Dave Whorton - From Built to Sell to Built to Last - The Tugboat Institute Story [The Business of Family]
The Business of Family
Is It a Good Idea to Diversify the Industry?
The founders are in discussions about effectively swapping ten % of equity between the families to diversify themselves. I almost hope they pull it off, so that we've got a case study for everybody else. One things i see in that and that kind of model is you have to go into it hoping the other partner is tremendously successful. And you hope you are. Toobe yo, hope they're tremendously successful, and that however they form that partnership, that's ok.
Dave Whorton is an entrepreneur, business leader, education reformer, and investor. Dave founded four companies including Good Technology and Drugstore.com. He also worked for three venture capital firms, Kleiner Perkins Caufield & Byers, TPG, and Interwest.
A small angel investment that Dave made in 2005 opened his eyes to an alternative way of supporting seasoned entrepreneurs who wanted to build large, profitable, innovative businesses that they would run privately for their lifetimes. In 2013 he founded The Tugboat Institute, a membership organisation designed to support Evergreen leaders and their companies over the very long term.
"We believe in the vital importance of humans coming together to create and grow enduring, private businesses that make a dent in the universe." - Tugboat Institute
Standout Quotes
- "How do you help a company have good hygiene? A very important component of that is how you develop the family members into the business" - Dave Whorton [31:44]
- "If you feel your company is deeply purpose-driven and meant to have a significant impact for a long time in the world then you do think naturally about it from a standpoint of stewardship" - Dave Whorton [34:04]
- "How can I take this incredible asset and move it forward before handing it over to the next steward?" - Dave Whorton [34:16]
- "I think it's really important to develop a work ethic in your kids, I don't care what level of wealth you have" - Dave Whorton [45:50]
Key Takeaways
- The 7Ps that makes a company evergreen: Purpose, Perseverance, People First, Private, Profit, Paced Growth and Pragmatic Innovation [21:44]
- Entrepreneurs have to be very clear with CEOs about what they want from their investing partners [39:37]
- Dave describes some qualities that he observed to be common among evergreen leaders which mostly include being introverted and humility [23:46]
- Developing a work ethic at a young age is critically important and also exposing them to the importance of saving [46:11]
Episode Timeline:
- [00:48] Mike introduces Dave and tells us a little about him
- [02:06] Dave shares his backstory and work background in more detail
- [17:20] The Tugboat group and how it's evolved over time.
- [21:44] The 7Ps that makes a company evergreen: Purpose, Perseverance, People First, Private, Profit, Paced Growth and Pragmatic Innovation
- [23:46] Dave describes some qualities that he observed to be common among evergreen leaders which mostly include being introverted and humility
- [30:18] How does Tugboat support generational transitions of family members or other closely held businesses?
- [34:04] if you feel your company is deeply purpose-driven and meant to have a significant impact for a long time in the world then you do think about naturally about it from a standpoint of stewardship; How can I take this incredible asset and move it forward before handing it over to the next steward?
- [39:37] Entrepreneurs have to be very clear with CEOs about what they want from their investing partners
- [45:33] Dave shares his thoughts on generational wealth and legacy building in contrast to a focus on the children developing a work ethic and inheriting nothing.
- [49:29] The failure Dave faced that eventually took him on a journey to where he is today.
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Special Guest: Dave Whorton.
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Links:
- Seed The Future - Evergreen Movement | Dave Whorton with Tom Bilyeu (IQ50) - YouTube
- Tugboat Institute — We believe in the vital importance of humans coming together to create and grow enduring, private businesses that make a dent in the universe.
- The Tugboat Group — An Alternative Path to Growing Lasting, Private Companies.
- How to Build a Company That Will Last for 100 Years | Inc.com — A growing number of entrepreneurs are ditching the steroid-like growth that comes with outside investment, and building their companies to last.
- Dave Whorton | LinkedIn
- Book: How to Be Rich: Getty, J. Paul — There are plenty of books on making money by men who haven't made much. But if J. Paul Getty, who Fortune magazine called “the richest man in the world,” doesn't know how, who does?
- Book: In Search of Excellence: Lessons from America's Best-Run Companies (Collins Business Essentials) eBook: Peters, Tom — Based on a study of forty-three of America's best-run companies from a diverse array of business sectors, In Search of Excellence describes eight basic principles of management -- action-stimulating, people-oriented, profit-maximizing practices -- that made these organizations successful.
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