Odinian Beta

My guests today are Scott Davis and Rob Wertheimer. Scott and Rob head up Melius Research and are the authors of a great book called Lessons from the Titans. The book explains what the industrial giants of old can teach the new generation of high-growth businesses about how to survive and deliver shareholder value over multiple decades. Drawing on their experience as industrials analysts, they present case studies on businesses like Danaher, Roper, Honeywell, Boeing and GE to reveal both what does and doesn’t work when it comes to capital allocation and business strategy as a company enters a more mature phase in its lifecycle. Please enjoy my conversation with Scott and Rob.

Read Lessons from the Titans

Listen to Founders Podcast

Founders Episode 136 – Estee Lauder

Founders Episode 288 – Ralph Lauren

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. 

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Show Notes

(00:03:20) – (First question) – The intersection between the current tech sector drawdown and the historical track record of industrial titans 

(00:07:10) – The most common ways they see companies start to fail and the types of errors they commit 

(00:11:01) – The best historical examples of companies that have gone from non-operational excellence to operational excellence 

(00:15:04) – Teaching the value of a business system and installing one for longevity 

(00:24:06) – Questions they’d ask and points of evaluation to uncover the health of a business

(00:31:19) – Thinking about sustainable value creation in a lower growth environment 

(00:37:04) – Lessons from operating leverage and the rental industry 

(00:39:11) – Ways industrial companies have handled growth CapEx well and badly 

(00:43:52) – The line between discovering the future in a lab versus major pivots in reality while trying to solve today’s problems 

(00:49:37) – How the best managers nurture a great shareholder base 

(00:55:35) – Lessons to learn about business model transitions   

(01:00:13) – Further important messages from their book that businesses would benefit from

(01:04:30) – The kindest things anyone has ever done for them