In Good Company with Nicolai Tangen - Kinnevik CEO and Chair: Long-term mindset, Innovation and Dealing with failures

Episode Date: September 4, 2024

In this episode, Nicolai is joined by Georgi Ganev, CEO, and James Anderson, Chair, of the Swedish investment company Kinnevik. Founded in 1936, Kinnevik has a rich history of driving growth and innovation across various industries, such as telecommunications, e-commerce, and healthcare. Tune in to this engaging discussion to learn more about Kinnevik's approach to long-term investments, their perspective on public versus private companies, and the challenges they are facing in the current market climate.The production team for this episode includes PLAN-B's Pål Huuse and Niklas Figenschau Johansen. Background research was conducted by Isabelle Karlsson and Kristian Haga. Watch the episode on YouTube: Norges Bank Investment Management - YouTubeWant to learn more about the fund? The fund | Norges Bank Investment Management (nbim.no)Follow Nicolai Tangen on LinkedIn: Nicolai Tangen | LinkedInFollow NBIM on LinkedIn: Norges Bank Investment Management: Administrator for bedriftsside | LinkedInFollow NBIM on Instagram: Explore Norges Bank Investment Management on Instagram Hosted on Acast. See acast.com/privacy for more information.

So hi everybody and welcome to this live podcast with Kinnevik, a remarkable Swedish company. And this company was founded in 1936, so has a long tradition in driving growth and innovation in various industries. Telecom, e-commerce and healthcare. And at MBM we own just under 4% of the company, equivalent to just under $100 million. So a warm welcome to the CEO, Georgi Ganev, and the chair, James Anderson. So, Georgi, just before we start, what is Kinevick? So, as you said, we are soon 90 years old or young, I suppose.

We have a history of backing amazing founders and being part of building businesses across various sectors. We are publicly listed, meaning that we give public shareholders the exposure to fast growing companies. And we have a long-term mindset because we also have our founding families still as lead shareholders, providing shareholders of flesh and blood with long-term mindset, looking for returns for generations rather than quarters.

So that I think in simple terms, who we are. Good. And how has portfolio changed over the years? It has changed massively, because the only constant within Kinevick is that we reinvent ourselves. So we've had a number of transformations before. And for the last six years or so, we have again changed the portfolio into new sectors. So health care was something we built up actually

starting six, seven years ago, complete new sectors. So transformed the portfolio massively over the last years. So when you come to work every day, what's your goal? What is your kind of long-term goal? I mean, I think our ultimate goal is that we want to be the best owners in these sectors for our companies. And I mean, a lot of investors say that they are long term. For me, that's not just the holding period time.

It's basically what type of discussions we are driving in the boardroom. So when I see, especially at times like this, with this quite difficult market climate for growth ventures. We see short-term discussions in the boardroom that we don't like. We would like to challenge our founders and discuss with them how to expand features, expand products, expand footprints into new markets

and have those strategic discussions. So invest for returns for the future. And becoming that owner, I think, is something you earn that right to have those strategic discussions. So for us to be perceived or to be properly perceived as a long-term investor, what kind of questions should we ask you?

Basically, the size of opportunity to start with. How large can something become? Because I think people tend to look at average returns, but forgetting, I think, that those returns are built up typically by extreme outcomes. So trying to understand the potential and how big something can become. I think something that I would welcome us, you know, welcome as a discussion. something that I would welcome us, welcome as a discussion. Now I saw some stats that out of one million companies,

only 45 get to a hundred year old. What do you think is the key to in getting there? Firstly, I think every successful company survives. So you need to survive to start with. That's a good starting point. Yep. And then I think you just need to realize that if you're going for novel business models, which I think is something that differentiates us as an investor, all investors wants to find amazing founders, great, you know, visions and so forth. But if you're backing novel business models, lacking comparisons, lacking peer groups,

it is very difficult. This is a different type of risk you're taking. And quite often, it turns out that might not work because of wrong timing or wrong setup, wrong structure and so forth. But when it works, it can actually create fantastic outcomes. How would you define the investment strategy just now? What type of companies are you looking for? I think we're looking for companies that actually are comfortable in articulating that great vision and how large something can really become,

and how large something can really become, that they are bold and brave. But at the same time, of course, understanding that creating a business takes time and they should have that grit to go through not only one period of challenges, but I think all great companies speaking about Nvidia, Amazon, and so forth. And of course, James knows much more of these companies than I do. They've all gone through difficult periods. So I think what I like to see in a founder is that he or she is ready to go through periods like that.

Now, how do you find that in a founder? What does an interview look like? So now I'm a founder, how are you going to figure out whether I've got this grit or resilience? The first question I think is to really pan out because typically when you do your classical three-year plans, you tend to extrapolate just what you do now, which doesn't tell me anything about what can potentially

happen and become. So to kind of pan out and to ask questions regarding the 10 or 20 years outcome, that forces, I think, the founder to think differently. And certain founders that we have met and, of course, backed, they have the understanding of how large this can become. They can articulate that for the long term while of course being very disciplined and execution oriented, result oriented here and now because you also build typically great companies by delivering every day, every week. So I think we have some kind of, We're not patient for seeing results. We want to see results all the time.

At the same time, we have the patient capital to actually wait for the large outcomes. And if you can have that discussion with a founder and ask those questions, I think that's a good starting point. So that's about the people, but what about the industry and the type of business you're looking at?

Yeah, I think when it comes to the industry, we have always looked for business models that can change an entire sector. Going back to the 80s when Genevieve was part of creating Challenger within telecommunications or the media sector, for instance, or in the early days of e-commerce, again, backing novel business models, disrupting entire sectors by providing better choice for the consumer. I think that's the starting point we always had, that we would like to see how we can use technology in a way that would disrupt an entire sector. Typically a sector that is, you know, where we see that consumers are badly treated or they have low experience or low customer experience because of lazy incumbents, if I may use that word. So I think that's something that attracts us

to the investments. And we can look at companies in our portfolios today, like Recursion, for instance, where we as an investor would back the platform of drug discovery, whereas many investors today, they would look at the actual candidates in a pipeline. So how many potential drugs are passing phase one, phase two, et cetera.

Those are the short-term proof points. We would more look at the potential of the platform again and how that fundamentally could change the success of drug discovery over a period. But do you think it was easier to be, I mean, in a way you're a bit of a venture capitalist, you know, investor. Do you think it was easier to be, I mean, in a way, you're a bit of a venture capitalist investor. Do you think that was easier in the old days when there were less venture capital companies

competing for these ideas? Yes and no, because I think at that time, you were by default unique if you were taking those bets. But today, I think you shouldn't underestimate how much impact you can do by just being different. And again, what I said, taking different types of risks, business model risk is something that very few investors do actually. They tend to look for comparisons for peers, etc.

Taking the long-term bets by pushing the right discussions is also something that is different. And although I think we have a team now that have been kind of spearheading a strategy of these different sectors, when we meet founders, typically we are also selected as a partner because of those different mindsets. Moving on to you, James, you are one of the most successful investors Europe has ever seen. And in particular in the technology sector, you've been incredibly early. Tell us about your investment philosophy, because you say that the normal ways of looking

at companies is not really valid valid and we need to look at 10, 15 year upside down side scenarios. How do you go about this? Well, firstly, thank you for the kind words. I think there is something very strange about our industry and the way it thinks about prediction. No experts on predictions who I've ever talked to or read would say that what you should be doing is providing a spot number, often to three decimal points for a particular company at a particular date. We live in a deeply complex society where you cannot

tell what is going to happen, but you can with all concerns about how precise you ought to be in your likelihoods have different scenarios. And I don't know whether it's been the same for you, but every single really successful company that I've been fortunate enough to invest in has way exceeded anything that I could primarily envisage. It's become a matter of trying to use imagination rather than anything else. And I actually sort of increasingly become, if I may say this, more extreme about this. And I was thinking this when you were asking Georgia just then about what to answer founders.

For those very small number of companies that dominate returns, you know, in America since 1926, just 72 companies provided half the returns over bonds of companies. I think these people, Nikolai, instantly shock you. But if you go back now, for instance, you've been one of the early very large and serious backers of Tesla, right? Yeah. So what did you think? What did you think at the time when you made your first investment? How did you go about that analysis? Well, the first thing to say is I think you need

to have a long-term few point of it. And you don't have to go back to what I was saying before. I have a desk draw full of to the second decimal point top price targets sent to me by kind hedge funds over the years. But you also need, don't you, different sets of information and indeed different metrics in thinking about all this. And in all honesty, the most valuable help I had in it

was talking to a set of professors, particularly a lady called Jessica Tranchic, who is both at MIT and at Santa Fe Institute, who was trying to think about how energy technologies progress over 15, 20 year time periods. And that gave us the confidence to say that actually your minimum improvement rate is 15% per annum, and it turned out to be rather higher than that. And if you afford yourself time periods sufficiently long, 15% is against a two to 3% improvements that even Toyota could give you, gave you confidence that it was going to change. So I think a lot of it was about the exponential change in the industry from academic sources. I think you and I would agree that for good or ill, Elon certainly falls into that category

of being an extraordinary person and the way he was thinking about this in the industry, possibly even more so at that juncture than in his present incarnation. So I actually think that as long as your clients allowed you patience, it was something that the odds of success were pretty high on. Give another example. We talked briefly about Atlas Copco, for instance, who we had on the podcast, why did you invest in Atlas Copco? Well, the first honest response would be that in 1986, if I go back and read my notes, which I don't have any longer, but I think I would have found the answer was

Guys, we're talking 1986, okay? It's a long time. Think about our holding period and how we plan on extending it. This is where we're going to. Yeah. I think at that time, the answer would probably have been reasonably superficial. I need to be honest about that. It took me a long time to try and think about this in a hopefully more profound way. I think in that very Swedish element of it, having stable long-term owners was incredibly important. You know, what the Wallenberg universe, who I know you talk to, have enabled there is so far different. I think you need, in most great companies, founders or long run families. I think there are very few companies that don't have those that become truly successful.

But it was also an absolute commitment, and this goes back to George's point, about constantly widening the market so that it got bigger and bigger rather than exhausting those tiny areas of dominance that some companies had. But what I'd most like to understand more is within those two conundrums, how they've constantly managed to select CEOs, mostly who've been there, as you know, for a very long period of time, who absolutely themselves embody these principles. And I think that is very unusual. And, you know, I sometimes find the European companies that have really succeeded even more interesting than the American ones from this point of view, because it is actually something wider, isn't it, than just the founder. You know, I'd say exactly the same of ASML,

which is effectively never really had a founder, but yet has had truly astonishing people leading it for 40 years. So when do you sell? Or do you sell? Well, I think firstly, one should think again and again of it, you know, as Charlie Munger says, interrupting compounding is not really a very sensible thing to do. And you know, my sins of commission on this front have been worse than my sins of omission on it, and you know, both on the buying and the selling. And I can only have to admit that I sold Apple

in 2016 because I couldn't see how it was going to grow and I couldn't see post-Steve how it was going to have the ethos it has. Now, in some ways, that's been true, but I don't really think it's been true in economic terms, even if it's been absolutely wrong in stock market terms. I think you should only sell if you think you have actually got to the period where you've exhausted that growth. And that growth has to be estimated via your imagination as well as any sense of predictions about it. And

you know, I wish on the whole that I'd kept to those cultural factors more behind all that. You know, I think once a company changes its nature, then it's very difficult to get the longevity and the extremes that we've got. So in some ways expressing about the scale of the market. But a lot of it is also have they got the culture still that will enable them to explore these extraordinary theses that they have. You know, I perhaps can't put it better than,

if you'll excuse me one more word, it's the Jeff Bezos thing, isn't it? I mean, lots is, but once a company moves on to day two, then it's effectively beginning to die. And you've got to stay with that extraordinary level of ambition, extraordinary iconoclasm about how you go about thinking about your own industries. The fact that so few companies account for so much of the growth in the market, what are the implications for how we should invest?

So in days of yore, my largest client and one which was immensely helpful was Vanguard. And if you imagine having interesting conversations with a very own everything type approach. I think there are basically three approaches that you can have and very quickly. You can own everything, but I'm not sure you can own everything because you can't own the unquoted companies that George is talking about, but then you don't miss out. Secondly, you do, and I think this is something which your organisation is trying to do extremely well and can have a huge role on. You try and make the companies better by how you are owning them. It fits in with what George is saying. The third one, which is my own approach, but I'm not remotely trying to say it's better,

is that you can believe that there are identifiable characteristics that truly great companies have. And actually, I think in many ways, I've probably expanded that too much and had too many not truly great companies, but I think they have identifiable characteristics. And I think you can actually, if you're prepared to use them for the long term, I think the job is possible. It's in some ways simpler, but that's not the game that most people believe they're doing. I sometimes use this analogy, which goes down quite well with my Italian employees, to say that Scotland, where I come from, will never ever win a European or a World Soccer Championship. Why? Well, mostly because we're not very good. We did beat Norway last time around. But also you just need to have the scale to be able to have something special

about it. But you know, if we play a different game like darts or snooker, mostly in cloudy pubs, we can be better than other people at it. Now most people in investment, and I find this incredibly sad, but most people in investment, to my my mind are engaged in the game and they are incentivized to this, trying to beat other people over short periods of time. I think if I say that you're looking for the extremes, they have identified extremes and you give yourself or hopefully your clients give you at least 10 years to do it, it becomes a feasible game, which is as much chance as winning, you know, because it sounds very arrogant, otherwise couldn't do it, Nikolai, you know, saying, I can do this, but other people aren't. I

just don't believe that's what most Marta Waite participants are doing. You know, the figure in New York is that 60% of people are paid on the basis of their daily P&L. Wow. You're not going to be interested in trying to find the exponential companies for the long term if that's what you're going through. Well, you'll be pleased to hear that we have a slightly longer-term horizon than daily. Yes. Now, Georgi, just moving on to the difference between Europe and the US. What's the difference between the startup scene we're seeing between Europe and the US, just what's the difference between the startup scene we're seeing in Europe and the US?

And in a way, why is the US succeeding so much better than Europe? I think if I kind of boil things down, the word I think of is ambition. And for sure, now when we have, you know, more than half of our portfolio in US businesses, I see a clear difference. It's an ambition level that is much higher in the US compared to Europe. I don't know really why, but in Europe we tend to focus a lot, you know, around legislation, boundaries, regulation, etc. Instead of actually thinking how to do the impossible kind of. So that's the ambition level.

And that goes well beyond founders. I think also investors think in a different way in Europe. And we have, of course, fantastic European examples. I mean, companies like Spotify and others that have proven that they can truly become global winners. But still, I think the ambition level is a big difference. What about Stockholm? I think Stockholm has, Sweden has the pleasure of having several factors that has, you know,

helped, you know, this startup scene to move. Everything from PCs being rolled out during number of years in the 90s, sorry. Very early on, I was working with that myself with kind of fiber to do home, kind of allow people to have fast access to internet in the early days has been kind of part of the scene growing. And I think also that successful startups

typically feed other startups. You mentioned this home PC, just to explain briefly, because in Sweden there was a situation where people just got PCs, right? At home. Yes, very affordable at least. Yeah, I know. But I mean, it's quite interesting how a government can actually accelerate technological progress by something like that.

It wasn't very expensive. No, it wasn't expensive. And I think it again was a long-term bet, understanding that if we would provide more people with these tools and the infrastructure, which basically is the broadband connection, right? Good things will happen, probably not so good things as well. We had a lot of debates around Pirate Bay and other stuff during this period of time, but I think it actually created a lot of innovation. So we can definitely do it in Europe as well. But it's sad to say that it's a clear difference today,

both within the investment community and founder community, that the ambition level is different. Then, of course, having said that, US is a huge market and you don't have to go abroad before scaling. What we see in Europe is that it just takes a year or two huge markets and you don't have to go abroad before scaling. What we see in Europe is that it just takes a year or two after a company has started and then it needs to think about expansion and going into new market, new language, new

cultures, et cetera within Europe can be more difficult than for US companies to scale. How do you see the difference between private and public companies? I mean, we say sometimes that we can actually save companies from going public. It sounds a bit sad, but especially since we are a public company ourselves. But we see sometimes that founders in the private environment has the freedom to actually focus on building a great company for the long term. has the freedom to actually focus on building a great company for the long term. And once they're public, they are actually evaluated along the lines that James just described, right? So much shorter time periods, different type of work streams.

You seldom hear a private founder or a founder in a private environment think too much about what to do today to improve the share price. But that's quite common actually in the public environment. And I think that's a big contradiction when you want the company to focus on innovation and R&D. And me and James just discussed the other day about Nvidia when they had this massive setback in, I think it was 2006. And they were nearly wiped out, right?

Exactly. Share price dropped by more than 80%. And the sad thing here, or the funny thing, I don't know, the irony at least, is that it was because they invested a lot in R&D, building the platform that then created a trillion dollar company, right? So the markets are not rewarding businesses typically in the public environment to invest for the future. So now you look at, so James, go back to you.

Now you look at where the R&D is being spent, where the innovation is, where do you think we're going to make the most money in the next five to 10 years? What type of industries? Oh, I think that there are three outstanding areas. One I'll just mention because I don't think we need anything else. I think that in clean technology, there are much better business models than people believe and that that can be done at scale. The second would be, and Georgie has touched on it at the moment,

where data meets genomics. I think that we've got a chance of moving our understanding of human biology up from, I don't know, 15% to 50%, and I think that will lead to a complete transformation, which hopefully will lead to better healthcare at lower costs. So of course there are many things cutting against that. The third one would be that I do believe

that AI has huge opportunities, but in a very different way, I think than people are going about at the moment. If AI continues to compound its power levels, its understanding levels at something like 60% per annum, then trying to think about what problems we can solve in 10 years time becomes what's interesting from my point of view. And what type of problems are they? Well, I think it feeds back into the healthcare one at the first place. And I think it's interesting. I think there are, you'll recognise that it's early stages here, but you are just beginning

to get companies evolve into that, which I think is a sign of real hope that we're going to break out into it. And I think it's going to real hope that we're going to break out into it. And I think it's going to be critical to reforming healthcare. I think one much talked about for many years, and again, back to a company that we mentioned, I think that you've got that rate of improvement than both autonomous driving and robotics for general purposes become extremely compelling and at prices levels where they can transform our world.

And Georgi, do you agree on this or are you coordinated in where you want to put the money? I kind of hope so in a way. Most of the time, not always, but most of the time. And I think, I mean, I'm an engineer by training and I'm truly fascinating because we're now seeing something that is, that hasn't happened before. I think for the first time we can translate human biology, chemistry into technology for the first time ever. And this does not mean that we move boundaries. We actually completely remove them. So I honestly think that we are looking at something that could, you

know, change fundamentally again how we look at health care and drug discovery, but also in other areas. I mean, we back the fantastic company where we are backing a fantastic company called Soligen in the US that has reinvented chemical engineering. They can actually produce materials and the result is kind of carbon net negative. And that wasn't able to do just five, 10 years ago, it was impossible. So now I think we have all this innovation and yet the market seems to focus more on the daily trading and the next quarter's results.

And I think it's quite interesting that we're talking about things in 10 or 15 years time, what this technology can do. I do believe, however, that there will be also a lot of margin compressions around the AI field. If you look at the, what we call thin wrappers, that might not have, you know, so much deep connection to businesses, workflows or anything like that, very limited modes. There, we won't see the same kind of development earning-wise over time.

Changing tack a bit here. James, moving back to governance, what are your main priorities as the chair? My number one priority at the moment is trying to make sure that Georgi and his team have the confidence to invest in a way that logically fits into the philosophy both of us, I think is expressive. You know, I think there is a continuous danger when you are in a bad phase of markets or a bad phase of the company or both combined that you give up trying to be truly successful. How do you do that? You call him and say, come on, Georgie, you're a cherub. Well, I...

As a matter of fact, yes, someplace. I actually think that the human aspect of that is important. There's this great story about Bezos and Buffett, far higher level than Georgie and myself, that in 2005, Buffett very publicly went and put his arms around Bezos and said, Jeff, you're getting it right. Don't listen to the market. These things really matter. I think, as Jensen and NVIDIA says, if he'd known how hard this was going to be, he wouldn't have done it.

So, you've got to keep that. But I think that there is, I think very often, as George was implying, a different way around. I think what goes on at board meetings does matter from that point of view. Does it help to have a big family shareholder? For sure, I would say so. In what ways? I mean, I think shareholders of flesh and blood, again, thinking about generations rather than quarters matters. And I think especially when you have founding families as in Chinavik, they have been around for a long period of time.

They have seen changes before. If there's some legacy and culture and history we have, it is that we have done many new things. And one of our famous persons within Kinevick, John Zembeck, he said, I don't just want to see around the corner, I want to live around that corner. And how is it to take over after somebody like that, right? I mean, he was kind of a visionary genius. I'm not saying that you are not, but of course, you know, probably you are, but he for sure was, right? And what is it to take that? First of all, I wouldn't say that. I wouldn't

compare myself to anyone like that. But I think the most important thing to understand as a CEO of Shinnevik is that you're actually taking the baton and you are carrying this forward because this is much more than one person or one team. It's actually an institution and it's a unique vehicle because we have the combination of being an investor, looking at fast-growing tech companies, but also in one way backed by a family of this kind of mentality with this long-term approach. That is unique. Is it important that board members own shares in the companies where they own the board? members own shares in the companies where they're on the board? Yes, though I fully accept that the number they own is dependent on their own personal

psychosensors. Yes. Is Kinnevika a very Swedish company? In that we had Erin Mayer on the podcast and she talks about the importance of consensus decisions in Sweden. Now, at the same time, when you reach consensus, it's normally not a very good investment because it's so consensual, right? So just how do you balance this?

How can you be contrarian in a country like Sweden where everybody has to agree? From that perspective, I think we're typically non-Swedish. And I think that's why Shinnevik in the past has been very much of a role model, I think, to certain Sweden founders that have been looked at, you know, the Stenbeck family and Kinovik as an example of being a contrarian and taking bold decisions. I don't believe in always in democratic decisions. I do believe that you should listen and carefully consider every different perspective. So having an open discussion, a good decision-making process is one thing.

Trying to agree on everything is a totally different thing. And I don't think we're there. So from that perspective, we're very non-Swedish. How do you deal with failures? I mean, I think, first of all, you need to acknowledge failures. But I think it's... Do you guys really acknowledge failures at Kinevick? You talk a lot about your successes, but you don't talk so much about the stuff that doesn't

go so well. It hurts to talk about failures, but actually we do. We talk about things that have gone wrong. We have taken some serious bets in companies that have gone bust and we have lost a lot of money. That we talk about. But I think what's important is that it doesn't create this culture of fear of doing mistakes, because we are in the business of risk-taking. And I'm sure that every great company out there,

including Genevieve, will do a lot of mistakes during that successful journey, right? So if you're obsessed about failures in a negative way, I think that can form a culture that is very negative when it comes to seeing the potential going forward. Somehow I think you should, as an investor, sometimes celebrate mistakes and see that as something very natural in your evolution of becoming better. And sometimes I also get annoyed by people saying that it's very good to extract learning so we don't do the same mistake twice. I do agree, but there are so many new mistakes to be done. So

I'm not sure you can protect yourselves from doing mistakes just because you learned your past mistakes. You just have to live with them and make sure that when you hit that extreme outcome, it hopefully will actually compensate for all the mistakes you've done for a long period of time. I don't know, James, if I get fired now or... No, but so we're actually going to... I'd just love to explore that a bit, kind of the potential of being fired because... Not you, of course, but... James, you mentioned a bit earlier that if your shareholders permit you, if your investors permit you to be long-term, right?

Now, how do you think about a drawdown and how much money you can lose before your job is at stake, right? So one of the reasons in this fund that they have this tracking error budget is that so there are limits for how bad we can do Because it's a very important fund now have you got have you got any type of Risk management put on you or drawdown limits or you know, we have have, of course, a lot of risk, you know, parameters that we look at. But I think typically what we do,

we back a company because we have a thesis and we see that big picture, but we don't deploy all the capital at once. What we typically do is that we deploy the capital over time when we see the company develop. And of course, that can reach a certain number, that it's a lot of money, $100 million or more.

But at a certain point, we don't regret that we backed that in the beginning, and we admit that we made a mistake and the company will actually not be part of our portfolio, either because it's written down or it goes bust. That happens, but it's a limit, of course, how much capital we can put in that company. What do you think, James? I think, how badly can he do before you give him a different type of telephone call?

I think it should be about making an assessment of the caliber of the decision making more than the outcome. And I think we forget just how fragile success is. So go back to another company that, in marked contrast to Atlas Copco, which I held onto through this. I mean, earlier in my My earliest investment when I was working as assistant in the American department was in Home Depot. Now, Home Depot in, I think, late 1985, might have been early 1986, but around that time period again, was within three weeks of going bankrupt.

that time period again was within three weeks of going bankrupt. And I believe there's a Harvard case study around this at the time. Now, it is since then one of the 25 best investments you could have made if you carried on owning it. If they'd gone under at that point, would they have deburved a program? I'm not really sure they would because the entire thesis was out there and correct and the upside was huge. So, you know, I think a lot is about thinking about the caliber of thought and the caliber of work that is done. And on that score, yeah, I do think that there are plenty of people in the financial industry who don't deserve to have very highly remunerated jobs

and to keep them. But I think also, I mean, in times like this, when we had a big market reset, it's more difficult to raise capital for growth, you know, companies for sure. I think we need you also to be humbled, right? Because it's easy to say that now we separate the winners from the losers, we separate the wheat from the shaft and so forth. But there are definitely a lot of companies out there that will go

bust because they can't raise capital. That could have become something extraordinary. And we are the one deciding whether they should have that chance. Might not be so that it's a bad company, but we did not give them that chance. What does it mean for us? Of course we can't fund every company

we have in the portfolio. We can't fund every company out there, but we should also remind ourselves that it's difficult to actually, you know, see that future potential also in a company that's struggling. Otherwise, investing would be easy. You would only then allocate more capital to the ones that are performing right now every day. But that's not the case. Investing is not easy. James, what advice would you have to us as a firm? Well, firstly, I repeat that I genuinely have admiration for you going on. I don't want to be remotely arrogant enough to say that I consider that, but I think that you have such enormous opportunities to do good for the way the financial sector works,

and indeed so that it goes beyond Nikolaev MA, the financial sector, because I've always had this belief that really would be better off if we thought about the job that we're doing as trying to help build great companies. I think you have an unequal chance to try and help build great companies. And the second part of that is that I think that building a really distinctive individualized investment culture within inside your organization would be a fascinating project for you because... And what should it look like? Sorry? And what should that culture look like? I think the culture, and I hope this is consistent with the

many of the companies that we've been talking about, should be all of you taking a look at what you think from the first principles your objectives are, what you can contribute in the broadest possible sense, and not to care at all if that, and again I would have thought you were in a strong position in most ways from that point of view, and not to care whether that cuts against the convention. You know, talking to your colleagues earlier about, you know, I personally believe that there is no evidence that the financial rewards prevalent in most markets for investment

do anything to help get you to better investment. So rethink it all. Rethink the metrics that you judge by companies by. I was incredibly influenced recently by Kathleen Currico, the discoverer of many mRNA technologies, most of you all know, autobiography, which was relating the terrible, terrible things she had to go through in academia because of what she put with the

rituals of how you had to do things each year. And gradually, the amount of money she was allowed, the research staff, the size of the lab, even the appointment of her was in question, just because she was being measured by how much money she brought in each year. Then at the end of 20 years, you suddenly win the Nobel Prize. You don't know when these things are going to happen and they need to be given their space. We have a lot of young people listening to this podcast. You know, the room is full of them. What kind of advice would you give them, Georgi, if we start with you?

I mean, I think if I go back some years, it's really the question about planning. I think it's very difficult to plan things because seldom it turns out as you plan them. It's when it comes to your personal development in your career, I think it's impossible, right? So you need to do what you're passionate about and what you're interested about. And also coming back to what we discussed earlier,

the mistakes, right? Allow yourself to do some mistakes. It's not possible to learn by just doing the things that you're comfortable with. And I think if you're able to do more mistakes early on, you become wiser. And I think that is something I wish someone would have given me confidence to do early on in my career. What about you, James? I think you have to have the courage to think differently.

And at the same time, I'm incredibly saddened by the number of people I've seen who continued in a financial services or an investment industry because they were, A, well paid and B, it was thought to be a relatively prestigious job. And they didn't enjoy it at all. Your advice is to leave the financial sector. If you don't have real willingness to think differently at all. So your advice is to leave the financial sector?

If you don't have real willingness to think differently or you find, in my own case, just the sheer problem of investment to be sufficiently intriguing that provides you with the inherent motivation from that point of view. I think it's a great, great piece of advice and a good place to end. Hey, if you don't like it, if you don't like to be different, do something else. Big thanks to both of you and great, and thanks for coming to Oslo.

Thank you very much. Thank you. Thank you very much. Thank you. Thank you very much. Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you. Thank you. Thank you.