Akram Sabbagh, the co-founder of Wayfinder Capital and Second Squared, used his presentation at the inaugural EtA Forum to discuss a subject that is often overlooked by searchers and business owners alike: the emotional investment, and how that affects perspective.
There’s an excellent example that Ak gives in his presentation about the different ways a owner might handle a broken printer. When times are good, the company is growing, and the money is rolling in, it’s easy to be blasé about a printer. When...
Akram Sabbagh, the co-founder of Wayfinder Capital and Second Squared, used his presentation at the inaugural EtA Forum to discuss a subject that is often overlooked by searchers and business owners alike: the emotional investment, and how that affects perspective.
There’s an excellent example that Ak gives in his presentation about the different ways a owner might handle a broken printer. When times are good, the company is growing, and the money is rolling in, it’s easy to be blasé about a printer. When the business has hit a plateau and is struggling with the risk of heat death, the frustration the owner feels can result in a very different response.
This is why, as Ak said, a searcher might meet with two different businesses in the same sector and with similar product portfolios, only to experience wildly different atmospheres within the business. This doesn’t necessarily mean that the emotional energy within a business should be the deciding factor in an acquisition. The owner of an organisation that is riding an emotional high will generally have an inflated sense of its value, while a business that has plateaued, is often an opportunity that is simply waiting for new energy and ideas.
What is important is to be able to recognise emotional states and how they can affect perspective, and in his presentation Ak brilliantly runs through the key steps that can help a searcher or business owner stay focused and help the business break through the barriers to achieve advanced growth.
Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with Ak: https://www.linkedin.com/in/akram-sabbagh/?originalSubdomain=au
What we discussed:
1:29 Introduction to Akram Sabbagh.
3:51 The journey and history of Wayfinder Capital. 6:45 The idea and goals behind Second Squared, Australia’s first search fund enabler.
10:19 Introducing the idea of “energy”, and the role intangibles, or “vibes” have in a search.
14:02 A breakdown of the emotional journey through a business, from when you’re just starting out, to the point where you see growth and success, and the wall of frustration that you can eventually hit at the other end.
21:11 The different ways that a business owner might respond to a challenge, based on the stage that the business is in.
23:46 What can we do to break through a business that is plateauing out to achieve advanced growth? The personal and professional qualities that every business leader should be developing.
28:46 Q & A and discussion with the audience.
35:00 Pete provides a final summary and analysis of the presentation.
Key Quotes:
“Some of you might have had this weird experience of walking into two almost identical businesses on the same day, similar industries, etc. Yet the energy in one is buzzing and you say to yourself “wow, this is awesome”. You walk into the other one and it's like going into a morgue. They have similar market conditions, similar products, similar everything. But what's different?”
“Succession is something that is really not thought through for a lot of people in the SME space.”
“The Corporate Leadership Council did research several years ago, and noted that emotional engagement is four times more powerful than irrational engagement. So if we can get to the hearts, and the minds of the people we're working with, there’s a four times better rate of connecting with them.”
“Frustration If we don't do something about it leads to stress. As we all know, in this room, stress is not good. Our decision making under stress is never great.”
“I'm assuming that no one in the room wants a business that's just plateauing out, but you'll see some of those and they could be really, really good opportunities to buy. Because they're just sitting there, waiting to be revitalised.”
“When you're feeling frustrated, stressed, disillusioned, and so on, ask how you can reposition yourself? What are you focusing on? What do you need to do to personally refocus and to re engage.”
“Some years ago we did some work with ANZ Bank, and got to understand the economic value of a cup of coffee. When they did the numbers, every cup of coffee worked out to be close to $2 million worth of loan opportunity for them. The lesson here is are you working in relationships? And can you measure them, so that you can see that the first 10 coffees may not go anywhere, but they all may lead me to the 11th. So that $110 on coffee will be well spent.”
“One of the things we look for in searchers is that they don't have all the skills, but they have the self-awareness to know where to find the ones that they don't have.”
