Weekly Thoughts


Naysayers and Advice

People routinely reach out asking for advice on matters related to Search and HoldCos.  These are typically fairly pleasant conversations that we are happy to have.  Sometimes though, we have to chuckle when people take our words as Capital T “Truth”.  That’s because, back in 2014, pretty much everybody we talked to about Chenmark didn’t like the idea.  They said things like: 

  • “Leave your stable finance job? Why would you do that?”
  • “You want to work with family? That’s pretty risky….”
  • “You actually think you can source operators to run small companies? That’s a bad idea.”
  • “You want to buy more than one company? You know having one child is very different from having ten right?”
  • “You want to buy a blue-collar business? Operations are way harder than you think.”
  • “You want to buy a seasonal business? Cash management is going to be really difficult.”
  • “You want to buy a company without contracted revenue? Are you unaware of search fund criteria?”
  • “You want to buy companies in different geographies? You’re insane. There’s no way you can manage that effectively.”

For most of these meetings, we smiled, thanked people for their advice, and promptly ignored them.  We sincerely felt that they just didn’t see the same opportunity we did.  It’s not that any of these concerns were not valid; they are all true.  It’s just that these concerns were not valid enough to abandon our vision. 

If you want to do something interesting, you can’t rely on advice.  Just because a person is “successful” doesn’t mean she knows anything relevant to your specific idea.  You never know the motivations, patience levels, timeframes, or risk tolerances of the people you’re talking with.  Anybody who wants to do something original needs to figure out what approach makes the most sense to them, not to other people. 

We were reminded of this dynamic when reading Arnold Schwarzenegger’s book Be Useful, Seven Tools for Life.  Given Schwarzenegger’s path from a small town in Austria to internationally renowned bodybuilder, to action and comedic movie star, to Governor of California, Schwarzenegger knows a thing or two about having a vision that others don’t understand.  From the book: 

“There will always be people in your life who doubt you and doubt your dream. They will tell you it’s impossible. That you can’t do it or that it can’t be done. The bigger your dream, the more often this will happen, and the more of these people you will meet.

Throughout history, some of our greatest performers and creative minds have had to deal with people just like this, people who didn’t get it. The author of Lord of the Flies was rejected by publishers 21 times. J.K. Rowling’s original Harry Potter book was rejected 12 times. The great comic-book artist Todd McFarlane was rejected 350 times by different comic-book publishers. Andy Warhol gave the Museum of Modern Art one of his drawings for free, and they gave it back!  The producers of The Godfather fired Francis Ford Coppola multiple times because they didn’t believe in his version of the story.  U2 and Madonna were both rejected by multiple record labels before they got their deals.” 

Similar dynamics exist in fields from science and business to politics.  We think this is great.  The fact that naysayers exist is the reason that there is opportunity!  So, while we are always happy to share our opinions with EtA and HoldCo enthusiasts, we hope they know if they have a vision that makes sense to them, that’s all that matters. 

Have a great week,

Your Chenmark Team

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