"威尔·索恩迪克：连续收购者访谈（文稿转录）" --- Will Thorndike: Serial Acquirers Talk (Transcript)
I really enjoyed this conversation between Will Thorndike and Chris Mayer that took place on March 13th, 2026, at the Redeye Serial Acquirers Conference.
I thought of calling the podcast The Outsiders, but wanted to save that name for Will, who has spent much time studying outliers.
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He makes a few points about outliers/outsiders that contribute to their success:
- They systematically schedule white space: blocked-out time in their weekly calendars to be alone, think, and read
- They almost entirely cut out investor relations: typical public CEO spends ~20% of time on IR; outsiders “just cut that out, freeing up that time to be spent on other things.”
- They were obsessive about talent and retention: “all eight had really excellent cultures and had exceptional retention of top talent, better in both cases than the peers.”
- They were highly data-oriented and rational in all decision-making, including the willingness to kill sacred cows (Singleton closing Packard Bell, the Grahams selling The Washington Post)
- All eight were first-time CEOs — “the most surprising finding in the book maybe.”
Ok, with that said, let’s dive in.
Transcript
Chris Mayer: My name is Chris Mayer. I welcome you to day two of the Red Eye Serial Acquirers Conference. We have a very special guest today, a man who needs no introduction, but I’ll give him a little one. So he’s the author of The Outsiders, which is a great book. I’m sure you’ve all read this classic. And he is also the founder of Cronwell Harbor Partnership.
So welcome, Will Thorndike. So maybe we’ll start by telling us what we’ve been up to here recently. What do you do these days?
Will Thorndike: Yeah, let’s see. So I’m involved in a variety of investing activities, and they range from active investment in private company investing, a lot of that through an entity called Compounding Labs. And I’m also involved in some public companies, I’ve done some of that with Christian Solberg, who was on the panel yesterday from Sun Mountain Partners. So sort of a mix of those sorts of things.
Extreme Equity Efficiency and “Paleo Diets” for Companies
Chris Mayer: Great. And we were talking at breakfast about some interesting ideas, and maybe I can start with the idea that you had of the extreme equity efficiency and your idea of paleo diets for companies.
Will Thorndike: Okay, yeah, so Christian touched on a little bit of this, but in the private investing that I’m doing, a lot of it is related to serial acquisition, serial acquirers. There’s sort of a very specific flavor of that, which I would say is about a decade old. Some of the tenets of that include a focus on building serial acquisition companies in an extremely equity-efficient manner.
So typically we’re raising a total committed capital pool, equity capital pool of about $20 million, give or take, and trying to build these companies to the point where they hit the flywheel state that Christian described. So that’s the point after which they can grow by making creative acquisitions all with free cash flow and debt capacity, increasing debt capacity, so no more equity required.
And the goal is to reach that point, this flywheel stage, as efficiently as possible, and then to grow for the longest possible period of time after reaching that point. So that is sort of a novel concept, a bit of a novel concept within the broader world of serial acquisitions; it’s about a decade old. And it’s been quite fun. I’m having fun with that.
Public Company Involvement
Chris Mayer: And you have a couple of public companies where you’ve been able to apply these ideas. Do you want to talk about those?
Will Thorndike: I’m involved on the board of two public companies. And both of those board seats arose in the wake of the book. One is, of all things, an energy company. It’s called CNX Resources. And I’ve never been involved in the energy industry before getting involved with this company. So it’s been really fun and interesting and new.
And the other is a company called Perimeter Solutions. They both trade on the New York Stock Exchange. I was the board chair at CNX for nine years, ending last May. I’m still on the board, but no longer the board chair. And I’m co-board chair with Nick Cowley at Perimeter Solutions.
In both cases, it’s been quite fun because we’ve been actively employing some of the frameworks in the book. Specifically, in both cases, we’ve been able to opportunistically repurchase shares in pretty good volume. Both of those have been really fun and complementary to some of the private investing that I’m doing.
Swedish Serial Acquirers and Leverage
Chris Mayer: Very interesting. And your attraction to the Swedish serial acquirers, what’s your views on, you had some interesting views on leverage. We were talking about the way they use those different methods of capital allocation.
Will Thorndike: I mean, well, it’s this amazing group of companies, many of the founders, CEOs, and so forth are here at this conference, which is really fun. But the results are just remarkable. So it’s a group of companies with a very specific related approach that has extraordinarily long-term returns on public markets -- multi-decade returns, it’s 10 to coalesce around 20% compounded, which is just remarkable.
So sort of a question of like, what’s in the water over here? How’s this possible?
And so studying that has been really interesting. And of course, the very recent book that Adnan and team were involved with, which is very good, by the way, sort of brought that to light more broadly.
And I have been studying them for some period of time before that. But there’s a lot of learning for the North American branch of this, so to speak, that’s coming from that group. Some of these core principles -- decentralization, systematic redeployment of free cash flows, kind of a broader ethos of frugality. There’s been learnings in that that have been really, really helpful in some of the other things that I’ve been doing.
Chris Mayer: And then on the matters of leverage.
Will Thorndike: Yeah, it’s sort of interesting if you look at the Scandinavian, which is really code for the Swedish version of this, the results have been amazing. And if you look at that broader framework from the book, it’s interesting because they’ve gotten those results, but sort of two of the outlets in the framework are de-emphasized, under-emphasized in interesting ways.
The first of those is leverage. They tend to be less leveraged, certainly, than their North American peers might be. That’s interesting. Obviously hasn’t affected the results, which, again, have been excellent, but it’s been interesting. Second thing is they don’t, as a group, progressively use share repurchases. So that’s also interesting, which is a tool that’s sort of central in that broader framework for those eight companies. And the two companies I’ve been involved in, in both cases, we’ve been active users of repurchases selectively.
Chris Mayer: What sort of leverage do you think would be a good amount, but not too aggressive?
Will Thorndike: I think that’s a very specific decision tied to the company and the CEO and founders and the board. And I don’t think there’s a uniform answer to that. It does seem as though many of the Swedish companies seem to congregate around two-ish times EBITDA, which I much prefer to EBITDA, by the way, it’s great. American equivalent companies would probably be levered one to two turns more than that, very, very roughly, so something like that.
What Investors Overemphasize
Chris Mayer: Is there anything that you think that investors emphasize with these models that you think isn’t important? Is there something people focus on?
Will Thorndike: Let’s see. I have an idea for you. I think one thing, I think what is generally missed in evaluating serial acquirers or not is -- so I was involved with a podcast on a company called TransDigm, which is a serial acquirer in the States. And there’s an investor who is on that podcast as well. He’s been a longtime investor in TransDigm.
He makes an interesting point that, despite an excellent record, TransDigm occasionally trades at a very significant discount to his assessment of the businessis value.
It gives him an ongoing opportunity to buy the shares. And he believes that’s because markets just have a hard time modeling and thinking about inorganic growth. By its nature, it’s somewhat lumpy.
So organic growth is very easy, very clear. You can sort of look at base rates and use those. They’re very predictive generally. Inorganic growth -- the rhythms there are different. So I do think that’s an area that does create systematic opportunities or can in the public markets. It may be more true in North America than it is here where that idea is a little more established. But, yeah, I think that’s interesting.
Private vs. Public Company Investing
Chris Mayer: Yeah, that’s what I was going to throw out, actually, that exact dynamic. Which reminds me, you’re involved in a lot of private companies too, so being on both sides, what’s been some of the learnings or differences between the two that you think?
Will Thorndike: It’s both the strengths and weaknesses, I think, of both of those models, so to speak, the private company and the public company model. It’s interesting because, being involved in these two public companies I described, it’s a very common experience for me to attend a board meeting and get detailed information on the operations of the company.
The company around that same time releases its quarterly earnings. And whatever my reaction is to the information I saw, the market’s immediate response to the quarterly earnings is often the opposite of my reaction. It’s just this interesting moment there. So it’s sort of fascinating. And in private companies, you’re really just focusing on the trajectory of the core metrics in the business, the cash flow being sort of the ultimate barometer for us anyway. In public markets, it’s a noisier system. And so it’s sort of fascinating.
Chris Mayer: A little bit of buybacks, right? That was a big one.
Will Thorndike: Well, the thing in the public market is it’s amazing the ease with which you can repurchase shares. As a private company investor, it’s a bit of a revelation. I mean, I’ve been involved a lot over the years in repurchasing shares in private companies. That is a hard thing to do. It’s a negotiated transaction. There are lawyers and accountants involved. You can do it, but it takes time. In a public company, you just literally call a broker and purchase shares systematically over time. So it’s possible to buy in very significant percentages of companies in pretty confined periods of time.
Chris Mayer: You’ve done that with your public companies, like Perimeter has bought back, what did you say, 15% of shares?
Will Thorndike: In Perimeter, we’ve bought in roughly 15% of shares, but we’ve basically done that in two or three larger bites in very confined periods of time when we felt the stock was creating an attractive valuation. In the energy company, there’s been a more protracted discount in the way that we’ve modeled that. We’ve been able to buy shares more systematically over time. In that company, we bought in more than 40% of the shares over a period of years.
Expanded Second Edition of The Outsiders
Chris Mayer: You have an expanded second edition of The Outsiders that you’re working on.
Will Thorndike: Yep, which is, I would say, still pretty much in process, but I am going to do an expanded edition of the book. It’s not going to be a 2.0 version, I believe the first book -- those eight chapters are the core ideas and frameworks are there. But I’m going to try to expand on some of those ideas and take it in slightly different directions. I’m not sure, it may frustrate the readership of the first book, full disclosure, but I’m having fun with that and it’s in process.
Chris Mayer: Do you have companies that you have discovered or I’m sure you’ve discovered new outsiders that people have brought to you over the years?
Will Thorndike: Yeah, there’s an interesting range of companies that fit that broader profile. And I’ll probably touch on that in this new book, some of those, but we’ll not go into the same detail I did in the original eight.
Chris Mayer: Any particular standouts that you want to mention that you’ve discovered since that first book?
Will Thorndike: I mean, they range really widely. The interesting one that’s kind of fun is the first company I was involved with in doing the work on the book was Teledyne and Henry Singleton. I know some of you may be familiar with that. He’s a fascinating character. It’s fascinating what he did.
He’s in many ways set a broader template for other CEOs in the book, the other outsider CEOs. The fascinating thing is that Singleton died in ‘99 and the company had spun off a bunch of the parts of that company and if you sort of track the performance of the spun entities it’s very interesting -- and one of them which was the one that retained the Teledyne name has had a phenomenal 25-year run in the public markets very quietly. It’s got a 20 or 25 year just under 20 percent IRR. And it’s very quiet. So it’s sort of similar, looks like this is just an echo with really elite results. Again, those results are interesting. Really great records, longer-term records, tend to triangulate around 20%, which is where the Swedish serial acquirer group also triangulates, including Bergman & Beving, which I think is in its 50th year this year. It’s a 50-year, 20% record or something. It’s amazing.
Lessons and Changes Since the First Book
Chris Mayer: Well, classic author question. Is there anything that’s changed from the first book, or is there anything that you’ve learned now that you would maybe do differently, or anything like that?
Will Thorndike: Yeah, I think there’s some things that I would probably emphasize more. I think the book gets oversimplified to being a book about capital allocation, but I think it’s a broader book about resource allocation. So the other two resources that are scarce and valuable that it touches on, and I think could probably go deeper on, are sort of human resources -- talent and allocation. Decentralization is a central theme within that, which is obviously a topic that we’re covering in lots of different ways here. The other piece is CEO time, the way CEOs choose to allocate their time. The eight CEOs in the book had a really differentiated approach to that, and specifically they would schedule in their weekly schedules, systematically schedule white space time to sort of be on their own, think, read, etc. They stayed away basically almost entirely from investor relations. You know, the latest data that you sort of see in the US public markets is a typical public market CEO spends about 20% of their time on investor relations in some form or other, and this group really just cut that out, sort of freeing up that time to be spent on other things. So anyway, those are things I’d probably spend more time on. All eight of those companies had really excellent cultures and had exceptional retention of top talent, again better in both cases than the peers. And that probably I didn’t do the best job bringing that out.
AI and Investing
Chris Mayer: I have to ask you because it comes up in every meeting so far -- has AI influenced your investing at all? I know you have some software exposure as well.
Will Thorndike: Yeah. Well, see, in terms of my personal investing, I am a very late adopter, so I really only started using ChatGPT in the last 90 to 120 days. I’m basically using it around some of the work I’m doing in this expanded edition of the book as sort of an expanded Google device. It’s been extraordinary. It’s been incredibly powerful and helpful. Some of the stuff that I’m trying to dig through there -- that’s really, personally, the only way I’ve used it. I’m just scratching the surface. I am involved as an investor in a number of software companies, they’re almost all private companies, and so I’m tracking that all pretty closely or trying to, and I’m still not yet able to have a definitive call on whether AI is a net secular existential risk for vertical market software or a net long-term enhancing revenue and cash flow opportunity. And there’s just -- sort of as I’m parsing it in the companies that I’m working with, it’s really hard to make that call. There’s data on both sides. And so this is very much in flux. Existing market positions that our companies have, software positions that they have, and the management teams are excellent and very nimble and agile around AI. They’re very much on it, but it’s changing so fast. There’s never been anything that’s moved this quickly, and so I think it’s just really hard to have a long-term forecast.
Chris Mayer: It’s easier to be happy with them when you’re private, right? Yeah, you don’t have the quotational risk that Mark Leonard has. You know, watch your free cash flow and you’re like, hey, things are good.
Q&A
On Innovation and Pivoting
Audience Member: Thank you so much Will for doing this. We all love the book, it comes up every time. It’s many many years since you wrote it, but thank you anyway. It’s been a wonderful resource for many people in the room. One of the things I think great CEOs do is they sort of innovate and they pivot. I think that’s something that’s very difficult to quantify. So could you just talk about that? It’s something that’s so hard to analyse and so hard to back test for, but it’s clearly really important. Have you got any thoughts about how we can systemise and think about that, or is it just intuition on their part and intuition on our part that sees that?
Will Thorndike: Yeah, that’s a good question. The sort of core framework for those eight CEOs was to try to be highly data-oriented and rational in all their decision-making, which would include how they handle businesses that are facing technology change. So examples from the book would be Henry Singleton closing down the television manufacturing business. It’s a business called Packard Bell. He saw that the Japanese were sort of dominating that market, sort of proactively stepping forward before anybody else among the U.S. manufacturers closed it down. Another really interesting example is the Graham family.
Katharine Graham was in the book. Her son ran it really well for a long period of time. They owned of course The Washington Post. It was the signature asset for them, which was sitting in front of trends in media and the newspaper business specifically over the last 25 years. So the economics deteriorated very significantly, very quickly, but people thought that the Grahams would never sell that. It was sort of seen publicly as a sacred trust for the family. That wasn’t what happened. When the time came and it was clear to them there wasn’t a path to profitability, he sold it. He’s also had his own tangled history with it, which is continuing, but they did sell it, which is sort of remarkable. So I think the framework there would be trying to be very clear-eyed and data-oriented and making decisions accordingly, including when to shut down and move things into other fields. This whole innovator’s dilemma idea is such an interesting one, and I think as a group, this group would have behaved very well faced with those sorts of situations. It would be fascinating to see how Mark Leonard, who has definitely come from the same cloth, how he processes AI over the coming years, he and his team.
On Leadership Models
Audience Member: I see you call yourself managing partner. I wonder whether you care to talk about different leadership models. What do you think is the best leadership model? Is it better to have a partnership model, better to have a chief executive structure, owner-operator structure? Obviously there are differences, but just keen to get your insight on leadership and what works best.
Will Thorndike: Now let’s see, I think it varies a lot, I think, by context, by the type of company. So I think if you’re in an operating company setting, the CEO model is very robust. I think committees are hard, generally. Partnerships, particularly investment partnerships, are often run by partnership, managing partnership groups. That’s a very specific thing tied to specific personalities and so forth. It’s tricky. It’s not easy. Partnerships are not easy. And they’re not easy to sort of create in a way that’s easy to promulgate going forward as partners retire and new partners come on. So that’s tricky. I mean, the situation I’m involved with is there’s two of us in the group. It’s very small. We tend to keep it always very small. So I’m close to being “the only guy in the office” would be my title, which I like very much.
Chris Mayer: I’m going to put that on a business card. “The only guy in the office.” I like it very much, actually.
On Sector Stability
Audience Member: Thanks Will for coming over here. We’re all looking forward to the next Outsiders book and also the next episode of 50x. My question relates to the characteristics and the stability of the underlying sectors of the companies. So I guess TransDigm, Constellation Software benefited a lot from the stability of the underlying sectors. You mentioned CNX, that’s probably the opposite of stability. And also I think the Swedish serial acquirers also target rougher sectors with regards to economic stability. What is your take from studying those companies, and also how does it shape your strategy at Compounding Labs with regards to the underlying sectors?
Will Thorndike: We’re very focused on core economic criteria. There’s sort of three principles there that we look for in all the businesses we’re involved with. So those would be: we’d like to see organic revenue growth potential, we could talk more about that. We’d love to see a consistent pattern of repeat business from existing customers -- the purest form, that’s recurring revenue, some sort of a monthly bill, but it can take other forms as well. And then the third thing is we really like capital efficiency. We use a metric called return on tangible capital to track that. But basically, we like to see that EBITDA in the US and EBITA here, which is better, convert efficiently into free cash flow. If you have those three things in combination, we think that’s a very powerful combo. So we typically look for businesses that share those three characteristics.
Chris Mayer: So you don’t worry about industry affiliation so much?
Will Thorndike: We do factor that in and we are really careful around industries that have regulatory risk -- we think regulatory risk is something to be careful of. But we actually, we’re trying to be open-minded and rational about it. Not all regulatory contexts are the same, but outside of that, we’re pretty open. We’re even pretty open around customer concentration. Customer concentration we found is a nuanced thing. And we’ve been involved in some companies that have had remarkable success in concentrated customer bases. And so it’s really a sense of understanding what the switching costs are for the customers there, which is as much a qualitative as a quantitative assessment. But anyway, things that have those three characteristics, we’ll certainly give them a look.
On Incentive Structures
Audience Member: My question is about incentive structures. I’m wondering about your experience. What are the most effective incentive structures to align with results?
Will Thorndike: Yeah, that’s a great question. And I’d say my thinking on that has evolved over time. I’ve been involved in the private investing I’ve been doing -- I’ve been involved in search funds over a long period of time. And there’s a very specific incentive structure for CEOs in search funds. So basically a third of the equity vests to the searcher at the closing of the company, the original investment. A third is time-based, usually vests over four years. A third is tied to IRR outcomes with the topmost ladder part at 35% IRR. And that’s produced really, really good net returns to investors over a long time now. Search is about 40 years old.
In the investing I’ve been doing over the last decade or so in the serial acquisition world, we created a totally different model than that, that I think is working really well in terms of achieving better alignment with our CEO partners. And that is basically we tie the management equity -- there’s no time-based vesting. There’s no vesting at close. It is entirely tied to performance with no IRR targets. We don’t mention those three letters in combination -- IRR. It’s tied to net multiples to investors, and we use a very simple system of doubles. And the opportunity there is for the management team to earn a much larger percentage of the company. Maximum ownership is 40%. In search, it’s 25 to 30%, but tied to pretty ambitious net multiple targets over longer periods of time. So we’re really solving for longer duration. Hoping our CEOs want to run these companies for 15 years, 20 years, something like that. And that helps us sort of generally target younger CEOs, which is an interesting topic.
Actually, I would just do a quick adjunct on that -- I think the most surprising finding in the book maybe is that all eight of the CEOs in the book were first-time CEOs. Eight for eight. It’s kind of an interesting thing. And in the investing we’re doing in the serial acquisition world, we’re typically backing early-career CEOs.
Chris Mayer: It’s tough to get right, the incentives. Are there publicly traded companies that you think really do well or get right -- gold standards come to mind?
Will Thorndike: I think it’s really interesting. TransDigm is worthy of study. They’re sort of an extreme case, so there’s some things that are -- but they’re really interesting. The way they structure the stock options for the management team members is really creative and I think really well aligned, and it’s worked really well for them over time.
Chris Mayer: Great. Well, we’re out of time, so thank you very much, Will, and thank you for your great questions.
Will Thorndike: Thank you, Chris.
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