Buyers and Builders
00:11:36 · Mikk
Although Bezos didn't ultimately acquire the company, Marc was saying on a panel that Jeff really helped create momentum around this specific transaction and they were eventually able to sell this business. Listening to Marc's story, I wouldn't recommend following executives into bathrooms, but you have to appreciate the extraordinary determination behind that story. That is the lesson here. Maybe you're chasing some of those people. One thing is you can just send a cold email, but I mean, everyone's doing that, or I hope they do. But if you really want to go an extra mile, you should probably look where their office is and just try to make it happen, try to meet them in person. Marc calls it creating your own luck. I think that phrase is often misunderstood. It's not that hard work guarantees success. It doesn't, but you can dramatically influence how many meaningful opportunities you create by the people you reach out to, the relationships you build, and the amount of preparation you're willing to do. I mean, Marc Stories, that's why I want to share those. One is just be super aggressive. Next, I want to share a story which describes all this pretty well. This goes back in time when Marc was studying at Stanford Business School. He was able to secure an unusual internship at the investment group of Santa Barbara. What they did, they gave him a million dollars to invest in public markets over ten weeks and he would receive half the profits. But before he started, the firm sent him 30 books to read. During that summer, Marc found an interesting business, which is called Mercado Libre. It's a Latin American online marketplace, which back then was preparing to do an IPO, preparing to go public. He liked the founder, Marcos Galperin, the massive opportunity, the network effect and the potential for the company to become something extraordinary. So he met the founder and became even more convinced that it was going to be an exceptional investment. What Marc did, he bet all the million dollars into a stock of Mercado Libre. Obviously, once he did that, the mentor reminded him that diversification was a thing.
00:13:45 · Mikk
Mercado Libre went public at $18 per share and the stock very, very quickly rose to around $80 His position became worth approximately $4,000,000 which itself pretty extraordinary internship story because Marc was sharing that just five days before his net worth was negative because he had this massive student loan, which he had to repay. Then five days later, he's about to make a lot of money because he invested 1,000,000 and this has turned into 4 and he was promised to make half the profits. Marc said on the stage as well, like, that's how you do it. Obviously the audience and himself as well, everyone were just laughing. The next idea is Marc is big one, and this is find people who've already done it. He shared the story of David Bonderman, the legendary co founder of TPG. Marc was a junior employee and wanted to build a relationship with Bonderman, but there were many layers between them. You can imagine one is as junior as one gets, another one is the OG of the industry and senior in his firm. There's just so many layers between them. But one day during the company off-site, he overheard Bonderman discussing a hotel he wanted to acquire. And Marc, what he did, he approached him and offered to work on the transaction. The funny part Marc was saying on a panel as well was that he didn't know anything about hotels, but he, again, as he has been doing previously, I can figure it out. He spent the following year working on the hotel transaction and largely during nights and weekends alongside his normal work. And he even remembers spending Valentine's Day reading these hotel documents. He was saying on a stage as well, the wife wasn't very delighted about this. But eventually the transaction was completed and Bonderman offered to reward him financially. But Marc, what he did, Marc declined. He asked for an IOU instead. And years later, when Marc had the opportunity to bring outside capital into his investment activities, he called Bonderman and asked him to invest $5,000,000 which Bonderman agreed. And Marc joked that he'd clearly asked for too little. The relationship went far beyond that one single investment. They became long term partners and friends. And here we go. There's a wonderful lesson for mentorship here. Marc didn't start by asking for an incredibly successful person to become his mentor. He started by finding a way to be useful.
00:16:09 · Mikk
He helped him accomplish something first, build trust and develop the relationship that became valuable for both of them over their long careers. And I have to bring up this, Marc said so many times, find people who have done it before, call them, write them big. Because if you're maybe buying your first company, there are people who have already bought 10. If you're building a roll up, there are people who have successfully built platforms and others who have made expensive mistakes already. If you're trying to raise capital, there are investors and entrepreneurs who've already navigated the process. Why wouldn't you learn from them? You want to be, how was the saying? You don't need to do all those mistakes yourself. You can just learn it from others. One of the most unappreciated forms of leverage in business is simply being willing to ask intelligent questions of people who know more than you and who have experienced more than you. Yes, you may have to create your own path in life, but you don't have to figure out everything alone. I say that again. You may have to create your own path in life, but you don't have to figure out everything alone. When he was building Dragoneer and raising money from institutional investors, they often struggled to categorize his strategy. Was it the hedge fund, private equity, growth equity, public markets, private markets? It didn't fit neatly into the existing categories. Marc would joke that they needed to create the new category called miscellaneous. He makes the point that some of the most attractive opportunities exist in that miscellaneous category before everybody else has figured out how to define them. Again, fascinating observation because so much of business is built around copying models that have already worked and there is enormous value in learning from successful investors and entrepreneurs. But if all we are doing is copying what everyone else is doing, where does our advantage come from? Sometimes the opportunity is in, let's take an overlooked industry or an unconventional acquisition structure or a business model that doesn't fit neatly into established category. Sometimes you have to invent your own approach and perhaps that's the thread that connects all of Marc's stories. Number one, he didn't grow up with a kind of background that made an investment career an obvious path.
00:18:32 · Mikk
Number two, he didn't fit the traditional recruiting model at TPG. And number three, he didn't want to compete with 500 other investors using exactly the same information. But at the same time, he learned to be selective. He was able to seek out exceptional mentors and he was able to recognize those great businesses putting together these extremely complex structures to get the deal done. So to summarize, can we say you shouldn't let other people define the limits of your ambition? Because whatever you're trying to build, there will be situations where the answer isn't very obvious. Maybe you're trying to buy your first company and don't have relationships or capital you'd like. Maybe you are building a roll up and competing against much larger firms. Maybe you're dealing with an acquisition that hasn't worked out as planned, or maybe there's simply something you've wanted to attempt for years, but you've convinced yourself you aren't quite ready. I mention all those things because I hope these stories encourage you to question some of those assumptions. You can always reach out to people you admire. You can learn from people who have already done what you're trying to do. You can look for creative ways to solve problems. And don't assume that the resources you currently have define everything you're capable of accomplishing. Important, I've been taking notes here. Be selective, protect your capital and your reputation. Choose the right people and remember that doing more isn't always the same as doing better. And here I'm referring to the amount of deals they've done. They haven't done hundreds of acquisitions. They've been just finding those exceptional companies at the right time on a fair value, then they were just going all in. And perhaps most importantly, remember Marc's idea of the inner flame. Sometimes it's one you have to create. And before I wrap up, I want to make one invitation. If you're building an acquisition platform, actively buying companies or thinking seriously about starting that journey soon, I'd love to hear from you and what you're working on. And equally, if you're sitting on the other side of the table, perhaps you're an investor, family office, a high net worth individual, or just an allocator looking to get access to exceptional people building businesses in the lower middle market, please know this, I'd love to connect.
00:20:56 · Mikk
Or perhaps you're one of the rare people who can really make a difference in this space. You're a great CEO, CFO, head of M and A, or just an operator who wants to partner with an ambitious entrepreneur and help build something extraordinary. Same here, please. I'd love to meet you too. We've been doing this for three and a half years. We've been connecting with, learning from, building relationships across this ecosystem, and I generally feel like we're just getting started. One thing I've learned is that the best relationships are often built long before there is a transaction, long before there is an investment or just an opportunity to work together. Whether there's something we can do together today or perhaps a few years from now, it would be great to get to know you while we're still young and early in this journey. You can reach me on X, on LinkedIn or directly by email. Tell me a little bit about yourself and what you're working on and I hope at least one of these stories makes you think a little differently about whatever you're trying to accomplish within the next six, twelve, eighteen months. That's my sincere wish that this is true. Thanks for listening to Buyers and Builders, and until next time, keep building.