How Family Firms Evolve | Episode 34 | Everything is Everything
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- čas přidán 1. 07. 2024
- Family Firms get a bad rap -- but the professional CEO is often not the solution, but an added problem. The modern firm has evolved to solve this.
Welcome to Episode 34 of Everything is Everything, a weekly podcast hosted by Amit Varma and Ajay Shah.
In this episode, Ajay gives us a masterclass in the different ways in which is family firm can be structured, and the incentives those structures bring with them. He takes us through the four stages of its evolution, from a one-person business to the modern company with dispersed shareholders and a board of directors. This is particularly important an an Indian context, where family firms abound -- and so do misconceptions about them.
Our earlier episode on the evolution of finance might also interest you: • The Beauty of Finance ...
If you like watching Everything is Everything, please like, subscribe, share, comment. :)
TABLE OF CONTENTS:
00:00 Packaging
00:13 Introduction: Ajay Discovers His Dharma
04:45 Chapter 1: Don’t Diss Family Firms
06:59 Chapter 2: Family Firms - Design One - You Are the Little Deity
15:03 Chapter 3: Family Firms - Design Two - Amitbhai Gets Minority Shareholders
19:35 Chapter 4: Family Firms - Design Three - The Professional CEO
28:29 Chapter 5: Family Firms - Design Four - The Modern Firm
45:54 Chapter 6: Ajay’s Recco
47:14 Chapter 7: Amit’s Recco
USEFUL RESOURCES:
1. Amit on Twitter: / amitvarma
2. Ajay on Twitter: / ajay_shah
3. The Seen and the Unseen -- Amit's audio podcast: seenunseen.in/
(Also on all podcast apps. And CZcams, though less than 1% of listens come from here: www.youtube.com/@TheSeenAndTh...)
4. Ajay's organisation, XKDR Forum, on CZcams: / @xkdr
5. In Service of the Republic -- Vijay Kelkar and Ajay Shah: amzn.eu/d/hwGILb3
6. The Art of Clear Writing -- Amit's writing course: indiauncut.com/clear-writing/
7. The Beauty of Finance -- Episode 21 of Everything is Everything: • The Beauty of Finance ...
8. What You Can Learn from Family Business -- Nicolas Kachaner, George Stalk Jr, and Alain Bloch: hbr.org/2012/11/what-you-can-...
9. Father, Son & Co: My Life at IBM and Beyond -- Thomas J Watson Jr: amzn.eu/d/cgy7pl2
10. The Godfather -- Mario Puzo: amzn.eu/d/2yTIcQI
11. The Godfather -- Francis Ford Coppola: tinyurl.com/5f5yy445
12. The Godfather Part II -- Francis Ford Coppola: tinyurl.com/yx8vt8vx
13. Rumblefish -- Francis Ford Coppola: tinyurl.com/3k3dk7wx
14. The Outsiders -- Francis Ford Coppola: tinyurl.com/ychnnmjk
Produced by Amit Varma
Shot by Vaishnav Vyas and Nomsita MS Haritashya: / vaishnav.vyas
Edited by Nomsita MS Haritashya: / nomsitaharitashya
Thanks to Gaurav Chintamani for helping with sound: / gaurav_chintamani
Chapter images & additional illustrations by Simahina: / i_am_simahina
“A rich country is made of sophisticated firms. A poor country is made of bad firms. All the work in public policy is about creating the conditions where the firms become better”
I just marvel at the in-depth knowledge that Ajay Shah has on such a wide variety of things. Thank you for dispensing it Sir! Amit bhai media company has diversified superbly into this format. Kudos!
Such a beautiful episode! Ajay builds an elegant and completely logical framework and completely de-mystifies how successful and long-lasting businesses might be built. I've read books and dense books in the two misspent years acquiring an MBA without getting a hundredth of the insight I got from this episode
All throughout the episode, two names were constantly hovering over my mind - Succession (the series) and The Godfather 1&2. And then came Amit's voice at last, soothing my inner turmoil!
What an episode!!
PS: Ajay, you could've easily recommended a couple more books for us gentle readers to benefit from, but you didn't! Why are you so frugal (like the family firms) when it comes to recommendations!?😂
Ya, he doesn't recommend enough books!
See Ajay, even Amit shares my complain!😂
I am so absorbed in the conversation that at its end I'm looking for the perfect books on that subject, and often fail.
Watched this one hour after publishing. One of the best podcast episodes ever for certain kind of people - including me. Thanks Ajay and Amit for such wonderful content. Where do we pay? :)
One thing that can be added to this episode is Tata Companies, one of the greatest pioneers in many areas in India, wealth creators, a family business that went on to become a conglomerate.
If Amit bhai and Ajay bhai make a company it would be ‘2ab’ company. The root of all solutions as per our supreme leader. Pls make this happen yesterday. Thank you
This is honestly great! The insights and the hyperlinks that I get from here are top-notch and it blissfully points out my ignorance. Keep on going sirs! Also, the balance of technicality and creativity(assuming they are different) is just a chefs kiss. Just Lovely.
Thanks!
Another great episode. Re: Design 4, a newer addition to that is this notion of Founder led companies. At companies like Meta, Google etc Founders still control more than 50% of voting shares using Class B allocation. The premise is that in technology industry Founders vision and ability to will it into the world is very important and for that Founders are given a much longer rope (through voting power) and a buffer from Wall Street short term pressures than ordinary CEOs. In some ways it's a cross between design 1 and design 4.
VC funded firms are set up with design 4 from the start. I think transitioning from design 1 or 2 to 4 while it been done at companies like Walmart, will be rare. New companies will be born with design 4.
I'd love to see what all books are there in the background bookshelf. Maybe a short 10 mins episode (a vlog) where Amit and Ajay pull out their favourite books from that bookshelf and talk about why that book is special. 📚
The shelf is random, nothing special there.
'Amit bhai media ltd.' what a appealing name of our half bengali dada's farm(is the other half punjabi?)! One query about the farm though, if ABML attempts designs 1,2,3 in that order, will there be anything left for design 4, to resuscitate our beloved farm? Great as always, though a short episode. Hope you are thinking about the future ideas mentioned in the last episode.
The South Korean firms stand as testament to the power of Family business, and web of relatives that are controlling them.
At first glance, South Korea seems an impressive bastion of family firms. However, shareholders seem to be afraid of family control. Consider Samsung, the South Korean family firm. It is a phone and chip manufacturer (amongst many other things). Shareholders value Samsung at a P/E ratio of 13.6. Compare this with Apple's P/E ratio of 28 or TSMC's P/E ratio of ~24. This may give us some pause about considering the success of South Korean family firms.
Great episode as usual..please make a episode on the white paper released by government on mismanagement of economy by upa..what's the truth and how to decode it..thanks
Will you do an episode on Marxian economics
Father son company🎉 tom watson❤
How does one become an independent director... So as to contribute in one of the boards based on the design 4 style companies😅
How do we prevent the risk of the bob Rubin trade? A modern CEO doesn't have a downside risk. What do you think about the robustness framework, where the firm is robust using optionality
Do a podcast on population decline, low TFR, what will be its effects and consequences?
Already done! look.
Not exactly related to this topic. This episode was fascinating as usual. I have a question - I was watching 'why India is poor' a conversation with Ajay Shah. I want to know if we individuals can make any difference for the country - apart from donating the money.
You are asking about the process of change. Hold that thought.
It's good to be fully distinct between a humanitarian goal (feed the children) vs impact (make the world better). The latter is completely distinct.
@amit and @ajay. Please do a screen share of how your roam research/obsidian is organised. It would be really helpful. Thank you in advance 😄
Already done. See our productivity episode.
@@amitvarma thanks a ton, it was present in the one episode which I had missed😅.
If you could make a video or suggest sources about how to read and retain book information, that would be great.
Already done! look.
@@ajayshah5705 which ep
i wonder how the ideal situation of dispersed shareholding will come to happen. I don't see indian promoters diluting their holdings to achieve the shareholding structure of 'the modern firm"
look around you! it's happening on a huge scale. Standard pathways are : IBC, or VC/PE shareholding getting sold off.
The family is risk averse, because they have too much of their resources in the firm, and legacy which should be destroyed etc..
But doesn’t this analysis take into account some particular type of personalities and exclude others. I mean people might respond in differ ways to the same incentives. A particular type of person might say “this is my family legacy, I have to take it to the next level”. Because of the same incentives they might be even more aggressive to take risks?
At individual levels, people respond to incentives differently and sometimes unpredictably. However, at macro-levels, the response to incentives is fairly predictable. There are always outliers, but the average is fairly consistent.
Change your channel icon with your pic or some logo and write channel name as Amit Varma
1st ad on this channel: Modi Sarkar ki Guarantee (in AI voice)
Oh wow. Well, we don't control what commercials CZcams shows. But get a premium YT account so you don't have to see them. Well worth it!