Alex Behring and Daniel Schwartz, Co-Managing Partners of 3G Capital, join Patrick for one of the most detailed public conversations they’ve ever had about how 3G actually works. 3G has built one of the most distinctive firms in investing around a simple idea: there are only a handful of truly great businesses and even fewer great CEOs. Their model is to raise capital with the intention of making just one investment per fund, commit meaningful amounts of their own money alongside their partners, and focus all of their time and best people on that single opportunity. What sets them apart is that they come to investing as operators. Alex previously ran the largest railroad in Latin America, and Daniel served as CEO of Burger King, and many of their partners have spent years as CEOs, CFOs, or senior operators inside complex organizations. Their approach has produced a series of iconic deals, including Burger King, Tim Hortons, Hunter Douglas, and Skechers. Along the way, they have also become known for developing talent early, giving young leaders real responsibility and ownership, and holding an unusually high bar. Please enjoy this great conversation with Alex and Daniel. Timestamps 00:00:00 Episode Intro: Daniel Schwartz & Alex Behring 00:01:20 The “One Investment Per Fund” Model 00:05:39 Great Businesses Own the Relationship With Their Customers 00:08:40 The Unique Structure of 3G Capital 00:14:21 Why Hunter Douglas Was Appealing 00:20:15 Forged in Fire: Alex’s Railroad Story 00:22:53 The Efficiency Playbook: Ownership is Key 00:26:43 Centralize the What, Decentralize the How 00:28:12 The “Burger King is Run by Children” Story 00:30:38 Negotiating with Tim Hortons: A Complicated Endeavor 00:36:56 Never Compromise on Quality 00:38:18 Talent Over Tenure 00:43:39 Be Wired for Urgency 00:46:43 3G’s Operating System: Clear Communication & Transparency 00:47:47 What People Get Wrong About Incentives 00:50:43 How 3G Recruits 00:52:32 When a Brand is Bigger than the Business 00:55:35 Why Burger King Was Undervalued 00:59:43 From Zero to $2 Billion in France 01:01:42 Kraft Heinz: A Case Study in Concentration Risk 01:04:25 Skechers: Great Product Meets Great Distribution 01:11:25 Finding Forever Businesses 01:13:10 Zero-Based Budgeting & When It Works 01:16:28 The Current State of Capital Markets 01:18:41 How Daniel & Alex View Technology 01:20:41 Misconceptions About 3G 01:23:04 3G’s Founder-Led Focus 01:24:31 Characteristics of Businesses Built for the Long-Term 01:27:19 The Power of Patience 01:28:57 The Kindest Thing ****** After the episode, I highly recommend you read our in-depth profile on 3G Capital at Colossus.com. They gave our managing editor Dom Cooke unprecedented access and the outcome is an excellent profile about the fifty year history of 3G and how the model began with Jorge Paulo Lemann in Brazil. Become a Colossus member to get our quarterly print magazine and private audio experience, including exclusive profiles and early access to select episodes. Subscribe at Colossus.com/subscribe. ****** Presented by Ramp: https://ramp.com/invest Sponsored by Vanta, WorkOS, Rogo, and Ridgeline: https://www.vanta.com/invest https://workos.com/ https://rogo.ai/invest https://www.ridgelineapps.com/ ****** Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own and do not reflect the opinion of Positive Sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc