Why we did this
How we met
We are not childhood friends, and we do not pretend to be. We met as adults, each with a career already behind him. This began in a conversation where one of us explained what he wanted to build in Portugal and the other realised he had been preparing for the same thing without having given it a name. Rather than move on the enthusiasm, we did the opposite. For a month we sat down once a week, each of us with written answers to the questions that usually go unasked: how we decide when we disagree, what happens to the money, what each of us does if one day he wants out. It was said in the first session that either of us could say no, with no argument and no ill feeling. Neither did, and we became equal partners.
Both of us could have stayed where we were. One of us had come through venture capital and consulting, and knew what it is to study a company from the outside, recommend what should change, and leave before the consequences reach the people. The other had built his own company from nothing and wanted to spend the next decade close to real businesses, real people and premises you can walk into. Neither of those paths put us where we wanted to be: owning, deciding on incomplete information, and having to be there on the day the decision costs somebody something.
Why these trades
We chose HVAC, electrical and plumbing because they are the work a building cannot do without. When the air conditioning in a hospital stops, or the power goes in a hotel, or a pipe bursts, nobody puts it off to next quarter. Much of this work is required by law, with inspections and checks that fall due on fixed dates, and much of it can only be done by a company holding a licence and a registration, with technicians who hold the right qualifications. That means demand that repeats every year, and a barrier to entry earned through years at the trade rather than bought with money.
There is also a reason of humility. These are old trades, done by companies most of which were built by the same person over thirty or forty years, and we are not here to teach anyone how to do them. We started with these three because this is where the recurring work and the legal requirement are clearest, and because you take on one trade at a time. What we look for is wider than these three, within the technical services a building depends on, but we prefer to speak only of what we already know how to do.
Why buy to keep
A buyer with a date to sell by has to sell, and so he always decides with the clock in front of him. The price he offers depends on what he thinks the company will be worth on the day he puts it back on the market, and the promises he makes about the years ahead will be someone else’s to keep. It is not bad faith. It is how that kind of buyer is built.
We did the opposite, and we did it deliberately. We are not a fund. The company has no fixed life and there is no date by which we are obliged to sell a business. The practical consequence is simple, and it is the only one that matters to the person selling: whatever we promise you about the years ahead, we will be the ones still here, having to keep it. That is why we can pay for a roof, a van or an apprentice whose return only shows up five years from now, say no to a good company that is not for us, and look an owner in the eye knowing we will still be running what he hands us.