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15 years ago we set an objective to become the number one performing private equity since we set that goal the four funds we invested after that have all done 5x or better.
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>> How do you do 5x in 6 years?
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Well, you go get Navy SEALs to run plumbing companies.
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>> [laughter] >> Well, that makes perfect sense to me.
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>> Yeah, it works pretty well. Oh, yeah.
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>> In your world there's a bunch of like AI rollouts.
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[music] We're going to buy a company, we're going to throw AI in it and it's going to be awesome. Is that a good strategy?
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>> These venture-backed apps still have 2 million in revenue and a $500 million valuation and they're going to go to zero.
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>> How do you see the world in the market?
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Where do you see opportunity?
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Where do you see destruction?
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And where do you see overhype?
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>> Okay, I'll start with overhype. How about that? >> All right.
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Well, listen, uh we have Ram Weaver here today.
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You've seen this guy all over YouTube, TikTok, wherever you've been seeing.
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What I'm interested in is I would have always loved to go to Stanford and go to Stanford Business School.
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There's probably a lot of people listening to this that kind of wonder what would it be like and you know, that would be cool to be able to go learn from the best at one of the best schools.
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Well, we get to kind of do that today.
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We have somebody who not only is out in the field, you've got a private equity fund that has almost like 20 billion in assets under management, but you also teach at Stanford and I think today it'll be fun if we get to hang out and pick your brain and be students like we're in your class. >> I love it. Looking forward to it.
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>> You know, what what's funny is like you I I've watched your talks for a long time and they're they're amazing.
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How to live an asymmetric life was a really good one.
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How to live your full life, I think that wasn't the exact title one, but that was my takeaway from another talk.
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And I was doing research on you and I'm like, I didn't even realize this guy had a PE fund.
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>> [laughter] >> And it and I think that's great that your your ideas are actually what you're known for more than your work.
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So, are you besides the talks, can you explain with with your fund how successful are are beyond just the talks?
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About 15 years ago we set an objective to become the number one performing private equity fund in the world as measured by net MOIC, you know, the return on capital and our last uh since we set that goal the four funds we invested after that have all done 5x or better or the fourth one's on track to do that.
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So, it's been it's been great.
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Like it's all the all the content that I try to bring to uh my talks or to the students at Stanford, you know, I I like to think they're really based in stuff that really works.
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There's a lot of a lot of amazing people that are have a lot of really good motivational content.
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I I like to try mine out in the real world a lot and see what actually uh what actually works and I've and I think that you know, the stuff that I I try to talk about is is exactly what we what we do at Alpine.
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But yeah, we've had a really great run and I'm really proud of how we've done it, too.
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We've done it, you know, with people treating people really well.
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We build our entire business around the people at Alpine and the people the entrepreneurs in our portfolio and um you know, try to be a force for good.
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The three goals are be the top performing fund, be a force for good and be a place where the best people want to come and works and spend their careers.
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And I think hopefully we've done it that way.
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>> So, you um you just said we you set a goal to be the number one performing private equity fund in the world. No big deal. >> That's right.
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>> So, and and you said 5x um MOIC, which is multiple on invested capital.
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So, and that's over like 10 years or what what's the time frame we're talking here?
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>> I mean, from the day the first dollar comes in to the last dollar goes out.
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Yeah, maybe it might be it it it's probably easier to talk about the average.
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Probably averages about six years of the average investment's probably about six years.
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>> That's pretty remarkable.
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So, um you know, normally uh you know, sort of rule of 72, you put your money in the S&P 500, in seven years you should double your money.
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So, you should get 2x if you're there.
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And you're you're basically in the roughly the same time frame trying to get a 5x, right?
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So, you you're really trying to outperform.
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Can you, in plain English, cuz Sam knows this, I spent the last 2 days having I had 40 private equity meetings, and you know, I'm half the time I'm just like what what they're like, "Yeah, we're a small fund, a billion and a half under management."
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And I'm like that was the story all day.
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I was like, "How much money do you guys have, and what the hell do you guys actually do?"
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So, can you give me the simple what the hell do you guys actually do?
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Are you guys buying like HVAC companies?
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Are you buying software companies?
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>> So, um I mean, private equity is a very broad classification.
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There's lots of different strategies.
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So, I'll tell you specifically what we do.
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I know um there's a lot of talk around AI buy and builds.
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If we can dive into it a little bit, but we do primarily buy and build.
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So, we'll we'll take a we'll find a really amazing CEO that a lot of times has worked with us in a smaller capacity.
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Maybe they were the CFO of a company we had, or they came through our training program, and then we'll back them.
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We'll go find an industry that we think is really interesting.
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We like the prosaic industries like the ones you mentioned, plumbing, HVAC.
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We also do software, too, because uh there's a number of strategies where roll-ups in software can be really attractive.
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So, we It's a small part of what we do, though, smaller than the services stuff.
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And but a lot of these really prosaic industries are massive.
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You know, the plumbing and HVAC industry you mentioned is like it's like a $170 billion industry.
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So, it's So, if you get it right, and you actually figure it out, you know, you can you can grow, you know, almost forever, cuz it you just don't run out of run out of TAM, which is why we like to buy and build, cuz we'll get it right once, and then we'll stamp it out a number of times.
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The other thing that's really cool about buy and builds is it really is plays to our core competence, which is just talent, you know?
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So, we're The buy and build strategy, the way we do it, really is a talent strategy, you know?
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We're in a lot of cases, we're putting high-attribute like military veterans in to go run these uh plumbing business, and they're just incredible leaders.
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and so our our secret superpower is really training these awesome leaders and giving them an opportunity to do something they might not have had the opportunity to do otherwise.
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>> Sam is isn't that hilarious?
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Sam you could be like, how do you how do you do 5x in 6 years?
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It's like, well you go get Navy SEALs to run plumbing companies.
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Well, that makes perfect sense to me.
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>> That's actually right.
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That's that's actually a pretty simple simplified expression.
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Yeah, we [laughter] have Navy SEALs run plumbing companies.
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That's it works pretty well.
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>> The deck is only one slide. I like it.
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>> The Navy the Navy SEAL is actually the a very common um background of our of our leaders in in these businesses.
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>> And um how big a companies are you buying?
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>> So the add-on acquisitions, which is primarily what we do, I mean the I think the average deal we did is like $30 million.
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So the company might have 15 to 20 million in revenue, something like that.
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>> Oh, it's pretty small.
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Do you and do do you borrow money to and do you borrow money to buy it? >> Yeah, we do.
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So we'll we'll once we get it going, we can usually finance all the uh acquisitions with cash flow and and debt.
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So we don't have to put in any more equity. That's important.
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Obviously, if you're if you're trying to have a high MOIC, the not putting money in part is is a big part of that.
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>> The main part of your model that's I would say kind of differentiated is is you kind of I don't know if it's not a search fund exactly, but you basically start with a an operator or a CEO in-house, which most private equity guys don't do, right?
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They're mostly like we buy you, we hope the management team really stays on, that's really important, or we're going to later install and do a search for an executive to run the company.
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But what you guys are doing is you start with the person, you kind of run a search with them, it seems like.
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Tell me what I get wrong.
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Is it not like what's different about it than a search fund?
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They come in-house basically is the difference.
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>> No, Sean, you nailed it.
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It's like a search fund where we try to improve on the search fund model like if you think about a search fund and for those who may not know, you know, search fund is you're backing a a young person to go buy a business and then they're going to go run it, but um the the thing where it kind of falls down is the first part, which is someone has to go source and buy a business.
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They have to go build an entire private equity firm to buy one company.
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So, we do all that ourselves cuz we are obviously doing this repeated on a repeated basis.
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But, the general part about having a really high attribute person betting their career on a business is a great formula.
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>> It's probably a lot of what you >> talk about on this podcast.
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I mean, it's it's the greatest formula there is.
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So, we love the that part of the DNA of a search fund model.
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We're hiring very similar kind of high attribute people, maybe a little bit older than the search fund, a little more experienced, so bigger businesses, but generally it is what you just said, Sean.
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It is it is kind of like a superpowered search fund model. >> All right.
8:29
So, this episode is all about excellence.
8:32
A while back, I shared my personal framework for building excellence in my own life.
8:35
And the team at HubSpot turned it into a 30-day operating system you can check out right now.
8:41
It breaks down the systems it took me 10 years to figure out and shows how I actually use them day-to-day.
8:47
These are systems that genuinely changed my life.
8:49
So, if you want to build a good life, scan the QR code or click the link in the description.
8:56
Now, let's get back to the show.
8:59
>> So, the simplified way of thinking about this is you find a really high attribute person, we'll call them the Navy SEAL for now, just say, you know, somebody who's clearly a go-getter, winner, organized, effective individual who's willing to work really hard for 5 6 years to create like life-changing wealth for themselves and build and own their own business without having to come up with a great idea from scratch.
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You go with that you're already looking at whatever, hundreds of deals.
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You have thesis around stuff.
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You go and you buy the best deal you can find there, and then you do add-ons.
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So, you go buy the plumbing company, it's already a good business.
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That person should operate it maybe to be a better business growing organically, and then you're going to buy maybe more tuck-in plumbing businesses to to grow the thing using the cash flow from the first business. >> Exactly.
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And then the other thing is once you bought 10 plumbing companies, you know what it looks like to run the best in the world cuz this one company might do really well on training.
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This other company does great on customer acquisition.
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This other company has a purchasing advantage.
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This other one has a training advantage. >> superpowers of each. >> Exactly.
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You grab and and usually that's true.
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Usually each company has a superpower, but after let's just say 10 deals, you've got all the superpowers.
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First, you know, and and now your next deal, your 11th deal has 10 superpowers.
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Often you can improve that business dramatically really fast just cuz you you take that playbook.
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And the reason you can make that playbook consistent is cuz you're putting your own people in there run it.
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This took me 10 years to figure out, but we would we would back founders and then say, "Hey, we have all these great ideas."
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And the founders would just smile and write stuff down and never do anything, you know.
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And and it's not that we don't love founders, but you can't you're not going to buy a a guy who's run a plumbing company for 35 years and be a and then, you know, come in and tell him how to run his business. That doesn't work.
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>> So Sam, should we do Graham a favor and make him likable?
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Uh because you're too hatable.
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You're happy, you're good-looking, you're super successful.
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You're like, "We just got this model that prints. This is amazing."
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And I'm going to do you a favor here because that's the end point, but I wasn't where you started.
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Like the start of your story is you're mowing lawns in Ohio listening to self-help tapes on a you know, in your earbuds while you mow lawns to try to figure out what the hell you're going to do.
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And then I my I my understanding you tell us the fun part of the story, but my understanding is you kind of in college bootstrapped this with credit cards and went through the financial crisis and a bunch of stuff like that.
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So, can you can you bring it down a notch and get go to the the part that makes us root for you?
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>> Like what what's what's hard about this?
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>> Yeah, well, uh first of all, thanks for the kind words. I appreciate them.
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But uh I grew up in a small town in Ohio, went to a public school, and it was a blue-collar town outside of Toledo called Perrysburg.
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Nothing special about it.
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And I I was I was probably just average in just about everything. Athletics, school.
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This isn't false humility.
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I mean this is actually I didn't make the basketball team.
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I got cut, you know, from the wrestling team.
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I mean I I just wasn't really and I was I was okay at grades, not nothing special.
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And just as you said, Shawn, you know, I I was mowing lawns and I start the Sony Walkman came out and I started listening to tapes by guys like Brian Tracy and Tony Robbins and Earl Nightingale and and guys like that.
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And so you're imagine you're like a 14-year-old kid and you're literally and figuratively brain I'm brainwashing myself with this content cuz I listened to so many hours of it in the walking back and forth.
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And the two big concept, the first concept they that they said was you're either going to be your own best friend or you're going to be your own worst enemy.
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So fit you figure out you first, you know?
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Like you think that the world's happening like for example you think you got cut from the basketball team and you all this stuff happened externally, but really it's it's you, you know?
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And and that was a very hard message to hear cuz I was like, "Wait, what do you mean?"
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I had all these excuses lined up like I wasn't tall enough and I hadn't started playing early enough and my parents didn't get me in wrestling early enough and all this stuff.
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It's like nope, you don't get to have any of that stuff.
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You got to it's like let you got to you got to get rid of all that and just you got to accept total accountability for your life.
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And that was absolutely brutal and I realized they were talking about me and I wasn't doing that and I was I was exactly who they were talking about.
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So if the first thing is kind of get out of your own way, the second one was like figure out what you really want and I give Brian Tracy the most credit for this about like how to set goals and I think he maybe the best, you know, at least back then was the best in the world at setting goals.
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And so I literally would write down my goals every single day, multiple times a day in in high school.
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And it was just incredible.
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The combination of those two things it's like pretty undefeated formula, you know, get out of your own way, don't allow yourself to make excuses, and then write down what you want.
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Be super clear, and then it obviously got to go do the stuff you write down.
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But that that formula was like really powerful.
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And there was just something in me, I guess, that wanted more than what I had.
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And so I so I just kept plowing through.
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And then and then the story is definitely not even close to linear.
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I mean, everything you can imagine goes wrong, you know, I mean, I I wasn't great at wrestling.
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I I cut a ton of weight in wrestling.
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I mean, I was 125 lb at 6 ft tall. I mean, do do that math.
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>> [laughter] >> And then and then with Alpine, I mean, our first fund lost money, drained my savings account, then we started clawing our way back, got smacked by the Great Recession, drained my savings account again.
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You know, it was so it's it's definitely not been a linear story at all.
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But I think the the story is just one of like being clear about what you want.
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And then just this crazy amount of like persistence. >> I love that.
14:44
Um I wanted to switch gears and ask about AI. So what the hell?
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What are we supposed to do?
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So you know, like 5 years ago, if you if I was advising my cousin on what what to do I'd be like, go study computer science.
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I mean, like the technology curve's only going this way.
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Learn to code, you'll be you'll be set.
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Now they're graduating, and they're probably like, you know, um you know, hate their uncle now because Uncle Shawn told them to go learn to code.
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And maybe that maybe that's irrelevant, maybe it's super helpful.
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We can't tell what either way yet.
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And so there's all these kind of there's all this uncertainty.
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I want to hear from you kind of like, how do you see the world in the market?
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Like, where do you see opportunity?
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Where do you see destruction?
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And where do you see over hype?
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I want those three categories from you.
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Opportunity, destruction, and overhype.
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>> Okay, I'll start with overhype. How about that?
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You know, I I I was I graduated from business school in '99, which was like it felt like this exact time right now, but it was the dot-com era.
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That was the time when you had like petfood.
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com and Webvan and all this nonsense.
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I think the I think there were 400 companies that went public and the only one that I'm aware of that survived is Amazon, maybe eBay.
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Um but it was like it was a bloodbath.
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And and so people were right that the internet's going to transform the world.
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And look at us right now, we're on a podcast having, you know, over Wi-Fi.
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>> And by the [clears throat] way, I can order DoorDash uh just like Webvan might have wanted to do. Instacart, right?
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Like even the ideas might have not have been terrible, but the way they were burning money and and, you know, that wasn't >> And and you know, you think about today, I mean, your your mobile phone and you think about like imagine just your Wi-Fi doesn't work for a week.
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>> [laughter] >> Good luck, you know?
16:21
Like that So, it transformed the world more than people could even imagine back then, but there was a lot of like false starts and hype that people didn't really know where to place it and they kind of misplaced it.
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I think that's kind of where we are in AI.
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And my example of I'll just just to back up.
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I think there's kind of four places you could play in AI.
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You could be in the infrastructure layer, which is really, you know, all the chips and data centers and energy and you know, that's a very exciting area.
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That's going to have growth for as long as we can see.
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Then the next is the large language models.
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There's really not a lot of those, so you know, I don't know that you can really play there unless you're a big business.
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Even investing in those, like you're already paying a price that assumes success for those, so I don't think that's really that interesting.
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Then there's the app layer, which is where kind of all the most of the venture money's going.
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And then there's the use case layer, which is your customer, you know, um like a HVAC company and you're going to use AI and I think and and and that's you know, that's why I think a lot of these venture firms are jumping into these AI roll-ups because they're realizing that the first three layers are kind of tough and they're going to play in that fourth one.
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But where the hype is is the third one, which is the apps.
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You know, I'm going to be an app that I'm going to help law firms settle their cases faster.
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I'm going to make call center software that's going to allow you to not use humans or I'm going to whatever.
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I mean, there's a million of those applications.
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I think that's where a lot of the hype is.
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We we see all these companies as vendors to our businesses.
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So we they're they're pitching us all the time these venture-backed apps.
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And they'll have 2 million of revenue and a $500 million valuation and they're going to go to zero.
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Like they're going to be worth absolutely zero. >> A lot of them aren't.
18:03
A lot of them are getting like huge revenue fast.
18:04
Are you saying that you think some of those guys are going to also go to like is it is the churn going to be so high they're going to go to zero?
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>> I think that you have to say like ultimately what's the barrier and what's the moat that they're going to be able to build.
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There are there will be apps that will be successful just like there were dot-coms that were successful, but they're going to get attacked by above and below.
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You know, they're getting attacked below from the companies that can have now they can build their own stuff.
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They're going to get attacked also from the LLMs who are introducing interfaces and new products that that are like literally just taking the business of some of these apps.
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So there's going to be this constant pressure on them.
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I think if you can build proprietary data sets, which is harder than it sounds or you can build really deep interfaces with your customers, which is also harder than it sounds, those are those are moats you can build, but really I think sometimes what you're really you know, you might be 6 months ahead of where the LLMs are going to ultimately go and that you can make a lot of revenue for a short period of time.
19:05
Again, use going back to the internet, there was a ton of businesses in the in the you know, '90s where it was like get your marriage license online and those business made a fortune and they grew really fast hundreds and they were growing at 100% plus a year they were until Google just absorbed all those rents.
19:24
You know, it's like that and that's a little bit of like the analogy of the LLM's I think absorbing a lot of the rent.
19:30
So I'm not making a blanket statement that all apps are going to fail.
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I just think that's you asked where I think things are over hyped.
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I think that's where they're over hyped.
19:38
>> And what about in your world?
19:38
There's a bunch of like AI roll up.
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So it's like oh, let's go buy these service businesses, smash in some AI baby.
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Let's put some AI in the front door.
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Is there a back Let's put some AI back there.
19:51
Let's lift the shove some AI under there, right?
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It's like you know, it's like me with the Thanksgiving plate.
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I'm just trying to put mac and cheese everywhere.
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They're like we're going to buy a company.
20:00
We're going to throw AI in it.
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It's going to be awesome. Is that a good strategy?
20:05
>> I think the reason that people are approaching the strategy is cuz they're probably seeing a little bit of what I was describing about the app layer and saying gosh, I'd rather be the person using the AI than someone you know, developing it.
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So I think that's why they land in these AI roll ups.
20:21
I think you got to be careful.
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I mean we've been doing roll ups for 15 years and AI is a a huge thing. It's important.
20:27
Depends on the industry of course.
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Some industries are AI is a much bigger factor than others.
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But the other basics of like getting the talent right, getting the companies right, integrating, doing the transition management, having your workforce stay on, you know, doing training, recruiting.
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Those are really the core elements.
20:44
The technology, I mean here's probably a hot take.
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I think the technology in many many industries is going to be is going to be commoditized.
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You know, like like I'll give you an example.
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I'll give you a real example.
20:56
In property management we happen to be in property management.
20:59
I know there's a been a bunch of AI native roll ups launched by venture firms in property management.
21:06
What technology like what's their real advantage?
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Like, are they going to have technology that's better than anyone else?
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I I would say the answer's no.
21:13
>> So, what's the what's the moat, then? >> Exactly.
21:15
Like, the moat in property management is all the stuff I was mentioning before, you know, hiring well, building, you know, good good cultures, retaining, recruiting.
21:25
But but the technology, at least in that particular segment, it's going to come through the I think the software companies are going to And and so we're we're all going to have access And this is this is my take, you know, if this isn't I mean, there's there can be other opinions on this, but I think ultimately, I think most people are going to have access to the same technology.
21:44
So, it'll be a tool, and it'll help everybody, but it's not going to be the thing, you know, it's not going to be like the real differentiator.
21:52
Um it And so you So, like, I I still would go back to say, if you want to win in AI roll-ups, you got to win in all that other stuff I was saying.
22:02
>> Yeah, that makes sense.
22:02
I I think what some people are doing, which is not really the roll-up part of it, but uh you know, you go buy a property management company that does 6 million a year in EBITDA, and then you use AI to make the business more efficient, and now it's doing 8 and 1/2 million in EBITDA, and you're priced at a 5x difference.
22:20
You've created 10 million to 15 million of value uh just by like running it more efficiently, and even though another property manager might be able to do the same exact thing, doesn't really matter.
22:30
Um plus most property managers are going to be slower to adopt AI than like you might be if you're really bullish on this.
22:37
>> I I I think that's the thesis.
22:37
Like, what you just described is the thesis.
22:41
And we'll you know, we'll see how it plays out.
22:42
We'll see like I'm I'm sure there will be some people that execute really well and have some version of what you said.
22:48
It It probably won't be as dramatic.
22:51
And then it's just like where the rents go, and do the you know, does how much that rents ultimately get passed down to the consumer.
22:55
I don't know that you necessarily win on technology, per se.
22:59
>> So, you must get this all the time.
22:59
If you're teaching at Stanford, I'm sure somebody's raising their hand and saying, "Hey, I graduate, you know, next semester. What should I go do? Like, where should I go?
23:08
I'm a smart, hungry person who wants to be successful.
23:11
You see the landscape and you know what's going on. Where should I be going? What should I do? What's the opportunity?"
23:18
>> I would say, um, if I were graduating right now, I mean, knowing everything I know now, I would go do a services role up because I know how to do that. It works really well.
23:28
I think it it I think AI is a tailwind.
23:32
I'd do that in an industry where you can build real motes and stickiness with the customers.
23:37
Not all industries allow that. >> What does that mean?
23:41
Like, services You You're talking about like pest control?
23:43
What are we talking about here?
23:45
>> Like, take wealth management, for example.
23:46
You know, if you go into that business, you're like, "Okay, well, I'm helping people buy stocks or whatever."
23:50
But, what if you were helping people buy stocks and you were doing their trust, and you were doing their taxes, and you were helping them with all their estate planning, and and and and and.
23:57
That's your, uh, moat against AI.
24:02
It's old-fashioned stuff.
24:02
It's It's Your moat against AI is like the deep deep relationships with your customers.
24:07
So, I would say, go into something where you can really build those kind of customer moats, and then AI is nothing but a tailwind for you because your customer doesn't care how you're doing your back end, you know?
24:21
But, I would just be playing around with that.
24:23
I think it's like it's going to be a language that I would advise anyone anyone, no matter what age you are, but it's certainly if you're a young uh, student graduating, like, you want to know that language extremely well.
24:35
You want to speak that language cuz that'll also allow you to look at an opportunity and say, "Okay, I know I could do this with it because I'm so fast on these tools."
24:43
So, I think So, Sean and I have both started companies, and without sounding too like grandiose, I think that sometimes we view ourselves a little bit artisty and creative more so than like good or even interested in like financial models and things like that.
25:00
And and because of that, I think it's partially because I was jealous and partially because it's true that I thought that PE was kind of nonsense.
25:07
Not in the I thought it was very effective, but I thought like well, buying a company and firing a bunch of people, that's not the only value creation is that is for like the the owners of the PE firm, not necessarily like the betterment of the world.
25:19
Uh which there's a million examples of why that's totally wrong.
25:23
But I think what's interesting about you is you're sort of the antithesis of that where you're putting out this content that's quite soulful.
25:30
And when I talk to you and and when I see your talks, I'm like, this guy's got it. He makes me feel good.
25:35
And yet, he's in like the most soulless industry.
25:39
>> Cuz you got to be good at both, right?
25:40
You must be great at the ruthless analysis of business and finding the levers, cranking out that gross margin, and doing doing all of that stuff while still like clearly not getting not not becoming what the caricature that >> Sam's painting. >> Yeah.
25:55
You know, like if I had to keep it really simple, I would I would say like let's pretend for a second that I wasn't interested at all in being a force for good and I was just interested in generating returns.
26:06
I'd run my business exactly the same way.
26:08
A lot of it is for me is like it's it's having the confidence in building something that's going to be durable and and and enduring.
26:15
Be- So, like I'll I'll use a real example.
26:18
Let's say that I have this strategy I won't use any names, but let's say I I'm a I'm a software buyout firm and my strategy is I go into a business, I buy a software company, I fire people, and I double price.
26:34
I'll make money in the short term, but you look at a time like now where AI is coming, like you really want the the companies that are going to win in software have incredible teams that are on top.
26:48
They're they're making uh you you agentic products on top of their software and they're going to they're going to they're going to have AI be this incredible Tailwind for them.
26:58
And you know, if you if you just destroyed your your your team and your cost structure, you're going to get attacked from from both sides from your customer side and from you know, the LLM.
27:06
So we found that building things is a lot more durable than ripping things apart because you can make like one and a half times your money or maybe maybe even two times your money ripping stuff apart if you're lucky if you time the exit just right.
27:20
But if you actually build something, time's your friend and it could be I mean, you can make a hundred times your money.
27:27
And so like I I do think a lot of it is time Horizon.
27:31
I think underneath that is even deeper like why are you in this business in the first place?
27:35
Like if if your goal to be in the business is to make money and you want to do it as fast as possible then then maybe that behavior does flow from that.
27:44
But but in terms of just being good at private equity, I don't think ripping things apart I don't think you're going to be the best in the world you know, doing that.
27:53
>> What's the best deal you guys have ever done? What's the hero deal?
27:56
>> You know, we've had it we've had a few really really good ones that rhyme with what I'll describe.
28:00
But you know, you picked the plumbing and HVAC example at the beginning.
28:04
That's one of our best deals.
28:06
I mean, we we backed two people that we we hired right out of business school.
28:11
They they joined our CEO and training program.
28:13
They went through that program.
28:14
They became the eventually the co-ceos of the business.
28:17
We bought a small plumbing and HVAC business that had like $8 million of earnings.
28:24
This year that business will do 500 million of earnings.
28:28
>> [laughter] >> How long how many years did that take? >> It took six years.
28:32
>> Six years to 500 million dollars.
28:32
You you have to break that down.
28:34
How >> 500 million dollars of earnings not revenue.
28:39
>> 3 billion of revenue 500 million of earnings and and we I think importantly that that happened without us putting in any additional money. >> Wow.
28:46
So so an initial buy of like what?
28:48
30 million or something like that?
28:48
What how much was the initial buy?
28:51
>> of 50 in the first deal.
28:55
We might have put in like that first year like another maybe nine or so that first year and then that was it.
29:01
Then we never put in any more. >> was going on?
29:03
Was it that you just you guys just went on an acquisition spree and picked up all the mom and pops or was it that they weren't doing any sales?
29:10
They didn't know what they didn't have a good website?
29:11
Like what was what was missing that you guys added?
29:14
>> We got We got fortunate that the third deal that we bought we partnered with this guy So the CEOs are named AJ Brown and Will Matson and then the the third deal we did we partnered with this guy named Ira Pruitt who was like the the grizzled HVAC veteran and just this wonderful guy.
29:31
He had seven of his kids in the business and like and he gave us a lot of the playbook levers and then the next deals after that we were adding to that playbook.
29:39
So eventually we just ended up with this amazing playbook about how to run those businesses and then we began that talent program we were talking about earlier where we started attracting a lot of incredible leaders.
29:49
A lot of the not all of them but a lot of them veterans.
29:51
And and then that allowed us to go buy businesses that other people can't buy because like really the line of people that wants to go buy a $12 million revenue plumbing business in the middle of Louisiana that requires a management change is short.
30:09
>> Wait, [laughter] can you You have to address this.
30:10
So you just you described one of the guys, I forget his name, as a grizzled HVAC guy which in my head I have a I have a picture in my head of what that is.
30:19
So I Google so I'm I looked up the company you're talking about is called Apex Service Partners I assume. >> Yeah.
30:25
>> And I looked up Will Matson.
30:25
Sean go ahead and look up Will Matson and >> Yeah, he probably looks like the opposite of a grizzled HVAC guy.
30:32
>> Will is a baby-faced guy.
30:32
Honestly he he looks and he might actually be 28 years old.
30:37
I I think he he looks very young and he worked at JP Morgan, went to Wharton, and worked at McKinsey.
30:44
>> So, the grizzled guy, his name Ira Pruitt, and and the combination of AJ Will and and Ira's like amazing.
30:50
So, >> That's what I want to ask about.
30:53
I want to ask about what makes this such a high-functioning team to go from 8 million to 500 million in profit.
30:57
Teach me what makes such a powerful team and what attributes are needed in order to grow a business that fast, because these guys look like the fairly odd couple.
31:08
>> [laughter] >> They are they are an odd couple.
31:09
So, the combo in this in this in this particular instance, the combo is AJ is incredibly focused on the talent, and he's the one that rallies the Navy veterans and flies around and gets them excited.
31:23
Will is does the finance and the M&A and a lot of the whole co-functions, and then Ira is the one that's like, "Hey, this is this is how you actually run a plumbing business.
31:34
Here's the playbook we got to implement."
31:35
So, that that's what how the combination works.
31:39
What they all have in common, and then to answer your question, like what we look for in these leaders, number one is just this white-hot will to win, and that's more important for us.
31:47
We found that to be way more highly correlated than like, you know, any other factor, IQ or background or experience.
31:55
But like, each one of these three in some version of their life has just demonstrated this crazy will to win.
32:02
We learned this from a book called Who, which was the sequel to the book called Topgrading, and it's about basically how to hire.
32:11
And so, we do like a 3-hour interview, and you start with the person in literally like in high school, and you go through yesterday, and you're just walking through their background.
32:21
It's kind of a conversation just like this.
32:22
It's not It's not super formal, but you're you're collecting data on this person.
32:29
And you're you're in in AJ and Will's case, you know, you'll or or Ira or really any anyone that had gone through our program, you know, you're just going to see example after example of like, hey, this thing went really wrong and it was a bummer and here's how I handled it.
32:43
I got I got up, you know, I plowed through, you know, I put my shoes boots back on and I kept marching forward and you're going to see that again and again and again.
32:52
We always say like if it'll leap out of that interview like and and if it doesn't then they probably don't have it.
32:57
>> So speaking of deciding what to do in a bunch of your talks it's basically like I call it my rich life.
33:02
It's like how to live a rich life.
33:04
You call it an asymmetric life and you and you've done a bunch of different talks on similar topics.
33:09
You have this cool thing called the genie question which I figure exactly how you phrase it but it's basically like what would you do if you couldn't fail and it's an exercise to basically get people to decide truly what they want because a lot of people listening
33:23
to this Sean and I included were ambitious people and sometimes will be we only listen to where the where's the money or where can I fit into some traditional sense of success along with a lot of your Stanford guys they all think the same thing like where >> Or fear talks us out of something. >> Yeah, like I can't do that like I was
33:39
>> Yeah, like I can't do that like I was supposed to like go to business school.
33:41
I got to go to McKinsey then I got to do this.
33:42
I can't do this other thing.
33:42
So you have this question of like what would I do if I couldn't fail.
33:47
What would you say is the most common reason why people are really bad at answering that question?
33:54
>> So there's a few a few things I'd say.
33:56
First is I think people don't ask the question.
33:58
So that's that's probably 90% of people.
34:01
It sounds crazy but they never ask themselves what do I really want, you know?
34:05
And they haven't given themselves like the permission to even think about that or or or like I think it's almost like the highest form of self-love is to trust yourself enough to say I'm going to be on the path that excites me.
34:22
You're asking why people fail and say so I'd start with people haven't given themselves the permission to even think like that.
34:31
So let's let's assume now you have done that.
34:33
But, I would say for your audience, like give yourself that permission, you know, to you you matter.
34:36
Like, what you what you get excited about in this world matters.
34:42
>> What are some example answers to that question?
34:43
You've obviously helped a lot of people go through this process.
34:45
I assume it's at your when you teach at Stanford.
34:49
>> I'll give you a couple just from my class in the last couple of years.
34:52
Last year, I had a student who's building a theme park in Dallas.
34:59
>> [laughter] >> In Texas, like literally a theme park.
35:02
>> Let's give him a shoutout. What what's that called? >> Yeah.
35:05
>> [laughter] >> I think it's called Texas Land. I'm not sure.
35:07
Maybe they haven't finalized that as the name, but but that was her thing and she's going and doing it.
35:12
I have a student this year who is He is brilliant.
35:15
He could go to any consulting or finance firm.
35:19
He's going to India um where his his family's from to help them build free hospitals.
35:27
And like that is his thing.
35:30
Like, it's super clear that's that's his answer to the question.
35:35
I give him so much credit that he has the courage and commitment to go do that, and it's going to be very hard, but that's his answer.
35:43
You know, what you guys are doing?
35:43
I mean, you guys are building a podcast that's like really helping people.
35:47
And you can just tell from being on this podcast, you guys love it. You're having a blast.
35:52
Like, you're doing it, right?
35:52
I mean, you're you're doing the thing that you followed that energy and gave yourselves permission to be like, "Hey, that that's a good place."
36:00
And >> But, I but I almost hate saying it that way because I don't want people to think that there aren't doubts yelling at us or anyone who's successful all the time because I think in another talk, maybe the same talk, you were like, "I do this exercise."
36:12
And Alpine is a $20 billion fund.
36:15
And I think you said for the first 14 years you thought it was going to fail or you weren't confident that I I forget the phrasing, but you you weren't confident that it was going to be a home run. >> Yeah.
36:23
I think all of us have these like crazy um limiting beliefs like that run through our minds all the time that are like beating us up with like I shouldn't do this. I have to do this. I have I should do that. I might fail. Oh, no.
36:37
And the thing about that is that's very normal.
36:39
Like having that fear and the those doubts is 100% normal. Everyone has it.
36:44
It's just what like what do you do with that?
36:47
And And I think one of the things I try to help my students do is like we have an exercise where literally we like spend an entire class writing all that down.
36:56
Like we like like empty your mind of all the limiting beliefs that are getting in your mind. Just let them flow out. Okay, I might fail.
37:01
I might run out of money.
37:03
This No one might watch my podcast.
37:05
You know, I I Alpine might not make it. AI might not work. Whatever it is.
37:09
Write all that stuff down.
37:12
And then And then once it's down on paper, you've removed it.
37:14
Like it does the most damage to you when it's in your subconscious and you don't even realize you have it.
37:19
So, if you're if you're walking around with some fear and you don't even know you have that fear, it just looks like inaction and paralysis and I'm not going to go forward and I'm going to stay stay stuck.
37:28
But once you have it down on paper, let's say one of your things is I want to start a company, but I don't know how I'd pay myself or pay my loans or whatever. Okay, so fine.
37:37
You For if if that's in your head, you're just not going to start a company.
37:40
But if you write it down, you're like you can rephrase and say, "How would I start this business in a way that I could service my business school loans and still pay my rent?"
37:49
You know, and now that's a problem to be solved as opposed to a fear that is creating complete paralysis.
38:00
And so, I like the act of just going right at your fears, doubts, and limiting beliefs.
38:07
>> That's a It's a great exercise. I highly recommend that.
38:09
Um I also just think like the the you know, you have the blank page.
38:15
And like there's a lot of things you could do with the blank page cuz I think you said it right. I think 90's low.
38:20
Probably 99% of people don't really take the time to examine their life or think about what they really want and actually go answer that hard question because it's a lot easier to scroll.
38:30
It's a lot It's a lot easier to worry about what's going on in Iran and then what's going on in the market what's going on everywhere else besides, you know, here because you know, those are those are arms length away whereas it's very very personal to to be here.
38:43
For the person who's like, I want to build the theme park in Texas. Awesome.
38:46
I want to build the hospital in India. Sounds great.
38:51
I've been in that position before where it's like, I'm ready to have that answer but I have no idea and I'm I'm kind of saying one out loud doesn't even feel right. I'm just making it up.
38:57
Um and I had to I've taught myself to basically go through this process of sort of dabbling like, you know, just take this mentality of a dabbler like, how do I go and run either lightweight experiments or brainstorm or just not feel like I needed to commit right away but like go try to see where the energy is.
39:14
How do you advise people to if they don't have the answer of Oh, this is the thing that would light me up.
39:21
Like, maybe you don't even know.
39:23
Where do you go to figure that out? >> Yeah, I love that.
39:25
Well, here's an here's one idea is maybe don't have one thing.
39:29
Make a list of like nine things that would light you up, you know, here Okay, I I I think I'd like to go to India.
39:34
I also think I'd like to start a podcast.
39:35
Maybe I really want to I don't know become a DJ. You know, I don't know.
39:39
Write down your things and then like you said, you know, keep your day job and devote X number hours a week to testing those things out.
39:48
Maybe you're going to do some work on it, take some classes.
39:52
You're going to start hanging out with people that do it.
39:53
Maybe you're going to get trained.
39:54
Maybe you're going to do podcast in nights and weekends and see if it's as fun as you thought it was and you're not looking there for This is what I think is really important.
40:06
You got to You got to be careful that you're not going to get a false negative on the outcome.
40:10
So, like a student who says, "Okay, I want to start a company.
40:13
So, I'm going to spend 5 hours a week this quarter and if I get traction I'm going to do it like no no no no no.
40:19
You that you're going to get no traction.
40:23
Like 5 hours a week if if you could build a business in 5 hours a week like it wouldn't be worth building, you know, so it's not that you're looking for like does it light you up?
40:31
It like in that 5 hours a week was that the 5 hours you were looking forward to that all week or was that 5 hours where you were like kind of like oh man, I got to do 5 hours on this thing?
40:38
You know, like that's what I think you're looking for in those like experiments.
40:44
Because by and large if you are lit up and you I mean you plus being lit up plus a long time frame there's very few things that won't yield to that.
40:56
And that was me at Alpine.
40:56
You mentioned, you know, it took 14 years for us to know it was going to succeed.
41:00
Yeah, but I was fired up.
41:00
I was willing to do it for a long time and I was in it I was excited and like most things will yield to that formula with enough time. >> Was that right?
41:11
In year 14 were you still like TBD if this is going to work?
41:14
And and what were the numbers?
41:16
Can you say what the what your numbers were then?
41:17
Cuz I would think you would you were financially successful at that point, no?
41:22
>> Well, we lost money on our first fund. Um so fund one was 2001. We lost money.
41:28
That means that >> did you get a second fund when you lose money on the first?
41:32
>> Well, we were we were very transparent with our investors about what was going badly, what we were fixing, what we were learning.
41:40
So they were very like they were like, okay, we see you're on the right trajectory. You're transparent.
41:42
You know, at one point that fund was marked at 40 cents.
41:48
We ended up returning like 95 cents, so they appreciated that and they gave us another shot, thank god, you know, and um but but what I was going to say is so we had fund one was it you know, we had that anchor for more than a decade cuz these you have to go in, you buy the companies, you run the companies, you sell the companies.
42:06
It takes probably 10 years and then fund two comes along.
42:10
And so it was kind of another 10 years after that after fund two where we actually had some success.
42:14
You know, where where we could have the outcome of that fund, you know, proving out that it was working.
42:21
And so that that's the 14 years I talked about.
42:25
But to give you the numbers, we were 14 years in I want to say managing maybe two or three three or 400 million dollars, something like that.
42:34
>> That sounds successful, right?
42:35
>> that might sound like a lot, but we're trying to run an entire team and we have all these portfolio companies and >> Well, let's ask the question.
42:39
So we called the podcast My First Million and we started there's a tradition.
42:42
We would always ask every guest when and yeah, when and how did you make your first million?
42:47
And we all we like to really put that reference cuz a lot of times the answer was longer than people think.
42:53
You try to get, you know, when you're 20 years old you think it's going to be when you're 20 and a half, you know?
42:55
You think it's right there and it takes a lot longer.
42:58
It took me I was 30 when it happened.
43:00
Took Sam, I think same thing, 30 31.
43:01
And so it takes a little longer and also we talk about how did it feel?
43:06
Like what what do you know, what what did anything change?
43:08
And what kind of >> I I will tell it's such a great question.
43:12
All those are such awesome questions cuz it's so not what I thought it was going to be.
43:15
So a couple different ways to answer the question.
43:19
One thing to be a millionaire on paper it's another thing to have a million dollars in the bank. >> Yeah.
43:25
>> They're different they're different feelings as you as you guys probably know. >> Yeah.
43:28
>> One pays the rent, one doesn't. >> Yeah.
43:30
So I'll say a million dollars in the bank cuz I think that's the that's when I actually felt like I had a million dollars.
43:38
>> And that was the that was year 14. >> That was one week.
43:40
No >> That was year 14 of start So I'm I was 29 plus four So yeah, I'm in my 40s I guess when I when I made my actually had a million dollars in the bank.
43:53
>> But to put that to put that in context by the way that is pretty slow.
43:56
Love like having a >> [laughter] >> having like a PE firm, your job is to get a good returns and to not having like that >> Well, yeah, I wouldn't I would say what we had what's called a European waterfall which means we have to return all the money in the fund plus an 8% return before we take any profit.
44:17
And so we had to we had to first of all fund one generated no carry at all.
44:22
And then fund two, we needed to sell it was really the very last business in that fund that we sold until until we got paid.
44:30
So it was that's what I was saying like the part about pay on paper versus in the bank.
44:34
You know, I was I was a millionaire on paper before that but actually in the bank it was it was 14 years.
44:40
But I want to I want to talk about wealth for just one second.
44:41
The interesting thing is like I felt wealthy way before that because my denominator is has always been small.
44:53
So, you know, like there's two parts of of wealth.
44:55
There's the numerator which is what you make and your denominator and what you spend.
45:01
The biggest mistake and this is something everyone who listens to this podcast can benefit from, the biggest mistake people make is the denominator.
45:11
And they so they they go like here's a perfect example.
45:15
I really want to start a business.
45:15
I'm going to go take this other job first.
45:19
And then I'm going to make some money and then I'm going to and then I'm going to start my business.
45:23
Okay, that's what they say. Never happens.
45:27
Because they go take that job, then they get a new house, then they get a new car, then they move to this other city, then they have kids, then they have kids schools, then blah blah blah blah and their denominator is keeping pace or even surpassing
45:43
their numerator and they're never they're never actually feeling wealthy and ironically they're creating less freedom every year, you know, because there's fewer and fewer things they could do to maintain the lifestyle and there's no way they could they could start that business. And so probably like one of
45:57
And so probably like one of the most underrated things that happened in my life is my wife I married my wife who was a elementary school teacher and made $18,000 a year pre-tax and like our first apartment that I think was like 900 a month, you know, she thought it was the Taj Mahal, you know, and like >> So we never I never Does the IRS just send you money if you're making 18,000 pre-tax?
46:17
Do you actually just get a bunch of money every April? That's awesome.
46:21
>> They literally should. They they should.
46:23
Uh I mean she would drive around for like 30 minutes to save, you know, $2 on parking.
46:26
I was like, okay, well we got to not do that, but >> [laughter] >> but but that So yeah, the denominator I So I felt wealthy way before that because I I just had a big cushion between my uh what I earned and my expenses.
46:37
So >> There's this story uh and I don't think at this point that this is true, but it's Rubin Carter.
46:43
Have you guys heard that song uh the Hurricane by Bob Dylan? >> Yeah.
46:47
>> It's basically about a boxer who um >> It's a great movie, too.
46:50
>> Yeah, it's a basically a black boxer who is in uh incorrectly uh imprisoned for triple murder and he didn't actually do it, but it was like a racist thing.
46:57
And um there's a story that's part of this that I at this point I think it's fake where he was like, I don't belong in prison and I'm going to take cold showers every day just to remind myself that this ain't home.
47:07
I'm only here for a minute, but I'm going to get out eventually.
47:10
And like I said, I don't think it's real anymore, but I heard about that story when I was like 15 years old.
47:15
And so when I moved to San Francisco to like start things and like I remember making a little bit of money sometimes and then I would go for long droughts where I wouldn't wouldn't make any money cuz I was trying to start something and I was like when I when the money comes in, I still got to take take cold showers cuz I can't get used to this. I'm not out of it yet.
47:28
And so I was always reminding myself like take cold showers. We're not home yet. Do not get used to this.
47:34
But I remember there was freedom in that. >> I love that. I love that.
47:37
And the freedom part is so true, Sam.
47:38
You know, like the steepest curve of utility with money was going from like the first one was having peace of mind of like not having to worry if I had to fix my car or whatever, you know, some some unexpected expense happened, but I've got money saved away and don't have to stress.
47:57
That was That was actually a very steep cuz that wasn't always the true for me, you know, like my car would break I'd be like, "Oh, no."
48:03
You know, and and and then the next the next curve that was really steep was I have enough money to do what I really want to do with my life.
48:11
I mean, how magical is that?
48:11
Like that's really where the utility it's flattened out after that, you know, so that's really where the utility of money comes for me.
48:20
>> But when you're giving advice to your students, what do you tell them that number is?
48:23
For example, some people say that like financial freedom is 25 times your annual spending.
48:27
Some people have like Some people will say like as long as you have 6 months of savings like that you're good.
48:32
Like is there like a like a threshold that you like to hit?
48:35
>> I I would say having 3 to 6 months of savings is level one, which is like the peace of mind.
48:41
Because then, you know, like I said, you have some unexpected expense and you're you're fine.
48:44
You don't You don't lose sleep over that, you know, you don't have to decide if you're going to pay your rent or fix your car.
48:49
That's like 3 to 6 months of savings.
48:51
That doesn't sound like much.
48:53
It's dramatic It makes some huge huge difference in your life.
48:58
And then the next one, I think it's lower than that.
48:59
Like when I say freedom, I don't mean like the like, "Okay, I'm going to live off the interest of my money I have in Treasuries."
49:08
You know, that that I'm okay, sure, that that's nice if you get there, but but I'm not even talking about that level.
49:14
I'm talking about I'm spending I'm still working, but I'm spending my day doing something that I enjoy that is the job that I want to have.
49:23
I think that's probably 9 to 12 months of savings.
49:25
It's not it's not that So, I I I think both of those are really within people's grasp.
49:31
People who are like, "Oh, I I really want to get to the like you money where I never have to work or anything." And then what?
49:37
You know, like then what are you going to like then what are you going to do?
49:40
And and I I want to go back to the other question you asked, did it feel the same that you thought it was going to feel? No. It did not.
49:46
So, when I actually had wealth and I'd worked and I'd go back all the way back to the lawnmowing and the all the sacrifices I made in getting good grades and getting into the right school and then getting the job and then suffering through fund one and then finally getting on the other side and then finally getting this big liquidity event.
50:05
It was it was like the most disappointing and like it it it cuz I cuz I thought it was going to change everything.
50:15
It didn't really change it hardly anything and and like what was still there was like the maybe the thing I'd been running from which is like I'm not enough, you know, like >> Well, so what what like what career milestones since everyone listening to this is interested in business, but it could and family's too easy to answer.
50:33
Uh but like what career milestone actually did move the needle on happiness?
50:37
If it wasn't like a financial thing, is there anything out like for example, you probably have hundreds or thousands, I don't know how many employees you have whatever it is like you've created like an institution.
50:47
Has that made you feel good?
50:47
What what what teaching at Stanford?
50:49
What career milestone have you had that a listener can like be like okay, that's like a cool idea on how it act he actually got happy via career. >> Good question.
50:59
The two ways to answer it.
51:01
First is you could one answer is you're not going to solve an internal problem with an external outcome.
51:06
So like if if I feel like I'm I'm going to be enough when like whatever you answer that with is going to be disappointing to you.
51:17
>> [laughter] >> You know, so that on on that answer it's you can't kind of get there with the career and and you you have to at least for me I had to do a lot of internal work therapy, coaching journaling, um meditation and and start
51:31
to just like let go of this, you know, I'm not enough part and that that's that's probably created more happiness and peace of mind than the than the career the probably the career achievement that I remember the most. It
51:43
It wasn't even really an achievement.
51:46
It'd be like my three partners and I up in Napa, you know, together working through something where I would just have the self-awareness to look around and just be like, "Wow, this is this is really special, you know?
52:03
These are people I really love.
52:06
We're doing something we love, and we created this together."
52:11
And it So, it wasn't like a big wire came through or something.
52:12
It was more just like these little moments.
52:16
>> Can we get some um second-hand smoke therapy from you?
52:19
So, you know, you talked about like doing the work, kind of like internal work, uh therapy, coaching, reflection, introspection, all that good stuff.
52:28
You know, a lot of people either haven't had the time or don't have the the sort of guts, they don't make enough time to do that sort of thing.
52:35
But, I think, you know, if they're listening right now, we can kind of benefit them.
52:38
I remember we had Daniel Negreanu, one of the great poker players, come on the pod, and he told us nothing about poker.
52:42
I don't remember anything about poker, but I do remember he said, "The most impactful thing in my life was a mentor, a lawyer guy who I really liked.
52:50
I thought he lived life well.
52:50
He told me I should go to this event, and I went to the self-help event.
52:54
I hated every minute of it, but they made us do this one exercise about like total radical accountability, where you write the worst thing that ever happened to you, and you rewrite the story where you are the cause of all of that thing, and you own the the the entire thing yourself. You don't blame anybody. Rewrite the story."
53:10
And he's like, "That changed my life."
53:12
And so, like, you know, I almost second-hand got the benefit of going to that seminar, just understanding that principle, then, you know, then taking it and doing it myself.
53:20
Um I'm curious, were there any kind of breakthrough, really important kind of realizations or exercises or questions or conversations you had anywhere along the way that we would benefit from?
53:31
>> Yeah, 100%, and I'll give you a couple things that I learned.
53:35
Um So, one is almost all your battles that you have are you against you.
53:43
>> [laughter] >> Let me It's true.
53:46
It seems like this whole thing is happening out there and you're you know, you're winning this, you're doing this and like but you're remember all that stuff that happens goes through this filter which is called like the story you're writing about it.
53:58
Then it goes internal and like you can you can change if the easiest part of changing your life is to change that filter, you know, it's it's way easier than changing what's going on out there.
54:08
It's a lot easier to change how you're interpreting it.
54:11
And so you can either be your own worst enemy or you can actually be your own best friend.
54:20
And I can tell you that I was my own worst enemy.
54:23
Like I it did it almost didn't matter what was going on out there.
54:28
I would look for what was wrong.
54:28
I would have a bad story about it.
54:29
I would beat the crap out of myself and then I would tell myself another story which is me beating the crap out of myself is why I'm successful.
54:36
Total Um it was just what made me miserable.
54:40
It's like running through life with your foot on the brakes.
54:42
So one is just that awareness like that wow, I'm I'm having more to do with my peace of mind meaning success, uh happiness than anything that's happening external.
54:55
I think if you really think about it, you'll realize that's true.
54:57
And then the and then the formula for like actually programming actually changing that I finally understood like in a simple way why to meditate and and how to be to be um how to make it work and and how to have it actually impact your life.
55:12
So you go to the gym and you work your bicep and your bicep you break it down, it gets stronger and then, you know, it regrows and is bigger.
55:21
So meditating is very similar.
55:25
Except the muscle you're working is your basically your mind and your your self-awareness, your presence.
55:30
So you pick your meditation, you're counting your breath, you know, that's simple one, right?
55:34
You You close your eyes, you count your breath.
55:37
And then your mind starts going off and talking about thinking about whatever, you know, I messed up this conversation or I should do this or I'll got tomorrow I got to do this, whatever.
55:46
And then you notice that and you it might take you a while, but you you notice that your mind just took off and you bring it back to your breath and you do that again.
55:53
And then happens again, you notice that, you bring it back.
55:57
You're basically building this muscle you're building a muscle.
56:00
The muscle is like I'm going to two things.
56:03
One, I'm separate from my thoughts.
56:04
I'm realizing those thoughts that are happening aren't me.
56:08
I'm creating this muscle of observing my thoughts versus just you know, succumbing to them.
56:12
And second, and even more powerfully I'm building the muscle being present.
56:18
Like if you want to have a great life, like be present.
56:20
Like if if everyone in the world was present and here right here all the time and not in their head, like people would be like in this great state of joy.
56:29
Like And so building that muscle of of watching your thoughts coming back and being present um is the same muscle of being your own best friend because you're because you you're you're you're seeing like oh wait, I see that this thing happened and I you know, maybe I didn't answer this question really well.
56:50
Or I could let that thought go and just be here, you know, and like doing that over and over.
56:55
>> Well, it's a great reframe, right?
56:57
Because normally if you meditate and then you're you're sucking at it, you know, your mind is drifting, you're not doing it, you're not having fun with it.
57:03
You're like, I'm I'm bad at this. This is not working.
57:05
It's like going to the gym and you know, you pick up a a weight that those last three reps are hard.
57:10
But you're at the gym you know, oh, that's great.
57:15
I did exactly the thing I was supposed to do.
57:16
I was building the muscle.
57:18
If I if I just went and I did curls with a 3-lb dumbbell, like I wasn't doing anything then.
57:21
I shouldn't have even been here.
57:23
And so reframing the meditation, the the failure in meditation as more of great, I'm building them I'm building this practice, this muscle.
57:30
I'm getting better at doing that.
57:31
And how do I get better by my failing at it?
57:35
>> Hey, can I ask you really quick before we wrap up about parenting?
57:37
I saw that you've got uh three kids, you blogged about how one of your kids went to college.
57:41
Do you put Do any of these exercises with your children?
57:44
And at what age did you start doing that?
57:46
Or were they like, "You're my dad, I ain't listening to you no matter what."
57:52
>> [laughter] >> All of the above.
57:54
My kids are definitely like, "You're my dad."
57:57
You know, it's funny because in most circle like worlds, I'm I'm you know, I'm a professor or I'm running a firm or whatever.
58:04
At home, I'm I get, you know, I have teenagers.
58:06
Like, they're ruthless, right?
58:07
They make fun of everything I do.
58:09
Um [laughter] and uh I I I do it in a in a way that's not maybe as obvious, but you know, I'll give you a real example, it's easier.
58:20
You know, my son was like trying to decide his fresh He had a really tough year as freshman year, and he was deciding if he was going to play lacrosse next year cuz he had a tough season, it didn't go how we wanted it, and it was brutal.
58:32
And so, you know, we I did a exercise with him, and we said I could said, "Okay, Blake, like, let's go through and talk about like like I want you to play out your next 3 years as though you didn't play lacrosse.
58:45
Like, let's go through it.
58:47
Like, I want you to really like think through, okay, we get home from school, here's what you do.
58:52
You know, here here's lacrosse season comes along, your friends are playing, you're doing this.
58:55
Now, I want you to go through and you go through the season, but it's hard, you do this.
59:00
And after that, he's like, "I I definitely want to play lacrosse.
59:01
Like, I know for a fact that's what I want.
59:05
Like, by the end, you know, when I get done with my my 4 years, like, I want to have gone through that."
59:10
And so, yes, I use these tools, but it's it's more letting them kind of it it's in service of their their lives, and and it comes up more like as when they ask almost when they ask for it versus me saying, "Okay, it's Tuesday, we're going to sit down and do this."
59:30
Having said that, my kids also watch, you know, that your kids watch what you do more than they listen to what you say, and so, you know, my kids have goals, they work hard, they write down their goals, they um they try their best, I like to think.
59:46
But, I think a lot of that just comes from osmosis.
59:50
>> What What about your employees?
59:50
Because when I listen to your stuff, I listen to your stuff because I'm looking to change my behavior.
59:54
Most people don't change their behavior, though, and you talked about hiring these um these operators, these like people who have these wonderful backgrounds and who um have a track record to where they have this will white-hot will to win.
1:00:05
Are you able to change any of their behaviors ever when you hire someone, or are you looking for someone who already has uh it?
1:00:16
>> So, I'm definitely not looking to teach someone how to be motivated or to care or to run through walls.
1:00:22
Like, I can't teach that.
1:00:24
However, um we've bought 800 companies.
1:00:27
I've been doing I've been in private equity 31 years.
1:00:32
We've built some incredible businesses, so we have incredible frameworks and tools and playbooks that we use that have been battle-tested.
1:00:43
And they're if one of the things we're screening for is are they uh do they have a growth mindset?
1:00:47
Are they open to learning?
1:00:48
And so, our if if you look at our companies that we have in our portfolio, there is a pretty much a 100% correlation between how much of the playbooks they're running and how successful their businesses are.
1:01:06
So, they're coming into Alpine wanting to say, "Hey, look, I'm 32 years old, I want to run through walls, but I don't know how to run a business.
1:01:13
Can you help me do that?"
1:01:15
And And that's a great partnership because we have so many great tools.
1:01:19
And now, now they will take our playbooks and they'll make them their own.
1:01:22
So, 5 years from now they've added to it.
1:01:24
They've They've, you know, changed it.
1:01:26
They've They've They've made them better, and they made them work for them.
1:01:30
But but we're definitely providing a lot of the foundation of like here's some amazing tools, you know, like we have Kaizen projects we run. We have process mapping.
1:01:39
We have a one-page planning planning tool we use.
1:01:41
Have you ever published this? >> And can I have it?
1:01:47
>> [laughter] >> Is this like Colonel Sanders' chicken recipe? >> Yeah.
1:01:50
>> Or is this like >> Yeah, I'd be happy I'd be happy to share with you.
1:01:52
It's probably come through in some of my materials, but um but yeah, we've I mean, we've we've we've definitely codified a lot of this in over the years, and yeah, I'm I'm happy to happy to share with you. >> That's awesome, man.
1:02:05
You're You're You're wonderful.
1:02:06
You know, I don't want to compliment you too much because I've I've I don't want to make you uncomfortable, but uh Shawn and I have this >> [laughter] >> we have this joke where we we call it the total man, where like, you know, we interview all these amazing people.
1:02:17
We've interviewed people who are deca-billionaires.
1:02:19
We've interviewed people who whatever.
1:02:20
And like, we're always 19-year-old who just >> sold his company.
1:02:23
You know, the whole the whole spectrum.
1:02:25
>> The whole spectrum, and we're always looking for someone who's like this combination of a good parent, a good husband, a good business person, is interesting, looks like seems like they have fun in life, and is kind to one another.
1:02:34
And um I think you've checked a lot of the boxes.
1:02:36
Um and uh it's really cool talking to with you because you you I think you're a good inspiration of what like a person should aspire to be. >> Oh, thanks, Sam.
1:02:45
That That really means a lot.
1:02:46
I I really appreciate that.
1:02:48
And um I really admire you guys a lot, and I've I really enjoy your podcast, and and this has felt to me just how you said it would, which is just hanging out and talking about fun stuff that we all really are excited about, and I'm really grateful you had me on.
1:03:02
Happy to come back anytime. It's really fun. >> Awesome.
1:03:06
Thank you so much for doing it.
1:03:07
What Where should people Where do you want people to follow us?
1:03:08
YouTube kind of your main spot, or Instagram, or TikTok, or what?
1:03:12
>> Um yeah, probably uh probably Instagram, uh and I mean, I'm on I'm all all the platforms, but um I'm GrahamCWeaver.
1:03:21
Uh at I think that's my That's all of them.
1:03:24
I think I'm the same same username at all of them. So, yeah.
1:03:28
>> Well, badass brother, we appreciate you coming on. That's it. That's the pod.