YouSaid · the spoken record

Henry Ellenbogen

lines on the record: 123
first: 2025-12-16
most recent: 2025-12-16
sittings or episodes: 1
sources: podcast

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“It was such a prominent view. In what I was trying to do. We talked a little bit about the investment velocity. I mean, the investment philosophy is really simple. Let's invest in small companies that can compound over time and become large companies. And what's our advantage that we bring over other investors? We think we're great at people and understanding change. So basically everything we do at durable, because we're an investment-driven firm is in support of that investment mission. First of all, we essentially with a clean sheet of paper said if we were going to go purpose build an investment vehicle to allow us to do this, how would it actually be structured? Essentially, the percent of capital that we put in the public markets and the private markets is aligned against that. And then the second thing we talked about.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“About how you transition to the public markets later, but I would say to us VAX is a perfect example of an act to entrepreneur that we had already been in business with. If durable does anywhere from five to 10 new investments a year, a lot of times it actually is with Act 2 entrepreneurs. And then if we're lucky, and this happens because of compounding relationship for having done this for 20 years, a lot of times it's with people that actually we were investors in their previous act. And I think that's also great because they know us and we know them, we know each other's strengths, and we know exactly how we can help each other, the maxes of the world get to do business with who they want. But I think what it allows them to do is with a clean sheet of paper decide who they want to be a business with, but obviously from our standpoint, we don't do a lot of new things and it allows.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Investments in my whole career. We invested in sly. And for many years until recently, we're now investors in a firm. I used to joke I'm the only investor in Max who hasn't made a lot of money. But with all jokes aside, Max to me represents the best of an act two entrepreneur. For those of you who don't have the benefit of knowing Max, first of all, he truly understands technology and he really understands how it can be used in very complex systems to solve problems. He can recruit exceptional people because he speaks their language. He's also very good leader and people believe in him. He's also exceptionally resilient. We could talk a lot more about a firm and we could talk a lot more about the relationship with Max and some of the things.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Serve it. That to me is the image we have at durable when we look at an entrepreneur who has solved and successfully won a product area or an area of business, but now wants to go do it again. And there's huge advantage when you go do it again. You are essentially solving the same problem, but with total clarity at the beginning. The other thing is if you've been successful, it allows you to align all ports of the organization, the people, the organizational structure, the investors exactly how you want to go do it. One of the examples of that comes to mind is Max Lewkin. A lot of people know Max obviously is one of the co-founders of PayPal. We first invested in Maxu. Actually, it was one of my first private.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Had felt they hadn't frankly completed their vision. So they came together, but what really also lit up the vision was cloud. Now this sounds so obvious today, but 2012 when we invested in a workday, I think a lot of the understanding of the cloud was not as obvious by investors. And frankly, I'm not sure I fully understood it either. But what I did understand was this was an Act 2 team. By that I mean if you understand HR systems of record, there's a bunch of the stuff you have to build into the product that for lack of a better word is exception management. And if you don't understand that exception management because you have done it before, you're going to not properly be able to do it. And because this was an Act 2 team, they actually knew how to leverage the modern technology, but also build the system of record in the way it dealt with the edge cases at superscale. And then obviously they also understood what segment of the market to go after and then how to”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is something that is so dear to me because when it's something we invest in, but two, it's actually at the heart of durable itself. And it's one of the reasons that I think durable is just different than other investment firms because we ourselves were an Act 2 team. The best way to explain it is by example. At my part, for I invested in workday when they were about at $100 million of revenue scale. What was so interesting was that the two co-founders of Workdale, Aneil Bouchry and Dave Duffield, had basically been the people who had pioneered HR systems of record in the previous client server world. They were literally the people who built PeopleSoft, scaled Peoplesoft, and then a lot of history there, but there was basically a very aggressive takeover by Oracle. And so in many ways,”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Head of AI and ML at Carnegie Mellon, but also has that much business clarity and is so crystal clear at communicating. He can make complex topics simple that even I can understand them was when I spent time with Toby when Shopify was private. And I said to Julio, we're going to basically clear our schedule. And whenever Luis will spend time in Pittsburgh, we're going to go spend time with him. And so I think for lack of better word, The understanding of the patterns and having studied them, the understanding of what creates the environment. Sequoria is famous for saying why now and what could lead that not only on the technology side, but across the economy. But I think the clarity you have when you spend time with at this point thousands of executives and you have seen the ones who've done it, you want to do more with them.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Who build great organizations. And then obviously we have to meet new people too. So one of our largest holding stays Duolingo. So we first spent real time with the CEO, Luis Van Awen, during COVID. During the COVID era, as the markets reopened, we went to highs and the private markets were white hot in the zero interest rate environment. And people were meeting people on Zoom. And I remember meeting Luis with my colleague Julio. We got off Zoom with Louise like you often do back in the day. I called Julio up and I was like, what do you think? And he was like, well, it's a super impressive business. They're leading their market. They're on the right side of their consumer and the product's great. And I said, yeah. I said, Luis reminds me of Toby from Shopify. The last time I spent time with someone that technologically strong, Louise had been.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Either substantially lower the relative cost advantage versus their competition, gain more revenue scale, and then reinvest that in a way where you create something that's permanent over the companies that maybe get to this late if they ever get to it. And often those are the best stocks when you go study the markets because you're already in a physical world business where the technology advantage transitions into a physical motive advantage or a distribution or scale advantage. That's one of the patterns we've observed. We call that the good to great thesis internally. The second way is people. If I think about the investments we have today, we tend to be in business with certain people we've known for 20 years now, and maybe they're doing the same thing or maybe doing the next thing, but we think these are the”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Relationship with those customers, all of a sudden, actually the brand Halo started getting a little bit better because people thought Domino was with it and it started to really help the brand. And you put all that together against a wonderful business model of a franchise business model, which is ROI light, you end up with a great stock. One of the things we think a lot about Adurable is which of the companies that are in distribution trucking healthcare who are already good and maybe investing on a different curve have the ability to use AI.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Scale of dominoes, and they didn't have great pizza. And what happened was when dominoes started its run, well, first of all, it started by basically making the product a little bit better. But if you talk to Patrick Doyle, who was CEO at the time and you really study it, what they started doing was if there's three value equations in pizza, it's quality value and convenience. And what they realized is if we really, really invest in technology, we can make convenience a lot better. And so they really invested in their app and they built a direct relationship with their customer. Very early on, they could then target that customer more efficiently with couponing, what have you, drive scale through that box. And then when you do something well, you improve the product probably was slightly above average, you really iterate on convenience and now you have a direct.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Small cap company over that 10 year period in the 2010s. Well, actually, it was domino, it was pizza, which was a modest growth company, didn't average 10% growth over the period of time. Why was domino so good? Well, it turned out having gone back and studied dominoes from the beginning but obviously owned the stock for some period of time. If you look at the pizza market in the United States When dominoes started its run, you basically had a third of the market that was local. So probably like a lot of listeners, I have my favorite local pizza place and I like it because the pizza is great. And then the other third we know there's the nationals, dominoes, papa John's little Caesars, others. And then the middle third, there used to be in DC this place called Armand's that had about 30 places and they had local or geographic scale, but they didn't have the”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Are the first or second derivatives, or maybe people were categorized as technology companies? I also think about the existing diversified companies outside of the technology space that could be huge companies here. So as an example, when you go back and you look at the era of cloud and mobile, for sure you wanted to go own Amazon in that period of time. But actually, if you look at retail once Walmart and Costco really understood what Amazon was doing but still had relative scale they leveraged their advantages and since they basically got on the same curve 62% of all retail has gone to those three so for sure one might have been better than the other but actually all three were good what was the best Russell 2000 growth or for your investors who don't know bench”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“At Columbia Business School, the Balli Analysis Program. And partially, this is our way of going back to school as an organization and partially it's our way of giving back to our community. But the class is based on this. And the students literally do about six case studies a year. But over time, you build out a library of them. So I would say you just start by basically studying the ones who've done it and then obviously trying to study the patterns of those who've done it. That's number one on how we do it. Second of all, if you go look at the data, they're diversified across the economy. So look, we're in a period of time where what's going on in AI is so impactful. My view on the impact of this is probably no different than a lot of the other speakers you've had. I would say what I think about when I think about the power of AI and really studying it, I don't only think about the companies that”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“The first is if you've been one before you have a higher probability of being one again. Which just sounds so simple, but is actually really interesting. We look at who is actually done it. And if we don't really know the company and we haven't studied before, we'll go double click and go essentially study it, see if there's an opportunity. But if not, go do a case study on it. So we want to go learn it. One of my partners, Anok Date basically teaches a class.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Create an investment philosophy that maximizes the probability of investing in those 40 companies. And the other thing that we have basically found out is that what's interesting is about 80% of those companies actually start their compounding journey as small cap companies. And so people always say, Henry, why do you love small cap companies? I was like, well, I love them because I love the people side of the job. But I also love them because 80% of them of these great companies actually start as small caps. That's what we're trying to maximize because we think that's what creates long-term wealth and economic growth. What we have done is basically purpose-built investment philosophy and just as importantly tried to purposely build an investment organization that can go do that.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And that's true. But at the time when I did this, no one had actually asked the simple question in the history of the US equity market, which is to me representative of capitalism. If there's 4,000 average public stocks, how many of them truly are great? And the philosophy we have today is predicated that over a rolling 10-year period, you have about 40 stocks that compound wealth of 20% a year or go up a little bit over 6x. So about 1% of the stock market are the valedictorians. And that's what we want to go do. Like a lot of things in life, you get through looking at lateral.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Had the steak in Walmart not been sold, the steak in Walmart would have been greater than the sum total of everything that I was managing. And I'm not saying people had made bad decisions before, but actually the math was one bad decision. Or maybe you had to make that decision every day because the public markets are open every day, actually wiped out all these other good decisions mathematically than had done. And so what that caused me to do was at that point start to really study the history of the U.S. public market. Since then, I think a lot of people talked about the study that came out of Chicago and the 4%.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“For the fun, and all the fund managers came, except for T row Price himself, who had managed the fund but was passed away. And in doing that, I talked to one of the managers who told the story of meeting Sam Walton on the IPO road show when Walmart first came public. For those of you who don't know, Walmart came public as a super small company and only had 50 stores. And obviously Walmart became Walmart. And I went back and I looked and I was like, wow, this is definitely one of the 20 stocks that mattered. But actually, unfortunately, was sold. And the math at the time was the retail fund. I think I was managing about $8 billion, which was the largest pool of small cap growth money in the country.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Been so successful over the 25 years he did what he did. So that resonated with me. What happened to me, though, was a bit of good luck. I was asked halfway through my career at T-Ro Price to basically go manage the new Horizon fund. In doing so, I started reading all the shareholder letters. At that point, it was turning 50. So I actually went into the archives and basically read the shareholder letters and tried to understand what drove this success of this fund over 50 years. At the time, it was the oldest, but also most people would say it was the most successful from a performance fund small cap growth fund in the country. And in doing it, I started to realize, wow, it was really only 20 stocks over 50 years that drove the performance. And then coincidentally, Jack, or maybe purposely, Jack decided to have a 50th birthday party.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look at all the success humans have had relative to every other species. I started to think about why shouldn't investing follow the same rules we see in science? So why shouldn't investing mean that there should be a healthy balance between companies that invest in their customers, their employees, their shareholders, and actually support their greater communities? That really resonated with me. And in many ways, I was lucky too that I ended up at zero price early in my career and the guy who became my mentor, Jack Laporte. This is what he believed. He believed that you invested in small companies and they were run by people who thought like owners. They woke up every day to make themselves better. They gave their employees a good deal. They had good cultures. They allocated capital. Well, this is what created companies that could grow and sustain. And that was how he had.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm the father of two boys. And you see it today when children develop, they got to basically go through certain curves, child, adolescents, teenager, adult. And they have to basically be in balance. And if they are, they can thrive and do incredible things. And we as human beings, if we do that”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's probably a couple places that come from. One was, frankly, my own personal background. So I came into investment, not directly out of school. It's not like I went a finance pass. I went into politics. I wasn't an economics major. I was actually an organic chemistry and a history and technology major. And I worked in politics for many years. As I started to try to figure out what I wanted to do professionally and eventually I started to think more about investing and I got involved in it, I started to think about investing based on a lot of the same principles that I learned in science, in particular biology, that in order to have organisms that sustain over a long period of time and persist, much like human beings, they'd have to be in balance with their ecosystem.”
2025-12-16 · Invest Like the Best · Henry Ellenbogen - Man Versus Machine - [Invest Like the Best, EP.452] · IDENTIFIED FROM THE TRANSCRIPT · source