Embracing peak suffering with William England
In this episode of the CrossLead podcast, host David Silverman speaks with William England, Partner and Chief Investment Officer of Walleye Capital Partners, and world-champion rower who raced for Princeton, Oxford, and the US national team.
They focus on lessons Will learned in crew teams and how those lessons translate to managing a high-growth investment firm. William talks about Walleye Capital’s operating model, structure, and culture and how they have managed through the last 18 months. He also discusses personal leadership philosophies, his weaknesses, and thoughts on personal development as a senior executive.
“Greatest enlightenment comes after peak suffering.”
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Welcome to the CrossLead podcast. I’m your host, Dave Silverman at CrossLead, we exist to help teams, individuals achieve and sustain optimal performance. In today’s episode, I had the pleasure of speaking with Will England, who was a partner and the chief investment officer of Walleye Capital as chief investment officer, Will England oversees internal and external strategy allocations and is responsible for risk management. He earned a Bachelor of Science and Operations Research and Financial Engineering from Princeton and a master’s degree in mathematics and computational finance from Oxford. Throughout his time at Princeton, Oxford Will England was an accomplished rower appearing in multiple world championships for the United States national team and winning the Oxford, Cambridge poses Today we talk about lessons we’ll learn as a world and collegiate champion rower and how he’s applied those lessons to life in business. We talk about why capitals operating model and why decentralization is critical for their success. We talk about the impact of meme stocks encoded on their investment fundamentals and how they’ve adapted in the face of change. Thank you for tuning in. I hope you enjoy the conversation about. All right, well, thanks so much for making time today. I’d love to introduce you to the audience and maybe just have you talk about your background a little bit if you’d be comfortable Sure Like starting from the beginning Yeah, yeah, take take us back, you know, through your life, sort of where you’re from and how you got to the position you’re at today So I like to say I grew up in a town that time forgot a little town called. Marblehead, Massachusetts, north of Boston, and it was the 10th largest town in the first census in 1790, and I don’t think it’s changed very much since then It’s kind of one of those places where if you don’t wear boat shoes, you’re kind of shunned. So, like, not in the normal world at all. But yeah That’s where I started. And I sort of break my life down into four stages and not all of which are necessarily obviously connected, but there is a sort of a logic to it and a flow in hindsight So as I said, I grew up in this little town where. It’s very sheltered upbringing. I wasn’t like flying around on jets, but you know, I had pretty much an idealistic way to grow up, frankly And sort of the first part of my life, which I’d say up until the end of eighth grade, I I wouldn’t describe myself as employed as it was now. Frankly, I I didn’t work very hard I was fairly lazy, a little bit fat. I had a lot of raw talent Unrealistically, realistically Both in regards to academics and athletics, but just really didn’t ever have to work that hard because of, you know, that sort of situation And that sort of seemed fine. And something happened in eighth grade. It wasn’t like This one died. It wasn’t any terrible like that, but for me, very formative time in my life. So in that, in my world, in that frankly part of the part of the country and how I grew up, everyone, you know, it goes to turn not everyone, but a lot of people will go to boarding school and that’s sort of what my whole family died. My sister, you know, it’s very much like playing college is a very difficult school to get into and you just sort of apply. And it just sort of what I what I assume would happen And what happened in eighth grade is because I never really worked hard and frankly, wasn’t that special I actually didn’t like the first time When I didn’t achieve a goal that I had, and it was really embarrassing and it sucked. And in hindsight, it’s like, Okay, it’s not the end of the world, but for me, being in eighth grade, it was just sort of terrible And so something in me kind of really snapped, and I never wanted to feel that way again. And that was really When I said, OK, I’m never going to not be absolutely dedicated to what I’m trying to achieve, as you know, a 14 year old kid. And so the rest that year and next year, I got basically an AA or an A-plus in every single class I took I started to work out and learn about fitness and sort of develop some of the core traits that still define me today and everything sort of Worked out. And the next year I applied and come to exactly where we wanted to go and See NF going there as as a sophomore instead of as a freshman .
Yeah, yeah, exactly. And again, there’s sort of everything else that I went to Andover Which is a, you know, very, very old elite status school Yeah But really interesting too, because it is very difficult To get into and or there are exceptions to this. Generally speaking, it is really just around very smart people and pushed very, very, very hard and then actually end over from an academic sense is much more challenging there I went to college or grad school But yeah, I went there as a sophomore and sort of went a little bit of My shoulder because I hadn’t gone in the previous year. And it’s not typical for somebody on as a sophomore. And I was just Like, You know, that next phase of my life, I’d say Was, you know, when I went from south in your nice gold’s all the way through the grad school or sort of transition from I was in my growing up had been this sort of lazy, not cool. Like I said, Well, the fat kid, you know, like this was very successful growing I did super well in school. It’s kind of this combination of like a, you know, a jock and a super nerd and was just really successful in all sorts of various different things, probably To my Detriment at certain points, because I was probably a bit of a dick after Some things. But that’s sort of the very formative time in my life I did start rowing in high school What drew you to rowing? What brought you to rowing? Just like to suffer?
Yeah, no. So actually, I resisted doing it for a while Because my sister wrote, as well as just a couple years older, me or very competitive with each other, among other things, and I was like, I don’t I’m not doing the stupid fucking sport. You just said That’s just really dumb. I finally was like, Well, you might actually be really good at it, so why don’t You just sit down?
So I actually didn’t start Until my junior year In high school, which is, you know, relatively late For any sport because I was six years old by then. Yeah. And there’s This thing called the ERG Which is like this stationary torture device where you sit. Down and you just pull on something until you pass out. I mean That’s basically if you’re super Good at that with a little bit of coaching over the years, you’re just going to be really good at rowing. And then as you get higher and higher like genetics matter and all sorts of things like that But rowing is this amazing sport because probably more so than any other sport that I can think of, how well you do is directly correlated to what You put into it. You know, maybe weightlifting is like that to some extent Yeah, but but very much correlated. So I just fell in love with it immediately, and I went from never having tried the sport To three or four months later, had the best scores on the team and made the top boat and and really just kind of got obsessed. So I don’t know, I had a natural affinity for for rowing. I still wasn’t that good because it does take a little bit of time to to be very, you know, competitive on that level But when I got To college, especially my freshman year of the summer before my freshman year, I spent some time and really thinking about how to how to train on my own, which is a huge part of being successful as sort of a sport is that, you know, a lot of people could sit down over coaches yelling at you and saying, you know, just pulling the fucking handles hard as you can do that, but actually being able to do it by yourself and be intelligent about how to design your own training program. That’s, you know, at some point really separates people Oh, interesting. Yeah, it’s very thoughtful Yeah. So I I spent some time doing that Before I went to college. And then, you know, my freshman year, I got a lot better, you know, and that wasn’t just one better than the guys. Most of the guys around me on my team, but it sort of, you know, very competitive on a national level You had gotten a lot better Yeah, yeah. Yeah. So, you know, again, just very good for learning about work ethic. And I mean, there’s all I Could talk for a long time about rowing. I talked to the people at work now, but all my stories and rowing But it’s certainly not the only thing that provides sailing lessons for Life, but, you know, very sort of obvious and transferable images from from rowing that apply to a lot of what we do. So So anyway, so I it does go back to What I saying before as far as figuring out just the benefits, frankly, of of. I would say extreme discipline, but being as disciplined as possible. That’s definitely true in academics as I’ve went through in rowing. So I was fortunate to be able to find and then have the opportunity to to really focus on those activities and was
successful to hang out and had a great time. Just really identifying and sort of both of those domains. So when I was And it was somewhat Extreme when I say it was like the super nerdy jock or like in in college, I was an engineering major as a particular major to where we went sort of combining engineering, mathematics, economics. But, you know, pretty, pretty intense academically, very different group of people than those that I was sort of spending their time on the river
with. And then when I went to grad school, I went to Oxford for grad school and originally to do a Ph.D. in math, which is like, really weird for someone that like sports, but very true to me at the same time one of the reasons why I also went there and was around this thing called the Oxford Cambridge Boat Race, which is one of the oldest Legendary race right in the world Yeah, and It attracts people that, like me, had wrote for their national teams and went to the Olympics and World Championships and all that. So it’s very, very elite level, which is just amazing experience. The first thing worked out well, so You know, through that basically So you represented Oxford in that in that match?
Yeah, I was I rode for Oxford. I was the start of of of our trip and we were we won by a lot Which was just That This was an amazing experience in all the ways I mean, maybe I’ll come back to that as I can But that’s sort of how to define that, that chapter of my life. And then after grad school and when I said, I’m going to Stop rowing at that point, I’d I’d done everything except go to the Olympics. I didn’t want to just row and sort of timelines. And as far as when I was in the Olympic cycle, it wasn’t very conducive. Obviously, I just four years is doing that, which is not resistant There was wasn’t something I want to do. So I went out to the real world and got my ass kicked. And that’s sort of You know, what I’d say is the third sort of wilderness phase of my life. Frankly I don’t know how to Explain to, you know, people in their early twenties when they’re finishing college or grad school or whatever it is, when they’re coming out of the cocoon If you know what I mean, the like you’re 20 fucking suck. Like you’re at the bottom again. You really don’t know shit, no matter how smart you Are, like, you just don’t have the experience and the judgment And there’s all sorts of Examples of this sort of in the business world, someone from from your background where Basically you do just Need to be humbled I certainly did It was very useful in hindsight. And so the story there is, you know, I work for a big firm and in finance, you know, my background as a mathematician academically. So work for, you know, big. Hedge fund Which is interesting intellectually But frankly, pretty fucking boring. And then I also worked in a private equity venture capital for for a period of time and just to get some sort of broad experience. And you know, that was super interesting, but I was like, Oh my God, I’m like, I have a lot to learn, basically And then also in those periods, you know, there was sort of the process of sort of iterating towards my career, my current life and as far as, you know, figuring out exactly what I wanted to do in my career, throwing out what I thought that I was necessarily uniquely qualified to do But so where some of my relative strengths lie, which is super important? And I just sort of other aspects of life, like being my wife and figure out where going you live. You know, for me, that was effectively in my my late twenties That’s sort of what I sort of define as the third phase of my life And the fourth is where I am now I’m only 36 and so not not super old by any means, although my, my parents and my wife basically say that I’ve been like a 50 year old trapped in a younger man’s life You know? And so now, you know I’m sort various different labels that I think are appropriate. You know, whether it’s a husband, father of two kids, two little boys that you know, the most important thing in my life, you know, but also leading leading a company and investment company to which is slightly different than leading a quote unquote normal company So, you know, you know, investor and and we’re very much in search of what we do about sort of the center of the hedge fund world and by design, we sort of even our business itself as a hub and spoke model So I’m at the at the center of that. So So those are Kind of where I am now and all the experiences that have before that have sort of sort of coalesced into all the things that that make me me So I want to go back to to one point on the the humbling experience. I think that’s interesting and relevant. And then and then spend a little time, if you would, talking about like, what is walleye capital, you know, you know, how are you different than other hedge funds?
I’d be curious about. But before that, if you think about in your twenties, you’re coming out. You’ve been uber successful at this point. And I mean, you’ve gone to Andover and Princeton and now Oxford, and you’re rowing at the national level, competing, you know, world championships And now you come into business when you say, kick your ass, go back at that and spend a little more time with that. If you what they work for civically was like the eye opening experience for you Well, that’s a couple of points. Number one, no one gives a shit, and I think that’s really important. That’s great It opens the door, right? It gets you to be realistic Like, Yes, absolutely Those experiences were Helpful. And yes, I was Sort of surrounded in a very Very privileged way, which initially appeared at the time. You know, that initially, like, oh, saying I have this brand association of being at those places, which is really what they are in a lot of ways. But, you know, also just having a network be exposed people, some of the most important people in my life were those that I met through through those experiences But then you get out in the real world and you know, you start to say, OK, instead of people giving me credit for my potential abilities, they’re going to start to Evaluate me on what I can do right now. So what’s the difference between kinetic and potential energy?
And also in a way in which you don’t necessarily think of? Because if you’re in an academic environment, you’ve got teachers, you’ve got parents, which are very much your cheerleaders and they’re rooting for you to do well, literally And so Yeah, yeah And then you get into the real world and people like, I fucking hate you do. Do you think you’re just like privilege asshole that went to all these good schools? Like, in a way, subconsciously they’re actually rooting for you to fail So if you aren’t super good, if you aren’t Super Competent, in some ways, you get less leeway. That’s not to say it’s like this is negative by any means, but just actually being totally realistic. And that’s sort of a big part Of who I am now. It’s just like Being real and objective and really evaluating things for what they Are and not telling yourself a story is a big part of that. And then so what I found, it’s like, OK It’s not about what have you done In your past? It’s about What can you do now? What can you do well for the environment? Yeah, sure. The fact that you might have been super successful in an athletic endeavor does speak to pride characteristics about discipline and work ethic and all that sort of stuff, but you still need to translate it into another area, which
can actually be helpful You know, I know lots of people with gold medals that frankly are pretty fucking useless The rest of their life because knows it And so does actually having a bit of an experience of doing that. You know, not fun. Not sort of painful, but like like anything like greatest enlightenment comes after peak suffering, and that’s true in sports. And so that’s why query, isn’t it?
And I think That’s, you know, it’s very much sort of true, true in life So so did you have a mentor when he got there or just found it was really like, you know, doggy dog So I do have a mentor He’s actually my son’s godfather now, who? He was also a 20 years older me who’s basically like my big brother and has sort of been a guiding voice of influence of, you know Basically saying all these things, which I didn’t even I believe at the time it’s like, OK Like you kind of need to go and get Your ass kicked for a couple of years and then you’ll you’ll start to figure out some stuff. I remember hearing that and not believing that But yeah, just having Someone to sort of provide Perspective on the way has been super helpful for me. And then over the years, I’ve Had other other mentors, even in my current business. You know, others are senior partners who’s much older and I, you know, very much has aspects of, you know, wisdom which are helpful. And I do think that’s really important I mean, one of the things that I’ve certainly found over the years going through various different phases of a business as far as the world is really hard to figure out on your own. Having partners or other people that you can talk to is really helpful, even if you are individually very impressive, very much more want to
do, you know, have have partners line along for the ride and to be able to come in each other as opposed to doing your own So that’s probably a good transition to a while. I may maybe spend some time talking about like what is while I capital, how are you different? And then what? I’d love you to use and tie those two themes together, which is, you know, you guys are in a high growth environment now you’re bringing on board How do you think about taking some of that young potential talent and turning it into kinetic I for you guys?
Yeah, sure. So, you know, I like to say a general like we’re a hedge fund, right?
So people have a lot of connotations around what that might mean, like, oh, you guys are evil I mean, first of all, I’d say we’re trying To be the non evil hedge fund. I don’t think those those are the concepts are synonymous, but It’s just structurally there’s only about TED Hedge funds in the world that are structured the way we are for various different reasons. one is just that in order to have our structure, we need a lot of energy, extremely competent and have a lot of trust from your investor group because of, you know, effectively how how Costco sort of shared across the group But our model is a distributed network It’s not like we focus on one particular area. It’s sound like they’re saying, Oh, we’re really great at picking tech stocks long and short or biotechs or something like that. We have all these different strategy pods. There’s actually about 100 And almost anything that You can do in public and in some cases, private markets. So we’ll have people that are, you know, focusing on one for equity and various different sectors all over the world. Well, I think doing quantitative strategies will have, you know, people doing, you know, various different forms of ops and strategies focused on trading all these weird dimensions early to fall and sort of higher or higher order characteristics and various different types of funding trends. As I said, there’s about 100 different across the group And stitching them all together Is extremely complex. But if done well, can, you know, can work extremely well. And there’s, as I said, there’s only about ten hedge funds that are structured like this, and they’re they’re the most successful hedge funds other So my role is is basically Sitting at the center of all that and very how to tie it together and have been a driving force, not the only running force, but if the driving force in sort of constructing that hub and spoke model over the past couple of years given given sort of the history of of of our firm And so the way You know, as I said, it’s it’s a distributed network we have We’re not trying To sit at the center and control what everyone is Is doing. We hire very competent people and then They largely run their own businesses and are given the freedom to to do that But at the same time, like that Center group as well, it needs to needs to think about stitching everything, everything together to make it work better And this is you asked about The analogies from from rolling to our business works. I mean, there’s There’s a ton, I think the most, most salient line from from rowing is it Sort of regards to creating a team and sort of stitching very complimentary people and and talents together is like Just the process of making a Boat in and of itself. So you know, the way what rowing works and every team that You’ve been on, there’s There’s a selection process Where like you’re literally sitting Down and it Fit better than the next guy, even Though he’s going to be on your team. Is that a very competitive in a productive way?
And the thing that’s so great about rowing is Not the only sport like this, but There’s no like storytelling, right? Like in some other sport, someone can say like, Yeah, you know I’m super good soccer player or basketball or in football like I’m the best ever in rowing. It’s just like, OK, sit down both I can score like it’s either going to be better or not or, you know, getting a seat race and then the seat races literally pull two boats together Is which two guys? And you see, if it went faster than in the Previous race, and this is very objective So there’s a whole process in Rowing about like just making the boat And and by that, you know, in Order to sort of be on the boat, especially as you go to higher levels. There’s just this This baseline Level of competency involved and sort of this sort of shared Shared desire and acceptance that, yeah, we’ve all been through suffering again, not not the only there in the world in which this applies, but what Rowing is certainly one of them where, you know, in order to, you know, be at the highest levels, you know, each person individually has to be very good At the same time I mean, there’s a reason why people use the analogy of like making the boat roll faster Like, you literally have to do that You have, you know, various different people that sit in the boat and you can’t just be doing your own, your own. Saying and especially if you really want to optimize it, you know, it’s it’s about getting on the same page and Very severe levels and also respecting that It’s not just that everyone is the same You can’t just take a Bunch of guys that are six, ten and big dumb animals that are ridiculously strong, but maybe don’t have a good feel for rhythm or things like that and put them in a boat and expect that that’s going to do as well The stroke, as I mentioned, that was sort of my seat as a slightly different role than the people in the middle of the boat at a slightly different role than people. Do you know about the boat? So just actually Saying, OK, there’s a baseline level of confidence that you Get into that type of organization, but then in the same Time, once you’re there, there’s no additional Selection. So then you really got to go back and be on the same page to to make it go faster. You know, there are there very much analogs to to that in our business, not necessarily Perfect analogs But sort of the concept of, you know, our business model, you know, we’re hiring senior people. We’re not really a training organization. We’re giving them a lot of trust. We start with an opening bit of trust. You know, I didn’t make it up that quote, but I think it’s a great quote where we trust that people are. That’s from Jim Collins, by the way. So don’t give it to me But, you know, just say you’re going to run your Business here and doing your own thing. But at the same time, there’s this notion of Why we’ve been successful in growing In our world in recent years is We’re not going out and Saying that the organization is is evil, right where we’re respected at the center for four, applying common sense of situations, not necessarily saying in order to be successful in the fight in the finance industry, you need to be in a time of time that is not respectful of people and developing people and sort of all the aspects that go into being, you know, having individuals that are very good at what They do and not Treating them like trading cards as well, which in our case and in some other businesses. one of the things that called the operators really don’t like is that for reasons that are outside of their control, all of a sudden there can be kind of arbitrary decisions about, you know, for whatever reason, they no longer have a job so that those are just some concepts that I Apply that to do very much go back to kind of throwing ideas. And I think again, the most salient one is there’s Baseline level of selection. And then You know, once you’re there is figuring out how we’re all in the same team.
Let’s just go really fucking fast Yeah, super, super interesting. If you go to let’s let’s pivot, send yourself and make your own leadership thoughts, if we could. If you if you think about like, maybe some of these critical lessons that you’ve learned that shaped the current phase of your life you’re in, I mean, you sort of alluded to some of this, you know, based on some of the rowing analogies. But I’d be interested if there’s something you think that’s like really topical top of mind for you, better some you’ve read or so you’ve been thinking about, you know, as you guys, you’re leading as a chief investment officer for a while I I guess sort of one of the things that I become more Cognizant of this is not by design is that To the extent I Have A superpower, it’s that I’m extremely disciplined without like trying to be disciplined. It just sort of seems natural to me You know, I can get into my daily routine if you want, but like, I eat the same thing every day. Very structure and what I do. Big believer in routines, you know, physically, I’m somewhat imposing. I can lift lots of crazy heavy weights and that’s just what’s interesting to me And I have lots of broad interests of our books. I mean, these are just things that I Do, and what I’ve learned over time is Like, that’s not necessarily normal And there is going back to rowing. This sort of idea like to be super successful in anything. You have to Trick yourself That that’s possible. Like saying you’re going to be really good at a sport is statistically irrational Saying that you’re going to be very successful. Business is statistically irrational or they’re going to have lots of money It’s just like if you just run the numbers and I’m saying this is a data person, like you said, No, I’m not, I’m going to conclude, that’s just nonsense. And yeah. And so what I remember from from rowing and What time was helpful, and I think there’s very much from a leadership perspective in Business is just almost saying like, guys, yeah, we’re going to do this, you know, we’re going to train. And then in the analog of businesses, we’re going to think about strategy We’re going to see better strategy, the tactics we’re going to, you know, think over the in the context of not just days or weeks, but months and sometimes year actually achieve what we What we want and just having an underlying level of like belief that you can do that and enthusiasm and optimism for that is is very helpful. And so I guess one of the things That I’ve just been thinking about recently, partly because I was that I devoured books and podcasts and heard lots of people talking about this is like, Oh yeah, that’s just something that Is just the concept of of optimism. I’m not like going out and saying I’m going to be inspiring Today, but just sort of a belief Of, yeah, like I I think we’re going to achieve X, Y and Z and optimistic about that. But it’s realistic because effectively, you know what you put In the training. I mean, when you show up on the Starting line and rowing, and I imagine that there’s Probably lots of analogs like this for you. It’s like if you know that you’ve put in years and years Of practice to get there Like you just. There’s this calmness, it’s like, yeah, I’m just I’m going to win The match, takes care of itself. It’s OK, you it And I think that there’s absolutely an analog for that in our world, especially in investing. It’s like there’s a lot of a lot of things that we can’t control In our world There’s there is short Term luck involved But if you have a good process across all the various different Areas of your business And you’ve been very diligent in putting that place over the years And The first principles themselves make make sense and you believe in what you’re doing and can Inspire other people to You know, follow what you’re doing and why. Like, it’s going to work and just, you know, all those Lessons together about, you know, being dedicated and being confident because of, you know, you know, that you put the work in. And for us, that’s been very helpful. And we, you know, a few years ago, five or six years ago, if you looked at where we were relative to where we are today, I don’t think it would have been a stretch to a lot of people to predict that. But you know, here we were. We very much thought that was that was possible. So I don’t know if that You know, that’s super, super interesting. I mean, what what would I think about, you know, because you’re right, the parallel for me, like with combat experience, is pretty similar seal teams. You hammer the fundamentals over and over again So when you get on the objective, you’ve got a lot of confidence that regardless of how the objective unfolds, you know, the basics of shooting me, communicate, communicate. You know, you’re going to be better than your adversary and that that Wednesday The second thing is, if you’re assuming you’re operating in a chaotic or complex, you know, conditions where there are a lot of variables that are moving or changing. The fact that the fundamentals are in place lowers that overall cognitive load and allows you sort of space and time to sort of assess the other opportunities or threats And and then be it’d be adaptive. Which to me was always the differentiator in a in a in a market. Because really, what equates to speed, right? If you’re faster than your adversary becomes? I’d be curious. Like, what does that parallel for you guys meeting about?
Like, so what part of the process was like, Hey, make sure your fundamentals are sound? And then and then, as you know, various factors or conditions are changing rapidly. How do you sort of get into your team? Yeah, it is very much the right parallel You know, our our business model is sort of predicated on the concept of dynamism being able to sort of pivot literally our exposures to areas that we think are going to be more profitable or interesting or really responding to the world It’s like a homogeneous blob in a positive sense And so, you know, the fundamentals that we have in place are, you know Do we have someone specific to our world? Do we have, you know, infrastructure that’s appropriate to be able to do that from a technology standpoint, from operational standpoint? Do we have risk management systems in place?
Do we have the right decision making process? We certainly Spent time over the years actually Moving away from Anything that resembles Management by committee because it’s just like slow and it Doesn’t add a lot of value in sort of a cover your ass thing So you know the reason I’m biased But but I love her business one, and I do think that as I said, that the most successful groups in our world is structured as in this platform concept is Have the fundamentals in place, literally have the Platform in place and then being able to respond and pivot as like, I don’t know, the analog to like Guys are shooting at you like you need to herd and fucking cannons because now guys are shooting at you from the right instead of the left. But you still need to have that, like, you know, grounded On the platform. That’s very much the way we operate So there are things that we do that we’re doing now that six months ago, I just I wouldn’t have thought Of but intervals throughout our process of identifying opportunities And it’s like, Yeah, that makes a lot of sense. Let’s let’s go and do that And we don’t have to like retrain Or pivot all These various different, highly specialized people because there’s a there’s a generalist aspect to me also to go in that category And so I do That’s why is are very bullish on our type of approach. And again, this isn’t something we invented. And in general, I think our industry is sort of moving more towards towards this concept of having a fewer number of firms that are more generalist in nature that can respond and pivot as opportunity sees itself in sort of very structural advantage, advantageous ways I know walleyes been you guys have been thinking a lot about culture recently and about values and principles, and I know I’d be curious, you know, if you want to share some of your your more recent thoughts about how you how you deliberately set a culture for your firm We’ve just in terms of headcount, we’ve kind of crossed that Tribal number that historically just Empirically pops Up as like, you know, past a certain point people units divide into into sub units. So, you know, we’re now about 170 People, not that huge by any means relative to the Scope of organizations, but 170, you know, very high performing people. And because we’re geographically distributed And give a sense where if you were two years ago, how big were you? About 100, about 100. So you almost doubled in in two years during a pandemic, no less Yeah. So there’s a lot of people we’ve hired that I’ve never met In-person one still feels feels weird to Me, so what we’ve been thinking about is like the so our friends that are around since 2005. And one of The sort of defining That there was literally Talked about when we started it It’s like we’re not going to hire high maintenance people. Well, trust me, there’s a lot of Hype is people in finance and It’s just not the viewers. It’s just not worth hiring someone Even if you know they might be able to make you a lot of money or a high performance if they’re if they’re high maintenance. And obviously, that’s somewhat subjective because I mean, it’s been from people, but you kind of know what you see it So. So that was a defining characteristic. But as we’ve grown, we’ve just noticed that it’s Sort of become harder for people to Understand like, OK, what are what are these guys about? Who are these white people? It’s like This Not small hedge fund that’s based in Minnesota. Like, who the hell is based in Minnesota? All the sort of aspects. So we actually recently took the time to write down some phrases that resonate with Us And intentionally did it in a way it’s like literally the first thing says is we hate our documents. Unfortunately, this sounds Like an H.R. document, but there’s Some, some momentary forgiveness, all of which is very true. So I remember we talked about it. I’d be remiss if I didn’t have at least one Thing in there about that involves Rawlings. one of them is like row in unison. Just kind of obvious thing, like being seen with your teammates if you want both to fly. But But the first thing in is statement is I asterix out certain parts of this, but It’s lets be fucking real And so you don’t attempt to fit A preconceived notion of what someone says you should be. Yeah, this one is really important That’s her first statement. And I do think in finance, it’s just the world In general Like just being objective About seeing things for what they are and stop trying to Put on a costume or tell a story. Again, just like in wrestling, you sit down and urge the number doesn’t lie. You win the race for you as a race that doesn’t lie and finance. The other day you make or lose money And so, you know, fortunately, we’re we’re in an industry where There is sort of an objective measuring stick. And what we’ve seen, what I’ve seen and you know, some of the other my other partners here seeing is just people The better that someone is at doing that They are, the more successful there there will be You know, other things that Just are important to us sort of around, though, like don’t Don’t have how many people, you know, be Real, you know, work together, you know, being able to At times go very, very Fast, but at times also just just have patience or that that balance, I think think is important. You talk a lot about the speed of iteration today, which is which is super important, but you can’t just be running around like anxious all the time and changing shit for for no reason So kind of finding that balance between the two other things that are sort of relevant or is this or talking about general concepts of just being humble, like remembering something no Matter what you do? There’s always someone better, whatever, whatever better might mean And then also being able to take responsibility, step up to the plate when you need to know things that are super important to us They are the last one that we sort of ended on. You know, this is a little bit more particular To to our business and how we’re structured, but Basically just longevity in our community And investment community, no matter. I think what you’re doing, whether you’re guessing in sort of the hedge fund world’s economy or, you know, public markets or private markets or venture capital is, it’s just the notion of consistency. And that’s somewhat of a mental thing where, you know, people that are taking huge swings and betting the farm are really the ones that last. So we do just like to sort of remind people that and there’s sort of macroscopic areas of sort of how they can manifest itself, as well as microscopic areas to them or the notion of a long term thinking Again, these are just. Concepts that resonate with us that I do think they Transcend Characteristics of individual people like we don’t want Everyone to copy what what someone else is doing actually. By design, we very much want sort of different sorts of skill sets, but these are pretty uniform across. You know When we intuitively have Been screening people to try and walk away and fit into, quote unquote, the wall way over the years, is there just some some threads that have come up?
So we’re very much thinking about how to Inculcate that into our environment because because yes, we want to continue growing to the extent to which we can do so in an enormously honest fashion. We want people to sort of understands what really matters to the, you know, the leaders of the firm, even if they’re not interacting with us as much on a day to day basis, just as we’ve grown out of necessity, that that’s harder and harder to do And thinking about to do that thoughtfully and in a genuine way, like just blasting out an email and saying, Hey, these are our values, you should read them and then it will be great. Like, that’s not Going to work. Yeah So, you know, that’s that’s certainly 11 area for a culture cultural development that I think is It’s super important in general to get broad statements. But financial businesses, investing businesses Obviously need to very much focus on Investing You know, how they effectively generate revenue for their, for their investors and for the firm As far as how those businesses actually operate as businesses, you know how they do things like even think about culture in some ways can be secondary Whereas in other industries, those are sort of the most important aspects. So we very much are trying to be more deliberate about thinking about both simultaneously Yeah, no. I love that. I love that you guys have always struck me as different. I mean, the fact just the fact that you’re in Minnesota and you’re sort of approach to the type of people you hire just does seem a bit unique compared to what I’ve seen and the more traditional financial hubs and firms and approaches. So, you know, it’s pretty remarkable. And I think that sort of speaks in your guys retention and you Know, when your growth over the years, which has been remarkable As you think about, you know, like over the last year of COVID, I’d be curious to see like what if what it’s been while capital’s approach to the pandemic, but from just a human capital management standpoint and then also like anything you’ve seen from a, you know, fundamentals of of your investing strategy I mean, I think it generally in like society, there are Actually a lot of benefits from COVID, not the Experience in and of itself, because it was, you know, terrible and also sorts various different ways But but arguably there could Be this sort of long run Benefit of people asking, like, why? Why don’t we do things this way? Like, Why do I sit in a car for two hours a day to commute into an office every day As well as sort of other types of analogs there?
And just the concept of what looks from a systems perspective, like a really high level systems perspective. I think a lot more people are thinking like, how are we structured, how we structured politically, you know, on a national level, on an international level, those types of conversations probably just did occur to people are in our world more of the Microscopic level in terms of, you know, our business because of this idea that we are distributed network, that we have a lot of people kind of doing their own things already and frankly are geographically dispersed I mean, we’re headquartered in Minnesota, which it turns out is not the center Of the hedge fund world And always have good offices all over the Place Literally in pods. There really wasn’t that disruptive to us. So what we did and what we still do is we say and this works because of the sort of that concept of like, we have super competent People that have already pre-qualified themselves to get into our boat, quote unquote That we said, you guys are adults, just figure out what you want to do when you want to come in the office, the offices open if you don’t come to the office or ship you a computer and like 20 monitors To your house Just you’re an adult, let us know and we trust that you’re sensible in that and we obviously can monitor for productivity and in our role Too, especially when you have people that are, you know, generating revenue, you can say like, OK, like how is that impacting what from what you’ve done historically Which is a big machine, right? That that works for us because just where we were business comprised of largely senior people where we’re not an apprenticeship organization, so I can understand why, you know, other other types of businesses You know, banks probably as most salient Example that you know, they’re training huge Portions of their workforce, and That’s very Difficult to do remotely Like this. Just you can’t do that. So, you know, I guess where I feel that for us is it hasn’t Really had an impact Overall. All things being equal. I just personally like seeing people in person. I think That’s helpful. I think that humans, you know, very much a wall to communicate In person and get more Out of an in-person meeting than the don’t. And so our offices across the country are sort of full to varying degrees, some very fulsome, not full at all. But certainly, I very much still enjoy seeing people, people in person So I kind of end up as like, I think, complete work at home almost for any organization. And that sounds very intentional from the start. I think that’s just idiotic I don’t think culture can be maintained long term, let alone develops through through Zoom. It just doesn’t make sense To me at the same time again, just saying to someone you like, I used to live in Boston, sitting in traffic in Boston is like way worse than Walking barefoot on glass at times And so I do that every day. Does that make sense? I don’t know. So I think our companies, just going back to what you’re saying is like, let’s just evaluate some of the why and how some of these questions and they are all just figuring out what that looks Like moving forward Which is which is very healthy I mean, is there a good match to what we talked about as far as, you know, being dynamic and doing things that that overall make sense and perhaps some of the artificial restraints that frankly existed because of industrial area society that was sort of developed long before some of the modern sort of technological age that we have came into being. So Yeah, I know I love that. I love that. I think you’re right. I think the pandemic has been, you know, almost a forcing function for those types of questions usually leads to like significant leaps and creativity innovation, which is great You’ve seen probably a number of cycles in your in your professional career at this point. You know, I’d be curious to get your perspective on what you consider to be the latest cycle or evolution and specifically what I hear a lot talking to people on that on the buy side, as is, you know, the retail investor and you know, these these Robinhood’s that they’re they’re fundamentally sort of altering the game. So my question is, is it is it it made? Is it a fundamental shift or do you think this is just sort of like a a fad?
I don’t know and someone I don’t mean just able to keep it take a cop out answer, but Partly know we don’t. We don’t know opine I don’t know opine on sort of these these broad themes because I could see it happening You know, both ways You know, the retail. This whole concept Of democratization of access to the markets, I think, is is ludicrous It hasn’t been that difficult in order to For for individuals even going back to, you know, certainly the nineties to get access to trading stocks. And just sort of the hype and mania around the internet bubble in the late nineties When it’s real to say that People are sort of suffering from from access and What some of the apps Have done Recently is they’ve just obviously hated The costs of trading I can tell you, just based on the bids for the Order flow from these, these retail brokerages, that you’re Still Losing money, you’re just not not seeing It. So there is this sense, a charlatan nature to the whole business model, but it’s really no different. I do think there are some some differences now Than maybe in the past, you the biggest one just as relates to Availability of capital And just how some of the structures for you, particularly call options, are being positioned to individuals. And there’s effectively people are saying You know, I’m going to because I don’t really care if I lose money and because it’s kind of fun So it was like gamified Well, yeah, I mean, it’s absolutely gamified. And there’s there’s just I don’t think that’s contentious at all. I think that’s actually one of the things that’s celebrated about The whole business model. I mean, you have fucking confetti when you make a trade. OK. But I am not trying to be overly philosophical about it, but it’s like there’s a reason why like, you want bankers and doctors to be boring, like, this is just not an exciting part of the world You want competency and consistency and you don’t want, you know, confetti. So, yeah, I but I don’t necessarily think this is a new phenomenon in society. To what extent Is does it lead to structural change in the markets?
I don’t know. I can’t say. The one thing that is definitely new is because of technology. I mean, you’ve talked about this in the book, but sort of the ability to network now because of Tech, which is not it is to just directly to enable coordination I mean, like humans, main thing in the animal kingdom is that we can coordinate, right? And so now you can have forums by which you can have mass coordination of of individuals. Now everyone that looks at that says, like, yeah, that’s that’s collusion Of course, that’s collusion. Like, that’s not really saying it’s illegal. But but realistically, yeah, like you’ve got, you know, how many thousands or tens of thousands or 1,000,000 people all doing the same thing, coordinating our activities because of technology that will have an impact That’s not to say it’s going to get out loud, but I just don’t think that’s even a contentious statement. And so I do think that Professionals like us, like again This is not saying this is good or bad Or right or wrong or anything, but just being cognizant That that can happen. And objectively, if I’m a retail investors Or the hive mind or retail investors and I see a stock with high short interest and you have an understanding for Essentially how the game works. Of course, they’re going to play that game and say, Yeah, I’m going to squeeze the hell out of some hedge fund. That’s not being cognizant of that. It’s kind of like, OK, if you didn’t lock your car in a bad part of the town and someone comes in and, you know, breaks breaks into it, like, whose fault is that obviously that, you know, that’s just the reality of the game that we’re in. So. So I do think, I guess to Summarize, because of the technology and some of the mechanisms which are more readily accessible That’s certainly different. Is that systemically different in terms of impact on the overall market? I’m not sure I’d go that far, but just the General sort of driving force behind, you know, people wanting to participate and, you know, getting a thrill out of sort of, again, not just a negative or positive. They saw it as sort of the negative connotation, but to me, that was just sort of the the idea of Gambling that that’s not new at all. Yeah So yeah, if you think about, you know, some of your your notes today at the firm and the decisions they’re making, how do you coach somebody from the center who’s going through a draw in their own business? How do you help them get out of that chair?
As I said, I’m a fortunately, unfortunately A pretty big math nerd historically And just the general. I just can’t even begin To explain how much I encourage people to have baseline understanding of statistics So what I do in those situations is Say, OK Why are we here? Why are you here? Is this because you did something really dumb? Or is it just That this is a natural evolution of of the business that we’re in? It’s like the You know, the quote from Godfather to like this is the business we’ve chosen in finance. If you are right, 55% of the time on a daily basis, you’re printing money over the long period, but that feels like you’re wrong half the time Yeah, there’s a sort of a psychological toughness that you need to have. And so I I do think for whatever reason, I just it’s a being Objective of being able to remind people that, yes, these things happen. You know, let’s let’s understand why. Let’s understand whether something’s changed And really sort of assessing is that is the process Itself broken? You know, our our business model and the way I think about where it is very, very process driven. I do have a bad process Or is it just that basis, a randomness? This is this is not a good period for. For what You’re doing, that’s not to say we’re Patting people on the back and saying like, Oh, it’s OK, like, you’ll be fine because it sucks But at the same time, just being objective about it again, going Back to the notion of like what is real and removing some of the human psychological biases And that’s more in the sense Of people that run fundamental strategies where they have discretion than in what they’re doing. But that’s not to say that even for someone running a content strategy, which is very rules based, that the ones that have had some of those same psychological pressures because at the end of the day, humans are the ones that are designing quantitative algorithms But just again, applying common sense being objective You know, looking at sort of statistical distributions and having an appreciation for what can happen. You don’t freak out and when something inherently goes wrong because it is And because I said that to sit at the center and because of our business model, I said, we have 100 strategies, you know, something always sucks So it’s like I’m constantly in That world where it’s like, Yeah, I’m telling you, like, there’s always something that’s not working and Just having a bit of perspective there to to pass down to people that are kind of, you know, one that monitors points of thing We’ll going back to you just as we sort of wrap this up here. These are we talked about your strengths. I love to know like, you know, what are some of those like, you know, you see perceived weaknesses for yourself and how you how do you approach how you approach those in life?
Sure. Well, you know, I’ve I’ve got a bunch and I don’t. one of the things I don’t shy Away from it. Sometimes people affectionately call me a cyborg because Externally, it might seem that way. But I actually very much talk about You know, hear your things and really sort of working On a pretty salient example. That’s just it’s somewhat funny, but But I very actively mention this to people to sort of humanize myself is I really pass out at the sight of blood or the discussion Of blood. I mean, that’s it’s actually a medical thing. It’s hyperactive Vagal nerve You know, everyone has is to some extent, you know They get a little Queasy. In my case, it’s like really fucking embarrassing. So I passed out every single time I’ve ever given blood. You know, there’s there is one dinner, a work dinner, whereas actually, I hadn’t really eaten that much. And so my blood sugar was little low and I was actually telling it was A potential investor and I was Telling them about this. I was like, Oh my God. By explaining that I have this issue, I’ve actually caused this issue to manifest itself. So I actually passed out at dinner, hit my head in the floor as the ambulance came and people were like, What the hell is wrong with you?
The next day I walked to the office and people are like, Are you OK? Like, what the hell? And that’s like, Yeah, you know, it happens. And the last one, again, is that it’s just funny. But again, it’s like, So I was sitting on a plane on pre-COVID I travel a lot And it was like one of those flights where I was rushing, you know, got like I moved when I just got a middle seat It sucked, whatever. I hate sitting in aisle seats. I’m not. I’m a small dude And I was like, This just sucks. I’m going to watch some mindless movie to get Through the next two and a half hours, and then I’m going to be home and see my Wife. So I turn on this movie and it was, is John Wick two, which I want to think about is like, OK, action movie, whatever. But my God, like within 30 seconds, they’re like stabbing people in the Vatican, just white everywhere And I was like, Holy shit, I’m going to pass the bill. And the play’s about to take off. This is a serious problem And I did actually it. It was a bit of a problem But I tell people about it because I a it’s kind of funny, but also it’s just just important. Like humility is a strength and, you know, like making fun of yourself as a drank, particularly if in some other areas It might seem like Slightly abnormal. Like, I Get up at 4:30 every day and do the same thing every day. Like I said, that’s just not normal being Like, Yeah, well, the same time, like you can look at John Wick and not pass out and I can’t. So yeah That’s that’s a good one It’s really it’s really I love that those. If you were going to leave sort of the listeners today of like some something that sort of been focused on recently, is there something like leadership wise that’s really you found impactful?
What would that be like? Where would you sort of point someone to if they’re looking for their own personal professional development? Yeah So one of the things I’ve been thinking about recently and the sounds, I put it in context. So generally speaking, like my Priorities are in no particular order, but in four main areas, there’s sort of myself from the intellectual and physical sense my family, my business and the world and the percentages that a time that I spent on all those those differ in their so obvious cases In each one The last category is the world at large, frankly, something I hadn’t spent A lot of time thinking about until recently. Like our system in and of itself, policy in and of itself, and have been spending more time just to. King, about that. I mean, I do police have a pretty decent understanding of history I was very it’s not a chore to go and read history books or first principle sources and have done that for years And that is something that I You know, encouraging within myself, encourage you in the sort of other people that are, you know, successful in achieving whatever it is they want to do have sort of achieved some level of influence and responsibility, especially at a younger age To actually just think about ways to get involved in a More impactful Way in policy, not in sort of a superficial I’m going to do some microscopic charity to make myself feel good enough not to judge any wrong with that But actually thinking realistically about policy because I do Think more people like me need to Think about that and Figure out ways to get involved. I don’t have an answer to that But that is one area That I’m certainly thinking about and And I encourage other other leaders to think about, as well as is not just in your own backyard, in your own world and for you on how to sort of optimize your business. But there’s some pretty serious issues in the world and in actually thinking about ways to ways to get involved More broadly speaking, I do think is very important. And again, particularly at those that are have achieved success and are in their thirties, it’s sort of our generation that is going to be left with the really crazy shit house So that that is one thing that I was just I was just think of it, I’ve been thinking about it how to apply. Some of the the principles that I have personally, you know, have had some success in developing a business context How does that Or to what extent Is that relevant as much in an in a broader sense? Or what are what are some effective ways to think more about policy involvement?
Other areas are like, Where are you? What are your sources of content for this? Like, is there civic books or like blogs?
So yeah, I first of all, I don’t do social media at all. And when I say that, like I, I haven’t used Facebook And Twitter in ten years, but really?
And so it’s it’s the ways that I consume material Ah, well, I I go For a walk For 45 minutes every single morning before I work out and I was not. He works on three X speed So if you do that consistently every day you can read a lot of material And so that’s it’s a combination of what I It’s just interesting to me from, you know Audio Books, typically biographies or descriptions, a certain area of history. I mean, the first principle sources like, you know Go back and read Milton Friedman’s original Stuff from the sixties It’s super interesting as well as podcasts I was kind of why I did this. I do listen to a lot of podcast, very fairly eclectic. I like the interviews. You know, I like interviews with people Just having them actually in long format, actually talking about themselves a little bit and their world. And that’s sort of super interesting to me. It’s not sort of consuming someone’s Twitter feed or or anything like that. It’s it’s it’s just I don’t personally find that sort of very effective So, you know, I just encourage people just to Start and then meandered, you know, read five books at a time. And if you’re or listen to a bunch of podcasts at a time and Just just do what’s interesting, like what’s Interesting to you and not what anyone says, but but do consume because there’s a lot of there’s a lot of information you need to actually have your own triage process for what’s actually going to be informative And helpful. And also reading outside of the scope of whatever it is that you that you do like I don’t just go around and read about business people or finance people or sports people, all sort of all sorts of different things and look for sort connections across across them. And there are, I think, some kind of universal personal truth And the closer you can get to first principles, by the way, the the better Like actually reading the the principal sources, as I said, like if you care about Called libertarian economics, I go and read, Don’t Treatment, don’t don’t read some textbook. Those rain in the nineties or even last year actually go and read the first verses of and listen to people talking in their own voice again, for sources I think is so interesting So good. Well, thanks so much for your time today has been. I’m super appreciative and I know I know the audiences.
Yeah, cool. Well, thanks, guys one more thing before we finish the episode across this podcast is produced by the team at Truth Work Media, I want to make this the best leadership podcast available, so I would love to get your feedback. Our goal this season is to have authentic conversations with special operators, business leaders and thought leaders on the topics of leadership and agility. If you have any feedback, suggested topics or leaders that you want to hear from, please email me at firstname.lastname@example.org. If you found this episode interesting. Please share it with a friend. Drop us a rating until next time Thank you for joining