I Have Found the Thirdly, the Third Attempt

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For the past two years, I have been writing this blog in reverse chronological order.  I have been doing this because it has largely been an introspective exercise about what I wanted to take as my next step (a step that I was considering to be my third step).  The logic largely built on the previous post.  Entering the conversation mid-stream, would have been a bit jarring, and difficult to understand (at least that is what I think).

Things have changed.

A few days ago I inked the contract on a small paper tube manufacturing company in Melbourne, Australia.  I hope that this company will provide the first jobs for some of the under-served groups in the Australian community (currently refugees/veterans, but others in the future).

It is really three entities. The first is a holding company that holds all of the shares in the operating company.  The second is the operating company where all of the profit is made, the third is a nonprofit that provides education and employment services to the people who are working in the operating company using the profits that the operating company throws off. I somewhat more full explanation is at our site www.pginitiatives.com.

The long term vision:

I’d like to prove that it is possible to simultaneously give people a ‘hand up’ while creating a return for investors (I’m aiming for a ROIC of 25%, or the same as private equity). The first objective, enabling people, is really the point, but it will forever remain sub-scale if I am just asking for handouts or bootstrapping this.  This is why the second part is so important.  We can spin off profits from the operating company to help people meet their long-term employment objectives in Australia, and that is at least sustainable, but it doesn’t help a lot of people.   The only way that we are going to help a lot of people is if we can have a lot of operating companies spinning off profits and training people.  Given that I wasn’t born a millionaire, there are two ways to scale this, either bootstrapping it (i.e. a portion of the profits are squirreled away for the next acquisition), or finding like-minded co-investors for future operating companies.  The latter is the fastest possible route to more growth.

Thinking from the past year and a half that has gone into this:

  • Why? I must admit, I didn’t ever find a really satisfactory  answer here, but a few months ago a friend of mine quite  sagely told me that any premises carried outside of their original domain will lead to bad results (e.g. while there is nothing wrong with studying physics, it may well still be the case that we will unleash a nuclear holocaust on ourselves). In my case, this means that I’m largely trying to help very disadvantaged humans, that’s admittedly bigoted, but I’m OK with it.
  • Faith, Mountains in the Mist, and Enough: I think that using all of our family savings to purchase this business that we don’t plan to take money back out of would be radically counter-cultural in any age and doesn’t optimize for a short time horizon (though it doesn’t optimize for an eternal or extremely long time horizon). I admit that I don’t know if this is a global optima. I’m just stepping out.  I am trying to keep a foot in ‘base camp’ not quitting Google, continuing in the Marine Corps Reserves in case there are areas there that I can invest more deeply in.
  • Chaos: Well, I must admit that investing in paper tubes, an industry that has not changed significantly in a hundred years is far from the inflection-type of investment that I talked about making, but then again,  I’m not actually investing a huge amount of my time.  There are two capable and intelligent men who are going to be running the nonprofit, and the for profit, respectively.  This (I hope) will still give me time to invest in yet other things with a non-linear impact. In short, I hope that I am in the upper-right quadrant of the chart that I put in this post not because of paper tubes per se, but because of the  structure that we have put around it.
  • Breadth and Depth and Margins: We’ve got a 9 month old daughter right now, and my wife would probably protest anyone claiming that I have found the right balance (and she is probably right).  The plan going forward is to continue to work 4 days per week, spend one  day taking care of my daughter, one day in this enterprise (primarily) in the short term, and then have my last day as a rest/family day.  All of those things call for more, but that’s the general pattern that I’m trying to hold.
  • Competing Ideas: Here I must talk about the logic for paper tubes. They have a high weight to value and space to value ratio, which drives up shipping costs tremendously.   Paper tubes must thus be made close to where they are consumed giving local producers an undeniable cost advantage.  They don’t change the world, to be sure, but they also use effectively 100% recycled  content, and literally form the core of a lot of what we do (toilet paper, carpet, etc). The only thing that doesn’t sit well with me here is the monetary cost of this venture.  It does tie up a lot of capital, and in the  short term I’m not getting a high social ROI, we can help perhaps four people every year find more suitable employment.  That doesn’t seem like a lot when you can save a human life for $3500 (less than 1% of the cost of this business).

In sum, on most of the areas that I have tried to examine over the past nearly two years, I am excited about this venture.  I will continue to look for areas that help me with the components that are missing here, but given that we live in the real world where not everything is exactly what you want it to be, this is about the best compromise I think I can find.

Thanks to David, Alistair, Shehan, Tom, John, Davina, Peter, and especially Penny for everything that you are doing, and that you allow me to do. I am looking forward to moving ahead with you.

Interesting stuff since the last post



  • See above.


  • Very interesting book on Genetics: The Gene: An Intimate History (free audiobook linked)
  • I was tempted to write a post about the Russian lack of faith and view of the world but This American Life  did better than I ever could
  • Podcast Richard Rohr with Krista Tippett God entirely relational, stranger than we can imagine, the relationship of helplessness and introduction to manhood, don’t take a position because then you have to represent it
  • Great episode to follow on To the Tim Ferriss ‘ego is the enemy’ [This American Life called ‘Choosing Wrong’ The basketball player who shoots granny-style.

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