· 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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· David Senra, Alexander Taubman
Okay, so I hang out with you guys a lot. We have a lot of dinners. I basically drop in on your office every time I'm in New York. I want to talk about the people that you've like pattern matched off of or that have inspired you. I know we've talked about some companies in the past, too. But people are like, "Okay, wait, this guy founded a company three years ago. How the hell did he just buy a 110-year-old company for six and a half billion dollars?" We'll talk about your crazy revenue growth. You're obscenely profitable, and I mean obscene, the deepest love. I love obscene profits. What I understand about you, just from being your friend, is that you kind of have a map of all... How do you think about this? It's like, just the same way that Buffett, you couldn't tell him about an asset and he'd be surprised, like, "Oh, I didn't know I wanted that asset." He's like, "No, I kind of like mapped out everything, kind of just waited for the right time if I could buy that company or could buy that asset. I already knew about it. I already studied it." You guys do the same thing, correct? [00:00:00] S1: We do. [00:00:00] S0: Okay. Why? And explain this. [00:00:00] S1: Yeah, so we want to be doing this for a long time. I'm still relatively young. I like to think I'm still young. [00:00:00] S0: You are.
· David Senra, Alexander Taubman
[00:00:00] S0: You are. [00:00:00] S1: And our friend Zach tells us we're going to live to 150, so hopefully I could actually be doing this for at least 50 years, maybe 100 years. So in the fullness of time, we want to bring Long Lake and we want to bring AI to- Huge swaths of the economy. We're now operating in roughly $3 trillion of the $20 trillion TAM, so-called 15% of the economy in the US, and now we're global. And we just want to keep adding to that. So over time, we'd love to have a market-leading business and platform in many more industries. But there's moments in time when you can find a great asset with a great team at the right price, and then there's other times where certain industries are not attractive for long periods of time. And so we take a prepared mind approach, where there's this sort of our top 15 or 20 industries that we think are interesting for our strategy at any given time. We're constantly force-ranking those industries based on what we learn, based on how market dynamics are evolving. And the best way to learn about is look at deals in the space. And so we've built a really powerful sourcing engine where we're seeing 4,000 or 5,000 deals a year across all these sectors, and we'll literally do one or two new industries per year. So it's a big funnel, very tight filter, and I can talk to you about how we select industries and assets.