How To Pitch Millennial Investors with Lee Caraher
Posted by John Livesay in podcast | 0 comments
Listen To The Episode Here
Episode Summary
Lee Caraher is a CEO and an acclaimed communications strategist, known for her practical solutions to big problems. She started Double Forte as a new kind of communications firm, designed to work with good people and tell their stories. She is the author of Millennials & Management and discusses on today’s show how the older generation can connect with a millennial team member or be able to pitch millennial investors.
How To Pitch Millennial Investors with Lee Caraher
Today’s guest is Lee Caraher who wrote a wonderful book called Millennials and Management, The Essential Guide to Making It Work at Work. Lee has over 20 years’ experience in Silicon Valley producing integrated work teams that get a great deal done and have fun at the same time. She’s known as a communication strategist for practical solutions to the big problems. She founded Double Forte in 2002 to work with good people doing great work for good companies. Her clients span from well-loved brands and high tech startups not only in San Francisco Bay Area but Boston, New York and even Europe.
She struggled with trying to figure out how to work well with the Millennial clients, and how to pitch the Millennial investors. More than half of her own staff is under 32. She wrote this book saying, “I was fed up with the negative stereotypes that Millennials are burdened with,” that they’re determined to figure out how to create a culture where Boomers and GenXers and Millennials can all thrive together. Lee, welcome to the show.
Millennials and Management by Lee Caraher
John, it is so great to be with you. Thank you so much for having me.
I love people who have fun at work and have high energy and like to solve problems. That’s what the key to getting funded is, is what problem do you solve and is it a big enough problem that I could get a big return on my investment. That’s what our audience loves to hear. Before we get into how you started Double Forte, obviously you’re an entrepreneur yourself. Take us back to your experience in being an entrepreneur even before Double Forte.
Before Double Forte, I worked for InterPublic, a very large, multinational media firm. Before then, I was at Sega of America, the video game company. Once Sega of America was about a billion and a half dollar company, I left Sega to go to InterPublic Companies in the dotcom boom. I worked with, I can’t even count how many startups and took more than 20 public and all that stuff and got them acquired. Then the boom crashed.
In 2001, at 9/11, I decided … Really, 9/11 was a big moment in my life when I decide that I didn’t want to be in the big firm anymore. I really wanted to be able to craft what was important to me and create that workplace that meant that I was doing what I wanted to do more than flying around the country and waving my magic wand. I had 750 people when I was in that company. They were very generous to me but that really crystalized that wasn’t for me. It was for somebody else.
My intention was actually to take a whole year off. I had two young children. I went to yoga and I organized my house and I did all this stuff. I’m the chief baking officer in my house. My husband is the chief home officer. That’s what we call each other. I basically drove my husband crazy. With the color coding and the flower arranging, which people who know me are like, “You flower arrange?” I flower arrange. I say that I aspire to put the flower in the right place. I asked for books for the holidays. It was terrible. Oh my gosh. I had three glue guns. It was just destructive.
I drove my husband crazy and he’s like, “We’re not going to make it if you don’t use your time outside of the house.” I was always been entrepreneurial. I’ve always been very entrepreneurial. I started two companies for InterPublic Company. At Sega, I did all this entrepreneurial stuff as well. I was pretty risk averse.
In 2002, it was clear that I need to go back to work. I wasn’t going to last a year glue gunning everything, that’s for sure. I am the breadwinner and we had all these unexpected expenses, blah, blah, blah. I was looking for jobs. I was in the running for two very big jobs. Then my mother got sick. I live in San Francisco and my parents lived in Wisconsin. My mother got sick, she got diagnosed with 4 months to live. It was very clear that I was going to go be with her. I couldn’t take either of the jobs because I was going to go be with my mom when she needed it.
Out of necessity, I created my company. I had to bring home the bacon and I had to be in Wisconsin and my home is in San Francisco. In my kind of work, when you’re in house, you don’t really have the freedom to be wherever you want to be, even in today’s world. I decided that I really like this job that I do. I didn’t like how it gets expressed in a large publicly traded media company, but I love what we do. Figuring out what to say and who to say it to and helping people really understand their story and how to convey it because people aren’t really good at it.
When you’re living close to an idea, it’s harder and harder to explain to someone who’s not close to it. That’s when I decided to start Double Forte. Here we are 13 years later. I guess I’m now fully fledged entrepreneurial because when you’re an entrepreneur, what you start and what you are in are probably two very different things. A plan is wonderful but really the goal is more important.
Before Lee could figure out how to pitch millennial investors, she had to figure out her company plan and goals.
I like that.
Plans should be in sand but goals need to be in concrete. You react to or respond to what the conditions are. We have probably reinvented ourselves four times since we started in 2002 to respond to the economy, to what the world is doing in communication, to be competitive in the situation and to who we want to serve. Today in 2016, we’re going to be 14 in a few months. I’m not sure I thought that when I started but here we are. It’s new every day, which is what keeps me interested.
“A plan is in sand but goals should be in concrete,” that’s a great line. That’s really helpful. Let’s take a second and take a little deeper dive into what you said earlier. Since you’re such a master storyteller and crafting something, especially if it’s techy, you do it for the media but the same skills apply for crafting a pitch for investors.
[Tweet “A plan is in sand and goals should be in concrete.”]
Do you have any tips on how to take something that’s fairly complicated or techy? How do you craft that for the media so the listeners could think about how they could do that when they pitch millennial investors or otherwise?
I think the most important thing in crafting your story is to frame your story with a problem and to describe the problem and the scale of the problem quickly, upfront. That’s number one. What’s the problem, what’s the scale of that problem? Number two, what is your inspiration to solve that problem? Number three, what is your approach to solve that problem and how does it differ from what’s in the marketplace today?
If you can be very clear about this is a problem and it’s big, it’s worth so many dollars, number one. Number two, that you have a passion to solve it and why you were inspired to do it. I think investors are looking for people who are smart, who are business savvy but who are just compelled to do something, to get it done and they have a big passion for that problem they’re solving.
[Tweet “Good money supports the passion of the founder.”]
At least good money. In investment, there’s bad money and there’s good money. It’s all money. It’s all dollars. Bad money, from my perspective, and I’ve had a lot of clients get bad money, bad money is money that, just looking for that quick ROI, not really there to serve and help you get there, not a connector. Mostly just criticizing and diverting you from the goal. Diverting you from the goal and saying, “That wasn’t your plan.” I’ve never seen a plan that executed 100% ever in my career because you just can’t control everything.
The purpose of a plan is to know where you should be so you can try and get them back to the point. In my experience, good money is from people who support the passion and the brains of the founders. If you can scale the problem immediately. It should be some amount of dollars there. Number two, why are you inspired to solve this problem? Number 3, how are you going to do it? What’s the innovation? Scale comes in innovation. Scale doesn’t come necessarily in just getting more efficiency. Scale comes in innovation. Investors are looking for innovation and scale to get their ROI out in a productive way.
[Tweet “Scale comes in innovation, not efficiency.”]
That’s another great one. “Scale comes in innovation, not efficiency.” I love that. It’s all about finding the good money that supports the passion of the founder. That goes to the whole point of whether you’re creating a team of people who work with you or investors, they all need to fit into the same culture. That’s the perfect segue into your expertise around Millennials. Let’s just define for everybody exactly how old Millennials are right now.
Millennials in 2016 will turn 16 to 36. It’s 20 years. It’s a big band. I break them down into three sections. The first section is the oldest section, 28 to 29 year old to 36 year olds. These people came into the marketplace after 9/11. As adults, they’ve never been to the gate to pick up a family member or a girlfriend or a boyfriend or a friend. They’ve never done that at the airport. They’re used to giving their IDs to get into a building. Their idea of privacy and security is very different from their older colleagues.
The next group is probably 23 to 28 somewhere in there. These people came into the workplace, into the work market after 2008, 2009. This is the group that’s had the toughest time finding work commensurate with their education. There are still Millennials trying to catch up to where they thought they should be, given their education and the economy.
The third group is going to be 16 to about 20. People who are in school. High schoolers and college students. This group of people learned entirely different from that oldest group. The iPad did not exist for the oldest group. Now, schools have iPads for every kid and they’re looking at videos at night and doing their homework in the classroom during the day. They learned very differently. They’ve had very different kinds of technologies.
The whole generation absolutely benefits from being technology sevant for sure. They’re digitally native. They all benefit from that. The youngest group is probably going to benefit the most.
In knowing how to pitch millennial investors, it’s key to recognize the educational environment they grew up in.
It’s so funny because in business, really luxury high end companies do well and really low end, the Walmarts of the world. It’s that middle ground. Same thing with restaurants. Fast food or really expensive restaurants and then that middle ground always seems to struggle the most. The same thing is true with the way you broke up this Millennial age group. That that middle ground is struggling to get where they need to be. I’m fascinated. I never thought of it, the 28 to 36 year olds never have dropped people off at the airport and all that stuff because of 9/11, right?
Right.
You just get yourself there. I’m not going to wait in line to pick you up. It doesn’t mean I don’t love you. It’s just that they’re not going to consider it.
There was a time, in so many airports around the country, than you couldn’t even get to the airport unless you showed your boarding pass. Definitely have never been to the gate, have never gone through security to get to the gate so they could say goodbye at the gate or welcome someone at the gate, ever.
Those emotional hellos and goodbyes.
Lee has been a speaker at The White House on millennials in the workplace.
You told me before we started the show that you spoke at The White House about this. Tell me about that experience. How did that come about?
They called me.
Did you think it was a prank call?
I did. In fact I thought it was a prank call so I said, “I’m very happy to talk with you. I’m on my way to a meeting. If you can email me with what you need and what the dates are, I will be happy to call you back.” Sure enough, an email came through from @whitehouse.gov.
I was doing a key note in DC about Millennials in the government. I think some of their people were there. They have seen the roster and they invited me to come. It was an amazing experience. That is a dedicated group of people who are doing just … No matter where you are in the political spectrum, the people who are in The White House, working every day for us, they’re just doing tremendous work.
I gave a workshop mostly about interns. They have over 150 interns at a time. How to productively work with interns so that everybody benefits. No matter where you are, has nothing to do with The White House, interns today, a lot of companies start with interns. You try them out before you buy them. Not The White House. White House works very differently. In commercial world.
Interns often show up into the business world just ready and go in that business pitch with you. First, we need to change your wardrobe. You don’t get to go to the top sales guy Day 1. There’s just a lot of expectation, false expectation that have been set by the media and by parents and by education I think about what an internship is all about.
I’ve got lots of stories in my book about interns. Interns, they’re the lifeblood frankly of the future because Millennials who are getting out of college, they’re super smart, super smart, super capable. They have a lot of energy. They want to matter. They want to matter immediately. You have to figure out a way for interns to matter and not go in to, not drop down into your boss’s desk and say, “Hey! What’s going on?” that is normal. That happens all the time.
Protocol.
How I work with companies who use interns is just helping them set expectations before they show up and explain what you’re going to get out of being an intern in the company.
You’ve been called the Millennial Whisperer. How did you get that title?
Oh my gosh. My friend called me that and she tweeted it out. She goes, “Lee is the Millennial Whisperer.” I was like, oh my gosh, that’s a little pretentious. I can’t call myself that. All of a sudden, all my friend would call and say, “We have this Millennial. We have a problem with him. I don’t know what to do.” I would help them figure it out, like the Dog Whisperer I guess. Cesar, right?
Right. I love it.
It just picked up from there. I prefer the Millennial Champion because a lot of what I read when I was researching my book … The book came about because I failed miserably at hiring and keeping Millennials. I hired six Millennials, or my company did hire six Millennials within about eight weeks of each other and they all were gone within three months.
One person, could be their problem. Two people, could be maybe their problem. But all six at the same time? That had to be us. When I started looking into it, I didn’t know there was such a thing as a Millennial at the time. It was all negative. So negative. I just can’t be negative every day. An entrepreneur is an optimistic person. An entrepreneur believes that they have a future, that they can make things happen. I’m an optimistic person.
Frankly, if you don’t have Millennials in your business, you don’t have a future in your business. My point of view was there’s got to be a positive way to do this. We figured it out in the company and my book came out of that. More than the Whisperer, I prefer to be a champion because I want people to know that I’m not … I hope being patronizing when I talk about it.
“If you don’t have Millennials in your business, you don’t have a future in your business.” – Lee Caraher
For people who are working on building their team to talk about, when they get funded to an investor, one of the things you’re going to be doing is hiring XYZ developer and this kind of thing. As they continue to grow, as you said, they’re going to have to hire some Millennials if in fact they’re not a Millennial themselves. What tips do you have for them to make sure that the Millennials fit in to the culture and they don’t have high turnover?
There’s several most important things. One, be very crystal clear on what the values and the company is there for. What is the mission of the firm, what is the mission of the company, what are you trying to do and what values drive the company? Because that will dictate what the behavior is acceptable and what behavior is not acceptable.
In general, Millennials are looking for something that’s going to make a difference. If you can’t articulate yourself in making a difference, you will have very little chance of getting the A list, the top notch talent in the Millennial generation.
The second piece is setting expectations really early, like day 1. “Here’s how we work here.” Every company has a different schedule. We work with a lot of technology companies. We’re lucky if they show up by 10:30. Strolling in, 10:30. Other companies, 6:30 in the morning, they’re all there at the gym and then they’re all in their seats by 8:00. What is the culture of your company? When do we expect to see people? What is the work from home policy? When is all hands on deck? What do you expect?
Because you should not … I hate that word should. It’s so full of judgment. If you expect them to understand that your day is 10:30 to 8:30 and you don’t say so, if they leave at 6:00 you can’t be irritated with them because you didn’t tell them. This happens all the time. All the time. The hours thing is the biggest point of contest.
“They should know that these are our hours,” or, “They should know, I’m here at 8:00. They should know that they’re late at 9:30.” I talked about this woman in my book. I said to her, “How would she know that I’m here at 8:00?” But she’s not there at 8:00 so she doesn’t see you. How would she know? For all you know, she thinks you got there at 9:29. That one woman thought she was going to have to fire this younger woman. I said, “You can’t fire her without telling her that she’s been late and what the expectation was.” I said to her, “How long has this been going on?” “Six months.” I’m like, “Oh my goodness. Be prepared for her to be pissed off because you let her be wrong for six months and you said nothing.”
Which leads me to tip three, which is give a lot of feedback. Don’t let someone be wrong. No one wants to be wrong. Don’t let someone be wrong for a long time. Just get in there and say, “That was a good effort and let me talk with you about how we could improve it next time.”
Love it. No one wants to be wrong.
No one does.
That’s such a great line. Let’s flip the story now. Let’s pretend that we’re over 40, over 50 even and we’re about to pitch Millennial investors. The Millennials might think they know more than we do and we have more experience than they and we’re the ones pitching them for money. We might automatically think, “Oh, they’re only going to give money to other Millennials and not somebody who’s older than they are.” How do you help people shift all that negative thought when they pitch Millennial investors?
That does happen. I think sometimes it happens because if Millennials have been burned by their older colleagues or their older cohort, or if anyone’s been burned, it’s not just Millennials, then they show up with a bias. How do you break through a bias?
I think one, you have to figure out where the bias is because you don’t want to go in assuming there’s a bias because that is just irritating and disrespectful. There’s no way to get no money faster than being disrespectful. The difference is people think disrespectful means something different depending on who you are.
I think explaining the company in the context of the future. If you’re 54 and you’re talking to a 29 year old investor, your research better be about that generation and what the potential is in that generation and how you know that. Not just saying, “We can fix …” You have Millennials on your team or you have a panel of Millennials or whatever it is. If you’re not relating it to the future generation, that’s a little tough. Number one.
That’s a great tip.
Number two is, are you relevant? I say it to Boomers and Xers all the time. Xers this year will turn 51. They’re 37 to 51. Boomers are 52 to 69, something in there. We all expect we’re going to work longer than we plan to. If you’re not relevant to the Millennial generation, which is the largest generation, you are going to be co-opted out of a job pretty quickly. Even if you’re the CEO or not, or if you’re just a worker, if you’re a worker bee.
How you stay relevant? Are you reading the things that Millennials are reading? Are you using apps on your phone? The reading thing alone. Do you know what theSkimm is? Do you know these different apps are? Had you used them at all? Just being versed in that stuff. So, so important because if you’re not versed in the way Millennials communicate and how they get information, there’s going to be a big divide before you even start your pitch on what problem you’re trying to solve.
Be versed in the way that Millennials communicate.
Just that whole communications preference. If you leave somebody, God forbid, a voicemail, nobody does that anymore for the most part. Or you say, “I sent you an email.” They’re like, “I prefer text,” and you’re not really comfortable with texting. Or there’s something else they prefer. “I prefer Snapchat.” Who knows? Or, “Send me a message on Skype.” There’s so many different variations that you have to keep being flexible to whatever their language is of the day.
Of the other person.
Whatever their currency is.
Communication is currency. The person you’re trying to influence is the person who has the card. You got to move to them. They’re not going to move to you. Once you got them, then they can move to you. Particularly in the money situation. If you’re on Slack, maybe you’re company is on Slack or not. Some companies only work in Slack and they’d only use email or whatever it is.
Finding out how people like to communicate is probably the first … You got to keep track of all that stuff. You might go up and down Sand Hill road one day and go from an email guy to a text person to a phone person to a “I only meet in person” person. Keeping track of who does what is super, super important.
[Tweet “Communication is currency.”]
To pitch Millennial investors, you need to craft it accordingly. You have to have a short pitch, a long pitch, on and on and on. This has been great. So insightful, such a unique perspective on how to communicate a pitch, not just to pitch Millennial investors but to craft that great team that everybody needs to be successful and to show investors that you have diversity within your company. Not only races but also ages.
Age is so important.
So that you can have a future focus. Is there anything else you want to leave us with? Time goes so fast when someone like you with such great takeaways on frame your problem and scaling it, the inspiration, why me and of course the innovation, what makes us unique and really focusing on what is your mission and how do you make a difference at this company is going to make a big difference on whether you can attract top talents and keep them. Of course the feedback and expectations. Those are such amazing takeaways from today’s episode on how to pitch Millennial investors. Is there any last little bit of insights that comes to mind that you want to leave us with?
I think sometimes all those things sound so daunting. “Oh my gosh, I got to remember to do all this stuff.” In the end, it just boils down to very simple concepts. What are you doing, who are doing it for, what difference are you going to make? If you can just get it right down to those very short sentences on those kinds of things, then people can grab on.
The point is to be consistent and to just keep doing. You cannot over communicate today. If you’re over 50 or over 45 and you’re used to sending a memo or an email and that’s it? This is one thing. From your advertising days, we used to use the number seven. The seven times you had to see something to maybe convey your message.
Today, we use the number 35. I am not telling you to do things 35 times to the same person. You need to think about the fact that you’re in that, this is the situation. People are seeing things 35 times before they actually grab on to them. One time does not do it. You got to find multiple times to reinforce, reinforce, reinforce. Don’t worry about it. Until someone says shut up, you have not conveyed it.
Good point. With all the social media distractions and everything, to break through the clutter requires a lot frequency.
And a lot focus.
And a lot focus. There you go. The two Fs. Frequency and focus. I love it. You’ve been a terrific guest. Millennials and Management is the name of your book. How can people follow you in social media, what’s your Twitter and all that good stuff?
My Twitter is @LeeCaraher. My website, my personal website is www.leecaraher.com where you can find my company, Double Forte, and all my book and my speaking stuff.
Terrific. Thanks again, Lee.
Thanks so much John. It was great to be with you.
You too.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
Lee Caraher Website
Millennials & Management by Lee Caraher
Double Forte Website
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Selling Your Company For Millions – Interview with Tom Scott
Posted by John Livesay in podcast | 0 comments
Listen To The Episode Here
Episode Summary
Tom Scott emerged as an entrepreneur at a young age when he started selling provisions to people stuck at gas lines in Maryland. When Scott and his college pal, Tom First, tried mixing peach juice and water in a blender in 1989, they did not imagine their little experiment would result in the creation of a multi-million dollar company. Tom discusses his success with Nantucket Nectars and his latest project, The Nantucket Project.
Selling Your Company For Millions – Interview with Tom Scott
Today’s guest is Tom Scott who is the CEO and co-founder of the Nantucket Project and he was the CEO and co-founder of the Nantucket Nectars which started in 1989 and got sold to Cadbury Schweppes in 2002. He has gone on to do so many amazing things, including being a film and television creator that’s won awards at both the Cannes and Sundance Film Festival. He created something called The Apple Pushers with Ed Norton, a documentary on that. He’s an expert in storytelling, and knows all the secrets that go into making a great pitch. Tom, welcome to the show.
Thank you. I’m glad to be here. Thanks for having me.
It’s my pleasure. I want to first start with, if you don’t mind, because you’re such a successful entrepreneur, taking our listeners back to how you and your co-founder came up with the idea to create Nantucket Nectars and you’re competing against major brands like Snapple and all that good stuff.
Selling your company for millions doesn’t happen overnight.
How did we come about it? We had started a business many years ago that was a floating store. We were doing this in the summers in college. The notion was you had all these yachts that would come in to Nantucket Harbor. In order to get to the land, they’d have to take a launch and it was a pain in the neck. What if you could just bring a store to them? So we did. We started selling coffee and muffins to these yachts in Nantucket Harbor.
Among the things we started to make to sell was juice. I should say that, depending on how old a listener is, in those days, there was no such thing as Tropicana Pure Premium as an example. Generally speaking, not even generally speaking, maybe entirely speaking, if you got a juice off a shelf in a store, it was pretty crappy. What we were making at the time was a fresh juice. It was different and it was more refreshing and it was something special. That’s how we started with the path. Took a lot of different twists and turns, but that’s how we got in the juice business.
I love that the initial problem was that there weren’t good juices and you solved that by creating a floating store to take it out to people who would be willing to pay a premium price for something good.
Yeah. It’s so true. It just didn’t exist. Really what we were doing, and I just, I always feel this is so important, we were making it for ourselves. Simple as that. This was something we wanted.
The passion was authentic. You would drink this stuff. It’s not something you’re really trying to force on people. When you’re telling them about it, it comes from an authentic place. When you’re telling anybody, whether it’s a potential customer or potential investor, what have to offer, that you can’t fake that passion, right?
No. I’m one of those people, and you hear it more and more, if … I think it was Henry Ford. “If I had listened to my customer, I would have ended up making a faster horse.” I’ve always made things for myself. Every part of my career, I’ve been making something I want. I have to be honest, I stumbled into that. But one of the things I’ve come to know very clearly is I’m decent at making something for me, but if I have to imagine the attributes of what somebody else wants, it’s just not who I am. It’s not my makeup. It’s not how I think about business.
[Tweet “Make Your Product Something for Yourself So Your Passion Is Authentic”]
Right. The same thing is true of a lot of other innovators like Steve Jobs and the iPad. If he just waited for people to say, “I need an iPad in addition to my laptop and iPhone,” he probably wouldn’t do it. Just like the Henry Ford example. You guys were selling multiple things. What was it about the nectar, the juice, that made you guys think, “This is what we should focus on.” Because that’s a big challenge for a lot of entrepreneurs, is focus.
It’s true. I’m going to say most valuable to us at that time was naiveté. We didn’t know what we didn’t know. We had a whole lot of energy. Because we had so much energy, you can move mountains. You will aggressively try things that others might think foolish. Some of those things, you’re going to find out probably were foolish. But plenty of those things, you’re going to find out were not. It’s vital. It’s vital. I would tell you that we came to learn and practice incredible focus. But in the beginning, the idea of stepping into such a crazy and competitive field had much more to do with naiveté than it did with anything else.
I’m going to tweet that out from the episode. Energy gives you what it takes to try new things. That’s a great line of that. Of course if you’re drinking healthy nectar, I’m imagining that’s giving you good energy, right?
Mostly. Some of those things … Drinking too much juice is probably not a good idea either, but it’s probably true with most things.
[Tweet “Energy gives you courage to try new things.”]
There’s a happy medium. Yes. You started the business in 1989. You and your cofounder are going along, did you ever need any outside funding or was all the revenue coming in just from sales?
No. More than anything else, again, I’m sorry I’m being a bit of a broken record here, but I didn’t know what a venture capitalist was. In those days … When I was 24 years old, somebody called me an entrepreneur. I thought, what a jerk. This guy is calling me a shyster. I was a relatively well-educated guy. I’d gone to Brown University. I didn’t know exactly what the word entrepreneur meant when I was 24 years old.
The reason I tell that story is, it was a different time. It was a different time. The idea of series A, series B, venture capitalists, Angel rounds, all that stuff is new. None of that stuff existed in the collective conscience of pop culture. So many of those, the pieces of the puzzle that went in to growing the company, we were unaware of. I never would have thought, I wouldn’t have even known where to go to get money. In part because I didn’t even know you need money for cash flow. We didn’t even understand what cash flow was. We did wonder how or why we were always running out of money.
The long story short is, we were very frugal. We had other jobs at night. We did what we could to survive. We therefore ran a very efficient business. Now, I did have to take a loan from my father. In the history of the company, we raised approximately 2 million dollars, which is unheard of today. We borrowed … Eventually we were able to get a line of credit from a bank based on receivables and inventory. It was an asset backed loan. We grew the company into the many millions of dollars exactly that way, which is just very different than I think the way people think about these things today.
Before you’re able to think about selling your company, you need investors; angel or otherwise.
One of the things that’s probably not different is how to build a great team. Whether you are pitching an investor, Angel or otherwise, they all want to know who’s on your team. You’ve obviously created a great culture, not only at Nantucket Nectars but what you’re doing with The Nantucket Project. Can you tell us what you look for when you are deciding whether to hire somebody to join your team? Do you first decide what your culture is and then see if that person is a fit?
It’s funny. I was doing an interview this morning. I’m all about chemistry. I’m all about the chemistry with that person. Are they a good person? Can you riff with that person? Can you trust that person? Can that person place their trust in you? Etc. it’s huge for me. It’s huge. I don’t always get it right. I’ve got to say, nobody ever gets it right. Hiring people is not a, you don’t get 100% on that. Some of the people I’ve worked with at Nantucket Nectars started as truck drivers and ended up as the president of the company. That’s a literal example.
Wow.
There’s been many of those throughout my career. I’m okay with on the job training often. I really just believe the amount of energy and focus somebody puts into something, if they’re reasonably smart and they’re reasonably aggressive and they’re reasonably entrepreneurial, I think you can work with a lot of different kinds of people.
I love that. Energy and focus again. There it is. It just keeps coming back over and over as again, the key criteria for hiring the right people to fit your culture. You’re going along, obviously, you weren’t planning on selling your company for millions at that point. From 1989 to 2002, there was no strategic exit strategy for anybody. What made you decide to consider selling your company and ultimately selling it? Were you worried about what you were going to do after it sold?
Yeah. The answer is yes, I was worried about what I would do after I sold. Here’s the thing. We worked very hard. I think most people who start businesses do. Nothing unique about that. You spend a lot of years on the road, you spend a lot of years selling, staying in lousy hotels, always afraid of making payroll. It’s a tough thing. In particular, I think at our age and we were relatively naïve at the time, it’s fatiguing. I think we had 150 distributors around the country. You got to visit each of them about twice a year. Do the math. That’s a lot of travel, a lot of trips, a lot of sales, a lot of stuff. Because our names were on the label, it was very … People found it critical to meet with us as individuals, Tom and I.
The answer as to why we sold, we never tried to sell the company. We never hired investment bankers. There came a day when we were hotly pursued. In the end, there was probably 7 different companies talking to us. We wheedled it down and ended up making a decision to do what we did with, what was initially Ocean Spray became Cadbury Schweppes, based on the fact that we liked those people, based on the fact that we felt they could do good things with the company in the future, etc.
You asked also, was I afraid? I was a little bit afraid, but I should tell you that I had been so busy for so long. There came a day when I just decided it was time for me to leave. Because after selling the company, they wanted us to stick around. It wasn’t a match for me. I definitely freaked out. I felt like, what in the world am I going to do now? I never considered having to film my days.
You have the opposite problem at the time.
That’s right. That’s the story of how we ended up making that decision.
How long was it between selling your company for millions in 2002 and starting The Nantucket Project? Tell us, was it … and how did you come up with this great concept of having this annual conference? I’m going to let you describe the vision for it because you can do it much better than I can.
You said at some point earlier, I’m paraphrasing, but I’ve been successful in businesses first. I’ve also been unsuccessful. I’ve had a number of misses. Even at Nantucket Nectars, if you took snapshots at different periods along the way, you would wonder, when you looked at some of those snapshots, how in the world this company is ever going to make it? It’s just part of the gig.
I mention that because when we were at Nantucket Nectars, we made our own ads, we made our own radio ads, we made our own printed materials. We had a staff inside that we would do it with. We never used an ad agency. But I loved storytelling and I’ve always loved films. I went to the first ever Aspen Ideas Festival. I think that was 2003. I also was a big fan of TED way back. We used to have a designer who worked with us at Nantucket Nectars and he said, “Let’s go to TED.” I said, “Get us the tickets.” He said, “No problem.” Then he told me the price. I was like, “Forget it. We are not going to that.” We couldn’t afford it.
To me, I love discovery and I love people who go to the front-lines of anything and they come back and they share discoveries with us. I just think there’s something so beautiful about it. Particularly now, it’s like we have such availability of information, which is a good thing. But we also have a massive quantity of noise. There’s just so much noise in the world. When you can get a concise telling of interesting new things right from the horse’s mouth, to me it’s like mental cocaine. I just find it so exhilarating. I think when you mix it together, in other words, when you have a number of people passionate about the same things and sharing similar things, it’s a wood stock of ideas. It’s like a Grateful Dead show of information. That’s how I think about.
[Tweet “Pitch is a concise telling of new things.”]
Tom, you just defined what I like to define as the perfect pitch, which is a concise telling of new things. It triggers our lizard brain. “Ooh, something new, I’m learning.” As you said, mental cocaine. Because we crave that. If you have that when you’re pitching for a customer, a team member or an investor, you can tell a story that engages people, then you’re light years ahead of others who can’t. Correct?
Yeah. I think so. Look, yes, I think the answer is absolutely yes. I was watching the Golden Globes the other night. You’re looking and Jeff Bezos is sitting there and winning. NBC gets zero nominations. You’re thinking, “Oh my God, do we live in a different world!” A show called Mozart in the Jungle. I don’t even know what that is but I thought, “I want to see that.” Just the title feels new. It feels like a discovery.
Here’s the thing, I think oftentimes, if you’re starting something or you’re new in a business, you want to tell that story. Here’s the frustrating truth, if you’re making something, you have to make the thing. I don’t care if it’s a juice or a service or whatever it is. I’ve got to tell you, I think the odds of you making that thing well right away, really low odds. You need to become a master at making something. You can’t skip the time part. You can’t skip the commitment part. You can’t skip the trial and error part. You can’t.
Until you know what that product is because you’ve been on the battle front and you’ve been building it, only then will you know what it is or how it works or how it could be better or why it’s better than everybody else’s. Literally, you’re just not going to know. Only then can you package what it is you’re trying to do. I feel like so many people want to tell a story before they actually even made it and it gets in their way. It just gets in their way. They say, and I’m doing air quotes right now, they say “creative things.” I always say, be creative in your, making your product, then the telling the story would be easy. Just translate. Translate the thing you’re doing to someone so they can understand it. If A, they don’t understand it B, they’re not turned on by it, I’m guessing your thing ain’t all that interesting.
[Tweet “Can’t skip the trial and error time it takes to make something great.”]
I love, we’re going to tweet that out. You can’t skip the trial and error time needed to make something. That’s so important to remember because a lot of people go, “Why isn’t this an overnight success?” Rarely is anything an overnight success, something to keep in mind if you ever want to go about selling your company down the road. You decided to take your storytelling skills from making your own ads at Nantucket Nectars into creating The Nantucket Project, which is this annual conference, and just decided to become a television and film creator and producer.
An event during the Nantucket Project Conference.
That’s an amazing pivot, if you will, as an expansion of your skillset. But a lot of people have dreams of, I like movies, I like storytelling, but they don’t get to do what you did. What was it that allowed you to figure out your way into that world?
One of the things about The Nantucket Project, if you go to The Nantucket Project, you’re going to learn many things. Some of them, you may never hear about again for the rest of your life. Some of them, you may pursue them as a career. It’s not trite to say that Steve Jobs, Bill Gates and Mark Zuckerberg share … They probably share several things in common, but they share one really interesting thing in common, which is they’ve never graduated from college. All 3 of them, these 3 cultural business icons didn’t finish college. Now, well, how did they learn all the stuff they had to learn to do what they do? The answer is, they love what they do. They’re going to figure out how to learn the things they need to learn in order to do what they do. I think if you know that … You know that Bill Gates didn’t go to computer school. He didn’t. Neither did Steve Jobs. They didn’t go to computer school or iPad school or touchscreen school. There’s no such thing. They just learned.
I can promise you, they were bad at it at the beginning. I promise. The first day, they weren’t good at it. They didn’t even understand it, the first day. They went one day after one day after one day. I just believe that. It’s that whole thing of, how do you eat an elephant? One bite at a time. I think one of the things, and I’m going to turn 50 in a couple weeks, I’ve been around a little bit. I’ve been around. The older I get, the more I realize that those silly old things your grandfather said, they tend to be true. How do you eat an elephant? One bite at a time. That’s the answer. How do you learn how to do, you go from one thing to the next. One step at a time. How do I know for me or for anyone I think, where to go next? Where’s your inner being telling you you want to go next? What are you really in to?
It’s that whole follow your bliss, follow your passion. I definitely want to ask you about, you went from not being able to afford to go to a TED conference to co-directing and co-producing an amazing documentary on your ideal films, on Richard Saul Wurman, who created TED and he’s an architect. He has a line in there that, “Most information doesn’t inform,” which I just thought was great. Can you tell us about what it was like to interview him and what gave you the idea?
Yeah. You mean for the film with him?
Yes.
He is the master. This guy talked about information architecture, information anxiety before Steve Jobs graduated from high school. This goes way back. He’s had a crazy and interesting career but his design mind, and I don’t mean that in the way of just design meaning graphic design or artistic design, but computer design and thinking design and speaking design, he has a design mind.
You asked earlier about, how do you learn this or that? The number of things that he has learned and the way he goes about it and the way he treats the packaging of things he learned or other people learned, it’s just one of a kind. TED is a cultural prize. It’s a powerful brand and a powerful concept. This is the guy who started that. This is the guy who built that. Imagine some of the things he’s seen and done. To my knowledge, I’m going to guess you knew very little of him prior to reading, to seeing that film. Am I right?
You are absolutely right. I pride myself in being pretty up on architects. I have friends who work at Gensler, I saw the documentary on Frank Gehry. But he was somebody I never heard of and his story is just amazing. The fact that you co-directed and co-produced that was phenomenal.
Again, hopefully you see my passion for TED and for him in that film.
Definitely.
It’s a film of a certain kind. It’s probably not going to be next to the Avengers or The Force Awakens in terms of viewership. But for people who are curious about a certain kind of thing, I’m proud of the film.
Yes. What else are you working on now that you are excited about that we can look forward to seeing soon?
It’s funny, last week we had our first 2016 speaker meeting for The Nantucket Project this year. It’s back to the drawing board. What I would tell you is, when we do this, when we face another year and book another year of speakers, it’s more about learning than it is about knowing. What I mean is, you’ve got to stay open to the fact that whatever’s going to be interesting in September probably barely exists right now.
Right. Whether it’s robotics or 3D printing or virtual reality, whatever.
Yes. If you were going to ask me at the moment what am I into, I’m into figuring out what I’m into.
Great.
There will probably be a few films in development about those things that we’re preparing for next year. Listen, this should be a TV show. The Nantucket Project should be a TV show. The TV show is something like 60 Minutes. It has segments something like 60 Minutes, but it’s a show about ideas and each of the ideas are carried out in some form of a film that are really instructive, like the Richard Saul Wurman film that you saw. In success, that’s where this goes.
Also, I think what you’re saying Tom, is give yourself a little permission not to know everything all the time, during the creative process. I think that’s a valuable takeaway. Before I let you go, I just want to ask you a couple more questions. One is, what’s a book that you would like to recommend about business or life or philosophy or as you said, following your inner being? Anything at all, any topic. I would love to hear what inspires you author-wise.
The two best books I’ve read recently, one is Just Mercy by Bryan Stevenson. It’s about race in America. I saw him speak a few months back. He was incredible. He was as good as anyone I’ve seen in years. I’m watching him and I’m looking and I’m thinking, okay, the guy is smart, because he’s definitely smart. But his brilliance was in the fact that he’s gone to the front lines of death row and race in the south in America. He’s made observations that are his observations. He’s come back from that front line and he shares with us those observations. I bet it’s easy for him. I could be wrong and I’ve never spoken to him about it. I could be wrong. That’s what comes through in this book. Race is such an interesting topic that I’ve looked at it in a full variety of ways throughout my life. But if I’m honest, in the last several years, it’s been through the TV or through the newspaper. To hear something that you can really get your brain around from somebody like him, that was amazing.
The other one I would say is probably one you’ve heard a few times, is Ed Catmull book called Creativity Inc. on Pixar. I just love it. I love everything about Pixar. It’s really good storytelling. I think it’s interesting to hear, to read a creative book from a science guy because that is hard. He’s much more of an Xs … I say that, he has a science background. He has his Xs and O background, he has a technical background. But he speaks, he writes very well about creativity. I just love that book.
Finally Tom, how can people follow you in social media? What’s your Twitter account? Let’s give out the website for The Nantucket Project.
I am not a social media guy. It’s interesting. It’s not that I’m against it. I like our people to speak for themselves. Maybe I’ll have something to say sometime in the future, but now I let my company speak for it. It’s The Nantucket Project. You can follow The Nantucket Project on Facebook and Twitter and Instagram. I think we do a pretty good job. I am really focused on making this TV show I mentioned to you come to life and pray for that to work. Then I think we’ll be able to speak to lots of people in a powerful way.
Fantastic. Well, it’s been an honor. You’ve given us so many great insights on selling your company for millions. I’m very excited to see what comes up next considering your track record, which is always a good predictor of people’s passion and focus over and over again, figuring out how to make something new happen. I can’t wait to see what you bring to us. Thanks for being on the show.
Great. Thank you so much. It was great to meet you.
Links Mentioned
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Nantucket Project on Facebook
Nantucket Project on Twitter
Just Mercy by Bryan Stevenson
Creativity, Inc by Edwin Catmull
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The Great Minds Of Investing – Interview with William Green
Posted by John Livesay in podcast | 0 comments
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Episode Summary
William Green is the author of The Great Minds of Investing, a book that features profiles of famous investors. William interviewed 22 investors for his book, including many billionaires, and breaks down what makes them truly unique and different people from the rest. There are so many great qualities you can take away from these brilliant investors who have made tremendous mistakes both throughout their lifetime and in their career.
The Great Minds Of Investing – Interview with William Green
Hi. Welcome to The Successful Pitch. Today’s guest is William Green. The author of The Great Minds of Investing. William has written for many publications both in the US and Europe including Time, Fortune, Forbes, Fast Company, The New Yorker, The London Spectator and The Economist. He edited the Asian edition of Time while living in Hong Kong, and then moved to London to edit the European, Middle Eastern and African editions of Time.
As an editor and co-author, he’s collaborated on books such as Guy Spier’s much-praised memoir, The Education of a Value Investor. I had Guy on recently and he’s fantastic. That’s how we actually were fortunate enough to connect. He’s also coming up with an autobiography of a legendary art collector. Born and raised in London and received a master’s degree in journalism in Columbia. He’s now in New York. Guy, I can’t thank you enough for introducing us. William, welcome to the show.
John, it’s such a pleasure to be here with you. Thank you.
I always like to ask my guests, how do they get started in the world of journalism, investing, and how did you become passionate about that. Can you take us back to your childhood if you don’t mind?
The Great Minds of Investing
Sure. I grew up in London and I grew up in a very bookish family. My father was a very literary judge. My mother was a writer. Everything really was about words and language and the like. I went to Eton, which was this very posh English school, which was where people like Prince Harry and Prince William went. I was supposed to be this great English gentleman and I thought I’d be a man of letters.
I went off to Oxford and I studied English Literature. So far so good. I leave at 20, 21 thinking I’m going to become a famous novelist. To my surprise, I discovered the stock market. Basically, I had owned a small apartment with my brother at London and we sold it. I had a little bit of money. Not a great deal because in those days land and property wasn’t as valuable.
I needed to figure out what to do with the money. I started to study investing. What I found was really intriguing, was that there was this elite group of investors who were just incredibly smart, who had this record of beating the market over many years. They were these master game players. I think there was a part of me that had always been very lazy and never really wanted to get my hands dirty. I never would have summer jobs where I would do anything really serious and painful. I always had this fantasy that I would just make money by using my brain.
When I was about fifteen, I had become obsessed with horse racing. Again, because I thought, “Here’s a great way of making money without doing any real work.” I think what happened to me when I discovered investing was I thought, once again, “Okay, this is this really cool area where if you’re really smart, you can actually outwit the crowd.” Initially, what happened to me, my interest in business and investing really was born out of my total laziness, my just wanting to make money without having to do a lot of work.
Then as I became a journalist in my early 20s, I had this incredible opportunity to go interview some of these people. I would go off, say, to the Bahamas, to interview Sir John Templeton, who is this guy who had averaged 15% a year returns for 38 years and ends up making $400 million selling his company. I would actually get to see these extraordinary people up close.
What started in a way, is this naughty, somewhat lazy, indolent boy wanting not have to do very much work actually became this intellectual passion. Because I looked at these guys like Templeton or Peter Lynch who I interviewed, or Michael Price who is on the cover of Fortune as the biggest SOB on Wall Street.
I would look at these guys and think, “What do they have that other people don’t have? Why, when most people are going with the flow, doing okay and sometimes doing well, then failing and then being fearful and not really fulfilling their potential? Why is there this group of people who perform extraordinarily well, that they win over the long term?”
[Tweet “Great Minds of Investing: What do they have that other people don’t have?”]
What I found that’s been an enduring fascinations to me really over the last 25 years, has been this idea that if you want to be more successful, both as an investor and also in life, in business, in your family life, you should really study people who are extraordinarily successful and then reverse engineer them and figure out why they win.
I’d say my interest in these people became a little bit more profound as I got older and ceased to be just about how do you make money and became more about how do you become successful in business, how do you become successful in life? What matters in life, what disappointed them, what fulfilled them?
In a sense, what I’ve been trying to do for the last 20 odd years is to figure out what can I learn from these people that will help me in life. I think, probably, that’s the overarching theme of a lot of my writing and also the speaking that I do. That’s really the question, is how do you actually reverse engineer these people so you can become more successful yourself and hopefully happier yourself?
One of the blogs that you wrote on your LinkedIn profile about Warren Buffett is so fascinating and just full of great quotes. Is there something from there? The one that resonates with me is about taking action. “Predicting rain doesn’t count, building arks does.” Is there one theme that you’ve noticed not only in Warren Buffett but other people you’ve interviewed that are successful entrepreneurs that you can expand on that quote with?
[Tweet “Great Minds of Investing: Predicting rain doesn’t count. Building an ark does.”]
I think one of the things that’s really fascinating about Buffett, one of the reasons why he resonates with people so deeply is because he has extraordinarily values. Here’s a guy who’s unbelievably smart. He clearly has an IQ that’s off the charts. I think the reason when you read something like that piece on LinkedIn that he resonates with you is that he’s actually talking about some fairly deep values.
If I remember rightly, the first quote from him was something where he said, “When I look back at my life and figure out what the reason was why I’ve been so successful,” he said really, the key was the unconditional love that he received from his father.
Great Minds of Investing: Warren Buffett said the key was the unconditional love that he received from his father.
Here’s someone who we think is just going to tell us how to get rich. Actually, he’s talking about unconditional love. I’m looking at these quotes from him like that and I’m thinking, “How do I become a better father?” Because I have a fourteen year old daughter and a seventeen year old son. I’m thinking, “Wow, that’s really interesting.”
Buffett is actually saying that that the reason why he’s become this guy who has $70 billion and has beaten the market over 50 odd years is actually because of the love of his father. I think what’s really interesting with someone like Buffett is that it’s not just about how do you beat the market, how do you make money. It’s about these broader values, these broader ideas of what works in life.
When you look at the way that Buffett runs his business, he has a tremendous emphasis on integrity, decency. There’s a wonderful line from Buffett at one point where he says, “You can’t do a good deal with a bad person.” I actually think what’s really striking about Buffett on many levels is his profundity as a thinker about life, not just about business.
Part of what fascinated me with Buffett is that I figure there were all these people like Robert Hagstrom, these great writers about why Buffett’s such an incredible investor. My fascination increasingly over the last couple of years has been, what can we learn from Buffett about having a more successful life? I think that idea of integrity and honesty that he represents and these values, like trustfulness and authenticity, these are incredibly powerful ideas.
[Tweet “Great Minds of Investing: You can’t do a great deal with a bad person.”]
One of the reasons why he’s been so successful is that he has a reputational advantage. You know that if he’s going to take over your company, he’s going to leave you in place as the CEO, he thinks you’re doing a great job. He’s going to treat you decently, he’s going to let you have some autonomy. I think for a lot of us, we look at the business world and we think if you want to be really successful, you’d have to be at snake. I think what’s fascinating about Buffett is that you realize that’s not actually entirely true.
There’s this other more enlightened way to be a capitalist were actually being decent becomes very powerful. There was a fascinating speech that Buffett gave many years ago where he was talking about his partner, Charlie Munger.
If I remember rightly, he said something like, “When I look back over the last 41 years, or something like that, that I’ve been in business with Charlie, I’ve never seen him take advantage of a single person.” That’s an incredible reputational advantage. I think this is something that applies to all of us. You have to figure out, do you want to get ahead by whacking everyone in the face with your elbows on your way up or do you want to try to do it this other way?
That’s a great quote that you have in your blog from Warren Buffett, “It takes 20 years to build a reputation and five minutes to ruin it.”
Exactly. These two friends of mine, Guy Spier and Mohnish Pabrai, had a charity lunch with Warren I think it was in 2009 where they paid $650,000 to have that. They won this charity auction to have lunch with him. One of the most memorable things, particularly for Guy, that Buffett talked about was this whole concept of the inner scorecard.
The way Buffett presented it, he said, “You have to ask yourself, would you rather be the worst lover in the world but known publicly as the best, or be the best lover in the world but known publicly as the worst?” His point was, you have to have this internal barometer of how you behave. He said his father was the greatest sort of inner scorecard guide.
[Tweet “Great Minds of Investing: Live your life by your inner scorecard.”]
His father was a congressman. At one point, I think there was some change in the salary scale of a congressman. They told his father, “Okay, you’re going to get an extra couple of thousand bucks.” His father said, “No, I was elected a salary of $12.5 thousand and so that’s how much I’ll take,” and he returned the money to the treasury. I think this had a huge impact on Buffett, this idea that you should act in a way where you look yourself in the mirror every morning and you just think, “Yeah, I’m okay with who I am.”
We shouldn’t lionize Buffett or any of these other guys. They’re all flawed just as we are. Buffett had problems with his relationships, with his marriage. He clearly had an extraordinary wife who divorced him and who he continued to adore and remain close to. It’s not like you can look at these people and say, “This is a saint and everything is perfect.”
That’s not to be disparaging about Buffett, who I really do revere. I think it’s just a reminder, we’re all deeply flawed. When you look at people like Buffett, it gives you something to aspire to because you start to think, “There’s a different way to do business that might almost seem naive but actually there’s a tremendous advantage to behaving in an ethical decent fair way.”
What you said about living your life by your own inner scorecard, for me really is just a great reminder that you can’t live your life worried about what other people think about you.
Great Minds of Investing: Templeton had this extraordinary ability to go his own way and to think for himself.
I think that’s really key. This actually, this was one of the very profound lessons I had very early in my career as a writer. When I went to Bahamas to see Templeton, before I had my interview with him, I sneaked behind a tree and was watching him exercising. He would go into the ocean every day and would pump his arms and legs under the water for 45 minutes using the resistance of the water to exercise. I’m looking at this old guy, at the time I think he was 86. His face is slathered with this horrible white goop to protect him from the sun.
Sunscreen.
Exactly, but super thick. He’s got this ridiculous hat on with floppy ears, with ear flaps. As I was looking at him, I was just thinking, “Here’s a guy who just absolutely does not care what anybody thinks about how he looks, how he exercises, how he thinks.” It struck me, it became a metaphor in my own mind, that he had this extraordinary ability to go his own way and to think for himself.
Someone had a lovely phrase to describe it when I was interviewing people about Templeton, where he said, “It was the willingness to be lonely.” I remember asking Templeton, where did this come from? Actually, it was funny because I said to him, “Who were the biggest influence on you?” He said, “Really, nobody. Nobody influenced me.”
I thought this was this incredibly arrogant thing at that time. Then he started talking about his parents. He said that they would go in these road trips when he was a boy. They would put him in charge from a very early age, seven, eight, or nine, of navigation.
They basically left him totally in charge of this. He said there was one occasion, where, finally, after a couple of hours, he realizes that he’s taken them 200 miles in the wrong direction. They haven’t told him. They really were just saying, “You’re free to make your own mistakes.” This, for him, became this enormously powerful thing. He was able to go his own direction.
[Tweet “Great Minds of Investing: Go your own direction. Think for yourself.”]
One of the reasons why he became one of the greatest investors of the last century was that he had this philosophy that you would buy at what he called the Point of Maximum Pessimism. For example, during World War II, he made this extraordinary investment when the world seemed to be ending. He bought something like a 104 stocks for under a dollar each. I think it’s something like 36 of them were in bankruptcy at the time. He told me that basically, over the next five years, he quintupled his money. Because the world righted itself and he had the strength of mind to go his own way to think to himself.
I think whether you’re a great contrarian value investor like him or you’re a great entrepreneur, you have to have this tremendous ability to think for yourself, the emotional strength to go against the crowd and the confidence to go against the crowd. It’s not something that many people have I think, to have that degree of independence of mind. I think when you see people like that, it makes you realize, “This is what I have to aspire to, I need to have a little more courage.”
One of the things also that Buffett said to Mohnish and Guy at their lunch is, “If you want to get better at something, hang out with people who are better than you. You can’t help but get better.” Buffett’s partner, Charlie Munger, says, “That includes hanging out with the eminent dead.” You should be reading books about Ben Franklin and whoever, anybody you admire. You’re reading books about them and you’re figuring out, what can I take from Steve Jobs or from whoever it might be that I can use in my life?
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I think it’s fascinating that these people like Buffett and Munger who we regard as these titans at the moment, actually, have done exactly the same thing where they’ve been studying people who were better than them and figuring out, what do I learn from them?
Two things you said that I just really like a lot, which is one, not only do we not have to let go of what other people think about us, and you’ve painted great picture of him in the ocean with all that sunscreen and the hat, but we don’t have to wait to be in our 80s before we can let go of worrying about what other people think. Most people think, “When you get to a certain age like that, then you’ll let go of what other people think.”
You’re really inviting us, at any age, to stop worrying about what other people think. That story about how his parents let him get lost and make his own mistakes, to me the thing that really stands out is not only did they let him make his own mistakes, but then they didn’t beat him up and make him feel bad about making it.
That’s an important point. I hadn’t really thought about that. He said this really had a lifelong influence on him, the fact that they allowed him to make those mistakes. I think with all of these people, the ability to make mistakes and then not be crushed by them is absolutely key. It’s very easy when you look at the life of an extraordinarily successful entrepreneur, or tycoon or investor. I’ve interviewed so many billionaires over the years. These are remarkably successful people.
Great Minds of Investing: The ability to make mistakes and then not be crushed by them is absolutely key
You look back at their life with the sense of it was almost inevitable. Actually, when you’re living the life in the present tense rather than looking back at it, there was nothing inevitable about it. There were moments where these people were totally crushed. There was a time early in his career when Charlie Munger lost his son who died. He lost all his money trying to basically pay the medical bills. His marriage ended. Munger is the one guy who most investors regard as even smarter than Buffett.
When you look at him now, he’s 91, 92 years old and he makes these incredible statements, where he just, he speaks like God. Just with tremendous intelligence. It’s as if he always knew the truth. Actually, when you look at his life, these were very, very hard earned lessons. He invested on margin at one point, I think in the 70s, and almost went under.
When he’s talking about how to avoid stupidity, how to get ahead by actually avoiding folly and stupidity. He’s not talking as someone who’s just looking at everyone else and saying, “You guys are idiots.” He’s saying, “I screwed up. I almost destroyed myself through stupidity and here’s what I’ve learned about how not to be foolish again.”
I think that ability not just to learn from your own mistakes but, as Buffett said, “It’s great to learn from your own mistakes, but it’s much better to learn from other people’s mistakes.” To read about someone like Munger getting almost undone by investing on margin and then the world going haywire and him being exposed, those are very powerful things.
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I think these are habits that all of us should develop. This ability to look at extraordinarily successful people and say, “What did they do wrong? Also, what did they do right?” Not to lionize them. To say you know, “Why was their emotional life a wreck? Why did their marriage go wrong?” It’s like with your parents, I tell my kids, “You should learn from the stuff that I do right, but also learn from my idiocy. Don’t repeat the stupid things that I do.”
When we show people our flaws, I think that vulnerability is what makes people be able to relate to us.
David Hawkins talks a great deal about authenticity, about being totally truthful and just not lying.
I think that’s very powerful. One of the people in this book, The Great Minds of Investing, that I wrote, one of the people I connected to most was this guy Mohnish Pabrai, who’s very close friend of Guy Spier’s as well. Mohnish is fascinating because when he stumbles upon a very important idea, he totally internalizes it and makes it 100% what he does. One of the massive ideas that he encountered in life was from this book Power Vs. Force by this guy David Hawkins. Hawkins talks a great deal about authenticity, about being totally truthful and just not lying.
You can see when you spend time with someone like Mohnish that he just … I went to India with him for about five days a few weeks ago. Whatever question you ask him, he’s going to tell you the truth. I think when you spend time with people who are less honest, you start to sense it. Mohnish’s view is that whether it’s intuitive or explicit, you actually sense when somebody’s lying to you or holding something back.
I think one of the things that strikes me as a powerful lesson from these guys like Buffett, Munger, Mohnish Pabrai, Guy Spier, is this idea of becoming more and more authentic to who you are, more and more truthful. One of the things that Mohnish discovered, which I thought was fascinating, was during the financial crisis, he had a terrible time and his fund was down 60 or 70% from peak-to-trough.
He said, he went to his shareholders and he just said, “Yeah, the market suck. It’s been a tough time,” but he said, “That’s not really the reason why our losses were so bad.” He said, “The reason that our losses were so bad was that I made this mistake, this mistake, and this mistake.” He said the amazing thing was that almost nobody bailed out of the fund, because he said really, what people want is for you to tell them the truth.
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I love that. We just have to really play that up so much William, because it’s something that needs to be underlined and bolded, especially for the listeners when they’re thinking of pitching an investor, they must be 100% truthful. They can’t hide anything, because it will come out in due diligence and then the deal will go sour, or they get an investor and things aren’t going well, they need to be able to tell the truth to the investor and own up to the responsibility of what they did wrong and what they’ve learned from it and not do it in order for the investor not to suddenly micromanage them.
I think you’re absolutely right. This really applies to everything. It applies to when you’re running a business, it applies to when you’re talking to your kids, it applies to everything. If you’re going to pitch your company to a venture capitalist, they might not know specifically what you’re lying about, but I think they sense when you’re holding something back. I think there’s something tremendously liberating when you just decide, “You know what? I’m going to tell the truth and we’ll see where the chips fall.”
Great Minds of Investing: When you peer under the hood and you want to see the dirt in there, it’s actually tremendously liberating.
I had this myself because there was a period when my career hit a rocky stage and I got laid off during the financial crisis. For a while, you feel ashamed and you’re like, “Okay, maybe I should hide this and I should pretend that everything’s great.” Then after a while you start to think, “To hell with it, I’m just going to be honest about what’s going on in my life. I’m not going to hide the fact that I’ve gone through tough times. I’m not going to hide the fact that I’ve written stories that got killed by major magazines or whatever.”
Once you start to do that and you start to say, you want to peer under the hood and you want to see the dirt in there, it’s actually tremendously liberating because you don’t have to remember what you’re lying about. I think the extraordinary thing is that people start to look at the truth tellers. This is not to say we’re all super truthful. There are degrees of honesty and dishonesty.
I think people look at investors, CEOs, writers, whatever it is, who are trying to tell the truth, who are pushing towards this level of integrity and honesty about themselves and what they’re doing. I think they sense it. I think of one of the things that’s really interesting that I’ve found in life, people always say, opposites attract. I don’t think that’s true at all, I think like attracts like.
As you start to behave somewhat better in your own life and to be more truthful and more open about your flaws and your failings and the like, I actually think you draw into your life a better quality of person. You might find that if you lie or prevaricate or you conceal a little bit about the problems with your company or your career or your background, that you do still manage to sell, you do still manage to get founders and the like, but they’re probably not going to be the people you actually want to have in your life.
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You’re drawing less high quality people into your life. What I found really fascinating is when I’ve seen people like Mohnish Pabrai or Guy Spier who behave in this way where they’re trying to be more decent or more open and more honest about their flaws and their failings, their mistakes. They draw an incredible group of people around them. I think it’s a superpower in life, once you understand this. Exposing your vulnerability and your mistakes, because people sense whether they can trust you or not.
When you take down your mask, which is another way of saying that, and show your flaws a little bit to people and don’t pretend that everything’s always perfect, not only you’re going to attract the right investors, but as a startup you’re going to attract the right quality of people to join your team. Because they won’t feel like they have to be perfect to join your team.
They’re like, “If you, as the founder, are willing to share your flaws and not be hypercritical about them, then maybe that will be a place where I could make a mistake and not feel like I’m going to be fired tomorrow.” That’s what’s going to attract really great people on your team. As we all know, having a great team is one of the keys to being successful.
I think it’s hugely important as a manager. When I look back on my own career, when I look at the best bosses I had. When I worked for people who were bullies and who were not that talented. I couldn’t wait to get out. When I worked for people who were really decent and kind and supportive, I would do anything for them.
You don’t want to sound naive about these things. There are incredibly smart people who get by being sons of bitches. I think there’s this other way where you see people who behave very decently and they attract great people in their lives.
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I was trying to think about it, who was it, there was someone I interviewed recently. He was a multi-billionaire who is running one of these big funds. He had a partner and he just said to me, “We haven’t argued in 30 years. We’ve never had a difference about anything in 30 years.” That’s an incredible thing to say, where you treat someone, you treat your partner that decently. Actually, I remember it was Mason Hawkins, who’s a close friend of Buffett’s. He runs a firm called Southeast Asset Management. He said to me, “My partner is just the most decent human being you’ve ever met.” What a wonderful thing to be able to say about the person you work with every day?
I can probably bet a lot of money that that’s the kind of person they’re looking to invest in too. They want to only be around people that match their values and their sense of integrity.
Exactly. One of the things Hawkins said to me that was really fascinating was that, he was talking about the type of people who he hired and he had about six characteristics he looked for. Actually, he said that the single most important thing he looked for employees he hired was generosity. He said he look for people who … He knew they were going to have excess income, he knew that we’re going to become rich if they were good in what he did.
Great Minds of Investing: People who shared their wealth had much more longevity in the investment world.
He wanted to know that they were going to be prepared to share some of that wealth. He said the extraordinary thing was that you actually, you discover that the people who were prepared to share their wealth and be very philanthropic had much more longevity in the investment world.
If you were just working for yourself, if it was just about how do I buy a faster car, or a red Ferrari, or a bigger house, or whatever, then that drive at a certain point wanes a little bit. What he was saying is that he felt that when there was a slightly broader cause than just your own ego and getting the best Volvos and toys and the like, you actually did a better job.
I think again, there’s nothing wrong with buying a beautiful car if you’re very successful or buying a beautiful house. These things are all fine. I think one of the things that strikes me with these guys who have been very successful is some of them are really pretty evolved and thoughtful about what the money does and doesn’t buy them.
The ones who strike me as most impressive in terms of models to how you want to live your life are the ones who haven’t lost sight of things like generosity, philanthropy, having a good work environment and the like. The ones who are really just out to dominate the world and prove to their father that they think they were better than he thought, those guys can be incredibly successful but they tend to create a lot of chaos, both to the people around them and also in their own lives.
I think again, when you’re trying to study people that have been very successful, you want to figure out what are their relationships like, both inside their company, with their wives, and the like, with their kids, how messed up are their kids. Look at them be like, “What do I want to be like?”
I had this fascinating exchange with a guy called Irving Kahn, who died at the age of 109 last year and was one of the famous value investors. He was too sick to talk to me in person when he was 108, so I gave him various questions that his grandson, who is in his 30s, went over with him for several days. His grandson came back to me with the answers that he’d written up.
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One of the things I said to Irving Kahn is, “When you look back on the last 108 years, what’s the secret not just of a very profitable life or a very long life, but a successful life?” He said, “It’s all family, it’s all relationships.” He said he’s really proud of the fact that he built a company, Kahn Brothers, that has three generations of his family working for it and is really successful and does the right thing by its clients.
It’s that combination of having built something worthwhile, that force for good in the world, his company, and the fact that he has healthy kids, healthy family, and good relationships. I think that’s really striking when you see someone with that 109 year perspective saying, “It’s not that I’m dying with the most money, or the most toys.”
It’s great. It’s full circle to the beginning of the episode where you talked about Warren Buffett’s whole focus on unconditional love from his father being one of the keys to his success. What a great insight you’ve given everybody to think about themselves, how to approach investors with authenticity so that you attract the right investors, and just how to be a happier person through this whole mindset.
That’s why your book has got a great title, The Great Minds of Investing. Everyone’s going to assume, “It’s all about the mindset of how to make money,” but it’s that and so much more. I highly recommend everybody getting that. We’re also going to put the book you mentioned, I believe you said Power vs. Force in the show notes.
Yeah, I think it’s an important book. It is an important book.
William, how can people follow you on social media? What’s your Twitter and all that good stuff?
They’re welcome to visit my website, which is WilliamGreenWrites.com. They’re welcome to find me on LinkedIn and become friends with me there. I don’t tweet as much as I should and so I’m struggling even to remember what my Twitter handle is. Sorry about that.
No worries. We can certainly follow you on LinkedIn and visit you on your website as well. Thank you so much for being on the show today. It’s been an honor.
Thank you so much. A real pleasure of me, John.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
William Green Website
The Great Minds of Investing by William Green
I’ve Followed Warren Buffett For Decades – LinkedIn Post by William Green
William on LinkedIn
Power vs. Force by David R. Hawkins
Crack The Funding Code!
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