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PJ Patel - Compounding Interest on Givers
Episode 216th December 2021 • Compound Ideas • Ken Majmudar
00:00:00 00:45:08

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My guest today is PJ Patel, Co-CEO & Senior Managing Director at Valuation Research Corporation. In our conversation we discussed the differences between Canadian and US entrepreneurs. How 911 changed the trajectory of his career, and how 50% of the role of a CEO involves supporting the success of the people around them. 

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Please enjoy my conversation with PJ Patel.

For full show notes, transcript, and links to content discussed in this episode refer to the episode page here:

For more episodes of Compound Ideas, visit Compoundideasshow.com

For more insights like these and to contribute to the conversation go to: https://www.ridgewoodinvestments.com/insights-from-our-founder  

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Linkedin @kenmajmudar

Twitter @kmajmudar 

Facebook kaushal.majmudar.3

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SHOW NOTES

[00:01:55] - PJ shares his family's immigration story

[00:04:55] - A closer look at our neighbor to the north

[00:08:13] - The most prestigious institutions for higher learning in Canada

[00:09:26] - Key social and economic differences between the U.S. and Canada

[00:15:57] - The role that chance plays in reshaping prospective 

[00:20:58] - The niche field of valuations and the wide range of clients that use them

[00:28:35] - The role finding mutual interests plays in relationship building 

[00:32:48] - Practicing altruism in your network devoid of expectations will be reciprocated

[00:35:23] - Insight into the role of a CEO in an evolving workspace

[00:41:01] - PJ reflects on two books that have impacted business decisions throughout his career

Transcripts

Narrator:

Welcome to compound ideas hosted by Ken Majmudar of Ridgewood Investments this podcast will feature exceptional individuals to uncover deep insights into business entrepreneurship personal growth investing and multi-disciplinary thinking so you can learn how to improve your finances find better investments and pursue authentic lifelong growth, wisdom, and happiness; learn more and stay up to date at compoundideasshow.com.

Ken:

Today I'm pleased to have co-CEO and senior managing director at Valuation Research Corporation PJ Patel on the show. Like many of the clients I have the honor of working with at Ridgewood Investments I think of PJ more as a peer where I get to help support him in areas related to investments in finances while we both develop and learn from each other in our respective areas of focus and expertise although my family and PJ's family are both from different parts of the same state Gujarat in India our stories and our journeys differ immensely. In this show we discuss the differences between Canadian and U.S. entrepreneurs and cultures, how 9 11 changed the trajectory of PJ's career and how 50% of the role of a CEO involves supporting the success of the people around them. PJ uh welcome to the show, great to talk to you today  

PJ:

and good talking to you as well 

Ken:

let's start with your personal story. I know you're from Canada and I've spent some time up there but not really that much. I don't know that most people in the United States are really as familiar with Canada as probably I think Canadians are more exposed to America. The big brother to the south or whatever you guys sort of refer to us as. But let's start there so tell us about your personal story. Were you born in Canada, what was it like growing up there? 

PJ:

Yeah actually I was born in England, spent the first five six years of my life there and then moved to Canada with my family and grew up there spent the next 20 years or so in the Toronto area. I went to college in Toronto as well at University of Toronto and pretty quickly after that decided to go to grad school and was looking still for something fairly local and moved to Buffalo went to grad school for a couple years and then from there made my way to Chicago and then finally to the New York area and have been here ever since. So it's now close to 20 years just over 20 years I guess in the New York area and I guess I spent about 20 years in Toronto as well 

Ken:

now I know you're Indian right you're Indian origin so what part of India does your family hail from and how did they end up in the UK?  

PJ:

Our family is from a town called Navsari which is about 100 miles north of Mumbai on the west coast in Gujarat on you know the west coast of India. my dad's family they started migrating to England and Canada in the late 1940s early 1950s now shortly after world war II there my family was in the electrical business in India had an electrical store did a lot of lighting and things of that sort were actually known as light walla which is you know the light people. My dad's cousins and uncles moved to England and Canada in as there was a need for electricity post world war II a lot of men yet you know from England Canada had died in the war and there was a need for electricians and that was the my dad's family was in and so a lot of our family ended up in England to start and then from there migrated to Canada they were primarily in the television business so you think back to that time TVs weren't as maybe simple as they are today definitely not as light they were in the electrical business TV technicians and things of that sort there were a lot of men they had a great workforce and became trades people 

Ken:

that's actually really funny I think actually if people like the young kids today saw what our TVs look like I don't think they would recognize them in fact I think I saw something like that on instagram they were showing them objects you and I would know and they were stumped they didn't know what it was do you know what prompted them I guess you were probably age five so zero to five probably I don't know if you have any memories from that time but what was behind the move to Canada to the Toronto area 

PJ:

just a better opportunity for us for the kids that's primarily what drove the move from India to England and England to Canada is just thinking that there'll be more opportunity for myself my brother my cousin and things of that sort 

Ken:

and where in Toronto did you guys settle 

PJ:

it's  just west suburbs this town called Mississauga it's a fairly big suburb just to the west of the city

Ken:

so what would surprise Americans let's say who spent all their time in the United States obviously we all know Canada it's our neighbor to the north but what would be the things that you would say would probably most surprise somebody who's never been to Canada if they go up there  

PJ:

look Toronto is in you know that part of Canada there's a lot of similarities between the U.S. and Canada but I'd say there's also a continuum and if you took Europe on one end of the continuum and the U.S. at the other end of the continuum Toronto is probably closer culturally to the U.S than to Europe but there's still a lot of British influence I look at myself for instance I play squash and squash as a British origin sport and you know down here a lot of times people say oh that's kind of odd how'd you get into that well I'd say when I was younger everybody not everybody a lot of people play squash I mean it's a fairly common game that that's played up there so there's a lot of other Canadian or let's say British origin foods and snacks and things of that sort that are still available in Toronto and slowly there's an Americanization I'd say of those things and much more today than there was when I was a kid but there is still that influence of Great Britain in Canada continues but as you move further east let's say to Montreal or Quebec City they're probably closer to the European end of the continuum than they are to the U.S.  

Ken:

and how about economically in the economic system and the system of government would you say there are any striking differences 

PJ:

America is much more capitalistic I think in Canada people do well but it's very much sort of do what's right for the group as a whole again there's a continuum there and it's Canada's probably a few feet over a few pegs over in terms of being towards a I hate to use the word socialist government healthcare and a welfare system and things of that sort remember I was up there for an industry conference five or six years ago there's a very interesting presentation by reporter who basically said in the U.S when you have serial entrepreneurs they keep going they find their first company found their first company and they they make a lot of money and then they move on to the second whereas in Canada it's more kind of like if you're an entrepreneur let's say you get to a value or a number of say 50 million and they sell and you never hear from those individuals ever again they go to the beach and I think that's kind of reflective of the environment there definitely seems to be just more appetite for risk and doing more and taking on more maybe in part it's the culture the social environment but also the idea that I've got enough and move on to doing something else 

Ken:

I just saw a really interesting map which showed like every U.S. state and what the equivalent country is in terms of economic output interestingly enough Texas and Canada by GDP were about similar and then I looked up and the population of Texas is slightly less than Canada I just thought that was like really interesting comparing contrast so now you went to UT you said right which I believe in Canada there's these sort of the schools that we have the ivy league or some of the other top schools Stanford MIT Caltech et cetera probably many others that we could add to the list so in Canada I believe UT is sort of thought of like that but there's some other ones so talk about the college system in Canada and where do people go what are different schools known for because I don't think most Americans really know  

PJ:

most either all of the schools are public schools big schools it's really hard to compare the University of Toronto is you know I would say world renowned if it's on near the top of the rankings definitely top 20 or top 25 globally and of course the school that most people especially in the northeast U.S. are more familiar with is McGill is also world renowned but there's a lot of good schools and across the country there's just a lot of good schools in in different provinces and even in the Toronto area or southern Ontario there's a lot of good schools and yeah there is a slight for instance the University of Western Ontario is known for their business school and it's a good program there but University of Toronto also has a really good business school as well and there's slight differences probably University of Waterloo which is where the company blackberry was founded 

Ken:

Waterloo is another one you hear about a lot 

PJ:

and they've got a really good program in math and computer science and that sort of stuff and there's sort of slight differences maybe there's one school is known a little bit more for math or science than another but I can't say that it's a significant difference from one school to the next 

Ken:

and you moved from Canada and settled in the United States now you're American now as somebody who grew up mostly in Canada for the first you know 20 some years I suppose what were the biggest sort of adjustments or surprises coming to this country and going to school and then settling here working here making a family here were there any or and are there things that each country could learn from each other  

PJ:

I think there's a lot that you can learn from each other what's good for the group as a whole I think there is definitely that sort of mentality and 

Ken:

there is this stereotype which I'm sure you're aware and at least in my experience turned out to be largely true that Canadians are extremely sort of polite and nice people right 

PJ:

of course I agree with that  

Ken:

probably one thing we should learn from Canadians right 

PJ:

yeah I mean it's not quite every man for yourself down here but in comparison on a relative basis in comparison to Canada it does feel that way sometimes there isn't the same kind of social systems welfare systems and things of that sort but on the other hand there is something good about the ability to work hard and go to school and benefit from that that exists in Canada but maybe not to the same degree that it exists here and it probably exists more today than it did when I was growing up as well I will say another thing that I see that's very prominent just given you know the world that I live in the world that you live in is just access to capital I think down here if you've got a really good idea and let's say start a company you really feel like money will find you I mean whether it's the initial money for venture capital angel investors and things of that sort or later on private equity the capital markets here are extremely fluid and in Canada historically speaking a lot of that was controlled by the big banks banks are just more conservative when it comes to lending money and then investors it may be and so 

Ken:

I'm not sure our listeners would know but I think in Canada unlike the United States even banking itself is quite consolidated there's like a big four banks that pretty much control vast majority of banking you went to UT so you could have stayed in Canada built a career there what was the impetus behind  coming to the United States and then why stay instead of maybe go back to the place you're familiar with 

PJ:

my undergrad degree at University of Toronto was chemistry math early in my third year I realized that I was never going to be a scientist I had a good friend of mine who were just kind of hanging out he goes I'm going to go up to the lab and I'm going to work on some things and I literally at that moment realized that's never going to be me I have no interest in that I'm never going to be and so really took some soul searching after that well okay if not that then what am I going to do I'd always taken business classes accounting and things of that sort and pretty quickly realized that you know this whole science thing I was probably just not cut out for that and decided that I would try to move to the business side I looked at different programs I was sort of unsure I would say still and there's a small school in Buffalo New York Canisius College and they allowed me to start part-time so it was literally I think two courses from Western Mississauga was like an hour and 15 hours 20 minutes door to door 

Ken:

or so you could just drive from living in Canada to this school in the United States do a lot of people do that or was that pretty unusual  

PJ:

yeah yeah there's a fair amount of people that do that I took a couple of classes really liked it I took a couple more classes and this shot this was like January 95 maybe I took a couple of classes really liked it took a couple more classes in the summer really like them I got to a point where I took a class called evaluation of the firm the professor that taught that class had a chemical engineering background and then moved over into finance I had a pretty good connection with him I you know it was one of those things where it was like ah my background in chemistry and math was not that different from his background in chemical engineering doing that class doing a capstone project where we valued a company and really got into its operations and figuring out its strengths and weaknesses opportunities threats to the company and decided this is great I'd love to be able to do  this I would also add that interestingly that professor had a consulting firm that he ran on the side and he offered me a job and his primary client was a utility in western New York and you know we processed all the paperwork and everything from to be able to do that and then the company went into bankruptcy so the project got put on hold you know I had all the paperwork done to to work in the U.S. but no job and so I'd always spent a lot of time in Chicago so got in my car drove to Chicago and within a month of getting there landed with a valuation firm yeah maybe just to go back to answer your question though in terms of why not Toronto the job environment in Toronto at that time was not great the economic conditions were not really fantastic and so there were limited job prospects and so but you know to some degree I would say it was destiny I mean it's like you end up landing a position it doesn't work out moved to Chicago within a month of getting there landed with evaluation firm and feel really fortunate that I did because I really feel like this career and valuation really I don't think there's a better fit for me out there than what I've done you know over the last 25 years  

Ken:

yeah it's actually interesting I was speaking to a different client of mine and we were talking about  how prospectively when you're working on something or you have some goal or something it looks like it's agency right like you try this you try that you're making these decisions to go towards what you want but when you look back in hindsight you find there's these few critical things that happened that didn't necessarily even want to happen that might change the course of your life in a way that maybe got you towards your goal or where you ended up the sort of role that luck or chance sometimes plays running into one right person or a particular pivotal thing but you don't see it when you're in it you see it years later when you look back 

PJ:

I absolutely feel that way sometimes certain things happen with very limited effort on the other times you can work really hard and as much as you try you don't have success and you wonder why but yeah in hindsight you're appreciative of the fact that things worked out the way they did 

Ken:

so from that you went to Chicago then you went to grad school you got your MBA here 

PJ:

no no so that was in Buffalo I went to grad school 

Ken:

and so you finished a degree there 

PJ:

I did yeah 

Ken:

what was next what led to the next thing  

PJ:

so then you know I moved to Chicago I landed with a valuation firm 

Ken:

but not the firm that you run right now is it a different one 

PJ:

no no a different firm competitor yeah I had a great mentor a guy by the name of John Spude when I I was working in in Chicago a great guy really a good fit for me not only in terms of his technical knowledge and things of that sort but also personality and things that we had in common in terms of sports and I remember when I was interviewing I when I was living in Mississauga probably towards the end of my undergrad maybe even while I was in grad school I was coaching a kids basketball team and basketball was really just starting to take off in the Toronto area and I would play pickup ball in college and that sort of thing and so I thought it would be a good thing to coach some kids and that sort of and John had young kids and loved the idea that I was coaching kids basketball and that sort of thing so there was an instant connection there and it was a good fit and somebody who had a significant impact on my career the technical knowledge and things of that sort I couldn't have asked for a better teacher 

Ken:

is he still in the business 

PJ:

he is yeah 

Ken:

and then what brought you to the valuation research and sort of the New York area then 

PJ:

I guess I spent three or four years in Chicago the name of that firm was Marshall and Stevens they were looking to grow and develop their presence on the east coast and so there was an idea that I wasn't from Chicago so I wasn't necessarily stuck to any one location that at some point I would move you know it was interesting with the timing I mean initially it was sort of like oh yeah you know after a couple of years maybe you'll move out there and things are going pretty well in Chicago so I was like maybe you don't need to and then I got an opportunity with them to move out to their New York office decided I would take it at that age you're not solid sort of in any I mean things happen quickly you know you're young you haven't bought a house you don't have a mortgage any of that sort of stuff you can move quickly so I did and you know I was working out of New York City with that same firm for a couple more years  

Ken:

and then you got the opportunity to join Valuation Research 

PJ:

yeah I did I mean I'd say there were a couple of things that were happening is one you know I no longer was working with John who was a great mentor so losing that I will say secondly I was in the south tower my train had come into the south tower on 9 11. The north tower was hit and I saw everything happen right in front of my eyes in between you know I just got married my wife was expecting within a month or two and I just thought it was time to make a move and at this point I would say five years into my career and you kind of get that itch of you know is there something else somewhere else and VRC I'd been talking to them for a while I'd interviewed with them maybe a year and a half prior to that it wasn't the right time 

Ken:

VRC is Valuation Research that's right  

PJ:

Valuation Research Corp yeah it wasn't the right time for them or for me but all of a sudden after 9 11 after a few other things we thought might be the right time and then I was living in Princeton New Jersey area and they had a sizable office right there in Princeton and yeah literally 10 minutes from my house and I thought that would be from a quality of life perspective it would be good and I will also add because it is kind of interesting I took a pay cut I took a title cut it just seemed like the right thing to do and you know also the mentors that were available to me that's probably a critical item in the decision making is there were a few senior people at VRC who I just thought I could learn a lot from I'm still only five years or so into my career and those folks would be really good mentors for me and they turned out to be that way  

Ken :

going back to it since you mentioned it 2001 I think we had probably similar arcs so I was going into the trade center basically every day also because my two investment banks that I worked for were on one side or the other for me it was kind of a traumatic experience what was it like for you being so close to ground zero 

PJ:

my office wasn't in the tower but I used to take the train the path train into the south tower every day and yeah traumatic for sure I mean I still remember the day like it was yesterday I would say for about 10 years afterwards any time I would see kind of a perfect day 70 degrees blue skies it would bring me back to that day  

Ken:

so you joined Valuation Research you said you took a title cut so what was your title when you joined  

PJ:

I think I was a director at Marshall and Stevens and I came into VRC I think as an associate maybe it was a senior associate something like that it's definitely a step down 

Ken:

you're a co-CEO now so I think it worked out all right 

PJ:

yeah it worked out

Ken:

what does a company like VRC do many people probably know about the investment banks we know about private equity firms maybe not everybody does but VRC I think is sort of a boutique so talk about that area of valuations whether it was Marshall and Stevens or VRC or whoever else might be in it what's the field about  

PJ:

it's a definitely a niche area in comparison to an investment banking or accounting or something else so we're specialists in valuation and I'd say my role the last 20 years has basically been associated with transactions so whenever there's a transaction you need somebody to come in and value the company value the assets value the liabilities as part of that transaction it could be for accounting purposes it could be for tax it could be for the board that's what we do it's very technical you know investment bankers no disrespect do a lot of the same sort of things but probably not at the same degree of dotting the eyes and crossing the t's that we do we're specialists in valuation we do our best to come up with the right value we expect the values to stand up to further scrutiny whether it's from the IRS or the SEC the PCOB shareholders board members others so there's lots of scrutiny around the work that we do starting with the management team it's a unique field it's a niche field but again when you think about my background with chemistry and math I've always been very quantitative and I'd also say sort of a people person and  I like to teach I like to learn and I also like short projects the idea of being on a project that lasted a year or two years or beyond it's not appealing so this kind of checked off all the boxes for me the math part of it being in front of clients helping them solve problems and also I've been able to do a lot of other things sort of in the industry I represent a lot I write a lot and just very involved with a lot of different aspects so for me personally just checks a lot of boxes  

Ken:

how many firms are there that are specialists in the same kind of thing that you guys are and who are the clients you touch on what they use it for and if I'm understanding it right I mean it's pretty consequential right because whatever valuation you come up with it's going to actually change people's financials what value they get redeemed or how much depreciation they get to take or how much amortization or whatever that actually changes tax returns and things like that so it's pretty important I guess to get it right so just touch on that who uses valuation research or other firms like valuation research how many other firms are there what's that industry environment look like as one of multiple firms 

PJ:

it's a very fragmented firm there's several big firms and I put us kind of in the group of the big firms but it's you know there's some absolutely massive entities like the big four accounting firms and there's some other independents there's also the next group of accounting firms as well that all have valuation groups we're sort of in between we're not quite as big as the big four but we're sizable and then you've got a bunch of other independent firms and some of those independent firms are literally one two three people working out of their home there's hundreds of firms maybe even into the thousands to be honest with you but it can range anywhere from the one individual who dabbles in valuations to a big four accounting firm that might have four or five hundred people that focus on valuation  

Ken:

what are the main sort of groups of customer bases and how do they find and pick among all of these different options 

PJ:

it's really wide ranging there as well like our client base are public companies private equity firms hedge funds BDC's that probably constitutes 90% of who we're dealing with you can also have valuations for gifts and estate purposes in that situation you might have a family that is a client it can again kind of range from individuals who are gifting shares or selling assets all the way up to you know the biggest public company or private equity firm that you can think of and I will also add there's lots of other stakeholders though as well right so there's the attorneys the accountants and all the other advisors around the deal that they may not be your client but they are involved and so there's many others that are involved in the process of doing or reviewing evaluations or you're using the valuations that we do 

Ken:

is the economic model more of a consulting type model or is it sort of like a recurring model what's the model that you guys charge on and sort of deliver value on what's the current 

PJ:

it's consulting it's project based fixed fee 

Ken:

do the clients tend to constantly come back to you for updated valuations  

PJ:

more and more these days I would say that if you rewound 20 years or so it was very transactional one project tier one project there today I think what you see is highly recurring valuation is at the center of every business transaction and so as a result of that there's a need I think the industry has matured significantly over the time I've been doing valuations and so I'd say again if you went back 20 or 25 years ago it was far more art than science today I'd say there's a pretty good balance between art and science and it's far more recurring than you would have imagined and especially as you think about private equity and hedge funds and clients like that they're in the business of doing deals so there's a high degree of recurring work associated with that 

Ken:

since you touched on it what talk about sort of how things were when you joined or maybe when you joined VRC and what's changed over the 15 20 years that you've been in it at a somewhat more senior level  

PJ:

do you mean at the firm or within the profession or 

Ken:

in the firm and in the profession both 

PJ:

I think  with regard to the firm is far bigger today and as a result of that has more depth and one of the challenges we used to have the old saying that you know nobody got fired for hiring IBM whereas today in many ways we used to compete but a lot of you know hustling to compete I would say whereas today we've got as much depth as anybody a lot of those issues I would say no longer exist or don't exist to the same degree as they did years ago I would say the industry is maturing as well and a lot of best practice guides out there on how to value companies how to think about some of the controversial issues like control premiums or how to value customers or how to come up with discount rates and things of that sort I think there's a lot less diversity in practice than there used to be 20 or 25 years ago I think all things are moving towards just more maturity in the firm or maturity in the profession as well 

Ken:

so you joined as a director maybe associate junior director or something like that what year did you become CEO or co-CEO  

PJ:

my effective date was January first two thousand and fourteen. I joined VRC say October 2001 and so was that 12 13 years I guess that said I was with the firm before becoming co-CEO but I would say that there were several key benchmarks along the way I mean initially it was sort of building up expertise and really learning from the people that had been there for a long time and working with them under their guidance and what I would say is just a safe environment you get stretched but you don't get stretched too far you bend but you don't break and just working a lot of deals a number of deals I worked on with just kind of the who's who of corporate America it was Kraft and Pepsi and the Carlyle group and Siemens and AmerisourceBergen and Questagna I mean it's just the who's who of corporate America and some of the smartest people in America and yeah it's you either sink or you swim you know in that environment you got to keep up with their pace and I absolutely loved that aspect of it and loved the fact that you know I had support there's a gentleman who I replaced Mark Brattebo he was co-CEO and outside of my dad I don't know if there's a person that had a bigger impact on my life just in terms of being a mentor personally and professionally I just can't say enough in terms of what he taught me and the framework and I think there's a common theme there just finding mentors like that which is unbelievable and there's others as well you know Bill Hughes and Neil Kelly and Summer Parrish who were extremely helpful but that was critical and then I would also say that finding time to get involved with more than just doing the job I got involved with the industry that was something for us as a firm that as we looked upon the next levels of growth I thought was to have somebody who can interact with the FASB and the SEC and the big four accounting firms and things of that sort would be helpful and so I started doing some of those things I would also say that I think it was about 2006 or seven I got to the point where Mark said to me we'd like you to spend more time in front of clients at the time I really had to think hard about this because what it meant was I was no longer going to be the person that was doing the valuations and I also wasn't the person necessarily getting credit for selling the valuation so if you looked at as a number on a spreadsheet I wouldn't exist but on the other hand I was in the middle of everything just making sure that projects got done properly making sure they got sold properly maintaining the relationship and all of that sort of stuff and that turned out to be really beneficial because then I'm the big sports guy if your value is only based on where you are on the score sheet or the leaderboard you're probably underestimating sort of your value to the organization or to the team and once I got comfortable with that and I trusted Mark and I trusted others that they were leading me in the right direction but once I got comfortable with that there was a lot of synergy you know it became being able to leverage people on the team and move things in a different direction and I'd say that was another one of those points that was a turning point for me 

Ken:

yeah there's a couple of threads there that I'd like to pick up on real quick so one is you mentioned the importance of mentors and you mentioned even the first pivotal mentor that you had when you were in the Buffalo area so how does somebody a young person who might be listening to this or even a someone our age with a career ahead of them how do you find and cultivate mentors how does that happen any thoughts on that  

PJ:

I can't say that it was anything that I did with a purpose I'd say there was sort of a natural association people that you found things in common with that you were comfortable with again it was never one of those things where I thought oh that person would be a great mentor or anything like that I'd see much more about the relationship and what I found was quite frankly people were open to helping people are open to mentoring if you asked Mark or John or Neil or anybody else I don't know if they would say that they were a mentor you know they were just kind of doing what was appropriate and reasonable and things of that sort but clearly they had a huge impact  

Ken:

do you see yourself mentoring other people and how does that happen is it pure chance 

PJ:

it's not pure  chance again I'd go back to it's a relationship I will say in my role today one of the things that I absolutely love is the ability to help people is that mentoring or is that helping I don't know but I look at that as a critical part of my role but there's nothing forced it's just sort of being willing to help developing a relationship and with some people it doesn't go further maybe there isn't the interest on one side or the other and for others for some reason it clicks I think there's got to be an appetite for it on both sides there's got to be something in common where you feel comfortable and it could be you know as I can go back to the fact that I've always played a lot of sports and you know I can relate to other people that have played sports and been in the team environment and things of that sort so maybe some level would you connect other than work from shared interest shared values shared something shared values I think is a critical part of it and it doesn't have to be identical but yeah some degree of shared value is important 

Ken:

and the other piece that you mentioned and I think was quite insightful was that you were sort of conscious of finding time to give back to the industry or get involved touch on that for a second and let's say somebody's listening to this you could be in any field how would you as a young person who may be wanting to rise in your profession how do you find those opportunities and how does that interrelate back to your career inside some firm  

PJ:

I wouldn't say that I necessarily did it with the purpose of helping my career and it's helped far more than I ever thought was possible quite frankly but it's good to be involved and it's good to network and connect with people in in your industry and something that many of us and myself included get stuck on is the idea of a quid pro quo especially early on in your career that yeah I'll help you if you help me and scratch my back I'll scratch your but actually Mark gave me a book probably in the 2005-2006 time period called Rainmaking Made Simple by a guy named Marc Maraia and a lot of interesting points in there but one of them was don't expect a quid pro quo help anybody and everybody whether they're your competitor it doesn't matter who it is and you know you'll kind of build a cloud around you and people start calling you and referring work to you and giving you a thumbs up and all of that sort of stuff on different things and I would say that I definitely found that that once I let go of in an expectation of a quid pro quo and just started helping people in my network my network grew and all of a sudden I started getting calls from people just last week I got a call from somebody who got my name from somebody who I don't know who got my name from somebody and it's turned out really well and again going back to your question in terms of working in the industry my thoughts of doing stuff in the industry were just to help no expectation of anything in return but I got a lot in return 

Ken:

I think there's a lot to that and actually I hadn't heard of that book so I'm definitely gonna check it out so you said that was Rainmaking Made Simple but you know that reminds me there's a newer book which I believe we might have even traded some notes on or something but it's called Give and Take by Adam Grant and he has a similar theme it turns out that he studied givers and over the arc of their careers they tend to really get noticed for the giving that they do that's a great insight  

PJ:

I love that book it really helps understand why some people are more successful than others and it's fantastic 

Ken:

what do you find as a leader of an organization that you either have to level up on or you're like I never realized it was like that for the CEO or whatever when you were just one of the consultants what kind of insights or other stories whatever that you may have that could shed some light onto what it's like to transition to being the leader of an organization and then the job when you're there 

PJ:

the first two years were really tough because I was basically doing both jobs on one hand drinking from a fire hose in terms of trying to understand the new position and what it would take and what's involved and at the same time still had my old clients was still very involved and interestingly one of my clients which was public at the time was going private and so it was a massive undertaking in terms of the valuation and so to lead that project while still trying to learn the roles and responsibilities of being co-CEO were challenging so I would say actually the first two years were pretty rough I'm not sure that I necessarily even wanted the job the first two years probably would have been happy if somebody said hey go back to your old job but once I got over that hurdle it's been fantastic I mean it is just I like helping people I've got the ability now to help people and it could be sharing some resources being available being a coach I look at my job and I'll use a sports analogy when I was playing hockey I scored a lot of goals put up a lot of points and was pretty well known for doing that when I played basketball I was kind of the big guy under the net I wasn't taking a three-point shot or anything like that I got the ball under the net I put it up I grabbed rebounds set pics things of that sort and that's kind of my job yeah you know today when you look at it I mean I present probably 30 times a year at different conferences within the industry with outside the industry write articles take the lead on certain firm related issues and over the last year with coven and all that there's been several and just think about you know the changing dynamics in terms of people working from home and all of that sort of stuff the uncertainty in the environment so that's 50 but the other 50 is just being in the background supporting people helping people helping to make them as successful as they can be and you know maybe they need help in one or two areas and in my role it's a bigger picture role I get to see a lot of different people and different approaches and also have access to resources where I can help it's you know 50 percent very prominent 50 percent behind the scenes just helping others be as successful as they can be  

Ken:

as you look out now we're actually at an unusual time it's May of 2021 we've been in a pandemic now for a little over a year it seems like things are starting to open up as you look forward over the next you know year two years three years what are the big things that you've been spending the most time thinking about focusing on that you're either optimistic about or concerned about whether it be business-wise or even just in terms of the state of the world what are you spending time focusing on thinking about in this kind of interesting time 

PJ:

there's lots there with both of them what does the future look like we've had now 14 months or so working from home quite frankly it's gone pretty well and people like it I myself over that time period have been into the office maybe three or four times only if I went in the office I would be on zoom just like I am from home but it wouldn't change what I do at all so just trying to understand you know do we get back to some sort of work from the office or hybrid model or what we will do with regard to that there's it's more than just oh people work from home or work from the office there's real costs involved we've got nine ten offices leases that are coming due and do you re-up do you take a fraction of the space that you were looking at before the layered on top of all of that is the market it's tough to hire right now and at least in our space certain firms are saying hey you don't ever have to come back into the office and so from a market standpoint I think we may have the answer in terms of allowing people to continue to work from home beyond that there's always clouds on the horizon and things of that sort on the other hand what I would say is I'm very optimistic in terms of where we are as a firm the depth we have the professionals we have it's as good as ever maybe better than ever and there's always certain clouds on the horizon that you have to be aware of you have to account for and you know AI may be one of them as well and that's something that you hear about a lot but I'm really optimistic I mean we've got a great group of people we've got a great management team it's colleagues that's really pulling in the right direction the culture of the firm is really good although we'll continue to evolve over time and in our business it's hard to predict or project what three years from now is going to look like or five years from now it's going to look like so we've got to make it through the current workload which is substantial make sure that we're busy but not too busy or higher so that people do get a break and that sort of thing as well there's a lot to think about I mean it's as you know I wish I had a crystal ball that could tell me sort of what the future is going to look like but you got to prepare for a lot of different things maintain a lot of flexibility I think that's a critical item so that you can adapt to whatever the future brings us 

Ken:

I wonder if you could think of one book or maybe a person or an experience that had sort of the greatest or one of the greatest impacts on you so far and what that was and tell the story or tell the takeaway from that 

PJ:

I would say there's two books that I think of and one is Shoe Dog it's the story of Nike Phil Knight and just sort of everything that he went through and growing and developing Nike and all the challenges the tax issues the personnel issues and it's an unbelievable story of that the one part of Shoe Dog that I bring up regularly with as I work with some entrepreneurs and all of that when I  got to the end of Shoe Dog I wondered well we know Phil Knight did really well and we see the value of Nike and all that but what happened to all the people that helped him along the way because they really didn't talk too much about sort of the people that it invested whether it's money or time and he took care of everybody he absolutely took care of everybody and so I thought that was fantastic I mean there was one individual I forget his name whose parents had lent Phil Knight some money and he was in a crash crunch and they thought they were doing their son had a disability and they thought they were doing just to have their son keep his job and that sort of thing and not only did Nike or Phil Knight return the money but it was like they had a piece of Nike and it worked out really well the other one it's also a sports related maybe that's the common theme here but the biography of Bill Walsh who was the head coach of the San Francisco 49ers in the in the 80s the title of the book was The Score Will Take Care of Itself and and he was absolutely adamant on just doing things the right way playing the right way and not worrying about the score score will take care of itself there's a lot of truth to that in life you do things for the right reasons and as you heard earlier for myself when I joined VRC it wasn't because of the pay I actually got a pay cut it wasn't for the title I got a title cut and it was for the mentors and the environment and all of that sort of stuff and I think it worked out pretty well  

Ken:

I have to echo your comment I mean I loved Shoe Dog I didn't know that great story about how Phil Knight took care of everybody but I have not read the second book and I'm going to definitely check it out I actually that reminds me of a quote that Buffett has which is to ask yourself whether you have a internal scorecard or an external scorecard whether you really try to do things for trying to get other people to think a certain way about you or whether you really try to score based on your own internal metrics and of course he's an advocate for the latter thanks for a wonderful fascinating discussion loved all these different insights that you shared appreciated your time today

PJ:

yeah thanks again yeah this was great I enjoyed being here 

Ken:

same here thank you 

PJ:

thank you 

Ken:

I really enjoyed speaking to PJ today we talked about the need for electricians and specifically tv technicians following world war II a historical footnote that led PJ's family to emigrate to England and eventually to Canada we also talked about the British influence on Canada for example the Queen is on the Canadian currency and there are many other things that Canadians have adopted from the British as well as many ways in which they are more like the United States I'm thankful that PJ lives up to the stereotype of Canadians being very nice people it was a pleasure having the opportunity to catch up with him and learn more about his origin story I'd also encourage you to read the books that we mentioned on the show Rainmaking Made Simple by Mark Maraia and Give and Take by Professor Adam Grant 

Narrator:

thank you for listening to this episode of Compound Ideas hosted by Ken Majmudar of Ridgewood Investments connect with Ken learn more about the show and never miss an episode at Compoundideasshow.com Ken Majmudar is the founder of Ridgewood Investments and several other affiliated companies all opinions expressed by Ken and podcast guests are solely their own opinions and do not reflect the opinion of Ridgewood Investments or any of its affiliates this podcast is for informational purposes only and should not be relied upon as a basis for investment decisions clients of Ridgewood investments and its affiliates may maintain positions in the securities discussed in this podcast

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