Matt Wolf

15 plus years or so uh and i wanted to share a little bit about that because i think it's very relevant especially as we look at you know private equity operators uh middle market large companies small companies doesn't matter just i found these numbers to be fascinating and i wanted to share them and so for example we look at um the top 50 and it doesn't really matter what we look at look the top 50 bottom 50 of the s p 500 excluding financials and real estate

So the top 50 of the S&P 500, excluding financials and real estate, the number of total suppliers those companies have now compared to 2009 has almost tripled. The number of customers those companies have now, compared to 2009, has increased over five times. And on the bottom end of the bottom 50 S&P 500, it's increases of four times and nine times really for number of customers.

So the top 50 of the S&P 500, excluding financials and real estate, the number of total suppliers those companies have now compared to 2009 has almost tripled. The number of customers those companies have now, compared to 2009, has increased over five times. And on the bottom end of the bottom 50 S&P 500, it's increases of four times and nine times really for number of customers.

And what that tells me, again, just by looking at the sort of subset of the top and bottom of the S&P 500, excluding financials and real estate, is just this explosion in the complexity of managing businesses that sort of evolved during the era of zero interest rates and now

And what that tells me, again, just by looking at the sort of subset of the top and bottom of the S&P 500, excluding financials and real estate, is just this explosion in the complexity of managing businesses that sort of evolved during the era of zero interest rates and now

you know, we're all kind of coming to terms with either as advisors or investors or as management teams of how do we actually navigate these incredibly complex business environments now that the cost of capital is higher? How do we do that in a way that makes returns? And, you know, we talk about that and we've talked about it on the podcast. I think people

you know, we're all kind of coming to terms with either as advisors or investors or as management teams of how do we actually navigate these incredibly complex business environments now that the cost of capital is higher? How do we do that in a way that makes returns? And, you know, we talk about that and we've talked about it on the podcast. I think people

Some people, at least leaders, sort of intuitively understand this. But just to see this absolute explosion in the number of suppliers and customers that companies are working with now compared to 2005, again, as much as a nine times increase, depending on how you want to slice it. I think really kind of drives home this incredibly complex operating environment that we're all working to navigate.

Some people, at least leaders, sort of intuitively understand this. But just to see this absolute explosion in the number of suppliers and customers that companies are working with now compared to 2005, again, as much as a nine times increase, depending on how you want to slice it. I think really kind of drives home this incredibly complex operating environment that we're all working to navigate.

And that's what we're watching.

And that's what we're watching.

Yeah, I mean, it's fascinating. I completely agree. And the other element of this is now business decisions change. We're seeing clients, we're seeing operating teams, operating partners, management executives more closely manage those solutions, their technology stack, their vendor relationships. Can we trim the number of vendors, the number of solutions? How does that streamline our operations?

Yeah, I mean, it's fascinating. I completely agree. And the other element of this is now business decisions change. We're seeing clients, we're seeing operating teams, operating partners, management executives more closely manage those solutions, their technology stack, their vendor relationships. Can we trim the number of vendors, the number of solutions? How does that streamline our operations?

But there's so many second and third order or second and third sort of derivative almost decisions that are impacts that go along with that, right? So, okay, if we reduce the number of vendors we're using in our technology stack, that probably has positive implications for our risk management, internal audit, our risk management framework, right? We're, you know, we're

But there's so many second and third order or second and third sort of derivative almost decisions that are impacts that go along with that, right? So, okay, if we reduce the number of vendors we're using in our technology stack, that probably has positive implications for our risk management, internal audit, our risk management framework, right? We're, you know, we're

fewer entrance points to kind of manage. Maybe on the supply side, hey, we're reducing our number of vendors, reducing number of SKUs, but what if one of them goes bankrupt or one of them has supply issues? Where do we want to pay for redundancies? Where do we want to accept additional risk and have additional point solutions and have additional suppliers? What does that look like?

fewer entrance points to kind of manage. Maybe on the supply side, hey, we're reducing our number of vendors, reducing number of SKUs, but what if one of them goes bankrupt or one of them has supply issues? Where do we want to pay for redundancies? Where do we want to accept additional risk and have additional point solutions and have additional suppliers? What does that look like?

It's made that analysis more complex. And then on the customer side, I think everybody would say, every operator, every CEO, every leader would say, oh, yeah, we have some difficult customers. We have some difficult clients that just don't make sense for us. They're off strategy. We really shouldn't devote resources there. But you know, push comes to shove.

It's made that analysis more complex. And then on the customer side, I think everybody would say, every operator, every CEO, every leader would say, oh, yeah, we have some difficult customers. We have some difficult clients that just don't make sense for us. They're off strategy. We really shouldn't devote resources there. But you know, push comes to shove.

And if the goal is to keep dollars coming in the door, it takes a special sort of culture and leadership and frankly, an investment to say, no, despite the potential short-term pain, we are exiting this segment. We are exiting this business. We are, you know, separating from these clients. It's a very difficult thing to execute on, even if we, we know and we, um, we view it.