SPEAKER_01 0:00

Hey, welcome everyone to another episode of Beyond the Case. This is a podcast where global leaders from Howard Business School's OPM community join in a personal capacity to share the life lessons, mental models, decisions that go behind building enduring companies. Today's guest is someone who's very special. He's been part of my living cohort for Unit 1 when I did OPM. And uh the guest's name is Richard Chen. He is the founder and CEO of Hawkbridge Capital based out of Toronto and Canada. Richard, how are you? It's a pleasure to have you here. Yeah. Richard, you're very, very analytical. You know, anyone who's been around you understands how you think maybe five to ten steps ahead. And uh I'm just wondering, is this something that uh has been a part of your trait ever since you were a small child? You know, do you do you attribute this to the surroundings that you were raised in, or do you think this is something you developed as you grew up? Well, since you're so kind of saying that.

SPEAKER_00 1:05

I would say it's it's rather a training from the work over the last uh almost 18 years. So I started Hawkbridge as a humans and banking firm, and then the most recent uh few years uh we turned it into an operator and investor, more like building businesses. So every time we meet with a CEO, we have to ask the questions, understand their strategy, and try to bring more ideas and bring more valuable contributions to their growth plan. So that training process has been uh, I would say, uh most important reasons. Of course, you know, there's always reasons from personal interest, education, friends' influences, such as your influence.

SPEAKER_01 1:50

You you are also very well read. During the case discussions and also in in classrooms, you would always back your your thought process with certain bits from history, and you would reference, you know, a book you might have read, which which developed that insight for you on any particular topic, right? How do you find time to read and how do you identify what type of content you want to read?

SPEAKER_00 2:12

Yeah, thank you. Yeah. So thank you for the kind of words. Yeah. So so one was small. I see my father buying books, not in you know, one book or two books. Every time he bought he buy, he buy in boxes. Each box is like 20 books. So he every time he brings a box home, and there's 20 more books, 20 more books added into his bookshelf. So that's how I buy books. Every time I buy, I don't want to buy just one or two. I buy a bench. It's an escape, it's an enjoyment, it's an entertainment for me to read books over the weekend. I use it as a stimulus to my thinking. I don't think just for work. I typically have a notebook besides me while I'm reading. It's actually, I read A, it gives me an idea for B. I read B, it gave me an idea for Y. So I think a book is not only adding energy or experience, but also it's giving me this stimulus to think how I can do better in my own work.

SPEAKER_01 3:16

So today you've had a career which has spanned across engineering, finance, investing, cross-border transactions, and of course entrepreneurship as well. If you go back to the beginnings, to your roots, were there any early experiences or any decisions that uh you can think of which shaped you to becoming the kind of entrepreneur that you are today? Thanks. Yeah.

SPEAKER_00 3:38

I I would say the single biggest reason is always probably like everyone coming to Harvard is have this, you know, silent crying for trying to be the best in in a game. So the pain of not being the best in the game is so burning that we want to, you know, keep the actions until we become the best of the game. You know, for situations I cannot be the best of the game, then you know, stop the game and change it to a new game. So this is why, you know, I was in university in Beijing this 27 years ago. I realized that, you know, there's the game's not for me, so I switched to University of Toronto. And then, you know, I figured out a way to start a business plan competition. That if I cannot be a president of an association, I create my own association. And if I cannot make it into the best investment bank in Canada, I create my own investment bank. So it's about deciding that to be the best in the game. And if the game is too tough for us, we just create a new game that we can win in the game.

SPEAKER_01 4:51

Now, uh, in preparing for this conversation, I read on your website you had written that running a business is a never-ending request of thoughts and decisions and experiments. What do you mean by that? And how has your relationship with decision making changed as you've become more experienced?

SPEAKER_00 5:07

Yes. I I I I will say, although we're making choices, making decisions, and have to use our judgment throughout the process, there is always that, those most important decisions to be made, such as which project or which partner to choose in which the style we should manage our life, and also what would be the main uh learning curve we we should pick over the next uh you know period of time. You know, should we go with AI or should we go with AI application or with traditional industries? It's always um uh a choice. I I would say we're in a lucky spot that almost every company has some capital needs or capital problems or capital crest. So, you know, if they're doing really well, they want to sell, they want to buy companies, they want to deploy, that's that's one problem. If they're not doing too well, they want to raise money or they need uh money to grow. So uh we got a luxury to speak with different versions, different categories, different industries of leaders, and then, you know, so we got the the chance to make those choices. Yeah.

SPEAKER_01 6:22

How do you think about competition for either your business or any other business? How should entrepreneurs think about competition? Do you spend a lot of time studying competitors in your industry, or do you feel focusing on competitors is a distraction for any reader?

SPEAKER_00 6:42

I think competition is definitely good and bad at the same time. We learn from competitors. We learn how other leading or boutique investment banks, how they do their documents, how they run the process. We try to silently learn from them. And also it's bad that, you know, especially for merging conditions, there is only one winner, everybody lose. Doesn't matter on the buy side or sell side. You only have one buyer for one company. You cannot have two companies buying more than 51%. Similarly, you can only have one advisor winning the mandate or close the mandate. That means all the other people who are trying to get the mandate loses. Okay? So that's unfortunately a sum zero gain. And we have to figure out a way to be specialist and to win those mandates. And at some point, invest making becomes who can win the best mandate? Who makes the money? Because eventually a good company will find a buyer. Uh, a bad company doesn't matter how good you try, it's it's not a good place to allocate capital. So this is why we're becoming a builder and investor over the last four years. So we still keep investment banking business on the side, but we started to design our own project, we started to manufacture our own opportunities. So in this way, there's no competition. Yeah, because it's so proprietary, it's so unique that there's nobody else doing this.

SPEAKER_01 8:14

I wanted to explore something that you have described, at least on your business website, as the digitalization paradox. Right.

unknown 8:21

Yeah.

SPEAKER_01 8:22

Could you talk a little bit about that, about how business leaders might misunderstand um the importance or lack of it of digitalization?

SPEAKER_00 8:30

Uh actually, I would say quite on the opposite. Um I would argue that almost every outstanding business leaders we have been working with are super passionate about digital edition tools. They either use commercialized one or develop their own proprietary app or their tools, or they engage uh consultants, AI consultants, upgrade their business. I would say these, at least, you know, for the for the circle of CEOs I have been working with, manufacturing, you know, food, services, home care, you know, franchise, at least in the circle I deal with. They are, I would say, quite passionate, quite adaptive to what's world changing. And I find myself being inspired and learning from them. And doesn't matter if they're trying to become a smart manufacturer or become a multi-stack system operator. I think everybody strives to make a difference. I I will not come and say they are under your PLS. I will say they are they have this urgency, they have this anxiety of not using enough. I definitely see that there's still a lot of room to improve, but I I definitely they are not underestimated, they're passionate this.

SPEAKER_01 9:50

Great. Looking back on your journey, Richard, are there any lessons from running a business that eventually became life principles for you and guide you?

SPEAKER_00 10:01

There's so many licenses, my goodness. I would say, I would say do not trust or count on anyone too much. Okay? I'm not saying this in the in a negative way. I say this in a very, very positive way. Try to count and rely on self as much as you can. Because if you if you rely too much, especially as a investor, if you count on anyone too much, there's a tremendous risk involved. Because you expect these other CEOs or partners to be resilient, solving the problems, being creative, making the right judgment. You all very often get disappointed. I would say just have normal, even sometimes a little bit lower, expectation of other people. Actually, you will be very, very happy, man. I think one mistake I made was have too high expectations, have too much faith in other people's performance, and get disappointed. Yeah. Um, right now, what I do is have low expectations, but but account way more on self-performances. And the second second lessons I learned is I actually started building my own business when I was 26. I started my company. Looking back, if I'm I'm talking to my 26 years old self, I would urge myself to not rush to start entrepreneurship, especially in the corporate finance business. It's probably smarter to learn from an industry leader for a couple more years. I think uh some sometime between 35 to 45 would be a great time to start a business, especially in the quote-unquote traditional industry. I'm not I'm not I'm not suggesting other industry, but you know, for corporate finance, for investment, for you know, normal operational business, it's much better to learn, learn more. Yeah. That's the second second advice. I won't say mistake, it's a choice. And the third experience would be about looking after uh your own people in a more sensational way. Because sometimes internal people can hurt you the most. If you don't look after them properly, that their disappointment. I I I I recently see a quote in which I totally agree. I think it says all the hate comes from misexpectations. If they expect you to treat them certain ways, but we treated them not as they expected, there is a chance that hate has been generated from the person you you love, you care. Uh so I would say that being more sensitive to the people internal uh is also quite uh important.

SPEAKER_01 12:55

Thank you very much, Rachel. That's very helpful. And the fact that you were able to introspect so quickly for this question and share your life principles, uh, at least the top three, it's very, very commendable. And so at what point did you decide to pursue OPM program? How did you even find out about it? And why did you consider being a part of the OPM program?

SPEAKER_00 13:19

Yeah, I I would say this is a long preparation and a short-term sprint. So, you know, as a corporate finance student or person, Harvard is the, you know, really the moon, right? It's a pyramid, it's it's top of the world, it's the most exciting stuff. So I have been long for the school, long for joining the community. However, you know, life has been busy. And I did go to the, you know, one of the best universities in Canada, you know, Rotman School, business school, University of Toronto, great school. I enjoyed it. And you know, started my company, got busy. A lot of clients, you know, kind of keep myself fulfilled. And, you know, Toronto has a small community, uh, OPMers. So one of them pushed me so hard to the point that I have to apply. And turned out that's actually one of the best decisions I made. Although it's just a month long, and uh right now it's less than a year, but uh, I would say this is a decision changing my life that I'm so excited. And I started the meeting with great young entrepreneurs like yourself. I would say this experience is definitely transformative to me.

SPEAKER_01 14:29

Incredible. Any takeaways that come to your mind from Unit One that uh are still staying with you, you think about them on a regular basis? Anything you want to share?

SPEAKER_00 14:38

There's so much to share, my friend. Yeah. I I would say the slogan we always say is make your customer a champion. If you can make your customer champion, you will win. And also um I would say leaders win in a very, very different style. Even in our living group, you see every person so different. And you you you you see someone who will lay back, but next thing you know, you know, she runs a hundred million dollar business. And you see a young person, a bit of cocky, next thing you know, he sold his company for hundreds of millions. And you you you see someone who don't talk much during the class, but whenever he talks, he shows so much wisdom. And you know, he's also super young. So this is uh I would say Harvard done a great job to select very diversified, very colorful personalities, but ultra successful uh leaders into this class.

SPEAKER_01 15:33

Incredible. How do you think about the relationship between ambition, family, health, and you know, everything that building a business demands from you?

SPEAKER_00 15:44

I I I believe in focus on one and make the other element to be configured into that one. And and that one element could change. You know, I had a parent really, really sick about 10 years ago. I just have to keep her as keep my mother as the center of me making decisions. And right now, you know, I have I have to make a business or make my ambition to be the center of the universe and make the other pieces being configured to that single center. I think this way people don't get confused. If people have two focuses, they typically feel the pain. If you have just one focus, you know, it's easier to make decisions. I always look up to the great masa from South the Bank. And, you know, I admire him to be so ambitious. He recently said that he feels so shameful he hasn't accomplished much. So imagine the successful Soft Bank. Of course there are failures, and he feels he has done not too much yet. You can't imagine the size of his ambition for the next five years or seven years. So I think, especially right now, we're in the technology revolution, globalization revolution, supply chain revolution. I do feel it's very important to be tremendously ambitious. Do not let last year's failures, do not let the old emotions to constrain your imagination. I do feel it's very important to be bold and to be a Robin Hood in this marketing environment. I wish I'm 10 years younger, but again, look at the people who are 10 years older, I'm still lucky.

SPEAKER_01 17:28

What are you optimizing for today that a younger child may not have understood?

SPEAKER_00 17:34

So I would say their experiences or their feelings. You had to go through those challenges, and now you can fully understand. Or you can understand into the bones. You know, I read the same book, I read the same articles 10 years later. You know, I I got a level of understanding 10 years ago. Right now I got a different level of understanding. And also I started to appreciate the patterns, the philosophies, way more compared to 10 years ago. I would say 10 years ago, I'm more lured to stories. Right now I'm more lured to philosophies. And uh it's very important to construct this internal philosophy and logic that it will save you so much time and effort because you can recognize the pattern and quickly understand what was happening, what's our ready reaction should be.

SPEAKER_01 18:27

What's your process for that? Do you write down uh your your philosophy or your I think uh I don't know how to put it, but your your takeaways from your experiences in life, or do you just there there are you know a lot a lot of people say on this?

SPEAKER_00 18:40

So like uh Charlie Mongo said, you only need to know 25 formulas, right? You know, for us, we have to understand the main business models. We have to understand the ways of growth, the ways of failure. We need to understand uh how to build relationships, what's the formulation of creative trust? And what's the formulation of doing marketing, how to build the relationships, and also we need to understand what are distractions, what are noises, what are signals. So it's about running the company, managing the life in a more efficient way, and know how to keep self, being excited, focus on being excited every day, and do not be dragging into those negative emotions. Because negative emotions are the single biggest theft in the world. It's stealing your energy, stealing your future, and steal stealing your your love, your your ability to conquer. So, whatever you do, figure out a way to stay excited, stay happy, stay satisfied with yourself.

SPEAKER_01 19:45

And just to piggyback on that question and your response, what is the definition of a wise man?

SPEAKER_00 19:50

What is the definition of a wise man? Wise man. I I would say, you know, come down to your question earlier. If one person always has quote unquote ambition or goals, but always unable to fulfill it, I don't think it's a wise man. Vice versa, if a person really not believing his own potential, really not, you know, stretching himself enough, then I don't think that's a wise man either. I feel a wise man is about you know, defining and use whatever intuition, cast feeling, calculation to figure out the right ambition, right goals to achieve, you know, just over a short period of time. I don't think people need a plan for seven years, five years, but people do need a plan for today, for this week, for this month, for probably three months, six months. That that's that's long enough. And accomplish it. And say something or claim something and actually complete it. I think that will build your credibility within your team, but more important, build the credibility within yourself. So I do feel a wise man is about putting the proper challenge, put a proper stretch to your body, to your soul, to your business goals, and actually hit them. If you hit all of them, which means you probably not stretch yourself strong enough. If you miss 90% of them, you probably give yourself too hard a goal. So I think a wise man is to understand himself, herself, and accomplish the goals.

SPEAKER_01 21:38

Thank you. My last question is again, uh as I mentioned at the start, you used to reference a lot of the reading you did when you talk about cases as well. Are there any books or any single book that comes to mind that you find yourself revisiting that you feel has influenced the way you think? There are so many, my goodness.

SPEAKER_00 21:57

That's a tough question. I I like to read autobiography books. If if you, for example, if you see an Amazon book, you see who the author is, right? So the person who actually matters, it's just Jack Benzos. So that's actually a book I would like the most. Actually, it's in my back right now. It's called Invent and Wender. You know, Amazon is one of the largest companies in the world, so the CEO must have made a lot, a lot right decisions. So the system in his brain is important. So Invent and Wender, it's it's it's not a book written by Jeff Benzo. It's a collection of Jeff Benzo's speeches and his essays. But actually, real Jeff Benzo's. It's not manipulated by an author or interpreted by a journalist. Okay? The second book I is my all-time favorite, is Lessons Learned in Pursuit of Excellence by Steve Schwarzmann. Because I'm in product equity, that's I won't say this is a golden bible, but that's one of the most powerful books you can find. I know he cannot disclose a lot of the secrets, but just the facts, just the stories he disclosed in the book. It's extremely humble and very, very inspiring. It just shows that with the right training, right effort, a normal person can accomplish so much.

unknown 23:25

Okay.

SPEAKER_00 23:26

I'm not saying he's he's not smart, he's super smart, super talented, but I mean, hey, he's not a superhuman, right? He failed so many times that gives you the confidence to say, okay, you know, my feeler compared to his is it's peanuts, you know. He can sustain that, I can sustain my. So what's the next battle? And then the last one I would give is called the Principles. Principles by Ridio. Yeah, those three books is are my favorite, and their own, each of their own successes, you know, tells the power of the book. So so it's Invent of Wonder, Lessons in Pursuit of Excellence, and the Principles.

SPEAKER_01 24:08

Phenomenal. Thank you very much, Richard. Uh, I know it's late in the night in Boston where you are right now, and you still made the time. So thank you again, and uh I look forward to seeing you soon.

SPEAKER_00 24:19

Thanks, Sokin, and thank you for the questions. See you next time. Bye.