The Outsiders Book Club Discussion with author Will Thorndike

David Rosenthal (0:00)

Hello, LPs. We are posting the audio of our book club Zoom session with Will Thorndike from The Outsiders.

This discussion was just fantastic. Thank you to everyone who joined. The video recording of the Zoom session is online in the LP Google Drive folder, so you can access that there.

We have also posted Ben and my notes on the book on The Outsiders, both online and right here below in the show notes. So feel free to share, copy those, add to them. There's a Google Doc version of them in the LP folder that anyone can jump in and add to.

And this whole thing, this book club, this is only our second one, but the series has just been fantastic. And thank you to everyone who's been joining and asking great questions of these amazing authors. And we wanna make it a big part of the special experience for all of you as LPs going forward. So stay tuned for our next announcement of our next session. And with that, on to Will and The Outsiders.

To get started, A, Will, thank you so much for joining us. This is gonna be awesome. We're like nothing I love better than 8 a.m. on a Friday morning discussing capital allocation and outsider CEOs. It's great. We thought maybe as a kind of warm up, we would ask you a meta question about the book, which is how did it come about? How did you get interested in this question of what made for an outsider CEO, a radically successful CEO? And how did you end up writing this book?

Will Thorndike (1:45)

Yeah, so this book grew out of a talk that I gave about a dozen years ago at a biannual conference. So I work in, I'm a private equity investor by profession. And every other year, our firm hosts a conference for our portfolio company CEOs. So that includes sort of the current group of CEOs, as well as alumni, people whose companies we've exited from, and then sort of the farm team of CEOs who we hope to work with. We gather that group every other year and have sort of a series of speakers. And there's always a headliner speaker. So we've had, you know, Jim Collins and Michael Lewis and Nate Silver, people like that in the past. And then there's always a series of sort of more pragmatic practical talks. And I raised my hand about a dozen years ago and said, I'll do one of those.

And I then had to figure out what I was gonna talk about. And I had read and heard about Henry Singleton, you know, this sort of CEO from the 60s, 70s, 80s who had run a conglomerate with extraordinary results. That's really all that I knew. And I decided that I'd do sort of a deep dive and profile him and try to share those learnings with our CEOs.

And we had a Harvard Business School student working for us between years at business school. And I asked who was excellent. And I asked him if he wanted to do sort of an independent study in his second year at HBS to do a deep dive into Singleton and his company Teledyne and his record. And he had been a varsity tennis player in college. So he looked at me and he said, well, unfortunately, I just committed to another independent study, but my doubles partner is looking, right? So by pure serendipity, I got connected with this guy, Aleem Choudhury, who lives in the Bay Area. He's just a super talented guy. And he'd been a Phi Beta in physics at Stanford. And he agreed to do this independent study. And what we did is we did an extremely deep analytical dive in the first semester into Teledyne and sort of the comparable group of 60, zero conglomerates. It was a comparable group of another seven or eight companies.

We wrote up the analytical work. And then in the second semester, we interviewed everyone alive who'd had anything to do with the company. Unfortunately, Singleton had passed away, but his longtime partner and COO George Roberts was still alive in Southern California and a bunch of investors, board members, former employees. And we literally went all around the country and interviewed those people. And I went to go write that up to prepare for this talk.

And as I was doing that, Aleem came to me and he said, Will, there's a really talented guy in the class behind me who's looking for an independent study.

And I had just found that whole process to be intellectually way more engaging than I had expected. And so that guy, a guy named John Gilligan is now in Chicago, also super talented guy agreed to do it. And we ended up doing Capital Cities. So I just by happenstance got into this really talented vein of Harvard Business School students, each of whom did a full year independent study for credit to support research of the chapters. And that sequencing worked for me because I had a day job. So I was sort of doing one of these a year. And after about the fourth one, I began to think, hey, maybe this will turn into some sort of a book project. I mean, I was writing them up as I was going along. And after about the fifth or sixth one, it became clear there was this very strong pattern, which I did not expect. As I was working on it, the model I had in my mind is a great book called The Money Masters.