The Pomp Podcast - #1278 Graham Weaver | Investing Legend Reveals His Investment Secrets

Episode Date: December 4, 2023

Graham Weaver is the Founder & Managing Partner of Alpine Investors, a people-driven private equity firm that invests in software & service businesses. He also teaches a top-rated Strategic Management course at Stanford Graduate School of Business. In this conversation, we talk about his philosophies, how he built Alpine, hiring & firing, company culture, favorite quotes, childhood, and more.  ======================= Auradine, a leader in web infrastructure solutions including blockchain, AI, and privacy, has unveiled the world's first 4nm Bitcoin mining systems, featuring breakthrough EnergyTune™ technology, setting new standards in performance and energy efficiency. The Teraflux™ product line from Auradine offers best-in-class performance, efficiency, and total cost of ownership (TCO), positioning it as the optimal choice for Bitcoin mining needs. With EnergyTune™, a patent-pending technology, Auradine's Teraflux™ systems enable rapid demand response and optimal energy usage, fostering a symbiotic relationship with electrical grids, and contributing to sustainable energy practices. Designed and manufactured in the US, Auradine's Teraflux™ product line not only ensures cutting-edge technology but also mitigates supply chain risks and provides increased supply chain resiliency. Visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠www.auradine.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for more information the Teraflux bitcoin mining systems. ======================= Cal.com is leading the charge of scheduling platforms in the open-source sphere, offering you the chance to harness the efficiency previously reserved for elite corporations and tech gurus. That's right, Cal.com is transforming sophisticated calendar management into an accessible tool for all via a user-friendly interface. Discover how countless users are optimizing their time in unprecedented ways. Use code “POMP” for $500 off when you set your team up with Cal.com. ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Graham Weaver is the founder and managing partner of Alpine Investors, a people-driven private equity firm that invests in software and services businesses. Graham also teaches a top-rated strategic management course at

Stanford's Graduate School of Business. He is a highly sought-after speaker and also happens to be a great private equity investor. In this conversation, we go deep on a lot of Graham's philosophies and how exactly he's built Alpine into the monster PE firm that it is. We talk about hiring and firing, building company culture, evaluating talent, some of his favorite quotes, things that happened in his childhood that formed who he is today, and why reading has become such a big part of his everyday activities and what he's learned from a number of those books. I really enjoyed this conversation with Graham, and I hope that you guys learn a ton from this as well. Here is my conversation with Graham Weaver. Anthony Pompliano runs

Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. This episode is brought to you by Auradon. They are a brand new startup led by a number of Silicon Valley legends who just raised $81 million to build the future of internet infrastructure. You're probably wondering what that means. Let me explain. There are numerous new disruptive technologies that are being adopted simultaneously

from blockchain to artificial intelligence to zero knowledge technologies. In order to ensure that these technologies thrive in this new world, we need new infrastructure. And that is where Auradine comes in. They just launched their first product line called Teraflux, which is a Bitcoin miner powered by the world's first four nanometer silicon chip technology. These air cooled single phase and dual phase immersion cooling miners have unrivaled speed and efficiency. They have superior uptime and they leverage a brand new innovation called EnergyTune that allows miners to dynamically adjust the energy consumption and Bitcoin hash rate based on demand response needs of the electrical grids. Auradyne is an ambitious company working on hard problems. I'm really

impressed with them. And if you want to check out more, you can go to Auradine.com. That's A-U-R-A-D-I-N-E.com. Go check them out at Auradine.com today. This episode is brought to you by Cal.com. What do I have in common with Chad Hurley from YouTube, Toby from Shopify, and Alexis from 776 and the co-founder of Reddit? We all use Cal.com instead of Calendly, and we are all early investors as well. Cal.com is leading the charge of scheduling platforms in the open source sphere, offering you the chance to harness the efficiency previously reserved for elite corporations and tech gurus. If you like to have your calendar organized and be able to have an efficient exchange when scheduling, but you love all of the benefits of open source technology,

then Cal.com is for you. They are transforming sophisticated calendar management into an accessible tool for all via a user-friendly interface. You can customize it and you can make your calendar work for you. Use code POMP for $500 off when you set up your team with cal.com today. Again, go to cal.com, C-A-L.com and use code POMP to get $500 off when you sign up. Cal.com, an open source tool that allows you to take back control of your calendar, be efficient when scheduling, and make sure that no one can steal your time. All right, guys. Bang, bang. I've got Graham here. Graham, I thought a great place for us to start the conversation is that you've said your favorite quote is from Michelangelo. And he said, if people knew how hard I worked to gain my mastery, it wouldn't seem so wonderful. Why is that your favorite quote? well i think that when people think about michelangelo they think he's some magician

that has these superpowers that they could never attain and then for him to say actually there are no superpowers it's just the power of working super hard i just love that it demystifies this thing that we're supposed to have all this embedded talent and if we're not born with it we don't have it and so i think it kind of opens up if michelangelo feels that way then there's hope the rest of us you know it is funny it's like one of these you know obviously very old quotes and somebody who i think we all look back to and we're like we can't even remember how long ago it was but it's still true today uh obviously there's you know kind of like the instagram culture of everyone shows their best life or whatever and he seems to have nailed it hundreds if not thousands

of years before i mean it's one thousand percent been the story of my life it's been uh a lot more time and hours to get anywhere that I wanted to get, a lot more work. And yeah, it's just probably if I could give a quote to summarize my life, it'd probably be the same one. Amazing. You've talked before about exceptional people create exceptional businesses. And I thought maybe we could break that down. How do you identify an exceptional person and know, hey, this is somebody who kind of checks that box? Yeah, well, I'll answer that question in one second. But in the private equity business, it is kind of unique for us to have as our number

one criteria, the management team. It's a little bit counterintuitive. I spend a lot of time in private equity thinking about industries and purchase prices and leverage multiples and multiple expansion and all these different things. And after all that work, I came down to the number one most highly correlated factor. Assuming we don't completely screw up the industry, if we buy a typewriter company, obviously. The best management team in the world isn't going to do anything with that. But assuming we get a baseline good enough industry, it really is, we've found to be the most highly

correlated factor. So the number one criteria that we have, we call it the will to win or management intensity, but really the will to win. And so you're interviewing someone. We use the top grading process that's in the book, Top Grading by GH Smart. And so you do this structured interview. You talk to someone for three to four hours. You start in high school and go through yesterday, their background. And what I would say is it either leaps out of that interview or it doesn't. And what I mean is this is someone who's got this will to win. They're going to throw the company or whatever they're working on on their shoulders and run it through the burning building. And they've done that again and again and again. And they just have this

fire and this energy. And after you've done a lot of these interviews with a lot of people over a long period of time, it leaps out of the interview or it doesn't. So that would be the number one thing. So it's a qualitative thing that people could have. We hire people who've shown that as special ops in green berets that have never been in private industry ever, but have that criteria. We've seen ballet dancers and people who work in investment banking. Anyone can possess that from any background. And what I love about that is we're not saying that you have to have 20 years of this specific experience. We're hiring you for who you are at your core. We can teach you private equity. We can teach you how to run a business. We can't teach you to have this white

hot desire to take over the world. And exceptional businesses are created by these people. How do you identify the exceptional business? There's a lot of things that go into valuing in a business. But if I had to summarize it into two words, it would just be revenue quality. For what we do now, remember, we're not venture investors. We're not predicting what cybersecurity is going to be the winner 20 years from now. We're buying pretty basic companies. So we're really looking for revenue quality. So how predictable is the revenue? How defensible is the revenue? How hard would it be for someone to take it away? How recurring is it? It can be reoccurring or recurring. And that's the number one thing that we're looking for. Now, we find

that in subscription software, which is probably pretty obvious, but we also see it in plumbing and HVAC companies. We see it in IT services, businesses, and other things where sometimes you have to squint a little bit because it's not contractually recurring, but it's very predictable when you look at a large customer base. One of the things in the private equity world that I've always found fascinating is people will talk about, you never want to be buying something from someone who's selling it usually, like they know something that you don't, but that is the entire business. And so sometimes these transactions, your private equity firm is buying from another private equity firm. And the management team is kind of like a third party in the transaction

that you've got to underwrite and kind of decide whether you're going to move forward with them or not. But when you're actually buying a team or a company from the management team, right? It's not another private equity firm. How do you kind of think through like, Hey, they're selling me this. Am I like going to be holding the bag or is there some kind of like one plus one equals three scenario here. Yeah, you're totally right. You're focusing on a great question. We're a little different in that we change management teams 100% of the time. I don't know that there's... In my knowledge, there's not another firm in the world that does that. We're the only people that do that. We manufacture or effectively create our own management teams

from that green beret who's never worked in industry. We'll hire them maybe right out of an MBA program or two years out of McKinsey or something, and then we'll train them. So we bring our own management team to bear. And then what we're presenting to the owner is, hey, here's an option for you. Everyone else is going to say, we need you to stay for three to five years. You need to roll 30% to 40% of your equity. There's another option here, which is just sell 100% and you can retire and go on your boat or whatever you want. And we need a six-month transition plan. And then we'll take over from here. And for the right seller, that is really, really compelling.

Now, your other point of how do you know that there's not adverse selection? And that's what I go back to with the revenue quality. We have to do a really good job of assessing that and making sure that there's not something that they know that we don't know. And we've gotten good at that over the last 23 years. Because in our first fund, we weren't good at that at all. We made every mistake you can imagine. We got left holding all kinds of bags in that fund.

And it wasn't fun at all. So we learned where the landmines are and how to make sure we're not stepping on those. It's funny because I think one of your favorite books is Competition Demystified when I was doing research before this by Bruce Green. You did a lot of research. You went deep, Anthony. I love it. I love it. Well, I think the books that you read really are kind of how you're programming your mind, right?

Yep. Totally. And so in that book, you say he basically outlined six different ways you can have these barriers to entry. And what I find funny is somebody who got burnt by that is the person who goes and reads the book and then memorizes all six of them and really evaluates it, right? Absolutely. So Michael Porter says there's these five forces, supplier power, buyer power, substitutes, et cetera. And Bruce Greenwald, who wrote Competition Demystified, basically says, throw all that out. There's only one force, not five. There's one and it's barriers to entry.

And by the way, there are only six barriers to entry. There's nothing else. And so when you zone in on those. I'll see if I can do this off memory, but it's economies of scale, switching costs, brand, technology, supply constraints like a coal mine. And I'm probably missing one. Network effect. Network effect. Yeah, the most powerful of all. You nailed it. Thanks for bailing me out there. So those are the six. And if the business doesn't have one of those six, you're going to have, no matter how fast it's growing or what's happening, you're actually going to have people eating your lunch. And in our early years, we would have these companies that were growing at

30, 40, 50% or even higher. And we're buying them at great prices and it looked great for like two years. And then they didn't have those barriers to entry. And so there were horrible investments. So that book has really been really important. It also then brings to mind this almost dichotomy to some degree. I think it's maybe Mark Andreessen said, I don't know if he came up with it, but he basically says something to the effect of like, you know, bad team meets good market, market wins, or a good team meets bad market, market wins, which I think is very much like a venture capital style, you know, view of the world. A Buffett style or view of the world is very much like barriers to entry. And so is it possible to really kind of draw a line in the

sand and say, hey, look, certain businesses fit kind of private equity, certain businesses fit venture capital, or what seems to be happening over the last couple of years is like, maybe people are trying to grade the line. They're trying to say, hey, we can take venture style dollars or growth trajectories and apply it to some of these other businesses. And we see this with dog walking. We see this with real estate and WeWorks. And it seems like many of the big stories haven't worked, but I don't know if that is necessarily because you can't mix these two styles of investing. I think the key for us has been to just know what you're really good at. And I think that's the key for Buffett too, not to compare myself to Buffett, but that's what he

says is like, he says, know your circle of competence and it's not important how big your circle is. It's that you know what it is. And I think that's really the magic. So whether it's Andreessen Horowitz or us, for us, we know exactly what we're good at. We know how to scale a business. We know how to hire, fire, do add-on acquisitions. We know how to increase sales and marketing. We're great at that. When we stay in that lane, we tend to do pretty well. When we try to predict product market fit, when we try to predict what's going to win in this crowded field or things like that, we're just not good at that. That's not our superpower. And so the magic for us, believe it or not, every year that goes by, we narrow and narrow and narrow what we do,

not the other way around. So we're not adding products and adding things. We're actually decreasing and just doing more of this tiny little specific thing, which is changing management, doing a lot of add-on acquisitions, winning through talent and sales and marketing, that playbook has worked really well for us. And so when we stick to that, we do great. And I think when you see firms that blow up, it's usually... You can almost always say they just went too big and went out of their zone or they tried to do something that they're not good at. Now, I've got a bunch of friends who run asset management firms. And if I was to ask them behind closed doors, are they a better investor or a better asset management firm

builder. Each one of them would kind of self-select into it. How do you think about that balance? It feels like it is two different skills that people kind of have a tension between as they're building these firms. Yeah. Another great question. I would add a third bucket, which is company building. And maybe that's in one of those buckets. I'm not sure. But company building is how I would define what we're great at. We think about starting with a blank piece of paper, figuring out an industry we want to go into, and then building one of the largest companies in the world and in that industry. And we're really, really good at that. And yes, we have to manage assets. We have to fundraise because we're in that business. And we have to

be good at investing. But really, our superpower is building companies. And the foundation of that really is talent, which is one of the things I think we're the best in the world at. Now, you mentioned that you guys will bring in a new management team 100% of the time. What you did not say is that you remove every single existing employee and replace them. So it's almost like leadership changes, but the employee base will stay the same for the most part. How have you learned over the years to transition as effectively and efficiently as possible without much disruption to the business, but also understanding like you're probably buying a business because you think it can be better or bigger than it is. And so there's going to be changes that happen for those employees. Yeah.

Yeah. So the answer is that it's taken us 23 years to figure out exactly what you're saying. The reason that nobody changes management is because it's very hard. Literally, a lot of firms will show their track record and they'll say, well, here's our actual track record because we're taking out the two deals where we change management because we don't do that anymore because it didn't work out. Exactly because of what you're saying, Anthony, which is that when you transition to a new management team, there's a lot of complexity to that. Gosh, I could spend the next three hours talking about the secret and special sauce into that, and I'd be happy to, but let me try to see if I can summarize it.

The best way that I would say is think about it like concentric circles. So we'll put in our own leadership, which is usually a CEO, maybe a CFO. And then that team will come up they'll work with a coach and they'll go through the existing team first to try to figure out the strategy. So let me make it more tangible. Let's say that that firm was to hire McKinsey to figure out their strategy. McKinsey is going to first talk to all the employees and then they're going to talk to all the customers. So we just cut the McKinsey part out and the CEO who comes in, the first thing they do for the first six months is they go on a listening tour. And the most common thing that employees say when they talk to them is, I've worked at this

company for 15 years and no one's ever asked me my opinion before. And, you know, when you sit down with that employee and your first, this evil private equity firm called Alpine comes in and buys your company and they replace the founder. And the first move that the CEO makes is to say, hey, I'd like to have an hour and a half and I'm just going to listen. What's going well? You know, what's not, what would you do if you were me? Where are we winning? Where are we not winning? How can we, you know, what's your advice for me? That's, that's literally the first move they make. And then with all that information from the employees and the customers, the CEO, and maybe with a little bit of help from us, we'll start to design a plan. And the plan is probably more about what we don't do than what we do.

And then they'll involve the top five executives, and they'll share that, and then they'll take feedback from those executives. All of a sudden, it's our plan. Now it's the executive team's plan. And then they'll take that out to the next level of management, and then it's their plan. And that's what I mean by concentric circles. It kind of starts with a small group of people and then sort of expands out. And each time it expands, you're getting the input from the rest of the people. And so everyone feels like they had a say in designing that plan because they have.

And it doesn't mean we do everything everyone says, but at least people got to feel heard and valued. And we actually, we have this expression that the answer is in the room. So your strategy, what you need to do, it's in the room. The people at the company know. Your job as a leader is to harness that. And between your customers, your suppliers, and your employees, you have the answer. You just have to get it out of them. And then in terms of transition management, we definitely have a lot more that we expect

from employees. And the majority of the time, employees step up and they're excited about that. They want to be feeling like they're putting 80%, 100% of their potential into the company. And some people don't. Some people liked coming in at 9.30, kind of ducking and hiding. And those people, that's probably not the right place for them. But the vast, vast, vast majority of people when we buy a business, not only stay on, but they're re-energized. We measure the net promoter score of all the employees the day we buy the company, and then we measure it every quarter after we own it. And almost without exception, we're increasing that NPS about 20 points in a short period of time, which is a big increase.

So it's not just qualitative. We actually measure how we're doing on the employee net promoter score as a proxy for how the culture is improving. Yeah, that's fantastic. Your comment, the answers in the room reminds me that every single time we've ever had to fire someone, all of the other employees almost always will say thank you. Yes, exactly. Exactly. It's one of the most common misconceptions, which is that great CEOs don't fire people. And of course, you want to coach them and you want to give them every opportunity to succeed. But if they're not performing, you have to let those people go for the reason that you're saying. All the employees already know it. It's really killing. Everyone's worked on a team where there's some people that aren't pulling their weight and it's really demoralizing.

So that's actually one of the things in our playbook is to make sure that we're fielding an A-team. When you talk about a playbook, Is this literally a written manual that you're handing to these folks that you're putting in as management? Or is it more so kind of osmosis? How do you go from Graham Weaver, 23 years experience of doing all the good things and bad things that go into private equity and teaching someone maybe coming out of an MBA program? It is written down and codified, but that's 5% of what people learn, how they learn. We have 23 or so coaches and consultants that literally will pair up with the CEO because this could be a 30-year-old who's never run something before. So they get a coach who goes into the company physically with them for six months.

And then that coach knows that entire playbook about the process I was mentioning before about listening and rolling out the vision, holding people accountable, putting in place a cadence of meetings and accountability. So they're working with that coach to put that codified playbook into action. And that's been really powerful for us. And again, that's taken 23 years to figure all that out. and that's why we can transition management because we have all that kind of machinery without that. It would, it would be really, really hard. You've previously written about three lessons you've learned from hiring. And again,

you've just done this so long that these three things seem to really cover the majority of it. The first is transform episodic hiring into programmatic hiring. I thought that was a really interesting one that maybe you could elaborate on. So yeah, episodic hiring is what everyone does. They, they need a, let's say they're Alpine and they need a new private equity analyst, they hire a recruiter, they go out to all the banks, they interview 12 people, they find one, et cetera. Or you're hiring a CEO of a software company and they're a healthcare software company. So you hire a

recruiter, they show you all the healthcare software companies, CEOs that are available, that want to move, that want your job. It's like two people. That's how everyone does it. And what we've found is that when you have repeated roles that you're going to be hiring for, that you can transform those into what we, I made the term up, programmatic hiring. So for us, using that investing analyst example, we'll go to undergrad schools and we'll bring in a cohort of 20. And then we'll train them and they'll go through this entire training program over the summer. than the next year when they graduate, because we hire them between their junior and senior year. The next year they come in, they go through another training program. And so we can onboard a number of them at the same time. And the good thing about that is you have a recurring

stream of graduates and you can build a brand at those schools. So you're not reinventing the wheel every time. And then you can train a bunch of people at the same time. Now that sounds like you're like, well, yeah, it's kind of obvious. But when you actually look at businesses, No one does that. So if we have an accounting business and the number one product that they have is a mid-level accountant who does 80% of all the work, why don't you make that programmatic? Why don't you go back a couple steps to where those people are graduating and then train them up? And the benefits are massive. It's not just saving on recruiting. It's saving on time. It's building a brand. It's getting better people. It's training them your way. It's having them

not having to unlearn all the stuff that they learned, you know, that, that is, is, is bad. And then, and then really like that's, that's in that accounting example, or in our example, that's your whole product, that's your whole world. So we want those people to be people that we've spent a lot of time and energy training. That programmatic hiring applies to almost any business that you're in and almost no one does it. Yeah. It's a great insight. The second one is hiring for attributes over experience. You mentioned earlier, when you replace these management teams, sometimes people come in with no experience. How do you think about the attributes outside of maybe just like that desire to win or that competitive spirit?

If they're going to be a CEO, it's the will to win. It's the ability to inspire followers because their number one job is going to be build a team. So is this someone who can inspire people to join them? It's an ability to sell because they're going to have to sell everything, employees, customers. Eventually, they'll have to sell the company. And it's an ability to prioritize, like say no to things and just be super focused. So that's what we're really trying to assess when we're bringing people on. Again, the great thing about hiring for attributes is just that you just widen the pool of candidates dramatically. You also improve diversity dramatically because you're not... If we're hiring a CEO of a software company and we require them to have 20 years

experience, that diversity battle was won or lost 20 years ago. And let me say it was actually lost most likely. So when we don't require that 20 years of experience, we just have this much, much bigger aperture of people that we can put in those roles. I also, but even above all that, it's just way more highly correlated to success. You show me someone who has that white hot desire to win and can build a team And they do start worse than the experienced CEO. They do. They start because they don't have the experience.

But typically in our experience, within 12 to, depending on the industry, between 12 and 24 months, they're catching that experienced person. And then for the rest of our hold period, they're shooting way, way above that experienced person. Yeah, that makes sense. A counterintuitive one is rather than go chase the best talent, you also say as a third point, make your company the best place that the best talent wants to work, but kind of serve as a magnet almost?

Yeah. Well, there's this one meme I saw one time on social media that said, okay, you want to go find your best life partner, your intimate relationship. So make a list, be really clear, make a list of all the attributes you want your person to have. Okay, blah, blah, blah. They want to be loyal and they want to be a good listener and all this stuff. And then the punchline is, and then go be that list. don't demand that list of everyone else go be that list i love that i thought that was like the most brilliant thing and so that's the same thing with building a business it's like yeah you can go out and want all these great people but you first have to be that firm that

they would want to work at you have to you have to embody the things that this high performing person wants which is tons of autonomy tons of accountability ownership they want to be able to run fast. They want to work with other exceptional people. They want a certain amount of capital that they can go deploy and they want to be learning and growing and they want a super exciting high trajectory career path. I mean, that's what I wanted when I graduated. That's what those high caliber people want. So the mistake a lot of firms make is they want that high caliber person, but then they have this company that's got all these layers and bureaucracy and it's a tenure-based place, and you're reporting to someone who's reporting to someone

who's reporting to someone, and you can't get decisions made. And then they wonder why they can't attract the best people or why they do attract them, and then they leave. So you have to work backwards and say, if you're the best person graduating or coming out of one of these programs or something, what do they want? And then go be that firm. And by the way, that, what I just said, is the hardest part of my job. The hardest part of my job isn't figuring out where revenue quality is it's what i just said it's making our firm that firm at even as we continue to grow and that gets harder and harder and harder that is that is the single hardest part of my job over the last 23 years are there one or two things that you point back to that were inflection points

in moving you closer to being that firm that you felt like would serve as the magnet for the best talent? Yeah. This is going to sound really maybe a little bit psychological or something, but it was limiting belief. I mean, for the first decade of running Alpine, I really had this belief in my mind that why would a great person want to come work at my firm? We don't have the most assets. Maybe I'm not a great leader. There's so many other bigger firms than us. And so it started with, I don't think I realized that I hired an executive coach in 2009. And with the help of that coach, I started to just flush out all these limiting beliefs that I had. And limiting beliefs are so dangerous. And they're most dangerous when you don't realize you

even have them. That's when they can do the most damage. So all of a sudden, I started putting these things on paper and looking at this and saying, well, yeah, I actually do think the best people should work for me because I can, I can provide them all these things. I know what they want. And so that was a huge turning point was just realizing that we were worthy of having these people. And then, and then we had one really good hire and, and he was incredible and he reset the bar for everyone. Then we said, okay, this, we want more of that. And then on the CEO side, we had one really good hire and, and she was lights out and incredible. And, you know, it took Cause it's, so then all of a sudden we had this, this like infusion of, of, of energy.

And we, we said, this is what we need. This is what we want. We finally saw it. And then we, once you see that, you can't go back. There's something that I did, uh, as a kid that I thought was really weird and I would have been embarrassed to tell other people. Uh, and now I've come to realize that it is a fairly common, uh, component of most young people's lives, uh, who ended up having, you know, pretty high success.

and it is, I'm going to put an overlay called self-help tapes, but it could be a whole bunch of different components of this. I grew up in high school, we got cell phones. And so that became a huge deal and we got started to get access to social media. And so it wasn't kind of the more traditional self-help tapes maybe of the years before. But I saw somewhere that you used to listen to self-help tapes when you were a teenager. And so what were the tapes and like, why do you think that was so important to kind of like setting you on a certain trajectory? That was also another turning point. So maybe that was really even the first turning point. So I grew up in a blue collar town in Ohio. It was called right outside of Toledo,

which is really the Rust Belt, made auto parts for Detroit. And then when I was, oh gosh, 12 or 13, my parents got divorced and my earth under me was kind of not stable. And I was looking for something to hold onto. And I mowed lawns probably like six or seven hours a weekend because that's a great job to make you can make more money doing that i calculated than anything else per hour and uh and then the sony walkman came out in the 80s and i started off just listening to music but then i remember one time i went to the library to check out some more tapes and there was this thing that said think and grow rich i was like i want to think and grow rich how do i do that and it was of course napoleon hill's famous book and i listened to

that thing and it was just like i put the first tape in and i was just just like yes this is what i've been looking for my whole life which is like a system to actually start setting goals and changing your mindset and achieving things and i can't even tell you how many times i listened to that and then i listened to brian tracy he had a whole bunch of tapes on setting goals tony robbins even back then believe it or not i think he was probably 20 years old when he he was making his first tapes, I bought, I used my lawn mowing money to buy his infomercial personal power. Listen to that many times. And really all those things were very similar in the message, which is part one, figure out what you want. Not what you want, like I want money,

but like, what do you want your life to look like? And think big, like be really aspirational. I thought that was a great message and then part two is like write it down every day present tense and then write down the three things that you would do this is my own version now write down the three things you're going to do to move toward that today like every morning today what are the three things I'm going to do to move forward to in my case you know one of the goals I said would be the number one rower in the world and so what are the three things I'm going to do today to move toward that goal. And the three things don't have to be that crazy or amazing. But if you do them every single day, you get those, you get almost anything you wrote down. And so I started achieving

some things early on using that system. And I was like, gosh, this is incredible. What else could I put down? And to date, literally, I haven't had an example of something that I've written down that hasn't yielded to a daily practice of moving toward it. I have not found one thing. There's nothing I've set out to do that I haven't been able to move toward or even attain using that process. It's fascinating to me because when I was 20 years old,

I read Thinking Grow Rich. I read Rich Dad, Poor Dad, and The Richest Man in Babylon. And all three of those, I always say like, they're good books, but it was also, I read them when I was too stupid to have already been set in my ways. Right. Exactly. Yeah. Something about being a teenager listening to those probably also was like you were receptive to the message, which was probably pretty important. Exactly. Yeah. You were impressionable

at that time. And you were looking for a framework to grab onto. And that's what they provided. And it was unbelievable. So one of the reasons that I go on social media is because I started going on Instagram and TikTok and YouTube. And all the people on there are selling this get-rich-quick stuff, flip houses, buy this particular cryptocurrency, do this, do that. And you trade options and buy my program for $29.99, and then you're going to get rich quick. And I was just appalled by all that stuff that was on there. And so I started trying to bring back some of the like basic stuff. And, you know, there weren't a lot of people on those programs that are saying, no, no, no, you know, slow down. You got to actually like do the

work kind of like how we started off the podcast, right? You gotta, you gotta put in the hours and do the work. And the most dangerous thing about the get rich quick stuff is, is, uh, well, there's lots of stuff, but it's just, it's demoralizing, you know, it's demoralizing because i'm this let's say i'm a 24 year old and i'm slugging away and i have in my mind that everyone's getting rich quick except me and i'm doing something wrong and you know because i haven't become a millionaire trading xyz options or something that you know i'm failing it's just it's so dangerous it's and so i i just i just gosh i was really really uh upset about all that all that and it's still on there by the way as you as you well know well it's um happiness is the

difference between expectations and reality right and so yes if if you literally think you can get rich overnight and you don't for sure it's depressing yeah exactly yeah yeah and social media does a really good job of making your reality unattainable you know your whatever you want your reality to be to be something that's really pretty much unattainable yeah come on Graham, where's your five Ferraris that are all parked outside your seven houses? You gave up drinking. What have been the pros and the cons of giving up drinking? Well, so my giving up drinking in 2015, we sold a business. So I started Alpen in 2001. 14 years later, I paid myself $100,000 through that time. And 14 years later, we had our first

deal that we sold that actually generated the carried interest, which is where the real money comes. And then I've never been so depressed because it was like, I worked so hard for so many years for this goal that happened. And then it wasn't what I thought it was going to be. At the end of that goal was still me, right? With all my same stuff, you know? And I thought it would feel different and it didn't. So I got really down. And then I started reading a lot about depression. I mean, I was like not wanting to get out of bed, really, really down. And it physical it wasn't just like woe is me it was like literally physically felt like i was just you know hung over all the time so so i started reading about um a lot about depression and i

i was like i'm gonna fire every single bullet so i was like what's on that list number one is alcohol i mean that's it literally is a depressant so that was number one on any list you look at pretty much which also affects sleep which was number two on the list caffeine you know my diet gluten, exercise. And I went on antidepressants. I did everything. And over time, in a short period of time, I kind of snapped out of it. And then I didn't go back to drinking. Actually, I would go back a little bit and then I'd just feel worse. And after a while, I was just like, the downside is just not worth it. But the downside of giving up drinking is it definitely impacts my social life. So I go out with friends sometimes and they're all drinking and I'm just not that engaged

in the conversation, which probably if I was buzzed or something would be fine. But when you're sitting there sober and we're having the same conversation we had last week and the same one about this and that, it's changed my tolerance for having these repetitive go nowhere conversations in social settings. So frankly, I don't really enjoy a lot of those things that I used to. And I don't know if that's a downside or not, but it's definitely an effect that I only kind of put that together a couple of years ago where it's like, gosh, I really haven't been enjoying these interactions. And maybe those are people that I didn't enjoy sober before. I don't know, but that's definitely been a factor. What about caffeine? Because I think

you know, more and more people are giving up alcohol just throughout society. You can see kind of the numbers rising there, which, okay, maybe people are smart, getting smarter, but caffeine intake is also rising. And so you're, you're kind of bucking both the, the, you're going with the trend on what you're bucking. So what's the caffeine? All right. So there's a study that I found and I, I, I wrote a blog on this. I don't have it in front of me, but there's study where basically this this is what they said okay if you go if you drink half let's say you've never had a cup of coffee in your life and you drink you start drinking coffee you're going to get this incredible rush for a few weeks then that's going to be your sort of new base then

your body you know so so what caffeine does is it blocks your adenosine receptors you know it basically looks like adenosine uh uh receptor and and kind of blocks that that makes stops making you feel tired your body normally produces those things that block adenosine when it sleeps so caffeine's kind of replacing that well over time your body just makes more adenosine receptors you know so it's like it's like no i still want to feel tired so it just makes more so what you might notice is that same cup of coffee you have in the morning doesn't get you the same bolt that it used to so the actual what the study showed was that if you've been drinking caffeine for like three months that cup of coffee you have in the morning isn't even returning you to your

baseline that you had before you ever had coffee so let's say your baseline's a hundred and now i drink my first cup of coffee in the morning let's say i wake up and i'm at a 60 you know and i drink that cup of coffee to get up to 80 well i'm still going to crash back down to 60 later in the day where i'm like why don't i just cut all that out and just stay at 100 forever you know and so it is hell giving up caffeine it is hell like it is every it is everything bad like it is it is like it's it's withdrawal like you would have any any substance i mean caffeine is an addictive substance so it is hard as hell to get off i've tried i tried multiple times and failed and failed and failed and finally i did and i just toughed it out and and look it doesn't mean

i'm perfect and i have like tons of energy all the time but i'm like i'd rather just stay at 100 than have to jump up and down between 60 and 80 and and i i feel a thousand times better no question i sleep better um but getting giving it up is hard it's really hard i want to talk about a couple of pieces that uh that you've written on your blog um one of them you said that you turned 50 and basically like hey here is what i learned right um and so uh you said time like the avalanche stops for no one don't waste it living someone else's life and then you said the true game of life is an internal one not an external one explain absolutely i mean i think that i went through my whole life thinking all the battles were external you know and that there's this thing

to get through and that thing to get through and this and that and you get through this and you realize it was all you the whole time like you you were fighting those battles so that you would feel something um because you wanted you wanted to feel something maybe you wanted to feel enough maybe you wanted to feel achievement maybe you wanted to feel love or you wanted to feel uh successful or whatever but that's still it's still you're you're you're the one who's determining what game you're playing what the score of that game is any time what the rules of that game are it seems like society is creating that, but you're the one who's accepting that or not. And it's an incredibly powerful concept when you start to really realize it's your game.

This whole thing is your game. And yes, there are external events. There's people, there's sickness, there's death, there's all kinds of things. But the vast majority of life is a game that you're creating the rules and you're deciding if you're winning you're deciding if you're losing you're putting meaning on an event that's happening you're putting meaning on how someone talked to you or uh something like that and and it's i i started arriving there with uh from doing a lot of meditation and and a lot of reading and and and then once you kind of really get there it doesn't mean you're like that you're like zen all the time all your life i still have all the same stuff, but it does give you a lot more agency over what you decide to focus on

and pay attention to and get upset about or get excited about. And yeah, it really is an internal game. On the topic of time management, you wrote, one of the greatest areas of conflict arises when what we are working on is not consistent with what is most important to us. And in this piece, you talked about blocking out family time or exercise, et cetera. What is the big lesson there that you've learned around how you keep what's important to you aligned with what's actually on your calendar i mean i think that if you look at entropy like imagine you're doing none of that okay and you're like i'll use myself as an example let's say i'm doing zero this is what my day looks like i get up you know do my morning routine commute to work um fight traffic show up

up in a meeting, meeting, meeting, maybe snarfed out some lunch. Then maybe I've returned some emails, a couple of Zoom meetings, fight traffic on the way home, dinner, get back online, do emails, go to bed. That's my day. And then I wake up and do it again. And what's happening is the urgent is taking over. The urgent almost always will take over from the important. This is from Stephen Covey's, you know, seven habits, highly effective people. So the, and so the urgent will take over your whole life, you know, social media meetings, emails, um, traffic work, et cetera, that's always going to dominate. So you have to kind of proactively put the important into your calendar and it starts with deciding what is important. You know, that's the first part. So that's,

I talked to two different coaches pretty much every week. Um, and one is just like, Hey, what's the vision? Where do I want to go? And then blocking time to either work on that vision or do the activities aligned with that vision on my calendar. I don't take any meetings before 10 AM because I do a lot of my thinking in the morning. That's when my brain works the best. So I'm blocking out time to proactively think about where I want to go. And for me, that's an executive coach. I don't need a personal trainer to go to the gym, but if I did, I would hire one to drag my ass there. I do need a personal trainer to do this intention and kind of goal setting. So that's a coach for me. And then it's putting that stuff on the calendar.

And then I would say like, work is infinite. As soon as you accept that there's an infinite amount of work to do, then it's almost like freeing because you're never going to finish your work. So if you put in the things that matter, for me, that's exercise, meditating, spending time with my family, doing my thinking with my coach, spending some time with my team, those kinds of things. And those are in there. Then the work can fit in around that. And you're never going to finish your work. So if you have this mentality, it's like, I'm going to finish my work. Then I'm going to spend time with my family. Good luck. Because you can always fill in the cracks with work. Makes a ton of sense. You also said that there's eight words that

flipped a mental switch for you. And I think this comes from the book Switch by Dan and Chip Heath. Find what's working and do more of that, which is like the most simple but powerful statement of all time. It is. You just said it. It's the most simple and powerful statement of all time. Our firm has made more money with those eight words than anything else we've ever done. So when I said earlier in the podcast, every fund and every year that goes by, we narrow down what we do, we're really just expanding our bright spots. So for example, we had this one woman that we hired out of business school who was just home run hire. Now each year we're hiring 25 of them. We found a couple of industries that really,

really worked for us. So now we're narrowing in on more industries that look just like that. and I think a lot of people would do so well if they focused on the things that they're really great at and the things that are really working and instead our minds just kind of have this loss aversion where we spend time on our biggest weaknesses or in our case, it's easy to want to spend time on your companies that aren't going well

or spend time coaching your people who aren't performing. Instead, give more energy to your people who are performing, give them more responsibility, train them more, spend all your time on your companies that are winning and and again that sounds really obvious you know but it's so so rarely followed because of this kind of loss aversion that we have plus the things that aren't going well become urgent like i was saying before you know they're the squeaky wheels you know those those employees are the ones that are causing problems of the companies that are missing debt covenants you know those are those

things become urgent and so find what's working and do more of that is like it is it is the best yeah, best e-words that have ever been written in strategy in my mind. And I've read a lot of books on strategy. My last question for you is a topic that I think a mentor told you, which is read to win the day. Now I'm somebody who loves reading. I read probably more than anybody else I know, but I've never heard read to win the day. So describe kind of what that is and how you implement it i i mean i think i i think like like you you are turned on to reading and and like probably like when you're reading something in the morning there's a lot of stuff going on you know one is you're learning something second is you're you're actually kind of improving

your your um your mind's ability to focus on the next thing because you're honing your energy on one thing you're you're getting ideas and your mind's going to be open to new things um throughout the day and so it's just it's like the meta habit you know it's just and so redoing the day would be like hey what if that's part of your morning routine even if it's 10 minutes like it does have a big impact for for a lot of reasons and just having that curiosity and continue to learn and grow it's it's just got so many knock-on effects and i don't have to sell you on that it sounds like you're uh you're you're already really really sold on that but that's that's been been a habit that's really helped. And I'm shocked. I mean, the stats are insane on this.

It's like, oh gosh, I'm going to get these wrong so we can look them up. But it's like 90% of people haven't even read one book in the last year, something like that. It's unbelievable. I host quite a number of dinners at our place and we kind of try to curate people from different industries and people just, we can learn from kind of interesting conversations. And at the end, I always ask everyone, recommend one book. And people who have been to these dinners will laugh because I literally get on the Amazon app and buy them right there on the spot. And whatever they are, I just wanted to read them. But I am shocked at how many people don't have a book to recommend. Like they will literally be like, I haven't read a book since college. You're like, you're 45 years

old. Like, what do you mean? Yeah. Yeah. It's like, I mean, imagine someone spends, like, imagine i wrote a book okay i spend 51 years of my life learning certain things and then i'm going to consolidate that down to 120 pages and i'm going to spend three years doing that and then you can read that book in three hours that's a pretty high return on that three hours if if if the author is someone that you can learn something from and i you know i you're going to learn something from almost almost everybody by the way while we're on the subject of books reading I just finished Elon Musk's biography, and I saw you tweeted on him the other day. That's been a pretty crazy topic recently, and it's pretty interesting because I just finished reading his book, and then the Twitter thing is kind of unfolding real time.

It's not what I was expecting at all, I guess. We are recording this right after he basically told advertisers, go F yourself a day before. And when I saw the clip yesterday, I turned to my wife and I said, demon mode, because in the book, they talk about like, he's unleashed. Yeah. And it's interesting because he got to be demon mode in Tesla and SpaceX. And because the product was so good, it didn't matter. And the demon mode sometimes actually helped him. I hate to say it.

I don't certainly advocate demon mode, but in some ways it probably propelled him. but but in this business when you're you're uh at the mercy of advertisers and and uh you know public opinion that the demon mode doesn't uh it has bigger consequences than it did in the other in other industries 100 percent um but but that book is uh is fantastic so it is absolutely fantastic uh unbelievable i read the isaacson one and it was just it was unbelievable definitely worth reading you didn't ask me my book type but that would have been my recommendation yeah Any other book, any other books that you would recommend that, uh, you think people would really benefit from?

I mean, I have the, the probably the, in terms of the books that had the biggest impact on my life, um, I would say, uh, I mean, Warren Buffett's biography or any of his annual letters, if you're in the investing world, you just can't read those enough. It's just like the, it's the kind of meat and potatoes of investing. And in terms of leadership and management, I think Good to Great is a classic. And the books Switch are probably two of the best ones. I've been on a huge kick for meditating and Zen. And I mean, I love anything by Eckhart Tolle.

Alan Watts, his stuff is unbelievable. unbelievable um those are those are a few those i think those are five or six different different ones uh that that are are worth reading fantastic graham where can we send people to find you online uh or if people would like to sell their business come work at or just learn more from alpine uh where can we send them for alpine too yeah so alpine is uh our website's alpineinvestors.com and then i'm on uh tick tock i know you don't like tick tock but i'm on there graham c weaver and um that's my uh instagram as well and i'm on on linkedin so all those all those places yeah awesome well i appreciate you doing this and we'll definitely do it again in the future

thanks anthony it was a lot of fun really enjoyed it super fun