The Hard Thing(s) About Holdcos with Bill D’Alessandro
Listen on Apple Podcasts, Spotify, YouTube.
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Why did one of the biggest holdco owners & operators sell his holdco? Bill D’Alessandro talks about what led to the decision to sell all but one of his companies, having to let go of being “the Holdco Guy,” advice for entrepreneurs thinking about operating & owning multiple companies, insights on online marketing, & how he sees AI changing the world forever.
LINKS & MENTIONS FROM THIS EPISODE
Bill’s Natural Dog Company https://naturaldog.com/
Acquisitions Anonymous podcast https://www.acquanon.com/
Join the list for Main Street Summit https://www.mainstreetsummit.com/
Read the Messy Marketplace (or go to episode 1 of the Permanent Podcast feed to listen) https://www.permanentequity.com/the-messy-marketplace
CONNECT
Bill on twitter https://twitter.com/BillDA
Bill on LinkedIn https://www.linkedin.com/in/billda/
Brent on twitter https://twitter.com/BrentBeshore
Brent on LinkedIn https://www.linkedin.com/in/brentbeshore
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TIMESTAMPS
0:00 Bill Fills Dead Air Time
4:48 HoldCos: A Mailbox Full of Money?
11:19 Letting Go of the HoldCo
16:14 Hitting Rock Bottom & Losing the Plot
25:01 How to Build a Holdco the Right Way
31:54 From HoldCo to OneCo
34:55 When to Go Fast vs. When to Be Patient
41:30 Don’t Buy a Business That’s Too Small
47:50 Handling Layoffs
52:12 Being Vulnerable: Handling Anxiety & Loss
1:08:26 The Additive Effect of Subtracting
1:15:12 Lightning Round: Advice for Small Business Owners & Operators
1:16:16 Lightning Round: Hiring
1:16:38 Lightning Round: Marketing Doesn’t Work
1:18:24 Lightning Round: When to Take on Capital
1:19:13 Lightning Round: How to Sell a Company
1:21:14 Lightning Round: How Much Debt is too Much?
1:21:50 Lightning Round: Stop Using Slack
1:23:51 Lightning Round: Cutting Costs While Increasing Quality
1:24:28 Lightning Round: AI is the Singularity
1:32:26 Advice for Your 25-Year-Old Self: Be Deliberate
1:34:28 Why Brent Can’t Sleep: Main Street Summit
EPISODE CREDITS
Produced by David Cover
Additional editing & mastering by Ryan Lipman
Interlude music by David Cover, Andy Freeman, Rhett Johnson, & Andrew Luley
Outro music by Jees Guy
WE STEWARD COMPANIES THAT CARE WHAT HAPPENS NEXT
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LEGAL DISCLAIMER
This podcast is made available solely for educational purposes, and the information presented here does not constitute investment, legal, tax or other professional advice, and should not be construed as an offering of advisory services, or as a solicitation to buy, an offer to sell, or a recommendation of any securities or other financial instruments. The thoughts and opinions expressed by or through this podcast are those of the individual guests and speakers and do not necessarily reflect the views of Permanent Equity. The discussion on this podcast of any entity, product or service does not imply an endorsement thereof, and the guests may have a financial interest, whether through investment or otherwise, in one or more of any such entities, products or services. This podcast is presented by Permanent Equity and may not be copied, reproduced, republished or posted, in any form, without its express written consent.
Bill D’Alessandro closed a recent episode of Outside Insights with this advice he’d give to his 25-year-old self:
Be deliberate in what you want. Articulate it and go get it. Always be measuring your outcomes against the stated goal. If you're not making it — which I was not by the way, a couple years ago — that is the time to make a change. Do not wait for the breaking point or for the external thing that forces you to proactively course correct towards the goal frequently.
But how do you know what you want — and who you want to be? And, what if that changes? In his conversation with Brent Beshore and David Cover, Bill outlined how he went from “Holdco Guy” to CEO of Natural Dog Company. Underlying and intensifying every challenge, though, was Bill’s suspicion that, if he changed from who people knew him as, those same people would view him as a failure.
It was an identity issue at heart:
My board came to me and said, “Bill, you have a tiger by the tail. You need to focus on it. You need to stop this holdco thing. You need to sell everything else and go all in on a natural dog company.”
And what did I say? Of course I said, “Absolutely not. I'm the entrepreneur. I'm very attached to this holdco concept. You know, it sounds very sexy. Let's keep doing that.”
But why is it so hard to let go of an identity?
Bill recounts a conference he attended, and the psychologist who presented her research. When a founder thinks about their business, the same parts of the brain are activated as when a father thinks about his children. (To be honest, this seemed a little urban legend-y, so we looked it up. Here’s the study.)
And, for Bill, it checked out:
I was so attached to myself as the e-commerce rollup guy. I mean, it was in my Twitter bio. It was my whole content brand. It was how people knew me at industry conferences. It was how I introduced myself to people and I was like… everyone's gonna think I've failed. The logical part of my brain agreed with my board that this was the right move. You know, if you were just dispassionately, zoom out and treat it like a case study, I could see it. But emotionally, I was having a really hard time letting go of that identity.
If you’re a driver and an entrepreneur and a doer — more importantly, if you’re known as someone who always has that little bit extra to go in on a new opportunity – shifting gears can not only be painful, it can seem impossible.
But when your sense of self is contingent on being able to do one more project, to add one more thing to the pile, you’re flirting with a finite resource: you.
My desire is to win, right? To never let it be said about me that I didn't work hard enough or that I could have had it. That just because he was lazy, he didn't have it… You know, if something comes across your desk and you go, “Wow, this is a really interesting opportunity,” or “We could take that on,” or “All I gotta do is work 3% harder.” I could work one more hour a week to pursue this awesome opportunity.
No single one of them is the thing that buries you, right? But they add up and before you know it, you are underwater.
There’s a dilution of emotional energy that comes to us all when we’re trying to really focus on eight different projects, our families, our friends, and our own mental and physical health. And that dilution means that, while you may be able to keep the plates spinning, or prioritize some of the fun stuff, or put out fires, you’ll never have the bandwidth to have the big breakthrough. Bill explains the phenomenon through Paul Graham’s essay “The Top Idea in Your Mind”:
There can really only be one to two things that are the top idea in your mind. The thing that you are thinking about when you are not thinking. It is the thing that you have epiphanies about in the shower or on your drive to work, or when you're on a hike, you know the things that just, it hits you like a lightning bolt.
And when you try to have eight top ideas in your mind, nothing sits in that spot and you get no epiphanies… I found that I was a mile wide and an inch deep. I did not have a top idea in my mind, and all of our brands were suffering for it.
Going at a breakneck pace, always looking for the next thing, and harnessing your hardwiring to solve things is great, as far as it goes. But your attention only goes so far. So how do you rewire the brain for what matters?
First, admit that it’s hard. It sounds cliche, but when you’ve spent years reinforcing a version of yourself, doing something new requires unlearning all that accumulated muscle memory.
Keep one or two things top of mind and allow time for real thinking, serendipity, connection, eureka moments, and being a little bored (i.e., don’t get sucked into the trap of “I’ll listen to a podcast on my walk so the time is productive.”).
Hire, train, mentor, and delegate. It’s a slow and deliberate play, but will ultimately free more of your time for what you’re exceptionally good at, what you like to do, and what no one else can do.
Seek out people who have dealt with the same issues and talk to them about their process and struggles — and share yours too.
Remember that if you’re saying yes to something, you’re implicitly saying no to something else.
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