A challenge of working with Adir and Adam is each day I have a hundred things I want to ask them that don't necessarily directly relate to The Contrarians. So I try to keep schtum and focus on growing the business. Which is fortunately going very well (more on that to come).
However, I came up with an excuse to ask some of those questions. Watch the full interview on the link above (or on Spotify or Apple Podcasts). The Adam interview is also live and linked here. Summary in today’s newsletter below.
I want to do more of these interviews. Other than dropping the annoying accent, how could they be better? Who should I speak to next? I’d also love to know more about what you think of the show - send me a message on LinkedIn here.
Preparation makes Adir worse. Curiosity does the work
Will Hayward, CEO and co-founder of The Contrarians, sits down with co-host Adir Shiffman for a special episode on how Adir thinks and builds businesses. Shiffman is Executive Chairman of Catapult Sports (ASX: CAT), which he has chaired since 2013, and trained as a doctor at Monash University before moving into technology. Listeners often see him arrive at recordings without reading the show notes, then talk in detail about businesses Adam has just raised, including earlier discussions of IREN (NASDAQ: IREN), the listed bitcoin miner turned AI “neocloud”.
Adir: “The honest reason I don’t read the show notes is the same reason I would never try to be a stand-up comedian, as much as I think it would be very fun: preparation makes me worse. I’m much better under the pressure of having to think on the spot. The risk of Adam raising a topic that I am totally unfamiliar with is quite small relative to the risk of over-preparing and then funny things feeling like they’re manufactured.”
Adir: “The idea of memorising things doesn’t really exist. When I went through medical school I had to memorise things. It is a terrible exercise. ... But business is not like that. Every business has a story and it has a narrative. ... When that business is raised, I don’t have to memorise anything about the business. I just remember my views of that business and how I felt about its narrative. It has this place in my head in the way that the words of a song might.”
Adir on digging into IREN and the AI stack: “IREN has lots of information in their filings that nobody reads. I always say about these neoclouds, it’s not fraud because they’re too transparent. Everything is connected to everything else. ... Once you understand the way the whole stack looks, you understand where these neoclouds fit in.”
Adir on using AI models: “It’s one of the greatest things you can say to a model: explain this ELI5. It will simplify a topic and use analogy so you can understand it in the most basic way, and then you can start building up from there.”
Adir: “They’ve consumed the world’s information, so they can see patterns. History, that’s an amazing topic. ... If you start saying, let’s think through how we might solve the problem, it starts falling to pieces pretty quickly. I know exactly what I want to use these models for, and I steer clear of thinking that they are the panacea and have all of the answers to life, because they don’t.”
Don’t hire a CEO to milk the dividends
Catapult appointed Will Lopes as chief executive and managing director in September 2023. Lopes was previously chief revenue officer of Amazon subsidiary Audible. Co-founder Shaun Holthouse, who started the company in 2006 with Igor van de Griendt, served as CEO until April 2017. Will asks what founders should look for when they think about hiring a CEO, and what the job actually demands.
Adir: “The most important job that a chairman has is finding the right CEO together with the board and then empowering them to succeed.”
Adir: “My first question would be why. You’re the founder. This is much more tightly connected to your sense of self-worth and who you are than a business. ... A good reason could be: my strength really is products and customers, and this business needs to grow much bigger than I feel I’ve got the capability to manage. A bad reason might be I just want to live an easy life and milk dividends out of this business. ... Once you take that person out, it’s like taking the core out of something. ... In my experience, virtually every business where the founder has stepped out and tried to milk it, the founder at some point has had to come back and try to save the day. And as often as they save the day, they can’t.”
Adir on his two rules for hiring a CEO: “I would say to my kids, don’t let your professional success define you as a human being. Don’t let your happiness be determined by whether your company is doing well. That is good advice for kids, but that is bad advice for a CEO. ... I just want a CEO that says I’m coming on board and linking my sense of self-worth to whether I make this work or not. This is not one of ten things for me, it’s one of two things.”
Adir on work-life balance and happiness: “Work-life balance makes the assumption that the work part has some reluctance attached to it. To me, you’re better off trying to address that side of the problem. ... It’s very trendy to say the most precious resource is time. I don’t think it’s true. I think the most precious resource is happiness. ... In my experience, the way that people find happiness at work is there’s a bar of I need to earn a certain amount of money, but that is not the primary driver. The primary driver is I feel like I’m a really valued part of something that’s bigger than me.”
Strategy is where you’re going and why. Everything else is tactics
Will asks how strategy actually gets set and implemented, including at Catapult and at Tanssu, the Melbourne-designed cabin-luggage brand Shiffman has launched, which currently offers Australia-wide delivery. Shiffman describes his preferred kind of business as one where customers already spend money on an imperfect solution — what he calls the “golden middle” — then expanding from a narrow pocket of product-market fit.
Adir: “The idea of strategy is actually super simple. It is: where are we going and why? That’s it. If you don’t know that, then what you’re doing is just turning the wheels every day for that day’s outcome. ... I don’t think whole organisations should participate in setting strategy. That is a particular skill. And then you start getting into the tactics: how do we get there most efficiently? That is what a business should be spending most of its time doing.”
Adir: “Lost businesses are businesses that walk or run as quickly as possible, and they feel so good about how well they’re doing that, but they’re just going in some direction to which there’s no obvious reason or purpose. That’s a well-run business without any strategy, and they eventually fail.”
Adir on growing Tanssu: “You can expand an early-stage business in two ways that I call the leopard approach or the wildfire approach. I’ve got some product-market fit for this Tanssu business now, and I’m selling to a very particular segment: very successful people in business, finance, funds management, founders. On the whole market, that’s like a little pinprick of product-market fit. ... One way is to go and try and find another dot in the market and another dot ... that’s the leopard approach, spots all over the market. The other approach is I say I’ve got this little dot and it seems to be working. How do I expand that dot a bit wider and a bit wider? That’s a wildfire. ... For me, that wildfire approach is generally the better approach.”
The first salesperson is the hardest hire. Then don’t go over the horizon
The conversation turns to hiring the first salesperson, what AI changes in sales, how to stretch a team’s ambition, and what marketing should actually do. Shiffman also recommends Benjamin Graham’s The Intelligent Investor, Accounting for Dummies, Akio Morita’s memoir of co-founding Sony, Bloomberg’s Odd Lots, and the Australian e-commerce podcast Add to Cart.
Adir: “There’s this gate on startup success, which is: can the founder sell? If the founder can’t sell, you never get anywhere and the business goes broke, generally speaking. ... No one is going to sell like you. ... Before you hire a salesperson, how about you hire sales support so you can spend more of your time in front of customers. I do not want to lose the founder doing sales for as long as possible.”
Adir: “The two hardest jobs to hire in a company: the first salesperson might be the hardest, and a CFO. Everyone who is in sales can sell themselves. Many of them can’t sell anything else. And the CFO, just in my experience, a lot of them can’t count. ... You are not going to hire some silver-bullet rock star who comes in and transforms the sales of your business. It never happens. ... I’d rather say don’t overspend. Hire for passion and belief, tenacity and resilience. ... The biggest mistakes I’ve made with sales have been holding on to people on the belief that they’ll get there. They never get there. In the first three months you can’t make a call generally ... three to six, that’s the time in my experience to make the call.”
Adir on ambition: “You should stretch it so far that it’s barely visible, but don’t go over the horizon. Saying we’re going to be a billion-dollar company, that’s not ambition. It’s nonsensical, really. Ambition is saying, I think that the world in our space is going to look like this. Why? What could our role be in that? ... A lot of the time when people say something is impossible, what they really mean is we don’t have the resources to achieve it. ... Not much in business is actually impossible. It just feels unachievable in the moment that you’re in.”
Adir on marketing: “Marketing is a pretty dumb name for a discipline because it encompasses too much. ... You have to start building the brand from day one. You can not invest a lot of dollars in it, but you have to invest time in it. ... Every ad that you run, no matter where it is, should be some mix of between 20% and 80% building the brand that people can love and trying to drive a sale. Minimum 20% try to drive the sale. Don’t just make excuses and say, that ad is just to drive brand.”
Find Tanssu:
https://www.tanssu.com/
Catapult Sports:
https://www.catapult.com/
