This video was recorded in October 2025.
Lightly edited transcript
What sets founders apart from other business leaders?
Founders not only have a vision, but also a very clear understanding of actualising that vision into the commercialisation of their products and services.
And they do this in a way that is very unique, and the evidence is whatever they do, people catch up to it much, much later.
One of the key things we look at as part of quality in any business, and we look at four key drivers of quality:
- First we always ask how the question: “What is unique about this business, in terms of, if you had time and capital can you replicate it?”
- How is this company positioned within its global value chain, are they one of the best positioned companies in the value chain?
- Then we look at the financial strength of the business, is it a self-sufficient business?
- And then we look at management.
And when we are looking at management, roughly half of our companies are founder driven, the founders are still involved. What these founders, I believe, provide, is a very unique vision or understanding of their businesses that’s different to 99% of the population. In other words if I were to give an ad to any place and say: “I want to look at a professional CEO who will come and manage these different businesses that we own.” I think it would be very difficult to find those managers that had the founders’ understanding of the core businesses.
Q. How do some founder-driven businesses enjoy such phenomenal growth?
With Oracle, with Larry Ellison who started Oracle many decades ago, his first big insight into his business was the architecture of the database that Oracle created, which was very different from what was in the marketplace back then, other players like IBM and others. He understood the unique advantages of the architecture of a database that was not similar to mainframe, but focused on a distributed computing platform. That big insight, which may seem simple, was so unique that it took others like Microsoft and IBM more than a decade to catch up and understand, "Wow, this is truly very different and unique."But by the time your competitors wake up, you do not wait for them to come and catch up with you. You add to that innovation, and it is the uniqueness of these quality businesses where time becomes your friend. Because you had that head start, with this clear, differentiated view that you create this business that over time compounds its advantages. From there, he built the applications in terms of the stack for what he was offering to his clients. Then, on top of that, he added cloud services, and now we are seeing that Oracle is also involved in building AI infrastructure.So that's an example of a founder who, over many decades, continuously made his core business stronger but added all these adjacent businesses that are as strong and as attractive in terms of differentiation and growth.
Amazon.
Similarly, Jeff Bezos started with e-commerce and then added Amazon Web Services, then logistics, and then advertising. But it started with this very strong core business that was very difficult to replicate. With the cash that the business was generating, the founder had this vision and understanding of where he wanted to take the core business, but also built upon it.And so not only do these founders have a clear vision, but they also have very simple yet insightful principles. They are very selective and do not go after every opportunity; they only go after those opportunities that fit those principles.
In the case of Jeff Bezos, he clearly laid out in his annual report back in 2006, when we first invested in the business, how he would choose to invest.
- First, he said, “Whatever business I go into, I want to offer something truly differentiated, something different than how others are doing things, something that will be very difficult to replicate.” That’s competitive advantage.
- Second, he said, “Whatever I’m going after, I want it to be really big so that it can provide the growth opportunity for me, but also it's worth my while to invest in that business.”
- Third, he said, “I want these businesses to generate really strong cash flow and good return on capital.”
These simple principles are very difficult to implement for many because they are not disciplined or do not have that vision. As a result of that, he was able to build these strong businesses.
Google.
You look at Google; it started with one product, and today they have 15 products with at least half a billion users, some of which have more than two billion users, like Search, Android, Chrome, Gmail, Google Pay, Maps, and YouTube. All of these businesses are extensions of their core business. When Google invested in YouTube, many thought it wasn't a smart idea to buy a company for billions of dollars that had no revenue. But the founders understood where search was going, where media was going, and where advertising was going. With that multi-decade look into the future, they took this business with almost no revenue and created today, a business, if it was a standalone business, it would be one of the most valued companies out there, as it's the highest viewed place. YouTube is even higher than Netflix, which is another great business that we own.
