Wall Street vs. SMB
Two of our team members recently recorded an episode on the Acquiring Minds podcast. The conversation ranged widely – from the evolution of Chenmark to our thoughts on managing people to incentive systems – and everything in between. One aspect that we thought worthwhile to highlight was whether or not working in a small operating business is intellectually stimulating.
We started our careers in finance in New York City, and we’ll be the first to say that the experience introduced us to some of the smartest, hardest-working people we have ever met. We can see how it’s easy to dismiss a role in a small operating business as intellectually inferior to a fancy Wall Street finance job. After all, when you’re trading billions of dollars in Eurobonds, staking hundreds of millions on a new deal, or investing millions in Asian stocks, your fast-paced, high-stakes job requires complete dedication and immense mental capabilities. What could, say, a landscaping company in Maine possibly offer in comparison? From the Acquired Minds summary:
“James acknowledges that the rigorous intellectual challenges found on Wall Street are not found in small business.
But make no mistake: you actually use more of your brain running small businesses than you do building Excel models at a bulge bracket investment bank.
James characterizes the contrast as one of depth versus breadth.
‘I can sit on a bond trading desk and be a complete expert at reading credit agreements, understanding covenant structures or whatever it happens to be,’ he explains.
‘But I may never have the opportunity to have to hire someone, have to fire someone, have to build out a marketing program, acquire another company, negotiate a price with a customer, any of these types of things.’
Those are daily occurrences in small business, and they are absolutely intellectually stimulating. Just not as strictly cerebral as the problems you encounter sitting behind a desk on Wall Street.
The value-add in our organization comes from the wonderful individuals who can handle a wide breadth of intellectual challenges. For instance, just this week, your beloved Weekly Thoughts writer has conducted management interviews, had team meetings, paid some bills, finalized pricing for an Operating Company she runs, attended a closing dinner for our latest acquisition, spoken at a conference, reviewed January budget versus actual performance, negotiated an LOI for a tuck-in acquisition, met with a marketing agency, booked some corporate group travel, run an off-cycle payroll, processed 401(k) contributions, put together annual performance reviews, and helped integrate a recent acquisition. Breadth indeed.
Somebody once told us that twenty years of experience can actually mean twenty years of experience, or it can mean one year of experience, twenty times over. While we are no longer behind Bloomberg and excel screens all day, the breadth of what we do now in small business ensures we are accruing experience at least on par with the time that elapses, if not (a lot) more.