We’ll explore his stoic philosophy, the importance of transparency and trust in acquisition processes, and the delicate balance of control and delegation in managing a company. Joseph also highlights the significance of meaningful legacy over financial gain, his approach to maintaining relationships post-acquisition, and how he prepares his organizations for seamless leadership transitions. Tune in for invaluable insights on dealing with acquisition challenges, the pitfalls of relying too heavily on bankers, and the importance of direct, personal engagement throughout the exit journey.
This is what we discuss during this episode:
- Emotional Preparation: Joseph emphasizes the importance of having a “sounding board” such as a mentor to provide emotional support and advice during the challenging exit process. This is often more valuable than early legal or commercial advice.
- Ethical Conduct in Business: Being the person you want others to be and consistently choosing ethics over short-term gains can significantly impact your reputation and long-term success. A good reputation is an invaluable asset.
- Control and Transparency: Ensuring transparency with buyers to prevent surprises, while carefully managing the information shared within your organization to avoid unnecessary rumors and anxiety, is crucial for a smooth acquisition process.
As always – hosted by Peak’s very own co-founder and managing partner Johan van Mil and this time the co-host was Philippe Klitzing 🕺🏻🕺🏼
You can find the episode on your favourite podcast platform, linked below. And, if you are truly interested in listening to the big exit of specific founders – reach out to us so we can invite them for the next episode!
Spotify Podcasts
Apple Podcasts
You can find the transcribed version of the episode below:
Madelon:
Starting a company is easy, growing a company is harder. But selling your company, that’s a whole different story. In the Big Exit show, we lift the curtain of secrecy around selling businesses by learning from ambitious and successful founders who have been on this roller coaster. Our hosts, venture capital investors. Johann Van Mil, the founding and manager partner of Peak, and Anke Hauskes, the founding and managing partner of nphard, will help you on this exciting journey.
Johan:
Welcome, everybody. Welcome. For joining the Big Exit podcast, I’ve asked my colleague Philip to join me on this podcast. Normally we don’t do it together and normally we don’t do it live. So this is the first time, Philip, and looking at the preparation that you did together with Tim, I’m really, I’m fully certain that it will be very successful. And today’s guest we have Joseph Brunner. And Joseph founded his first company when he was 16, sold it, and then after that he started four other companies and aggregated he was successfully, he sold it for over US$400 million. So pretty successful founder to have here in the show and welcome here in the show, Joseph.
Josef Brunner:
Yeah, thanks for having me.
Johan:
Great. Hey, you founded your first company at it at you were 16, right? I also did it when I was 12, so I know a little bit about what it is to start a company. But what was the reason for you to start it? And also what does it say about, let’s say, the skills and how you were raised also at that time?
Josef Brunner:
Well, skills I didn’t have. So it was, I think, primarily the circumstances. My parents had a bakery and the bakery went bankrupt and we lost the house that we lived in. We lived in the bakery, so we lost the house. Became homeless when I was 15 and that changed my life pretty dramatically. I decided to drop out of school. I wanted to study physics, loved numbers, dropped out of school and then wanted to, you know, helped my parents, started a company, sold it when I was 18 and could buy them a new house. They still live in that house.
Josef Brunner:
So most, most certainly the most emotional benefit I have gotten and will ever get from being an entrepreneur.
Johan:
Yeah. And do you say that the circumstances becoming homeless made you forced to do that or was that already, let’s say, an entrepreneurial spirit within you at that time?
Josef Brunner:
No, I was not an entrepreneur whatsoever. I actually was. And I still am very shy. I don’t like people. I don’t like interacting with people. So at a party, you typically find me in a corner alone.
Johan:
Here you’re sitting on the stage, right?
Josef Brunner:
Yeah, because you put me on Stage. And so it was the circumstances and what they did with me. And I reflected pretty intensively about the circumstances and what they did with me. And I became aware that I have a big friend on that journey, and that’s pain. So pain for me is extremely important. I do it in sports to always try to generate more pain as a driving force. And the nucleus of the pain was actually when my parents lost their house.
Johan:
Yeah, yeah. And if you translate that pain to, let’s say, founding the companies also afterwards. Right. How do you work with that pain? Also in building companies, but also in building a culture and teams within those companies?
Josef Brunner:
Well, the pain I try to keep to myself. Not good to hear the employee to the employees. That would not be great motivation. But pain motivation will not help you at all. Motivation is not your friend. I think discipline is your friend. Right. I mean, so you talked about the difference between starting a company and then, you know, selling it or, you know, you.
Josef Brunner:
In the intro, you forgot the. We did an IPO in between as well. And the getting to the point, you know, you will not get to the point with motivation. Discipline will bring you there. And that’s why the pain for me is so important, because it’s a constant reminder that I have to stay disciplined. And what changed for me, this was roughly five years ago. I was doing a hike from Bavaria to Austria. And I always reflect, reflect on those hikes.
Josef Brunner:
And what I realized on that hike was that I was always, you know, haunted by the pain. And that was not good. And I, on that hike, I reflected that I should be, you know, actually pulled by that, by the pain. Right. So if you think of, like, pictures. So now I have, like, horses that actually pull me, that’s my pain. Because I always thought the pain had to do with money. But then as you.
Josef Brunner:
As you grow in your career and you get more money and you see the pain doesn’t go away. Indeed, it’s something, you know, more meaningful in a fight within. So I wanted to make this my ally and my friend and not my foe.
Johan:
Yeah. And you mentioned last question on this. Right. Because I see Philip is also eager to jump in. You mentioned discipline is really important. Right. For you also as a founder and also starting and building companies. And discipline is a pretty broad topic, Right.
Johan:
What do you mean in your case with discipline?
Josef Brunner:
So I’m a stoic, Right. So stoicism, for those who don’t know, it essentially is very simple. It means focus on the things you can control and ignore the things you can control. And in order to be able to control as much as is under my control. I have two tools. One is rules, and the other tool is behavior. So what are my rules? I hike every Sunday. Every Sunday.
Josef Brunner:
There’s no excuses. So as long as I’m alive, I’m on a mountain on a Sunday. So that’s one rule. Then behaviors are. If I go out and I eat, I ask myself, what would a healthy person eat? If I have a tough business situation, how would a good business person or a good human being react? And that question helps me do the right thing. And those two tools are incredibly important for me, but they also give me a framework that then enforces the discipline. Right. So I go to bed at the same time, I stay up at the same time.
Josef Brunner:
I do the hiking, I do the sports, I do the thinking. I have thinking blocks in my calendar.
Johan:
Wow.
Josef Brunner:
I have walking blocks, hiking blocks. And those are non negotiables.
Johan:
Yeah. Not for you, but also not for the people that you work with or for your family or.
Josef Brunner:
A rule is a rule because you cannot debate it.
Johan:
Yeah, indeed.
Josef Brunner:
If it was something to debate, it would be a suggestion.
Johan:
Yeah. Not a rule. Yeah. Cool. Cool.
Josef Brunner:
Philip.
Johan:
Sorry.
Philip:
So that’s great to have the context and the background. Now maybe let’s talk about the businesses themselves. You mentioned that pain was kind of like one recurrent topic in your life. But what are the key inflection points across all the journeys that you had, across all the companies that you had, the key inflection points that, like in the life cycle of those startups? And how did those inflection points change from your first venture to New Churchill United, which is your last one?
Josef Brunner:
So I think in the early days, everything was pure luck. Right. So I basically just stumbled through life and was, I have, I think about direct luck and indirect luck. You know, indirect luck is I was born in Germany. Right. Which, you know, helped tremendously. I met the people that I met that helped me tremendously. So those were certainly inflection points in every company, like, you know, was once acquired by a friend of mine.
Josef Brunner:
Now Tom Noonan, that is also my co founder at Nutri, became a billionaire when he was 30. He’s now 65 years old. And meeting him and having him acquire my second firm was certainly an inflection point for me as a human being. The meetings, the CEO of Cisco, Cisco back then was the most valuable company in the world. He had a big impact on my life. The meeting, Henry Kravis, the founder of kkr, he helped me with my family office and how to build a family office. So those were the inflection points of me personally. And I don’t think that the companies had an inflection point per se, because I never thought about this, right? Because if you think of inflection points, that actually would mean you have to get over the hump in order to be successful.
Josef Brunner:
And if you think that way, it would leave a theoretical chance that not being succfsful would be an option. And every jewel of energy you invest in a thought that would lead you to somewhere where you’re not successful is a wasted jewel of energy. So I would never accept that thought. That’s why the companies per se don’t have inflection points. But what certainly changed over the time was I grew in confidence and I had a better plan of how to do things. But I lost my virginity, right? And I would never underestimate the beauty of not knowing how things work and then have curiosity and just be eager to learn. So I had to, as a discipline to make sure that I stay curious, that I continue to learn to not become too much locked into my own thinking process.
Johan:
And what was your reason? What is your reasoning to start new companies ever again and again? Because you’re now starting your sixth company, right? And you’ve been really successful so far. So let’s say from a financial standpoint, you don’t have to do it anymore, right? But you keep on, let’s say, starting new things. What is your, let’s say, underlying motivation to ever start again, a new company apart from being on the mountains every day and for the whole day? Right.
Josef Brunner:
There are a few reasons. One is I love the journey. I mean, there’s nothing more exciting than having an idea and ambition and then make it successful. And for me, like, I love people who push back, you know, now I do food, you know, I had a, my family office. We also started a few non tech businesses. So in Corona as an example, when the Corona virus hit us, we started to buy hotels because all of the smart finance people would say, oh, we can’t finance hotels anymore and when is tourism coming back? And I was like, and if you apply, you know, common sense, you go like, there’s two options. The world is going down and we all go up in flames. Then I can also go up in flames with a few hotels.
Josef Brunner:
It may, it makes no difference if the world does not go up in flames. Maybe people would go ski again, right? Maybe they do hiking again, right? And the funny thing is we, we bought those hotels from the big chains and now we Already signed the contract. We’re selling it back to them. It’s just brilliant. You can’t make that stuff up. Right. That’s why I’m so grateful of all the consultants out there who advise the big companies, because you always have to do what others people don’t in order to be successful. And that just makes me love the journey.
Josef Brunner:
Right. So that’s one. I just really, really enjoy it. That’s one reason. The second reason is it allows me to learn to find new people and it gives me structure in life. So the rules and behaviors and all of these things are very important to me. If you take away. And I was not working for a few years, this was not good for me.
Josef Brunner:
Right. It’s like it’s. I lost my. The reason to really be disciplined, to really get up, to really, really work hard. Right. And that is not good for.
Johan:
And you can’t find that in something else also on that part, because I have some friends also who exited a company and they sail around the world and they do kind of, let’s say, help other people with things, etc. Right.
Josef Brunner:
Well, of course, I could keep myself busy. Right. But there is. There’s incredible beauty in the brutality of building a company and just running around into charity or something like that. You know, as somebody who loves pain. Right. It’s just like I need that pain. Right.
Josef Brunner:
And it’s just. There’s nothing more painful or fulfilling than building a company.
Johan:
Yeah. I think that’s a great motivation for founders these days. Right. That you love pain so much.
Josef Brunner:
Right.
Johan:
Yes.
Josef Brunner:
And if you don’t, don’t do it.
Johan:
Yeah.
Philip:
So now going to the real kind of theme of this session, which is the exit itself, that probably must have been also quite painful in their own way. When you look at all the, like, let’s say the four major. Let’s say the two major exits that you had with Juulx and then, you know, Relayer. What was the strategy behind choosing the right moment to exit? Is it because you kind of felt onto the next venture? Was it because you got an offer and you said, okay, maybe it’s the right time for me to step out? Was there a specific strategic decision behind it or was it just gut feeling? The acquirer can build something even bigger than what I can do because my time has come and I know my limits up to a certain stage in the scaling of the company and beyond a certain amount of people or beyond a certain level of product development, you’re not the right person anymore to actually do this.
Josef Brunner:
I think one of the big questions and mysteries in the industry we’re all in is am I too early or am I too late? And the answer is yes. So you never know if it’s too early or too late. That, that being said, you have to really be. What I did in my early days in my career was not necessarily the way that I do it today, but what I did is I really looked into market windows and how they open and when they close. And if you think about those windows and you have something that is thriving and it’s growing and has substance, then you can certainly find a good buyer within the window. What I always focus on in life, generally speaking, is I totally believe in long term relationships. And I actually use it now as I grew older to. Also when I go into new relationships, I look into the environment of the people.
Josef Brunner:
And if the environment changes too often, they have new lawyers, they have new VCs, they have new whatever. I’m not sure if this is a good sign, but if you have people that stay with the same people or don’t change their entire network too frequently, then I think this is a good sign for me. So that being said, whenever I sold a company, I would have never done this in a way that would make the company that acquires us feel uncomfortable. So I wanted them to be happy as well. And for me, like when Cisco, as an example, when I left Cisco, I had the discussion with John Chambers, the CEO and said, you know, I learned so much from you, so I want to build a new company. He said, yeah, you can of course leave earlier, right? And he accelerated the vesting and was very kind of him. And then he said, but I would be delighted if I could invest. And that was great, right? And that is for me what I’m striving in life.
Josef Brunner:
It also helps you, you know, build the reputation that you want to have. So early companies. To your question, I looked too much into the market windows. But then as we talked about Chambers, I then thought more about market transformations, how markets evolve. That’s why with learnd as an example, we did an IPO because we thought this thing is just growing so nicely, it’s so profitable. And after having sold four companies, understanding that detaching from the firm is a hard emotional process, I said, no, then let’s just keep the company, which is beautiful as well, but those are the lenses I use to assess whether we sell the company or no. And then thirdly, also if it makes sense for the investors, the people, the customers, because ideally I would like to call the customers again. Right.
Josef Brunner:
So I’m really, really focused on reputation. And maybe sometimes this costs you a euro, a dollar or whatever, but I think long term it’s worth it.
Johan:
When did you realize this, this was the best approach for you to sell and to exit your companies? Because this is a different perspective that a lot of, let’s say founders and also investors have. Right? Because you dependent, indeed, let’s say on the market window, but also on the attractiveness for the buyer. And you want to leave your legacy well behind. Right. So it’s not a financial motivation, or let’s say ego like motivation, but you look at it more from the substance, from the company itself. Right. When did you in your life realize this was the moment, the best moment for you to exit the companies?
Josef Brunner:
I can’t talk about the company names involved, but I once was funded by Kleiner Perkins and had the joy of working with John Doar, like one of the superstars of our industries. And he was on the board of a company who wanted to acquire one of our companies. And I, you know, had the discussion with him and said that I. It doesn’t feel right. The terms were good, but it didn’t feel right for reasons that are very important to me. And his response is, I think part of the answer that you just, the question you ask is like, hey, Joe, that’s, that’s absolutely, perfectly fine. I will always do what you want to do. Because he didn’t say that, but that’s how Silicon Valley thinks.
Josef Brunner:
Because I want you to call me again and I want me to be able to always call you as I can call my entire network. So if you think of great business people like them or Warren Buffett, I think is the same and Chambers is the same and Tom, my co founder, is the same. They always want you to behave in a way that you feel comfortable with, but also they lead by example. And that gives you great confidence, right. In saying no or saying right. Because every liquidity event, so to speak, on my journey always extended my network. Right.
Johan:
And my network, and also positively, you.
Josef Brunner:
Mean yes, in a way that is reliable. And that’s why I just always had these very, very open discussions. And sometimes then we said no, sometimes we said yes. But I think retrospectively we have been extremely lucky with the deals, but what it also did to the lives of the people involved, maybe lastly, what I’m. What I’m most proud of is at Relaya as an example, we really institutionalized entrepreneurship because I wanted to have great people that work for us that would then go on their own journey and really try to educate those learnings on those values. And I now have a network of former employees that called me if they wanted to start something their own. And I feel extremely fortunate that I could fund them. And what I’m doing starting next year is I will bring them together in one really nice mountain hotel.
Josef Brunner:
And then all of these, because now we have the second generation of firms, right? So we Learned as an example, he was my former. The guy who’s the CEO of learnd. He was my head of sales of Europe in Relayer. He was a sales guy at Chulex. So the journey right now is the CEO of a publicly traded company. And now he has people that I don’t know from learned is 4 years old, 420 employees really growing nicely. The first people that are leaving Learned and starting their own thing. And now Chong calls me.
Josef Brunner:
Do you want to invest with me?
Johan:
Yeah.
Josef Brunner:
You see? And that is great. And it’s very, very fulfilling.
Johan:
Yeah.
Philip:
So it’s like the Broner mafia. Just like the PayPal mafia.
Josef Brunner:
It’s a cult.
Philip:
It’s a cult, exactly. Regarding the process itself, I remember you mentioned the other day that you pride yourself of running the process yourself and not with an advisor. Can you maybe run us through the.
Johan:
Logic behind it and perhaps to explain that a little bit, we as investors, we typically like to run this process with corporate finance advisors. There are a few vcs here also in room, and so that’s a completely different view. So. Indeed, I would also love to understand that.
Josef Brunner:
Yeah. Do we have bankers in the room?
Philip:
Ex bankers, probably.
Josef Brunner:
Ex is. Okay. Okay, good. I always strongly advise every company I invest in, work with, to not work with bankers. Never in the fundraising, and most certainly never in the exit process. And the reason for this is actually very simple, is like business people do business with people, right. If you put somebody in between, then there will be things that are going to be lost in translation. Because if imagine you’re the CEO of or an executive in a company that wants to acquire a company, then he or she might actually put his career on the line for that acquisition, right? Because if these things fail, maybe there’s a scar that, you know, he or she then has has on her back.
Josef Brunner:
And in order to help these people overcome the fear, you really need to be close to them and understand what they are trying to achieve. And then you contextualize the pitch and the whole process is like, Dear Mr. Whatever the company name is, I entirely understand where you’re going And I think we could play a role on that journey. But did she consider abc?
Johan:
Right.
Josef Brunner:
So you’re, you’re immediately starting to build that team. And the disadvantage is if you fuck up their process and that relationship, the deal will not happen. But is it really a disadvantage if you’re focused on being a good citizen on this planet and try to be a good business person? Or isn’t it even more so advantage an advantage for you if you have that bond and will that bond maybe increase the level of confidence doing that deal? Will it help you to implement a different deal structure? Because it benefits the rationale and the idea behind it. So there’s so many reasons why you running the process as a CEO is imperative to get a good deal and to get a good life afterwards. And because UVCs, you’re typically out, right? The CEO and the founder, they stay in, they have to integrate. And those could be terrible years. Right. And that’s why I don’t understand the reason to hire a banker.
Josef Brunner:
They bring up that you have to have a competitive process. I agree that you need a stalking horse and you need competition in the process, but nothing prevents you from creating the competition yourself. And also if there’s a competition of 20 buyers, 10 buyers, whatever people that the banks bring on the table or bring to the table, the message will always be the same. And the message will gravitate around your company. And then not about the problems of the potential buyer, but it’s about the problems of the buyer to really make company understand why you’re a good fit. And that’s there’s so many reasons that speak for running it yourself. And then last considerations, the first one you as a founder have to understand, this is the same with IPOs. As an example, a company, a bank who does your IPO could not care less about you.
Josef Brunner:
And I speak of experience, they care a big deal. They care a big deal about the investors that they bring into your deal. Because although you pay for everything, they want to make sure that the investors get a good deal because they are the real customers. And the same is true if you hire a bank. They will always make sure that whoever you know, the buying universe, gets a good deal because they will, you know, how many companies can you build versus how many companies will Google or Cisco acquire? Right. So you have to really understand this.
Johan:
Yeah. And how do you then in that case manage also your time? Right. Because what I learned myself as a founder, but also as an investor. Right. If you run the process of extending a company, especially the first time Right. I think the second, third, fourth, fifth time is easier, but especially the first time. How do you manage your time with, let’s say, indeed, reaching out to buyers, making a long list, making all the documentation, reaching out to them, having the first meetings, et cetera, learning also the fit, et cetera, while running your company, keeping your people informed, running with your board, discuss their, let’s say, thinking on exits, et cetera. What’s your view? How do you solve that in that case also.
Josef Brunner:
Yeah. Before I answer the question, there’s one last thing that I forgot to the previous question. Why not to work with bankers? I want to make this very clear. Deep, deep. And you know, I said that I’m a stoic and people that are stoics control everything that they can control and ignore everything that they can’t. If I can control the exit process, I will control the exit process because it increases the likelihood that it will be successful. So now to the other question. If you have discipline in place, you will as a founder and as a CEO, very quickly understand that one of two, as a CEO you only have two responsibilities.
Josef Brunner:
One is you need to very clearly frame, architect and communicate the target picture of your company. The second responsibility you have is you have to build an organization that will get you to the target picture as effectively, as efficiently and as sustainably as possible and sustainable in the terms of long term defensibility. That’s all you have to do. So and if you believe in that philosophy, then as a CEO, your companies, if they are successful, they will run without you. Right? And the organization includes the board of the directors, essentially all of the stakeholders, your employees, your customers, everything. And that’s why you as a CEO have to constantly focus on making the organization better. And most entrepreneurs I meet out there have never thought of organizational health. When they think of organizational health, they think about some mental health bullshit, Right? Which is not the real issue.
Josef Brunner:
Mental health problems arise when your organization is fucked up, right? If you have to artificially come up with a purpose, if you have a real company that is really functioning, none of these problems exist. That’s why your focus needs to be the organizational health, because it will then derive individual health, otherwise you’re just fixing symptoms. That being said, you will understand when you’re really successful CEO and is your organization works and then your organization does not need you as much in the day to day operations. And that gives you time to then focus on strategic processes. And one of the strategic processes could be an exit process.
Johan:
Yeah. So the prerequisite for this is that your company is ready to run without you. Right. So that you as a CEO fully can focus on the exit process, what you fully control, therefore totally.
Josef Brunner:
And this is independent of selling the company.
Johan:
Indeed.
Josef Brunner:
Yeah. Right. Because it has a lot to do with succession, resilience. You always have to make sure that you take out any person in any level of the organization, including the CEO and the company still runs.
Philip:
What was the most challenging exit that you’ve done in terms of the process that you ran? The choice of the buyer, the negotiation between the terms and the cultural fit. Each exit was probably different.
Josef Brunner:
That is a very challenging question because if I think about challenges, I would have to disclose things that are not necessarily positive. And one of my rules is I either say positive things about people organization or I not talk about them. So I can’t answer that question publicly, but I can give you the opposite. A few highlights of things that worked well and things that inspired me greatly on my journey. And one of the things was that I see as a poster child for me is the Cisco acquisition process. Because what they, you know, we had off Cisco when they acquired Chulex was still, you know, was very young. So we were three years old. But we had offices in China, in Japan, in the US and Europe.
Josef Brunner:
And when Cisco acquired us, it was such a great process in the, you know, the pre scouting phase. So we did the due diligence was great, the team was great, the executives were really, really great. We were acquisition. Cisco was 20 years old and we were acquisition 196. Right. So Cisco is in the business of acquiring companies and you could tell. And then the post merch integration came and they had people, we had a son, you know, we just talked about the geographies. We tried to do a simultaneous announcement and closing and they had people feet on the ground in every office.
Josef Brunner:
They flew people to China, to Japan, to the US in Europe. They had Cisco T shirts and said, your Tulex time is over, you’re now a Cisco employee. And everything worked just brilliantly. And then afterwards, Chambers had a council where he would bring all of the founders for, you know, the period of the re vesting time, which typically is two years together to talk about the flaws that Cisco has, Right. That help us get better. Right. And that spirit of self reflection is very different to other experiences that I have made. And you could tell that Chambers himself was more of an entrepreneur than an executive or a manager.
Josef Brunner:
So that was really, really brilliant. And then I also had the opportunity to work with the Google MA team and The Google MA team. And you could tell that John Doar was still on the board of Google at that time because that spirit that we discussed earlier is pretty much what he as an executive also tries to reflect this. They were so incredibly positive and the deal didn’t come together. But the way, I mean sometimes when you, when things don’t end as one party would expect or hope, the way that you separate tells you more about the people. And this is why I have such an admin. I admire Google greatly for the way that they think about M and A. It’s just, it’s like Cisco, a very, very non German mindset.
Johan:
Can you elaborate a little bit more on that? What did you like especially in the process afterwards, right when the deal didn’t go through?
Josef Brunner:
Well, the head of M and A, you know, I think he still reaches out like once a quarter. What are you seeing? Can I be of assistance? When they have questions about acquisitions that they want to do, they reach out. It’s just, you know, they, Silicon Valley, unlike any other place in the world, thinks about building networks. Right. And the way that the whole ecosystem works in America. I just got off like last night at a discussion with one of the senior partners at Kleiner Perkins about investment and these multigenerational networks that they are building is one of the secrets to their success. So you have Kleiner Perkins, as we just talked about early investors in Amazon and in Google, then Amazon and Google, the companies, but also the executives investing in the next fund generations. And it’s just becoming the strong, strong network.
Josef Brunner:
And that’s why if you work with a top tier VC firm, you get meetings with CEOs of any company extremely quickly because they all think of long term relationships and building networks. And that is just I think something we all can learn a lot from.
Johan:
Yeah, hey, really interesting and really I recognize that. Right. It’s more about building long term relationship and building your legacy than having a short time, short term success. Right. A one off success. Right. That’s I think. And we think about us differently.
Johan:
Right. A lot. So I think that’s a great insight what you bring and I take it step back to the exit process of the company. Right. Because you mentioned also that you want to let the people run the company so that you as a CEO, founder can run, focus on the exit process. Right. How I know that’s a struggle for a lot of founders in this process. How transparent at that time can you be also within the company about process, et cetera? What’s your experience also in that Especially if you run the process.
Josef Brunner:
Like, so I’m a big fan in transparency, like with what we do with, as an example with Nutri United now, you know, we built the company in public, right. So we, we are as transparent as we can be. We have our own podcast where we talk about a little bit about successes that we have, but more importantly about failures and, you know, things that I, you know, where I was wrong and things like that. And I think there’s great beauty in being transparent, but there are, there are limits. I don’t. I never talk publicly about acquisition processes for a few reasons. One is it makes the entire herd nervous immediately and everybody’s running around like crazy. And specifically if you do something in German, we German have a few superpowers, one of which is we like gossip.
Josef Brunner:
Right? And if a rumor like this comes up, you know, it’s. The rumor starts here on the left hand side. And once it’s traveled successfully through the company, you would be amazed, amazed about the story, how it evolves and transforms on the way. That’s why I would always be very clear and not be transparent about these access processes because of gossip and rumor and what it does to the productivity of the team. Secondly, I have had a lot of strategic inbound requests where I looked into the interest, the deal, and then decide together with my board and the investors if there’s something we want to pursue or not. If you’re always transparent about this, people go like, well, how fucked are we as a company? If now the third acquisition process did not come together, they would never say, wow, we are in a pretty strong position because we have three acquisition offers that came to the table. So those are just two reasons why I would not be transparent about it. The third reason is if you’re transparent about it in the age that we will live in, you can be sure that this will disclose to a broader audience and let’s say you have a company like Cisco.
Josef Brunner:
If the Cisco deal would not have come together, I think it would be hugely disrespectful to Cisco if they would then have to explain why the deal would not come together because nobody would know the real reasons. So there’s a whole host of reasons why you should keep this to yourself.
Johan:
Yeah, so you say I want to be transparent, but unless it’s generating a lot of noise also in the company, it distracts, it creates uncertainty both on employees and also in the market. So when do you typically then involve the management team right in the process? What’s your typical experience on that?
Josef Brunner:
The management team very early on because it’s part of the being the stoic I am and not having bankers. I’m not sure if I mentioned this before, but it would not work with bankers. The. One of the benefits that you have as a CEO is because a company acquires a serial entrepreneur, the likelihood that that person will move on is high. So what you have to do in order to further substantiate the attractiveness of the deal is say my second and third and fourth line of command, they run the business. So I bring in the management team very early on because it helps the buyer understand that it’s more than just the entrepreneur. It’s that the organization is really working. That’s number one.
Josef Brunner:
Number two is as I’m maybe I’m just an incredibly lazy person. I. One of my rules and almost my religion is extreme ownership. And in order to have extreme ownership in the organization, people need to be responsible for their area, but they also have to take responsibility of the results. Big difference. And so they run the business so they are best qualified to answer specific questions on technology, on finance, and so on and so forth. So bringing them in is a true asset. And also it’s.
Josef Brunner:
I think it tells the management team something about the trust, which is the most important attribute in unhealthy organization. Trust that I bring them in. Right. So there’s a lot of reasons that speak for bringing in the management team. But I always went further and I specifically like in an access process, you. You typically always have to specify who are your, you know, the key employees. They get in. In some deals, they get a special treatment by the buyer.
Josef Brunner:
Like Cisco gives them additional restrictive stock units so that they, they stay. And having them in very early on also shows somebody who might not be in the management team or in the leadership team, but maybe is an expert in a specific part of the technology. If I bring them and said, all right, so I give you the trust, come in the process. I’m not sure if it will be working out, but I hope that it shows you how important you are to the company as I give you that exposure and as I expose myself. And then typically, even if the deal doesn’t come together, it helps me strengthen the relationship to these employees as well. So not on day one, but if process has started, I bring them in.
Johan:
You bring them in. And then indeed, I think it’s also regarding this topic, it’s about, especially with the exit process, which you mentioned, also you want to have a competitive process, right? But you really look at it from Your legacy and also the feeling that you have on a potential buyer and acquisition. How do you at that time, if you have multiple offers on the table like you had a few times, how do you compare these offers, right? And also how do you indeed work together with your board on that end? Because you do it, if I understand you correctly, also a lot of gut feel, right. And about your legacy and see how your company will land in the company. But how do you, let’s say, make a decision to with whom to continue if you have multiple offers on the table?
Josef Brunner:
Well, the advantage of not working with bankers is that you can help the buyer understand what is important to you. And you know, it’s not always just a price. You know, sometimes it’s the deal structure, right? What is the clawback, what is the escrow, what is the re vesting it? Indemnifications? Just name it. So you can help your buyer understand what is important to you. What is nice to have are there specific red lines. And that results in a situation where the deals ideally don’t differ that much. Because you helped everybody understand if this is a deal structure that they could be comfortable with. And then as transparency in the boardroom is very, very important and in the management team, you every people are typically involved, right? And there is no surprises.
Josef Brunner:
And that’s why that actually was never a real challenge because we tried to be in the driver’s seat when it comes to these processes and that maybe led to a few deals dying, you know, at the get go because the buyer said, you know, that is a deal structure I cannot feel comfortable with. And then that’s fine, but then why waste the time to advance something that.
Philip:
Won’T work and doing the process yourself versus a banker? Because my understanding is that you don’t like bankers. Did that also change the way companies did the process on their end? As in, you know, structured process with a banker on your end is very, it’s like a framework, right? You, they kind of take care of the whole like process for you, but doing it yourself. Did it also change the way your acquires did due diligence on you and or were they running it on a very structured banker like M and a process?
Josef Brunner:
It depends on the company. So Cisco was extremely structured, but also very involved. And Cisco has a wonderful culture where everybody that is a vp, VP or above can actually start an M and a process. And then you have different approval stages and so on and so forth. And that is enforcing ownership, right? So the VP or the SVP or whoever it is that starts a process. He really needs to understand what is the implication of this thing. And because he puts his career on the line. And even in a company like Cisco where Sean said that the CEO said I understand that only a certain percentage of deals will work, you know, and I want everybody within Cisco to understand that it’s okay if acquisitions fail.
Josef Brunner:
And that that is also a very, very different perspective to German companies. Like when, when something fails they challenging for them. And this is also the, the American Silicon Valley approach. Actually the, the chief of staff of Chandor or when I talked about the compensation that they had within Kleiner Perkins, he said they also measured a failure rate of the partners and the write off rate. And if they don’t have enough write.
Johan:
Offs, they don’t take it off. Risk.
Josef Brunner:
Yes, they’re not taking big bets. And the entire asset class like I invest very different to Kleiner Perkins because I have a different philosophy. But if you’re in venture capital and you have to make sure this is an outlier business, you have to do big bets that are extremely risky in order to get the results you need to see. And if somebody has a 0% write off rate, it shows you that he or she might not be as aggressive as you need to be. And so long story short, Cisco had the combination of running the process extremely structured because they really understood to post merge integration in the scouting process. But they had the executive always in the line and we had a situation where the money was not enough for the deal to work. And then we actually sat together with the executive and they found different financial resources outside the M and a budget to make the deal work. And that is just a wonderful example of how I think M and A should work at a company.
Josef Brunner:
You have a structure process that makes sure that you’re also integrated properly, but you have somebody who takes ownership.
Philip:
But would you go to an acquirer? Like would you choose an acquirer if the acquirer actually says I’m, you know, it’s not 100 sure that your company will continue and your legacy will continue. Because that’s Cisco’s case. Right. Would you actually go then for that acquirer?
Josef Brunner:
Yeah, because I, the way that I would see it as a stoic is it’s on me whether this thing survives or does not survive. Because if I succeed and if I can manage to bring life to the business plan that is the foundation of the acquisition, then the company will succeed. And so I have the control. Right. If I was not in control and if a banker would work with an acquirer and come up with a business case. You get to the business case and it looks wonderful but it has nothing to do with reality. Then it’s a more challenging situation. Right.
Josef Brunner:
And also for me what was always you can never guarantee that the things will work out the way you wanted it. But I want to guarantee, I want to give the guarantee to the people that I work with that I will work as hard as I possibly can to make them successful. And that helps you even in cases where this would not be the case, you still build a strong relationship with these people.
Johan:
Yeah. Because that’s what you really control right there. That’s where you have influence on. Yeah, yeah. And then looking at. Especially after. Right. Reached a deal.
Johan:
Sorry reach a term sheet or loi with a potential buyer. Right. Then the due diligence phase happens and what we learned also myself as a founder but also as investor but also if you read the news, so it’s not the news but if you hear founders talk, that’s a really challenging times. Right. Because especially at the DD phase things pop up where let’s say deals either get rid. Sorry get taken from the table or will be negotiated. Right. What’s your experience also as a founder where you should be prepared on in the DD phase.
Johan:
What’s really let’s say, important to make the deal succeed. Yeah.
Josef Brunner:
That’s why I’m not a big fan of negotiating a term sheet independent of the business or the technology. So I would like what we do at Nutri as an example now when we acquire companies we do a due diligence before we send out a term sheet. Because I don’t want to be a person who puts a term sheet on the table and then pulls out of the deal. I think it’s terrible. I think it’s emotionally disastrous to the people involved that if I sell a company or if I raise funds, I insist on pre term sheet due diligence. And of course it’s more effort but it gives more confidence to the other party. And then I would say if then somebody pulls the plug then I think it’s a behavior I don’t like. That’s why I try to be different when we are acquire.
Josef Brunner:
And that’s why the reputation of an acquirer is important. And we live in a world where everything you know, you don’t have. You can’t believe everything you read on the Internet. But there is a public reputation that is being built. Right. And we talked about Google and Cisco and these tech companies, they know that their innovation to a large extent comes from young companies, so they’re super, super sensitive with their reputation with the foundry ecosystem. And sometimes I feel that German or European companies could be a little bit more sensitive when it comes to their MA reputation.
Johan:
And it’s the process that you run, right. Where you say I do the term sheet, let’s say really late in the process because they’ve done their due diligence most of the time. Right. So they know everything of the company, so there’s no uncertainty. And also it helps you to understand the buyer and the motivation and for them to understand your motivation. Right. So you align really well. Is what’s your experience also with indeed buyers like Google, Cisco and let’s say other U.S.
Johan:
buyers. Is that the standard process or is the standard process more. Let’s say what we all read in the books and read in the news. Right. That there’s a commercial DD loi and then the factual dd. What’s your experience on that?
Josef Brunner:
I think that’s the standard. Yes. But I think for the US firms, it’s okay because they’re willing to take bets. Right. And they’re not looking for perfection, they’re looking for potential. I think the more advanced the company becomes and the more the value of the company is based on fundamentals, the more important the financial and commercial due diligence becomes. Right. So that’s why I wanted, or why I would like to share more upfront.
Josef Brunner:
If it’s a pure technology acquisition, which Cisco and Google sometimes do, then they typically try out the technology first. There is always some kind of a relationship prior and there’s experience that I, that’s why I think it’s, it’s different.
Johan:
Right.
Josef Brunner:
So I think it depends greatly on the deal, but in the process, be as transparent with your buyer that you can be because, you know, you avoid surprises.
Johan:
Indeed.
Josef Brunner:
And secondly, you build trust.
Johan:
Yeah. And a relationship also over time to better, let’s say, leave your legacy behind. Right? Yeah.
Philip:
Looking at these exits, I know you don’t want to talk about the negative side of things, but were there a couple of things that you would do differently today? In hindsight.
Josef Brunner:
Yes, I would do, you know, things differently, but I think it’s part of life, you know, you, you learn, you grow. That doesn’t mean that, you know, I’m dissatisfied with something. Right. But it’s just like also I changed as a person. Things became more important to me. I think the, the one, the major one, the one major thing I would do differently is not sellers early. I, you know, I sold one company that I actually tried to buy back later on, which unfortunately didn’t, didn’t work because I, I think we should have taken a company public versus selling it. So that is the.
Josef Brunner:
If I would have a regret, then, you know, it’s selling them out too early. That was the main reason why we took Learn public. It’s just like it’ if you love something and you build something that really works, why sell it? Right. But this is when I still had a different relationship with my pain and I thought that more money could help me. So my life is almost like a therapy session. And as soon as I realized more money will not change how I feel, then the perspective of, you know, became evident that I love the journey and I love these companies and the culture and that’s why I would not sell them as early. On the flip side, I got to the conclusion because I sold them too early. Right.
Josef Brunner:
So there was also a benefit in having that learning experience.
Johan:
And what’s your. Because you’re very active in the Berlin, but also the San Francisco ecosystem, let’s say in the general ecosystem. So you speak a lot to, let’s say, very renowned investors, but also indeed CEOs like John Chambers of Cisco, but also a lot to founders. Right. What is your view? What would be. And I know it’s a broad question, but I think it’s interesting for the audience also to learn, especially on the exit part. Right. What is your biggest advice for founders who are now, let’s say, either preparing the exit process or are in the midst of an exit process? What would be your biggest advice for them on the exit of their company?
Josef Brunner:
Not working with bankers.
Johan:
I think that’s clear.
Josef Brunner:
No, I don’t want to do banker bashing. Right. There is a reason why they exist and they, I think most of them do a wonderful job.
Johan:
I don’t think we get a sponsor for the big exit show by a banker.
Philip:
No.
Johan:
Anymore. Never.
Josef Brunner:
So it’s not the bankers. It’s. I think it has. Yeah, it is. Everything is about me. Right. So I just like to be in control. And so if some of my statements came across disrespectful, that’s not what I meant.
Josef Brunner:
It’s just like if I can own something and can control it, I always will. So my number one one advice that I would give to first time entrepreneurs that sell their first company is have a, like a sounding board, a sparring partner who can give you advice, guidance, sometimes, you know, therapy. Right. If things don’t, I mean these, these processes are emotionally extremely challenging. Right. Especially if you do it for the first time, there is a likelihood that this is life changing for you. And you have to be extremely controlled in these processes. You can show negative emotions.
Josef Brunner:
So having somebody who you can call and just shout, cry, you know, get advice, get strength is I think very, very, very important. Right? So before you get more legal advice, more commercial advice, more process advice or support, have a friend that understands mental.
Johan:
Right as a mentor.
Josef Brunner:
Yeah, mentor is a good description.
Philip:
And what is the best advice you.
Josef Brunner:
Ever, you’ve ever gotten in regards to the exit process?
Philip:
Personal, professional, Something that really so many.
Josef Brunner:
Important advices, I think on a, on a, on a personal level, a few is always try to, you know, be the person that you want others to be. Because we are so quick in complaining about Thomas or Nicole and how she behaves. And sometimes when we interact with people, it’s like, you know, who do you want, want that person to behave? And then apply this to yourself if it just gives you a much easier life. That’s, that’s certainly one. The second one was really when I was not working for a few years, I was almost lost. You know, I did investments and I, I just, I didn’t know why, why, why I was unhappy. And then I was having lunch with Henry Crevice in New York work. And Henry, you know, he, I’m not sure when he started KKR 50 years ago, maybe something like that.
Josef Brunner:
And he’s one of the two founders, there were three founders, two of which are still in the business. Multi billionaire. He created an asset class, he created private equity. And he said, joseph, the secret to a long and happy life is be a workaholic. And he, at that time, he was 80 years old and you could see the fire in his eyes. And that touched me so, so much. Right? And then of course, his attitude and values. He’s just a wonderful person.
Josef Brunner:
So those people really, really changed my life and gave me great advice. There was another guy, very successful investor who said, you know, always, you know, try to be an ethical person. And it sounds so obvious, but if you, if you build businesses almost every day, you can make a choice that is leaning more to the ethical side or more to a side of, you know, short term benefit for you. And if you, if you constantly think about, you know, it’s basically the same advice, you know, try to be the person you want others to be and always, you know, try to be an ethical person. The reality is you say no to almost everything and you make those tough decisions. And I can tell you it’s like they are, they’re tough decisions. Because they’re tough decisions. It’s not like that.
Josef Brunner:
You know, I would be like a perfect person. It’s the opposite. I have situations where I look back retrospectively. The reason why I have have to deal with him or her now is I felt it.
Johan:
Yeah, I felt it.
Josef Brunner:
I took a short term benefit over long term. Stability, reliability, honesty. So try to be, you know, always try to act ethically. Always.
Johan:
I fully recognize this, especially the long term versus short term. So yeah, and great insight questions from the audience because we asked a lot of questions.
Philip:
I just have one question regarding the.
Josef Brunner:
Pre terms to due diligence.
Philip:
So some of the founders actually have.
Josef Brunner:
The fear then that some acquirers are.
Philip:
Actually just kind of spying on the product, wanting to see the roadmap and not even the financials but more around that. And how do you take away the.
Josef Brunner:
Fear or how can farmers kind of.
Johan:
Prepare that and let me repeat the question right. For the audience, for the listeners also. So your question is indeed in the process, if you have, let’s say a very early on term sheet, how do you prevent that the buyer steals everything, what you know and all the IP and have all the insights without indeed doing the deal? Right. So what’s the risk there and how do you prevent that?
Josef Brunner:
Yeah, there’s a few things you can do. Number one is we talked about reputation before. Work with people that have a good reputation. Right. We talked about Google and Cisco as an example. And I think these firms don’t have a reputation of stealing because the long term impact would be disastrous for them. So that’s number one. Number two is always this is a general advice.
Josef Brunner:
Always understand that the only thing that makes you successful as a founder is execution. An idea means nothing and a roadmap means nothing. And if you, if you have that philosophy implemented, you could even turn this around and could say, I share my roadmap publicly, I don’t care because I will be faster, more efficient and just better than you. And by doing this, you inherently build an organization that will not be caught by surprise if somebody would steal something. This also goes back to deal negotiations. Warren Buffett has this great advice for his direct management team. They’re a very small team. So for everybody who makes investments is like, just think about everything you discuss in the boardroom is going to be printed in your local newspaper tomorrow.
Joseph Brunner:
Tomorrow, Right. And if you still do the deal, do the deal. And if it makes you think, don’t do the deal.
Johan:
Right.
Josef Brunner:
And if you apply the thinking when you meet people for the first time, you will immediately get a gut feeling. Right? And sometimes we ignore. We have a million years of cumulative evolution in our DNA, and sometimes we ignore the gut feeling. Right? And if you have somebody, somebody that would steal something or behave unethically, I promise you, 90% of the time, you look back retrospectively, you’re like, I felt it. And if you feel it, don’t do it.
Johan:
Four more.
Josef Brunner:
Yeah.
Philip:
Mark, what’s the single best advice to stay in the driver’s seat as a founder while you’re in the exit process in respect to. You have bias dynamics, you have your own shareholders as an own dynamic, you have a legal frame work. How do you stay in the driver’s.
Josef Brunner:
Choose your partners wisely. Right? From. So sorry, the question.
Johan:
Yeah, Please, let me. Let me. How do you stay. Let me repeat the question indeed. How do you stay in the driver process? Right. During an exit process, as a founder.
Josef Brunner:
In the driver’s seat during the. The exit process. Very, very important question. It. It starts with the first investor you bring in, the first business angel you bring in. And if. If those are good people, then they will invest in you, not in the business. They will invest in you.
Josef Brunner:
And then if they have that philosophy, it would be not logical to take you out. They would be very logical to support you, but it would be not logical to take you out. So choose your partners wisely, and the right partners will always support you and never take you out. You. Hi. I find it really good that you are bringing up stoicism, and I’m living it for some time, and I try to apply it, and I find it very easy when things are doing good. Like, when things are going good, I can. I know what to do.
Josef Brunner:
But when Ish hits the fan, sometimes I find it very hard to apply these things. Do you have any like. Or any advice to remain stoic or like. Do you have any suggestions to keep. Yeah. To continue with that? Yeah. So I would suggest throw shit in the fan yourself constantly, because it will always hit the fan anyways. And then if you’re a stoic.
Josef Brunner:
I think the moments where stoicism really pays off is when the sea is rough, right. And I see a lot of, like, sunshine sailors and a lot of sunshine captains, especially in the younger generation, to throw the cliche. But I think there’s truth to that. And for me, what I do is I. Stoicism as it became. And my rules and the behaviors became part of my everyday living. I don’t, you know, I don’t. Feel it when the sea is calm.
Josef Brunner:
I only see it and feel it when, you know, shit hits the fan. And then it provides me with incredible confidence and I’m very, very calm because I know I got my rules right and I’m just plowing ahead. And I also this, that’s why I love long term hikes. As an example in winter where I do like cross country hiking or cross country skills because it’s so brutal, right? And it’s so hard and there’s so many dark moments. And if you have those rules and then you make it, then you know, this is like muscle memory. It tells me and my inner system that if I stick to my rules, things will be okay. Because I con. There’s.
Josef Brunner:
There’s two convictions. One is if I can control things, I will control things. That’s number one. Most people don’t control things they live in. They are a result of their environment and they go with the flow, control things. And the second conviction is that with those rules there comes resilience. And I think my biggest superpower and the reason why I was lucky in life is you can’t kill me. Like just, it’s just with my rules I have confidence and I just stand up one more time.
Josef Brunner:
And I’ve done this so many times that I know it’s just like I don’t, I don’t know if I have to stand up 10 times, 100 times, but I will, I know I will always stand up. And then at some point, last thought, the people feel it, they go, it does not make sense to continue fighting with someone because this guy’s too stupid. Like, it’s like rock. It’s like, how hard can you hit, right? Come on, hit me one more time. And then you get up one more time. And then at some point reality gives up because people are lazy and they stop fighting you. Yeah, thanks. I think you said one of the tasks of a CEO is building an organization, right.
Josef Brunner:
And maintaining the culture. And I would be interested in your observations post acquisition. And then secondly, at the point where the founder leaves the company. Right. Because I think that’s interesting to understand what happens here. Thank you. It’s. It’s a very good question for a few reasons.
Josef Brunner:
One is the in order. So you have a really well functioning organization. Then this is like, it’s a very, very strong team, right. And it typically, you know, fights every odd. Right. And it stands together very, very closely. And this can be. There’s two ways that companies can acquire you.
Josef Brunner:
One is, is you. And that’s what the big tech guys do, they acquire you and then you become part of a business unit and they, they sometimes rip your company apart. Like you know, the engineering team is moving over there, the sales team is moving over there. So and you could also say this differently. They purposely destroy and dismantle your organization. But I think for the right reasons because they have their own work, ideally they have their own work organization. And this results sometimes in a few people leaving ship. Because if you have the trust and the autonomy to always do what you wanted to do and you were in control and you get, you know, dismantled and they put different parts of the business in different silos of the other business really of no control whatsoever.
Josef Brunner:
So I think for that’s why the acquisition processes and you know, my regret of selling to early early this is where this comes from because the team is being purposely destroyed as it has to be. Right. I get this now. Even when we acquire companies, this is the. With relay we acquired a company called Proximity. It was a firm but was not too big, 60 people or so. And I, you know there were people at the, at our kickoffs, at the summits that were wearing the Proximity T shirts. And I said, you take this off, right? I did the same.
Josef Brunner:
It’s like you’re now part of something else and our values are different. Right. So it’s a fascinating topic and that’s why I really, really like the philosophy of the Cisco’s and the Googles. Because what they then say is like I understand that you are leaving and that’s okay way, but can we invest in you again? And once you build the next thing. And Cisco had a team, they call it the Mafia was like four Italian guys literally they built the UCS data center unit like multi billion dollar unit outside the company build it and Cisco will pay billions to acquire them all the time. And people, you know, people within the organization would start to ask questions if this is a good way of deploying capital. And Chambers always said if we will get our shit together internally, we wouldn’t need them.
Johan:
Indeed.
Josef Brunner:
But we are 180,000 people or something, right? It’s just like we have problems. No, I don’t say this. Anyway, so there is a reason for this. And then when Chambers left Cisco, he started his own venture firm just with his own money. And guess who he built the first company with? The Mafia. Right. And like two years after they started it, HP acquired it for over a billion, I think 2 billion and change. And then they dismantle it again.
Josef Brunner:
Right. And that’s evolution. So that’s perfectly fine.
Johan:
Last two questions at a time.
Johan:
Well, thank you. I mean we’ve learned that you like to reflect. So maybe I do have a very.
Josef Brunner:
Hypothetical question for you. If you would be that 15 year old boy again that you once were, would there be anything you would change from that standpoint where you are now? Thank you. So yes and no. Yes, because there is situations where I look back selling the companies too early or working with the wrong business partner where I was too impressed with the VC and the CV and then, you know, hired them and they did harm because they didn’t have the experience. So. Yes, but no, because life is about dealing with those mistakes and I would not be. I have still so much to learn and to grow and I’m like the human incarnation of imperfection. But you know, understanding that there is so much to learn from those mistakes embeds that learning philosophy.
Josef Brunner:
So if I would have not made these mistakes, it’s just logical that I would make mistakes later on and they would be even more expensive and they would be even more disastrous. That’s why I think they were really, really helpful for me. And that’s why I would like to keep those scars as their reminder of know people I don’t want to work with or things that I did wrong.
Johan:
Nice.
Josef Brunner:
So you mentioned two concepts, the stoicism that is deeply in your roots and you mentioned that you are lazy, which I doubt, but that you’d really like to get people in responsibility. So these two concepts sound a bit contrary in a way that you want to control things, want to have them close to you, but also so give things away. How do you handle these two ways? Yeah, really interesting question because you’re right. Theoretically it could be in conflict. Right. And theoretically you could say I need to be involved in everything. But I don’t think that’s true. I think if you have control over everything, you don’t have to necessarily be involved in everything.
Josef Brunner:
So the way that I see it is I want to work with people that I trust entirely and fully and they will, you know, manage their part of the business to the best of the company. That’s number one. Right. By doing so I actually, as I give that person control and trust, I think I have indirect control over the success of the company. Right. Because if she or he is really good, they will do their job. They do it better than I do it. At the same time this allows me to constantly work with any layer in the company.
Josef Brunner:
I can then go down to an engineer and try to understand things. If I would have to be involved in the day to day operation constantly, then I would actually have less understanding about my own organization because I was so busy managing my team that, you know, if you have a few hundred people or a thousand people, you cannot spend time with the individual contributors, but they make, you know, a significant contribution to the success. So I like to always have cross movement in the organization and I like to be in touch with everyone because this enables me to make the right decision position. And then so that’s, that’s where I see the bridge between being control of everything but also allowing others to embrace extreme ownership as well. And for me that, that really always worked brilliantly because I then can for example, also implement things like succession that I think most people, people don’t think enough about. And succession for me means that I have in every company there is a succession planning in place I’ve created. Or a former colleague of mine, actually she created that. It’s a spreadsheet and it’s like a 360 degree assessment on values, behavior and domain contribution.
Josef Brunner:
Right. So you’re an engineering leader. What’s your contribution to our product as an example? That would be the domain. But how are you enabling other people in the organization and then how do you help us be the organization we want to be? So three different buckets. And as everybody embraces that, I actually have more control over the company. Because if the engineering leader at some point says, you know what, I want to leave and move on, I go. That’s not a problem because I have 10 people in the organization that can immediately fill that spot. The same is true if I get sick or if I die or anything happens.
Josef Brunner:
There is immediate succession that could fill in my role. That’s why I think there could be a theoretical conflict between ownership and building a self sustained organization. But I actually think that if you want to be in control, you have to embed that into the organization as well. Thanks. All right, thank you. Thank you. It was a lot of fun.
Johan:
Yeah, thanks for sharing all the insight. I think the biggest insight that I had from is that I have to read about Stoics. I read a book a little while ago, but I think it’s really fascinating. And also how you apply that both to yourself also when indeed when your sorry parents got bankrupt and you were homeless and brought that also into your life, but especially also in the company and also how you manage the exit process. Because that’s what we discuss here a lot. Really good on that end. Right? Giving indeed the team there, the execution and also the power, but also staying in control yourself. So thanks really for sharing those insights.
Johan:
Josef Yep, thanks for having me.
Josef Brunner:
Thank you, thank you, thank you.
Johan:
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