Open-Ended Questions ● Where or how do you spend a majority of your time and what do you use as a barometer for your return on invested time? ● Of your competitors, who do you respect the most and why? ● Tell me why you’ve been successful and how do you sustain it? ● What three things would you tell a friend about how to be successful in your company? ● What is really hard for new hires to get used to in this firm? ● What do you want to be known for? ● How do you measure whether you are successful? ● If you were a private business, how would you operate differently? ● What do you like about working here? ● Who are your current and past mentors, and what impact did they have on your life? ● What three things would you do to destroy the business as quickly as possible? Give yourself a one-year time frame. ● If we were meeting three years from today, what would need to have happened during that time for you to feel happy about your progress? ● What type of information do you need on a weekly basis? ● If you were away for one year, which key metrics would best tell you how the business was doing? ● Why can’t other people do what you are doing? ● What's your comparative advantage? How do you invest in it and improve it to magnify the opportunities where that advantage is indispensable? ● Of all the businesses you’ve looked at, what’s the best one, and why? ● What are you compulsive about? ● I think all companies need to answer 3 simple questions. I'd call them the why, the what and the how. ○ So the why questions are the fundamental ones. Why do we exist? Why should someone want to work here? Why should we come and go the extra mile and care? That's about purpose. ○ The what questions are: what are my products and services? What are the target customer segments I'm trying to serve? What is our business model? That's strategy. ○ The how questions are: how are we going to behave? How are we going to operate as an organization and as a team? How are we going to bring our purpose and our culture to life? That's about culture. ○ And I would argue, great companies, highly successful companies have real clarity in these 3 things.

● If [Company] disappeared, what would happen? Does [Company] have a reason to exist? ● In which (single) area of life do you have the best taste? ○ Optional follow-up: Do you work in that area? Why or why not?

● Do management's capabilities fit with what the task is going to be for that company? ○ Don't get overly persuaded by one person. Typically the people that have risen to the top are great at storytelling, extraordinarily persuasive, and believe what they're saying. ○ When we invest we are trying to invest in what a company will be, not what it was or what it is. There are no future facts. Form your own outlook separate from what management tells you.

● What's been your biggest recent error of omission and did you make any changes, even at the margin, to your process as a result of that error? ○ Either the stock you wish had sold, the stock you wish you had bought. And I ask this instead of the error of commission because I find that everyone should be able to talk about their mistakes, the stuff that I did that went wrong, but it's only the really good managers who look and say, what didn't I do that could have added value.

● Which functions in the business could you outsource if you really had to? ○ And the purpose of that is to understand where the value is really being generated in the business, versus the ancillary activities that support that. That [question’s] trying to understand what capability drives their competitive advantage.

● How much time or money would be needed to copy your products or services? ● What are the three most important financial and nonfinancial KPIs (key performance indicators) on your dashboard? ○ What does management think is critical to the business that drives value? ● When do you choose to build versus buy? ○ How do they make that decision of going to buy an asset versus go green field? ● What are common mistakes you've seen others make in the industry? ○ This would be to get a sense of not just how the industry works, but also what management sees as a fatal flaw that they try to avoid—and whether they have a good understanding of what can break the business side; the risk management side of it.

● Sometimes it could be an innocuous, supposedly naive question—but [one] you can get a lot out of. An example would be if a business has really high returns on capital, you could ask, “well look, your returns on capital are really high. Why haven't they come down? Everyone else in the industry doesn't do as well. What's the secret sauce?” ● Anything else I should have asked? ● Reminder: listen to the point of being uncomfortable with the silence.

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