Recording -- 7 Powers Book Club Discussion with Hamilton Helmer

David Rosenthal (0:00)

Hello, LPs. We heard from several of you that the content from our book club session with Hamilton was great, but was pretty hard to consume as a Zoom recording online. So we have gone in and pulled out the audio and are putting it in the feed here. The quality and production here isn't obviously up to our usual acquired episode standards, but this was such a special and cool experience to be live with so many of you here, your voices and questions in the discussion with Hamilton. So we wanted to make sure that it was open and accessible to everyone in the LP community.

If you have not read the book and want a cheat sheet before listening to this, you can pull up our notes on the book in the LP Google Drive, or go back and listen to our full LP episode with Hamilton on March 10th of this year in this same LP feed here.

Also, FYI, our next book club live Zoom discussion is on The Outsiders with author Will Thorndyke, and that's going to be on August 28th, 2020 So if that hasn't happened already by the time you listen to this, make sure you come join for that. We are super excited about the conversation with Will. And with that, on to the discussion with Hamilton. Enjoy. All right. Hello, everybody.

Ben Gilbert (1:37)

Look at this, Motley.

David Rosenthal (1:38)

Hey, what's going on? Hamilton, I think, just joined us.

So hopefully everybody got the emails that went out, but plan is to do an hour or so of Q&A with Hamilton. And then, after which, Ben and I will stick around and we can all keep jamming. Let's see. Couple logistics. I think unless things get too unruly, let's just have everybody ask questions directly. If there's anything you don't want to ask directly, you want to do anonymously, just send me or Ben a DM in chat and we'll jump in and ask Hamilton. Let's see, the only ground rules are, I think most people know Hamilton also runs a registered public equities hedge fund. We can't talk about investing directly or any of strategy capitals, Hamilton's funds, proprietary models or methods.

That's the only stuff that's out of bounds, but everything else hopefully should be in bounds and Hamilton will let us know if we can't talk about anything.

Hamilton Helmer (2:40)

Yeah, I'd prefer to stay out of jail.

David Rosenthal (2:45)

As would we all, as would we all. Cool.

Let's see, with that, we thought we'd break the ice with maybe a fun one, Hamilton, to start up your game, which if you were assembling a dream team of CEOs you've observed, worked with maybe over the years, who makes your list? Who's the captain of the team and who are maybe the starting five?

Hamilton Helmer (3:14)

David was kind enough to hit something.

I thought about it a little bit. What I say won't be terribly startling because these are kind of I think on everybody's team. I'm certainly, of course, huge fans of Zuckerberg's and Bezos' for lots and lots of reasons. I think they're amazing. But I thought when you asked me favorite, I was thinking, well, who had really hard strategy problems that were very difficult to solve and then follow up on? And I'd say with Facebook, it's like it's a straight up network economy play. And it was not easy.

They had to start at Harvard and figure out how to scale it and then all that. I'd say more on the operational side. The strategy wasn't so much a puzzle.

It was because if we do this right, it's a network economy's play. You're on Facebook because I'm on Facebook, period. And I think, of course, it's interesting with companies that have that directly, they become accustomed to that clarity and don't realize that most strategy problems aren't like that. And often demand that of anything they get into, which is too high a hurdle. But I thought two companies where it was really hard, and as a strategist, I had to admire them enormously, were Tesla and Netflix. And for sort of different reasons. I think for Netflix, they did, I heard you earlier talking about Kodak. And if you think about how you create value, they're kind of two piles, tuning and transforming, right? Tuning is what can we do better? And transforming is what do we do next? And transforming is really hard at a strategic level, if you're going, if you're actually creating a new business and from the base of an existing business. Because usually, you know, it's very, very hard to do business. And so once you've established something, you have a whole series of modalities and, you know, culture and processes and everything that are fitted to that. And then to try to do something new is just, I mean, it really is Herculean. And so on Netflix side, they did that. So they went from the red envelope business to the streaming business. And those really are different businesses. And I give full marks to actually the co-CEOs now, Ted and Reed, because they're, you know, and both of them were essential ingredients to this. And both are frankly, quite brilliant strategists. I know them both fairly well. And they're very high at the top of the pile for people I've ever encountered who can think acutely strategically.