Ask Us Anything: Should people go to uni? + Adir's FAVOURITE PC Games Ever

0:00I'm Adam Schwab. I'm Adir Shifman. And this is The Contrarians with Adam and Adir.

0:07And we're back. Ask Us Anything, episode 133. Michael, chief question, Aska, over to you. Well, I wanted to ask a question this week because I think a lot of people in my age group are thinking about this at the moment around going to university because I went to university for an undergraduate degree, but I've never really felt as though my degree has been useful in me getting a job or starting a business. I'm curious about where you guys are at the moment with your thoughts on universities and whether you think young people should go to university anymore. I do. The man with the medical degree.

0:51I'll hand this one to you to start. Aren't you going to start with your, what's that dude that pays you not to go to university? Peter Thiel fellowship. Peter Thiel. And you're going to start with your Peter Thiel fellowship dissertation. I was going to put that in at some point. We're going to provide general advice. I think it's very personal, this question. Yes, I went and did a medical degree. It was maybe not the greatest use of taxpayer money. It was good use of my time. I was very happy to do it. I think if you're planning on being a doctor, it would be very good to go to university. I'd strongly suggest not trying to be a doctor without going to university.

1:23but for most professions you don't really have to go to university in order to do those professions a lot of things are called professions now I don't know if they like this word profession is a very confusing word now as well and so like yes doctor lawyer probably accountant you probably have to learn numbers and how accounting works accounting is its own discipline but I think that for most and maybe then we can go into some of the social sciences like if you want to be a psychologist, I think you need to go to university and learn some theory about psychology. But the vast majority of people that I come into contact with, when I say to them, if I ask them, what did you study at university slash did you go to university?

2:05There are two things that become, that stand out. One is a very significant number of the people that I think are the best quality people in, even in relatively technical disciplines like coding, they did not go to university. And so I'm not sure university, I mean, I'm saying this and my son is going to study computer science at university, but I'm not sure university for coding is necessary if that's what you want to be and that kind of thing. So that's one observation that, like, many people haven't gone to university that are some of the best people I know. And the second thing I'd say is those that did go to university, it's incredible how many did some form of a liberal arts degree and basically whatever they're working in and whatever they know has got no relationship whatsoever to what they studied, which I suspect is like your pitch, Mike, right?

2:46What did you study? I studied media and communication, so I have a Bachelor in that. Well, you are kind of doing media and communication. Yeah, that's a true point, yeah. Yeah, but it was definitely more liberal arts focused than actually practical, like using gear and equipment and that kind of thing, which I think is a more valuable skill actually to have. But it's got a technical aspect to it. So far what I've said, I suspect Adam will agree with most of it and so now let's diverge. and so you've asked so the question is like you're asking from the perspective like of like the individual and i've talked about vocational outcomes but i happen to think that there was a time and this i'm hesitant because now might not be the time anymore but there was a time that i think going and doing a liberal arts degree it made you a more well-rounded person and it would give you a better passage through life and maybe you pick up some wisdom and also might buy you a few years of time and I think it was good for the human being and the human soul.

3:48What subject specifically do you think, like does sex, drugs and rock and roll help one be a rounded human? I'm not sure that's a degree you can get. That was a subject. People did it, when I was doing law and people did arts law, they all did that. And they did that in one part of the course. They did that in their recreational time. It was an elective. No, no. It was a subject they chose. Sex, drugs and rock and roll? Yep. Arts subject. I can't comment on that. But I do think, like, I think that learning, like, history, for example. By the way, history is not very much studied anymore. But learning about.

4:22Can't go to Wikipedia? Learning about history. Can't go to the hassle? Yeah. And so I think, like, I don't know how to respond to that. I think learning about history is very good for the individual and for liberal democratic societies. And I support that. My problem today is. There are students who are protesting. Well, this is my problem. Like almost all are, how they learn with history. I'm less concerned. Well, they haven't learned the lessons of history. I'm less concerned about art students and more concerned maybe about faculty. That's my bigger concern now. You can't split the two. But that's my concern.

4:54Because I think it's a minority of students, but I'm not sure it's a minority of faculty. I don't know. It's all the faculty. And so I think my concern is that a very big chunk of university is not necessary vocationally. but I thought it had a lot of value outside vocational orientation. And now I really question whether the value for that is still there in the current liberal democracy, you know, tertiary environment in which we live. That's my concern. And so I would not make it an automatic choice to go anymore. I think, just to be a bit nuanced on your initial point, I think there's, should you go to university?

5:31But the point, the question is, should you, there's a lot of occasions, be it medicine, be it engineering. that it's university or tertiary education is non-negotiable because you can't build a house and not have the relevant understanding of engineering concepts so there's no question you need some sort of tertiary education for medicine and for engineering and for there's a there's a bunch of different vocations the question i think though is should you do something that requires you to go to university i think is probably the the question i think mike was almost getting at is as you said there was there's plenty of things you can do and computer science is a big one that doesn't actually need you to go to university at all and you can make a huge amount of money you can have huge amount of value um so the question is should you be doing because university there's don't forget there's multiple taxes with university there's a tax on there's a cost and university's been incredibly expensive if you're doing a medicine how much the medicine degree cost now do you i don't know i think my hex when i did it was laughably low it had to be hundreds of thousands of dollars i would have thought for medicine now right yeah i it was significantly less than 100k when i did it yeah that was a long time ago yeah it was like 20 plus years ago and like the thing is it was just it was not cheaper it was just more subsidized by the government so you've got a huge tax and you in most cases you end up with this huge debt so there's a huge tax on you for 10 20 30 years so you got that but don't forget the tax of time if you're doing a three four five year university course that's and let's say average wage now is I caught 100K for someone who will be doing a course.

6:58Then you add that up, you're getting pay rises and the delayed opportunity cost of pay rise. That's upwards of a million dollars in, it's called remuneration cost as well. So the cost of going to university is very significant, the actual cost and the opportunity cost. So you've got to factor in, do I do something, a computer science degree or whatever, sorry, a computer science non-degree, or do I do a degree that has this huge cost that you're bearing? I think that the whole fraud is the US and Australia's not as bad, but the whole US branded college system where they charge you$250 ,000,$300 ,000 to get this certification that you enter at not even Ivy League school, you're paying that much for non-Ivy League.

7:37That whole house of cards is really collapsing at a great rate. Leaving aside the whole political bias that exists in these universities, I think the whole notion of you need to spend all this money to get this university degree to maybe you get paid more five years later. That's a huge gamble that I think people are now starting to realize isn't a particularly wise one for a lot of people. And I would say, though, statistically, tertiary educated people are higher income earners overall than non-tertiary educated people, statistically. Is that causation correlation? Could these people be higher income earners regardless?

8:11No, it could well be. By the way, it's why I don't support getting rid of HECS and just wiping everyone's debt. because they're the future wealthy, right? It's Green's madness. I would say, did you take a year off, Mike, before you went to uni? No, I didn't. So I think my advice would be, it's the advice I gave my kids, is if you get the marks to get into uni, sign up for a degree that you think is going to be worthwhile for you, but defer it and go away for a year on a gap year. It can be a working whole. That's even more opportunity cost. Well, I don't think it is. Like I think the personal growth that you experience.

8:48No, sorry, there's opportunity. Your question is you get some benefit that overrides the cost. It's clearly the cost. The cost is$10 ,000. So, yeah. But so you do it, yeah. You do it, let's say, a working holiday. You go and travel the world for a year. I think the benefit massively outweighs the cost. And I think also it gives you a level of maturity and perspective that is much more than just one being one year older. and it gives you more perspective to look at university and say, is this actually the right decision for me to be able to make? Now that I know there's all this other stuff going on in the world, I think the main problem with university is you finish high school, you've been in this structured academic environment and now there's a carrot being waved at you, which is completely consistent really with the structured environment that you've known for the last 13 years of your life.

9:33I think that's the problem. You need to take that year off to see how much more of the world exists beyond this structured academia. When we talk about branding and there's almost no better brand than certainly Ivy League US colleges and to an extent called the Big Eight in Australia, their brand, they've managed to con millions of people that spending four or five years and effectively millions of dollars essentially is a smart thing. And I think in many cases, it's not a smart thing. If you want to be a doctor, of course, you've got to go do this. There's no question. And certainly other vocations.

10:01But I think for the majority of people, you're just paying for a brand so you can tend to be You're smart and gloat to other people I went to. I did law at Melbourne or whatever. Well, you're paying a big price for that, a huge price. I'm not sure that price is worth it. On the flip side, my last comment is the reverse to emphasize the point. It's amazing how many founders I meet that went to university and studied a commerce degree and they have no understanding whatsoever about how margins in their own business work. They don't even know where to begin. Like I don't know what is being taught in commerce degrees.

10:30Well, it's not that. Like I feel like I want to teach a degree, which is this is how to make money. That's cool. That's an entrepreneurship and that's completely, what's the word? Antithetical. How about that? That's a good word. Antithetical. Antithetical, yeah. That's the word I was looking for. So it's highly antithetical to what you're trying to achieve. So yeah, I think if you want to be a founder, go and be a founder. And Peter Thiel has proved this beautifully. So yeah, great question, Mike. That is why you're the chief question asker. On to question two. This one comes in from George via the pod page.

11:02in recent episodes there has been a great discussion about both the AGM process at Catapult from Adir and also the legal profession fees value assessment etc given the recent AFR article about luxury escapes hiring Macap for a partial sale it would be interesting to hear more about this process what is involved and how do the guys think about which bank to hire Who's doing a partial sale? We are. You could see you reading the street talk on Luxury Escapes articles very closely out here. I didn't say that. Thanks for the interest. Where was that? Two weeks ago. Oh, well, it was away probably. What did it say?

11:43Tell me in. Oh, so we're – this is obviously leaked. We certainly didn't tell Sarah this, but we're a couple of shareholders. Gabby and Hesse, who are obviously friends of both of ours, who have been long-term shareholders in Luxury Escapes, are seeking some liquidity for their stake. They've been great shareholders of ours and been in for eight years. And this is effectively a continuation of their earlier business because we effectively bought their scoop on business. So they're seeking some liquidity. We might have a couple of other shareholders who might join in and some employees. I was giving employees the chance to sell vested equity is always a great thing to be able to let our team sort of benefit in real terms from their loyalty.

12:20So we're doing a little secondary process that Macquarie. So Mike mentioned Macquarie Capital, who have been our house banker for seven or eight years, eight, nine years now. So they're sort of running a little process for us, which is effectively a minority process because Jez and I aren't selling down. I know why I didn't say it, by the way. This is actually a serious comment. Remember when I went off LinkedIn, I kind of also, I didn't tell you this part of the story, but like I also went off news for like a week and a half because it was not good for my mental health. So I just kind of, I don't know, I know what it's called, the detox because I'm going to have to punch myself in the face if I say that word but like basically but anyway it must have been then I must have missed it then okay well very nice uh it does I mean you'll be not surprised to know that it comes as no shock to me to know that um but um how do we choose a bank you want to say how you chose that bank I mean you've used them for a long time how'd you start with them yes we used Macquarie and then we used Citi for a while and then um just Citi just had other priorities and didn't have the capacity to work on a process we were doing so we went back to Macquarie who and we were Michael Milne who was Michael was a junior a junior banker when he started now he's the big dog sort of reporting into Tim Joyce and running to TNT so he's sort of he did the air trunk stuff so he obviously works on much bigger deals than the house but obviously we've he's been loyal to us and we're pretty loyal to them but yeah so I think I think ultimately and you work with obviously Nick Sims and a bunch of people at banks so you're probably a bit and given Catapult's public it's probably a more relevant discussion from your end.

13:50Well, I'll tell you how I think about bankers and how we make choices with bankers. So when you first have a startup, if you raise money from venture capital, they don't want you to have bankers. That's fair to say, isn't it? They generally frown on. And nor would bankers be interested because there's not enough sort of money in it for them to be able to cover their costs. Yeah, because bankers are taking general, like if it's not, if it's not, we're not talking billions of dollars. They'll take one, two, three percent of like the value of a deal. So they want pretty much 100 million bucks. If a bank can't make a couple million bucks in a bulge bracket, they probably won't do it.

14:23There's a bigger bank, right? And so at the beginning when you're just trying to sell, I'll give a bit of a detailed explanation. So if you're selling a business for a million dollars, then you go to a business broker. What's the difference between a business broker and an investment bank? Size of deal. And luckily you'd say maybe sophistication or whatever, but like I've met some sophisticated business brokers and some unsophisticated bankers, but let's say size of deal is the difference. So little deal. Or you can go to our friends at Flipper. Oh, you can go, exactly. If you want to sell for$2 million and it's an internet thing and you can go put on Flipper and someone will buy it there.

14:55Oh, I think Flipper goes up. I think Blake said when he came on the show, they're$30,$50 million businesses on Flipper. I'm just starting with something small, right? So if you're going to do a few mil or smaller, you're going to have a business broker or Flipper, for example. And so if I was a business broker, they should have a way of business brokers putting stuff on Flipper as well because I think it's just a good marketplace for liquidity. And then you get bigger. and then you start saying, you know, I want to sell a business for$20 or$30 million and like putting Flipper to the side, you're probably outside the range of now a broker and you're going to start going to investment banks and these might be smaller investment banks, one-person investment bank or maybe three or four people that tend to deal with like the lower end of the market that that would...

15:42Also, would you be at accounting firms like a PwC, KPMG who do this sort of stuff as well? I think, yes, KPMG definitely, like those kind of firms would definitely do a$30 million M &A transaction as part of their advisory business. And so that's kind of, they would do much bigger stuff as well. They would all, everyone wants to do bigger stuff. And so then you work your way up. Now I went to Goldman Sachs for the dumbest of all dumb reasons, but it turned out to be a good reason, which is I just thought Goldman Sachs was the best because whenever I heard people talking about stuff on like, I don't know, I don't want to say movies because I don't really watch movies, but whenever people talked about like, who's the like i don't know remember they were once called uh what are they called some kind of face eating squid or something like that whatever it is and i'm like uh the giant vampire squid any humanity giant vampire squid i thought well you know any firm that's been called the giant vampire squid or whatever like like oh like if i'm in the big leagues if i can be a part of that and so you want to be part of it you want to be a tentacle yeah and so unfortunately i think i'm probably like the prey of the giant vampire squid but like but anyway so i kind of reached out to them because i thought it was 100 a brand-based decision what they got as a result of their brand was a very low acquisition cost me reaching out to them okay and i basically persuaded them to get involved with us and Catapult was a sexy business.

17:04And once I did that, I just, you know, I'm a relationships person, as you know, like I like dealing with people. I love interacting with people, maybe not so much in a social setting, but like in these kind of settings. And so I just became friends with Nick, who is like the now co-head of the investment bank or maybe the head of the investment bank, Nick Sims, yeah, and with other people there. And they've just been great over time and they have shown a reciprocal commitment to the relationship as well. And frankly, when I tried to do this deal for Sleeping Duck, that's who I brought in as well, and they forgave me for that debacle.

17:37But your brand had a bit of forgiveness involved. Exactly. That was my brand. And so that's why I've stuck with them, and they've been really good. And definitely it sends a message to the market when you're working with one of these big banks like Macquarie in Australia especially, like Goldman Sachs. There's others as well. You've got JP Morgan, Morgan Stanley. There's a sort of Citibank. There's probably seven or eight bulge bracket. That's right. But ultimately, the reason that I've stuck with them is because of the relationships with the individuals and the service that I've had. That is why I've stuck with them.

18:11If Nick goes back to UBS, would you follow him? I'll be shocked considering he's a global partner of Goldman Sachs. Obviously, he's not leaving Goldman. But let's say he did. Let's say he started his own firm. He started a Caliburn-style firm. The person that I was dealing with most at Goldman Sachs, because Nick is not my day-to-day contact there. Relationship partner. Yeah. But the guy that was my day-to-day, he left and went somewhere else, and I certainly didn't follow him. Okay. And so I stayed at Goldman Sachs, and somebody else came. And so he's now – Adrian Lee came, and so he has now been terrific.

18:43But then on the flip side, what you've also got is banks that – because Goldman Sachs is very big, and I think when Catapult was$200 or$300 million, quite frankly, we wouldn't have received the love that we received if not for my relationship with them so then i got to know cam ray who's the husband of um courtney the daily blooms founder and he is one of the partners at lazard and then i got to understand actually they specialize in like renewables and they actually did the i think i can say this like they did the instant scripts transaction and like they've got and so yeah and cj obviously was goldman's that's originally so That's right.

19:18And so I think, and you know, you know, pretty well, right? And so we did a lot together. So I know very well. You did a lot together. And so I think it's a combination of somebody that will take your work because there has to be enough money in it for whatever they are. Combined with getting the best brand that you can, combined with finding a person who will prioritize you and really give you the love and the commitment. And ultimately that's what it is. And, you know, in summary, it's like all advisory businesses, whether it's a search agency or an investment bank, it comes down to interpersonal relationships, most of it.

19:53And the trick with these banks is not to allow them to devolve into transactional interactions that are all about moving and shopping and changing and trying to get the lowest price at a given point in time. I think the key is find a relationship and maintain relationships. That's how I deal with all of the businesses I deal with. There's actually a tension there. There's a tension there and it's a really interesting tension that you want to work with the best brand you can because generally the best brands tend to have the sort of hardest working people and obviously the brand. But on the flip side, you don't want to be a brand that's too big.

20:28There's no point, as you said, there's no point being a$100 million business or a$50 million business trying to work with Goldman because they just can't put the resources to your deal. Yes, that's right. So you want to pick the brand that's right for you. So it could be a small – it could absolutely be a – It could be a fantastic person who used to work at Goldie's or Macquarie and started their own shop. You're getting great quality person without the big brand behind them, but who will pay great attention to you. So I think he's got to pick the right advisor for you is almost more important than picking the biggest brand.

20:55You'd be absolutely trapped by picking a brand that's just not right. Oh, I totally agree. And also, obviously, they invite you to stuff. Like you get invited. Maybe you got invited to a Macquarie thing not long ago. I get invited to Goldman Sachs stuff, all sorts of stuff because like everyone wants the business. And like, you know, like it has to have some impact in building the relationship because we're not immune to reciprocity bias. And so like it's worthwhile. But for a reason, they're not stupid. But I think we're inviting you to tennis for no pay. Well, you and I would be very conscious of that.

21:24And I definitely think those moves, I'll just, I mean, it kind of sounds very self-serving, but I'll just be honest. Like those moves inviting me to stuff. Usually I say no because I just can't be bothered. But going along to these things, it is a nice chance to spend time with people that I genuinely like and develop the relationship further and build trust. And I think ultimately transactions, if there's a baseline level of competence, transaction comes down to trust between the parties. because the biggest risk in investment banking, and this is also equity capital markets where you're selling shares on the stock market, is I'm just one person selling something once.

22:05But the buyers are usually doing lots of transactions with the bank. And I have to be able to trust them that they're going to represent my interests and do the best for me, even though the more continuous relationship is with the other side of the transaction. And I feel like I happen to get that from Goldman Sachs, which is why I've stuck with them, right? Like the relationships. Great. On that note, we've got a quick break. Back with question number three.

22:35And we're back. Michael, question number three. All right, guys. Thanks so much. And remember, you can ask the guys anything. This one comes in from Sebastian Greenway. And Adir, you're going to love this one. It actually also, this one came into my direct messages on my personal Instagram account, so you really can reach us anywhere. Hi, Mike. I love the Contrarians pod. I was wondering what Adir's favourite PC games are. There you go. And Adam, you can obviously answer as well. Well, Adam, let's answer on behalf of Adam. You can answer, Mike. What's Adam's answer? Tetris or Pac-Man. No, come on, are you joking?

23:17Age of Empires? Is it Age of Empires? Two. Age of Empires 2, isn't it? There we go. I can play two. Two, come on. You pay no attention, Mike. What a game. Did you ever play much of three, Adam? Nah, I'm a traditionalist. One and two. In fairness, three and four did not really get much better than two. I used to love Civilization as well, and obviously GoldenEye. Yeah, so there's the classic games, like GoldenEye is a classic on the N64. But if you say to me, I'm going to say, what games will I go back to over and over and over again? Like I'm thinking, I feel like playing something that's probably like, cause I'm constantly playing new games.

23:56Right. But like, what will I go back to? I'll tell you something that I'll go back to, like whatever the latest civilization is, I'll definitely go back to that. There's now some alternatives to Civ, but like that, you know, 4X genre of which Civ is the best example, that would be very like, that would be on my list of things I would go back to at least once a year. I think the one I've gone back to most in the last three years is probably RimWorld with their various add-ons. I mean, And that is an incredibly great mechanic. But it just depends like what mood I'm in. So I might go back to like some Fallout game if I need to shoot things.

24:33I don't like shooting people so much, but like, you know, so kind of monsters and more stuff. So like if you want to play first person shooter, like the, like Fallout's a good first person shooters or like Red Dead Redemption 2 or like GTA 5's pretty old now, but that's still good. So I'll go to one of those. So they're like the classics that I might go back to frequently. And then, look, I do like city builders a lot. So I might historically have gone back to something like, so you know, SimCity. Yeah. I thought you were all about Grand Theft Auto and all that sort of red. Well, that's like a first-person shooter.

25:08There's not many genres I don't like. There's a few. I don't love puzzle games. Like my son loves puzzle games. Like Sudoku? He loves like Portal. Do you know what Portal? You would know what Portal is, Mike. Portal is one of the original games by Valve, right, that is the Steam owner. So he loves Portal and Portal 2, and he likes watching me play and struggle my way through these games. He finds it very amusing. But I'm not very good at those games, but like City Skylines was a really good game. Like that was like the modern version of SimCity that you would know, Adam. And it was really good.

25:40And then they did City Skylines 2, and it's like nowhere near as good, sadly. So I think those would be high on my list. What's yours, Mike? What are the ones you go back to? Oh, okay. So PC games from when I was younger that I would always love to go back to. Definitely Rollercoaster Tycoon, which is a – I loved that and I could spend hours. You know one of my favourite ever games? Do you ever play Monopoly Tycoon? Which was like a – No, I've played that. It's like Age of Empires but Monopoly style. Like it was real-time – what's that real-time called? Real-time strategy. Real-time strategy. I've tried to find it, but you had to build.