Stuart Miller
speaker
308 appearances
1 recordings
1 series
first heard Feb 2025
last heard Feb 2025
Stuart Miller’s voice in public audio — every appearance, attributed to the second.
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It's related to the idea in the investment world, but maybe it applies to founders too. Like the main asset is your future decisions.
And so when you're moving from the container you were in before and the way reality was defined into this new ambiguous setting, if in the transition, you are now sitting next to somebody, I use the example in the piece of often younger hedge fund managers will hire a more seasoned CFO, but the CFO is taking responsibility
risk that almost by definition, if they're a CFO and grew up in the accounting profession, is more risk than they actually feel comfortable taking. And so their risk aversion and slight skepticism about you, the portfolio manager, can enter your confidence when your fund is down 10%. You're less
senior and your own chip stack is smaller and you're sitting there and the guy sitting next to you in his body language and in his questions is conveying anxiety and fear, those are very contagious emotions. You want to be very pristine, particularly early on as you're holding the ambiguity and trying to assert reality about the
the energy of the people around you and whether they believe in you, because you need some skepticism in there. Of course, you don't want to go off a cliff because you're sizing something too big or in some other way, you haven't taken input, but you're managing your own psychology. And I think one of the best ways to do that is manage the inputs. And so it could mean turning down an investor
where the check size is really good, but they're actually kind of an asshole and they're going to call you weekly. And they signed up for your liquidity terms, but they've never signed up for a fund with that liquidity term before. They actually like quarterly liquidity. And in all these ways, they're faster twitch than you are. And you sold them on your strategy.
The expectations you have with your team, with your investors have to be so pristine and so well managed or you don't protect the climate and the skull.
Yeah, it plays a big role, of course. And it's back to the source point. You want them senior enough that you find them credible and they find you credible and you've had enough time together. But then, depending on the construct, you hopefully want them game for, at the end of the day, being on your ship.
And the challenge becomes if actually they wanted to do their own thing or actually they think they should be the PM or they should be co-PM or all of those. You're capturing somebody who's extremely talented on their path. Do they believe in you? And... Do they agree with how you price them? You don't want somebody who they think they should have 40%, you gave them 10%.
It's just in the water all the time. And if they wanted 40%, actually, maybe they actually wanted 50%. And If you could hold it for a couple of years and then they go off and do their own thing, that's great. But that can screw up the energy of the system.
It's also like why in those settings, if your partner has experienced failure in some form or done it themselves and knows how hard it is, is pricing it correctly. Because if they think it's easy, then they should fucking go do it. Yeah. And if they think it's too hard, they're probably not going to join you. So it has to be like right in that sweet spot.
And I'm thinking this in personality terms, depending on how you're wired, how they're wired. You need to understand how those two are going to go together just like it would in a marriage. Because if they're truly your business partner, I think David Senra picked out that amazing Zell quote. A partner is somebody who shares the same level of risk that you do. I thought that was so profound.
That was such a good catch-up. That is a partner. You're in this new thing. And if it goes down, it has real-world implications for your family, for where your kids are going to go to school, where you're going to live. And yet, I think most of the time...
those systems benefit from at the end of the day, the buck stops one person and they are going to make a call and everybody needs to be okay with that.
Yeah. And having it be dynamic over time, of course, to accommodate the shifting system. There's a quant fund I'm obsessed with, The Culture, and I probably shouldn't get into the specifics of it, but they have a very dynamic comp system in a way that gives rise to the culture. And so I think there are ways to be creative about that.
how equity changes over time, how carry changes over time that allows for meritocracy and for change. And people tend to do the same self-expression hitting the comp system and how value will change over time, I think, is a fertile area as you're setting up something new.
It's the what's going on here. It's what's going on here in this new setup. And can I or anybody else describe it in a way that's useful to you, truly understanding the structure of what's going on here?
If you have humility about it and realize the things you can't see, then if you read the right thing or hear the right person talking at the exact right moment, there's such leverage to that moment. Waitzkin has this language of firewalking somebody else's mistakes. Can you burn in someone else's mistakes or not?
And it's really hard to do because it's obviously not visceral to you the way it was to them. But are there ways to inform your own compass in this whatever period, whatever rite of passage you're going through that makes you better at it or somehow improves your ability to do it? I just think there's extra leverage around those.
Well, a huge percentage of them are source related. Knowing when you are sourced and when you're not is such a valuable thing. So the first business I started with a professor of mine out of Yale, Richard Medley, he was sourced on that, but I was running the business. He wasn't really a business guy. I was a beneficiary of his poor judgment about people, which extended to me.
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