Private Equity Spotlight: Overcoming Adversity with Andrew Joy of Hidden Harbor

[00:00:00] Sean Mooney: Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and real time trends. In this episode, we have a incredibly compelling conversation with Andrew Joy, partner with Hidden Harper Capital Partners. This episode is brought to you today by BluWave.

[00:00:29] I'm Sean Mooney, BluWave's founder and CEO. BluWave is the go to expert of those with expertise. BluWave connects proactive business builders, including more than 500 of the world's leading private equity firms and thousands of leading companies to the very best professional service providers, independent consultants, and interim executives for their critical variable on point and on time business needs.

[00:00:50] Enjoy.

[00:00:57] So I'm Really, really excited to be here with Andrew Joy with Hidden Harbor. Andrew is someone that we've had the privilege of working with for a long time. And and I say privilege meaning like they're one of the groups that really kind of sees PE in slow motion, I think. Gets it right. And one of the things I'm actually most excited.

[00:01:17] Usually, we'll talk about kind of people's path to private equity. And it's always this very kind of interesting tale, no matter who we speak to. But I think some of, our friends, our colleagues, our clients, their stories are a little more interesting and compelling and have more life lessons than others.

[00:01:35] And Andrew, at the risk of maybe, putting that, that on you, I'd say you have one of these stories that is, you know, in some ways should be a at least a lifetime movie, but probably even a bigger one. so Thank you for joining.

[00:01:48] Andrew Joy: Yeah, no, excited to excited to be here.

[00:01:51] Excited to talk to you.

[00:01:52] Sean Mooney: So maybe we'll jump in Andrew. I'd love to hear kind of your story. And it's one that I think has a lot of, kind of takeaways and lessons in life and, demonstrations of tenacity and overcoming. So I'll for sure pass the mic here.

[00:02:09] Andrew Joy: And when I, when I interview executives, I always start with like, tell me about your parents, right? Cause I think that. That really shapes a lot of, how a person grew up and the experiences they had. And so I'll start with my parents.

[00:02:27] Which I think shapes the rest of my story. So, neither of my parents graduated from college. My dad didn't graduate from high school and they were together since, really high school, but they were career long criminals. My dad was.

[00:02:43] A drug dealer and not the type of drug dealer that, is on the corner, slinging nickels and dimes, but moving significant weight, in the 70s, in the 80s. So there was this big dichotomy of growing up, early on where. Literally living multiple houses, raceboats, spurt drums, from a unique lifestyle.

[00:03:11] And then the other side of the dichotomy is, where the feds arrested my dad for possession and intent to distribute 15, 000 pounds. And so, that really started the downfall of, the other side of the life. And so we've very, two very different lives.

[00:03:35] From an outside in perspective when I was young, but, at its core, it was nothing but chaos, whether we had, money or not, both my parents were, alcoholics, addicted to drugs, went through the divorce, just bounced around. just a whole bunch. And so, there's, there's tons of stories that you can get into when you go through that, as a child and, the trauma that you experience, but I'd say the most formidable happened when I was, I guess, 14 years old.

[00:04:17] So, in the context of, not a lot of parental oversight, kind of just running the streets, doing what I want, in and out of the house, staying out all night, that type of stuff. buT I was, I was shot with the 12 gauge shotgun at at close range, about five, seven feet away.

[00:04:41] And really blew my leg, almost off, you know, it was hanging by, some tendons, some muscle, a little bit of skin. And the story there is, it was with my buddy. Who is similarly young and wanted to stop by his buddy's house. And so we go over there and as soon as we go in, guns pulled on me and pointed at me and I turned to run and he pulled the trigger and hit me in the back of the leg and came out the front.

[00:05:14] The kid whose gun it was was killed about six months after I was shot. And so it didn't get, the full story of how it all happened, but, it was really the pivotal point, in my life, not just from a growing up quick and a reflection perspective, there's the reflection of in the moment.

[00:05:43] And what I mean by that is, it shot out my femoral artery, bleeding to death you know, fading out, is this it right? Is this going to be my life and you really think about not what you've done in my experience, but what you didn't do, what you didn't get to experience as you're.

[00:06:06] As you're bleeding out and dying, especially at that age. And so, went from there, was airlifted to a trauma center and spent months and months in a hospital, battling infection. 25 surgeries just kind of, you name it. I really couldn't walk for years after getting shot.

[00:06:33] And the other part of why, , I say it's pivotal and probably one of the best things that ever happened to me is the best thing that ever happened to me is it just forced me to say. There's only one asset I have left, meaning, , I was going to go into the Marines or the military or do some labor job, like that's, that's out the window.

[00:07:01] The only asset I have left is, , now I have to use my brain. anD so really started to focus on school a little bit. I think back then it was like I'm focusing on school a lot, but the bar is different, right? But again, parents weren't educated. So and I had to homeschool myself so couldn't go to school because I couldn't walk still doing surgeries.

[00:07:30] And so homeschool myself took about five years to finish high school between, , hospital homebound program and homeschooling myself. And then I did some homebound program. Classes at local private school that I worked for the church to help pay the tuition. Just really buckled down to do everything I could to finish high school in those circumstances.

[00:07:56] I took the at that point I was in a body cast literally from, , my chest all the way down to my ankles. And did okay. And through all this, , the guiding light or the beacon that was at least helping me see of what could be was my older sister. Like, she dealt with trauma on the home front through, , studying, reading, just locking herself in the room and that was her outlet.

[00:08:27] Was was education, so, get, around to senior year and I'm like, my sister's name is Michelle, you know, Michelle, what's next? Like, well, now you got to do this thing called an application and you have to you have to apply to, schools and, , take the standardized tests and okay, Michelle, where should I apply?

[00:08:49] And, well, there's some good schools in the south, there's one called Emory and kind of good business school. So, I didn't know what Emory was. I didn't know what, any of the path really was, but, you Really relied on my sister. Luckily got full scholarship financial aid to to Emory up in Atlanta and was a wonderful experience.

[00:09:12] I went to college. Not to have fun, not to party, not to drink, but I was there on a mission and the mission was make something happen so I don't have to go back to where I came from. So that's a lot, , I covered a lot there in a short amount of time. , but A lot of volatility and a lot of things happening, but maybe I'll pause there and

[00:09:41] Sean Mooney: it's it's one of the more amazing stories.

[00:09:43] I think I've heard of kind of being in as much not only physical pain is possible, but also just kind of, probably holistic pain, and then rising up and finding a way and digging deep and, particularly times like now, I think, that your story kind of puts things, at least for me personally, into perspective in terms of what's big and what's not and I agree. Yeah, I'd be curious. , like, how did you, how did you make that mind shift? when you're kind of you're sitting there, going through probably, I don't even know if you had the experience where you're looking at yourself, from above, as you hear some of those things.

[00:10:25] But now you're saying I can't walk. I can't go to school. I can't do anything. How did you dig yourself out and kind of get going?

[00:10:33] Andrew Joy: I would, so I didn't get the out of body experience from above. But what I would say is if I think back to that, those few minutes.

[00:10:45] When I think of the definition of peace and like comfort, before, my heart stopped before blood out before I got brought back to life. And there's just this overwhelming sense of comfort and peace, that comes over you. So wasn't looking at myself from above, but, whatever happens after we leave here, at least you leave here with a.

[00:11:12] Pretty similar experience with like a good sense of of peace, but I'd like to say that, to your point on kind of pull yourself up by your bootstraps, I'd like to say you know, it happened right away. And I just all of a sudden, I just got super disciplined. But I think it was, it was more likely just a series of.

[00:11:37] Series of small wins. Series of accomplishments that started to build confidence I never thought of myself as being smart or intelligent. But, when I had to, teach myself algebra and pre calculus and the teachers that check your work when you're doing homeschool, not teachers, but administrators are like, wow, like you, you taught yourself this? and so there's a set of like small confidence boosters over time that really, then, , even parlayed into emory, which I felt very out of place at 1st, , I remember, , 1st day on campus. Some guy asked me, it's like, what happened? Your leg, , I get up in his face and I'm like, if you, you want to fight, like, and people are looking at me, like, I'm like, oh, that's not how things get solved here.

[00:12:42] You know, I'm in a different I'm in a different environment, yeah. Yeah. Yeah. And so that I feel very out of place, very, but that turned into competitiveness to like in this, this chip that's been on my shoulder to kind of prove and so, again, I was, , at Emory for a reason.

[00:13:05] And , my first semester I got all A's and I was like, second semester got all A's. And I was like, well, maybe I can do this. And I ended up graduating with. A 4. 0, not a single a minus number one in my class. And so I look at that and, all the way back, it was just a series of just like. I mean, one foot in front of the other at a time, build the confidence, build a skill set.

[00:13:36] Still , a philosophy I have, , throughout my career is just, You're learning something new every day, , if you don't need to know where you're headed, but as long as you're enjoying what you're doing, you're learning things, you feel like you're contributing, you don't need to know where you're going, but you are bettering yourself and it'll end up, , somewhere positive for you.

[00:14:00] Sean Mooney: I mean, it's just, you hear that and 1, it's like we said, it just puts so much things into perspective, but also this philosophy that's transferable. It's like, just little victories 1 step at a time. You don't have to make it. I'm sure you didn't start off with how do I become the valedictorian of memory, but, , that's why it's just like, little bits at a time and take a step.

[00:14:24] Andrew Joy: All it is, is just taking the step, , it's one foot in front of the other and the top of the mountain isn't even visible for most people at the time that they start out and, my story is somewhat unique, but it's somewhat isn't right, like, unfortunately, there's so many instances of children, kids in our society that, they look around and their only way out is, , playing ball, selling drugs or joining a gang.

[00:14:58] There's no, role models to show them that, hey, , there's this other way that if you, , really work at it, it can be achievable. But but it just starts, , kind of. One foot in front of the other.

[00:15:16] Sean Mooney: And you kind of mentioned this a little bit, but did you have, , someone, whether it is with, sister sounds like she played a really helpful role where there's others that kind of gave you that, like, you can take that first step or did, or was it combination of maybe some help, but also just like eventually having this mind shift

[00:15:35] Andrew Joy: I would love to see, you know, it wasn't, even after I got shot, it's not like all the other problems went away, and so, my mom's, experiencing psychosis, literally drinking herself to death. My dad's You know, in jail for six months for something stupid, contempt of court and I'm bouncing around still so it was still very tough period and contributed to, it being a tough period, but no, I think it was just, , Hey, like I said, , when you're sitting there saying, and. bleeding out saying, hey, for me. It wasn't. Oh, your life's flashing before your eyes. It's a, my life's ending and this is it. Like, this is. This is all I got to do. And so I think that was the part of it that's like, , I'm not sure where this will line up, but it's my only, it's my only way from here to get to there and where there is being better than here.

[00:16:52] And so, , I'm gonna do everything I can to kind of focus on the controllables, right? It is just in life. There's. things that are totally out of your control, , where you were born, what color your skin is, , what resources you had as a kid, , there's the part that's just random, right?

[00:17:15] There's the randomness of each day, whether you set your alarm at six o'clock or 601 can impact how your day ends up. And that's just pure randomness. And there's this part that you can affect the outcome, , it's the controllables. And so it was just, , well, all this other randomness and uncontrollables were happening.

[00:17:39] It's, this is the part that I can control. I'm not sure where it ends up or where it leads to, but I know that it'll improve the odds that it ends up. Somewhere better than where I am right now,

[00:17:55] Sean Mooney: and has this translated? I'd be curious as , this amazing experience where you've had this, this metamorphosis and this life changing event that could have still gone 2 ways.

[00:18:11] And it went up into the right is this kind of led to any kind of philosophies or mindsets and teams of like, even how you interact with your kids or the, business leaders within your portfolio companies in terms of how to, yeah, I think,

[00:18:26] Andrew Joy: I think totally. I mean, I'm. I'm just a piece of white trash that, like, , stumbled my way into a job that I'm overpaid and underqualified and, I'm no better than anybody else, regardless of what their job is.

[00:18:48] And so, I try and resonate really well or, , which is business owners and so I think it's been really, really helpful in my career, both from, my team as well as, business owners. As well as just, internally at, Cerberus and, , my other companies to just have that real world experience.

[00:19:18] Sean Mooney: Yeah, you see the world as it is versus maybe the way that so many of us try to kind of shape and mold into this ideal perspective of, it probably isn't, but trying to control that. And my life story is very different, in many ways, but even this things that you're saying about, I think anyone, whether you're in private equity or otherwise, it's this.

[00:19:37] Every day is a crossroad and you can go left or right, you can stop or you can turn around and there's a rock in front of you and so many people walk right up to him, they stop and they turn back or they just sit down. And, I mean, what you're portraying is, I think what all of us try to do, whether it's our kids or team members or, people in our lives or stakeholders, like, I think what you really demonstrated here is like just the power of taking that step. And if something gets in your way, it's easier sometimes to just stop. And, but it's a lot of time, it's harder and better to figure out a way to go around it, above it, below it, , et cetera.

[00:20:17] Andrew Joy: Yeah. And you don't need to know, , where it ends up just, and I'm a big believer in, are you doing the right thing?

[00:20:26] Does it feel like you're doing the right thing? Do you feel like you're getting better by doing this? Does it feel like you're learning? And you don't need to know where it all culminates, but it's like stochastic, right? As long as you're trending up into the right, there's going to be downs and there's going to be, stagnation, but over the longterm, just keep, keep pushing, man.

[00:20:56] Sean Mooney: Yeah, I mean, there's so much wisdom in that where it's just take that, , 1 more step forward. 1 more step forward. And yeah.

[00:21:05] Andrew Joy: You don't know how resilient you are until you have no other options. Yeah. Right? Like. , Humans are, very resilient, especially when you're backed against a wall and have no other options, then it's, pushing forward from there.

[00:21:25] Sean Mooney: And then it just changes your whole perspective. And what I still struggle with is, that idea of, always looking how far you need to go without really appreciating how far you've already come,

[00:21:38] Andrew Joy: That's one of the biggest things that. I struggle with , which affects, which is not good affects my home life and, it's like, I don't ever celebrate the wins, right. I don't ever say, wow, this is awesome. It's like, wow. What could I have done better, did I screw up, ? And so it's something I struggle with too.

[00:22:00] Sean Mooney: I think you're in really good company, particularly in, the P industry.

[00:22:04] I can, even at. BluWave here in a different vantage from where I operate before I have the same kind of challenges. Are and a head of office operations Libby. I just use, it's just great and touch this with humanity at lack. And I'm like, can you just remind me?

[00:22:19] Sometimes I got to give. People hugs and say, good job, because I just totally lack this ability and I try and it's not that I don't want to. It's just, it's just lost on me. And so that I can appreciate without having, , nearly the same set of experiences, but maybe a proclivity that might overlap in our Venn diagram a bit of just.

[00:22:40] Yeah, we've come so far. It's like, it's okay you can take a moment. So yeah, I think this is, thank you so much for, for sharing that story. It's an amazing story, but it's also I think a great set of resetting certainly my own perspective on things where, , even whether you're talking about, it's that one step at a time, but like, there's big things and they're small things, and, whether they're big or small, each of them present this great opportunity to kind of overcome.

[00:23:08] Andrew Joy: And , in the moment, they're never, things aren't as ever as good as they seem in the moment. And they're never as bad as they seem in the moment, ?

[00:23:18] The more important part is you just keep moving forward because, , ups and downs of life will happen. Yeah, that's

[00:23:27] Sean Mooney: that's that's well said. And maybe with that in mind, , I'd be curious. So, , you've had this , kind of amazing set of experiences, , some, , way below the ledger, some way above the ledger in terms of.

[00:23:43] Great things going and then no doubt that's impacted your worldview on things. And so I'd be curious as now a a private equity , investor where you're trying to build and create things for a whole host of people and with a whole. Post to people, how do you look at a company and you, and you say, , this is something that we can have an impact on and create value

[00:24:09] Andrew Joy: yeah, look, I think, I'll talk about hidden harbor here for a minute and kind of what. Our most important things we look at when we're looking at a business and then, , how that relates to personal experience, but, , there's, there's certain things that are most important to us and really that's, what is the company's market position?

[00:24:34] And, , do they have a good value proposition? Do they have a really good reason to exist? But we're at the same time, we're, we're value oriented buyers. So every private equity company wants that, right? There's no private equity, , company in the world that doesn't want good market position and good value props.

[00:24:56] So we gotta, we gotta be willing to. trade some qualities away to be able to buy things at six, seven, eight times. And so those things are again, things that, , we believe are more controllable, , post close through value creation initiatives, whether it's , poor data, lack of systems, poor management teams, and, , we can really wrap our arms around, , what we need to accomplish to then take a business that has a good value prop, has a good position, but it's just under optimized.

[00:25:43] And and really put resources against it to build it professionalize it and think about where the business needs to be, not just over our ownership area, but for the next 20 years, because that's really where you create value is. , being able to tell the story for the next buyer and the buyer after that, right?

[00:26:06] And so that's kind of, , what we look for, , most importantly in the businesses we looked at. As a element of that, though, one of the most important metrics that we look at is we survey the employees before we do a deal. , when we do employee NPS scores and, , this thing called power scores and that is critically important to be able to gauge whether you're going to be able to have that impact post close because in the real world, , I managed just a team of Extremely motivated, extremely career driven, extremely intelligent.

[00:27:01] , hardworking type A professionals but that's not what most of our businesses the employee bases are, , and, so one of the, one of the most important things, , for us is, , employee net promoter score, engage employee base, and if it's low, how do we really improve it?

[00:27:24] Because, is the employees that are interacting with, , internally day to day with your customers are what really drives value at the end of the day. It's not in the boardroom. It's not even at the executive team. It's at, , the folks in the field. So just said that that labor component that, , Is it's just so critical to having success in what we do?

[00:27:50] Sean Mooney: Yeah, I love that. And 1 of the things that I really appreciated just seeing how you all do things and, , even in the before story, , your partner, Chris and I were friends and we used to or our friends and, but knew each other back in the day when we were coming up in our formative years.

[00:28:05] And we used to. Wax poetic slash meaning like over too many drinks talk about the way we thought things should have been kind of a thing. And I'll speak for myself, me having too many drinks. But, but it's this whole idea.

[00:28:20] Andrew Joy: I don't think Chris would disagree.

[00:28:24] Sean Mooney: My name is Sean Mooney. I'm genetically predisposed. It's not my fault, but one of the things that we would always talk about is like, it's not what this business is. It's what it can and will, or should be. And I think that's something that you guys bring really kind of an amazing mindset to as value investors of companies is like, this is what it is.

[00:28:47] And it's got some, some real, like, it's got some good foundations, but boy, can it be something like this, and it's like, there's some great upside.

[00:28:59] Andrew Joy: Yeah, and a lot of times it's not, , this, that, that future state. A lot of times there's nothing more than just rock solid execution, , where, , we have a saying at an Arbor strategy easy, execution is hard, right? You ask us any private equity guy, what to do with any particular business. And they're largely going to get to the same conclusions, which are, Yeah. The right conclusions, , whether it's, okay, we want to increase the amount of service mix. We want to, , do a creative M&A, we want to lean out, , our cost structure, we want to improve our capital and, , I think the hard part is actually doing that stuff.

[00:29:46] And. In staying laser focused on just two or three of those initiatives and driving them to completion. And so, , fundamentally through that though, our businesses look very different from when we buy them to when we sell them. , but it's through just a really deep appreciation for and respect for operational execution.

[00:30:20] It's fine. And we like to think of ourselves in private equity is these big, , strategic thinkers. And, , we're going to we're going to solve, , these fundamental industry problems. But, , for us, transformation comes through just day to day execution.

[00:30:37] Sean Mooney: One of the things I always liked about PE is it, , when done well, it's this really good kind of team sport where you got a lot of people kind of working together and trying to get things done and the incentives are ultimately aligned, right?

[00:30:50] If the company increases in value, a lot of people are going to generate pretty tremendous wealth. And it's not only , the private equity professionals that in some ways, , knowing their families, , as much as others might. But also, , LPs and pension funds and the management teams, you all kind of participate, but coming with that takes a ton of work.

[00:31:10] As you said, it's a lot of execution. And the thing that I've appreciated, , watching you all do what you do well, is that you're bringing more than a PowerPoint deck and a check. And so I'd be curious, , if you could share, , some of the things that you all in terms of value creation and helping your port goes, not only figured out on their own, but to kind of get there together, if you will.

[00:31:35] Andrew Joy: Yeah, for sure. So Hidden Harbor's made. A lot of investment in our, what we call operational capabilities and, , complete shout out to my partner, David Block, who, who leads that, , part of our firm but. , We've, we've done something called build out Hidden Harbor University and Hidden Harbor University is a set of our standard operating procedures in multiple different forms, whether it's presentations, but, , really live in action examples where, , we have our management teams go through these modules, And these standard operating procedures are, , applicable, irrespective of your business model, your industry, and they're just, Hey, what are the, what are the 12 things that every business should have, regardless of what they're doing?

[00:32:36] And so, , that's on one side of, of the spectrum that we've really invested in and give our management teams access to, , we've then also built our functional operation folks. So, , if you need help with recruiting, , we have a head of talent, , we have our accountants, we have just their group smart kind of strategy consults and just general athletes.

[00:33:04] we have our operations folks, manufacturing, and so we have a bench of say, hey, what do you guys need, in terms of, of resources outside of just, just money. And, , my personal view, you know, from the board perspective is. my job again, in the context that, , it's pretty easy to figure out what we need to do to make this a successful investment, , in where it's difficult comes down to execution, my jobs.

[00:33:38] Is to serve the executive team in the sense of what can we provide, , you guys to put you in the best position to be successful, because to your point, if the management team successful, the business is successful and harbor successful, our LPs are successful and we all win. , instead of this tops down approach I think we really put our humility , and say, hey, what can we do?

[00:34:12] It's in Harvard to make our executive management teams, put them in the best position to succeed and what resources, , do we need to provide them to increase, , the probability of success.

[00:34:28] Sean Mooney: I think that's , spot on perspective. And one of the things I'd be curious about is you think about like this washing machine we're in now, or it's, , , macroeconomically, it's good news, bad news, good news, bad news.

[00:34:39] And I personally think we're, we're getting two good news is now for everyone bad news, or maybe it was the other way. And so I'm, I'm seeing at least some things in our data and the cycle that, Pleased me to think, , the sun will come up tomorrow, but I would be curious, like, what are some of the things that you're.

[00:34:55] thematically or tactically talking with your teams about right now.

[00:35:00] Andrew Joy: Right now it's obvious, , it's the obvious stuff, right? None of this is going to be particularly enlightening. But , it's cash discipline, right? With interest rates, essentially doubling, and fixed charge getting tighter.

[00:35:18] we need to have, , cash, cash discipline. But I think not just in recent periods, but what we're going to see transformationally, , over many years is just the labor markets have inherently changed and, , attracting good talent. And more importantly, retaining good talent, not just at the executive levels is one thing, but all the way down to, , the field level employees, particularly in skilled labor, , particularly in the trades is becoming more and more and more difficult.

[00:36:03] And so how do we best position ourselves to be successful? In that type of environment, and it comes down to, , doing the right things in terms of being a good employer, quarterly, , check ins, annual reviews, all the good kind of HR managerial stuff, but I think fundamentally, that is the biggest challenge that all of our companies face, almost regardless of Industry is just finding good talent across the organization.

[00:36:42] Sean Mooney: I think that is completely spot on. And it's, , what I learned, , it's interesting for my own little kind of like journey here from being a person for most of my career. And then. And then I call it my, my fit of craze, which was , powered by hubris and naivete to start a company like, what am I nuts, but you realize, , just, I've learned things to you, like before I used to work with.

[00:37:06] You know, 10 out of 10 type a, , people who would take, take hills anytime, like we were told to, to like, no, you actually have to manage your things, but it's just like, and to now like being in a business, it's just, you get the right people and you keep them and you develop them.

[00:37:26] Everything becomes easy, easier, easier,

[00:37:30] Andrew Joy: easier, , yeah. If you're rolling in the same direction, it's a beautiful thing. When you, , when we buy these companies, it's like, it's hard. It's like, man, I just want some good news. Why can't anything go right? What problems do we have today? When you really get the right people in the right seats, rolling in the same direction, it becomes fun.

[00:37:55] Yeah, because you start winning and, , and the team celebrates the wins together and it becomes a lot of fun then, but hard to get to that point.

[00:38:08] Sean Mooney: Yeah, it's like everything's possible. Nothing is easy. That was and that was I used to do investing in China and , and this was right after the WTO.

[00:38:18] that was this is one of our executives would say that when he's like, everything's possible in China. But nothing's easy. And then I realized the next six years, every day, I'd have an 8 AM and an 8 PM phone call where I would learn that the word yes does not mean yes. It does not mean no. It means I acknowledge what you said.

[00:38:36] Is that a yes, yes or no, no, or yes, no, or no. Yes. I don't know. But, but to your point, what you say is once you get, , like it's that whole point, like, it's like. Good market, good team, magic happens, like,

[00:38:53] Andrew Joy: that's it, man

[00:38:54] Sean Mooney: someone wiser than me came up with that before, but I'm just repurposing it,

[00:38:59] Andrew Joy: a successful private equity investment, some private equity investor would tell you like, ah, , it was just such a great thesis or,

[00:39:08] Sean Mooney: you know,,

[00:39:08] Andrew Joy: it just worked out because , we saw this angle and the other firms didn't see it.

[00:39:16] , in reality, it's all just about private equity returns about timing and your executive teams like. That explains like 95 percent of if you get a good team and the timing is at least okay to good, , that's what's going to drive your return.

[00:39:35] Sean Mooney: I don't know if I'd agree with this because some of my models were really good.

[00:39:38] And so, no.

[00:39:39] Andrew Joy: It worked really good in Excel.

[00:39:44] Sean Mooney: In nearly 20 years in PE, not one single investment turned out. For the reasons I thought it would, it's like, but it doesn't do the

[00:39:53] Andrew Joy: same thing with the risk side too. It's like, getting a little bit philosophical, but the reason I like the value side of investing is.

[00:40:05] I think the unknown risks are the ones that are, that aren't priced. In other words. Every private equity investor can price customer concentration or, end market drivers, all this type of stuff that go into the risks and mitigants in the IC deck. I think what gets not priced in as risk is the long tail of things that you just don't think about, that you can't think about.

[00:40:41] But just inevitably happen. Right. And so, , on the value side of the spectrum, you're inherently pricing more of that in that you're getting fully priced in. But yeah, it's the same thing on the side. It's never what you think goes wrong.

[00:41:00] It goes wrong. It's always something

[00:41:02] Sean Mooney: you leave yourself more room for error and come back. And I think it's the people is the timing is the room to make risk, but kind of going for a full circle. The beginning of our conversation.

[00:41:14] It's this. Tenacity and grit and something gets in your way having this mindset that I'm going to continue taking a step forward and not if, but when something gets in your way. You figure out a way around it, above it, below it. And it's like, and it's just, that's what I know what you do so well, what your firm does so well.

[00:41:34] And you think about other business builders that are listening to that, you just add that to, it's like your chance of success goes like way through.

[00:41:42] Andrew Joy: Yeah. Yeah. Yeah. Just keep pounding, man.

[00:41:48] Sean Mooney: if my career were based on intellect and good looks, it would have been a very short one. And so

[00:41:56] this is, this is why I like podcasts. It's an audio medium. So what I love to do is, is, turn the page here and talk about. One of my favorite topics which is kind of like life hacks and i spend an inordinate amount of time looking at gizmos and gadgets and and buying stupid things on amazon cuz i'm curious to see if it'll work and it causes.

[00:42:25] Unbelievable tension in our home because boxes keep on showing up and my wife is like, when is this going to stop? So, so, but what it means is I'm a connoisseur of these things inside be curious if you have, if you have any any little things that you've figured out?

[00:42:42] Andrew Joy: You're going to hate this answer, but I'm going to say it anyways, I think the more important message.

[00:42:49] There is so much narrative out there about, get rich quick, make life easier, a five hour work week, Hustlers University, , like our kids and young adults are just inundated, inundated, inundated with all this stuff. in this social media and these advertisements to, , convince them that, there's a hack or there's a shortcut to success.

[00:43:28] My life hack is just put your nose to the grindstone. It worked really, really hard and maybe You'll be successful. I know, and there's no shortcuts or hacks for that.

[00:43:45] Sean Mooney: I think that is very well said, and it's I love that answer because it's because if it weren't for that, I would not have a roof over my head.

[00:43:54] Right, right, right. No, it doesn't mean I don't like the little $12 iPhone holder that I put on the back of the, the plane . So I'm in the, and versus, or bucket on that. But , but I think that answer is another pearl of wisdom. And what I'd say is that, , eventually when the, when, when you , have, , extensive time under your hands and you're just like, wondering what do I do with my time and you write all the stuff down. I'll, I'll read it. I'll be the first to buy the book

[00:44:25] for sure.

[00:44:27] So Andrew, thank you so much for really, , having this really open conversation that, , I, , can truly say has changed a lot of, , how I view things and it's a good kind of hit the reset button. when things otherwise seem topsy turvy, , it puts things into perspective, but also says, , the future is so exciting. So let's, let's get excited about it.

[00:44:50] Andrew Joy: I appreciate you having me, man. Anytime.

[00:44:55] Sean Mooney: Thanks, Andrew.

[00:44:56] Andrew Joy: Alright, bye.

[00:45:05] Sean Mooney: Special thanks to Andrew for joining. If you'd like to learn more about Andrew and Hidden Harbor, please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcasts, including Apple, Google, and Spotify. We truly appreciate your support.

[00:45:21] If you like what you hear, Please follow, rate, review, and share. It really helps us when you do this, so thank you in advance. In the meantime, if you need to be connected with the world's best in class, private equity grade, professional service providers, independent consultants, interim executives, or anything else, please give us a call or visit our website at BluWave.

[00:45:40] net. That's B L U W A V E. net and we'll support your success. Onward.

Private equity insights for and with top business builders, including investors, operators, executives and industry thought leaders. The Karma School of Business Podcast goes behind the scenes of PE, talking about business best practices and real-time industry trends. You'll learn from leading professionals and visionary business executives who will help you take action and enhance your life, whether you’re at a PE firm, a portco or a private or public company.

BluWave Founder & CEO Sean Mooney hosts the Private Equity Karma School of Business Podcast. BluWave is the business builders’ network for private equity grade due diligence and value creation needs.