "We're not for sale for any price." Scott Wu, I push him on this a lot because billions are getting thrown at that guy's face. [00:00:00] S1: Yeah.
· Alexander Taubman, David Senra
[00:00:00] S1: Yeah. [00:00:00] S0: And he's like, "Nope, not doing it." He has this great line. He's like, "Oh, we'd sell if it was the maximally ambitious thing to do." [00:00:00] S1: Yeah. [00:00:00] S0: Which is obviously- [00:00:00] S1: Great line. [00:00:00] S0: Yeah, it's a great line, which is obviously his way of saying no. I'm even going to tell you some of the conversations I've had with him on the phone, which I was like, "I can't put this in the podcast," because he's definitely friendly UI, but conqueror spirit underneath that friendly UI. And then I just talked to Zach Dell. And I was like, "Is this the last business?" Because what I love about Karim and Eric from Ramp, I asked them both the question, like, "This is our last business." [00:00:00] S1: Yeah. [00:00:00] S0: It's not like I'm going to fucking sell this and start another company. Like, this is it. This is the last one. And Zach Del had the funniest thing because he wants to build something, like you said, he's relatively young. He's like, "I want to work on this for 50 years and go see how far I can take this thing." And he goes, "And do you think I'm doing this for a paycheck?" He's like, "Think about my background." I was like, "Yeah, good point. You're not doing it for a paycheck." So, what would be the point of selling it again for more money that you're never going to spend anyways? So I just love this idea. But we never closed the loop on your maximum ambition, which is like, you guys could be building a trillion-dollar company.
· Alexander Taubman
[00:00:00] S1: I think we can, yeah. If you just think about the power of compounding, and this is one of the reasons that long-term thinking and not being a seller is so valuable, is that it's amazing if you just kind of can keep getting a little bit better every year, how that can add up to, well, then you're tripling the value of these businesses every five years. And if you just keep doing that for 20 years, you're a trillion-dollar company. I'm not trying to make that sound easy. That's really hard to keep executing that way over a long period of time, over decades, and avoid mistakes and continue to retain the best talent, best technology talent in the world, and deliver the best customer service, customer excellence in the world across these service lines. That's really hard to do. But if you do it for long enough, the pie here is just extraordinarily big. We're talking about the whole economy, basically. This is like the largest TAM imaginable. And so if we can just keep executing and doing what we're doing for a long enough period of time, I think the potential is staggering.
· David Senra, Alexander Taubman
[00:00:00] S0: Well, I have to say, as somebody that's been there, been able to see this from almost the very beginning, I remember when the first time Long Lake got name-dropped on a podcast, and people were like, "Oh, no," because it was something relatively stealth, even though you guys were killing and buying everything and doing everything. I know for a fact and firsthand knowledge that one of the 10 best entrepreneurs in the world, you got their attention when you did the Amex deal. And they were like, "Hey, what's going on with Long Lake, and how do I get involved in this?" So just as a friend and a fan, it's been wonderful to see you, man, and I really appreciate you trusting me with coming out and telling the history of Long Lake today. [00:00:00] S1: Thank you so much. Honored to be here. [00:00:00] S0: Yep. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review, and make sure you listen to my other podcast, "Founders." For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through "Founders."