September 17, 2024 • 1hr 25min

Ric Elias - The Art of Living Well - [Invest Like the Best, EP.388]

Invest Like the Best with Patrick O'Shaughnessy

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Ric Elias, CEO and co-founder of Red Ventures. Red Ventures is a portfolio of fast-growing digital businesses including Lonely Planet, The Points Guy, and Bankrate. Elias shares insights from his 24-year journey building Red Ventures, discussing the company's evolution, cultural values, and his personal philosophy on life and business.

0:00

-0:00

Key Takeaways

Red Ventures operates as a private equity platform with permanent capital, focused on digital businesses across industries
The company's success is attributed to relentless optimization and performance-based deals, rather than competing directly against others
Culture and shared beliefs are central to Red Ventures' approach, acting as connective tissue across portfolio companies
Ric Elias emphasizes the importance of living in a state of wellbeing over pursuing external measures of success
Surviving a plane crash on the Hudson River was a transformative experience that shaped Elias' outlook on life and purpose
Red Ventures aims to be a platform for training and developing talent, with a focus on creating meaningful impact
Elias advocates for balancing speed with sustainability in business growth, using concepts of "pace" and "intervals"
The company is exploring opportunities in healthcare through a joint venture with UnitedHealthcare
Artificial intelligence is expected to significantly disrupt industries in the coming years, requiring both aggression and thoughtfulness
Forgiveness is highlighted as a powerful and transformative force in both personal and professional contexts

Introduction

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Ric Elias, CEO and co-founder of Red Ventures. Red Ventures is a portfolio of fast-growing digital businesses including Lonely Planet, The Points Guy, and Bankrate. Elias shares insights from his 24-year journey building Red Ventures, discussing the company's evolution, cultural values, and his personal philosophy on life and business.

Topics Discussed

Red Ventures' Origin and Evolution (4:29)

Elias describes Red Ventures as an "operating private equity platform with permanent capital" focused on the digital world. The company began in 2000 with a flawed business plan but pivoted to capitalize on the rise of Google as an aggregator of intent.

Started with $2 million raised from friends in January 2000
Pivoted in 2004-2005 to focus on customer acquisition for brands
Developed core technology to map phone numbers to online experiences
Offered performance-based deals to outperform existing agency and call center operations

"We really started with two principles in mind. One was let's build a company we would want to work for... And then the second one... a company that would outlast us." - Ric Elias

Early Challenges and Turning Points (6:44)

Elias recounts the struggles of the early years and key decisions that shaped the company's trajectory:

Nearly ran out of money by November 2000, with only $117,000 left
Hustled to sell marketing programs and consulting services to survive
Offered to return investors' money in 2004 but some chose to stay invested
First major acquisition was Bankrate for $1.4 billion, marking entry into "big leagues"

Operational Success and Company Culture (10:15)

Elias attributes Red Ventures' success to several factors:

Relentless optimization and focus on incremental performance improvements
Not directly competing against other companies, instead focusing inward
Permanent capital structure allowing for long-term investments
Strong culture and shared beliefs acting as connective tissue across portfolio

"We have never competed against anybody. I never thought that our competition was somebody else... We always thought, look, if we can compound our performance a little bit every month... it was all performance based deals." - Ric Elias

Insights on Motivation and Growth (16:10)

Elias discusses the challenges of maintaining motivation as the company has grown:

Difficulty in instilling the same hunger in new employees joining an established company
Seeking people who are self-motivated and willing to continuously learn
Valuing those with backgrounds in athletics or music who respond well to coaching

"I think right now, to be successful in the next five years, you almost have to be willing to re-underwrite your skill set. You need people that really are in that mindset and mode." - Ric Elias

Reflections on Money and Personal Wellbeing (25:35)

Elias shares his evolving perspective on money and success:

Warns against the relentless pursuit of more, which can be a "mirage"
Emphasizes the importance of inner peace and a sense of wellbeing
Advocates for using capital to compound things that matter beyond financial returns

"I've stopped pursuing more. That's why anything I do from here and out with my capital, the return on the capital, I don't invest anymore on funds. I don't invest in anything. I don't want to compound capital." - Ric Elias

The Hudson River Plane Crash Experience (32:39)

Elias recounts his experience as a passenger on the plane that Captain Sully landed on the Hudson River:

Describes the 90-second period of certainty that he was going to die
Reflects on the regrets and realizations that came in those moments
Explains how the experience transformed his outlook on life and ego

"It's the greatest gift one can get. It's the greatest gift to know that you're gonna die... And then on the other side of this, no one dies. So you can talk about it and celebrate it and understand it." - Ric Elias

Reconnecting with Puerto Rico and New Ventures (42:25)

Elias discusses his efforts to give back to Puerto Rico and a recent investment in a basketball team:

Created initiatives to move Puerto Ricans back to the island and create employment
Invested in multiple companies in Puerto Rico, disrupting banking and media
Purchased and turned around a struggling basketball team, creating a cultural phenomenon

"We have five companies in Puerto Rico with hundreds of employees disrupting banking, disrupting media. Really a phenomenal. And it's a movement, it's not even a company." - Ric Elias

Building Trust and Team Dynamics (49:56)

Elias shares insights on creating strong team cultures:

Emphasizes the importance of putting the team first, not individual players
Describes how shared experiences create lasting bonds among team members
Stresses the need for consistency, clarity, and fairness in leadership

"Great teams, great teams. In anything in life, it is team first because most places are player first, exceptional teams that where they exceed their expectations were where we are." - Ric Elias

Balancing Speed and Sustainability (52:19)

Elias discusses Red Ventures' approach to growth and iteration:

Focuses on "pace" (sustained speed) rather than just raw speed
Uses the concept of "intervals" to manage periods of intense effort
Emphasizes the importance of iteration in building better models and products

"We talk about two concepts, as an iteration of that. One is pace. Cause pace is sustained speed... And how do you bring an organization, and the other one is not sprints. You're almost running intervals inside of a race." - Ric Elias

The Role of Confidence and Courage (56:05)

Elias reflects on the importance of confidence and courage in his journey:

Gained confidence through experiences at Harvard Business School and in Japan
Developed courage through early business struggles and personal challenges
Emphasizes the role of resilience in overcoming obstacles

"I got confidence. Like I could compete in any level. I can compete in college, I can compete in Japan. I can be okay, I can figure it out. I have tools and I got a lot of confidence." - Ric Elias

The Pursuit of Purpose Over Profit (1:00:49)

Elias discusses his evolving perspective on success and purpose:

Shifted focus from accumulating wealth to creating meaningful impact
Emphasizes the importance of using resources to compound things that matter
Discusses Red Ventures' commitment to social impact, particularly in Charlotte

"I am incredibly privileged to broaden that purpose to things that are good for society. That's all that matters. Capital for capital. What? You're never gonna be Bezos or whoever else. That's a silly game." - Ric Elias

Recruitment and Company Culture (1:06:39)

Elias describes Red Ventures' approach to recruitment and culture-building:

Seeks individuals comfortable with the company's dynamic, less predictable environment
Values young talent and creates an environment that shapes behavior
Emphasizes the importance of humor and not taking oneself too seriously

"We take our work really seriously, not ourselves. There's a ton of humor. We do a lot of things. We have tons of sports. We have tons of stuff, just because it's all interconnected." - Ric Elias

Future of Business and AI (1:11:20)

Elias shares his thoughts on the future of Red Ventures and the impact of AI:

Anticipates significant disruption from AI across all industries
Emphasizes the need to be both aggressive and thoughtful in approaching AI
Expects his own role to evolve over the next 3-4 years

"I think AI is going to disrupt every workflow, every interface, every platform, everything in ways that no one can predict. You gotta be both aggressive and thoughtful." - Ric Elias

The Kindest Thing Anyone Has Ever Done For Ric (1:23:20)

In response to the closing question, Elias highlights the power of forgiveness:

Expresses gratitude for being forgiven by family and colleagues for past mistakes
Emphasizes forgiveness as a beautiful and powerful human quality
Sees forgiveness as a reminder of our ability to extend grace to others

"I have been forgiven by many people ultimately for being human... The grace that you give somebody when you forgive them is the most beautiful things we do as humans." - Ric Elias

Conclusion

This conversation with Ric Elias provides a deep dive into the philosophy and practices that have driven Red Ventures' success over the past 24 years. Elias emphasizes the importance of culture, continuous learning, and adapting to change. His personal experiences, including surviving a plane crash, have shaped his perspective on life and business, leading to a focus on wellbeing, purpose, and making a positive impact. As Red Ventures looks to the future, Elias anticipates significant disruption from AI and emphasizes the need for both aggressiveness and thoughtfulness in navigating these changes. Throughout the discussion, Elias's commitment to personal growth, forgiveness, and creating meaningful opportunities for others shines through as core principles guiding both his personal life and his approach to business leadership.