How Our Firm Has Changed Since Inception
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Joe & Ryan discuss their journey from just starting out in the midst of the 2008 GFC to where Graceada Partners is at today, and how the current challenges differ from the previous ones.
Episode Transcript:
We were just reflecting and realized that we're at about the two-year mark on these podcasts. We're at the 14th year of this firm, but the two-year mark on these podcasts and that, it's interesting, there are little time capsules over the last two years of what was in our heads, uh, about every other month.
And, it'd be neat for us to stop for a minute and say, well, how have things changed and, and what's different? Uh, maybe you could start Ryan by. Sort of reflecting on what, what got us to here, maybe specifically the long-term friendship and yeah. 40 years of personal history between the two of us.
Well, and uh, before I hit that, I was just thinking about one thing that hasn't changed in the last couple years. We're still here. These chairs, these chairs, these hideous, wonderful chairs have probably been in almost every podcast we've done. Eventually they're going to come back into style.
Well, so yeah, we, I mean, we started as friends in third grade. Um, so I mean, we've had a really, a lifetime of growing and evolving in our friendship, our relationship, and then our partnership.
We have our third-grade picture framed in the, uh, break room, by the way of the two of us. So it's, uh, yeah, it does go back a really long ways.
You know, there's that kind of adage, you know, if you're not changing, you're not growing. Yeah. And one of the things that's changed is over, not even the last couple years, but really over the last five years, is we've always been fortunate to have an exceptional team of people. But we have started to be able to earn the right to have people at that top tier in our organization and people who come with a wealth of knowledge and perspective and wisdom.
And that's been, that's been great. It used to be you and I riffing off each other about where are we investing, what are we seeing, what are the opportunities, what are the risks? And now we've, we're able to draw on such a deeper well of knowledge. Yeah. I, I think of the, the, the sole owner of a company.
You know, a person who just builds their own company on their own. And I've always, since we've always had this partnership, I've always viewed that as such an isolated and lonely spot. Yeah. Just out there on your own. You're the one calling the shots No sounding boards.
You and your own echo chamber of your head.
And the people around you. And I've, I've been so fortunate, or we've been so fortunate to have this partnership that allows us to have that, that see the value of that shared. Um, experiences and perspectives and, and challenge. Yeah. And so as we've added more to that over the last couple years or last several years, it's been really rewarding to, to be able to multiply that, the value of that it might go without saying, but building a business is really hard.
Like nine out of 10 businesses fail. Um, I could have never done this on my own. This partnership has been so important. Uh, just emotionally and like the camaraderie of it, but to show up every day to to, uh, purchase own, manage lead, half a billion dollars’ worth of real estate, 55 people. Mm-hmm. To run a p and l to make a profit, to deliver on what you promised to investors is an epic undertaking.
And these last five years have been, uh, tremendous, uh, in, in growth and. Uh, well, you spoke to the quality of our team, but as we speak, they are managing and running and leading and watching that half a billion dollars’ worth of buildings. They are painting it, they are fixing it, they are pushing rents, they are dealing with tenant com issues or complaints or problems.
And, um, getting the organization to this level of scale, uh, has been a, you know, it's, it's been a special journey and I think we're in a much better spot to scale to that next spot because, Getting to this piece of complexity. Um, I, I think solving that will be much harder than the next few steps up. Yeah.
What about our relationship? How's that, uh, different or similar? I, I, I would start by saying we, it used to be there was a time when we sort of did everything, like we were tag teaming everything. Yep. And, uh, over the last several years, we've evolved into our particular strengths and, um, we’ve specialized more.
We went from originally being specialists to generalists, and now we're sort of back to being specialists. Yeah. Because there are generalists in the firm that, um, and that allows us to be world class at the things we are world class at. What do you think? Yeah,
I'd say the exact same thing in a, in a slightly different way, which is that we've been able to slowly gravitate toward, toward our natural, highest and best value, our highest and best use.
Yeah. Right. Which is the, the joy of kind of the business environment is that, you know, uh, mar reward Yeah. Is, uh, I rather, I should say success is rewarded and failure is punished. Like, that's, that's the business environment. Right? Right. And with that, um, as we've evolved over time, we've, uh, I can think of times where, where I have, uh, had to work on aspects of the business that weren't my natural competency.
Yeah. And I struggled and, uh, and muddled through it and made the best of it. But as, as the organization grows, it allows each of us, as well as the rest of our team to really kind of hone in on that. Part that where we can provide the greatest value and where, where we find the greatest joy and freedom doing what we do.
There's that idea that, you know, uh, one plus one doesn't make two, it can sometimes make five. And I think, I think that's been the power of this partnership as we've number one, been committed for decades. Yeah. In various, in various ways. Yeah. Uh, but number two, it's, it's provided that stable foundation that a, a firm can flourish around.
Yeah. So if we were sitting in these chairs two years from now, or three years from now, how will things be different? Will we have new chairs? Will they, I I, I know two years ago, that sounds like a challenge. Two years ago, I didn't need these glasses and, uh, now apparently, I need glasses. So, I, I don't know what it's going to be like two years from now.
You're just trying to keep up with me. Yeah. That's different.
Yeah. It, you know, it's interesting because, uh, we've seen. A lot of growth over the last five years, and it's been fun, it's been challenging. Um, it's been rewarding. Um, I do see over the next couple years kind of a, maybe a more moderated growth.
Yeah. And that's reflective of a few things. One is that, um, uh, the market, the market is not this frenetic hot market. It's a more tempered. You could say thoughtful, selective market. And so our, our general ethos has, has turned that direction, which is just be being a more, uh, you know, cautious, thoughtful buyer.
Not to say that we were ever, incautious or unthoughtful. But when you're in a frenetic rising environment, it's much easier to kind of close your eyes and, and make bets than in an, in an environment that requires that, more of that diligence and thought. But the other part of that is, is our business growth.
We've been fortunate to be able to build out a really exceptional team of people. Yeah. Um, and. That team of people has a long runway. Uh, and so I, we will selectively add people where, where we have additional bandwidth growth that we need. But, um, I just don't see it over the next couple years being, uh, that kind of aggressive, frenetic kind of growth.
Just a more, more, uh, tempered, um, growth because we've been able to kind of pack the bench, I guess you could say. I think that sort of fits our life stage, the stage of our partnership as well. Though we've built the firm to this size, um, it is in a more stable place. This is a spot where we can be more.
It's like once you've gotten here, you start to see that next three or four years and it will be more thoughtful, more measured. Um, I, I'm excited about that. Yeah. I'm excited about working a strong plan. Not that we haven't before we have, but at this vantage point, we, we have a three-year plan written down that our leadership team agrees on that has clear benchmarks and milestones.
The roadmap is laid out. Which is a luxury here. It's a joy. I'm proud of what we've done. So obviously as businesses grow, um, generally they get more complex. Hmm. But, uh, I, I'd be curious, in what ways over the last two or three years have you seen our business simplify?
Well, I've been reading about Bill Belichick, I guess he won seven Super Bowl rings, and he has this famous, uh, quote of, uh, do your job. There might be, uh, some other words in there, but the main idea is you're one of 11 when you're out there. His jaw, he says, look, I've got seven Super Bowl rings. Like, your job is not to do all the jobs.
Your job is to do your job. Yeah. My job is to see Bill Belichick. My job is to see the big strategy. My job is to, uh, cast the vision. Your job is to do your job and with the bench that we have, like all of our jobs now. It used to be that my job was to do kind of your job and their job, and his job and her job.
And as we get bigger and as our, as our plan is very clear and written out and articulate, your job is to do your job and my job is to do mine. And there's a, um, there's a simplicity in it. Yeah. I, I come to work knowing that buy great investments, maintain firm profitability. Done. That's it. Yeah. That's what I do.
Yeah. I think about those two things. That's it. Everything else that pops up is a distraction from those two focuses. You know, thinking more about the simplicity idea is, you know, when, when a business starts, it is chaotic and it is, you wear all sorts of hats, and you figure out things as you go. And, uh, very entrepreneurial.
It's the essence of entrepreneurial. And as a business, business matures in a sense. It does simplify because, uh, things. The train runs on time, and we know why it runs the, the parts do their part. Yeah. And the, the predictability of the process. Obviously, you can run into a case of scale where a company becomes too bureaucratic and too process driven and, and all that sort of thing.
But, but there is a beauty in the simplicity of process and predictability in what we do. It's like we're in a sweet spot. We're in the spot where we're still highly entrepreneurial and focused, but we've done this long enough that the trains are running on time. Yeah. And we know which trains are running on which tracks.
Yeah. So, you can, you can live in both worlds and over time we're going to feel probably pressure to go the other way, which is, uh, more bureaucratic, more trains on time, less spark of on entrepreneurship, less, um, joy of innovation. So, the challenge for both of us is to. Maintain that to live in that happy middle that both and yep.
Where the trains are running on time and there's the spark of innovation, but it's the right amount of both. And I think, I think for many years to come we, we will be able to do that. And I think that our partnership will be really important in, um, making sure that we do that.
And it'll be fascinating to see how this conversation goes. Two years from now, I'm sure my glasses will be thicker.
Summary
Joe & Ryan discuss their journey from just starting out in the midst of the 2008 GFC to where Graceada Partners is at today, and how the current challenges differ from the previous ones.