If one walks the city of Florence, one can still feel the vibe of the Renaissance epicenter of the 15^th century. It was the rivalry of powerful families like the Albizzi, the Strozzi, the Pazzi or the Brancacci that created astounding progress in the fields of art, astronomy, mathematics, banking, commerce and warfare. But above them all was one single family that finally ruled them all: the Medici.

It was Giovanni di Bicci de’ Medici who would begin the great dynasty by making a fortune in the wool industry, establishing the Medici bank in Florence with branches in Geneva, Venice, Naples and eventually becoming the trusted banker of the pope in Rome. While everybody knows Lorenzo, called “the Magnificent”, for his outstanding ability to spot artistic talent, it was his grandfather Cosimo, son of Giovanni di Bicci, who positioned the Medici as the dominating family in the capital of the “Rinascimento”.

“Cosimo the Elder”, as he was known, obtained the title of “Gran Maestro” of Florence in 1434 after returning from exile (forced by rivaling Florentine families) and expanded the Medici bank all over Europe with branches in Pisa, Milan, London, Avignon, Bruges and Lübeck. In a clever way, the same branches served also as wholesale trading hubs for spices, textiles and other valuable goods magnifying the Medici banking fortune. But the Medici weren’t just shrewd businessman and politicians, they also had a deep interest in art, architecture and science backing illuminati such as Brunelleschi, Michelangelo, Leonardo da Vinci and even Galileo Galilei.

The Uffizi, the Boboli gardens, the Medici chapels of the Basilica of San Lorenzo are all testimony to the artistic greatness and vision of the House of Medici. Even the Palazzo Vecchio, build much earlier in 1299, prospered greatly when the young Medici Duke Cosimo I made it his residence in 1540. One of the most ambitious projects for the renovation of the palazzo was the “Sala delle Carte Geografiche” (the so-called hall of geographical maps), where Cosimo I wanted to showcase his deep interest in geography and manifest his grip on the entire world. At the end it was completed only in part.

Even today one can admire the 53 maps conceived by Giorgio Vasari and painted by Stefano Bonsignori and Egnazio Danti, the Dominican friar that created also the beautiful big globe at the center of the “Sala delle Carte Geografiche”: the “map mundi”. Head to Florence if you want to experience the Medici’s version of “Google Maps”.

If Sam Walton wasn’t diagnosed with bone cancer in 1989, his autobiography “Made in America” would probably not exist today. The media-shy founder of Wal-Mart would have been busy flying his Cessna twin-engine-plane around the country, chasing new business, and opening new stores. Writing his life story with John Huey from Fortune Magazine would have been probably dismissed as a complete waste of time. But his sickness made the 1992 book possible.

Walton was a true maverick, a man who enjoyed shaking things up and create a “little anarchy” from time to time. His early Saturday morning manager group meetings were legendary, and the main idea was to “let everybody know what was going on and let everybody be aware of the mistakes we made”. If he wasn’t out there taking care of his staff and customers, you could see him walking around stores (often those of his competitors) scribbling notes on his coffee-stained yellow legal pad. He wasn’t much of a stock market CEO either and often complained about the short-termism of analysts and investors: “I feel like our time is better spent with our own people in the stores, rather than off selling the company to outsiders. I don’t think any amount of public relations experts or speeches in New York or Boston means a darn thing to the value of the stock over the long haul. I think you get what you’re worth.”

Sam was also truly great at picking the right people and giving them responsibility before they even were ready: “If you take someone who lacks the experience and the know-how but has the real desire and the willingness to work his tail off to get the job done, he’ll make up for what he lacks.” He obviously took pride in Wal-Mart’s associates (that’s how he called his employees), made them share into the profits and was big on corporate culture promoting a “whistle while you work” philosophy.

Walton even welcomed competition: “Kmart’s attack on us was probably the best single external event in Wal-Mart’s history”. Almost 30 years later Sam’s work and life ethos still lives on at Wal-Mart and if he was around today, he would certainly face today’s ecommerce giants as always: head on!

I was listening the other day to the Acquired podcast featuring Ho Nam from Altos Ventures. I loved every minute of it as Altos is applying Warren Buffett’s timeless investing and business principles while helping scale high-growth technology companies like Roblox from zero to hero. Later in the podcast Ho Nam was admiring the “70 years relationship between insurer GEICO and Warren Buffett”. I never had thought about it that way, but it’s true: what a remarkable, successful and long-lasting business marriage. That story intrigued me and so I went back reading Wedgewood Partner’s excellent case study on GEICO from 2016. To make a long story short, it was Benjamin Graham (Warren Buffett’s early mentor) that discovered GEICO and decided in 1948 – ignoring for a moment his deep value cigar butt approach – to put 25% of his partnership’s funds into this growing insurer and to become its Chairman. Needless to say that this single investment outperformed all other Graham-Newman investments combined by appreciating 500-fold until 1972. Also Warren Buffett was introduced to GEICO early on, wrote the by now famous piece “The Security I Like Best” in 1951 but sold the stock already in 1952. By 1976 GEICO had completely overstretched itself and was in deep trouble with it’s share price cratering from a high of $61 to just $2. Fortunately the “Babe Ruth of Insurance” John Byrne stepped in and brought back underwriting discipline and operating rigor. Warren Buffett was impressed with the man and invested $45 million by taking 30% of GEICO over the years to come. By the end of 1995 Buffett’s Berkshire owned already 51% and bought the remaining 49% for $2.3 billion – the rest is history. So one quick question: aren’t the best companies bought on the way up?

In March 2018, just two weeks before its IPO, Pär-Jörgen Pärson of Swedish VC Northzone published the piece “The Impossible Success Story” – a short recap of the early days of Spotify. We really love the article because it puts some lights on the dark days: when the co-founder duo Martin Lorentzon / Daniel Ek struggled to secure licensing rights from the four major music labels and had a hard time finding enough capital to move the company forward. As Pärson recounts, it was a very close call as all VCs in Europe and North America had declined to invest. Northzone, in partnership with Creandum, at the end did the heavy lifting and provided the fuel for Daniel Ek’s Spotify rocket (and yes, Sean Parker was the Chief Dreaming Officer). Some time later, Spotify had to re-invent again by shifting the whole company to mobile first which implied rewriting all existing label-agreements. Make or break. Fast forward (Q4/2020) the company is still growing with about 4% of the world population as Monthly Active Users. So, what’s next?

It’s always fun when a little idea from a random early morning run becomes real. The Tenbagger Circle was born like this. We first read Peter Lynch’s “One up on Wall Street” at the turn of the century and a couple of years later we had the good fortune to make a sizeable investment in a company that not only continues to solve complex health-related problems, but in its journey achieved also the so called tenbagger status. And they are not done yet.

Tenbaggers don’t come as an overnight success. The ride is often pretty rough. A good story with good people gets periodically shaken by setbacks and bad news. Gains evaporate. Even mighty Amazon lost more than 90% of its value after the burst of the internet bubble and needed almost a full decade to recover. But Bezos won big by focusing on the customer and neglecting the share price noise. Victory doesn’t come easy, neither for the outstanding company builders, neither for the very few investors who hang in for the long-term. Both have to have a deep-rooted conviction that their company is destined for a bright future. Most CEOs and investors come and go, but a selected few have the stamina to be part of something outstanding.

Lately we have read Peter Lynch’s book again. Twenty years later his advice is still timeless. Wouldn’t it be great to have a chat with somebody like him? That’s why we are reaching out to you. Are you interested to join the Tenbagger Circle and share your special tenbagger story?

We would love to hear from you.