Then and Now: @APAE


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Inspired by the recent return of some all-time great WSO members, we will begin featuring a series of posts from forum favorite 'superusers'. This "Then and Now" series will let people share a bit of their story through a handful of questions that touch on their career progression and how this site has supported that.

See posts made by CompBanker, WallStreetOasis.com, and thebrofessor, and expect more to come from @Frieds", @brotherbear", @Layne Staley", @CRE", @IlliniProgrammer", and if we're lucky, even @Eddie Braverman".

When did you first join WSO?

I registered an account in 2010.

Why did you join?

Many people spent a ton of time in the computer lab at my college. It was the best place to work on presentations for group projects and Excel assignments. Laptops ten-plus years ago sucked, and obviously not everyone had the newest ones. Battery life was brutal, displays were weak, and most had a little red dot called a ‘nub’ or ‘pointing stick’ instead of the large touchpad common today.

I kept walking past people in the lab reading the same website. I finally found out what it was and wished I’d found it sooner. Back in the day the Vault ‘Guide to Finance Interviews’ was basically the grail. Mergers & Inquisitions was just getting off the ground. There simply were not many resources for interview prep. There were fewer transparent conversations about the industry and lifestyle. You could only get that the brute force way: talking to upperclassmen and alumni.

By the time I found the site, I already had an offer at a top bank. I was weighing whether to continue with the other firms I’d spent the energy to research and network at. I appreciated the honest conversations on the forums. I loved that the site helped me scale my time. It was easier than digging for alumni to find, cold email, and try to speak with about their experiences.

I did the classic move and lurked without an account for a couple years before registering.

Where were you in your career then?

Young and dumb. I had a few brand-name internships under my belt and I thought I was set. I would be launching my career in a top-five group, I attended a target school, and I wanted to spend a year figuring out whether public or private market investing would be my next step.

I was arrogant, and worse, I thought I wasn’t. I was hungry, hardworking, and ready to break through walls, but that’s only a humility born out of knowing where you come from and being willing to sweat to make something of yourself.

That’s different from knowing your life means no more than any other person’s. The first is surface level. It’s about what you’ll endure. The other is internal and about your relationship with the world. I am grateful life taught me this. It’s something I will work on until I die.

Where are you in your career now?

I am in a decision-making role with the freedom to invest across the capital structure. I can access capital at just about any scale. My priority is to find good people and learn as much as I can from them, whether they are an operator or investor. Learning through variety is my favorite, so this works really well for me. I want to grow as a manager so that I can scale my time. I am excited for the decade ahead.

What can you share about your personal or family life?

Where I grew up does not correlate at all with where I am today. I saw a lot of violence and other things I didn’t like. The traits I developed that helped me succeed and move beyond that environment hindered me later.

The way you think and act in a ‘how do I survive’ mentality probably won’t produce behaviors that help you relate to or fit in with the people you meet at a Goldman Sachs or Evercore. No shit, Sherlock.

I had a bumpy time figuring that out. It sounds stupidly obvious on paper, but after living only one way, it was difficult to identify all those flaws and begin addressing them.

What this translates to is that I have a narrow core group of friends who truly know me, have seen me grow painfully, and respect me. I have been very intentional to build towards and with them. I make all the time for them. We have made career and geographic choices based on each other. Our conversations are honest, hard, fun, and fulfilling. I am so fortunate.

Outside of that, I have another narrow group of people who I have certain commonalities with. If you share an uncommon hobby, property in a similar location, or a specific lifestyle component like a hypercar or an overlapping investment, those people are the very few you can talk about them freely with.

One thing worth pointing out is how wildly isolating success can be. Our society is weird about money. The pursuit of it is celebrated, but we are incredibly judgmental of those who have it.

It can complicate your family relationships, distance you from people you’ve known a long time, and limit what you can talk about comfortably.

Sometimes it’s because you become a dick. I know lots of those guys. They’re conspicuous in what they have and voluntarily voice it.

Sometimes it’s not because of you, but because of a flaw in someone else:

  • Greed: people want your things – a relative asks for money, you say no, they paint an entire story about you across the whole family.
  • Jealousy: you can’t possibly deserve the things you have – someone sees something expensive you bought for yourself (a car, a second home, an expensive toy) and mocks you sarcastically.
  • Gluttony: giving a metaphorical inch and losing a mile – you take a group of friends out, someone orders a $5,000 wine and then look blankly at you.
  • Sloth: people who want help without lifting a finger of their own – someone asks you for an introduction or a recommendation, you take the time to point out what they can do to prepare, and they refuse to do the work but still demand the favor.
  • Lust: people spend time with you only out of selfish motives – you realize s/he’s not pursuing you for who you are but for what you have.

It’s easy to joke about (“smallest violin in the world”), but I don’t think it’s kind or respectful to minimalize the psychological or emotional burden someone may bear.

For the younger people on this site: if you envision meaningful financial success for yourself, it’s smart to think through ahead of time the challenges or compromising positions you may find yourself in.

I believe this is worst for ‘strivers’, the self-made who got there through their own efforts. Wealth in general brings a set of challenges, but it’s certainly a different problem set for anyone who earned it rather than was born into it. My children, for instance, will have a different relationship to money than I do.

I’m not married yet. I would like to be; I think fatherhood would be one of the most meaningful things I could experience in life and I would like to do that in the context of a traditional nuclear family.

I believe a family starts as a couple. Before I can be a good parent, I have to be a good spouse. Being a loving, caring, present partner is an immense challenge. It’s more difficult when you practice a demanding profession.

The people I am most impressed by are the ones who work on themselves the hardest. I want to emulate that. I continue to find stellar books providing science-based perspectives on love, commitment, intimacy, and attraction. There are also many on character development.

Having a stable, caring relationship seems like the prerequisite for stable parenting. I want to find someone who has a similar mindset. Being young in New York does not correlate well with that.

Looking back on your career, is there anything that you thought you knew starting out which turned out to be wrong?

Working hard and being smart isn’t enough.

Life put a number of hard things in front of me at a young enough age that I developed the mindset that you could overcome anything simply by buckling down and grinding through it. When you’re intimately familiar with sink-or-swim moments, it’s jarring to realize you’re being judged on your ability to dance. It’s an entirely different muscle movement. Without the muscle memory, you freeze. The grim smile of perseverance fades to a grimace of confusion.

The thing I failed to grasp early on was how much how you do things matters. Perception and relationships with the people whose opinions matter affects your success more than your work product. That only increases the farther you progress into your career.

A painful experience in my final summer analyst position taught me this most poignantly. I was frustrated because I had left another strong bank where I felt people were heavily invested in my success. It was a gamble. I felt that joining one of the top-five groups people worship on this site would set me up for whatever recruiting I wanted to pursue.

I learned the difference between a mentor and a sponsor. The absence of the latter can be catastrophic. Small things can mushroom quickly if there isn’t a warm voice in your corner.

Were there any opportunities that presented themselves along the way that you didn't take? With the benefit of hindsight, do you wish you had taken one of them?

No, I feel remarkably fortunate for how things in my life have unfolded.

During school I had a few pangs of regret or envy when I thought about my school choice. I studied business in undergrad. If I were counseling a teenage son on that decision, there are a few factors I would want him to reflect on.

The heavily pre-professional focus seemed to attract few people that were intellectually curious. I don’t mean people that weren’t passionate. My class was full of people who were very driven, goal-oriented, and committed. What I discovered was that very few of those people were willing to do anything without an immediately identifiable benefit.

The students that loved exploring for its own sake stood out. They tended not to be in the ‘hard’ courses that had competitive registration. They weren’t at the recruiting events; you didn’t hear about their offers. Five years after school, I saw them starting small businesses, running their own consultancy, several rounds of financing into their growing startup, living abroad, or something similarly unique. When I caught up with them, they seemed to have a really healthy relationship with their self.

What I realized was worse was how the culture suppressed any deviation from the norm. Looking back, I remember so many conversations where an interest or passion would sneak out of someone’s mouth and they would quickly bottle it up, almost as if they were afraid or embarrassed of it.

It felt like the school collected a lot of really talented, interesting, capable people who were painting themselves into a narrow box. The closer graduation came and the more the pressure of ‘where are you going to place’ seemed to dissipate, the more of people’s true self you got to see. As if they were free to voice it because the dust had finally settled.

College is most valuable as a time of exploration. If I were advising a child or a mentee, I would encourage them to find a school and topic to study that encourages exploration, that has no strong norms other than intellectual curiosity, and that promotes learning how to learn.

That brilliant Kanye lyric captures my feelings well: “Everything I’m not made me everything I am.” I discovered so many things I’m not built for or don’t fit well. Trial and error. There weren’t many things that I didn’t reach for.

What do you think has made you successful in your career? Are there any particularly interesting or unique challenges that you've faced along the way?

It is so valuable to examine everything on a psychological plane.

There is a finite set of levers behind any position any person you encounter in any context has chosen. The more you invest in identifying and mastering those levers, the better you will be at addressing them.

This also applies internally. You can grow to excel at interrogating yourself: why do you feel the way you do, is that an appropriate way to think about things, and what is the best action you should actually be taking?

Any investment you make in the caliber of your thinking is going to pay dividends globally in your performance. Investing in a single aspect of your performance will benefit only that element.

My worst performance has come when I fail to examine the underlying why behind whatever I’m facing.

Once I burned a relationship with a Forbes 400 principal. I wanted him to introduce me to other peers to help fill out the vehicle I was trying to capitalize. I had a great deal lined up, the structure was really favorable, and I knew by name some specific people he could connect me to who the thing was center-of-the-fairway for. It should’ve been an easy lay-up: me, him, them.

I got frustrated with the fact that he kept overlooking my request for a meeting in town and was annoyed to keep seeing invitations from his chief of staff every month for a shooting trip. I thought it was hard to justify taking five days on some remote ranch with no service, and I couldn’t shorten the trip by chartering out of the nearest FBO because at the time I didn’t have the money.

My dumb ass basically pressed so hard on the meeting that they stopped responding to me. I slogged on and never got the thing done. Another buyer closed before I assembled the capital pool.

Two years later I was on (you guessed it) a shooting trip in South America. I only knew the guy who invited me. Everyone razzed me a bit. It was fine. I was the only American, everyone was European or South American. I was at least a decade younger. I was the only one who showed up without a girl (most of them had companions of some sort of arrangement). We had a great time, shot a couple thousand birds, ate at great places, saw some sights, had some nights.

I figured that was that. Maybe I’d see some of them on future trips (the guy who arranged it is something of a super-connector in London).

I was wrong. Several of them sought me out in the following months, asked about what I was involved in, and either gave me a deal, money to do a deal, or someone else with one of the two to offer.

The memory of the American billionaire hit me one day like a truck of bricks. He just wanted to make sure I wouldn’t embarrass him. Hell, he probably wanted a private setting he controlled where he could tell me sensitive things about himself or them. It was idiotic of me.

My lesson was that people in a position of strong financial and social capital really want to get to know you on a human level before they do anything with you.

Turns out this isn’t an uncommon mistake for people who are relatively young for their seat. Again, it’s painfully obvious on paper, and doubly painful because I’d learned a smaller version of the same lesson years before.

Today I take pains to think through why the thing matters to the person saying it to me. It’s helped me uncover investment opportunities that weren’t immediately apparent, ask smarter questions in diligence, screen potential employees or vendors or partners more aptly, and engineer better outcomes in negotiations and sales and many other instances.

Is there anything else you’d like to share?

It’s very easy to exert yourself tremendously on something without thinking about why you’re doing it. I love the saying about missing the forest for the trees. Regardless of where we are in our career, we can always benefit from thinking critically about the task at hand.

The analyst who wants to get a private equity job might drill really hard on making the most complicated model possible so they’re a step ahead when recruiting season rolls around. It powers him through the late nights. That’s valuable to an extent, but does it really prepare you for impetus behind the interviewers’ questions?

No. They really want to know that you understand what matters in private equity. When you’re deep in some slides late at night, pull back for a minute and think about why what you’re writing makes the company more attractive to a financial buyer. It will do volumes more to make you compelling in an interview room.

A private equity associate might be so focused on perfecting the deliverable the partner asked him for that he never stops to think about the unspoken dimensions he’s being judged on as a potential vice president for the partner track.

It’s important to master your work product, but you can move up the ladder of life way faster by improving and leveraging your strategic understanding. It will manifest many compelling things for you.

Some will be easily identifiable: a promotion, a lateral role, or a better bonus. Some will be more opaque: a company that doesn’t fit your fund’s strategy but is one hundred percent worth owning, or a brilliant person whose skill-set yours complements where it might be worth launching a thing …

If you develop the habit of keeping your head up, you may begin to see cool things other people miss. I try my best to share through anecdotes how to do that. Hopefully people get value out of it.

I deeply appreciate the things I’ve picked up over the years from this site. Patrick, you don’t get thanked enough.

People don’t necessarily grasp the impact of this site. I have run into people in real life who have referenced things I’ve written anonymously on here.

One I’ll never forget was a conversation at some charity event with a senior HR person at Perella. I asked about their talent initiatives. “We have seen such an uptick in applications the past few years,” she said. They couldn’t figure out what changed when their recruiting process hadn’t really. She said she discovered the ‘David and Goliath’ post, asked some of their analysts as well as HR peers at other firms, and got several answers confirming it was a known thing. She laughed about it as the best free gift they’d ever gotten. That made me think about how far-reaching things on the Internet are.

Thank you to all the people who send me thoughtful messages, I enjoy thinking through the problems you’re facing. I apologize for how slow I am getting to some of them.

 

Really grateful to you for doing this and for all your work on the site. I have forwarded your posts to people I've mentored, and as an entrepreneur and investor myself, I appreciate your insights and what you share from your journey.

You mention books on relationships - can you share more of what you found useful. I enjoyed the Power of the Past on your recommendation.

Thanks again for what you do - it's a real service and I believe resources like this site at it best are crucial in leveling the playing field for access. What you have done inspires me as I think about ways I can potentially give back.

 
OracleofBromaha:
Really grateful to you for doing this and for all your work on the site. I have forwarded your posts to people I've mentored.
Thank you, that's really kind of you to say. I'm glad you find value in it, and even more that you think it's worth sharing with people.
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as an entrepreneur and investor myself
It's weird being both, right? I met one of the megafund founders once and was amused to see he referred to himself as an entrepreneur repeatedly. It was a window into how clearly proud he was of the business he built.

It made me pause to think about how he is way less of an investor at this point relative to being a general manager. I blocked some times that month to reflect on how I envision my own future: the mix of time between cranking on the minutia of an investment myself versus overseeing other people whose sleeves are rolled further up.

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You mention books on relationships - can you share more of what you found useful. I enjoyed the Power of the Past on your recommendation.
That's such a great one. I'm glad you liked it. Here are some others:

"How to Choose a Partner" - Susan Quilliam

This is a really practical book that frames partner choice as a journey toward self-development. Her lens is on the reader learning more about their self, about other people, and about life and the way they want to live.

"The Seven Principles for Making Marriage Work" - John Gottman, Nan Silver

Gottman is the best. He and his wife Julie run this fascinating institute housing the research they've done for over four decades. They focus on marital stability. They have a nine-point framework called the Gottman Method. Anything they've written is worth reading.

"The 5 Love Languages" - Gary Chapman

Nearly everyone has heard of this framework, but usually only in passing. This book unpacks it through very practical and valuable tools. There are variants of the book for teenagers, religious people, and people interested in its applications in their career. It's basically a Bible for interpersonal dynamics.

"Why Him? Why Her?" - Helen Fisher

This is a science-lite approach at framing your personality type as the driver of your romantic life. Not just what sort of person you're drawn to, but how you can find, attract, and hold onto them. The author has a straightforward and digestible style. Before taking a university position, she was at the natural history museum.

"Anatomy of Love: A Natural History of Mating, Marriage, and Why We Stray" - Helen Fisher

The same author wrote an earlier book about the known history and hypothetical future of sex, romance, and partnership across time. I read the first edition, apparently there's a newer one from a couple years ago. She studied several dozen known societies from 50 countries across different millennia and documents it all in the book. Her primary idea is that everything that most people think is just careless or unpredictable behavior actually isn't. There are identifiable root causes or prompts.

"Attached: The New Science of Adult Attachment and How It Can Help You Find and Keep Love" - Amir Levine, Rachel Heller

You may know the popular framework in psychology for attachment styles: secure, anxious, and avoidant. This book is about how those styles inform our needs as a partner. It boils down years of attachment theory research on the nature of human relationships into super actionable pointers on:

  • how to identify your own and other people's attachment styles
  • the emotional tax of a relationship with someone with different intimacy needs
  • communication skills to bridge the gap
  • people's different capacities for intimacy and the need to prioritize a partner's well-being
  • exiting a failed relationship or predicting ones that can work for the long run

Obviously in one book it's impossible to be exhaustive, so it focuses primarily on the common problem pairing (anxious and avoidant). If you're a secure type it won't be one hundred percent applicable. Still worth the read.

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Thanks again for what you do - it's a real service and I believe resources like this site at it best are crucial in leveling the playing field for access. What you have done inspires me as I think about ways I can potentially give back.
That's humbling, man. Thank you. Please do give back, it's important to help lift other people up.

I appreciated your perspective on how to interact with senior people in your recent thread. I owe a comment there, I think you raised some interesting things.

Chuckled when I first saw your name, thanks for that too.

I am permanently behind on PMs, it's not personal.
 

Thanks for your kind words and for these great recommendations - I really look forward to reading them, and I found a couple (like the 5 love languages) very helpful.

I also appreciate your candor about money and talking about the complexities it brings. As my business has gone from garage band hedge fund to hockey stick, I've gone from years of making nothing to suddenly having an exponential experience. It's weird in itself to make more money in a year than you have in your prior career to date (obviously it's nice, and that's also a function of bootstrapping and weird background, not just business doing well). So far it still feels fragile and I haven't really changed my habits. I'm struggling with how to talk about it while still relating to close personal friends and family in less lucrative fields. Normally, I just play it down and suppress it, and while that's better than being a jerk about it, I think there must be a more skillful way of owning the success in a classy but caring way.

I find it very jarring but revealing when the megafund founders talk about themselves as entrepreneurs since I view their firms as so consensus and compromised by their scale, hierarchy, product proliferation, asset chasing, etc. It does force me to imagine the leap they took, though I also think it's their way of claiming why they should still be be king of the hill - as an entrepreneur myself, I respect that. Its like how Schwarzman opens his book with being stuck in the rain when an LP ghosted him, or Phil Knight's memoir basically stops once Nike becomes a big success - the hand to hand combat of entrepreneurship can be very vivid on people's impressions of themselves.

 

APAE thanks a ton for sharing. Always look forward to your consistently insightful comments. Seems like you and I both come from similar beginnings and have similar ways of thinking, as well as a shared general attitude and disposition toward life (however I'm likely a decade or so your junior). At the risk of potentially asking something too personal, do you mind elaborating on how you've handled managing relationships with your family members? How have your relationships evolved as you grew in your career? Did you find them to become more understanding themselves or was it something you had to actively manage and work on (i.e. was it somewhat a one-way street of unreciprocated effort)?

On the career side, you aluded to this in your last response, but I was wondering if you could expand. What's your advice for junior-level professionals who are trying to prepare for the jump to becoming a mid-level professional? Outside of the obvious things, what can we do to position ourselves to have a strong case for an internal promote? What are some of the "unspoken dimensions" you mentioned we are being evaluated on?

Thanks!

 

Thanks for the comment, and the nice words.

I can't talk too specifically about my family unfortunately.

For your career question, the easiest thing to do is to borrow heavily from a comment I made two years back.

To me this falls into two clear categories: soft skills and hard skills. They overlap and reinforce each other in many ways. The latter has been covered well on this site and others. I will focus on the former.

Instead of a checklist of bullet points, here are a couple 'mindset' pieces that I've learned contribute strongly to success.

Relatability:

This is a people business through and through. I struggled with this a lot. Clearly, as you can see from my anecdotes opening the thread.

It's not enough to do the work the right way. The right way means you are reliable; communicate well about your bandwidth, other deadlines, and questions you have with any task; add value by proactively accomplishing unstated second-level objectives; and have a good attitude all the way through. That's no mean feat. It's hard to be a top-flight generator of work product, and that's simply table stakes in this game.

You have to do the work the right way while being the right type of person. Another user amusingly termed it being a "money salesman."

I'll paste a portion of another comment I made the prior year.

APAE:
Relatable means being an enjoyable presence on the floor. Note that I didn't say 'tolerable'. People self-censor so rigorously out of fear of standing out and getting punished.

This (the self-censor) seems to come in two primary forms; the person who's so fearful of any potential misstep that they eventually turn into the equivalent of the dog that's been beaten enough that it flinches each time a human near it raises a hand, or the person who knows they're so far from the cultural norm that they box themselves up to look like a drone.

Both of those look tolerable, but the first archetype is someone you can't stand to be around because they're so ingratiating and eager to conform to whatever they think you're looking for while the second is someone who looks either so disengaged or so ready to explode that you kind of shy away for your own safety.

Don't be afraid to bring your own personality. You don't have to be stuck talking only about the weather, sports, or vacation plans for your whole two-year stint. It's okay to bring more of your authentic self to the office. Be personable, ask real questions about the people you work with, and listen when they talk. Human moments in this industry are few and far between, and if you're the guy who becomes known for bringing them, that will serve you well.

People will smile genuinely when they see you, you'll develop deeper relationships with the people who manage you, and as your career progresses and you see certain people far less frequently as you change roles, the warmth of your relationship won't fade like it does for the people who simply clock in and clock out day after day.

In my case it actually meant tightening up how I presented. I have a lot of different interests. I'm expressive. That can be overwhelming, so narrowing myself to come across as less of 'a lot' helped me be more relatable.

This matters.

Picture a guy who started a company, sweat and bled and begged and borrowed to make it work, and after 15 years is looking for a sponsor to come in as majority owner and eventually buy the remaining interest. He is going to be really, really picky about who he lets take 80% of the cap table and works with for three to five years before jetting off completely.

Picture a lawyer who made partner off the back of a college roommate who got into a good fund and threw him the legal work for the bolt-on acquisition they did every single quarter. Think he's going to be careful about who he introduces to that old roommate over golf as "the right guy who could maybe take one of those babies off your hands now"?

Self-awareness:

People could write novels about this. Said simply, most people in this industry have a very strong sense of self. That strength often leaves little space for a habit of inward reflection.

Simply taking the time to think critically about how you're doing in each aspect of your role can surface key areas of development you can improve on.

For example, one recurring thing I see in private equity is how few people are good managers. I'll paste from yet another comment.

APAE:
The harsh assessment I make of most guys is that in that first post-MBA role where part of their job description includes overseeing (either directly or indirectly) people in a job they themselves had only two years ago, they resort to one of two extremes: either way too hands-on (over-managing) or hands-off (under-managing).

It's understandable. If you were a really good associate, you're now a VP, and the associate on your team is just failing to give you that last ten percent of output on work product that you're looking for, there are two easy defaults. Do the work yourself (leaving them with no developmental feedback on how they can improve for the future), or hound them until they get it right (micromanaging).

Further, most people lack the self-awareness to be critically reflective on developmental areas of their own, meaning John Q. Vice President isn't sitting down once he gets Principal to think about how he can be a better manager. If you didn't have it before, the chance you develop it later in your career gets increasingly smaller.

The transition from doer-of-work to part-doer/part-reviewer is really bumpy.

News flash: this is the real thing that people never clue into when they wonder where the soft-skills feedback they get as a PE associate comes from. It's the partners being indirect about saying the associate demonstrates no or too few indicators of being a good future manager.

News flash: Being a good manager is absolutely imperative to your success as an investment professional. It allows you to leverage your time effectively (delegating work components to more junior members of your team), streamline processes with service providers like counsel, bankers, and consultants to their peak efficiency (because you're managing the humans inside those service providers who interact with you on your deal), and also maximize what you get out of your portfolio executives.

This is just one example of failing to be self-aware. Others could be:

  • monopolizing board meetings - droning on, because who'll stop you, you're the fund representative
  • talking at your portfolio executives, not with them - dictating what your boss said he wants to see; obviously you have to communicate the strategy, but realize that they bring a wealth of knowledge you could never hope to have; don't miss the chance for them to tell you what they could use help with
  • not managing your physical health well - ignoring the proven connection between better physical fitness and better mental output

Character:

I spoke about the idea of respectability in the same comment I excerpted 'relatable' from.

We can think about this more broadly. Character matters. I love that quote we all heard as kids: "Character is what you are when no one is watching."

Think of everyone's complete disgust the other year finding out Experian knew about the data breaches for several months before it came to light, and even then it came out from journalists, not the company. It wasn't even because their steps to resolve the issue required secrecy, but out of pure complacency or fear of the public backlash.

I have several personal stories I could share. I have seen people blithely choose not to do a deal with someone because of some personal data point they have on the guy.

  • "Oh, he reneged on so-and-so on the such-and-such deal, wasted everybody's time and ended up costing my buddy another $80 for having to extend the debt financing."
  • "Ah, not that guy. He lied about one of the guys in my fraternity cheating on his girlfriend just so he could score on the girl. I know him, it's a good shop but I'd hate to see you do a deal there."
  • "XXX Capital? Let's not do anything with them, they don't really take compliance seriously, I want to avoid a headache."

In order, those were:

  • a billionaire telling me about a fund I was thinking of selling something to
  • a megafund partner when I told him about a venture fund that put a term sheet down for a company I'm already in
  • a PM at a credit hedge fund talking to me about another fund I thought we could sell an asset in a SPV to.

People do off-list references. They'll call and ask about you. They'll plug your name into LinkedIn and see who they know who knows you. Everything is a data point. If you are character-poor, you'll find it harder to succeed in the long run because people won't want to do things with you.

Vision:

Are you someone who is reactive, or do you invest your own time studying the world to identify key things you think will happen in the short or medium term?

The former kind of person chases all the stuff people are talking about today. He can't be behind the curve. The latter is heads-down and ends up doing something that looks a little off-center right now, but at least he has the chance to be proven right in the future.

This comment is getting really long, so here are some others I've made in the past about how to make moves:

The takeaway here is that you can get a lot done in not that much time if you really apply yourself. One quote that has impacted me most was Bill Gates's "Most people overestimate what they can do in one year and underestimate what they can do in ten years."

Develop a vision and hone in on it as your north star. You should do this not only for your life overall, but in specific areas within your professional life.

If you can identify a lane you want to live in as an investor, you can pour energy into becoming the Hulk of that lane. This will make it easier to 'serendipitously' manifest cool things. The CEO of Niantic (the company that made Pokemon Go) laughed at all the press coverage and said "Yeah, we were an overnight success 20 years in the making."

I am permanently behind on PMs, it's not personal.
 

I have fangirl-ed heavily on many of your posts, so I'll save the rest of the readers from more of the same. I wouldn't be able to do your contributions justice anyway.

Wanted to comment on this segment, about education:

APAE:
The heavily pre-professional focus seemed to attract few people that were intellectually curious. I don’t mean people that weren’t passionate. My class was full of people who were very driven, goal-oriented, and committed. What I discovered was that very few of those people were willing to do anything without an immediately identifiable benefit.

The students that loved exploring for its own sake stood out. They tended not to be in the ‘hard’ courses that had competitive registration. They weren’t at the recruiting events; you didn’t hear about their offers. Five years after school, I saw them starting small businesses, running their own consultancy, several rounds of financing into their growing startup, living abroad, or something similarly unique. When I caught up with them, they seemed to have a really healthy relationship with their self.

What I realized was worse was how the culture suppressed any deviation from the norm. Looking back, I remember so many conversations where an interest or passion would sneak out of someone’s mouth and they would quickly bottle it up, almost as if they were afraid or embarrassed of it.

It felt like the school collected a lot of really talented, interesting, capable people who were painting themselves into a narrow box. The closer graduation came and the more the pressure of ‘where are you going to place’ seemed to dissipate, the more of people’s true self you got to see. As if they were free to voice it because the dust had finally settled.

College is most valuable as a time of exploration. If I were advising a child or a mentee, I would encourage them to find a school and topic to study that encourages exploration, that has no strong norms other than intellectual curiosity, and that promotes learning how to learn.

This is complicated, and I think it's really important. I recently read "Prepared: What Kids Need For a Fulfilled Life," by Diane Tavenner. She's an educator who's a co-founder and the CEO of Summit Public Schools, a charter school system on the West Coast. The whole idea is that since most of us don't work in factories anymore, the purpose of school teaching us to put our heads down and follow the rules (listen to lectures, do homework, memorize, be in your seat before the bell, etc.) doesn't prepare people to function in a society or workforce where someone has to figure out how to solve unstructured problems.

The solution, as per the book, is to shift the focus from teaching kids how to do things to teaching kids how to teach themselves how to do things, as that has far more carryover to being an adult. I don't sit in a classroom very much anymore, but I do go to YouTube to figure out what I need to pour self-leveler in my basement.

This echoes your point from above, at least tangentially - there's a difference between learning a set of measurable skills or knowledge ("if I pass the bar, I'm a lawyer now!") and having deeper experiences that teach across a variety of subjects. My best leadership class wasn't "Leadership" in business school, it was being a captain of my varsity sports team in college.

I think there's tremendous value in putting kids in a learning environment that helps them learn how to learn, and I think that's the idea behind most top-25 universities today. Problem is, put simply, shit's expensive. I don't know as if it's executed well enough anywhere to be worth the price of entry. And if you're just going to go sit in a lecture hall with 450 other engineering students and listen to a PhD student who doesn't speak English like I did, then is that really worth paying for at all?

My kids are young enough that there's time for this to shake out - but I don't think they'll go to college as it looks and feels today. I'm with you in that I'm more concerned with making sure they have a chance to explore a self-directed learning path in depth, and that I help them acquire the tools along the way to set goals, plan, execute, succeed or fail, evaluate, adjust, and repeat. I suspect a lot of their learning will happen at home, using resources from the internet, and in the context of completing projects. I don't think my kids are going to memorize facts about the Battle of Hastings and then fill in bubbles on a Scantron. It's not useful for forging a life path that affords you the freedom to never have to sit in a cubicle again.

"Son, life is hard. But it's harder if you're stupid." - my dad
 

Hey Layne Staley. It's always a joy to see you. Thanks for such a thoughtful reply. You owe me a private message or reply on your distressed thread.

Thank you for the book recommendation, I wasn't familiar. I'll read it this year.

It's interesting, people bandy about the term 'future of work' a lot but the future of education doesn't get the same attention. One of the structural changes resulting from COVID is going to be a change in not only the delivery channel of instruction, but the core focus as well.

What you termed 'teaching kids how to teach themselves' will be the entire heart of it. I have seen memes about how we all know that the mitochondria is the powerhouse of the cell, but half the people in America don't know how to do their taxes or what compound interest is.

I've gone with friends to open houses at their kids' schools. It's helped me see a broad swath of what's out there: P.S. branches, Ethical Culture, the Blue School, and some of the more progressive or smaller ones in different cities.

Some of the ones in the Bay Area stood out starkly. They were started, funded, and hiring-planned by self-made successful people from new-economy fields like technology, healthcare, or investment management related to them.

I remember one administrator said verbatim that "We don't bother much with memorization-based homework when kids will have a pocket supercomputer for the rest of their life."

I'd asked her about homework because I'd recently read a bunch of research on the efficacy of homework in improving learning outcomes. There were some interesting studies that showed for kids all the way up until their teen years had effectively no worse learning outcomes without homework, provided that they enjoyed a low student-to-teacher ratio in an academic setting with strong resources and had a stable home environment.

It makes sense that such schools differ so strongly. The parent and funding audience is so convinced of these things from their own experience.

I wrestle with the fact that this is creating a new kind of inequity. There are so many people who lost the zip-code or womb lottery who will be so structurally disadvantaged as we face this Fourth Industrial Revolution.

The gap between the digital, physical, and biological worlds is shrinking - technology is also changing faster than ever. Being poorly equipped to face that feels like a death sentence; if not literally, then figuratively in a financial, intellectual, or cyber-consciousness sense.

Your comment about leadership outside of any four-walled room being the best teacher is so true. I have a similar comment I often make.

I didn't really have an agenda with this comment other than to say I really agree with what you wrote. I either didn't know or forgot that you had kids. That makes me happy, I bet you're raising them really well and we need more good humans in the world.

Hope you're staying safe man. It's a wild time.

I am permanently behind on PMs, it's not personal.
 

You mentioned trying to figure out whether public or private market investing would be your next step while going into your banking job. Ultimately, it sounds like you decided to go an alternative route than the traditional 2+2 or hedge fund route.

Could you elaborate on your thought process in deviating from the more traditional paths at that point in time? I imagine it was probably considered somewhat atypical compared to the rest of your peers.

 

Top Boy.

You're right. I did deviate.

I interned in one top-five group and went to a different top-five group after school. I saw how hard everyone worked at memorizing a bunch of minutia to prepare for buy-side interviews. I looked back at how hard I worked to get my successive roles. It didn't make me feel any spark inside, only like I had kept the door open to get somewhere even better down the road.

The countless hours teaching myself modeling, the classes I stressed over, the internships before the top-five one - it didn't add anything to make my spirit feel full.

If I could get all that done, why couldn't I carve something out of the universe that was both fulfilling and lucrative?

I tested my way through this, searching for ways to make money to prove it to myself before the irrevocable decision to forego 'the path'. I found a way to make a million dollars. I called a bunch of people until I got enough yeses. I did it. All those people introduced me to other people.

I realized I could keep practicing in the exact field I had labored so hard to equip myself for, but under my own parameters rather than the confines of the linear path as an employee.

Do the math.

Say you find a $20m business you think is worth owning. You want to buy it. Assume you can put the effort into financing the deal (which is fair, because it's really straightforward and there are very visible channels for doing that).

Cool, problem is now you have to run it. It's probably got all the inefficiencies that are endemic to lower middle market companies. Improving EBITDA 50% over a few years so that you can earn a couple million on the upside - that's going to be a slog. You have to brute force it, and there probably isn't much supercharged IQ to go around inside the company beyond your own.

You can do that. It will make you a million or a bit more.

Okay. What if you find a $200m business that's fairly well run and offers good prospects. Why can't you run the exact same process on financing it? Okay, you did that and now you have to run it. The difference here is that you have a layer of competent people who were already running the damn thing. You just have to stay out of their way. It's not about swinging the shovel yourself, you win by being the guy running around between them all with cold beer and cigarettes to keep them going.

You also have so much more budget to get yourself the resources to help make the thing go great. The same relative figure is a much bigger absolute amount.

It also can be spun as a less daunting thing for you to be in charge of. That existing business performance and layer of operational talent is a protective mechanism. So maybe it's less of a risky proposition than you being the sole hero pushing the lower middle market thing to new heights.

Say EBITDA improves 25% during your hold period and are able to find a buyer at 10x, two turns higher than you paid for it. You just earned yourself $22.5m if you did it on a 20% structure. Let me know if you need the math broken down on that.

You can do that. I'm telling you it's possible, and I know a couple dozen guys who can say so too.

EDIT: My mental framework was that it would be really challenging to get underway and really rewarding to experience success. I drastically underestimated the first. I drastically underestimated the second too, on both the financial and intellectual dimension.

Private markets are way more attractive to me. I shared my thoughts on this in a comment a few weeks ago.

APAE:
I always knew I wanted to do shit with money. I didn't know what that meant exactly as a kid. Then I learned what investing was.When I was young I didn't have any idea what distinctions existed within that world (asset class, strategy, and the like), and I certainly didn't come from a background that correlates strongly with the industry.

When I got to school and began soaking up career information, it became clear that banking provides a rigorous and respected foundational experience with basic skills that translate well to investing roles as well as strong recruiting opportunities. I was interested in banking solely for those points. As I began the job, I realized the network of peers would be of equal value; the diaspora as we all left the analyst program would yield me people I could tap for advice, deals, jobs, recommendations, and similar stuff as my career unfolded.

Private markets are much more attractive to me than the public markets. I chose private equity because:

  • I prefer to see my investments perform over time without exogenous factors beyond my control -- if I was in the public markets, I may be completely correct about the quarterly performance of a company, but other market participants or even events beyond my control like a liquidity crisis, a short squeeze performed between two other investors I have nothing to do with, or a proxy war fought between hostile parties with different strategic visions for the company's future could push the stock in a different direction than I want, even though I am right about earnings rising or falling or whatever
  • I enjoy being able to be a majority owner where I can rely on formal power to steer strategy -- in the public markets, I can't, the best I can hope to do is initiate board change through collaborative conversations with the company or hostile actions like a proxy, tender, or other activist campaign
  • I enjoy the complexity of deal structure -- in the public markets, I can only be a buyer or a seller, as opposed to being able to choose not just what asset I want to invest in but the exact format (leveraged buyout, growth equity, structured equity, hybrid equity and debt investment, direct loan, or whatever) that I think will maximize my return relative to the risk assumed
  • I believe there are greater inefficiencies in the private markets -- there is no central clearing exchange where everyone can see the price being paid for an asset, meaning I don't have to compete against the complete universe of possibly interested parties; I can find assets being transacted upon with a variety of reasons, deal timeframes, and counterparties that own them; those dislocations create opportunity

Separately, I have found that I think differently than many senior decision-makers in the industry do because I have had very different life experiences than are common for people with the educational and professional pedigree required to progress in the field. That difference in thought pattern makes me look at the same opportunities through a different lens. It also lets me identify different opportunities that other people didn't see.

Banking is an attractive career option for people who have a lower risk tolerance. Obviously if a sell-side process yields a lower transaction value, the bank receives lower fees and the MD receives lower compensation, but that's very different than structuring a deal, managing an asset, and having to secure an exit.

Neither is better than the other. Some people lik pineapples on pizza; others don't. You have to know yourself. If you'd be bored out of your mind advising on deals over and over, getting to a senior role in banking where you simply sell people over and over on your ability to do a deal for them would make you really unfulfilled and frustrated. If you'd be stressed and uncomfortable trying to choose how to deploy capital, private equity would make you miserable.

One thing I've seen is that as the private equity industry has matured, a lot of the opportunity at the top has evaporated. Some of the megafunds have gone public, so their compensation pool has narrowed. All the megafunds have launched numerous strategies in an attempt to diversify fee streams, and with that, have correspondingly hired hundreds of new employees; this add mouths trying to feed at the trough. Lastly, there's crowding at the top. Once you make partner, you're gonna practice for two decades: it finally got good for you.

All in all, there are a lot of factors that have colluded in more recent years to make banking more similar in how financially attractive it is at the senior level. So a lot of guys recognize that they can just keep doing what they're doing in banking and get to more or less the same point as their private equity counterpart.

The overall point is that to progress at the senior level, you have to be pretty invested in the thing you're doing. Since the two fields require a different mindset, different types of people tend to gravitate to and perform strongly in those respective paths.

I am permanently behind on PMs, it's not personal.
 

Thanks for doing this. Genuinely extremely helpful. At which point in the rat race did you venture off to do your own thing? Did you end up working in a PE shop post banking and was that experience helpful in doing your own thing? Raising capital at such an early stage of your life must have been extremely difficult. How did you demonstrate to investors you were up to the job without any sort of track record?

 

This is one of the most thoughtful things I've ever seen written, period. Very kind of you to contribute so much time. Have a couple questions if you don't mind answering:

  1. In (equity) investing, to what extent do you feel the job is natural aptitude vs. skillsets that can be learned? In what you can learn, what are the top 2-3 things that matter most to making one a better investor?

  2. What are your hobbies / how do you decompress?

  3. What do you want to be doing 20-30yrs from now?

 
hedgehog9:
This is one of the most thoughtful things I've ever seen written, period. Very kind of you to contribute so much time.
Thank you, I really appreciate that.
:
1. In (equity) investing, to what extent do you feel the job is natural aptitude vs. skillsets that can be learned? In what you can learn, what are the top 2-3 things that matter most to making one a better investor?
I don't know that there's a single formula. Someone may rely 30% on their natural aptitude and 70% on their learned skill-set, while someone else may be 80% natural aptitude because who they are is such a strong fit for their work that only a minority of their time is spent on learnable functional-type topics.

I am probably more of the latter than the former. Older and more successful people have told me I "get it" more often than I can remember. I don't have a formula for it. Most of the frameworks I share in my comments I come up with more or less on the spot after thinking for a minute how I'd map an answer to whatever someone's question was.

I love learning, so when I find something I should be better at, I do my best to first figure out the smartest way to learn it, then absorb it as quickly as possible. I wouldn't excel in a setting where financial engineering is the primary driver of returns in a buyout opportunity, for instance. It doesn't draw on my strengths, and I have so much fun in the situations that do that I would enjoy lower utils trying to make myself strong in that way.

:
2. What are your hobbies / how do you decompress?
Man, I'm into a lot of shit. Can I respectfully pass on this question? Not from any lack of enthusiasm, but because most of what I'd write would make me identifiable.

I did mention shooting. I have been on some really fascinating trips with fascinating people. Louis Bacon Moore shoots. Paul Tudor Jones does too. There's a whole pocket of guys who go around on elaborate trips. Bird sport is the most common game. From what I have seen the big game thing can be considered less genteel in some circles. No one in the sport feels bad about common game like pheasant, quail, partridge, or duck. A lot of people aren't down for land animals beyond deer or boar.

I love to read. Always have. I appreciate being able to absorb knowledge someone else had to work so hard to accumulate and refine.

:
3. What do you want to be doing 20-30yrs from now?
Spending every day surrounded by people I love with complete control over my calendar. Time is the most precious asset because it's the only one we can't replace.

I hope I find meaningful ways to give back at scale. I'm less interested in the classic board seat on half a dozen big, established organizations. It would be more impactful to take something from zero to huge, especially for a purpose that is harder to make a dent in. Like education in inner cities, or a thing for first-generation college students regardless of race.

I am permanently behind on PMs, it's not personal.
 

Thanks man. I love a ton of your posts. Your story has always been interesting. It's in a space I know little about -- ecommerce has so much minutia to stay on top of, and that breadth of minutia always seems to evolve so damn fast -- but find fascinating.

I am permanently behind on PMs, it's not personal.
 

Wow, I've reread this post multiple times to really absorb it all. I've only really been on the site for about a year now, but it didn't take long from when I first began browsing for me to take notice of you as a user from the high quality of your comments throughout.

Your point about considering the why and developing a strategic understanding to think more critically about what's in front of you stuck out to me in particular. I've been told by multiple people that I don't think like someone my age, that the way I approach things resembles someone much older than me, but the fact remains that I am still not even 20 years old, and because of this lack of experience, I struggle with that grasping of others' perspectives. Where I am now, I'm junior to all those I work directly with by 6+ years, and especially now that I don't have that in-person interaction to pick up on more of the nuances (body language, how they're interacting w/ others in the office, etc.) I've had additional difficulty in figuring out the "why" you allude to in how the thing matters to that person. Beyond going the extra length to ask lots of questions, to demonstrate the curiosity and interest that truly is there, etc, what else do you think is helpful for addressing this gap in perspective from significantly varying circumstances/places in life (student/very young intern vs associates and up many years out of school) to still be able to develop that sort of strategic understanding over time?

Array
 

Thanks for the kind words, I appreciate that.

First off, I know you are already sick of hearing this, but it will get easier with time. I know it's hard being younger than the people around you. High performers often face this. It can be isolating. Keep up the hard work.

It's important to understand that there are two different things at play here. One is strategic thinking, and the other is grasping someone's perspective. Both have a why behind the what, but the two are very different.

One you can excel at regardless of your age or life experience. The other you will progress in as you continue to mature and experience more things. Let's tackle both of those.

Growing comfortable at thinking through how someone got to the position they're advocating simply requires intellectual horsepower and some reps. You can improve on this by studying psychology. You can read books on negotiation, crisis communications, and self-help (like pop-psych). Take notes. Watch TED Talks, speeches by business leaders (the Dealbook Conference is a gold mine), and great debates.

Analyze what people say; see if you can dissect how they got there. If a CEO says something subjective, research everything you can about them. Who did they work for in the past (any prominent business leaders like Jack Welch, Andy Grove, Fred Smith, etc.)? What companies did they spend time at early in their career (a go-go risk-on powerhouse like Drexel, a white-shoe investment bank like First Boston, a cutthroat culture like Enron's trading division)? What school did they attend (a brainy place like Booth, an entrepreneurial place like GSB)?

Here's an example. If a pro basketball player emphasizes teamwork, ball distribution, and court vision in a post-game interview after a playoff series, why does he cite all that? If his Wikipedia page tells you he spent three seasons in San Antonio, you have your answer. He studied under Pop; that's the system he learned. Maybe you have to go deeper. Maybe he was on a different team coached by one of Phil Jackson's assistant coaches from the Bulls era who's now a player development guru.

Always look for what informs someone's perspective. If you can grasp that, you'll immediately be in a better position to communicate why your thing is sensible, or identify what to cede on, or choose what to say to make them like you, and so forth.

On the other hand, strategic thinking is not something that's purely about intellect. You actually need experience. That's good and bad. The bad: experience isn't easy to get. The good: you can absolutely toggle how quickly you get that experience.

If you focus on maximizing the variety of things you taste, you will begin to fill up your tank, so to speak, much more quickly than people who do one thing for a long time.

Think of it like a scatterplot graph. When you have very few data points, you can't get a clear picture of any trendline or correlation. The more data points you add, the clearer things become. It's like pointillism. Consider yourself 'Seurat the Dot' - you are painting by data points.

To excel at this, populate things as quickly as you can with the broadest variety of inputs. You want dots of different colors, sizes, and in different places on your graph. Ever heard "Variety is the spice of life"? It holds true here.

You don't have to have gray hair to develop strategic thinking. You just need to have a breadth of experience to draw on. If you're proactive and tactical, you can develop that experience quicker than other people. Some ideas on doing this could include:

  •   launching a side project outside of your working hours
  •   going full-on with a startup (trial by fire, learning through immersion)
  •   buying an existing business and managing it while keeping a day job
  •   traveling as much as possible to soak in new cultures, meet new people, and develop new perspective
  •   taking a job that presents a tremendous amount of variety (this is the single biggest advantage of management consulting, in my opinion)
  •   teaching yourself new skills constantly (front-end development, financial modeling, negotiation, CFA, foreign languages, dance, whatever)
  •   investing personal capital (you will have to learn so much in order to not fail and lose all your money)

Don't be put off by being younger than the people around you. Keep aiming high. It's the only way you'll ever reach lofty goals. 

I am permanently behind on PMs, it's not personal.
 

Exactly!

However, I would say someone who is exceptional skilled at one thing still trumps one who is a jack of all trades while being master of none.

The only exceptions are the ones who can find the connections between ideas and synergies them together.

 
Most Helpful

Let me start by congratulating you on being an excellent writer. If I could give any single piece of advice to people on this site, it would be this: learn how to tell a story. I'm not just talking about being more engaging over dinner or drinks. I'm not just talking about one day giving speeches or interviews on TV. I'm talking about story-boarding an idea. It's such a rare skill that I don't ask interviewees to do modelling tests. I ask them to write me a story. I don't care what it's about. I just have to be able to read it without wanting to shoot myself. Writing mirrors speech. If you write poorly, you present poorly. If you write poorly, you can't order your thoughts clearly. It's incredibly important to write well, and as a reformed journalist, I applaud your writing ability. For me, it's the clearest indication of intellect.

To that point, I'd like to call out the following:

"The heavily pre-professional focus seemed to attract few people that were intellectually curious. I don't mean people that weren't passionate. My class was full of people who were very driven, goal-oriented, and committed. What I discovered was that very few of those people were willing to do anything without an immediately identifiable benefit"

You had several other well-made points in your piece, but for me, this hit home. Intellectual curiosity is rare even at the very best of schools and even in the very best of firms. It's exceedingly rare everywhere. In my experience, mental laziness is far more common than physical laziness. There is an ocean between drive and a desire to learn. Both are important for success, but the latter makes you interesting. I am so, so tired of meeting uninteresting fucks who think they're clever due to a degree or a job that places them in proximity of driven people, none of whom have to be interesting for the business to succeed.

Interesting people--those who are intellectually curious--can very rarely work for others for very long. The innate desire to question everything and learn something new typically makes for a poor quality in an analyst or associate, but might be the only thing that matters in an entrepreneur or CEO. For me, it's one of the only qualities I seek in friends because everyone else eventually bores me. There is a good reason visionaries are rare--the world can't handle many of them at any given time. If you find one, keep them close--God only made so many.

 

Intellectual curiosity is so rare, in school (even great ones) in business (even finance, which I think can be pretty stimulating). It's pretty easy if you have a good platform to hire people who are competent technically - they're a commodity, albeit an expensive one. Finding someone who has enough curiosity that they have a chance to develop wide angle investment judgment that you would pay your own money for is quite hard, at least in my experience. So many "investment professionals" and so few investors.

I always joke I was an involuntary entrepreneur when starting the fund. This partially because of a background that made it hard to get hired conventionally, but also partially because it is very hard to work for people who aren't intellectually curious if you are.

A message to younger people on this is to embrace that curiosity and what makes you different not just suppress it. You do need to fit in in certain situations, but you also need to be different and right if you're going to be a great investor long term.

 

Hi Brotherbear, I’m a bit of lurker but I’ve always enjoyed reading your posts. Your writing style in particular is a breath of fresh air and I find it crispy and succinct. Glad people like you are regulars on WSO. I would love for you to expand more on what you mean by intellectually curious and if you could share Any examples as it relates to investing or from your time in banking? Looking forward to reading more!

 
brotherbear:
Let me start by congratulating you on being an excellent writer. If I could give any single piece of advice to people on this site, it would be this: learn how to tell a story. I'm not just talking about being more engaging over dinner or drinks. I'm not just talking about one day giving speeches or interviews on TV. I'm talking about story-boarding an idea. It's such a rare skill that I don't ask interviewees to do modelling tests. I ask them to write me a story. I don't care what it's about. I just have to be able to read it without wanting to shoot myself. Writing mirrors speech. If you write poorly, you present poorly. If you write poorly, you can't order your thoughts clearly. It's incredibly important to write well, and as a reformed journalist, I applaud your writing ability. For me, it's the clearest indication of intellect.

To that point, I'd like to call out the following:

"The heavily pre-professional focus seemed to attract few people that were intellectually curious. I don't mean people that weren't passionate. My class was full of people who were very driven, goal-oriented, and committed. What I discovered was that very few of those people were willing to do anything without an immediately identifiable benefit"

You had several other well-made points in your piece, but for me, this hit home. Intellectual curiosity is rare even at the very best of schools and even in the very best of firms. It's exceedingly rare everywhere. In my experience, mental laziness is far more common than physical laziness. There is an ocean between drive and a desire to learn. Both are important for success, but the latter makes you interesting. I am so, so tired of meeting uninteresting fucks who think they're clever due to a degree or a job that places them in proximity of driven people, none of whom have to be interesting for the business to succeed.

Interesting people--those who are intellectually curious--can very rarely work for others for very long. The innate desire to question everything and learn something new typically makes for a poor quality in an analyst or associate, but might be the only thing that matters in an entrepreneur or CEO. For me, it's one of the only qualities I seek in friends because everyone else eventually bores me. There is a good reason visionaries are rare--the world can't handle many of them at any given time. If you find one, keep them close--God only made so many.

This. I cannot put it better than you have brotherbear

APAE great thread.

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
 

brotherbear, I fuck with you heavy, man.

I think much the same way. Life is about storytelling. Narratives matter. If you can't compellingly articulate any thing, it ain't happening for you.

I love the stuff you share. I wish you did more of it. Right now I'm thinking of that "Women, when did you decide to have children" thread from a year or two ago. To this day I very often (more than weekly) think verbatim of your reply about being a 'math dork' and the principle of a constrained optimization.

Thanks for the positive encouragement.

I am permanently behind on PMs, it's not personal.
 

"I'm liable to go Michael, take your pick: Jackson, Tyson, Jordan - Game 6."

Go Michael

You put a smile on my face, man. Cracked me up. I think I owe you a PM. I can't stay on top of the inbox. I asked them to add some more functionality to it, I hope it comes in a few months.

I am permanently behind on PMs, it's not personal.
 

Thanks a ton man. I hope you're doing well, staying safe with your family through all this.

I am permanently behind on PMs, it's not personal.
 

hey man as someone who will be interning at a top bank this summer, but came from a pretty shitty upbringing, your story is super inspiring to me. I have one question, are you a partner in pe? because you say you graduated in 2010, and if you are congrats because you're probably an amazing dealmaker

 

I'm glad you've been able to persevere and exceed your circumstances. I hope you set high goals for yourself and are able to attain them.

Congratulations on a strong internship. I'm sorry for you and everyone else who will have to deal with the frustration of a virtual experience as opposed to what you envisioned. It's annoying to work so hard to get such a competitive thing, then see it changed completely by a thing out of your control. That's a lot of life though; we actually control so little. One benefit of this entire ordeal is how it can help us keep or gain perspective. I hope you're able to convert and get the analyst role you want.

Yes, I am in a decision-making role with autonomy and a number of deals in my track record with sole attribution.

I am permanently behind on PMs, it's not personal.
 

i remember reading your stuff through the years. it was always gold. though it's just now that i learned your user name -- always remembered you as the fresh prince of bel air butler!

 

It’s a joy to see you back APAE. You’ve been one of the most thoughtful mentor I have had over the course of my undergrad.

While I ended up in tech, a lot of the ideas about relationship matter. Being able to communicate (I m not talking about presentation) well your progress to your manager/stakeholder is very critical.

Being able to tell a great story (AKA the language of social media) is also very important. As the digital world is overlapping with the real world, you need to be able to craft a story that resonate with your audience to hold their attention. The best content that lack entertainment will lose out to entertaining crap.

 

Wow, I remember our private message thread from years ago, that's a blast from the past. I hope you're doing well.

I am permanently behind on PMs, it's not personal.
 

It's been fire man!

Finance wasn't working out for me. I swallowed my pride and went against all the momentum I have built in finance by pivoting to tech. I had reached one of the lowest point in my life and it was a real slap in the face.

Everyone I knew in finance thought I went crazy until I landed a SWE position at a FAANG level company.

Now I am earning a compensation that far surpass my friends in IB, working on gravity defying projects with world wide scale, and on top of that have ample time to come up with new creative ideas everyday.

 

Thanks for doing this.

  1. If you could start over, would you still be in PE/ Finance? I was discussing this with a few colleagues and a lot of them said they would be in tech or became a Quant if they could start over. What about you? What would you do knowing what you know now?

  2. What are some good books on strategic thinking and personal development?

 

I think a lot of an answer I shared above applies here.

Drawing on what I wrote in a comment on a thread two months ago:

APAE:
I always knew I wanted to do shit with money. I didn't know what that meant exactly as a kid. Then I learned what investing was.When I was young I didn't have any idea what distinctions existed within that world (asset class, strategy, and the like), and I certainly didn't come from a background that correlates strongly with the industry.

When I got to school and began soaking up career information, it became clear that banking provides a rigorous and respected foundational experience with basic skills that translate well to investing roles as well as strong recruiting opportunities. I was interested in banking solely for those points. As I began the job, I realized the network of peers would be of equal value; the diaspora as we all left the analyst program would yield me people I could tap for advice, deals, jobs, recommendations, and similar stuff as my career unfolded.

Private markets are much more attractive to me than the public markets. I chose private equity because:

  • I prefer to see my investments perform over time without exogenous factors beyond my control -- if I was in the public markets, I may be completely correct about the quarterly performance of a company, but other market participants or even events beyond my control like a liquidity crisis, a short squeeze performed between two other investors I have nothing to do with, or a proxy war fought between hostile parties with different strategic visions for the company's future could push the stock in a different direction than I want, even though I am right about earnings rising or falling or whatever
  • I enjoy being able to be a majority owner where I can rely on formal power to steer strategy -- in the public markets, I can't, the best I can hope to do is initiate board change through collaborative conversations with the company or hostile actions like a proxy, tender, or other activist campaign
  • I enjoy the complexity of deal structure -- in the public markets, I can only be a buyer or a seller, as opposed to being able to choose not just what asset I want to invest in but the exact format (leveraged buyout, growth equity, structured equity, hybrid equity and debt investment, direct loan, or whatever) that I think will maximize my return relative to the risk assumed
  • I believe there are greater inefficiencies in the private markets -- there is no central clearing exchange where everyone can see the price being paid for an asset, meaning I don't have to compete against the complete universe of possibly interested parties; I can find assets being transacted upon with a variety of reasons, deal timeframes, and counterparties that own them; those dislocations create opportunity

Separately, I have found that I think differently than many senior decision-makers in the industry do because I have had very different life experiences than are common for people with the educational and professional pedigree required to progress in the field. That difference in thought pattern makes me look at the same opportunities through a different lens. It also lets me identify different opportunities that other people didn't see.

Banking is an attractive career option for people who have a lower risk tolerance. Obviously if a sell-side process yields a lower transaction value, the bank receives lower fees and the MD receives lower compensation, but that's very different than structuring a deal, managing an asset, and having to secure an exit.

Neither is better than the other. Some people lik pineapples on pizza; others don't. You have to know yourself. If you'd be bored out of your mind advising on deals over and over, getting to a senior role in banking where you simply sell people over and over on your ability to do a deal for them would make you really unfulfilled and frustrated. If you'd be stressed and uncomfortable trying to choose how to deploy capital, private equity would make you miserable.

One thing I've seen is that as the private equity industry has matured, a lot of the opportunity at the top has evaporated. Some of the megafunds have gone public, so their compensation pool has narrowed. All the megafunds have launched numerous strategies in an attempt to diversify fee streams, and with that, have correspondingly hired hundreds of new employees; this add mouths trying to feed at the trough. Lastly, there's crowding at the top. Once you make partner, you're gonna practice for two decades: it finally got good for you.

All in all, there are a lot of factors that have colluded in more recent years to make banking more similar in how financially attractive it is at the senior level. So a lot of guys recognize that they can just keep doing what they're doing in banking and get to more or less the same point as their private equity counterpart.

The overall point is that to progress at the senior level, you have to be pretty invested in the thing you're doing. Since the two fields require a different mindset, different types of people tend to gravitate to and perform strongly in those respective paths.

The thing I like about finance is that it's the language of transaction. If you think freely enough, you can go accomplish outsized things at a younger age. You can do that in technology as a founder, but I didn't study any technical subjects growing up. I have dabbled out of curiosity.

The best of both worlds would probably be to develop technological fluency as an engineer, whether self-taught or through college, and to practice finance in the first years of your career. You could launch a company, repeating until you hit with one that scales.

You could then basically buy your way through a variety of businesses where your technological know-how helps you assess the viability of their product or market, figure out what adjacent products could be developed organically or inorganically, and basically be a buy-and-build sponsor entirely on your own. Effectively do a Vista or Siris strategy but as a technologist. ESW is the closest to this I can think of, and sure enough, Joe was an engineering wunderkind.

Some book recommendations, beyond the classics like Art of War and 48 Laws of Power and Marcus Aurelius' Meditations:

(personal development)

(strategic thinking)

I am permanently behind on PMs, it's not personal.
 

Thanks for your great reply and for these great recommendations - I really look forward to reading them, So, if you could go back to school and start again would you study CS or electrical engineering? What do you mean by Vista or Siris strategy and ESW? I am very curious and I have found that I think differently than many students. Would you recommend me to switch my major to CS or engineering? So I can pursue the path described above. I would like to have the best of both worlds.

 

I wrote a similar response to this thread here a while back: THE ULTIMATE CAREER PATH

And was shitted to oblivion by children of WSO with no critical thinking ability. Instead of being curious and asking for more details to learn something insightful, they make childish remarks.

Here's a snippet of my response which is closely similar to APAE: "

Career paths are for loser who can't think on their own. Herd mentality. You'll never reach your full potential. Just not going to happen.

The winners carve out their own path by doing their own shit resulting in a non crowded market.

Examples:

Start a company? No. You buy companies and own their distribution channels. You buy digital assets with your audience.

Climb the ladder? No you build relationship with those at the top in a lateral industry. Then you run private deals with them and leverage the assets they have already built."

Having worked in both finance and tech, I can tell you the characteristics of each:

Tech bro - No business brain. Dwelled too much into the technical details. Tries to solve artificial problems by forcing whatever "tech stack" is trendy. Might get lucky if they try and fail enough time.

Finance bro - Overly pragmatic. Too profit driven. Lack critical thinking and any resemblance of creativity. Monkey see monkey do people (follow the carrots -> PE -> HBS/GSB -> PE/HF)).

I can tell you the real money isn't in either group but from bridging the two together and amplifying it with reality bending marketing skills. Marketing is the final piece of the puzzle that breaths life into your work. Judging by lack of creativity in this crowd, this is unlikely to be a reality for many of you.

The real money comes from deal making (finance mindset) while utilizing technology to scale your marketing effort.

Then suddenly, you view every marketplace as your playground.

 

APAE, have you read Grit by Angela Duckworth? I'd be curious to hear your thoughts assuming you've read the book. Her work centers upon the importance of focused persistence (relative to exceptional talent) in understanding professional "success" and draws parallels to many of the discussions held in this thread as well as the grind of an early career in financial services. A few noteworthy quotes:

"Yes, but the main thing is that greatness is doable. Greatness is many, many individual feats, and each of them is doable."

"...a high level of performance is, in fact, an accretion of mundane acts."

 
 

I bought one that hasn't begun customer delivery yet. There's usually about a two-year lag between when a manufacturer invites you to the purchase queue and you receive it.

I am permanently behind on PMs, it's not personal.