Transcript
A (0:00)
This clip of Making it with John Davids features John talking to Jason fried, founder of 37signals.
B (0:09)
The dirty little secret in all these hold cos whether it's Tiny or Berkshire Hathaway or Constellation Software or, you know, you name it on and on and on, is that 70, 80% of the revenue and profits usually come from one or two or three companies. Like they have a big portfolio but they got, they certainly got rich off one and then maybe they have two or three now that are. That are bringing in most of the money and the rest are really just bets. They're not. It's not like you're making the exact same amount of money from all these things.
C (0:42)
Yeah, you can even see this in like huge luxury conglomerates, there's like, you know, one or two brands that really bring in everything and then the other ones sort of are part of the constellation of the brands because it just, it gives the holding company more power because they have more companies and more control over the market and the whole thing. So, yeah, it's the same thing is true in the VC model, right? In a fund, you've got one or two winners, big winners, and they kind of take care of all the ones that didn't pan out. It's pretty common just in all groups of anything. It's the same thing in music. You buy an album, there's like two, three good songs out of 12, but you buy the album. That's why albums are packaged that way. Now, of course, there's singles, which are a more direct way of saying just buy the hits. Right. And everything's changed, of course, with streaming and the whole thing, but historically albums had a couple good hits and those are the ones that got on the radio and those are the ones that sold the record. And then the other ones were like, you know, other songs. So that's true, that's true. Been true for us. We just want to keep placing more bets, but in our own way, in our own method, under our own umbrella, with the same team, versus, I think making it more complicated to have entire groups that aren't working out and have to figure out how to support those. I just, it's not. It wouldn't make my day.
B (2:00)
Let's just say you have your hit songs and then you have songs where, when they play them in the concert, that's when you go to the bathroom because you don't song.
C (2:07)
Right. It's basically hits business. And so is, so is like the NBA, you know, like you got a few awesome teams and a few incredible I mean, more than a few great players, but, like, there's some teams that just aren't very good, you know, and they're never going to be. You're never going to have a league full of incredible teams. You're in any collection of things. Some things are going to float to the top and some things aren't. It's just how it is.