Weekly Thoughts

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The Beginnings of Things

We were recently reminded of a great scene from Mad Men, as described by Anne Helen Peterson’s (always interesting) Culture Study newsletter: 

“There’s a scene in Season Four of Mad Men that’s never left me. Briefly: the show’s protagonist, serial cheater/womanizer Don Draper, has developed a relationship with the first woman who’s his true match (Dr. Faye Miller, known in the show as Dr. Faye). But then Draper gets scared, sees his secretary being kind and motherly to his children, and decides to follow that road instead. When he calls Dr. Faye to break it off, she gets in a real laser of a last line. 

‘I hope you’re very happy,’ she says. ‘And I hope she knows you only like the beginnings of things.’”

Right now, we feel that there is a lot of focus on the “beginnings of things” in the EtA space.  While there’s nothing inherently wrong with this, if you don’t share the same level of enthusiasm for the middle and end of your endeavor, things might not work out as well as desired.  At the moment, we often hear from people focused on the search aspect of EtA (understandable, but that’s just getting you to the starting line), or, more dangerously, the spreadsheet math and theoretical financial rewards on offer in the SMB world. 

The downside of focusing only on the returns is that it’s often easy to gloss over the fact that to generate those attractive returns, somebody actually has to operate an SMB.  Typically, that means leaving your home office, showing up (in person!) to a facility (every day!), interacting with employees, talking with clients, traveling to important conferences, winning sales, managing cash crunches, implementing systems, negotiating contracts, handling HR headaches… you know, actual work.  Ideally, the person operating the business is actually interested in doing work for more than a couple of months before trying to figure out how to hire an “operator” so they can “get out of the day-to-day.” 

Chenmark is by no means perfect.  We have made a lot of mistakes.  However, from the get, we have always understood that in our model, value is not generated at the beginning of the deals.  Rather, value is generated by consistently executing, day in and day out, over the near, medium, and long-term.  More importantly, that’s also where the magic happens. Perhaps Draper should have listened to Dr. Faye. 

Have a great week,

Your Chenmark Team

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