Latest / Earn Your Leisure / Dean Forbes: UK's Top Black CEO on Private Equity, & Building a $100M Business

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Dean Forbes: UK's Top Black CEO on Private Equity, & Building a $100M Business · Earn Your Leisure

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Speaker 2: Sponsored by the United States Department of Homeland Security. This
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Speaker 2: episode of The Market Monday's World Tour is brought to
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Speaker 2: you with limited interruption by Ally.
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Speaker 3: Time for the unforgettable moments you say we're all better
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Speaker 3: off with an Ally.
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Speaker 4: A bird in the skysh flight away on your feet
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Speaker 4: and give it up from a guy.
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Speaker 5: Dean Fobes a legend in the game, and he came
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Speaker 5: dressed to the nons. He he made a comment about
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Speaker 5: American fashion. I've noticed that, you're. Ah, Now, this is
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Speaker 5: something I've noticed that was funny. Europeans have a very
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Speaker 5: disdain for American fashion. But I understandable most Americans can't dress.
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Speaker 5: But you're not talking about You're not talking about people
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Speaker 5: from New.
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Speaker 4: York though, so that's different.
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Speaker 5: It's just it's a difference, like this New York fashion
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Speaker 5: and then there's Middle America fas. It's good though, if
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Speaker 5: we adopted them. But Dean, you look, you look very shocked,
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Speaker 5: my brother. So let's get into this. Man, what led
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Speaker 5: you to become a CEO in the tech sector and
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Speaker 5: what is your biggest motivator to keep going forward?
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Speaker 4: Oh?
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Speaker 6: Man, Well, firstly, thank you guys for having me here.
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Speaker 6: Like I said before, you know, I'm a big, big
2:39
Speaker 6: fan of the show, big fan of the format, you know.
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Speaker 6: Getting these people together and giving all these jams it's amazing.
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Speaker 6: So so it's a pleasure in the honor to to
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Speaker 6: be part of this. I think I've you know, told
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Speaker 6: that story a couple of times. What got me into
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Speaker 6: tech was the biggest kind of failure in my career,
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Speaker 6: right I was trying to play football that didn't work out.
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Speaker 6: I had a bunch of debt. And then when that
3:00
Speaker 6: kind of all came to a head, my agent at
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Speaker 6: the time said, you've got to go work at motor
3:04
Speaker 6: Oil because you're in so much thatb you need to
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Speaker 6: earn money right now. Why is it going to cripple
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Speaker 6: you for life? And very tough decision, very difficult moment
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Speaker 6: in life, but it turned out it turned out to
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Speaker 6: be turned out to be okay.
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Speaker 3: Yeah, for someone sitting down in the crowd who was
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Speaker 3: inspired by you being here tonight, if you can go
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Speaker 3: back to when you were nineteen or twenty, what three
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Speaker 3: pieces of advice would you give them, and talk about
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Speaker 3: the ups and downs as well, But what three pieces
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Speaker 3: of advice would you give them on the journey to
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Speaker 3: becoming you?
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Speaker 4: I mean nineteen twenty.
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Speaker 6: You know, I'm probably a year after being homeless, a
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Speaker 6: few months having been released from playing football, a mountain
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Speaker 6: of debt. Like if you'd just said to me at
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Speaker 6: that moment in time that life would be what it's become.
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Speaker 6: It was like unimaginable that the things that have happened
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Speaker 6: to me could have happened. So it's a little bit
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Speaker 6: strange to think back and say, what advice would you
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Speaker 6: give yourself, because my advice would be just chill out,
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Speaker 6: you know, like stay calm, don't panic, work hard, And
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Speaker 6: I think I probably wasn't good enough to have made
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Speaker 6: it as a footballer, and that was important because when
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Speaker 6: I failed, I kind of didn't want to fail again
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Speaker 6: to It's like the next thing I go into, you know,
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Speaker 6: if it was bakery or I don't know, track and field,
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Speaker 6: whatever it was, the next thing I went into, I
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Speaker 6: was going to apply myself so hard I was probably
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Speaker 6: going to be okay or maybe even good at it.
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Speaker 6: So if I if I could go back now, I
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Speaker 6: would say, calm down, work ethic has to go up,
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Speaker 6: and you've got to be prepared to kind of play
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Speaker 6: this out for the long term, like this is it's
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Speaker 6: going to take a while, but you gotta keep going
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Speaker 6: with it.
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Speaker 2: So it says a lot about your mindset, right you
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Speaker 2: had the mental foder tool to say it doesn't matter
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Speaker 2: where I go, I'm going to be successful because I
4:50
Speaker 2: want to turn up my mindset. I'm gonna turn out
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Speaker 2: the productivity. I want to go back right because you
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Speaker 2: start that motoroler. But your first CEO role is at
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Speaker 2: the the Paris based firm KDS.
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Speaker 4: So what is that deemed fors like?
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Speaker 2: Because this you've now climbed up a ladder and you've
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Speaker 2: reached the pinnacle of a company at a firm.
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Speaker 4: What was that like for you?
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Speaker 6: That was an interesting learning experience because I'd kind of
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Speaker 6: grown up at Premium Verre. I wasn't CEO at Premire,
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Speaker 6: but I'd led a big part of that company and
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Speaker 6: it became the fastest growing part of that company. It
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Speaker 6: was an American software company, and my part of it
5:25
Speaker 6: became the largest largest part of it. So I think
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Speaker 6: when I when I was in that position. Then we
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Speaker 6: sold the company to Oracle, and I made like life
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Speaker 6: changing money in that transaction. Then Oracle said you got
5:37
Speaker 6: to stay, and we're going to pay you a bunch
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Speaker 6: of money to stay because we think we think you're great.
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Speaker 6: I was like King of the Hill. I thought I
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Speaker 6: thought I'd cracked life, and then I didn't enjoy Oracle.
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Speaker 6: I got approached to go do the KDS thing. And
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Speaker 6: I was so sure of myself. Afore I'd made it.
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Speaker 6: I'd worked this big firm oracle, I had all this
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Speaker 6: money now, And when I became CEO of KDS, I
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Speaker 6: took over from the founder of that company, and the
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Speaker 6: employee base, you know, was just committed to the founder
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Speaker 6: that you know, they didn't care about me. They didn't,
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Speaker 6: I don't know, they cared about the company so much.
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Speaker 6: They just were in love with this founder, with the founder.
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Speaker 6: So I took over. I had these great ideas. I
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Speaker 6: had what I thought was an incredible CV, and I
6:19
Speaker 6: would hold staff meetings and management meetings and people wouldn't
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Speaker 6: turn up, Like they just wouldn't.
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Speaker 4: They wouldn't show up for the meeting.
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Speaker 6: So you'd be sat in the meeting with croissants and
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Speaker 6: coffee and and nobody's just you and just you, yeah,
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Speaker 6: just you. And there was there was even a time
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Speaker 6: I went into a meeting room and I was like
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Speaker 6: pouring coffee before the customer arrived, and the team were
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Speaker 6: complaining and they went off to speak to HR about
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Speaker 6: me because I'd gone in the room and dared to
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Speaker 6: pour coffee, which was there for clients. So it was
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Speaker 6: a very difficult environment, and it kind of brought me
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Speaker 6: back to ground zero and said, you know, not not
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Speaker 6: everybody thinks you're good, not everybody cares, and you're going
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Speaker 6: to have to kind of go back to the basics
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Speaker 6: and kind of win people over, and you know, to
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Speaker 6: work a bit harder than this than I thought than
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Speaker 6: I thought I would. But yeah, I thought I cracked
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Speaker 6: it and everybody was just going to do what I
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Speaker 6: told them because I had this, you know, I had
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Speaker 6: a stellar kind of eight year career. But yeah, it
7:09
Speaker 6: was very, very humbling and very educational. Did you have
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Speaker 6: a thing like you're fired. You're not coming to me,
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Speaker 6: you're fired. Well, like, sometimes you have to have what
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Speaker 6: I call like public executions, you know, like you can't
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Speaker 6: and shouldn't do that to everybody, but there's a professional courtesy,
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Speaker 6: like if there's a meeting happening, you should show up.
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Speaker 6: Like that's just a that's a professional courtesy. So when
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Speaker 6: some of those things continued for a while, yeah, you
7:35
Speaker 6: got you know, you have to make examples of people
7:37
Speaker 6: so that the rest of the village understands this, this
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Speaker 6: behavior isn't isn't sad?
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Speaker 4: Have you heard that? That's right up your public executions.
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Speaker 3: If I can do a follow up real quick example,
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Speaker 3: how are you able to turn the tie to then
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Speaker 3: get them on your side after? Because I'm sure we
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Speaker 3: have some entrepreneurs and here that may be having issues
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Speaker 3: with their staff. How did you turn that ship to
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Speaker 3: get them back or initially with you when they were
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Speaker 3: so invested into the founder.
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Speaker 6: It's a really good point. I think it that was
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Speaker 6: such an important learning moment for me. Right, it just
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Speaker 6: killed my ego. My CV was irrelevant, The amount of
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Speaker 6: money I had was irrelevant. So I had to stop
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Speaker 6: and ask myself, like, how are we going to get
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Speaker 6: these people on side? And it taught me to communicate.
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Speaker 6: It taught me to really spend a lot of time
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Speaker 6: with staff explaining what we were trying to do, why
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Speaker 6: we were trying to do it, and most importantly, ian
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Speaker 6: like what their role in that was going to be right,
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Speaker 6: Because I don't think you can invite hundreds of people
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Speaker 6: to come to work every day because you want to
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Speaker 6: build a big company or a highly valuable company, or
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Speaker 6: because you want the stock price to go through the roof.
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Speaker 6: Because the guy working on the support desk who doesn't
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Speaker 6: have equity in the company. So I learned in that
8:50
Speaker 6: moment to translate the strategy of the company and the
8:53
Speaker 6: aspiration of the company into language that was meaningful for
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Speaker 6: everybody in the company.
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Speaker 4: Right.
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Speaker 6: So I started talking about what we wanted to do,
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Speaker 6: what we wanted to be, and why if you were
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Speaker 6: in this spot in the company it would create opportunities
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Speaker 6: for you or income for you, or you know, something
9:09
Speaker 6: important for you.
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Speaker 4: I made sure every.
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Speaker 6: Communication had that kind of free part trilogy to it.
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Speaker 6: What do we want to be, how we're going to
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Speaker 6: get there, and what it means for you know, rank
9:18
Speaker 6: and file employee and that and and some people loved
9:22
Speaker 6: it and we're excited and some people said, you know,
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Speaker 6: not for me, and they and they left and that
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Speaker 6: was that was okay too.
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Speaker 4: So all right, so let's get into this. So you're
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Speaker 4: the CEO.
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Speaker 5: Correct me if I'm saying is well, you're the CEO
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Speaker 5: of fort Toennaro for terror Portero, your partner in Courting Capital,
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Speaker 5: and you're chairman f FG. So that's a lot. So
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Speaker 5: can you talk about for To Naro Courting Capital? What
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Speaker 5: are those two companies and how does that intersect with
9:50
Speaker 5: your chairman position at f FG.
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Speaker 6: So, so for Terra is an ERP software company focusing
9:59
Speaker 6: on the industrial mid market in Europe is probably the
10:01
Speaker 6: biggest company in that space in Europe, so business to
10:04
Speaker 6: business enterprise software, so we sell direct to customers. Court
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Speaker 6: capitals are private equity firms. So it's a one point
10:11
Speaker 6: two billion euro fund. I've been been part of the
10:15
Speaker 6: team helped raise that fund. So now what we're trying
10:17
Speaker 6: to do is invest from that fund into technology companies.
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Speaker 6: So one of the guys trying to find opportunities convinced
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Speaker 6: managers to sell us a controlling stake in their business.
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Speaker 6: And f FG is something that me and my family
10:30
Speaker 6: created Full's Family Group because on my career journey, I've
10:35
Speaker 6: been helped by so many people.
10:37
Speaker 4: So many people have showed up.
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Speaker 6: At a moment in time giving me advice, introduced me
10:41
Speaker 6: to somebody, helped me out that I realized success isn't
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Speaker 6: always only talent based.
10:47
Speaker 4: Sometimes it's opportunities network.
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Speaker 6: So we set up f FG to try to try
10:53
Speaker 6: to play that network effect back to people like us
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Speaker 6: from places like I said, it's a not for profit
10:58
Speaker 6: trying to help people in their career aspirations.
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Speaker 3: Can you walk us through your investment philosophy everything Everyone
11:06
Speaker 3: here wants an investment jim from you. So when you're
11:08
Speaker 3: looking to acquire a company, what are you looking at
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Speaker 3: in terms of the parameters before you buy a company?
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Speaker 3: And what is something that makes a company like jump
11:18
Speaker 3: off of a sheet to you to say I have
11:19
Speaker 3: to buy this or be involved.
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Speaker 6: With It's different. So at Fortierra we're an acquisitive company.
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Speaker 6: I bought six I bought six companies with for Tierra
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Speaker 6: last year, the largest of which paraded one hundred and
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Speaker 6: fifty million pounds for So the philosophy is are different
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Speaker 6: between how I invest in acquire companies at for Tiro
11:40
Speaker 6: and how I would investors as a personal private investor.
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Speaker 4: Are you sure both? Yeah?
11:45
Speaker 6: Yeah, So on for Tiero, we've got free value creation streams, right,
11:50
Speaker 6: we want to grow to the company by more than fifteen
11:52
Speaker 6: percent organically every year. We want seventy percent or more
11:56
Speaker 6: of the company to be recurring revenue. So that's customers
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Speaker 6: on long term subscription plans. That's a higher quality of revenue.
12:03
Speaker 6: It allows you to invest for the long term because
12:05
Speaker 6: you know you've got this annuity base. And then the
12:08
Speaker 6: third is we want to expand our profit margins, both
12:11
Speaker 6: in net profit and percentage terms, you're a vehic because
12:15
Speaker 6: we want to show the company becomes more efficient as
12:17
Speaker 6: it scales. So when we look at a business, we're
12:20
Speaker 6: trying to figure out which of those parameters is going
12:23
Speaker 6: to accelerate. So I like things that grow faster than us,
12:26
Speaker 6: that are more recurring than seventy percent, and that have
12:29
Speaker 6: a profit margin in percentage terms higher than we have.
12:33
Speaker 6: And if it has all three of those and it's
12:35
Speaker 6: in our space, we're probably going to do the deal.
12:37
Speaker 6: If it has two of those, it's better, and not
12:40
Speaker 6: all three, only two, but I can figure out how
12:43
Speaker 6: to accelerate the third. That's even better. If it has
12:47
Speaker 6: none of those three, but I can look at it
12:49
Speaker 6: and say, when I own it, I will be able
12:51
Speaker 6: to accelerate all three of those. Those are the best
12:53
Speaker 6: because then you buy those for cheaper and they become
12:56
Speaker 6: more accretive in value terms. That's kind of the thesis
13:02
Speaker 6: on the full terrorI side. On the personal side, it's
13:05
Speaker 6: two things. I invest in things that I know and
13:07
Speaker 6: understand because I have a lot of time, so I
13:10
Speaker 6: need to expeble to look from distance and say, okay,
13:13
Speaker 6: you know this, it doesn't look like it's going well. Right,
13:16
Speaker 6: So you need to have pattern recognition and a rhythm
13:19
Speaker 6: for those businesses. So that's normally property and tech, and
13:24
Speaker 6: now I do stuff with startups, which is more to
13:28
Speaker 6: be supportive to founders who've got a great idea and
13:31
Speaker 6: I think I can add value and that's less about
13:34
Speaker 6: whether I'll get a standout return and more just this
13:37
Speaker 6: guy's great there. He's from Lewisham like me. You know,
13:40
Speaker 6: I think if I participate in this, let's go South London. Yeah,
13:47
Speaker 6: then I'll invest in. I'll invest in that.
13:50
Speaker 4: This is interesting.
13:51
Speaker 2: I wonder when you talk to founders, like you said,
13:55
Speaker 2: you do private equity, and so one of the things
13:58
Speaker 2: that we notice, especially in the States, is that when
14:01
Speaker 2: we have a company, we like to hold on to
14:03
Speaker 2: our companies. We don't like to sell because there's a
14:06
Speaker 2: stigma that if I sell a piece of ownership.
14:08
Speaker 4: I've sort of sold out.
14:10
Speaker 2: What's that like when you approach founders when you're looking
14:12
Speaker 2: at to be a part of the investment opportunity and
14:16
Speaker 2: ownership of a company.
14:19
Speaker 6: Yeah, I get it because I talk to founders all
14:22
Speaker 6: the time. You know, they started their company in nineteen
14:25
Speaker 6: ninety eight, they remortgage their house three times. You know,
14:28
Speaker 6: they've been living in this business for twenty years, haven't
14:31
Speaker 6: seen their kids, two divorces, and then I show up
14:34
Speaker 6: and say, you know, on my maths, this thing is
14:37
Speaker 6: worth you know, eighty million, and the guys or the
14:40
Speaker 6: lady saying, I feel like my life's work is worth
14:43
Speaker 6: you know, more than that, or I don't like the
14:46
Speaker 6: emotional element of just handing it over to you for money.
14:49
Speaker 6: There's two hundred people in this company who I know
14:51
Speaker 6: their names, I know their family, so I get the
14:54
Speaker 6: emotional element of doing those deals. What I've always tried
14:59
Speaker 6: to do those conversations explain that the legacy of the
15:02
Speaker 6: founder will continue under my under my ownership, right, so
15:06
Speaker 6: the things that they wanted to do, the things that
15:07
Speaker 6: were important to them in building that company, will continue
15:10
Speaker 6: to be important as long as that's true.
15:12
Speaker 4: Like sometimes you're.
15:13
Speaker 6: Buying a company, you know you're going to have the
15:15
Speaker 6: workforce on day one, which isn't a nice thing to do,
15:17
Speaker 6: but that's the capitalists in us, and that's the that's
15:20
Speaker 6: the business. But as far as you can continue a
15:23
Speaker 6: founder's legacy and cash them out in a meaningful way
15:27
Speaker 6: for it, it's normally it's normally a good a good thing.
15:30
Speaker 6: And fortunately I've kind of built a reputation. So when
15:33
Speaker 6: I speak to founders and say I'm going to continue
15:36
Speaker 6: a legacy. Go talk to these six founders who I
15:39
Speaker 6: acquired companies from before, they'll tell you that that's what happened.
15:44
Speaker 6: I've been able to trade a bit on my reputation,
15:48
Speaker 6: you know, my reputation with that. But there is this
15:51
Speaker 6: like fetish of complete ownership, which you know, which which
15:56
Speaker 6: I just don't agree with, Like it's about value creation,
15:59
Speaker 6: like how does how does ten million become one hundred million?
16:02
Speaker 6: And if if I can make one hundred million owning
16:05
Speaker 6: the minority steak or make twenty million own in all
16:09
Speaker 6: of it, I'm a capitalist, so I'd rather take the
16:12
Speaker 6: hundred than the minority steak. So yeah, I don't know
16:15
Speaker 6: why sometimes, especially in that culture, we're a little bit
16:18
Speaker 6: obsessed with you know, ownership or all costs.
16:21
Speaker 4: And I don't get I don't get that. So let
16:23
Speaker 4: me ask you this.
16:24
Speaker 5: As far as for people that are looking to get capital,
16:29
Speaker 5: whether it's on you know, private equity side, a bunch
16:31
Speaker 5: of capital side, what should they do to prepare themselves
16:36
Speaker 5: to pitch their companies to somebody like you.
16:40
Speaker 4: It's a great question.
16:42
Speaker 6: Well, unfortunately, less than one percent of available private equity
16:48
Speaker 6: capital goes to minority founders. So if you look like me,
16:53
Speaker 6: you have a disproportionately poor likelihood of getting funded, which
16:58
Speaker 6: is something you know through my relationship and ship a
17:01
Speaker 6: cornerstone we're trying to we're trying to train that we're
17:03
Speaker 6: focused on investing in underrepresented founders. I think, yeah, I
17:08
Speaker 6: see pictures all the time, maybe maybe a one hundred
17:12
Speaker 6: messages a week or pictures the team at f FG
17:15
Speaker 6: probably get, probably get more. First of all, I invest
17:19
Speaker 6: when I invest personally in a business, not on the
17:21
Speaker 6: full terier side. Personally, I'm investing in the person first,
17:26
Speaker 6: like the person, because a good person will make an
17:29
Speaker 6: average idea a success. An average person can destroy good
17:33
Speaker 6: but good idea. Right, So first thing is the person.
17:36
Speaker 6: So any business I'm investing on the personal side, I
17:39
Speaker 6: spend so much time with the person, Like they come
17:42
Speaker 6: to my house for dinner, and go and meet their family.
17:44
Speaker 6: We go and watch games, We sit and drink alcohol
17:47
Speaker 6: because people tell the truth after they've been drinking.
17:49
Speaker 4: True, great strategy.
17:51
Speaker 6: So I spent a bunch of time, right and normally.
17:54
Speaker 6: What I'm looking for in that person is, you know,
17:56
Speaker 6: all the all the normal things, good work, ethic, good
17:58
Speaker 6: business mind. But I want I find the reason that
18:01
Speaker 6: this person needs to be successful for themselves. I need
18:05
Speaker 6: the driver in the person. I don't want the person
18:08
Speaker 6: to tell me if you invest in me, I'll make
18:10
Speaker 6: sure you make a return.
18:12
Speaker 4: I don't want that.
18:13
Speaker 6: I want the person to say, I was bullied at school,
18:17
Speaker 6: my girlfriend left me, I lost a bunch of money,
18:20
Speaker 6: and this making this a success. This is how I
18:24
Speaker 6: This is how I change my past and creating future
18:26
Speaker 6: right time. As the person is the first thing. The
18:29
Speaker 6: second thing is a well fought out idea, and a
18:33
Speaker 6: well fought out idea isn't always somebody describing how this
18:37
Speaker 6: is going to be the next Facebook or Snapchat, which
18:40
Speaker 6: too many founders do, and they I don't think they
18:42
Speaker 6: realize the kind of scarcity element of a Facebook or
18:48
Speaker 6: a Snapchat. And I don't think they realize how much
18:50
Speaker 6: money there is to be made, you know, like a
18:53
Speaker 6: free extra return is crazy, right, that's great, So don't
18:57
Speaker 6: tell me I give you fifty grand and give me
18:59
Speaker 6: back fifty million and six years give fifty grand, giveing
19:02
Speaker 6: bick one hundred and fifty grand in six seven years time.
19:04
Speaker 4: Amazing.
19:05
Speaker 6: So a well fought out business idea with a path
19:08
Speaker 6: to like a modest return, I'm all in.
19:12
Speaker 4: And then like accuracy in the numbers.
19:17
Speaker 6: I've seen a lot where people pitch businesses and they're
19:20
Speaker 6: very visionary, they're very creative, which I admire because I'm not.
19:24
Speaker 6: And then we get to the numbers and they're kind
19:25
Speaker 6: of like, well, you know, you don't really need to
19:27
Speaker 6: worry about those too much, and I've forgotten and oh shit,
19:29
Speaker 6: I've just realized this isn't adding up the way it's
19:31
Speaker 6: supposed to. Like, at some point, this company is going
19:35
Speaker 6: to have an amount of pounds in the bank, and
19:39
Speaker 6: if you are not a careful custodian of those pounds, yes,
19:42
Speaker 6: bad things are going to happen. So if you're pitching
19:44
Speaker 6: your business and you didn't have the fortitude to even
19:49
Speaker 6: rehearse to pretend you were going to be good at
19:52
Speaker 6: managing the pounds, yeah, you know, I'm out.
19:56
Speaker 4: I'm out.
19:56
Speaker 6: And sometimes people talk to me as I just have
19:59
Speaker 6: multiple fifty fiveands of pounds that I'm just wanting to
20:01
Speaker 6: toss around, like for vibes and you know, because it's
20:04
Speaker 6: funny to do.
20:05
Speaker 7: Vibes are important, but yeah, it's that's not going to happen. Yeah,
20:09
Speaker 7: so those would be my free I feel.
20:12
Speaker 3: Like the geopolitical market and overall stock market has been
20:15
Speaker 3: in a weird place since twenty nineteen. As an investor
20:18
Speaker 3: and business owner, do you think these next three or
20:21
Speaker 3: four years will become a little bit easier or are
20:24
Speaker 3: we like setting up for a black Swan event here
20:27
Speaker 3: anytime soon.
20:29
Speaker 6: I think it's a great time to be an investor,
20:30
Speaker 6: isn't it. Like all the nervousness, caution, downturn and these
20:35
Speaker 6: are great times for investors because history has told us,
20:40
Speaker 6: you know, we come out of recessions, we come out
20:42
Speaker 6: of downturns, right, That's what history has told us. So
20:44
Speaker 6: if you deploy capital now, if you're able to deploy
20:47
Speaker 6: capital now, and you're able to leave that capital deployed,
20:51
Speaker 6: you're almost invariably going to make money. Now you have
20:53
Speaker 6: to make good choices about where you deploy it. But
20:56
Speaker 6: downturns are just you know, kind of infinite opportunity. So
21:00
Speaker 6: on a personal level, I've been invested more in this
21:03
Speaker 6: downturn then you know in twenty eighteen, twenty nineteen.
21:06
Speaker 3: Quick follow up, Are you worried about VC valuations the
21:09
Speaker 3: commercial real estate bubble that can pop any contagion level
21:13
Speaker 3: events or are you just head down focus focusing on
21:16
Speaker 3: the supercycles and buying.
21:17
Speaker 6: These are timing, These are all timing events. They're all
21:21
Speaker 6: time And like if you if you you know, you
21:24
Speaker 6: buy a house to live in that house, and at
21:26
Speaker 6: some point you might sell that house over a twenty
21:28
Speaker 6: five year period, you're going to lose money on that house.
21:31
Speaker 6: Not over twenty five year period that is going to
21:32
Speaker 6: be worth a lot more than you paid for it.
21:35
Speaker 6: So the only thing that matters is the moment in
21:36
Speaker 6: time when you need to sell that house. That's true,
21:39
Speaker 6: that's the only thing that matters. So so downturns, if
21:42
Speaker 6: you have capital, if you have liquidity, if you can
21:44
Speaker 6: get it, are great times to invest. And that's what
21:47
Speaker 6: that's what I've been doing. That's what we've been doing
21:49
Speaker 6: at FFG. We're so aggressive a court and trying to
21:52
Speaker 6: find stuff. You know, we bought six companies last year
21:55
Speaker 6: at for Tierra a little bit because of that. So, yeah,
21:58
Speaker 6: you don't want to buy something at the peace of
22:00
Speaker 6: that absolutely not. That's tough, but yeah, it's a great,
22:04
Speaker 6: great time to be.
22:05
Speaker 4: What's your holding period?
22:06
Speaker 6: My last follow up, It depends, it depends what it is.
22:10
Speaker 6: So for real estate, you know, we own a lot
22:13
Speaker 6: of properties double digit years, you know, ten, ten, fifteen years.
22:19
Speaker 6: Maybe tech clap it up seven seven?
22:23
Speaker 4: What seven? Tech? Tech is?
22:25
Speaker 6: Tech is up up to seven because normally over a
22:29
Speaker 6: seven year cycle and privately held tech, yeah, you find it.
22:32
Speaker 6: You find a moment to find a moment to get out.
22:35
Speaker 6: But also tech can kind of define valuations. If you
22:37
Speaker 6: have a hot company, strategic buyer, you can defy kind
22:40
Speaker 6: of market conditions and valuations to tech a little bit.
22:43
Speaker 4: A little bit.
22:44
Speaker 2: Can we go back to last year February twenty twenty two,
22:47
Speaker 2: And I just want to give people context when we
22:49
Speaker 2: talk about this is a rare conversation. This is a
22:51
Speaker 2: legendary moment for Tero achieved something that I don't think
22:56
Speaker 2: we've spoken to anybody that has done this. You achieved
23:00
Speaker 2: tech unicorn, right, which means a billion dollars raised.
23:04
Speaker 4: Please clap it up for that. That's tough.
23:08
Speaker 2: A new market euros euros in euros even more. I mean,
23:16
Speaker 2: I trust my intuition, but what is that like for you,
23:19
Speaker 2: when you trust your intuition, you've got the process of
23:22
Speaker 2: how you're gonna invest in companies. But when you see
23:25
Speaker 2: something like this happened, what was that that moment.
23:28
Speaker 6: Like, oh oh my god, that was Yeah, that was
23:33
Speaker 6: that was unbelievable.
23:34
Speaker 4: That was emotional for a few reasons. You know.
23:36
Speaker 6: Number one, when I got to for Tero, the evaluation
23:40
Speaker 6: was free seven six, So I walked to the door.
23:43
Speaker 6: It was free seven six. Number two, I told the
23:47
Speaker 6: investor who I was going to work with that twenty
23:50
Speaker 6: four months billion euros and he was like, yeah, knowing
23:53
Speaker 6: about it, you know six seven will be okay. I said, no,
23:56
Speaker 6: been in euros. And just secondly, the again, the scarcity
24:02
Speaker 6: of that, right. I think I did some people with
24:04
Speaker 6: Bloomberg where they said there are six thy seven hundred
24:08
Speaker 6: privately held companies on Earth with a market cap of
24:12
Speaker 6: a billion or more, and only eight of them are
24:15
Speaker 6: run by black you know, black operatuities. So to be
24:20
Speaker 6: in that conversation is just unbelievable.
24:25
Speaker 5: That's amazing. Yeah, that's that's all. I mean, that's pretty amazing,
24:32
Speaker 5: But it's also pretty alarming. Yeah, six thousand companies, only
24:36
Speaker 5: eight and only eight are run by a black person.
24:40
Speaker 5: And another thing that's pretty alarm in which you spoke
24:42
Speaker 5: about where So we spoke with a gentleman named Don Peebles,
24:46
Speaker 5: who's the top black real estate developer in America and yeah,
24:49
Speaker 5: shout out to.
24:52
Speaker 4: And he he told us.
24:53
Speaker 5: That there was eleven trillion in private equity and venture
24:58
Speaker 5: capital in America, money that's been flowing every every single year.
25:03
Speaker 5: And out of that eleven trillion, ninety seven point five
25:08
Speaker 5: percent goals to white men. So that means that two
25:16
Speaker 5: point five percent is divvied up between women, all women
25:22
Speaker 5: of every race, and every person of any color, Black, Spanish, Indian,
25:29
Speaker 5: doesn't matter. So the whole entire, every single person outside
25:33
Speaker 5: of white men are fighting for two point five percent.
25:36
Speaker 5: So when we spoke to Robert Smith, who.
25:40
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Speaker 5: Who's the richest Black American ever? He told us the
27:33
Speaker 5: other side of that story where he said that seven
27:39
Speaker 5: ninety seven point five percent of all venture capital and
27:42
Speaker 5: private equity firms are run by white men.
27:47
Speaker 4: So now it starts to make sense. White men lend
27:49
Speaker 4: to white men.
27:51
Speaker 5: So how do we have more private equity venture capital firms?
27:58
Speaker 5: Because I mean, it's been proved and that people kind
28:01
Speaker 5: of usually look out for each other, and that's just
28:07
Speaker 5: like historical fact. So black firms higher proportionally lend to
28:14
Speaker 5: black people. It would make sense. The problem is that
28:16
Speaker 5: we just don't have enough black companies. So how do
28:18
Speaker 5: we get more black private equity firms and more black
28:22
Speaker 5: venture capital because that's the part of the wealth gap
28:25
Speaker 5: that nobody talks about. Yeah, where it's like, okay, you
28:29
Speaker 5: know you can, we can implement programs, we can get
28:31
Speaker 5: more college degrees, but you ultimately are only going to
28:35
Speaker 5: be as good as the exposure that you have in
28:37
Speaker 5: the capital that you can raise. So if you don't
28:39
Speaker 5: have access to money and you don't have any relationships,
28:43
Speaker 5: you could be the brightest person in the world.
28:45
Speaker 4: It's not going to work.
28:46
Speaker 5: Where Mark Zuckerberg he has a great idea, but more importantly,
28:52
Speaker 5: he has millions of dollars in capital to get Facebook started.
28:56
Speaker 5: If he didn't have that money, then Facebook would have
28:59
Speaker 5: just been another good idea. Yeah, so how do we
29:01
Speaker 5: solve how do we help work to solve this problem?
29:03
Speaker 4: Wow? I don't know.
29:06
Speaker 6: No, Okay, it's a big it's a big deal. I
29:10
Speaker 6: think there's like a few there's a few different elements
29:13
Speaker 6: to write. So I'm a big believer in taking responsibility
29:20
Speaker 6: for it. Right, let's take let's take responsibility for it.
29:23
Speaker 6: I think I don't have hostility towards the way capital
29:28
Speaker 6: is deployed by private equity, your bench capital, because of
29:31
Speaker 6: the familiarity with what you see. Right, So I don't
29:35
Speaker 6: hold any grudge to a white man who's going to
29:37
Speaker 6: make a fifty million euro investment in a company doing
29:41
Speaker 6: it to something and somebody that he feels very comfortable with,
29:45
Speaker 6: very familiar with. He's seen a bunch of times before. Right,
29:48
Speaker 6: I don't have any I don't have any any issue
29:51
Speaker 6: with that. His job is to turn that capital into
29:53
Speaker 6: more capital. So if he's more comfortable with this bet
29:56
Speaker 6: versus this one, I don't. I don't have hostility towards
30:00
Speaker 6: for doing that. So when I say take responsibility, I
30:04
Speaker 6: mean I feel like there's an element, there's an element
30:07
Speaker 6: of us understanding this game. And when we walk into
30:11
Speaker 6: those rooms understanding the one hundred and ten percent is
30:15
Speaker 6: the minimum. One hundred and twenty percent maybe gets us
30:18
Speaker 6: the gig.
30:18
Speaker 4: Right.
30:19
Speaker 6: That's just where we are in society. We're a minority
30:22
Speaker 6: in most of the major economies. So whether we like
30:25
Speaker 6: it or not, that is the gig.
30:26
Speaker 4: Right.
30:27
Speaker 6: So when I say to you, I see I spend
30:29
Speaker 6: every Saturday morning looking at pictures for f FG. And
30:32
Speaker 6: let's say I look at ten pictures each Saturday morning,
30:35
Speaker 6: I can tell you that seven or eight of those
30:36
Speaker 6: pictures are poorly prepared, contained spelling mistakes, how people are
30:42
Speaker 6: wrestling with the technology for the first time. And this
30:46
Speaker 6: is before we get to the viability of the business idea.
30:49
Speaker 6: Before we get to the viability of the business idea,
30:51
Speaker 6: we can show up better than that let's invest and
30:55
Speaker 6: use our friends and use our networks to show up
30:57
Speaker 6: to show up better. So let's take responsibility for being
31:00
Speaker 6: uber excellent in the first place. Then there comes the
31:03
Speaker 6: next part, which is, you know, coming up with something
31:08
Speaker 6: that is credible, viable, and having the tenacity to push
31:12
Speaker 6: it in the first place. Right, So, being prepared for
31:16
Speaker 6: the noose, being prepared for the ego bumps, but continue
31:19
Speaker 6: to go. Because even Zuckerberg and Jobs and Bezos all
31:24
Speaker 6: had their moments where people were kicking them in the
31:26
Speaker 6: shins and saying this thing perhaps isn't going to make
31:28
Speaker 6: it out. So we have to be ready for those
31:31
Speaker 6: things too. And then yeah, there is us in private equity.
31:34
Speaker 6: There is us in vcs who have to work harder
31:37
Speaker 6: to break that familiarity cycle of only other deploying capital
31:41
Speaker 6: and things that we've seen before, things that we know before,
31:43
Speaker 6: and people that we've worked with before. Right, And I
31:46
Speaker 6: take myself out of that for a moment, because now
31:48
Speaker 6: we're talking about the people who control those firms who
31:50
Speaker 6: are invariably you know, not us and don't look like us.
31:53
Speaker 6: There is more effort that needs to be made, you know,
31:56
Speaker 6: to break that familiarity cycle. I definitely put it in
32:01
Speaker 6: place free. I definitely put in place free. Do we
32:04
Speaker 6: collectively want private equity to deploy a pound behind the
32:08
Speaker 6: black founder who is, you know, poorly prepared, poorly researched.
32:12
Speaker 6: I don't think that's reasonable. Show up a game, well researched,
32:16
Speaker 6: well prepared, good deck, and then yeah, then then you've
32:21
Speaker 6: put it on them to back you. At that point,
32:23
Speaker 6: I think we've got to take a lot responsible.
32:25
Speaker 4: Never follow up. You gotta follow up. Okay, well I
32:30
Speaker 4: do have a follow up. I know him, go ahead.
32:32
Speaker 5: I agree with everything you said, but I also think
32:35
Speaker 5: that it's awareness to have positions of So I we
32:38
Speaker 5: was at Diddy's house and.
32:41
Speaker 4: Shout out to Black Caesar. You see the little casual,
32:44
Speaker 4: humble flex talk.
32:45
Speaker 3: Your talk said again, well Miami, Sarry Island, where were
32:49
Speaker 3: you at?
32:49
Speaker 4: Wait, where were you at.
32:52
Speaker 2: That you've heard of that guy before?
32:55
Speaker 4: Yeah, that's cool.
32:57
Speaker 5: So we was talking and he was very passionate about
32:59
Speaker 5: one and to solved the wealth gap and wanting to
33:01
Speaker 5: help black people. And I was telling him that, Okay,
33:05
Speaker 5: we have some people now that have become billionaires through entertainment,
33:09
Speaker 5: through sports, a couple of different areas. It's great to
33:15
Speaker 5: start a clothing brand or start a tequila brand. But
33:18
Speaker 5: what would be better is if a few of them
33:21
Speaker 5: came together and started a private equity firm, or started
33:24
Speaker 5: a venture capital firm, or started a political lobby all. So,
33:30
Speaker 5: I think that part of that is the education for
33:34
Speaker 5: the people that do have resources. They may not be
33:37
Speaker 5: able to do it themselves, but collectively, and they're not expertise.
33:40
Speaker 5: That's what we said, I'm not expert. Well, you don't
33:42
Speaker 5: have to be an expert. This is when you bring
33:44
Speaker 5: somebody that has an expertise in to run the company,
33:47
Speaker 5: just like somebody might not be an expert in fashion,
33:50
Speaker 5: but they'll bring a designer in and they'll So I
33:57
Speaker 5: understand why white people would while a white man will
34:00
Speaker 5: lend to a white man, But it is not sustainable.
34:07
Speaker 5: There's a reason why the economies is on the dcline.
34:11
Speaker 5: This is what I told we was in front of
34:12
Speaker 5: we was in Bloomberg. I told the room full of Bloomberg.
34:15
Speaker 5: I said, look, the way that the capitalistic society in
34:19
Speaker 5: America has worked is not working. And if you keep
34:23
Speaker 5: if you keep with the same philosophy of empowering, the
34:27
Speaker 5: problem is that a lot of people look at empowering
34:29
Speaker 5: disenfranchised people as charity.
34:32
Speaker 4: It's really it's best practices.
34:34
Speaker 5: If you keep looking at like his charity, this is
34:36
Speaker 5: why we are declining, right, and other countries are English.
34:41
Speaker 5: So I think that we have to start pushing a
34:44
Speaker 5: narrative of this, Like we got to push a narrative
34:49
Speaker 5: to even make people aware that most people don't even
34:52
Speaker 5: know that. They don't even know about private equity in
34:54
Speaker 5: venture capital with different things that nature. So it's like,
34:56
Speaker 5: we need more private aquit, more venture capital. But if
34:59
Speaker 5: they're not even aware of it, or if the narrative
35:01
Speaker 5: is not pushed for it, then we're not even in
35:04
Speaker 5: a position where we can even try to help ourselves.
35:07
Speaker 4: I think you're right.
35:10
Speaker 6: But how it happens at scale, I think is something
35:14
Speaker 6: that we can really take you know, we can really
35:16
Speaker 6: take charge of. If you take court capital. We raised
35:18
Speaker 6: one point two billion as part of my participation with them,
35:21
Speaker 6: I said we are going to invest in ten black
35:24
Speaker 6: lead businesses each and every year, right, which is cool.
35:28
Speaker 6: Does it shift the needle entirely? Probably not. The main
35:32
Speaker 6: reason that's important to me is it will condition these
35:35
Speaker 6: guys to reviewing, you know, fifty sixty businesses right, so
35:40
Speaker 6: now they see sixty businesses that they may otherwise not
35:42
Speaker 6: have looked at. We'll invest in ten and you get
35:45
Speaker 6: You start to change that familiarity cycle. And that, for
35:48
Speaker 6: me is the main thing changing that familiarity cycle. That's
35:51
Speaker 6: why these conversations are great. That's why you know my
35:55
Speaker 6: career I think has been important. Away from the numbers,
35:58
Speaker 6: there's now a set of private equity firms think what
36:01
Speaker 6: we backed, we backed Dean, we made free for six
36:04
Speaker 6: times our money. So when the next Dean walks through
36:06
Speaker 6: the room, they kind of going, well, we don't want
36:08
Speaker 6: to miss the next Dean, so maybe we listen to
36:10
Speaker 6: this a little bit differently. For me, it's like breaking
36:13
Speaker 6: that familiarity cycle. But we like we got to show
36:16
Speaker 6: up with our a game, like we got to take
36:19
Speaker 6: responsibility for that.
36:20
Speaker 3: For all the entrepreneurs here, what project products or innovation
36:24
Speaker 3: needs to be created and there's a new landscape that
36:27
Speaker 3: will allow them like an irresistible path to get funded.
36:31
Speaker 3: Because we have enough social media companies, we have enough door,
36:34
Speaker 3: dash and delivery service type companies.
36:37
Speaker 4: What's the next wave?
36:38
Speaker 3: AI is already here, So I think most of us
36:41
Speaker 3: may have missed the boat on that. What do you
36:43
Speaker 3: think is the next innovation or project or product that
36:45
Speaker 3: we need to create that can get funded.
36:47
Speaker 6: The thing I struggle with the most for Terror, the
36:51
Speaker 6: thing we struggle with the most at Corton and the
36:56
Speaker 6: businesses we look at at Corton and even for Tero
36:58
Speaker 6: struggle with is talent. It is, you know, finding brilliant people,
37:04
Speaker 6: you know, getting them into the company, keeping them in
37:06
Speaker 6: the company for the right amount of timing, and I
37:08
Speaker 6: know it sounds strained, but like extracting value from them
37:11
Speaker 6: whilst they're kind of a talent of our company. So
37:15
Speaker 6: I think any technology solution that is helping companies find
37:20
Speaker 6: the right talent, engage the right talent, extract value or
37:23
Speaker 6: not extract exchange value because people should be compensated for
37:27
Speaker 6: their work Like that to me is a really important
37:31
Speaker 6: place right now. Our strategy to create value for TIRA,
37:35
Speaker 6: I think is very defensible. Market conditions are favorable. Whether
37:39
Speaker 6: or not I'm successful depends on, you know, the two
37:42
Speaker 6: thousand people that come to work every day, the three
37:45
Speaker 6: hundred of them that will leave, and the six hundred
37:47
Speaker 6: of them are replaced with Like how does that cycle
37:50
Speaker 6: move that that is where success or failure will be determined.
37:55
Speaker 6: So anything around optimizing human capital human talent.
38:00
Speaker 4: Followup real quick?
38:01
Speaker 3: You think we have more talent if tech companies decided
38:04
Speaker 3: to pay more?
38:07
Speaker 4: You wan, it's a TEXTI somebody's going to work tomorrow.
38:11
Speaker 6: That raise.
38:12
Speaker 3: I mean, can we be very honest here at in
38:14
Speaker 3: the States, there are a lot of people, I think
38:16
Speaker 3: who are looking for jobs, But it seems when I
38:19
Speaker 3: talk to people on a daily basis, they've almost given
38:22
Speaker 3: up hope that almost all the good jobs are gone.
38:24
Speaker 3: Or if I have a tremendous value, I won't. Does
38:27
Speaker 3: everyone here feel like they're getting paid what they're worth?
38:33
Speaker 3: Does anyone here feel like they are getting paid what
38:35
Speaker 3: they're worth?
38:38
Speaker 5: Shot out to you, nobody's gonna pay you like you
38:40
Speaker 5: pay yourself, So you're never gonna get paid how much
38:45
Speaker 5: you work unless you're paying yourself.
38:47
Speaker 4: Great point. They took their clap back.
38:53
Speaker 6: I don't know if if compensation creates talent. I know,
38:58
Speaker 6: if I pay a person more, or they become more,
39:02
Speaker 6: you know, they become more talented. I do think there's
39:05
Speaker 6: like a comp issue. Like in the textplace, we've seen
39:07
Speaker 6: Facebook been people Google have laid off a bunch of people.
39:10
Speaker 6: I think even Amazon have announced the land of people.
39:13
Speaker 6: So yeah, there's a there's a there's clearly a talent
39:16
Speaker 6: and compensation issue in the tech space, for sure.
39:19
Speaker 4: I think the beauty, but not of my company that
39:21
Speaker 4: we got to be clear well comers. Uh.
39:26
Speaker 2: The thing about tech and I love it is because
39:28
Speaker 2: of the growth and because of innovation, because of the disruption
39:31
Speaker 2: that it causes.
39:32
Speaker 4: We said, AI is here.
39:34
Speaker 2: I wonder how you look at it from a private
39:36
Speaker 2: investor in terms of are you looking for companies that
39:40
Speaker 2: are creating new forms of AI? Are you looking at
39:43
Speaker 2: companies that if they had AI can enhance their performance?
39:47
Speaker 6: We love the latter, Like if a company is doing
39:50
Speaker 6: great and just haven't figured out that applying AI could
39:54
Speaker 6: create a bunch of value, then yeah, you acquire that company,
39:57
Speaker 6: you put the AI in and you created a set
39:59
Speaker 6: of value. You know, they may they may be missed out.
40:02
Speaker 6: And so yeah, we you know, we love AI. We're
40:05
Speaker 6: doing some interesting things you know with with AI at
40:09
Speaker 6: the moment. But any any company that we can acquire
40:11
Speaker 6: where the application of AI is an immediate accelerant is
40:15
Speaker 6: a is a great deal to go after.
40:17
Speaker 2: Can I get to follow up real quick. Absolutely, So
40:19
Speaker 2: in terms of creating talent, I want to go back
40:22
Speaker 2: to that a little bit, because yes, AI will make
40:24
Speaker 2: things more efficient until that talent level kind of gets
40:27
Speaker 2: increased unless they have the talent inside of that space.
40:30
Speaker 2: How do we go about forming intentionality around crafting the
40:35
Speaker 2: talent or creating an incubator in a sense to have
40:39
Speaker 2: talent so that we know where we can go if
40:41
Speaker 2: we need it.
40:42
Speaker 6: Yeah, Like, there's been a lot of debates about AI,
40:45
Speaker 6: like wiping out mass jobs and these kind of things,
40:47
Speaker 6: and it comes back to like the innovation question. You know,
40:50
Speaker 6: like over over time, over decades, disruptions, innovations happening in
40:54
Speaker 6: the market. The wheel took out a bunch of jobs
40:57
Speaker 6: where people would carry stuff from one place to another place.
41:00
Speaker 6: We had the wheel, so now it needed one person
41:02
Speaker 6: to drive wherever it was. So like this stuff happens,
41:05
Speaker 6: you know, all of the time. So like humanity will
41:08
Speaker 6: just redefine itself. I think although AI is probably the
41:11
Speaker 6: biggest you know, innovation disruption of the of the twentieth century,
41:15
Speaker 6: of twenty first century, in terms of talent, people are
41:20
Speaker 6: staying less in education than they ever have, and people
41:24
Speaker 6: are staying shorter tenures in jobs than they ever have.
41:28
Speaker 6: So as an employer, I am a little bit worried
41:31
Speaker 6: about like the depth of expertise. So where people stayed
41:36
Speaker 6: ten years in a job and they built up incredible
41:38
Speaker 6: expertise and the main knowledge in the job, don't really
41:40
Speaker 6: do that anymore. And where people stayed in education and
41:43
Speaker 6: got PhDs because it was the thing to do, they don't.
41:47
Speaker 4: They don't do that anymore.
41:48
Speaker 6: So you know, statistically you would expect the degree of
41:52
Speaker 6: expertise to fall off, which.
41:54
Speaker 4: As an employer is a worrying, a worrying phenomenon. That question,
42:00
Speaker 4: how are you how are you?
42:01
Speaker 5: You say you're excited about AI as far, how are
42:03
Speaker 5: you utilizing AI and what are your plans to utilize
42:06
Speaker 5: AI in your in your businesses?
42:08
Speaker 6: So so at for Terra the main application of AI,
42:12
Speaker 6: which I think is pretty cool. So we serve industrial
42:15
Speaker 6: companies who are usually manufacturing goods, manufacturing you know, different
42:20
Speaker 6: elements and machinery, et cetera. So for some of our customers,
42:25
Speaker 6: the goods and products that they make are kind of
42:27
Speaker 6: weather dependent. So we have a weather customer who makes
42:30
Speaker 6: garden furniture. So we are using AI to predict sales demand,
42:38
Speaker 6: which is based on historical trends, effectiveness of their salespeople,
42:42
Speaker 6: plus weather patterns forward forward facing weather patterns, so we
42:47
Speaker 6: know in good weather times people all the more kind
42:50
Speaker 6: of garden furniture, and bad weather times they don't. Now
42:54
Speaker 6: that's important because instead of buying I don't know, to
42:57
Speaker 6: have a garden table, which is predominantly glass. So instead
43:00
Speaker 6: of buying fifty glass sheets for these tables because they've
43:04
Speaker 6: got fifty two orders, they buy three hundred glass sheets
43:09
Speaker 6: because they anticipate three hundred orders. And as we know,
43:12
Speaker 6: you buy three hundred at a lower price per unit
43:14
Speaker 6: than you buy fifty. So it's just unlocking margin for
43:17
Speaker 6: them with clever use of AI, and you apply that
43:20
Speaker 6: across all of their products, all the timelines, all the
43:23
Speaker 6: sales people. You help them incrementally buy elements and components
43:30
Speaker 6: of their products at a lower and lower per unit price.
43:34
Speaker 6: You also help them not stock things that they're not
43:37
Speaker 6: going to sell, so now they're not buying things, deploying cash,
43:41
Speaker 6: putting it in the warehouse, paying for its storage. So
43:44
Speaker 6: you just helping them gain more and more margin. Very
43:47
Speaker 6: very simple but effective use of AI Machine learning you've.
43:51
Speaker 3: Had a few successful exits, just talk like it's just
43:54
Speaker 3: me and you like it's maybe for you. How the
43:57
Speaker 3: hell you pull us off this many times? Like welk
43:59
Speaker 3: us through your and can you tell us how difficult
44:02
Speaker 3: it is to have that many exits? But for all
44:04
Speaker 3: the aspiring entrepreneurs entrepreneurs in a building, did you start
44:08
Speaker 3: with that end goal in mind?
44:10
Speaker 4: Or like what was your rationale?
44:12
Speaker 3: Because like to be able to do what you've done
44:14
Speaker 3: and be a unicorn that's not by accident.
44:18
Speaker 6: Uh. I always had like each project at a time,
44:23
Speaker 6: Like I was never when I was at Primavera. I
44:26
Speaker 6: was never thinking one day I'll be in a company
44:29
Speaker 6: would do with the a unicorn. I was just kind
44:30
Speaker 6: of at Primavera thinking man like, these people are talking
44:34
Speaker 6: about this thing going for three hundred four hundred million,
44:36
Speaker 6: and I've got three percent of this company.
44:38
Speaker 4: That would be like life changing.
44:40
Speaker 6: So now this deal has to get done because that's
44:42
Speaker 6: gonna And then that happened and you go to KDS
44:45
Speaker 6: and KDS was.
44:46
Speaker 4: A much smaller company losing money.
44:49
Speaker 6: So that was a pride thing where it was like, Okay,
44:51
Speaker 6: I've come out of the comfort of Oracle you know,
44:54
Speaker 6: the cachet of being in one of the world's greatest
44:58
Speaker 6: tech companies.
44:59
Speaker 4: I'm in this kind of startup in France.
45:01
Speaker 6: It's going badly, so now this has to work right,
45:04
Speaker 6: So now you're trying to make that work. And that
45:06
Speaker 6: was very difficult. And then I went to core HR
45:10
Speaker 6: and I was asking myself, are you any good you
45:13
Speaker 6: did Primavari? You weren't the CEO you did KDS. Okay,
45:17
Speaker 6: you've done one. You need to prove that you're actually
45:20
Speaker 6: good and you know what you're doing. So that became
45:22
Speaker 6: the core Hr thing. And then when I came out
45:24
Speaker 6: of core HR and I had this opportunity. Yeah, that's
45:27
Speaker 6: when I put the billion on it to say, I
45:30
Speaker 6: like the sound of two billion and exit, So this
45:32
Speaker 6: now has to be two billion.
45:34
Speaker 4: It was always is.
45:36
Speaker 3: Here casually he says that I guess two.
45:40
Speaker 6: But you know something, and it's something I heard you
45:43
Speaker 6: guys talk about as well. I was very lucky, like
45:47
Speaker 6: people broke my horizons because growing up how I grew
45:51
Speaker 6: up and how a lot of people grow up like
45:53
Speaker 6: you cap your horizons. You start to think that certain
45:56
Speaker 6: things are not possible, or certain numbers just sound too big.
46:00
Speaker 6: I remember pitching KDS to Google, and we were in
46:03
Speaker 6: the hotel room the night before we wanted Google to
46:05
Speaker 6: buy KDS. So we're in the hotel room the night before.
46:08
Speaker 6: We've had business plan and everything I said about investing
46:10
Speaker 6: in well thought out business plan to just pulls that
46:12
Speaker 6: for a second, because we're in the hotel room going
46:15
Speaker 6: through the business plan, going this isn't exciting enough for
46:17
Speaker 6: them to add a zero, add a zero to all
46:19
Speaker 6: of these numbers, adding zeros, and then we're looking at
46:22
Speaker 6: it again, going.
46:22
Speaker 3: We've all done and when applied for a job, this
46:25
Speaker 3: is the same thing at.
46:26
Speaker 4: A higher level.
46:27
Speaker 6: And then we're like, I still like add another zero,
46:29
Speaker 6: like just get at it. So we're just dumping numbers
46:32
Speaker 6: into this business plan and rehearsing the business plan to
46:35
Speaker 6: say it like with authority, like we really did it.
46:38
Speaker 6: And we went into Google and the guy said, see
46:41
Speaker 6: if we achieved this business plan, what would be our
46:43
Speaker 6: market share in those in those economies and every think
46:47
Speaker 6: We said, you know, we'll get up to like fourteen
46:49
Speaker 6: fifteen percent, which isn't bad market share. And the guy said,
46:53
Speaker 6: how do you measure market share? And we said, so
46:55
Speaker 6: of all of the companies that would use a product
46:57
Speaker 6: like this will have fifteen forty fifteen percent of them.
47:01
Speaker 6: And he said, oh, we measure market share differently. So
47:03
Speaker 6: I said, how do you measure it? He said, by
47:05
Speaker 6: population of the globe that have Internet connectivity. Jesus perspective
47:13
Speaker 6: is he so so you're just like, all, you know
47:15
Speaker 6: that we couldn't have put enough zeros in this thing
47:17
Speaker 6: to make it, you know, to make it relevant.
47:20
Speaker 4: But I'm lucky.
47:21
Speaker 6: I've had those I've had those moments where people have
47:24
Speaker 6: just blown, you know, blown my context. I remember when
47:27
Speaker 6: we were pitching I think it was KDS again, and
47:31
Speaker 6: we had an offer for sixty five million, and I
47:33
Speaker 6: was telling that then investor that it was really difficult
47:36
Speaker 6: and maybe we should accept this offer. You know, it's
47:39
Speaker 6: a good off for sixty five million. And it was
47:42
Speaker 6: on his jet. Actually, we sat on his private jet
47:44
Speaker 6: talking through this, talking through this offer. And I've never
47:47
Speaker 6: seen anybody me be more disappointed. He invested four million dollars,
47:50
Speaker 6: by the way, and he was going to get back
47:51
Speaker 6: sixty five and I've never seen anybody more disappointed in
47:55
Speaker 6: that return profile like and he said to me, I
47:58
Speaker 6: don't forget it.
47:59
Speaker 4: And I've told the story before.
48:00
Speaker 6: He said, you know what you're going to do if
48:01
Speaker 6: we still just coming from sixty five million, you know
48:04
Speaker 6: you're going to make a bit of money. You're going
48:06
Speaker 6: to buy a beach house, a holiday house in the
48:08
Speaker 6: south of France, a watch and a Porsche and then
48:11
Speaker 6: what you're going to do?
48:12
Speaker 4: Right?
48:14
Speaker 7: But he was telling me a truth though, But I
48:16
Speaker 7: was as great, you know, you got it.
48:22
Speaker 4: I don't need to.
48:22
Speaker 6: But he was so disappointed that my aspiration for this
48:26
Speaker 6: company was so mediocre because for him it wasn't and
48:30
Speaker 6: he he was spending far less time in the company
48:33
Speaker 6: that was so it made me think, if I'm going
48:36
Speaker 6: to put six days a week into this like I
48:38
Speaker 6: should get do you know what I mean? So we
48:40
Speaker 6: have I've had those moments that have just blown my horizons.
48:44
Speaker 6: So two billion, I know, is a lot of money,
48:47
Speaker 6: but it's not nearly enough, like enough.
48:50
Speaker 4: How much is enough.
48:52
Speaker 6: The tractra horizons the number for me isn't so for Tira,
48:56
Speaker 6: we did it. We did it a billion. I think
48:57
Speaker 6: by the time we get done, you know, three year
49:00
Speaker 6: is four billion would be a good How.
49:02
Speaker 4: Much is enough for you? Though?
49:04
Speaker 6: In ttern of my own my own my own personal money.
49:09
Speaker 6: I'm okay, now, clap it up for that.
49:14
Speaker 5: So before we before that's a fact, before we leave.
49:19
Speaker 5: Last question, I wanted to ask you about the wine. Oh,
49:22
Speaker 5: sparkling wine.
49:23
Speaker 4: This is in tech, now, this is a different industry.
49:26
Speaker 6: Yeah, you know, I've I've never invested outside of my
49:30
Speaker 6: two comfort zones of property in tech. But I've always
49:33
Speaker 6: been curious about our culture. And our culture is. But
49:37
Speaker 6: forgive me, it's kind of music, food and you know
49:42
Speaker 6: to a degree, right, that's kind of our culture. When
49:44
Speaker 6: we're enjoying ourselves, when we're celebrating our successes plus family
49:48
Speaker 6: and friends, that's really our culture. So I always wanted
49:50
Speaker 6: to do a drink. I always kind of had this
49:53
Speaker 6: passion to do that, but I knew I couldn't put
49:57
Speaker 6: it in our culture. I don't have the connectivity to
50:00
Speaker 6: you know, music and the social culture in that way.
50:03
Speaker 6: So I never I never really committed to it. And
50:06
Speaker 6: then by chance, Corle Loko, who's you know, chairman of
50:09
Speaker 6: Black Seed, which is a VC investing only in black Founders,
50:14
Speaker 6: had me come and speak at an event, and I
50:15
Speaker 6: bumped into a friend of mine do me, who I've
50:18
Speaker 6: known a long time, but we've never really collaborated on anything,
50:20
Speaker 6: and we're just chatting backstage. He says, what do you
50:23
Speaker 6: think of this? He shows me the pitch deck and
50:25
Speaker 6: it's the pitch deck for Severn, which is a sparkling wine.
50:29
Speaker 6: And the theory behind the wine is it's a it's
50:32
Speaker 6: an African grape, so South African Charlon, a grape that
50:35
Speaker 6: we bring over to the UK and finished. And Dumi's
50:38
Speaker 6: thing was, it's born in Africa, finished in the UK, which.
50:42
Speaker 4: Is which is US.
50:43
Speaker 6: And if you if you met DOMI or you know,
50:45
Speaker 6: Dom's like a damon dash like when you sit with me,
50:48
Speaker 6: like you get tired listening to him because he said,
50:50
Speaker 6: you know, we got to do this and how culture
50:52
Speaker 6: need this and we're going to make a bunch of
50:53
Speaker 6: money and we need to stop drinking other people's drinks.
50:55
Speaker 6: And he just he was so like passionate about it.
50:59
Speaker 6: And he managed wiz Kid, you know, jessej Tiny Temper,
51:04
Speaker 6: so He's and many others. So his connectivity to the
51:06
Speaker 6: culture is there. He's got amazing energy and passion. Started
51:10
Speaker 6: in Africa, finished in the UK, which is which is US.
51:14
Speaker 6: So I was I was, I was in and I
51:16
Speaker 6: think that. The beautiful part of that was he had
51:20
Speaker 6: a little bit of equity left for investors, and it
51:22
Speaker 6: wasn't enough for me because I wanted to be a
51:24
Speaker 6: meaningful investor. So I said, you know, is there a
51:27
Speaker 6: way for us to make it bigger? And he was
51:29
Speaker 6: just like, yeah, we're gonna you know, we're going to
51:30
Speaker 6: do that because this is a thing for us, so
51:33
Speaker 6: we want us involved in it. And it was It
51:36
Speaker 6: was kind of a beautiful moment for him to just
51:37
Speaker 6: open the door in that way, and I'm like excited.
51:40
Speaker 6: We got bottles backstage. We've been drinking before we came
51:42
Speaker 6: out here. So it seven and wines everybody to go
51:47
Speaker 6: check it out, and I'd love to hear what you thinks.
51:49
Speaker 6: If you buy it and you like it, tell me.
51:51
Speaker 6: If you buy it and you don't like it, you
51:52
Speaker 6: can tell me to We're trying to get it right.
51:55
Speaker 6: It's a very very important investment for me.
51:57
Speaker 4: So we can't wait to go backstage.
51:59
Speaker 5: And so with yes, ladies and gentlemen, make some noise
52:03
Speaker 5: with d.
52:08
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