Graham Weaver - Building Alpine - [Invest Like the Best, EP.425]

Transcript from https://podmenti.com/t/a9888e9dabe866a6

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Hello and welcome, everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money.
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Mm.
Patrick O'Shaughnessy is the CEO of Positive Sum.
All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive some.
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My guest today is Graham Weaver.
Graham is the founder of Alpine Investors, a large private equity firm targeting an interesting market inefficiency. Alpine focuses on the thousands of$20 million or so revenue businesses whose baby boomer owners want to retire, but lack succession plans.
Alpine buys companies and installs twenty-eight year old military veterans and top MBA graduates as CEOs.
Leveraging twenty five years of intellectual property on how young executives can successfully run established businesses.
Alpine CEO and training program is now the most applied to job at Harvard, Stanford, and Kellogg business schools.
In this conversation, we discuss the past, present, and future of their unique approach. Please enjoy my conversation with Graham Weaver.
I think the place to begin would be to just understand what you are trying to build.
And why?
Great question.
We have three North Stars at Alpine.
One is to be the number one performing private equity fund in the world.
As measured by M O I C
Our specific goal is five X.
On every fund.
Number two is we want to be the best place to work for the top talent. So we want it to be a place where the very best people can come and have just an amazing career.
And three is we want to use this platform as a force for good.
And really everything that we do fits under one of those three, and usually all three.
When you think about five X M O I C
Why do you care about that? Why that number? Where did that come from?
We went through a really tough period in the recession.
We didn't have a fund for a number of years. So we had three years to kind of work on our business and really do some deep thinking. I hired some executive coaches. We can talk more about that.
But part of that was kind of the questions you're asking, why are you doing this? What's your goal? What are you waking up every day to do? And I think we wanted to create something that was gonna get us just jumping out of bed in the morning.
And so we said, Hey, we want to be the number one performing fund of all time. So we looked at all the data that was public.
on some of the pension funds websites and information and we said, Hey, if we could deliver
three X net consistently on every fund that would put us in the conversation.
We've been outperforming that. So we increased our goal a little bit.
What's underneath it?
You're probably a person that could build a whole variety of different kinds of businesses. Why is
high performing private equity.
One that's interesting to you.
I never knew what private equity was until I graduated from college, so I didn't have this background
This was never a goal of mine when I started, but
when I got recruited out of college to go into private equity, I just thought it was
I had a real burning interest in business and I thought
Once I learned what private equity was, I was thinking, wow, this is the best expression of building businesses.
We get to do it over and over and over across a bunch of businesses.
In terms of why I try to be the best, I guess
Ever since I was pretty young, I just never thought about doing anything other than
Trying to be the best in the world at it. It's like
There's a great quote by Daniel Burnham who says
make no little plans for they have no power to stir one's blood.
What's the earliest that you can remember having that?
Sensation.
A feeling?
So I was twelve years old.
My parents went through a really
Bitter, ugly divorce.
We changed schools to a new school, so I didn't really have friends.
So the ground beneath me was pretty unsettled.
Grew up in a small town in Ohio.
Like in the Rust Belt outside of Toledo.
And I mowed lawns.
I moved lawns about six hours a weekend to make money. That was the best paying job.
I had a Sony Walkman.
And I started to listen to books on tape.
For whatever reason, our library had this self-help section. So I had these books like Think and Grow Rich, By Napoleon Hill, and Lead the Field by Earl Nightingale.
Universal Laws of Success and Achievement by Brian Tracy. So there were only like three of them, three or four.
So for the next
X years I just would
Six hours a week and walking back and forth. Literally brainwashed myself walking back and forth in the
Hot Ohio sun and
These authors, thank God, just had incredible content that I really needed at that you know, as this young, impressionable kid that
Was having
A lot of trouble in my life and I had these
frameworks to just hang my
life on for lack of a better word. And there were really kind of three big ones that came from that. One was
Hey.
You don't get to be a victim.
Yes, you have things that have happened to you.
And
They're not necessarily your fault.
But
You walking around blaming people and thinking, Whoa was me
that's not gonna serve anyone. You gotta take control of your life.
Now that sounds probably really obvious to you and me right now.
But back then, like that was a new concept for me.
grabbing control of your life.
And then they were huge about deciding what you want and writing down your goals and
I got really into that.
I would rate my goals down three or four times a day.
literally all through high school. And then the third one was
You gotta make some choices, so you can have kind of any goal.
you want, but you can't have twenty. So you pick the one or two that you're really excited about.
And then you have to kind of draw a bright line and give yourself permission to not do goals three through thirty. Those are really the three concepts.
I'm summarizing
Thousands of hours of lawn mowing. So then what happened to answer your question why I felt the first time I started feeling like this.
I started applying this to really small things like getting an A on a test or
running a faster mile or something like this. And it just worked.
Exactly like all the authors said.
I just kept
pushing the boundaries of what I thought I could do. And I never really
ran into and I still probably have yet to run into boundaries that you couldn't blow through.
So you said it worked. Like what specifically worked? Just writing it down and working hard or something more tactical? The very, very first major thing that I ever tried to do was
right after the summer when I started listening to these tapes. And it was to this day the hardest thing I ever did. So I wrestled
I was on the varsity team my sophomore year.
And
I wrestled at one fifty five.
I had a starting position, the captain dropped down to my weight class.
I looked up and down the lineup and the only guy I could be was at one twenty five.
So I'm six feet tall and I dropped thirty pounds and I wrestled one twenty five. I was eating
Nine hundred calories a day. I was going on runs in the morning. It's like nine degrees outside.
And I just powered through that and
All of a sudden I was like, Wow, if I could do that.
At least the other goals I said I I was able to eat. And so
I just got to feel this incredible power of being able to really change the trajectory of your life by just deciding you wanted to.
It was really cool.
I just got done reading the story. Is it Dan Gable? Is that the guy's name the great grass? He's incredible.
What is it about wrestling? Like it seems
We'll talk about rowing too, which I know you did a lot of as well.
What is it about, maybe those two are similar, the extreme nature of those sports, it seems like
It has a lot to teach, maybe even more so than other sports. Dan Gable's one of my favorites. He has a great quote. He says, Once you've wrestled, everything in life is easy. I think that's dead on.
It's dead on.
So I think that wrestling is just the most primal sport.
In our high school, wrestling was a big sport in the Midwest and Ohio.
They would turn a mat light on, the gym would be packed, people are yelling and screaming, there's a mat light on, the lights are off.
In the
H
Arena.
And it's just you and one other person and you're trying to defeat the other person. I mean, it's crazy.
It's a pretty intense sport and then the weight loss and the training and everything.
Hardest thing I ever did.
I think it's something about just the primal nature of that.
Can you say maybe one degree more about this idea that you can just choose
Sounds so simple.
But
I've experienced that same thing.
And every time I do it, I'm amazed how powerful it can be.
But I want to understand the contours of it.
From your perspective. What does that mean? What does it feel like to choose? What do you choose? What was the process? Whatever else you can say about this?
The first thing I'd say
Is it if you watch most people
They're kind of
Asleep or unconscious.
I am too sometimes.
Imagine
You get up
Whatever your routine is, you brush your teeth, you get ready for work, you commute to work, you have a tough commute, you get to work.
You have a couple meetings.
Some zoom calls and you eat.
Then you return some emails, you
have a few more meetings, you get home, return some emails, watch some Netflix, go to bed. There's all this busyness.
You're just kind of doing today what you did yesterday, you're doing tomorrow what you did today.
And you're stringing together that and calling it a life.
So there's this real level of unconsciousness about it. So the first part is
Step back.
And just make space.
And I do this with an executive coach, you can do this with a journal, you can do it with a friend.
But just step back and just make space and then ask.
really powerful questions in that time.
My favorite question of all time is
What would you do if you knew you wouldn't fail?
I should build it up a little bit better on one of the audio tapes I heard this guy said, Okay, imagine there's this genie that comes out of this magic lamp.
And he says to you, Hey Patrick, I've only been in here like a thousand years, so I can't give you the traditional three wishes.
But what I can give you is that whatever you throw yourself into with your career, your life
Vocation, like it's gonna work out amazingly well.
And you'll have ups and downs. It'll take a long time, but I'll be here to bless you with that. What would you wish for?
And then the punchline is
Go do that thing.
That's your life path.
That's what your soul really wants to do. And that's what you would do if you get out of your head and get out of your fear of failure. So that's one great question. Another one would be like if you didn't have to worry about the how. So relax the how you're gonna do it.
the coaching quote is the how is the killer of all great dreams.
Make space, ask these really provocative questions.
And it's not like you're gonna answer'em right away, but you might
two days later in the shower, you might answer that question and then you'll really know
You're gonna feel it when you really know it. And then
And then it's really, really
Tough.
To go do it.
Takes a lot of courage.
And sometimes the path isn't clear.
But I think that's where the real fun of life is is you're really trying to get in touch with what your answer is to some of those questions.
So maybe pick another thing in your high school or early years.
Something you wanted and then the steps you went on each of these t just picture you walking around with this bottom or like home. I go to college
Because I thankfully turned on to these tapes early, I did really well in high school and
I got to go to Princeton, so I was I think the first kid in my school to ever even apply there, let alone go
So I go to Princeton and then all of a sudden
I literally felt like force dump in that scene where his braces f come off and he's running. Yeah, because I didn't have to be like at
My mom's house from this time and my dad's here and high school at this time and all this. I had like all this
space and so I literally was like, Oh wow, now I can really
Let go with these goals.
I set three goals.
going into Princeton, I was gonna be the Val Dictorian.
I was gonna be the number one rower in the United States, even though I've never rowed before. I didn't even know that the boats went backwards. And uh
And third, I was gonna start a business to pay for school.
To skip the end of the story, I didn't actually achieve
any of those goals, but I came really close on all three.
And so rowing is probably the simplest one to explain.
So I show up
I'm a novice. I'm a hundred and
thirty pounds from the wrestling, you know? And I got my ass kicked because there's kids who'd rode for six years.
And they knew how it worked. So I got cut my freshman year.
But they didn't cut anyone, instead they said
Okay, if you don't make a boat, you're gonna be a land warrior.
And you can use the rowing machines. I still remember
When they posted the boats and my name wasn't on there.
I did the math and I said, Okay, women's heavyweight, light I was a lightweight, lightweight. And I did the math on how many people got cut and how many rowing machines there were.
And so I was like, Okay, I gotta get here really early because all these people are gonna be using the rowing machines. I show up the next morning.
I worked all the way back. I talked myself into getting there at like five thirty in the morning. You know the punchline. I get there, there's nobody there. There was no one there at five thirty six, seven. No one ever showed up'cause Land Warrior was a euphemism for you just got cut. Yeah, you got cut.
I stayed in road and I met this guy who was training for the national team.
Mike Tatey and he and I were the only two guys in the morning at the Princeton Boathouse and he ignored me.
He's a legend. He coached the US Olympic team. He went on to coach the US Olympic team to a golden
I didn't know any of this at the time. I just saw this tall skinny guy just hammering this erg.
And eventually he kinda took me under the wing a little bit.
After I showed up at five thirty in the morning for like three weeks in a row, he's like okay, this kid
Really means.
He really is gonna do this and
He taught me a little bit. So anyway, progress forward, I get better.
A little bit better my freshman year, better my sophomore year. By my junior year I had
one of the top times, maybe the top time on on the two K
rowing machine on the team and then
My senior year I was captain. We won nationals and so it was just everything came together.
But it was just a really linear expression of if I put in a certain number of hours
This is what Mike Tatey said. He said
Here's the formula. It's really simple.
sit on this machine and row as long as you can.
Slightly below your aerobic threshold.
Basically you'll hit your goals. I was like, That's it? He's like, Yeah, that's it.

And I just did that.
And it worked.
It just required a lot of hours.
Is there anything else between ages twelve and twenty two?
That
Without which you would be a wildly different
Person.
I'll just say a couple things about my dad real quick.
So my dad started a veterinary practice about the time I was born.
He and his father went in my grandfather's a veterinarian too. They started this practice called Weaver Animal Hospital.
In our home town.
And
They had a falling out of some kind. I don't know what happened. I never f heard the whole story, but my dad like stormed out.
Well, he has a mortgage and three kids.
And we have no money.
The only money we had coming in was he would take emergency calls at like two in the morning.
So his little beeper would go off and he would get up, drive to the office, fix a dog's leg and go back and he did that.
For twenty five years, and I think.
The bad news was he was really never around. We didn't have a great close relationship when I was growing up.
But
I think that
ended up having a big impression on me because if you were to ask him about his practice, he ended up building this.
really, really successful veterinary practice, but he just did it one emergency call at a time over a long period of time.
And I think that really stuck with me. I don't think I realized that at the time, but that
Was a lot of what
Alpine looks like.
He would say it took way longer than he thought and he built something
much bigger than he thought, and I would say almost the exact same thing.
about my business. And I never really put that together until many, many years later that I was watching
That as a kid.
What was the story for between graduation and starting to tell the story that leads to Alpine?
Why did you get interested in this field? What was it about investing or business that
Call due.
graduate from college. I never once thought about my job. I never had internship because I was always rowing during the summers.
I got recruited from
Morgan Stanley, which had an in house investment bank and to my knowledge, they were the only ones that
recruit in nineteen ninety four.
directly into private equity.
The guy who recruit me was this guy, David Ramsey, and he kind of explained to me what private equity was.
And the way he described it.
He couldn't see any reason to do anything else ever, you know, he thought it was the greatest business and he had a pretty compelling case.
So
I was really just fascinated by how you could buy these companies and
build them and be a part of so many businesses. I just thought it was the coolest job I'd ever heard. I couldn't believe that you got a blank piece of paper from investors to go buy things. So I was fascinated
However
I come out of college and I'm just ready to run through walls, Patrick.
Just had this incredible experience in college.
And I show up, I get this job on Wall Street, you know, I've seen the movies and everything, and I think it's gonna be this.
Incredible experience.
I learn how to build a financial model in the first three weeks and then I do that for two years. That was all I did.
That's all that anyone undergrad ever did. And then we did it, by the way, eighty to a hundred hours a week.
The culture wasn't great.
And I just remember thinking like
Is this what work is like?
Is this what you do when you graduate? I've been in school sixteen years.
And this is my big moment and
It was incredibly disappointing.
And that would end up being a really, really foundational part of Alpine was just that kind of feeling of
Wow, I have so much more to give to this place.
Why I'm only using like three percent of my
capacity.
My friend Jeremy
Kifan has this
Really funny idea for two models of success that he dubs
the Peter Thiel model and the Arnold Schwarzenegger model.
The Peter Thiel model being like a lot of maybe public and market investors that I know.
who kind of sit around and think and then make infrequent decisions on the back of like a special insight that leads to great returns.
And then the Schwarzenegger model is just brute force, like more reps, more push.
I have an early guess as to which camp you might fall into.
But maybe react to that. Do you think of private equity as the ultimate
open tapestry for performance almost for its own sake.
Like the ability to push and drive.
outcomes versus
Have insights that lead to good returns, which might be the other paradigm. I mean I think you can have investors
in private equity that have the Peter Tiel model.
They make few large investments.
And they sit around and think and it looks like that.
That's not really us
That's not how we're wired.
The way I like to think about it is
I like to think about the world in like
endogenous winnable games.
And then ones that might be a little more exogenous and or
unwinnable or hard to win.
And so
I don't want to just go full on brute force in a non winnable game.
So for example
In private equity.
Today.
It wasn't like this in nineteen eighty four, but today if you have a big business
You can hire an investment bank.
You get the game, you're gonna show it to
fifty five private equity funds.
For me to just go brute force.
In that
Red Ocean as there's a great book called Blue Ocean Strategy. So
They would call that a red ocean for me to go brute force in that.
I think isn't a good exercise.
If I have a hundred units of energy.
I wanna use twenty five of those units to go try to find a winnable game to play.
And then the other seventy five would be like the
brute force endogenous path.
So maybe using that I like that framework. Yeah.
If we think about today's private equity landscape where there are many, many funds that command huge sums of assets.
My understanding.
It's not the style of investing I'm in, but
My understanding is if there's a good high quality asset.
It's an auction process in many cases. It's a bidding war.
And there are lots of great highly professional super talented investors and firms that can buy private business.
Maybe describe the state of the market.
And what the characteristics might be of like winnable games within that broader market.
I mean I think there's fifty five hundred private equity funds.
at any given great high quality business like you're describing
particularly like take just the extreme high quality business.
ERP subscription software business. I mean, it doesn't get any higher quality than that.
There's just a lot of people that can buy that.
There's a lot of people that can see
what that's worth and do some calculation.
and come up with a value for that. And
By the way, it doesn't necessarily go to the smartest person.
It goes to the highest bidder.
So it's a little bit different where
That doesn't mean that they were the smartest person necessarily.
It's just a really, really tough game.
And conversely, the winnable game that we're
Engaged in
And we learn this over the first ten years of Alpine when we were
really hands on with these businesses is
We're going and finding a
Twillion dollar revenue.
Plumbing company.
In Ball, Louisiana.
where the owners retiring and they need a new management team.
There's
Just not a lot of people that want to sign up for that game.
It's a lot of work. I mean, we're putting in a new CEO in a small company.
We're putting in new IT systems.
We have a whole new playbook we're putting in.
Godspeed if you want to play that game, particularly at scale.
That's an endogenous winnable game where
It's just a ton of work.
But then the investment decision ends up being pretty easy.
When someone brings a deal to you and they say, Okay, here's a business you're paying eight times EBTA.
With the
playbook that you have, you can blend that down to five times EBITDA. You can borrow at five and a half.
And your platform's gonna trade at eighteen.
The investment committee decision there is not the hard part. The hard part is getting the CEO in place and IT systems and all that.
So maybe walk us through the earliest days.
Right before and right after the start of Alpine. What was going on? What was your goal in your journal
Give us this window into that period of time.
I was at Wall Street and then I got into Stanford business school. I deferred for a year.
I eventually went, I show up and once again I had that feeling of being unshackled again where someone wasn't telling me where to be when.
When I was at business school.
So I decided I was gonna start buying companies out of my dorm room.
That was really the beginning and
My dad, he always wanted to name his company something that started with a A because of the yellow pages.
And start with an A and come before the word American.
And so Alpine was a great I thought a great name.
And I lived on Alpine Road.
Funny story about that. One time I sent a letter to a banker
And it had my address and
You said Oh wow, they named the street after you
Meanwhile it's like one guy you know with no money.
Anyway, so we didn't have class on Wednesdays at Stanford, so
I'd take a red eye flight Tuesday night.
And then go visit these little manufacturing businesses in the Midwest.
And then go to bank meetings and try to get them financed and then fly back and then try to take my exams and stuff. So
That was kinda how I spent the two years at Stanford.
Keep the story going. So you come out of that. Did you buy any one? A total of three companies. I was twenty five.
So I had no idea what I was doing. And that's not false humility.
These were like half a million of EBITDA businesses that I bought for two million, the f seller would finance one million.
They'd had some equipment. So I get the equity, literally get the equity down to like a hundred grand, which I also didn't have.
So part of it was I had some people on Wall Street who put in ten thousand here, five thousand there.
And then
At this time.
Capital One was just starting get a envelope in your mailbox and say, write yourself a check for twenty five thousand dollars and pay no interest for two years. And I did that. I was like okay, great. That was where I contributed my equity capital to those to these deals.
And then later on, thank God, do you get another one that said roll your
balance and pay no interest for another twelve months so
I was playing a very high wire act.
Which I do not recommend. Did those three businesses work? No, they didn't. Those three collectively
Ended up at a one X.
I had one deal I did
right after business school in the same industry that worked out really well and thankfully helped fund
A bunch of the early part of Alpine, but the first three
Where I did literally everything wrong.
So what did you most learn from those three and then the one that worked right after?
They were in the label printing business, which
With a good business because
Label might cost a penny on a
five dollar bottle of shampoo, but it contains all the product information. So no one's gonna wake no purchasing manager's gonna
Be a hero by saving a
Fraction of a penny on the label.
had very good predictable revenue.
I missed two things. One is you were really underrating the underlying customers.
You had to go a level deeper and look at how recession so the companies in the Midwest when a recession hit in oh one, their clients got destroyed.
the revenue went down significantly. That was the first thing I missed. The second thing was
I didn't understand how important management was, and this would become a huge part of our philosophy.
later on the founder would retire and then the number two person was there. I just backed them and they were
Absolutely not backable.
I wildly underappreciated how much the management team mattered.
And I made that mistake three times before realizing I had made it.
So in the next one, next label business.
the underlying customer, the biggest customer we had was Trader Joe's.
Which was just like the best customer ever in the early two thousands. They just grew fifteen percent. Yeah, fifteen percent of year every year they
paid in five days. They allowed their vendors to have great margin. So it was just
It was a home run deal. I owned it for twenty two years and it paid Yeah. I just sold it a couple years ago, actually.
It paid dividends along the way, thank God.
So now you've got a successful deal under your belt coming out of business school.
Sounds like obviously at this point you would have said
This is the thing I wanna do. Is that right? Or was there still
searching to be done. Oh gosh. It was a hundred percent what I wanted to do, and I still chickened out. So I
If you'd asked me any time in the tears, I was like, I know exactly what I want to do with my life.
As graduation starts approaching and all my classmates are getting jobs in private equity, I'm getting a little FOMO and I'm also also scared.
I take an interview which turns into a job at a institutional
private equity fund. And I knew in my soul it was not what I wanted to do. And I showed up and a
Little Mbidomy died the the day I started.
And I did that for a little bit of time.
And then actually had a close friend of mine
Around that time.
Around my age had passed away.
I just took a little time off.
And I just realized hey
When am I gonna do the thing I really wanna do, if not now? And so
I walked in.
couple of days later and quit. I didn't have any
thing to land on. I didn't have a fund. I didn't have investors. I didn't have anything, but I was like
I gotta give this a shot.
It seems like so many of these stories when they go this way, they start
Small and modest.
SPVs or single deals or whatever. So is that how yours was chained together before Alpine? Exactly.
What advice would you give people that hear that and they're like, Yep, that's what I wanna do. I wanna find a company, put together money, make it happen, start to build a track record.
I'd say a few things. First is I'd say pick one industry. Don't go do three deals in three different industries.
Because you're not really gonna know that much. In my case
I had that fourth deal s was successful because I had done three and learn what really
matter. What really mattered. So I'd say try to stay in the same industry if you can.
Pick a good industry.
Secondly
I'd say
Pay yourself.
Sounds really obvious, but I didn't do that. So when I
That was part of the pressure that I had about why I
Didn't go do that full time, so
carve out enough that you can live
reasonably comfortably, even if that cuts into your
Total upside or something.
Duration is more important.
Over the long period of time.
I made so many mistakes, Patrick. Everything you could imagine.
But I also got in the game when I was twenty five, so
I just sit around thinking about it.
overthinking it. I got to get in the arena.
That would be my third piece of advice is go get in the arena.
What did you learn about raising money
For deals
When you really didn't have a track record and you were twenty five.
Okay, I started off trying to sell my track record, which was a catastrophe because what I didn't realize is
These people are seeing phenomenal track records.
And then they're comparing me to that.
I was on the plane in the Denver Airport going to San Francisco to visit what would turn out to be my largest investor.
And I read this little book.
And I don't remember anything else this book said. It was a little book of selling. It was called
But they had this line that said
People by the salesperson, not the product.
And on the plane ride from Denver to San Francisco, I completely changed my presentation and was like, Okay, I'm gonna
Sell myself as someone that
We'll figure this out and it's gonna be
Trustworthy, reliable
Kill myself to make this work.
And that pitch.
Landed a lot better than hey, here's my three label deals. Yeah, yeah.
They just read that book at the right time.
So then we fast forward to the chapter where now you have Alpine. You have a private equity firm, you're starting to raise bigger and bigger funds.
What are like the foundational core beliefs of the business, how it runs, that are most distinctive from other firms of its type, would you say?
There's a number of them.
The first one I would say is
What's your objective function?
Our objective function is M O I C.
We have a specific number we put on that. We're trying to do five X on a fund.
Have you done that historically? We've done
Five X or no last four funds.
We have it marked at five X in our last three and the fourth one is
Well on its way, yeah.
And so we have a objective function that is specifically
net M O I C and I think
Cascading from that is how long you want to hold businesses.
How you're gonna invest in them, how you're gonna build them.
What's your objective function, I think matters a lot.
What's your goalpost?
And I think a lot of people use IRR maybe or they're trying to raise their next fund or something like that. And I think it can muddy up
You know, are you selling your best companies quickly so you can raise the next fund and have higher hours or what are you doing? And I think the objective function matters.
Another belief that we have is
The way that we're really gonna create alpha is through talent.
That's probably the foundation of Alpine is just
We think that incredible
leaders, CEOs, management teams are gonna create amazing results. We'll look at
B plus industries that other people really don't look at as much.
But we've pair that with an A plus team. We found that to be just a great combination.
We won't overpay for the A plus industry. We'll go down a little bit and I could talk more about that. That's number two.
And then number three would be
I'm a huge fan in
Thinking
Slash using your imagination.
We schedule time outside of the office.
In the great recession
We were spending a full day outside the office just really thinking, mapping out.
What do we want to build? What are the capabilities we want to have?
Using time to work on the business the expression I use is
We're planting seeds of oak trees that will yield us shade five years from now.
And if you can do that consistently, you can always
Create.
Motes effectively, but it takes a lot of discipline.
In the middle of all the
crazy stuff you're working on to actually take time out.
to work on something that's important but not urgent, and that's the like imagination and innovation.
When I do my like asking around, I'm always curious if you
condense everything down to
asking someone what is Alpine known for? Like what is the thing? You only get one thing.
What you hear a lot is
young talent development and
relying on twenty something CEOs.
To run.
Sometimes very large companies.
And the search and development process of that young talent, those young CEOs.
So maybe you can like explain when did you plant that acorn seed?
Why how is it grown? We could spend as much time as we want on this thing because it does seem to be like a mental part of the software. Yeah, that's right, Patrick. That is course. So
The way it came about was in the early days we were doing all kinds of things.

Going well.
So one of us would go out and run the company. So Dan Sanner, one of my partners today, we moved to Detroit.
for like a year, Will Adams moved to
Maine for two years to run this horrible business. And a guy named Mike Duran was in Chicago. I ran one of our company's slot machine business for a while.
We got in.
When we were in the recession and we had all this time to kinda look back at our track record.
The best deals that we did
were always ones where we put in either us or someone just like us to go run this business who knew nothing about the industry, but had these
Raw talent and also coachability.
to like say, hey, I don't know everything, so who do I learn from?
Not this grizzled veteran that's already
knows everything about the industry.
But I'm gonna look at things differently and fresh.
And by the way, I'm gonna just run through walls.
Those were our very, very best deals.
Mike Duran ran one, the guy names Greenberg ran one and then Mark Straup ran one.
At one point.
I can still remember where I was when we had this conversation. Those were also, by the way, the most fun.
Most fun board meetings. So
You're sitting literally with your friend
Talking about how you're just gonna just
Crushes crank.
And you know when you walk that meeting they're gonna do it. Yeah. It's not like the founder who says, Oh yeah, oh great idea, Patrick, and they're writing it down. You just know it's never gonna happen. It's the opposite of that.
It was so much fun. And so at one point we just said
Let's just do that every time.
from this point forward, let's just let's put our own team in a hundred percent of the time and we burn the boats.
Brutal to burn those boats'cause
Bankers don't sell companies that don't have management teams.
So we had to rebuild an entire sourcing engine to do that.
We had to
Change our brand in the market.
Where the brand now if you don't want to continue, you call Alpine as opposed to
the other private equity firms that'll back the founder. So
It was really, really brutal to make that change. But yeah, we made that change.
Around two thousand ten.
So is it true now today that you will not do a deal where you're not installing your own team?
In a platform company, we
install our own team pretty much a hundred percent of the time. Every rule can have an exception. So if they're if they're coachable and they
wanna run through walls and meet our criteria that we would have otherwise, we're certainly that would even be easier. But
Historically we've
last I don't know, four funds, we've replaced the management a hundred percent. And we're super upfront going in. We're saying hey, you want to cash out and go hang out on your boat and whatever, great.
And then probably eighty percent of the time in the add on investments were changing management.
Can you give us like a platform architecture or a platform building
class like one oh one or two oh one. Does platform mean roll up?
That's a word you hear a lot in private equity. Like what is a platform? How do you build one? What are the steps?
So for us it means roll up and I'll use our best example. So we started off em plumbing an H VAC and
We had this a guy named H Vac Yeah, I know.
AJ Brown was a CEO in training. We put him in to be CFO of one of our companies. He did great there. We sold the business.
We repatriated and we said, Okay, you're ready for prime time. You're gonna be the CEO of a platform.
And then we paired him with another CEO and training that was just coming in this guy, Will Madsen. So they become president and CEO or CEO and CFO initially.
We picked H factor, we had a little experience in that space.
They were excited about that space.
And then we started just going and visiting tons of companies. And when you go visit uh twenty companies in the space
You learn more in one three hour management visit than you do in three weeks in a conference room.
And then what you're picking up in those meetings is what does great look like?
And what's cool about it, each company probably does one thing great.
The company does recruiting great. This company does
Purchasing training.
marketing, IT systems they use and how sophisticated they are with them. But if you add that up across twenty companies and you grab every single piece of that playbook you have
The best playbook in the world.
So you're starting to architect what does that look like before you even have bought a company. So you're
We're hiring the CEO
Getting the industry right. We're getting the management.
part of the management team right.
And then we're getting the playbook right before we've ever even written a check.
Then we start going and buying companies
The first couple we try to buy pretty small. I think our first deal here was eight million dollars of Ebata.
And we learned a ton and we bought another one that was like two of Eba Dodd building along the way.
And then we're also building our whole co. So we're building out the CEO, CFO
Chief people officer. That's the platform. That's the platform. Yeah, the whole co is the platform.
our best companies, we've really overinvested in those platforms. It's really expensive to do that.
And we have platforms that are pretty young that have a
fifteen million dollar hold co expense.
But that's really your foundation going forward.
And where does that fifteen million dollars come from? That comes from the fund? Yeah, yeah, it's a capital. But but it's not it's not quite that bad because we're pretty quickly
buying companies that have EBITDA that we're using to fund the businesses. So they're cash flow positive pretty quickly.
So
This particular deal
One of the early things we figured out is
You said there's a lot of H VAT companies.
But we figured out that every competitor in H VAC
was doing the same thing. They were buying the five to ten million dollar Ebitab business.
That
had a great management team.
They were all buying the same company.
It turns out ninety percent of the market is below that and management wants to leave and cash out. And so we said, Why don't we build
a system to go buy that company.
And that included
Talent was a huge lever. So
I give AJ and Will a ton of credit, but they tapped into
the veteran market. They built their own CEO and training program because they came through with Alpine's program and they said, This is amazing.
The company's called Apex. They built their own Apex.
One of the early people they brought through was this guy named Brad Schwartz, so his
His resume is West Point.
Green Baret.
Wharton business school.
And he comes in to run the
I think eight million dollar revenue business and fast forward
He's running a five hundred million dollar division today.
The business we initially bought was forty million, I think, of revenue and
eight of you but die this year it'll do three billion of revenue.
We haven't put any more equity in.
They've just been
Accumulating these small little
businesses. So the business has gone from
We put in fifty million of equity.
This year it'll do five hundred million of EBITDA and we put in no additional equity.
And it's just been
an exercise in just really having each
business that we acquire putting in incredible talent. We rip out their IT systems and we put in
a financial package, an ERP system, a uh
Business intelligence.
System and then
Every single company we buy has to literally input every
job they do exactly the same. So we can compare
all the data across all the companies. And then we have
a training school now for the
military veterans. I think that we have eighty
military veterans as general managers of that company.
They've been phenomenal.
That's an example of
Starting literally with a blank piece of paper.
Which is how we do a each thing. We form a pod of people to go
Assess a bunch of different industries.
We designed the playbook.
And then hopefully repatriate someone from our
system into be the leadership team and we have
A lot of the key decisions already made in evaluated, we have plenty of time and patience before we ever have to wire money. So if I think about if I step all the way back on like what service Alpine
has and will render in the market.
It's
I have this visualization of decades of small businesses being built.
by the baby boom and gen X generations or whatever.
There's tons of them. I don't know how many there are. Probably a gazillion fee facts alone.
True for like every industry.
The problem is that there's nothing to do with them when those people want to retire. Right.
And basically your solution is solve that with talent.
That was like the unique insight and thing that you built up relative to
to other private equity firms or something. Yeah.
And I would say
In a headline it's solve it with talent, and underneath that is a whole bunch of
intellectual property about how to make that person who goes into that company on day one be really successful.
Because if you just
Change management.
It's really hard.
And it can go really badly.
We've learned that the hard way.
We have a lot of intellectual property on the
What does that CEO actually do?
on day zero and the first thirty days and sixty days and ninety days
We have intellectual property on the systems and how we're measuring it and
Literally how they're hiring. It is what you said, Patrick, but then underneath that there's a lot of intellectual property about how to actually do that. Without giving away all the secrets to us. Can you give us like a flavor of that IP and like some of the things that you've learned?
I'll give you a couple things. So first is we have about 30 coaches in our ecosystem that are versed in this playbook. And so they get paired up with
This first time CEO and they've been through it a lot of times and they're doing this specifically the Alpine playbook.
So they can they're full time employees. They're ten ninety nines, but they're probably spending part. Yeah, they're probably spending seventy percent of their time on Alpine.
So they have that
Intellectual property. They're
literally partnering with this first time CEO and going through this first
six months of the paint by numbers what they're gonna do, but I'll give you an example.
CEO walks in
Day zero.
They make their big announcement.
that people are upset because Joe's plumbing, Joe's retiring. You've been working with Joe for fifteen years.
Here's this.
twenty eight year old that doesn't know the industry.
They're not thrilled on day zero, which understandable.
The first move for the first
Sixty days is
Listen.
They sit down with the key employees and say, Hey
Tell me about your role. What do you do here?
What's going well, what else, what else, what else, what's not going well, what else, what else?
Hey, if you were me, what would you be focused on?
What should the top priorities be?
What are we working on that's a waste of time? What should I be worried about?
What are the biggest opportunities we have right now, biggest problems?
They're going and doing that and they're meeting with depending on how big the business is, they might be meeting with twenty, thirty people in the business.
Without a doubt.
Without fail.
One of the first the biggest things people say is
I've worked here for fifteen years and no one's ever asked me my opinion before.
In a very short period of time we're really like in Joe. Yeah. Exactly.
We're really engendering trust. And then we're y you know, we're using that and we might say, Hey
I heard that you're number one.
Hey, Patrick, I heard your your favorite idea was that we're gonna expand internationally.
We're not gonna do that this quarter, but we did hear you know you you don't have to do everything they say, but they they have to feel
heard. So they do that with the employees, they do that with the customers.
And then from that there
kind of enrolling the top people and designing the plan. Here's what we got to do. Here's what the low hanging fruit is.
And usually the fruit is so low.
And it's so obvious when you get through that.
I know'cause I did this. I took over a business

I remember thinking.
How did they not do all this stuff? They just talked to their own people.
One of my executive coaches had this great quote, The answer's always in the room.
You don't have to go hire McKinsey. If you go hire McKinsey, they're gonna go do what I just said. They're gonna go interview your people and then repeat back what you just heard.
And you do that with the customers as well. And then the customers will tell you about the product or
The service or whatever.
Yeah, so I was gonna say like one beneficiary.
Presumably this is the end customer. But you're not going from
fifty to five hundred of EBITDA if
Someone's not happy at the end.
Yeah, a hundred percent.
Just work backwards.
I think the two biggest underappreciated leading indicators of success are
the net promoter score of the customers and the net promoter score of the employees.
We go in and we measure the net promoter score of employees.
Right when we buy the business. In other words
Before we came in the business.
How engaged and happy our employees.
And then we measure every six months.
going forward and we publish that.
across all of Alpine and we hold COs accountable.
For two reasons. One is I think it is
probably one of if not the most important leading indicator of success for the business.
And two going back to being a force for good.
It's probably the thing I'm the proudest of.
in terms of the impact that we have is
Forty thousand employees
are having an experience that they enjoy coming to work more.
significantly more after we buy the business.
And I just think about okay, you're a single mom and you're
working at a call center in one of our companies or something.
before we come in, you know, maybe you're
clacking in, you're clacking out, you're not that excited. You're spending half your weeking hours.
doing this, maybe the people don't know your name or whatever and
And then how you show up in your community.
And seventy percent of people
And this is
True across any industries.
In the US you can replicate this study, but seventy percent of people
dislike their job or they're disengaged from their job right now today.
And if we can flip that, you know, and have seventy percent of people feel really engaged, it's not just that it's good for business, but I think it
makes a big difference in these employees' lives.
And so we take that really seriously.
And it's something that
It's probably one of the things I'm the proudest of of all the things that we've done.
I wanna come back and spend a lot of time on the
searching selection training of this young talented twenty seven year old that takes one of these things over, like what that whole system looks like.
But before we do that, I just wanna close the thinking on
the financial outcome associated with this strategy of building one of these platforms.
So again, going all the way back to your five X M O I C target objective function or whatever for the funds.
What does that mean you need out of these platforms?
Where does the return come from? Is it multiple expansion? Is it fundamental growth?
simply those are the two simplest areas that can come from. How do you think about like what you need to get?
For one of these things to be a success.
So the way we think about it is we're underwriting
Typically an individual deal
to a
Let's say a three X net outcome.
And that will typically not have multiple expansion. It'll have
You're buying the business, you're leveraging it with whatever the debt multiple the company is and then you're
Growing it.
We should be able to get to kind of a three X
Three five gross in
five years. So that's kind of our typical standard underwriting.
Where the five X comes into play is you have these asymmetric outcomes where things go right.
organic growth kicks in better than you thought and you can hold the business longer than you thought.
You can kind of portfolio your manage your your way to a five X through a bunch of
Getting on base.
And then good things happening.
If we underwrote an individual deal to five X, we would never close a deal, so
That's kinda how we think about it. If you look back at the f now that you have all this data and all these funds, is it true in most of the funds that it's one
platform or deal that
dominates the returns. Yeah, there's definitely an asymmetry for sure.
One of my favorite
Things I remember I used to read every word that Buffett ever wrote in his annual reports and
I'm gonna get this a little bit wrong, but it'll be directionally correct. I wanna say it in like
Nineteen eighty eight or something, he'd made
half of all of his money on two stocks. Geico in the Washington Post.
He had tons of businesses he bought and sold and everything, but
Fifty percent of Yeah, there's like asymmetry and
Yeah, we tend to we tend to have
At least
One real outlier deal per fund.
As we're learning
We're figuring out the ingredients of that outlier better and better and better.
So that we're hoping that each
Seed that we're planting.
at least has the potential to be that outlier.
We want every shot on goal to at least have that upset. It w they won't all hit that, but
We're getting better at identifying
the ingredients of that outlier.
Which is hey, build a real company. You know, build
a real hold co with a phenomenal team in a large industry, really spend the time to get the playbook right.
and give yourself some breathing room.
And if we're doing that again and again and again, we're now starting to have a lot more consistent
businesses that are these outliers.
In our more recent funds, it's not one company, it's
In fact in our most recent fund
I'm biased, but I think
Just about every company has that potential as of now to be a real outlier.
Let's go back to the talent.
It almost sounds like what you've built is like a captive search fund business. Yeah. That's right. Oh, that's a good analogy. It's also same f really good analogy. Personal attributes, time of their life.
So one question I have is on incentives. How do you incentivize like in a search fund that's really tight and clean, like you're buying a business, if it does phenomenally well, you as the searcher CEO are gonna do phenomenally well.
What have you learned about incentivising the people that
Get installed to run these businesses. You know, using your search fund analogy, let's say that you're the kind of person that wants the ball.
early. That's the search fund person. They want to be CEO early.
I love that. I was twenty five, I wanted the ball.
I appreciate that characteristic.
So they want the ball early.
And
If you think about what they want the ball to do, it's to go run a business. That's what they want.
In the search fund world, they first have to go build a private equity firm to find and close.
And if you actually look at the data
I used to invest in search I don't know, I've invested at seventy
Search funds or more.
They usually mess up that first part.
Investing is a pattern recognition business.
Bankers don't want to sell to them because they're only going to ever do one deal with that banker. They have a clock ticking. So there's a lot of stuff wrong with that first part.
And then the other thing that's kinda doesn't really work is they don't have really any support. They're like
Yeah, you get the ball of good news, but you don't know what to do with the ball.
So we're trying to
Say hey, we have
I think one of the greatest sourcing engines in private equity.
We're gonna find
phenomenal businesses
Plus we're gonna
have a whole team that's gonna help you evaluate the industry and make sure we're getting those right. We want you to play a winnable game.
We wanna give you a platform where you're gonna win based on your talents and
hiring and firing and all those things not
Missing on the industry.
You're not gonna figure that out when you're twenty eight.
We're very good at that part of the business.
And then once they buy the business, we want to have
And we'll get into the training.
We want to say, Hey, look, we have
Twive years of intellectual property.
of how to be a CEO, but not just how to be a CEO, how to be a thirty year old CEO.
Going into a really established business.
And getting that team on your team alongside you.
And going forward.
That's the specific intellectual property that we have.
And it's not super complicated.
But we might as well start you off twenty five years
In year twenty six rather than in year zero.
So where do you find these people? Where do they come from? How did that start?
I'm sure it's much easier now you've got a reputation like this can be a place you go do this thing.
It was a very inauspicious start, Patrick.
At the time we started the CO and training.
process. I was a guest lecturer at Stanford Business School. And I would meet with students for coffee and stuff and
The class I was a lecture for
It was an entrepreneurship class and so the students wanted to
CEO.
And they'd say, Hey, how do I go do this? And Search Fund was an option.
They didn't like some of the elements I mentioned earlier.
And so I didn't really have a good answer. So finally one student I said, Hey, why don't you join us? We'll teach you how to be a CEO and we'll put you in one of our companies.
That sounded great.
So we hire this guy
And we weren't gonna put him in a C or gonna put him in like CFO or COO in one of our companies.
We couldn't get anyone to hire him.
in our portfolio because they said, Okay, let me get this straight, Graham. You've got someone who's
Got no experience.
is a little bit entitled and super expensive. Like like come on, no.
So we couldn't get that first person place, he left.
The next year we had this woman, Laura Walsh.
And same thing, but although this time I said to this particular CEO
I said listen, hire her and if she doesn't work out in a year, I'll reimburse you her salary from
The management company.
So like a money back guarantee and she knocks it out of the park and he's like, I want three more.
And then it kinda took off from there. And when I say took off, then the next year we had two, and then the next year we had three and
It took a long time and it also took us a while to really figure out
what kind of business they would be successful in and where their blind spots were.
And what they could do and not do we made every mistake you could make.
But thankfully we made that on smaller classes of CEOs.
And now we have it a little bit more dialed. And we're still learning. I mean I'm not
declaring victory at all.
What are some of the especially extra points for surprising attributes?
that have made these young people successful.
I like the surprising one. Obviously hard work is smart.
Okay, so I'll say some and then I'm not sure how many of these are surprising. So
The number one attribute is
Will to win.
I'm gonna take
this project or business or whatever
And I'm gonna put it on my shoulders and run it through this burning building.
And you just see that show up in their life historically, they've done that. Just this ownership and drive.
And that's number one. Number two.
Which is probably one A.
is grit. So they've been knocked down, they got up. They've been knocked down, they got up.
Because that's gonna happen as a CEO.
And I think the great thing about getting knocked down and getting up is at some point
You just have the belief that you're going to get up and you have the expectation you're gonna get knocked down every now and then and
That one is actually more rare than you would think at some of the schools that we're recruiting from, that grit
isn't as common and we made that mistake many times.
Third is I'm gonna mash a whole bunch of stuff together, but it's like
Emotional intelligence.
Self awareness.
ability to get along with people, we've also got that when we've had big failures, we've missed that one. So those are probably the three
Big ones.
Surprising.
Would be
probably just a bias for action. So getting in the arena, trying stuff. It fails, try again.
Versus this
Analysis paralysis.
If you think about marketing to these people, like how you get
Obviously, you would want to monopolize people that have that trait to come on one of your companies. That would be a great virtuocy. How do you do that? Is it just word of mouth? Are you more deliberate about it?
The answer is it's word of mouth.
one of the students goes and has a great experience running a business
their friend hears about Alpine, calls them and says, Hey, is this real?
And the friend says, I am having
the absolute time of my life. Like I didn't even know this exists. I can't believe this even exists. And it is as or better than advertised.
And that word of mouth
So the best thing we can do is just deliver on the experience.
Starting with giving him a winnable game and a lot of support.
I think last year
This would be surprising probably to you, but Alpine was the number one most applied to job.
at Harvard Business School, Stanford Business School, Kellogg Business School.
Dalpine CEO and training program. Yeah. Yeah. I mean you've literally like short circuited the front part of that search fund process.
Yeah, exactly. Which is a pain in the butt. It is a pain in yeah. Yeah. It's also so interesting that
In that process, like you said, you said it as they have to build a private equity firm and then abandon it. Exactly. They don't get to reuse the skill that they built. Build it to do one deal. And
And you know, the other thing is they can just do something on a way bigger scale.
They're gonna run something much bigger in this and they're gonna hopefully get there a lot faster. Yeah.
We spend a while talking about your class. Yeah at Stanford. So I think you took Irv Grossbeck's class, who was the father of search funds and
Yeah. Maybe first talk about him.
Anything you learned from him, the nature of this class, and then
I have lots of questions about.
How you run it. I would say Irv is one of the most influential people in my life and
I would also say there's probably literally without hyperbole probably a thousand people that would say that same thing. I don't know
Anyone else that that's true of
And
You sit down with Irv.
And
You are the most important person in the world for that period of time.
He remembers everything from your last conversation. He later told me he takes notes afterwards.
And then reviews them before he meets you again. He just cares, right? So he remembers everything from your last conversation.
He's always the voice of you got this.
Yeah, you got this.
I've seen all these students, I've done all this
Let me just tell you, it's gonna be okay.
It's like your older version of yourself could come back and give you advice. He's that person. And I can't tell you how many times in my career where
I've been down and
out and gone and met with him and just
He just gives me a shot in the arm that I need it at the right time.
And from someone that you believe it when he says it, so
He's just incredible.
So my experience was I was a case guest in his class and the case was about buying companies in my dorm room.
And all the stuff that went wrong.
And I don't think Urb would say this, but
I think I was like the token failure case.
And in the quarter where it was like
You know, all these people there's prey to champions.
And I'm this like twenty eight year old that just gets my teeth kicked in.
Again and again. So he probably wouldn't say that, but now that I teach there, I think that's the role I played in the curriculum.
One funny story too.
When I first started
Teaching his case.
I was young, I was twenty nine.
I knew a lot of people in the class'cause I'm the basically the same age.
One of the students told me like in the wrap up of my case, one of the takeaways was
As you can see from Graham, you don't really need to have charisma or be articulate to be a CEO. That was one of the takeaways.
I was so nervous and
Stumbling over my words and stuff.
But anyway, so yeah, I mean, the class was amazing and then
I was a case guest in his class for twelve years.
And then he was gonna go start a new class and he called me one day and was like Hey Graham, do you wanna teach my class?
I was almost immediately s gonna say no because I'm like, Yeah, I already have a full time job, but I thankfully said I'll think about it.
I thought about it for a week and I was like, I light up every time I'm in that classroom and
I don't think I'll ever have this chance again and
I ended up teaching.
I know it's like one of the or the most popular classes there now.
How did you build it?
Same set of questions kind of as for Alpine as for the class.
What do you hope the class does for the students and how do you architect it to achieve that goal?
In the first four years I just wanted to learn how to be a
Professor and teach.
I had so many limiting beliefs, like thinking I'm not a professor, I've never taught. And so I just was probably the first four years I was just trying to
be like a B plus in that and they
Curriculum is largely around how to be a CEO.
Things like hiring, firing, having difficult conversations.
It's not big strategic things, it's kind of like
at the one foot level. Like you're gonna have a conversation with an employee about
getting demoted or whatever it is. And we're gonna role play that actual conversation. So it's really like granular.
People stuff it is the important stuff as a CEO.
So it's a great class.
So I did that for four years. And then what I realized is students love the class.
But they weren't doing it.
They were like, Oh, that was a great class. Thanks for that. And then
their dream was to go run something and they didn't go run something. So I said
I need to add something else to this class.
I want to help students figure out what their dream really is and spend a bunch of time on that.
And so
We talked about this a little bit earlier, but a big part of the class is really giving the students some space.
And asking questions and having them do exercises, visualizations.
And some other exercises to truly figure out what the thing is that they're excited about. Like if they could do anything over the next ten years, what would that be? And that takes some time.
We spent a bunch of time on that. They have to keep a journal.
And we have a bunch of classes and visualizations and then
When they get kind of clear on that.
Immediately they're gonna have all these doubts and fears and limiting beliefs.
their head's gonna talk them out of it. And so we go right at that.
Hey, what are the obstacles? How do we overcome that? How do we design a path to go do that?
So that's probably twenty five.
percent of the class now and I think
That's probably the students remember the most. Yeah.
You've told me before some of these incredible framing questions to like expand the mind beyond incremental thinking into more like blank sheet thinking.
One of the ones you told me that I liked best that I've thought about a lot since is
Imagine you have nine lives.
You're just gonna do this life. What do you wanna do in the second life and in the third life? And like really like make it feel bigger.
More expansive.
Are there other questions like that one that you found to be the most effective to get people to like give you the real answer to what you're trying to help them find, which is like the thing that's burning inside them? Yeah. What's cool about the nine lives exercise is I think people get really intimidated by saying you gotta find your passion.
And then I got one thing and they get in their head and I'm like, Okay, well, let's say you had nine.
They can ro rattle them off like right away. Okay, I'd do this. You know, I'd be a professor and I'd be a law author and I'd start this business. I'd do a nonprofit. They could come up with them like right away and then I'm like good news. Do those Yeah, good news. Your thing is in there somewhere.
And then we try to take those nine and
Talk about which ones they have the most energy for, who are they gonna meet along the way, how are they gonna grow.
I mean a great example is a student of mine.
One of their lives is
The thing they did before school, they're gonna be a convertible bond salesperson. Life number three was run a business.
And as they started learning how are they gonna grow and learn the convertible bond one wasn't as interesting, even though they were gonna make more money doing that initially.
You can dig into those nine lives and then
It's just a lower
stakes way to kind of get them to their something they're passionate about.
And the secret is you can have all nine at some point in your life, just not all at the same time.
And then other questions, we do visualizations, which you go out 20 years and we spend some real time in this. You're meeting your future self twenty years from now.
And your future self has just been incredibly successful and
Everything's
Worked out.
And you really spend some time on like what does that look like?
And then you come back and say, Well, what advice did that future self
have for you now.
The advice is always go do this thing or
Hey, relax, it's gonna work out, or don't stress about these things. So we do exercises like that.
Some of the key questions are what would you do if you knew you wouldn't fail?
relaxing the how, not worrying about how to get there, the nine lives, you know, there's a whole bunch of those.
Incredibly powerful.
And I'm curious how
You've learned to administer them. Do you personally have to do it?
One on one with the student, or is it more scalable than not? It's both. So there's a lot we can do in the class and then they can break out into groups and do some one on one stuff. Earlier in the quarter, I have a class just on coaching where they learn how to be like
A good enough executive coach for each other.
We have a whole class on that. So then throughout the quarter when they
have to coach each other, they have some core skills.
So I can do that for an entire group.
And then I do tons of one on one meetings.
My one on one meetings are typically they're almost always the same.
The student comes in and says
They asked the same question, which is like, What should I do with my life? Number one question I could ask. Great question.
And then they say, Okay, I I have path A and I have path B.
And I'm torn.
I spend a few minutes with them asking some questions.
In ten minutes it's clear that their heart wants to do B, but their head's talking'em out of it. And
Is the kind of
Safe thing.
And then we just spend the rest of the time trying to unpack
how they can do A in a lower risk way and that sort of thing.
And that's the framework I use in the class as well.
How has being a teacher changed you personally?
What are the takeaways that you have like how are you different as a thinker, as a person?
Because of this experience that you've had.
With all these students, hundreds of them, sure, of students.
Thousands.
Every quarter I learn the most.
I try to make each class and each quarter be a reflection of the best I've got.
This is my twelfth year teaching this year. I spent more time
Preparing than I did in year one.
I'm trying to like
Use it as a way for me almost like to personally share.
My latest and greatest
frameworks and thinking on really everything from everything from running a company to
Personal growth to spirituality, you know.
I'm trying to bring everything I can, so it's a forcing function.
That
Almost
makes me download an entire year of reflection into nineteen classes.
And bring the best that I can. So just
the process of that reflection and having to codify it has made me learn it better. And the other thing is
I have to practice it. I can't stand up in front of class and say
If you're running this business, you can't have B plus people in your key roles of your executive team. And then I
look in the mirror and I'm thinking, Okay, I got two B plus B, you know care and advice. Yeah, I I do. I do fall I have this thing where I really can't stand up in front of the class and say something either I'm not doing or don't believe.
And then sometimes it's a good mirror to look at my own life and make sure I'm living that way. What is your relationship with the students like after the fact? Do lots of them come work for you?
This is a very common story you hear.
Especially at Harvard and Stanford, it seems, and other schools too.
Of someone teaching and that
they're doing it usually for the right reason, but it ends up being tremendous fuel for their business because of the talent.
Have you had that happen to you? The way it became a fuel for talent isn't because I was going out and recruiting my students. It was because I was meeting with enough students to learn.
what they really care about, what they're passionate about, and then
That helped me design a role at Alpine.
that was directly catering to the things that students wanted at the level that the students were. Cause I understood that really well. So that's how it was helpful.
is that I could say, wow, there's all these MBAs who want to be CEOs.
They have this skill set, but not this skill set.
And it just happened to marry up really great with our strategy, which has like
All these
twelve to twenty million dollar revenue system. You couldn't ask for a better training ground.
That's how it was helpful.
Mechanically it works out really well'cause we do all of our recruiting at Alpine in the fall.
So by the time my class comes around in the winter
Students either have a job or they don't.
at Alpine. So they're not my class is not a job interview.
Which is really important to me.
I draw a line. I never interview students.
I don't even ever give feedback on students.
When I'm teaching, I'm really just there to be their professor.
The calendar works out that I can do it that way.
Your whole
affect and the story and the setup.
It just so rings of athletics and
You said personal growth.
somehow in the world of sports
It seems obvious and cool that LeBron would have twenty five coaches and spend all this money on his body and do all this stuff to get better. Like not our heads. Like it sounds obvious.
And then somehow in the professional world, there still seems to be like a stigma of sorts associated with personal growth and executive coaching. Yeah.
Why do you think that is?
The two aren't fundamentally that.
Different, but there doesn't seem to be the same
appreciation for the potential value
of something like coaching.
The first coach I had in two thousand nine, I sat across the table from him. His name's JP Flom and he pitched me.
on being an executive coach and I remember thinking, What the hell's an executive coach? What are you gonna do?
And to this day, I don't even know why I signed up. I think he was just really compelling person. I bought the salesman to the case.
About this sales person.
I think most of the people that probably
Have
negative things to say have actually never done it.
I don't think I've ever met anyone who actually
hired a very high quality coach.
And had anything
negative to say about the process. So
And they probably just don't really know.
what they can get out of an experience like that.
So if you think about the reason you do it or have done it and have all these coaches that are part of your business or whatever, can you define personal growth? Like what is that?
Actually mean.
So for me, a number of different coaches I use for different things, but I'll give you a couple of real examples. So
I have a coach
Dame Manny Shoemaker and
Just to
have a call with her. I have to fill out a form that says
What are your one year goals?
What did you say you were gonna do last week? What'd you do and what are you gonna do this week and what's the outcome of the call?
And just filling that out every week, if I never even talked to her, would be a great accountability. And then obviously she's an amazing coach. She came up through the Tony Robbins system.
So for her
It's like a personal trainer.
for your goals and your life.
What better investment is there than that?
I don't need a personal trainer to go to the gym, but I actually do need a personal trainer to like grab me and say
What are your goals? Are you sticking to them? Are you on track? I think that's really valuable. I'm not able to get there by myself without a coach.
Then I have another coach I use. We will set aside four hours
And this will be like
Really blue sky.
messy thinking. Sometimes nothing comes out of it.
We ask big questions like what do we want Alpine to be 10 years from now?
What do you want your life to look like ten years from now? Where are you getting on track, off track?
If you were gonna achieve your tenure goals in six months, what would be true? Just these really big questions.
Sometimes amazing things come out of that.
Sometimes
Amazing things come out of that.
Three days later in the shower.
But I like making space to have that. And I just enjoy that too.
So it's like a way to put space on my calendar. You activate different parts of your brain when you talk than when you think or read.
So just the act of having another coach you're actually lighting up more of your brain. So
Then I have another coach, Rachel Lockett, who helps with the org chart of Alpine. I haven't
And every step of the way I'm running a business that's bigger than I've ever run before.
She's run she's been the chief people officer at really large companies. So she can help guide me through like
Hey, this org chart makes no sense and
Here's some ways you could be thinking about it.
I wanna come back to the definition question again. Personal growth.
What does that mean? Get better.
What does better mean?
I'll go like a little bit deep here, but
I think that
Ultimately
Each of us has
most of the answers inside of us in our intuition. Like I think we have this compass.
And you could call it your
Intuition, your soul, whatever that is.
That's incredibly powerful. It's like our own LLM. It's taken every experience and every
input we've ever had and it's storing all this and it has all the answers.
And so
I think a lot of personal growth is
understanding what that intuition is telling you.
and spending the space and time to really understand what it's saying and getting out of your head, which is a lot of times
Confusing things.
And then having the courage
To go do what it says.
That's probably my highest level of personal growth'cause I think
If you can do that over and over, you'll self actualize.
and become the best version of yourself, for lack of a better word. And then there's a whole bunch of things underneath that.
Try to make that happen. What are some of those things? Some of those things are
Designing
being really intentional about your life.
Figuring out
What does a successful life look like for you in all your different areas?
And really spending time on that and designing it and then
having a practice where you're
Working toward that.
Almost on a daily basis.
Is there an episode of the second part?
of the description courage.
A key word, it seems like. Yeah that stands out in your memory like
What is that?
Mean
in practice for you, what's the time that you felt like a thing you your intuition told you and then it required courage, which is a big
I've I mean, I'll tell you like a really early one. This is the first one that came to mind when you just asked a question about as an early one. So
I'm in Toledo, Ohio.
And to be the popular and be the cool kids, they
Didn't care at all about school.
Lot of more drinking, doing drugs.
Some of them just really weren't nice kids.
They were bullies in many cases, they were like the athlete group.
I just remember
That took a lot of courage for me to separate myself'cause I could have been in that popular group.
I chose a different path.
And at twelve or thirteen
For me, that took a tremendous amount of courage and isolated me.
And then I think
In a very short period of time realized
That that was the right call and that
That gave me just so much
confidence in listening to that gut from then on.
I still have a
Try to tap into that. But I think
I think at a pretty early age.
I just got a sense of like
how powerful it was to just listen to that voice.
If we have this amazing onboard intuition LLM and then
courage we can learn or something over time.
It seems like the other key step here is asking the right question.
Of the intuition.
I'm curious about two things.
what you've learned about that part, like how to get to good questions.
And then I'm also curious to zoom into today what those questions are for you today.
Your head is a really powerful tool. It'll talk you out of a lot of things.
Three really simple ones.
So first off, to get into your intuition.
A lot of times it's
Meditating.
Breath work.
really being still and quiet and getting out of your mind.
And a lot of things that people have talked about for thousands and thousands of years.
So
That's a part of it is to try to get yourself in that state where you're
silencing your mind or separating yourself from your mind as much as you can.
Which is kinda the
Core principle of meditating.
But if you had to jump to just
Questions.
Which is a form.
As well.
It's some of the ones we talked about, like
What would I do if I wasn't afraid?
What am I afraid of?
How is fear?
playing into my life right now. There's a great call you unquote where your fear is, there is your task.
usually look at where something is
Holding you back that you're afraid of.
and go into that and toward that thing, your work gonna be in there versus running away from it. A good question
just using kind of your future self. Okay, I have this decision to make going left or right.
And right now I'm in the fog of war and it's scary and
Gosh, it's gonna be really hard to go th either direction.
but stepping out and saying, Okay, if your ten years older version of yourself were to give you advice right now
What would they want you to do? And so you're getting out of like the immediate fog of war. And a lot of times the answer is super clear.
So those are all just a few questions or tools that might help.
The point on fear and being afraid or whatever makes me realize we talked about an amazing deal.
What was like a terrible really deal?
We had a lot of deals that just didn't go well, but probably the worst deal we did
Was this slot machine business that we owned.
It was the worst deal. It wasn't economically the worst deal, but
It just was so consuming, so
We put money in the slot machine business.
Made them manufacturing. They made basically software that went into slot machines and then they assembled the slot machines somewhere else and
put them in the casinos. They put'em in in a rev share. So we give away the machine for quote free and then we get twenty percent of the win.
So it had a recurring revenue element to it.
It was on paper a good business.
We sold the Native American tribes, which was exploding at the time. This was probably the early two thousands. Native American tribes were just growing their gaming presence. So
All those fundamentals.
Or the reason we did it.
But there was just
Something
And I'm sorry I'm gonna probably offend a lot of people here, but there's just something about that industry where
There's still an undercurrent of
S
People that weren't
Playing by the rules.
A few things were tough about that. Number one is
We just had way too much money in it. We had
Co invest in the deal.
We were in a sixty eight million dollar fund at the time.
And we had
A hundred and seventy million dollars in the business. Including co invest.
So it was just like too big to fail.
So we had to make it work.
I became CEO of the business. One of my partners was basically the CFO. We had technology, we had customer concentration, we had CapEx.
We had product obsolescence.
It was a very hard business to run.
And then there was just again this element of like you're competing with some people that don't follow the rules of the law.
It was just a
undercurrent it just didn't feel right a lot of the time.
And I still remember this one time.
someone would ask me about it and I'd say, Oh, you know, it's just entertainment and the median income of people who play slots is actually higher.
They could afford it and I'd have all those things I'd say. And then I remember this one time I walked, we had these like local casinos.
I remember one time walking in and there was this
Five year old girl.
sitting outside with a coloring book.
And her mom was in there blowing her paycheck.
I just was like
I don't want to be in this business.
It consumed a lot of our time.
That was probably the worst deal we ever did. It set us back quite a bit. How did you work it out?
What was the end of the story?
We saved the deal because
We read that Illinois
was going to open up and put slot machines in bars.
And Illinois, like the fifth or sixth most populous state in the US.
We were like
Oh my God, this is gonna happen. It was gonna happen in like a year, then it was two years and three years, but in the meantime
We went around Illinois and made deals with all the bars.
They had no money coming in, these bars weren't making any money.
So we'd pay them X dollars to have the rights to put slots in their bars. And we we were like three years ahead of time ahead of people. So then when the
Thankfully the law finally passed and the games came out. We were the largest or second largest supplier in that market. And then we were able to sell the business on the back of that.
Did you earn a return on the equity on the hundred and seventy?
Initial equity was about a three X and then some of the late equity was like a one X.
Everybody, the banks got paid back. Every one of our investors made their money, plus we had some preferred equity, they got all paid. So it was like we did escape, but
Yeah, we'd never want to bet our business on one thing. So in addition to the concentration lesson.
Is the other key lesson just don't back businesses where you're not a fan of the core product or service. Yeah.
for us, you know, I wanna think that we're having a I mean, it sounds cheesy, but we're having a positive impact.
the world's a little better because we're building this company and
If I'm being honest.
I don't think that was true in that business.
What are you most afraid of today?
I told you this when we talked the other day, but my two boys went off to college and
It was like the end of a chapter that was really one of the first times I felt like I needed to start facing my mortality.
And I think that's the thing I'm the most afraid of is
How long do I have? And like, am I going to
be able to do all the things that I wanna do in this lifetime and this is the only one that I know that we have and am I doing that right now?
Or am I gonna look back and have any kind of regrets?
That's probably the thing I'm most afraid of.
What have you done about that?
I'm in the process of it, honestly. Like I think one of the things I've done about it is I try to
Whatever I'm
In at the moment.
Just be one hundred percent fully present and
just be all in with a thousand percent of my energy.
Each thing.
And actually, ironically, not overthink it.
And I think that's been the thing that
I guess has allowed me to feel the best about the mortality.
Is there anything I think of like pillars supporting the ability to do that day in day out as like a human biological thing that has limited energy or whatever? This could be anything, what you eat, what you do, whatever the pillars are, what are those pillars for you that let you do that?
I think one of the pillars is that you have
spent the time
being intentional and
spent the time getting in touch with your intuition so that
You just know the things you're working on are the things and you don't have to
Be hedged at all.
You're not spending your time my in the right job, my in the right relationship.
Am I living in the right place? You've already answered those questions. So you can just kind of relax.
into those things.
So a lot of the work that
I do on that has allowed me to to relax.
In those things. I think the physical part is massive.
I think the most highly correlated thing to having a good day is is if I feel good physically like
That starts with a sleeping well.
And then there's a whole lot of things you back up from sleeping well, so I don't
drink alcohol. I don't drink caffeine.
Don't take sleeping pills.
I have a nighttime routine. I try not to schedule stuff early in the morning that's gonna stress me out.
I think that is so underrated.
How you feel physically like matters.
If I go back to our Teal versus Schwarzenegger analogy, my experience with the Schwarzenegger of the world is that the structure of their days matters a tremendous amount, typically a lot more than the teals.
Maybe could you give us like a day in the life?
Let's say a normal day of work or something, a Tuesday.
In some detail what does a day in the life look like?
A normal day
I'm waking up with no alarm, hopefully sleeping eight hours, so maybe I go to bed at
Ten or nine thirty getting up at five thirty or six.
I'm having a somewhat relaxed morning that's gonna include
at least fifteen minutes of meditating and then a work out and I try to work out
Really hard.
I try to lose shocked. Yeah.
I try to like ease into my work out.
enough and warm up that at some point in that work out, no matter what it is
I'm going
Hard for like at least something.
I don't know, it has some kind of impact on me that I enjoy.
And then if I'm successful, I have my day start.
A little later, like nine or ten.
So that I have a little time in the morning to just kinda gather myself and get
Organized.
And then like I have this habit I've done since I was twelve.
I write out
What are the three most important things you're doing this year?
And what are the three things you're doing today to move toward those things? I write that list.
Every day. Weekends.
Probably not weekends, yeah. Weekdays.
I have it all on one note and then
I try to just compare my schedule to that. I look at the things I have on my calendar. Hopefully I'm
Prepared for those things and then
I try to just be present.
Throughout the day.
And in that day
If I think about the archetypes
A second like pairing of archetypes for people running investment firms, you have a category of
investor focused people and more like what I would call CEO.
running a business that happens to do investing as its thing.
versus people that are like doing the deals. So like very famously like Schwartzman or the KKR founders.
They were kind of CEOs from day one. Yeah.
Deal people.
It was more about building the machine than executing the individual deals. And I know you've done both.
But if you think about the day in the life today, like if I look at your meetings, how does it break down between
While we're doing this huge equity investment, like talk about the company versus
Talking about alpine.
That's an awesome question. I'm just gonna go back for a second on that question, which is
I worked at four private equity firms before I started Alpine.
The leader of every single one of those firms looked at their job as being a deal person.
Trying to close deals.
And in many ways they almost were competitive with me and like my deal's better and I'm gonna have
I'm gonna grab your analyst'cause you know, whatever.
And they spent virtually no time, if any time, saying
How do I make this the place where the best people want to stay? And I remember the last place I worked, if they'd spent 25% of their time doing that, they'd probably have the best returns.
And so I remember thinking that
Tucking that away in my head and thinking, gosh, so to answer your question, I think that's the most important part of my job is.
Is Alpine the place where the best people want to come and work and spend their lives and their careers?
That's the most important part of my job.
And then similarly.
with our portfolio companies, which are really an extension of us.
'Cause we're putting our own teams in there.
Are those a place where we can attract the very, very best people?
I spend a lot of my time on that.
How are we structuring the deal teams? What does career advancement look like? How are we recruiting
meeting with the world class people on our team and trying to say, Hey
How are things going? What's working well, what's not, and then
That's a big part of my day. But to answer your question specifically.
I have gone through periods where I'm doing
I mean, the first ten years at Alpine I just did deals.
And then I've gone through periods where I wasn't working on deals and wasn't on boards.
I think for me the right balance is to probably spend
Around twenty five percent of my time in the action.
because I think it's good for me to keep one hand in the action so I can know what it's like building one of these companies and what problems they're facing.
I don't wanna be totally out of that and then I'm spending probably seventy five percent of my time
Working on Alpine itself.
What do you think?
Private equity is going.
It's a very interesting time in the news because
Yale and others have just sold these big secondary interests and whole bunch of their private equity exposure, venture exposure.
It is an industry. I mean, it is professionalized, mature, huge
There's huge public companies that do this.
When you started Alpine, it was very much still in you know, whatever, earlier innings, let's say.
How would you describe it today? What does it kinda feel like to you having been in it a while?
Or do you think it might
Go.
Well, if you go back to
when I started say nineteen ninety, I started ninety four, but let's say nineteen ninety
I think the tenure treasury was around eight percent.
Then you watched over the subsequent thirty years from ninety to two thousand twenty.
Interest rates steadily went down. I mean they had a little few spikes, but they went basically from eight to zero.
over a very steady period of time throughout that.
And that had two massive impacts. One is
the pension funds pretty much all underwrote their pensions at eight or nine percent. I don't know why they picked that number, but they all did.
And all of a sudden your risk free rates at
Zero.
You have to find alternatives. And so over that same period of time
That last thirty years you had allocations
Just steadily increasing.
It was a biggest tailwind.
I mean, over that time, Calipers probably went from a zero percent allocation to I don't know, a twenty percent allocation. That's a lot of money.
Multiply that by fundations, endowments, and everybody. And so you had this just
Massive tailwind. And then the second one, the obvious one is
debt was really cheap. And so that's a big part of the private equity model and borrowing was cheap. And so you had multiple expansion over that entire period of time.
I don't care what anyone says, there was multiple expansion.
I mean, we were buying the same companies in nineteen ninety four.
At five times that we're paying
thirteen times for now and excited about to do so. So
You had that trend going on over that same period of time and their four returns were good, generally speaking.
Today, fast forward, there's fifty five hundred private equity funds. It's very efficient.
Interest rates are going the other way.
That's dynamic one.
And then
dynamic two is there's eight dynamics very early and it's tiny dollars, but
individuals are starting to be able to go into private equity through
their wealth management, which didn't used to be a thing.
I think the impact of all that is that the people who were putting up
median returns and felt like they had this
God given right to raise their next fund and it was gonna be bigger.
I think that's not gonna work out very well in the next
decade or so, I think you're gonna have to be pretty differentiated. Or
the really, really massive firms that are able to collect the money from the individuals, which is the new tailwind coming in.
I think they're gonna be able to mass assets, but I think it's hard.
It's gotten harder every single year I've been in it for thirty one years.
I think it's gonna get even harder just given some of the potential headwinds of interest rates.
One of the themes here has been between your class and Alpine and the talent program, all these things.
Requires that you
See the best in people.
What have you found are the keys to doing that specific thing well?
I think one of my
probably favorite things is when I went back when I was telling you earlier about Irv Grossback and how
At certain times in my life
I would walk in
And
Asked for his advice.
And he would tell me
Hey, I've seen a lot of students, I've seen a lot of people, you got this.
Coming from him, like I would believe it.
It would matter that he said that.
I think a big part of it, Patrick, is
We get to be that force now.
for these MBAs who are coming in and saying, Hey, look, here's been your track record.
We've done this a lot.
You're gonna be awesome at this.
You're ready.
We're gonna help you go do that.
And then
It becomes somewhat self fulfilling. The students
believe it and they start behaving as though it it's true and then it kinda becomes true. So
I think seeing the best in people is
It's really one of my favorite things about Alpine. Our passion statement Alpine is unleashing heroes.
And so we think that the people we're bringing on at Alpen and our companies really are heroes and they haven't had the arena yet to really like fully
be the hero that they can be.
If you think about the industry as a big participant in it.
Are there any parts of it that really bother you?
Are there features of
the private equity investing style, landscape industry, whatever that you think are messed up.
Yeah, there's a lot.
I think that
Gosh.
There's so much money in the business that it's just very, very
Hard to not
Get
Distracted by that.
So if you really think about I was talking about before about the objective statement.
And how much that matters.
I think if you watch what firms do, maybe not what they say, but what they actually do.
Their objective statement is go raise the next fund, go raise a bigger fund.
I think that that makes sense. That's how they stay in business, but I think it can lead to
the wrong behaviors.
specifically you cut your
Flowers and water your weeds.
You show these great realize returns and you're compounding your stuff that's not great.
It leads to a lot of people that
come in the industry and maybe are in it to make money as opposed to build things or don't always show up the best way sometimes.
Anything we haven't talked about that you feel like
is an essential
Part of your
story Alpines story
ingredients of success as this style of investor that we haven't
I mean I think probably the biggest thing is
It just took a long time.
Through the first
14 years at Alpine. I had seven years of private equity before that. So I'm twenty one years into the industry.
I think we managed
four hundred million dollars or something like that. And we had a huge team and
weren't really paying ourselves. Twenty one years in.
Twenty one years in.
I mean, twenty one years in my salary was a hundred thousand dollars.
That's a fact.
And we hadn't yet had a carry check'cause our
European waterfall and so we're waiting for the last company, which was our best one.
It just took a long time.
I think
Alpine is a success story.
A lot of it is
'Cause we just stayed with it for a long period of time and were constantly
growing and learning through that entire time.
I think that's something that
At least my students and I think a lot of
People miss.
is they probably hear people on your show
Who sound really successful'cause they are.
But they may not really understand that it doesn't just happen. Like it takes a long time and I think
giving people the
perspective going into
starting a company that
It's going to take a long time and be ready for that ride. So pick something you're excited about that you want to stay with for a long time because if you're in it,
To make money and exit.
You're probably gonna be disappointed.
Doesn't that pair beautifully with your questions for your class though? The lifetime questions or whatever that
For you to
go twenty one years and be making a hundred grand. Obviously you've loved part of it. Like you wouldn't have kept going
Otherwise.
Yeah. It seems like there's quite a nice pairing. Absolutely. I mean it again, not to get too philosophical, but the real journey, the real part of your life is the journey.
The building.
not knowing how it's gonna turn out and the challenges you face.
When you look back, that's all the fun stuff. And so
You wouldn't even want it to go great in the first year because you I think you'd be depressed.
I think you want it to take a while and you want to learn because what's happening along the way
is you're growing and you're learning who you are and you're building your own confidence and your own resolve. And I think
The dirty secret is that's actually what it's really about.
That's really why we're here.
I was reading some of my old Alan Watts notes this morning around philosophy.
I found this quote which was so good, which is the point of dancing is not to get to a particular spot on the dance floor. I love I love that story he talks about dancing is so awesome. And he says
You're not rewarding the fastest dancer, right? He says that in that quote.
When I do these, I always ask the same traditional closing question. What is the kindest thing that anyone's ever done for you?
First thing that comes to mind was last year my wife's out of town and I have my middle son Blake and Lily were at home.
So it's just the three of us. We had these crazy power storms going on.
I get up in the morning early, I drive down to Stanford and Blake
Calls me.
And I'm like oh no, what's happening?
And he says, Hey, school's canceled, there's no power.
And I said, Okay, no problem. Just, you know, make sure you drop your sister off somewhere she couldn't drive, you know, before you go wherever you're gonna do. Just make sure she's okay. And he's like, No, Dad
Lily and I want to come down and watch your class.
I just remember thinking
Wow, you know, these two teenagers
who could have done whatever they wanted on their day off. They're gonna drive an hour and a half and come.
hang out with me at Stanford and I don't know, it just really, really moved me in.
Yeah, it meant the world to me.
Amazing. Amazing place to close. It's so cool how you've
Build what you've built.
With
Some simple ideas just taken very, very seriously over long periods of time. I think that lesson is especially powerful.
So thank you for telling us the entire story and so cool what you build. Thanks for doing that. Patrick, I love your podcast. I've listened to so many episodes. I learned so much. So I'm really honored to be here. Thanks so much.

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