Coburn Ventures Podcast

Today we are discussing Profit and Purpose with Omar Shaikh, co-founder of the Global Ethical Finance Initiative. We asked David Kim, who many of you know, to join as well, because this topic can’t be torn apart from philosophical underpinnings of commerce, business, history, and law, and David has such a strong ability to put big concepts into context. This is such an interesting discussion that I hope will be absorbed into how you are currently crafting your ESG process, or even more clearly defining a few things that you learned in business school that are "just not so". I think this episode has the highest frequency of citing or referring to major philosophical theories or thinkers, from Adam Smith, Hume and  Hutchinson, to Narrow banking to the up-to-date work the Global Ethical Finance Roundtables are doing. I’ve included links to Omar’s Global Ethical Finance Initiative, as well as the Economics of Biodiversity paper David mentioned. That link will take you to a highlight report, but there is a 610-page version as well for reference. Thanks for listening.

Today we are examining business strategy, and especially, strategies that are weak, becoming "Tactics Masquerading as Strategy".  And then, we tie that to a key philosophical underpinning of many business strategies that we may be adapting away from: Porter's Five Forces. This is a philosophy that fits very well with the last four decades. It would be a largely successful framework to start strategic thinking…  but just as we want to be able to identify when a strategy is really just a reduction into tactics, we want to be able to understand the underlying building blocks philosophy a strategy rests on. So it's important to consider that this framework is now being reevaluated, even by Michael Porter himself and his colleagues, who starting in about 2011 now write mostly on Creating Shared Value. So, some kind of change is afoot. Let’s get into it. 

Polly Labarre is an author, thinker, collaborator, and journalist. I first met her through Pip as she was working on her book Mavericks at Work, which is a fascinating look into the most original minds in business. You may know her as a co-Founder of Fast Company. Any of you who enjoyed our very first Sundance Gathering know her as the first to utter "you are the program", an ethos of creativity and contribution that is inherent in almost all of our work at Coburn Ventures.  Polly's special ability lies in examining what’s happening at the edges of organizations and culture to see what might be an indication of future change in business and management. We dive into what it means to have a company that understands how to bring out the best in their employees, how institutions frame our work experience, in sometimes limited and very outdated ways. Polly has this great phrase about building organizations where systems and structure "go with the grain of humanity". Imagine that.  We will get into edge cases that take us to real-life examples from China to Sweden and back again. I hope you enjoy it.

We are often asked to help teams in some way refine their communications, especially so that they can get better idea flow between the analysts and the portfolio manager. So Pip stepped back to see if he could better define each role required in investing. You could probably break this down further, or differently, but here are the four jobs of stock picking. Business Analysis Security Analysis Market Psychology Portfolio Analysis So who does what? We’ll walk you through, in hopes that communicating around these four “jobs” might help analysts and PMs get clearer on how to work more powerfully together. I hope you enjoy it.

We promised to pick up where we left off from last week's Episode #1 on the Reinvention of Real Estate. If you remember we have three guests for this conversation, from different but highly related disciplines in real estate: we have real estate investor Glenn Lowenstein, Matthias Hollwich, co-founder and principal of architecture firm HWKN, and Jennifer Salopek, advisor to major retailers on navigating change.  In this episode, we go deeper into the transformation happening with mixed-use real estate. If you remember the great perspective from Matthias in Part 1, that after this year of massive pressure and change we are already really living in "2035", we apply that idea to specific changes that blur the lines between retail, commercial, residential, and office space. 

We are bringing you a big topic today, so big that it matters to every corner of our lives and our economy: real estate. We’re interested in what is changing, at what pace, and why. To think through such a vast topic, we are bringing in three friends with three very different but complementary vantage points. We have Glenn Lowenstein, a real estate investor who has a very holistic approach to looking at the markets he invests in. We have Jennifer Salopek, who knows the business of retail at a large scale, and has served on Boards of large national retailers, and we have Matthias Hollwich, architect, founder of Architizer, and principal of the architecture firm HWKN. Today we start with commercial and industrial and end with some paradoxical thoughts on retail. All the while we will be working to go under surface level.  Next week we will continue with many more thoughts about retail and residential.

What do we do when valuations of stocks and markets become so high as to defy our most careful assessment of the value of the business and its future cash flows? Today we are going to present some options for layering in a process or method to use during these times. Our purpose here is to provide a few ways to help you think about  addressing the question directly, especially since valuation is one of the most potent triggers to take our conversation into the world of the abstract, to launch us directly into the mess of our own investment biases, to get into conversations that just swirl around and don't go anywhere, or  to amp up the fear and confusion... all of which get in the way of making great decisions. After listening to this you may come up with your own framework.  The design principle here is to have a process that will keep you on shore, rather than being swept away into the swirl.

John Dillon, a seasoned CEO with experience in both private and public sectors and currently leading Aerospike, shares invaluable insights on corporate leadership. He discusses the critical relationship between shareholders and executives, emphasizing the importance of effective communication and transparency. Delving into the traits of successful CEOs, Dillon highlights how the dynamic of IT departments can offer competitive advantages. Additionally, he shares anecdotes that reveal the power of well-prepared questions in investor relations, driving home the need for genuine engagement.

Part of our job as investors is to find or design uncommon inputs that will lead to uncommon investable insights. One of the important inputs is how we spend our conversations with management teams. At Coburn Ventures we focus so much on designing questions for management because it can meaningfully alter the probability that we will walk away with something insightful to act on. Now you'll hear a bit more about that process, and a few methods you might like to use too.

ESG, or Environment, Social and Governance regarding sustainability, was thought of as an add-on to an investment thesis 5 or 10 years ago. But the world is arriving at the doorstep of ESG investors. Its more than an add on, it is a base layer, a foundational component of investment philosophy. And its rare that we get to take part in forming such a crucial component of investment philosophy. For teams that take on what ESG means to their particular process and philosophy, they may find themselves with a more rounded out look at a company, a more enhanced view of risk, and likely, stronger conviction in real long term competitive advantage. So how do you implement ESG into your process? In this podcast, Pip and I talk about just a few of the 10 greatest hits we published in 2020 on ESG. We’re happy to send you the piece, this is just a starting point. *Just one thing to listen for before we begin: I hope the tactic of pulling away from moral arguments and into exploring the gray zones is particularly helpful. Using this tool, you might be able to lay the groundwork for productive discussions right from the beginning.