Supported by Greenhaven Road Capital, finding value off the beaten path.
This post is part of the TIL2017 Summary Series.
Eliud Kipchoge said, “one-hundred percent of me is nothing compared to one percent of my team.” Even solo-efforts like running a marathon take a team to get ready for. The best results come when those stakeholders are aligned.
Investors know this. “Permanent capital” like Trish and James Higgins, Brent Beshore, and Warren Buffett and Charlie Munger are the pinnacle. They are the stakeholders. It’s a committee of (nearly) one.
Other investors have similar situations. Wes Gray called it “educated capital.” Thomas Russo found business owners. John Montgomery uses stewardship questions as a screening tool. Good investment managers will follow Barry Ritholtz and Josh Brown’s et al. lead and communicate with their investors about how they think about something and why.
Investors are like spouses, it may be enriching to lie about the size of your returns but the truth will come out.
Non-investing businesses have stakeholders too, they’re called customers. Andy Rachleff said that successful startups must preach to the converted. They’ve reached the “shut up and take my money” meme stage.
Non-professional stakeholders are your family and friends. This is why Marcus Lemonis advocates for people to start businesses when they’re younger rather than older. Not having kids, he says, is a competitive advantage.
Morgan Housel said that few stakeholders is part of being like Elon Musk or any CEO. The stakeholders of ‘reading’ or ‘coaching soccer’ take a back seat to the business. Ken Grossman gave a first-hand account of this as he started the Sierra Nevada Brewing Company.
Malcolm Gladwell clarified this point about support in the Freakonomics podcast:
Everyone in our life makes it better or worse. Some people more, some people less. Success comes from filtering out the wrong stakeholders, as best you can, and then limiting the existing ones to only those you enjoy. From companies to families, the best results come from everyone not only rowing in the right direction but wanting to be in the boat.