Will Bachman and Ben Balbale discuss Balbale’s journey since graduating from Harvard. Balbale talks about how he has applied technology to the world in various different guises. He also talks about how he worked during the summer to help pay for college. The speaker discusses their background in computer science and how it has helped them in their career.
The Changing World of Computer Science
They mention how the world of computer science has changed dramatically since they graduated college. They talk about how they started their career in management consulting and then went to business school. They mention how a third of their business school class moved to the Bay Area during the peak of the dot com bubble. Ben started out his career in sales, working for a software company in San Francisco. He then moved to New York to work for another software company. In 2005, he started looking at buying software companies that were trading below cash. This led to him joining a long-short equity fund in Boston. He then decided to go to business school.
A Career in the Software Industry
Ben Balbale reflects on his career in the software industry and how it has changed over time. He discusses his decision to shut down his public software investment fund, and how he is now taking a pause to think about where he sees market opportunities and what he wants to do with the next 15,000 days of his working life.
The Future of Investing
Ben realized that he had effectively jumped over the next hurdle and that it was time for him to do something for himself. The second step was to realize that the software industry was not about the software itself, but rather about what you could do with that software. He discusses the importance of computer science, especially in relation to software development. They mention the chat GPT algorithm and how it can be used for various purposes. Ben then talks about how they have been thinking about markets where the concept of automation can be easily implemented.
92 Report_Ben Balbale
Ben Balbale, Will Bachman
Will Bachman 00:01
Hello, and welcome to the 90 T report conversations with members of the Harvard and Radcliffe class of 1992. I’m your host, will Bachman. And I’m here today with Ben Balbale. Ben, welcome to the show.
Ben Balbale 00:16
Thank you. Well, it’s a pleasure to be a part of your podcast.
Will Bachman 00:20
That’s kind of you to say, Ben, tell us about your journey since graduating from Harvard.
Ben Balbale 00:30
Yeah, it’s such a broad question. And you actually catch me at a time of significant self reflection, which I’ll get into in a little bit. But I think if I roll the clock back, most of my journey has been about the application of technology to the world in various different guises. So when I was at Harvard, I actually work in one of the IT departments doing some basic database work. And between the time school ended, and the school started in the summer, I worked basically the entire summer, as part of allied signals, Research and Technology Lab. I grew up in Chicago. So this is in DesPlaines, Illinois. And actually the combination paid for most of college. Ironically,
Will Bachman 01:30
so you, you worked during the summer, and that was able to you were able to like pretty much pay for college. That’s incredible.
Ben Balbale 01:36
I mean, yeah, it wasn’t 100%. But it paid for a lot of it. Paid for a
Will Bachman 01:41
lot of it, were you kind of like, kind of geek in high school, like you were programming and stuff, or
Ben Balbale 01:50
Yeah, I had, I had the benefit of a dad who was a scientist at Bell Labs. And he actually died a few weeks after I graduated. But he was really insistent when I was younger that I learned how to write code. And I was talking to some friends of his recently and some of the switches he worked on this compact 30 years are still in use today. And I remember him telling me when I was in middle school that we would be getting television through twisted copper pair. Now obviously, today we get it from, you know, fiber and cable and even over the air and Wi Fi or, or cellular networks, but it’s most of the 90s it was DSL, which is a twisted copper pair technology that allows you to get streamed content. And so I was lucky enough to have a parent who was involved in the industry and had me work in it. I did not end up. I was an engineer for about a year. But then I moved into studying government. But the CS background that I had developed through high school actually was my first job and turned out to be a lucrative one. And it’s I was about to say it’s kind of ironic, you know, back then, like you’d be in the bowels of the Science Center, kind of send an email with nobody else. And now of course, you have a son who is applying to colleges, and you know, 20 to 30% of many of the Ivy League classes are all people who want to study computer science. So the world has turned dramatically from where it used to be. When we graduate, it’s just to kind of keep the story going. I started, I started at a management consultancy doing a lot of work first and telecom companies. And you know, that prior background kind of helped me to get that job was a tough time to graduate, as we all remember. Did that for five years with a bunch of clients that a bunch of telecom and software companies and then headed off to HBS to go to business school and had the I’m not sure if it’s a walker, less fortunate graduating basically at the peak of the.com bubble in 1989. And I think a third of my HBs class was in the Bay Area. And ironically, you know, I’ve tracked actually, the percentage of HBs classes that go into an industry and historically, when that threshold crosses 17, or 18%, it’s a good market top and we clearly we clearly had surpassed that in 1999. But I ended up at a at a software company in San Francisco. And we then sold out to another software company in early 2000. And I then became a bag carrying sales executive selling software, first in a region in the Bay Area. And then I ran the Bay Area and then I moved to New York in oh three, two Eastern Americans for this company called Epiphany. Joe’s one of the early vendors of marketing automation software, and it’s been an amazing alumni network. Actually the company ended up getting bought. But the talent was everywhere. So it’s actually hard to find software talent today that doesn’t have some connections at Def days. So teams at Salesforce or Google Analytics, all came out of definitely just to give some some example. But it wasn’t a career that I anticipated being in sales. But as I had, as my boss said to me, if you ever want to run a company, you should you gotta go carry a bag. And that turned into a career for about six years for me. Ironically, now, if you go back to oh five kind of coming out of that.com crash, there were over 100 software companies trading below cash at the time, and most of them were trying to grow in a market that had been fully saturated. And so I started looking at buying a set of these companies and managing for cash. And that actually, through a calm, located set of events turned into an offer to join a long short equity fund here in Boston, called matrix capital. They had a sister fund called matrix partners, which is a venture firm that had done a lot of work in the telecom industry. And I had been talking to them about joining them after business school, but but decided not to do that. But the offer to join the public equity vehicle made a lot of sense to me. So I moved from New York to Boston to do that, along with my wife, Meghan novel, A, who was also class at 92. And Boston has been a great place for us, I ended up staying at matrix for almost 11 years, running most of the software investments, and that period of time called Oh, seven to 2018 was a remarkably profitable time to be investing in companies that we’ve all heard of. And I was pleased to be a part of that part of the industry. 2018, I decided to launch my own fund, when we launched with $10 million. I had investors from sea level and board level investors from every company that had invested in and with my prior 11 years. And we grew that to about $120 million in assets. But COVID, frankly, was a bullet of death. Because once COVID hit our pipeline of inbound investors really dried up. And so at the start is started last year, one of our largest investors, and we ended up with really only having two large institutions, but our largest ended up having some liquidity issues. And so in the summer of last year, I made the decision to shut down to fund the public portion of the fund to avoid my small investors having to deal with any of the shutdown costs. And that process of winding down the public vehicle has just now come to a conclusion Well, it’ll, the last little bits will be complete by the end of this month. I found my team has all thankfully landed except for one person very nicely. And that makes me feel really happy and happy that they’re that the bet they took on me, though, didn’t play out the way we all wanted, that they’ve all evolved, generated nice step ups in their career as a result of the experience. And we still maintain private fund, oh, with some with, with with, with an investment in a private company and potentially more coming. And so I have taken a chance to kind of take a pause for a little bit. Think about where I see market opportunities in front of us and think a lot about what I want to do with the next college 15,000 days as my working life.
Will Bachman 09:03
I love quantifying it that way. 15,000 days, what’s that make? Wow, 3000 weeks or something? What? What are you thinking about? Tell me how you’re going through this reflection process?
Ben Balbale 09:18
Well, I think the first realization for me was that I have effectively jumped over the next hurdle and it’s been a medium my entire life. You know, I think we’ve probably all been that way. Right? So get the right grades in high school, go to college, get the right grades in college, get the right job, get the right graduate degree get the right job, even systematically. I think starting a fund was all caves but a decade one fund and help it grow to be very large and substantial. So now it’s time for you to do it, you know for yourself. And so I think the first step is just realizing that well, what is it that would be fun Do not just what’s the next thing to do? The second is, you know, I think that as much as I’ve spent a lot of time, investing in operating in software and in technology, and the technology industry, I think that we’re at a state in the industry where it’s not about the software itself, but rather, it’s about what you can do with that software. And I started our conversation simply by saying lucky 30 years ago, no one is in a science center, writing code and putting it up on a server. And now my son applying to college is seeing that, you know, a quarter of the classes that many Ivy League institutions all want to say computer science. And the reality is, software is going to be writing most of the code for software, by some essence is more of a 90% of that code of software, in the next period of time. And so it becomes much more important to think in terms of thinking about markets and thinking about where to invest time and energy, about thinking about, well, what happens when automation becomes easier for everybody to touch. I don’t know if you spend time with the chat GPT algorithm that got released a few weeks ago, but there’s several others out there. And, you know, it can be used in simple ways to do mental health assistance, I’ve seen sneezes like that it can be used to edit code, it can be used to summarize documents that can be used to scan the web and create a synthesis, definitional essay about a new idea that you’re thinking about. And so you can imagine paying a marketing executive, you know, a six figure salary, to do a lot of what is now being done or could be done in code. And so I’m thinking through markets where that concept can be easily implemented. And so the process of doing that is really just been talking to people, you know, hearing what’s happening in the market. And there’s been a lot of work that I’ve done in the last, you know, in the creation of my own fund, around this concept, but I have to admit, most of my time was spent in some combination of building the team, marketing to fund as well as looking at places to invest. And so now I’m having the pleasure of just having conversations on where to invest and not have to deal with the other pieces of the business that were so time consuming.
Will Bachman 12:49
I want to ask you about something you mentioned before you said that you’ve tracked what percent of HBs grads go into what different, you know, tracks consulting, or private equity or what have you? And if 18% is the threshold to run away, tell me a little bit more like one about how you’ve actually tracked that. And number two, like what some of your What have been some of the, the hotspots for HBs. Grads? I’m just curious to hear about that. Yeah, that you’ve looked at there.
Ben Balbale 13:21
Yeah, I mean, it the the HBS alumni team has been very generous over time of responding to this odd request from me. And, you know, it’s not a perfect indicator. It’s not a perfect indicator, by any definition. Right. And to be fair, I haven’t tracked it since COVID. But I think we saw spikes in the 90 is also you saw spikes in the in the 90s. You know, first there was a spike or on the venture world and there was a spike in the.com world. And then I think in the last in the last few years that caught the mid mid oh eight, so it spiked back into finance. And then in recent years, it’s spiked back into technology. So you’ve seen it by by, by, by my logic. And again, it’s not precise. But there’s a spike in technology at 19 conocidas site into the top spike in finance and 708 kind of the top spidering again, internet.com and 90,000 sign on the top. And then a bunch of stuff around the venture business that was probably a little earlier because the venture business didn’t has probably didn’t didn’t really suffer until the.com. Crash. But look, I think the reality is is that these are all big markets and they’re all going markets. And so the top has historically been momentary. I mean, the simplest way to think about this, I think is that, you know, in 1950, whatever, there were 2 billion people on Earth, and in a few years, there’ll be 10 billion people on Earth. And those incremental 8 million people all want the same things that we have, right? They want good food, they want shelter, they want education for their children, and they want to look attractive. By wearing the right clothes and putting on the right products. They want to be able to make a living. And so you know that that natural organic growth of humanity is going to continue to drive both innovation as well as new opportunity. Unless there’s some cataclysmic event like we get hit by a comet or nuclear war. You know, these, the six the cyclicality of the economy, and the cyclicality of different industries kind of mellows out over some reasonable period of time just because we all procreate.
Will Bachman 15:47
Yeah, I wonder, this ties a little bit to some reading have just done recently, I don’t know if you sub stats or something that gave me this idea. But it’s, there’s a certain set of tracks, if you will, that can be kind of the gold standard resume box checking kind of thing to do. And, I mean, make fun of myself a little bit here, like I was in management consulting, I still do that. But I’m at different points that might be being at an investment bank or being at McKinsey or email@example.com. And the early people who go into that, when it’s not sort of a positively attractive thing on your resume, maybe doing because they’re truly passionate about that thing. But at some point, when it becomes like, prestigious to do it, maybe that’s like when it becomes prestigious to do it. And you have a big inflow of people who are doing it, not necessarily because they’re long term committed to it, and they’re passionate about it. But like, that’s the standard kind of next step. You know, you go to Harvard, you go to Harvard Business School, like you get these sort of checks on your resume, when that crowd comes in, it’s maybe the warning sign, because they’re not so much committed to that particular industry or function or thing. But if you have a lot of people who are doing it more for the resume, then they’re not as kind of passionate and committed to that, that particular thing. And maybe that’s the time to flee.
Ben Balbale 17:18
Yeah, or, you know, you stick through it, right. I mean, it’s, um, if you’re genuinely passionate about it, then you gotta believe that opportunities will come your way. But I do think, to your point, and the point that I was making earlier, there is high risk that there will be, you know, some significant pullback in that industry. Yeah. But, as I said, like, I think you have to keep I had, you know, I, I there was at reunion, there was this, I don’t know, how many of these sessions you attended. But we effectively had two big conversations about what happens to your career, how you should approach your career after the age of 50. And, you know, there was a narrative that said, Well, you know, you should just kind of realize your ability to process information is slower. And so, you know, spend time coaching and teaching as opposed to spending time doing. And, you know, I sort of get the point, it’s hard for me to figure out if the point is correlated or causal, right. I mean, there are great entrepreneurs who are great, who’ve been great at coaching and teaching and getting a team to understand since they were in their 20s. So And mathematically, like by the time you reach a certain age, generally, if you’ve been reasonably successful, you’re managing a larger group of people and managing a larger group of people. It’s not about dealing, it’s about coaching. And so, I think that when you if you kind of approach the world and say, Okay, how do I take what I’ve learned and get creative leverage on it? Right? You can you can figure out the next place to go. And this this framework that says, you’re a doer, a coach is sort of a false framework. And so when you come back to sort of the conversation, we started, like, peak of an industry or not, I think, if these industries are all not or they’re not generally big industries aren’t going to go away, textile kind of go away, isn’t gonna go away, right? Being a lawyer is not going to go away being a consultant is not going to go away. But if you can figure out how to take your combined experience based on whatever industry you’ve decided to focus on, and then coach others to get better at it and create leverage for yourself. I think that’s, that can happen irrespective of a monetary spiking. recycle.
Will Bachman 20:00
Yeah. And particularly if you find something that is a boring or non sexy place to be, like, go into waste management or something that that is sort of off the beaten track of your standard gold plated talent. Tell me a little bit more about how you’re thinking now as you go through this reflection process of what are the kinds of criteria that would draw you to some particular area? You mentioned fun to do? Are there any other kind of criteria? And how do you how do you anticipate if something would be fun?
Ben Balbale 20:38
Yeah, I think so the first thing I would say is, you know, it’s really simple mindset. But what do I look at the world today and say, okay, 10 years from now, this will be done differently? You know. And it a few markets that come to mind. I think, what’s happening in energy, what’s happening with energy efficiency? And what’s happening with the electrification of the economy, like, that will continue, right? It’s hard to imagine, in 2040, that we’re all going to be driving around with on vehicles where there are 1000s of explosions happening every second, right? I mean, not just like, the stuff that’s been done already, but just the natural inclination of like a vehicle with art 1000s of explosions happening every second is gonna have less wear and tear than one. Right? It does. So that’s one example. I look at, I grew up in my parents came to the United States from India, in the early 60s. And I look at the experience that they had as immigrants, and the Indian diaspora. And, you know, I was the only until I got to high school, I think it was the only kid of Indian ancestry. in Wheaton, Illinois, where I grew up, and then in high school, a couple more showed up. But turn on Netflix today, and you’ll see tons of shows around the Indian diaspora. And that’s hitting people, parts of the country and world and otherwise have had no exposure to it. And it’s not just the Indian diaspora. It’s the Korean diaspora and the Chinese diaspora and internationalization of the world that I don’t think is going to slow down or stop. So those are two areas where I think there’s significant change and how the world will be in a decade. There are a few others, but those are two that attracts me the most right now. I think the second is that I kind of want to go back to making something. And being a part of making something I think some of some of my best and most enjoyable times as an investor have been working with management teams against market opportunities. And in certain cases, I was active as a board member and other cases, I was simply vocal as an investor, but sharing my read of the market. And if I hadn’t been, I wouldn’t have been able to get the types of investors I did when I built my fund. But I think it would be interesting to get my hands into the weeds more than they have been over the past decade. I’ve definitely enjoyed my time inside of a company. And so some way of being able to connect the two would be interesting. So there’s, so I’m not quite sure exactly how that plays out. But those are some of the criteria that I’m looking at.
Will Bachman 23:50
Tell me a little bit about what you’ve learned from your years as an investor and how it’s shaped your thinking. I’m curious about if there’s some mental models that you’ve that you’ve used, or some rules of thumbs thumb rules of how you think differently now versus before you started your career as an investor. And how that developed. Certainly, like famous investor Charlie Munger talks about mental models, Farnam street blog, talks about mental models. I’m curious how your career as an investor was shaped and what which, if any, you’ve developed and find useful.
Ben Balbale 24:38
I think I think there’s a shared narrative around what all investors look for. The narrative though, is colored by the use of different words. Right. But in the end, I think everyone’s really looking for a handful of things. They’re looking For a monster market that’s growing, or looking for a product that creates what I’ll call evangelical customer resonance. And, you know, you we’ve all had some experience, it could have been, I don’t know, the first time you went to a restaurant or the first time you used an iPhone, or the first time you used Uber, like some experience where you said to all your friends, wow, this is so amazing. And you felt compelled yourself to say that. And so I think finding products that have that type of evangelical customer residence is really important in today’s world, because we’re no longer sort of limited by distribution, right. And so, being able to find a product is what people do all the time. And so products are, are bought more than they’re sold. And getting that that resonance, right becomes really important. I think we’re then all looking for teams that have shown that they have the ability to execute against the market. And so when you find a monster market with a product that’s really working with a team that knows how to execute, that’s, that’s, that’s great, fine, right there. The incremental thing you need to figure out is, is this company in his products that have a business model that allows it to make money over time? And are you buying it at a reasonable price. And, you know, those are, the first three are probably easy to figure out like you can use to market sizing. You can look and talk to a lot of customers and hear what they say about a product, you can gauge the team’s ability to the historical track record as well as how they engage as a problem at hand. The next two are harder, right? The next two require you to think about well, is this model, one that has an analogue historically that makes sense? Or does it not, and if it doesn’t, we’ll have to figure out a way that is different, that doesn’t make sense to make money. And then prices subjective, right? Price can change a lot, certainly in the last 12 months, or actually, I should say the last three or four we’ve seen prices go up and or multiples go up and the multiples come back down. And so that has some some volatility associated with it.
Will Bachman 27:43
Across your career, if you were kind of given permission to be completely, shamelessly brag about what are the one or two or three things that you’re particularly proud of?
Ben Balbale 28:02
Well, I mean, I It sounds trite, but I’m kind of proud of my family, you know, across many dimensions, I wouldn’t say kind, I’m very proud of my family, and being a part of their growth. And this isn’t just, you know, my immediate family. In Michigan, I’ve been married for 25 years. We have kids that are proud to be a parent have given how they’re developing. But I also have three siblings. My My dad died, as I said, a few weeks after I graduated, and my mom got very sick soon afterwards. And so I’ve been a part of their lives, and to see them all succeed and grow has been incredibly gratifying to me. And alongside that, I’d say building the teams I’ve built right over my career not just on frankly, not just now, like the fact that I built a great team here at my fund. And I think a sign of how good they are and how to develop is how quickly they were able to land in the middle of a tsunami in the investment management world. I built a team at my prior fund over the course of 10 years. And so we started small, but every partner there for almost a decade is one that I brought in. And then you know, when I was an operating executive do the same thing. So that’s all I think, maybe part of one big topic, which is I’ve been proud of my ability to find talent and develop it and be a part of their careers. I think the second is, I’ve been lucky in terms of where I’ve invested and the relationships that I’m able to develop across companies. I don’t want to drop names, but in most if you look at the software industry, I’m involved with a lot of the biggest winners in it. In certain cases, as I said as a private and astronomic cases, as a public investor, and I think it sounds trite, but the meaning I got as an investor was less the money that you made for by making that investment. But that was gratifying but but the feeling that I was a part of the chain of a change in a market and in the industry and in the world, and feeling like I helped make that happen. And I completely recognize that my impact on it is de minimis relative to the entrepreneurs who sweated blood to go after their opportunity. But in my own narrative, it feels it feels important.
Will Bachman 30:42
Yeah. And also feel like you’re approved. Right? Like, you know, I was, you know, I, I sort of anticipated the future, and I made the right call for this company, you know, successful. That’s gonna be satisfying. Thanks. That’s
Ben Balbale 30:56
right. That’s right.
Will Bachman 30:57
I want to ask you about finding talent. Since you know, building teams is something that you’ve been very successful and proud proud of. Tyler Cowen came out with a great book last year, just called Talent along with Daniel gross. What are some of your tips that you’ve learned over the years about how to identify talent?
Ben Balbale 31:20
The first to me that’s been consistent across both operating and investing has been curiosity. Right? I think that trying to understand the why behind a situation is hard. And it’s, it’s really easy to not want to bother. But that sense of curiosity, whether you’re going after an account, and trying to figure out who’s gonna make the deal happen for you, or you’re going after a market and trying to understand how this market is going to play out, is just a really important skill to have. I’d say the second is some combination of humility, and confidence. You know, I had a professor at business school who said that competence, to confidence without competence is arrogance, right. But he left unsaid what happens when someone is confident and competent. And so it’s that mix of having a lot of confidence in your ability to figure something out, you may not know how to do something, but you know how to figure something out, combined with the humility to know that you can often be wrong, I think results in a better culture, and a better team to work with and then the opposite. So those are two things I look for, I think the things that change, or how people learn, you know? 10 years ago, I asked potential analysts. Tell me what you’ve read about investing? It is sort of a trick question, because I probably read with it already read. So it’s just a way of having a conversation about the thing that they had read to see if they’ve actually truly read it, then oftentimes, we’ll find people who haven’t really read the thing that they’ve read. But it also every now and then came across like a new source of wisdom that I thought would be interesting for myself to read. And I noticed the last four or five years, as I asked that question, many kids and their kids are 2122 years old, 23, maybe? All they do, I haven’t read anything about investing. And I think that’s kind of stupid, but I do want to be an investor then. And so I changed the question to say, well, how have you learned about investing? And all of a sudden, they started dropping YouTube links, or blogs or podcasts, right? That’s the way we learn for for a generation behind this is different than the way we were taught to learn. Right? And, and I don’t think we should be surprised by that. Like before the Gutenberg Bible, right, like, information is passed verbally, and now it’s passed through verbal and in visual forms. It’s not to say that reading is dead, it’s just to say that we have to be aware that how people are learning is changing.
Will Bachman 34:38
Yeah, I think a pretty awesome answer to that question. Be like, oh, in college just started a podcast and I’ve interviewed like 100 investors or portfolio manager. Yeah. That would be cool, right?
Ben Balbale 34:48
Yeah. Yeah, exactly. And it means for me it opened up like a set of sources that I previously wasn’t aware of. Right. So You know, so so it keeps you fresh, I think.
Will Bachman 35:07
Let’s talk about college. And I always like to ask guess what, course or professor that you had in college, if any, have continued to resonate with you some way, it doesn’t have to be a professional thing it could be maybe took, you know, jazz and you still listen to jazz or something and learned about it from Grambling what the course or professor continues to resonate with you.
Ben Balbale 35:37
Thank you. Well, there’s two. The first was Judith Sklar, who unfortunately passed away a few years after he graduated, she was a student of Hana Arendt, and wrote a lot about kind of the nature of society. And much of what I study with services, I think, in junior seminar was around power and its effects and how power is created, and lost and abused. And the second Peter Hall had a class about, I forget the exact title of it, but it was about the topic was essentially the preconditions for democracy. And yeah, with democracy is actually a remarkably new concept, right? I mean, people think about democracy has been around for generations. But in fact, like until the 40s, like, most of Europe wasn’t really a democracy. And I think both of those topics resonate with me today on on several dimensions. So so on dimension number one, look, I think there is in companies and as an investor, I think it’s important to look through how a company is actually creating power in its market. Right? You want increasing return economics, you want a team that can figure out how the cost of acquiring a next customer is lower than the cost of acquiring one before. And, and you want teams that kind of think about how to create power dynamics for themselves in an industry. And so it you know, this was a topic with with due to scar that was about societal power, but, in fact, society is an amalgamation of families, companies, communities, etc. And so the the lessons you can draw more broadly come down to microscopic levels. And so I think, that was really informative for me and still resonates. I think, the other class, I think the Peter Hall class is societally more interesting, right? I think, you know, we see the rise of conservatism everywhere. And I don’t know that people have put these thoughts together, but, you know, is, is the rise of ISIS and Islamic extremism, frankly, that different from the rise of very aggressive evangelical Christianity that denies women the right to choose, like, we can make abject distinctions around how bad it is in one versus another. But at its heart, it’s both they’re all about control and maximizing control the individual back to maximize the control of the institution against the individual. And so you have to ask yourself, why are these very different philosophies and religions and geographies all? All effectively doing the same thing in their own in their own language? And I think there is connection with what we see happening, you know, in the 20s, and 30s, and 40s. And the biggest connection I can see is, you know, this is what some of Peter Hall’s writings were about, or at least ones that he gave us, or about how labor gets disconnected from, from what it creates. And these these issues show up in very odd ways, because I think, you know, people may not recognize the economic genesis of their emotional state, but it’s there. I mean, like, look at this is a bit of a non sequitur, but I think it’s worth considering. You know, there are a lot of reasons for the Black Lives Matter movement to pop up, you know, in 2020. But I think underneath it all, you’ve got to ask yourself, we just spent four to $6 trillion effectively to save For people over the age of 80, I know I’m exaggerating. And I’ve had issues with long COVID to I don’t want to undermine health issues, but we spend a lot of a lot of money basically saving people who have negative impact on GDP. And yet you look at communities in the United States, that could be significant contributors to GDP, you know, underprivileged communities across the country. And at some level, I think, emotionally, the reaction was like, Well, why are we spending money on me because I can actually be a positive contributor to GDP. And we spent all this money on people or native country. And so I don’t know that anyone’s ever like kind of talked about that topic. But in my belief, I think it’s underlies some of these issues that we’re facing both as a country and as a world.
Will Bachman 40:50
Outside of class, any extracurriculars or anything else that you were exposed to, at Harvard, continue to resonate with you.
Ben Balbale 41:01
So I was really involved with the Institute of Politics. And I made a lot of great friends there. I mean, it was, it was a great way to see politics and action. And meet me people who’ve done far more with that, than I have with my life. But it’s kept me involved, I think. And so that was that was where just like us, I spent a ton of time with the Crimson. That’s where I spent a ton of time.
Will Bachman 41:34
You mentioned that one of the questions that you ask talent are used to was, what have you read about investing? And that you’ve read most of the books? What are some of the top books that you recommend on investing?
Ben Balbale 41:47
Well, I think there’s kind of the baseline standards, right? The books from Buffett and Munger, and then their predecessors, I think there’s a second generation. There’s a second gen. The irony, of course, is in my mind that many of these books were written at a time when access to information is incredibly limited. So the predecessor of Buffett was a guy by the name of Ben Graham, who ironically, in his book, talks about how effectively he made all of his money on a growth investment on the value investor, he doesn’t say that for the last three or four pages of the book, everyone misses it. But at the time, you know, if you wanted to get financials on a company, you needed to, it was very hard to do it. And there’s a huge time delay. In fact, my first job coming out of college, and I was a management consultant, I would literally have to call companies who were doing work on and say, Hey, could you send me the last five years of your 10, Ks and 10, Q’s and your annual and your quarterly filings. And you got to find the person in IR if you give that to you, and you have to ask them to send it to you. And then at the end of them agreeing to send it to you to Hey, by the way, I have a FedEx code, would you mind if you use my code to FedEx it to me? And half the time? They say no, I can just put in the mail, right. But now like you can go into Yahoo, and get everyone’s financials, right. So like, the access information has changed. So some of that literature is important, because there’s some principles of investing, but the times have changed. But yet, at the same time, not not having read them would be like not having read some of the basics of block, right. And trying to understand democracy and politics. I think there was another set of books that were all about how you find information. There’s a great book called by Phil Fisher called common stocks, uncommon profits, that talks about understanding what’s happening with the customer. And he’s called scuttlebutt, finding, finding information from talking to people or inside of an industry. Then there’s a third generation, I think, really led by by Peter Lynch that really talked about the consumer economy, how to invest inside that consumer economy. And so, you know, one up on Wall Street, which was written in the 80s, by late 80s, early 90s, I think by Peter Lynch’s is a great place to start there. And I think in recent years, Staying on the topic of books, there’s a lot of work that’s been done around trying to understand how companies grow, and what our ways of thinking about growing so Reed Hoffman, who founded founded Lincoln has several books that are on this topic. So there’s, I forget the names of all of them, but There’s at least two there might be a third. There’s books around around how to think I think Daniel Kahneman has won around noise. It’s super interesting. Data rally around predicting, predicting how, how markets think and how people think about decisioning. And then there’s, you know, I think to take to be consistent with what I’m hearing from analysts that I’ve interviewed, instead of blogs, the strategic series is a great one to kind of keep track of, to hear what’s happening in the world of tech. Bet Evans has another great one. He used to be a former partner at Andreessen Horowitz. I think all the venture firms now have the big venture firms, companies like Sequoia and Andreessen Horowitz have podcasts and, and material on their websites. It’s worth keeping, keeping abreast of and so if I were to in the areas that I invest, which is largely growth markets, those would be some of the places that I’d start.
Will Bachman 46:09
Amazing. Then, for any listeners that wanted to, you know, follow you check in and see what you have going on. Reach out to you, where would you point them online?
Ben Balbale 46:25
Oh, online, I have now a very limited presence. But folks are welcome to send me an email. And I don’t know if I should send an email here or not. But I’m happy to
Will Bachman 46:40
not if you don’t want it to be public. So
Ben Balbale 46:45
yeah, no, I mean, it’s I think, I’m happy to connect with people, and the easiest email would be been at Babel a.com.
Will Bachman 46:54
All right, include that in the show notes. Then it has been great speaking with you and hearing about your incredible career and investing and carrying a bag and being part of a family. And I look forward to hearing about, you know where your reflections lead and where you decide to take your next chapter.
Will Bachman 47:54
All right. We will edit it so that then it’s been great speaking with you, thanks so much for joining
Ben Balbale 48:01
Will Bachman 48:14
we will keep plugging away. And as thanks for joining us.