Announcing CompleteBankData: The ultimate growth tool for bankers

One of the most important things in business is identifying your customer, determining their needs, and evaluating whether your product fits their needs.  In most industries this is a well defined process.
If you are hired to sell software to accountants what do you do?  You pull a list of all accounting firms in your territory and begin to market and prospect to that set of potential customers.

But what do you do if you’re a bank? Who are your customers?  Is it everyone who might need money?  Does a bank that is interested in growing simply load every resident in their given footprint into their CRM and march through it?

The traditional way a bank conquered this problem was by trying to cross sell to depositors.  A bank’s depositors are their current customers, the ones who have money, enough money that they need a place to store it.  The problem is a bank’s customer is someone who needs money, not someone who already has it.  Because of this there’s a mismatch between who they are marketing to and who their ultimate customer is.

To solve this problem lending officers have relied on “centers of influence.”  A center of influence is a person in a related industry, an accountant, a lawyer, a consultant, who has industry connections and can refer prospects that need money to a banker who has money.

The problem is relying on centers of influence is reactive, a bank is waiting for demand to appear before they can react and provide prospective financing details.  The second issue is that banks end up marketing to centers of influence instead of directly to potential customers.  It becomes the job of the center of influence to pitch the positives of a bank verse the bank itself.  And lastly the relationships are between individual lenders and these centers, not the bank itself.  When a lender leaves to work for a competitor, they take those relationships with them along with subsequent referrals and their book of loans.

CompleteBankData has taken a different approach.  We believe that banks should be able to identify their ideal customers, market, prospect and own that relationship themselves.

We do this by taking data from a number of different sources including deed filings, mortgage originations, assessor data, real estate listings, commercial financing transactions, and demographic data and then creating links and relationships between these entities.

By having this large connected store of information, we can proactively define a bank’s ideal customer, and then put customized details about all prospective customers in front of them in real time.  But that isn’t all, we can predictively unearth leads based on the profile of a bank’s ideal customer that a bank might not know about.

For example, if a bank specializes in owner occupied commercial real estate to businesses with more than $1m in revenue we can alert them when a business that fits their profile purchases a new property for cash.

Another example of actionable and targeted information is the ability to show a bank loans in their market that fit their ideal customer profile that are set to mature or balloon within a given time period.

Let’s take another example, a banker who specializes in financing landlords and their property profiles.  It’s very difficult to discover non-corporate landlords, but in many cases these “hidden” landlords own substantial portfolios.  In Allegheny County, Pennsylvania there are over 1,000 individuals who own 12 properties or more, with one individual owning more than 600 properties.  The majority of these landlords have no website and no information outside of a few “For Rent” signs on their properties.

What our system can do is alert a banker when one of these landlords purchases a house for cash in an area they desire to lend into.  The banker can then discuss with the landlord the potential for providing liquidity by financing the most recent purchase, or potentially refinance their entire portfolio.  The icing on the cake is that a lender can use CompleteBankData to evaluate the real estate property profile of a prospective landlord all without ever having to speak to them.  Through the system they can see what properties they own, the property on a map and details on the liens associated with the properties.

Of course, these are just two examples of many possibilities.

The real key is that we enable a bank to discover, contact and interact with their prospects directly instead of having to rely on a center of influence relationship to sell for them.

What this means for a bank is they can control their own destiny.  A bank can decide to chart its own course, build a prospective sales pipeline and then follow those leads through the pipeline from discovery to loan origination while measuring and reporting on their progress the entire time.  These relationships we help banks discover are their own, not owned by the centers of influence, or a star banker, they are the bank’s.

By enabling banks to proactively discover their customers we also help banks reduce risk.  Typically, when a bank enters a market, or attempts to grow aggressively they end up taking somewhat marginal business because all of the good customers are already financed.  With CompleteBankData customers can “shop” for new relationships by looking at customer lists, loan terms and contact details for competitor banks.  The risk is that competitors with good underwriting might find their clients walking out the door, whereas for our customers they can grow their portfolio with quality loans without taking undue risks.

Let’s consider what this means for branch expansion.  In the current world a bank will hire a set of loan officers, build a building (or purchase one) and hang their sign on the roof.  They now have a shiney new branch, and little to no business at that new branch.  The bank spends an outsized amount of their marketing dollars attempting to attract retail deposits at their new branch.  In turn the bank then markets to their depositors hoping to drum up new loans.  At the same time their commercial bankers are hitting the business networking circuit attempting to build new relationships around this branch outpost.

What we offer is a more efficient approach.  CompleteBankData can be used to pre-emptively evaluate the lending market even before opening a branch.  A bank can evaluate the number of borrowers, size of existing loans, and look at who they are competing against.  After they’ve settled on a soft spot in the market then they can establish a physical branch.  But what’s different is instead of opening with a few relationships on day one the bank can proactively work to build excitement even before the branch opens.  They can do this by building marketing lists of prospects from CompleteBankData and marketing to them digitally and traditionally via the mail months before the branch opens in their location.  Commercial loan officers can be proactively working on building relationships ahead of the launch with target customers.  With marketing and direct relationships ahead of a branch launch a bank can ensure that when the doors open they will have a sizable customer presence ready to bank with them.

Is this for you?

If you are a banker, primarily in a community bank sized $1b-$50b in assets we want to speak with you.  You can schedule a demo here, or give us a call at 1-866-591-8315.  We are familiar with the challenges you face and believe that we an tip the scales in your favor.  Email Nate Now

If you are an investor in banks and have an investment in a bank that might be able to use this.  Would you be able to introduce us to the CEO or CLO (Chief Lending Officer)?

We are always looking for introductions and connections with others in the industry.  If you know someone who might be worth talking to please drop me an email at: Email Nate

Recent Press

We were recently profiled in the Pittsburgh Business Times about what we're doing.

New to banking? Check out The Bank Investors Handbook

And of course if you're new to banking or would like to understand how banks work better I'd suggest you check out my book, The Bank Investors Handbook.  The book is available on Amazon in both paperback and Kindle format.

Oddball Stocks Newsletter: Boston Sand and Gravel Co. (BSND)

Here is another sample piece from the Oddball Stocks Newsletter. This is another excerpt from Issue 21, published last August, about Boston Sand and Gravel (BSND).

Last summer BSND was trading in the mid $400s. It is up pretty substantially since then, to $546 bid and $573 offer. The 2018 annual report is not out yet, but we'll be writing an update in the Newsletter when it is. Last year, BSND's annual meeting was held in Boston on July 26th.

You can subscribe here to the Oddball Stocks Newsletter, and we also have some a la carte samples of back issues available.

Also, be sure to watch Bob Vila take a tour of the Boston Sand and Gravel Plant!

Oddball Stocks Newsletter: Conrad Industries Inc. (CNRD)

Here is another sample piece from the Oddball Stocks Newsletter. This one is from Issue 22, published in November 2018. This one is about Conrad Industries, which has been posted on the Oddball Stocks blog multiple times in the past (like here and here back in 2012).

In addition to a pretty good track record of interesting ideas that worked well, the Newsletter has also sounded some cautionary notes about names, which have turned out to be prescient. For example, back in August we wrote some cautionary thoughts about Conrad when its shares were trading in the high teens. The shares collapsed down to $13 at the end of the year and have only now recovered to $15.

Conrad is a rare Oddball with friendly management, but their business is really challenged by the lack of oil and gas activity in the Gulf of Mexico. We will continue to monitor and report on developments in the Newsletter. (You can subscribe here to the Newsletter, and we also have some a la carte samples of back issues available.)

Tender Offer for Goodheart-Willcox Company (GWOX)

Textbook publisher Goodheart-Willcox is an Oddball that was written up on Oddball Stocks way back in October 2012 when shares were trading for about $72.
I ran across Goodheart-Willcox in the Walkers Manual, the numbers in the manual intrigued me, from 1998-2001 the company had earned anywhere between a 24% and 32% return on equity, and EPS had grown at 25% annually. I was even more impressed with the ROE when I noticed the company was debt free. I was curious about how they were doing now, so I picked up some shares and contacted the company for an annual report. I received a few years worth of reports and liked what I saw. In the years between 2001 and 2011 the company had continued to throw off excess cash, but with reinvestment opportunities limited cash just piled up on the balance sheet. The company had become what value investors affectionately call a "cash box". A cash heavy company with a business bolted on.

So what is the business of G-W you ask? They're a textbook publisher. Most readers will see the last line and think "no wonder they're a cash box, dying business, dying industry, and relies on government funding." That's the bear case in a nutshell, a bit more information might change some perceptions, but my guess is for 99% of my readers this stock is untouchable because of some preconceived negative bias. I understand that, I've wrote about this stock to a number of investor friends, and all of them came back with some variation of my above sentence. I've heard it said that courage of conviction, and patience are two skills investors need to succeed. Both of these traits are required in double doses for G-W.
The Oddball Stocks Newsletter also did an update on Goodheart-Willcox in November 2014 when it was trading for $81, which was right around book value at the time.

Along the way from 2012 until now, GWOX paid some healthy dividends - a total of $23 per share since the post back in October 2012. The last trade of the stock was in December 2018 for $107 per share. That made for an IRR of 10%... until today.

We received a notice today that the GWOX Employees' Profit Sharing and Stock Ownership Plan and Trust is offering $150 per share for up to 124,000 shares (which is 27.8% of the outstanding stock). That boosts the IRR to 15%... but it happened in "One Day".

At $150, the market capitalization of the company (with 445,725 shares outstanding) is $66.9 million.

The P&L for GWOX is "cyclical" because of the school book adoption cycle. To some, the business looked like it was in secular decline. If you look at the financials from back in 2012, it earned $5.6 million in 2006 (on $31 million of sales) but only $563,000 in 2012 (on $17 million of sales). Even from 2013 through 2017 it never earned more than $1.6 million, with two of those years being below $1 million. But then for the year ended April 30, 2018, it earned $8.3 million!

Is the tender offer worth taking? There's some juicy nuggets that bear on that in the tender offer document - we will be discussing in the upcoming Issue of Oddball Stocks Newsletter in June. Stay tuned!

On outsourcing and vertical integration

There is an interesting pattern happening in the business world at the moment.  It's the outsourcing of everything.  And it's interesting because there are leaders, followers, and my conclusion from watching what's happening is that this outsourcing shift is more than an outsourcing movement, it's actually a shift in intellectual capital from one sector to another.

I'm not sure when this started, but in my mind the current batch of outsourcing picked up steam in the 1990s with IT outsourcing.  As technology was a newer thing to companies they thought it might be easier to hire experts rather than develop their own in-house capabilities.

Of course outsourcing isn't new, companies have always relied on vendors to help them in their business.  Not every company that delivers parts owns a trucking or rail fleet.  Completely vertical integration isn't possible, and isn't necessary, but that's not what I want to talk about.

What's happening is a technical outsourcing on steroids.  Because companies were comfortable outsourcing initial IT support, or systems there has always been a comfort level to other types of technical outsourcing.

Executives have an idea that it's much easier to outsource an accounting system, rather than host their own customized accounting system.  Or to outsource sales verses building an in-house staff.  The rallying cry is "we don't want to be involved in things that aren't our core competency."

Of course that makes sense.  If a business is the best in the world at manufacturing widgets why would they want to get bogged down in the logistics of distributing those widgets to the world?  Or why would they want to waste time hiring people to manage facilities, or run a phone system?  Instead they should focus all of their energy on manufacturing widgets and let others do the rest.

The problem is most companies don't really have a core competency.  If you take a deep dive into a businesses' operations you'll find there really isn't much of a secret sauce.  It's just a group of people working together in a unique way to provide a solution.  And if you begin to abstract the pieces away like lego blocks you start to realize there isn't anything at the center that can't be replicated elsewhere.  The exception to a generalization like this would be companies that own infrastructure, or prized real estate that is truly one of a kind.

What's happened is these outsourced vendors begin to understand their client's business better than themselves.  And the vendor starts to think "why don't we just bolt on a few front office features too?"  Then suddenly the back office vendor becomes a vertically integrated company that is competing with their clients and doing it better than they could do it themselves.

In effect many companies have leadership teams that have bought into this outsourcing mentality so deeply that they're slowly disassembling their own companies and transferring their knowledge and skills to their vendors.  And those vendors are realizing that with their knowledge and expertise that they can replicate what their clients are doing better.

It's fascinating that the competitive advantage Carnegie had with his steel was that he fully integrated operations.  He owned coal mines, owned the path to the coaling and coking plants and eventually steel.  The great innovation was the fully assembly line from coal to steel was physically located in close proximity eliminating the distributed logistics gap that existed at the time.  It was an enormous factory made up of many smaller operations all lining the same river.

The end result of this outsourcing transformation is this "new economy" that we're experiencing.  Old main-line companies are willingly disassembling their businesses and re-incarnating as portions of multiple tech companies.

The implications of this are far ranging and wide, and I'm not sure this process can be stopped.  It's the pattern of the Innovators Dilemma on a much larger macro scale.


What's going on in the Oddball world?

I wanted to put together a quick update post of what's been going on for me (Nate) in the Oddball Stocks world.

As you've noticed my posting frequency has slowed to a crawl.  This has coincided with the acceleration of my software business, CompleteBankData.  As that's taken off I just haven't had as much time to write and muse on investment topics.

Our company was accepted early in 2019 into the AlphaLab start-up accelerator here in Pittsburgh and that's taken up even more time.  But I'm not lamenting the loss of time, the benefits far outweigh how crammed things are.  Here's an article about the current cohort of companies, ours included.

While being a part of an accelerator I've had the opportunity to greatly widen my network and meet a ton of entrepreneurs and successful executives.  As readers know I'm a value investor through and through.  Which is sort of a paradox in that I'm running a growth company, and the maxim of our company is that we help banks grow.  So how is it that I'm a value and growth person?  I think it all breaks down to the level of involvement.

A lot of investors and activists struggle to push a stagnant company to grow.  That's because growth isn't in their DNA, and for a lot of people growth means change, and it's hard to change.  When someone else is buying the dollar for $.30 and liquidating it I'm happy to take a ride.  But I'm not sure I'd want to be doing that liquidating myself.

On the other hand I really enjoy running a company.  I love talking to clients, love networking with prospects, and getting involved in client operations and helping them accelerate their growth.  But you can't do this if a company doesn't want to grow.

In the meantime my partner in crime at the Oddball Stocks Newsletter (and you really should subscribe if you haven't already) will be starting to post from time on this blog.

The posts I author have my name attached at the bottom, whereas the posts Colin authors have "Oddball Stocks Newsletter" attached.

I want to take a quick turn and talk about the newsletter for a minute.  Over the past year I brought Colin on board and he's taken the letter to a place that I didn't have the ability to take it.  We've dramatically increased our coverage universe of oddball stocks, while at the same time expanding the depth of coverage on each name.  If you're in the oddball investment space I'd highly recommend you take a look and consider a subscription.  There is a lot of content we put together that is simply not available anywhere else.

A parting word.  Lest you think I've lost the value gene, I'm still out hunting for bargains, although not always stocks.  I've been out in the real world finding bargains on hard goods and reselling them on eBay.  It helps me scratch the itch until the market is littered with similar bargains.


The first post ever on Oddball Stocks...

...was PC Connection back in September 2010 when it was trading at $6.85 a share.

The thesis was pretty simple. There was $6.70 per share in working capital (current assets - all liabilities).

Assuming a 10x multiple for the business at a $0.45 earnings level for the year would have valued the business at $4.50, so that ($4.50+$6.70) suggested a valuation of $11.20. Or, being more conservative and placing a 10x multiple on the then-current earnings (and assuming no growth for the year) resulted in a $2.70 value for the business and thus $9.40 for everything. So, back then the "conservative" estimate was a 40% upside from the trading price.

So what happened along the way? Well, note that in 2016, the company changed its name to "Connection" and the ticker symbol to CNXN. Names are trendy and subject to fads, so one thing that we find is that doing a retrospective can be more complicated than just typing in the ticker symbol.

But here is the stunner: the share price is now $36!

Starting in November 2011, the company paid a dividend of $0.40 and then has paid an annual end of year dividend of similar amounts since then, for a total of $2.98 of dividends. The dividends plus the share price appreciation have resulted in an IRR of 24% compounded for eight and a half years!

Let's look at what happened here. Revenue grew from $1.9 billion for the year ending at the time of the blog post to $2.7 billion for the year 2018. Gross margin grew from 11.6% to 15.2%. The result is that gross profit almost doubled (+88%). Meanwhile, SG&A only grew 70%, so operating income more than doubled.

The result is that earnings per share have grown and in 2018 they were $2.41 a share. (They were 85 cents a share for the full year of 2010.)

So, coming out of the recession you could buy this business for 15 cents a share because current assets covered almost the entire purchase price - and it ended up being a growth stock that had nice operating leverage.

We've been talking about this lately... price rules. Whenever a business sells for a really low price (e.g. for no price once you subtract current assets minus all liabilities, or for zero or negative enterprise value), the market is already acknowledging the problems people are worried about: a recession, a business that seems to be highly competitive and lacking a moat; or in other cases, bad management, bad capital allocation, unfriendly insiders.

Sometimes bad factors win out and a company goes to zero. Or a stock purchase can do really poorly even if they company survives when too high a price is paid. But when companies don't have much debt (and that's what a low or negative enterprise value is telling you), there is a lot more runway to try to improve things. So much more runway, in fact, that most shortsellers are not very interested in situations where there are not financial debts or other fixed liabilities to act as catalysts.

Oddball Stocks Newsletter: Small Bank Snapshot

Time to post another sample piece from the Oddball Stocks Newsletter. This is something we wrote about small banks in Issue 21 last August - just a "snapshot," if you will. A collection of small banks with market capitalizations almost all under $100 million, with P/Bs back then ranging from 52% to 199%!

The Oddball Stocks Newsletter has gotten longer and we now have more general commentary like these observations on the small bank equity market. You can subscribe here to the Newsletter, and we also have some a la carte samples of back issues available.

Also, on the last page of this sample you can see a little bit of our thoughts on Tesla. It is amazing that the market seems to have some extremely overvalued mega-cap companies, while on the small end a lot of Oddballs trade to a big discount to what their liquidation value would be.

For example, Bank of Utica (which we have been writing about) is overcapitalized and the nonvoting shares trade at a big discount to book value. It would make a ton of sense for the controlling shareholders to get moving buying everyone else out. But until they decide to allocate capital that way, it could continue to be a "one day" stock.

What infrastructure has to do with investing

When was the last time you thought about infrastructure?  Your mind probably drifts to roads, bridges, subways.  But when was the last time you thought of the infrastructure that is so boring that it's thoughtless?  Things like your water, electricity or plumbing?

The scale of these projects is breath taking.  In the US and Canada everyone who wants to be wired with electricity is wired with electricity.  And it just works.  You never flip a light switch and think "I hope the lights come on this time."  The same is true for plumbing, or water if you're in an urban area.  These things work and they're enormous.

Step back and consider electricity.  How many miles of electric wires are there in the US?  Google tells me that the US electric grid is the largest interconnected machine on the face of the earth at 200,000 miles.  And right now everything is working.  I mean there are probably a few localized outages, but it all just works, and will work tomorrow, and the next day, and the day after that.

This giant machine marches forward every day regardless of what's happening.  But what's even more unique about the system is that any outage is quickly localized.  If you plug in too many items into an outlet you'll blow a fuse.  If a tree falls on a line and overloads a circuit a fuse blows at a distribution hub.  There have been a few rare instances where a portion of the country goes offline, but the entire grid hasn't gone down.

The reason for this is by design.  Issues are isolated to the smallest area possible.  If a lamp is bad it's just a fuse.  If a house goes bad then maybe a neighborhood.  But plugging in a counterfeit iPhone charger into a wall socket doesn't have the ability to down my city.  This is by design.

So what does this have to do with portfolio construction?  Most portfolios are constructed where the errant iPhone charger can take a country offline.  Investors concentrate their portfolios into similar companies, or companies that rely on each other, or on specific conditions in a given country continuing.

The challenge is to design a portfolio that's like the electrical grid.  If you make a mistake and buy a dud (and we all do) that the damage will be limited to that dud.

The natural answer is to state "buy an index and you'll get a bit of everything and be safe."  Unfortunately it isn't that easy.  The largest companies in the S&P have underfunded pensions that are invested in....the other largest companies in the S&P!  Smaller companies are reliant on suppliers that have financial difficulties of their own.

If you start to follow this train of though you'll end up in some tangled web of interconnected liabilities that looks like something out of a CSI show.  But just because something is connected doesn't mean that an issue can bring the entire company down.  What you want a resilient companies with strong balance sheets and a growth mindset to overcome setbacks.  A balance sheet gives a company time.  And time is necessary in any situation where the future becomes unclear.

It's always a good time to look through your portfolio and make sure you aren't concentrated in any sector, or that companies don't rely on each other.  Sometimes you can load up on companies in the same sector and avoid contagion effects.  Whereas contagion exists across sectors, especially with manufacturers who have specialized suppliers.

Call me old fashioned, but I always want a solid balance sheet.  A company with a shaky balance sheet and growth can outrun their liabilities, but it's never a guarantee.  A solid balance sheet gives the company and investor time to react to market realities.

In the end I want my portfolio to be like the electrical grid.  I want it to be able to withstand a few trees falling and a hurricane in Florida without a blip in New York.

If only a company did... then things would be better

I have a family member who believes there is a deep liberal conspiracy to smuggle illegal aliens across the border and dump them with senior citizens.  At the same time I have another family member who believes that if it weren't for those pesky conservatives they'd have pristine bridges, commuter rail, free college and whatever else they can dream up.  Maybe you can relate to one of these, or maybe like most you are chuckling at the absurdity.  The devil is in the details you say.  But what's interesting is that often investors will tout equally outlandish theories about companies, and no one bats an eye.

How often have you heard someone say "X company just needs to initiate a buyback" or "Management is a bunch of idiots, anyone could run that failing division" or "we need an activist to unlock value" or "they should sell" or maybe "they should acquire."  The list goes on forever.  And just like the wild political takes a simple capital markets act will magically make everything better.

Maybe it's just Mr Market that's like this, and you aren't.  But I doubt it, every investor does this, myself included.  We think that a few simple acts can just change the trajectory of a stock.

But let's step back.  Why is a division, company or a stock in a slump in the first place?  I look at slumps in stocks/companies (anything?) through a sports analogy.  We always love to make fun of last place teams.  But those teams with the worst records are made with players who are some of the best in the world.  Sure, a few duds might have snuck through, but there are others who have hall of fame fabric.  So why does a team do poorly? Do they wake up and say "we want to lose."  They all go out and play four quarters like everyone else.  How are they so bad?

Companies are the same.  Why does a division underperform?  Why is a company sub-par?  Do employees show up at work and proclaim "I love underperforming today!"  Of course not.  In many cases employees might be thinking they're doing a great job.  They might be exceeding expectations.  So what is it?

Most of this stems from our inability as outside investors to appreciate the nuance of a situation.  Maybe a division is underperforming because management fails to motivate employees.  Different managers who are motivational might be able to turn something underperforming into something outperforming.  But we just don't know.  Likewise it might seem foolish for a company to be hoarding cash.  Why would a company without investment opportunities save money?  What we might not know is that management had experience with a nasty downturn and wanted to make sure the company survived going forward.

My point is as outside investors we really don't know or understand the reasons for what's happening.  But insiders do.  They know why something is dysfunctional, and they know why the problem can't be fixed either.

These simple fixes we toss around as investors aren't new to management.  I sometimes laugh when I see activist proposals.  I think "I'm sure management has never considered buying back stock, they'll probably be so happy with such a great suggestion."  In a few rare cases there are managers who have their heads firmly in the sand.  But just like everything else, there is some underlying, and almost guaranteed unspoken reason why the action hasn't happened to date.

Does this mean all hope is lost?  Not at all, but we shouldn't hope for simple things either.  I could fill an afternoon sharing stories of activists who had a simple fix for a company that turned into a quagmire once they won and became involved.  As outsiders we don't know why a situation is what it is, but we should know that fixes aren't simple.

Does this mean we should avoid companies that are a mess?  If they aren't trading at a discount for the mess then I'd stay steer clear.  Why invest in a mess when you can invest in something pristine for the same price?

What this means is there are no simple fixes for companies, just like lower/higher taxes won't magically fix the nation.  The fixes required to unlock value are difficult, time consuming, and costly.  But if the discount is deep enough then they're worth it.

Success is only obvious in hindsight

My close friends and family will usually claim I'm "crazy" or "march to a different drum".  What they're saying, or so I hope, is that the challenges that excite me are far from normal.  And that's how I found myself attempting to backpack 100 miles through the mountains in less than 50 hours.

I've always been fascinated with endurance events.  Riding a bike across the state, ultramarathons, canoeing the Ohio river.  I've always been active, running, skiing, hiking, backpacking.  I started to dip my toe in the endurance waters in 2012 when a friend and I biked the State of Maryland in 60 hours.  It was a good intro, some of the trip was incredible, some monotonous, some a challenge, but enjoyable overall.  It was a good accomplishment, 200 miles in 60 hours.

Biking was one thing, but distance walking was another.  The event I walked in was in the Allegheny National Forest, an area of close to a million acres an hour and a half north of Pittsburgh.  The goal of the event was to walk the length of the North Country Trail segment that went from the north border of the forest to the south border.  The trail, a 4,000 mile monstrosity, has 100 winding and hilly miles in the forest.  You start at 1,200 feet, hike up 12,000 feet of hills and down 12,000 feet of hills to end at 1,200 feet in elevation at the end.  The challenge was to complete this hike self-supported.  There were no aid stations, no volunteers, nothing, just you, you're gear on your back, and a lot of miles.

About 20% of the people who attempt this finish.  Maybe one reason friends consider me crazy is I looked at this and said "oh, 100 miles in 50 hours? That's just 2mph at a constant pace, seems easily doable"  Uh huh... but what about sleep and eating! Well, there wasn't much sleep, and I ate as I walked.

What I worked out was that for every minute I was stopped I had to increase my average speed slightly.  That might not be bad in the beginning, but after walking 60 miles?  I determined to not stop except when completely necessary.  I slept about five hours total during the event and was moving the other 99% of the time.  Was it worth it?  It definitely was, I finished with two minutes to spare.

Over 50 hours my margin of safety was 120 seconds.  I have thought about that two minutes considerably since I finished.  What if I had dawdled at a road crossing an extra minute?  What if I took a little longer to filter my water?  What if I had sat on a rock for a few seconds a half dozen times.  There are so many variables of things that could have happened to eat that margin that it's crazy.

I trained for months for the event.  I ran considerable distances.  I woke up at 2am and would hike 30 miles in the middle of the night so I knew the feel of being in the woods at night.  Sometimes before bed I'd put on my backpack and walk a quick two miles in the dark in the neighborhood, just to get more miles in.

All of this training helped, but I was never assured completion until I crossed the finish line.  I had doubts I could complete the event up until I crossed the finish.  As a participant it was never clear I'd complete it.

To outsiders it seemed abundantly clear I'd complete this.  Afterwards my wife, kids, parents, friends all said "oh yeah, we expected you finish."  This expectation was based on my stubborn drive, and training.  But they weren't out there walking with me!

I don't know if that hike will become a lifetime achievement or not.  Maybe I'll do something wild and crazier in the future.  But what I do know is that for now it has taught me a lot of life lessons.

When I look at companies that the market has labeled "successful" I think back to my hike.  To outsiders it appears that all of the preparation will guarantee success.  When success happens everyone nods in agreement because it was expected.  But when failure occurs people are shocked.  How it this happen?  It happened because success is only assured in hindsight.  To the players involved there are a million variables, a lot of tiny stops eating up seconds that are digging into that two minute margin.

As outsiders we never see these challenges or struggles.  Even worse, as outsiders we tend to minimize these struggles.  It's not a single struggle that brings down the endurance athlete, it's a culmination of events.  Your feet hurt, your legs hurt, you get tired, you don't eat enough, your brain tells you to stop.  What was the specific event that killed the race?  You can't identify one, it's a number of things working together.  And failure in the business world is the same.  It's a culmination of many decisions working together.  Sometimes there is a single reason for failure, a big giant mistake.  But usually it's dozens of small decisions that at the time looked like the right decision that when assembled in hindsight result in failure.

Success is just like failure, a combination of multiple variables put together in a very specific way.  You can increase your odds of success by doing things correctly, but it never assures anything.  And you can increase your odds of failure by doing everything wrong, but you might succeed!

This is why I think success narratives are nothing more than false hope.  Getting up early, or drinking coffee with butter, or reading 500 pages a day assures nothing.  Even worse, if you adopt a task some successful person has deemed important, and your journey isn't the same as theirs the task might be harmful instead of helpful.

If you ask any successful person what it felt like on their journey they'd echo what I wrote above.  They were never quite sure they'd make it until they made it.  At times on the journey it feels like success is assured, but at other moments it feels like failure lurks around the corner.  It's a constant battle you fight, and if you stop fighting you fail.

I don't have any great wisdom on what it takes to be successful.  My only parting words are this, find the destination you have in mind and determine what variables will make a difference.  Then focus on those variables as you move forward.  Good luck might find you and give you a boost.  But it's always a possibility that misfortune finds you as well and derails your plans.  Either way, you won't know until you set a path, work to execute it and see what happens.