John Tough, Energize Capital: Why Climate Tech Entrepreneurs Deserve a Specialist Investor
John Tough is Co-Founder and Managing Partner of Energize Capital, a Chicago based climate software investor focused on the intersection of software, services and the energy transition. Since founding Energize, John has built one of the few specialist firms backing companies from Series B through to profitable growth buyouts across climate, industrials and built environment.
In this episode John traces his career from bioethanol banker in Chicago to Kleiner Perkins investor to operator at Choose Energy, and explains why that combination of finance, investing and operational experience became the blueprint for Energize. We explore what it really means to build a specialist firm, why John believes generalist investors are leaving the climate market at exactly the wrong moment and how AI is creating an entirely new wave of budget for the companies Energize backs.
Key themes from this conversation:
- Why climate tech deserves a specialist investor and why John has never doubted that conviction
- Building a world class firm from Chicago without the Silicon Valley playbook
- The co head structure that shapes how Energize makes decisions
- Being early is being wrong — how Energize uses proprietary data to know when to lean in
- Why AI is creating the fastest emergence of budget in Energize's history
- Decision making frameworks and the power of knowing who to call
- Career advice from John to his 21 year old self
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Transcript
I was like, there has to be more innovation somewhere in the ecosystem.
Speaker B:Right.
Speaker A:Grain silos being converted can't be the future.
Speaker A:I think I was pretty bearish on Europe most of my career until the last three to four years.
Speaker A:And it's very clear that Europe has a huge part of the energy transition and climate story.
Speaker A:We thought the executives, the entrepreneurs deserve somebody to scale with them.
Speaker B:Right.
Speaker B:Was there ever a moment after you found it energized that you sort of doubted that you'd made the right decision?
Speaker B:Hello and welcome to reedcast, a podcast series sponsored by Reed Partners, featuring founders and thought leaders in the private markets industry.
Speaker B:I'm your host, Scott Church, a senior partner and co founder at Reed and.
Speaker B:And I am so happy to be able to welcome our first guest for our inaugural Recast series, John Tuff, John's co founder and managing partner of Energized Capital.
Speaker B:How are you doing today, John?
Speaker A:I'm great.
Speaker A:Excited.
Speaker A:I'm excited to be the first one for this and see where we can take it.
Speaker B:We really appreciate it.
Speaker A:Yeah.
Speaker B:Maybe a quick bio before we get into your career journey.
Speaker B:John oversees all aspects of the energized business as a member of the IC and on boards of several investee companies.
Speaker B:His career spans over 20 years across finance, investing and operational roles.
Speaker B:He's been focused on the ongoing integration of new technologies into the critical infrastructure and resource industries.
Speaker B:Prior to Energize, John was an early employee of Choose Energy, ultimately scaling that business into one of the largest online energy marketplaces in North America.
Speaker B:As chief Revenue Officer, he then managed a successful sale of Chews to Red Ventures.
Speaker B:Before that, John was an investor at Kleiner Perkins, an obscure venture shop you may have heard of, where he focused on investments in the intersection of technology and energy.
Speaker B:John started his career in investment banking with UBS in Chicago.
Speaker B:He's a Duke undergrad, we'll forgive him that.
Speaker B:And got his MBA at Chicago Booth.
Speaker B:John, welcome to the show.
Speaker A:Thank you.
Speaker B:I thought maybe a good place to start for our listeners is just to describe energy capital.
Speaker B:Bit the business and what you're doing there.
Speaker A:Sure.
Speaker A:So Energize Capital is a firm focused at the intersection of software and services and the energy landscape.
Speaker A:The name is Energized, so energy is a big part, but we also think that within the climate theme, there's other industries like industrials, agriculture, built environment, where we focus.
Speaker A:In general, we see that there's a megatrend occurring with the digitization of our more traditional industries.
Speaker A:And we want to be the specialists that serve those markets.
Speaker A:So we've established a firm and I can give more of the history shortly that looks to capitalize with financial capital, thought capital, strategic capital, the best stars of the space.
Speaker B:Got it.
Speaker B:Super interesting.
Speaker B:And maybe then just in the background of building up to this part of your career, why don't you walk us through a little bit of your career journey, if you will.
Speaker B:That brought you to the vision of founding Energize.
Speaker A:Yes.
Speaker A:So I began my career here in Chicago, which is where we're having this today, at UBS Investment Bank.
Speaker A:I was a biology and chemistry undergrad.
Speaker A:And how does you know biochem undergrad.
Speaker A:Show up at UBS Investment bank in their industrials group, and the answer is the Midwest was the first wave of Clean Tech 1.0.
Speaker A:The first wave here in the States was bioethanol and those types of fuels that were being converted from old grain silos into production plants for E85 gasoline.
Speaker A:And so the banks were coming to Duke University to look for kids who understood biology, who could write S1s and take them public.
Speaker A:And so I came to the Midwest, never having a connection here, spent a few years learning the heavy depths of finance and had a tremendous experience, but quickly realized that wasn't the future of the energy transition of the climate movement.
Speaker A:And I was like, there has to be more innovation somewhere in the ecosystem.
Speaker A:Grain silos being converted can't be the future.
Speaker A:And so after I decided to go to business school to learn more of that traditional finance, and quickly in that experience, I applied to and got a job at Kleiner Perkins, which you mentioned.
Speaker A:I had been dreaming about going to the west coast or being around the innovation cycle.
Speaker A: And this was back in: Speaker A:And so I said yes midway through my first year and went out there and started working.
Speaker A:And I've been in the space ever since.
Speaker B:Awesome.
Speaker B:And how did your experience with kind of climate 1.0 inform your vision for Energize?
Speaker A:Yes.
Speaker A:So by seeing the hardware cycle of that more Clean Tech 1.0, and then by going to the West Coast, I saw just how nuanced and different the climate industries are.
Speaker A:You know, energy industrials, these are critical infrastructure industries.
Speaker A:Yeah, they think differently, they think about risk differently.
Speaker A:You need to understand them as a customer to better serve, understand how to sell them software and digital tools.
Speaker A:And so the lessons I learned were just that it's.
Speaker A:This space is different.
Speaker A:It requires specialty, requires expertise to know how to serve and grow these companies.
Speaker A:And I also learned that there are some amazing Tools that the more digital and traditional venture capital growth equity firms in the west coast have used to grow.
Speaker A:And so I want that experience of both clean tech, climate, tech investor, but also really understanding the technology landscape out West.
Speaker B:Got it.
Speaker B:And I suppose your role as an operator at choose also informed this whole venture, right?
Speaker B:Energize.
Speaker A:Yes.
Speaker A:So Kleiner Perkins is an amazing firm.
Speaker A:It's one of the most important firms of the technology landscape.
Speaker A:It's also extremely humbling for a younger investor.
Speaker A:Every entrepreneur that comes through the door was generally coming for the logo behind me.
Speaker A:Right.
Speaker A:Not.
Speaker A:Not to talk to John.
Speaker A:And despite how, you know, ambitious I was, and, and I quickly realized what they wanted was a sparring partner.
Speaker A:They wanted somebody who had been an operator, who had been in their seat to really, you know, go through the nuances and the doldrums of running a business.
Speaker A:The highs and the lows.
Speaker A:So after a few years at Kleiner, I helped lead an investment into a firm called Choose Energy Online Energy Marketplace.
Speaker A:Joined as the second employee.
Speaker B:Yeah.
Speaker A:And wore every hat in the organization for over the course of six years, including Chief Revenue Officer.
Speaker A:I learned tremendous respect for an entrepreneur.
Speaker A:I earned tremendous respect for the capital markets and having to raise funds and ultimately about how to sell a business successfully.
Speaker A:And I used that experience to then think about, what do I want to do next?
Speaker A:And I said, I'll never start a company again.
Speaker A:Well, then I started Energize.
Speaker A:So here we are.
Speaker B:Was there ever a moment after you founded Energizer that you sort of doubted that you'd made the right decision?
Speaker A:I.
Speaker A:The belief of Energize is that the climate entrepreneur and executive deserves a specialist.
Speaker A:Like, at our core, it's that there are firms, every industry, health care, finance, finance markets, there are investors that have served those domains.
Speaker A:And so I really always had conviction that this climate space deserve a specialist.
Speaker A:Now did I doubt it?
Speaker A:Of course, you know, the highs of entrepreneurship are so high and the lows are so low, as you know, also from.
Speaker A:From your experience.
Speaker A:And there are moments when you just wonder, you know, it's a very cyclical industry.
Speaker A:It has regulatory influences, and even me, who has that experience can, you know, can question.
Speaker A:Man, this is pretty hard.
Speaker B:Yeah.
Speaker B:Well, I suppose the other challenge in building a firm like Energize is, is you're shaping a culture.
Speaker B:Right.
Speaker B:And a mindset.
Speaker B:Maybe talk about what your North Star is in those areas.
Speaker A:Yes.
Speaker A:You know, the.
Speaker A:The most important part of a investment firm is the decisions we make.
Speaker A:We don't make a product that is, you know, you can make a facility or anything like that.
Speaker A:Our, our decisions are the product.
Speaker A:And so I go back to there are so many different stakeholders involved to making a decision at an investment firm.
Speaker A:You have your internal team, you have the executives or entrepreneurs you invest in, you have the limited partners.
Speaker A:And so really early on, I made a framework for our team.
Speaker A:We called our ethos and our order of operations which is defining who's the most important in that stack.
Speaker A:And for us it IS team, entrepreneurs, LPs.
Speaker A:So if the LPs out there, you know, I'm sorry, but you're last in the stack.
Speaker A:The way it works is if we take care of our team, we build a great culture, we, we build a great culture of respect, we'll find great entrepreneurs and we'll support them entrepreneurs if they perform.
Speaker A:Ultimately it's their job to deliver returns to our US and our LPs.
Speaker A:And so it's a very natural stack.
Speaker A:And where I've seen investment firms in my career have missteps, it's when they've mixed up that order.
Speaker A:And so we are extremely laser focused on team first, culture, respect and trying to incorporate what we say is quality is contagious.
Speaker A:So every level of the organization has to be top tier.
Speaker B:And are there things from your past experience when you came into building Energize that you knew you absolutely wanted to change without disparaging any of your prior stops?
Speaker A:No, I think it's a great way to frame the question which is being different is not better or worse.
Speaker A:When we have CEOs come and change leadership at some of our companies, which is a natural movement.
Speaker A:When companies scale, I always tell them, you can go make a change and you don't need to disparage the prior because being different is not better or worse, it's different, it's what works for you.
Speaker A:And so when we launched Energize, just to be clear, we are based in Chicago, people said to start an investment firm you'd be in New York or you need to be in the west coast to be focused on climate, you need to have ties to Silicon Valley and be part of the university ecosystem there.
Speaker A:It was really important for me to say, let's take away all the priors.
Speaker A:Let's assume that we're going to build a world class firm patiently, over 20, 30, 40 years.
Speaker A:What are the most important things?
Speaker A:And for us, what I kept or what I decided not to keep were some of those fake requirements that others had shared, like vocation, et cetera.
Speaker A:And Then we've really focused on building a team from within now.
Speaker A:So that's another one.
Speaker A:People said go hire 10 senior people.
Speaker A:Well, if you know our team, we have grown together.
Speaker A:It's been the exact same leadership team for almost nine years.
Speaker A:We are growing together.
Speaker A:We'll be together for another nine to 20 years.
Speaker A:And that's the really important part for.
Speaker B:Me in building that team.
Speaker B:Was there a key hire or hires that were really transformational in your efforts to do that?
Speaker B:Get it off the ground.
Speaker A:Yes.
Speaker A:There's a fun story within our firm.
Speaker A:So we have two co head structures going back.
Speaker A:We have two strategies that energize capital.
Speaker A:We have a venture capital strategy focused on emerging startups, kind of series B, series C startups.
Speaker A:No technology risk, but commercialization and scaling.
Speaker B:Right.
Speaker A:That strategy today is co head by Tyler Lancaster and Juan Muldoon.
Speaker A:And we love the co head structure because Tyler came from industry, came from energy, he knew the customer really well.
Speaker A:Then Juan came from traditional investing and they get to be natural counterparts and lead a team together.
Speaker A:And so Tyler, Juan joined when I joined.
Speaker A:So like Fabric from the start we had to convince Tyler to come over.
Speaker B:Right.
Speaker A:We were like a three person shop and he was making a career decision.
Speaker A:So that was a big one.
Speaker A:But then in our co head structure for endurance and just to give a summary on endurance.
Speaker B:Yes.
Speaker A:Endurance is a more mature profile of climate investing and energy transition investing.
Speaker A:We focus on profitable control investments for climate companies.
Speaker A:So think 30, 40, 50 million of revenue.
Speaker A:EBITDA positive.
Speaker A:A different investment profile.
Speaker A:But we wanted to keep the fabric of the team structure.
Speaker A:So we have a co head entity there.
Speaker A:Kevin Stevens comes with more energy background.
Speaker A:Alan Glass, who's the pivotal hire, which this is the long answer for, just joined us from Vista Equity Partners and is a fantastic execution focused investor to pair with Kevin.
Speaker B:Right.
Speaker A:So there are these big moments that we've made in our history to really invest in the team and we think it starts with leadership.
Speaker B:Sure.
Speaker B:Makes sense.
Speaker B:So it's not completely organic, but that's kind of the correct.
Speaker A:Most of the team has built their career here at Energize.
Speaker B:Yeah.
Speaker B:When choosing the strategy and the nuances, you've explained some of it across the venture and the later stage investment strategy.
Speaker B:How much of that is what you really enjoyed and have passion about and experience in versus what your read of the market was?
Speaker B:They really need this.
Speaker A:Yes.
Speaker B:And they're not getting it elsewhere.
Speaker A:Yes.
Speaker A:Fantastic question.
Speaker A:When we started Energize, the market was pretty nascent for climate companies.
Speaker A: table climate company back in: Speaker A:There are few in farbage.
Speaker A:So when we launched the firm, it was.
Speaker A:The first strategy was ventures, because that was the state of the technology landscape.
Speaker A: And we started investing in: Speaker B:Right.
Speaker A:And that conviction that I learned from the west coast, which is be a great support to the executive team, deliver an experience from, from your operations background, and it can be very valuable.
Speaker A:The beauty of our firm is that most of us were operators in a prior life.
Speaker A:And so we just inherently early on created a vision.
Speaker A: And so as back as: Speaker A:And when the climate market matured for the energy transition, for the industrial technology landscape, we would mature with it as an investor because we thought the executives, the entrepreneurs deserve somebody to scale with them.
Speaker B:Right.
Speaker B:So in a way, you have stayed ahead of the market and it's kind of you're following the market opportunity or the market's coming towards you.
Speaker B:What would you say?
Speaker A:It would be hard to say.
Speaker A:We could push the market ourselves.
Speaker A:Yeah, I think it's really important to know timing, being early is being wrong in many ways.
Speaker A:You don't want to overinvest resources.
Speaker A:You don't want to be early to a movement.
Speaker A:And so for us, we have this really proprietary database for over the last almost 10 years now, we've sourced over a thousand companies per year.
Speaker A:And so we've been able to identify all the key metrics of maturity, of scale, revenue, profitability, growth rates, customer health.
Speaker A:We have this huge backend system at our firm called Edge, which captures all that data and it's told us when to lean in.
Speaker B:Okay.
Speaker A:It said, hey, there's maturity, there's scale, and profit emerging now.
Speaker B:Right.
Speaker A:And so once we started seeing more of those data points, we started to create the second strategy, which is endurance,.
Speaker B:Maybe looking a bit ahead.
Speaker B:What opportunities are getting you excited now?
Speaker A:So firstly, it does still feel like, I won't say the first setting, but it feels like maybe the start of the second.
Speaker A:Baseball reference.
Speaker A:The.
Speaker A:The first movement of the energy transition was all about getting certain technologies down the cost curve.
Speaker A:Solar, wind, batteries, industrial landscape sensors, they all got really cheap.
Speaker A:And so now we can deploy those assets at scale.
Speaker B:Right.
Speaker A:Energize.
Speaker A:We focus on software and services, capitalized business models.
Speaker A:Those businesses are best at helping enable scale.
Speaker A:They're not best at helping lower the cost curve of a hardware unit.
Speaker B:Right.
Speaker A:And so what we're most excited about now is now that everything's pretty cheap, the new technologies are as cheap as incumbency.
Speaker A:It's all about how big can these industries get.
Speaker A:And just when it was already exciting enough, the AI wave.
Speaker A:Right, Right.
Speaker A:Suddenly Google became a climate company.
Speaker A:You know, Microsoft, if you're a hyperscaler, you're long energy.
Speaker A:If you're a hyperscale, you're long construction materials.
Speaker A:You have to be sustainable.
Speaker A:So the landscape of budget for the companies that we focus on just exploded.
Speaker B:Sure.
Speaker A:So that's most exciting, would you say,.
Speaker B:Is the thing that's changing the fastest right now?
Speaker B:Is it kind of AI driven?
Speaker A:I would say that it's the quickest emergence of budget that we've seen in our firm's history.
Speaker B:Yeah.
Speaker A:So that a company that, you know, if, for example, if you were in the energy transition, you were selling software to help a utility manage their grid, it was the utility, maybe an energy developer as a customer.
Speaker A:Now you have, you know, a whole landscape of the developers for data centers and people trying to do resilience.
Speaker A:And so it's, it's extremely exciting and it's metrics oriented because the profit and scale is happening in climate and, and for so long those were just not consistent.
Speaker B:What, what surprises have you had either recently or further back?
Speaker A:Yeah, so I'd say I'd put this internal as like a firm manager and external internally.
Speaker A:This is a positive surprise.
Speaker A:We put out a job posting for a senior associate role here and over a thousand people applied.
Speaker A:Wow.
Speaker A: t a job at kleiner Perkins in: Speaker A:So I think that just a, the maturity space and how talent wants to come to the space is amazing.
Speaker B:Right.
Speaker A:And that's not just us, that's the portfolio, that's the investment landscape.
Speaker A:All of these avenues are really, really positive.
Speaker A:A positive to the, to the industry and to our portfolio has been scale.
Speaker A: So our first vintage, the: Speaker B:Right.
Speaker A:Those businesses are cruising through 100 million of revenue.
Speaker A:And so when you get an underwriting wrong to the positive, it just tells you that there's change.
Speaker A:It also tells you to stick with it.
Speaker A:And so the negative surprise recently has been it's a cyclical industry and their policy can come out and kind of scare the market.
Speaker A:The beauty is if you're a specialist, which again we want to be, we know how to navigate Those cycles and know how to get ahead of them.
Speaker A:It's meant a lot of the generalist investors who are in our space and doing some later stage investing have all left.
Speaker B:Right.
Speaker A:You know, I don't want to be too proud of this, but they left at the wrong time because of all these trends.
Speaker A:There's these amazing revenue profiles that are scaling, these amazing entrepreneurs evaluations are actually fair for us relative to the AI theme.
Speaker B:Yeah.
Speaker A:So we're pretty excited about the market today, but just have to be aware that it's a cyclical space and you know, this is where the capital light strategy really pays off.
Speaker A:You can ride the highs and lows in a more capitalized strategy.
Speaker B:Right.
Speaker B:I guess in the cyclicality is probably the biggest risk.
Speaker B:Are there other risks that keep you up at night?
Speaker A:Certainly.
Speaker A:You know, the energy movement, the climate movement is global.
Speaker A:So in addition to local policies, there's international fun.
Speaker A:The tariffs for example, or trade dynamics that have emerged.
Speaker A:It is harder for some climate businesses to scale across border for those reasons and just staying up to speed in all the different nuances that could affect a business.
Speaker A:In addition to the basics like managing a team like culture, like product market fit, like pricing strategy, all these things are hard enough and climate makes it just a little bit harder sometimes.
Speaker B:Right.
Speaker B:And I suppose, are there disruptors, potential disruptors that maybe the venture gives you a window on?
Speaker A:Yes.
Speaker B:Coming up.
Speaker A:Yeah.
Speaker A:So at Energize we like to say that we're better together because of both strategies.
Speaker B:Right.
Speaker A:And so our venturous strategy, even if we're investing at series B stage, which is 5 to 10 million of revenue, you know, they're meeting everybody from two person teams so we get to see what innovation looks like, what disruption looks like.
Speaker A:It also gets to tell us where people aren't focusing sometimes and where, where like moats have been built around product or distribution at a later stage.
Speaker A:And so we definitely use that intelligence to inform our endurance strategy.
Speaker A:There's more protection.
Speaker A:But in general, this is a global movement.
Speaker A:We have a huge pipeline of companies and it would shock you the level of innovation that is starting to come to this market.
Speaker B:I bet, I bet.
Speaker B:Want to pivot a little bit now.
Speaker B:I mean your business is super exciting.
Speaker B:We could talk about that all day.
Speaker B:Want to talk a little bit about leadership and I think our audience is interested in career learnings and leadership.
Speaker B:Maybe what's inspired or you who's inspired you in terms of industry leaders that you've been impressed with or that you've tried to model your Leadership on.
Speaker A:Sure.
Speaker A:So the beauty of Energize is that we're across a few strategies.
Speaker A:And so over my career, I've been able to pinpoint firms I respect, groups I respect.
Speaker A:On the venture side, I really respect a firm called Rivet Capital.
Speaker A:They are their focus on the financial services space, Fintech.
Speaker A:And Mickey Malta, who's the founder there.
Speaker A:Whenever he speaks, I've got to meet him, so if you have a connection, let me know.
Speaker A:But whenever he speaks to you, you can just tell that he understands the role of a specialist.
Speaker A:And I think that's important at the venture stage.
Speaker A:And they've become a firm that has carved out their value there at the buyout stage and the kind of more growth buyout stage.
Speaker A:This is going to be a little basic, but it's hard to not admire what Blackstone has built despite.
Speaker A:You can be critical of the generalist approach, but they've built specialty within a generalist approach as a firm, and they've delivered scale.
Speaker A:And I think the climate market needs that partner at scale, which I'm excited to hopefully sell ourselves, too.
Speaker A:Yeah, yeah.
Speaker A:And then the third one is our space is very tied to infrastructure in some ways.
Speaker A:You know, the software we sell is going on an asset somewhere.
Speaker A:And there are tremendous infrastructure investors that have emerged the last few decades.
Speaker A:And one out of Canada, LA Case, formerly cdbq, who's a great partner of ours.
Speaker A:You just, you see how they see the future and you can get growth and value out of infrastructure.
Speaker A:That's a very unique approach.
Speaker A:So I admired all of those as firms and then admire what you've built at Reed.
Speaker B:Oh, thank you.
Speaker B:I guess as a leader, one of the challenges we all have is you can't be everywhere all at once.
Speaker A:Right.
Speaker B:How do you think about your time allocation, John?
Speaker A:This is where the team is, everything.
Speaker A:Like I mentioned, our decisions are our product.
Speaker A:And so you have to know when to delegate.
Speaker A:You have to know that you have a team you can trust.
Speaker A:Fortunately, Energize, the leadership has been together for almost a decade.
Speaker B:Yeah, it's amazing.
Speaker A:And we have the ambitions of, like I mentioned before, going for another few decades.
Speaker A:And so that trust you can't kind of overlook.
Speaker A:I would say, like I generally think of it, a matrix of is this decision critical and if we get it right or wrong, you know, can we recover it?
Speaker A:And if it's critical and you get it right, that's great.
Speaker A:But so many decisions are not that important, even if you get them wrong.
Speaker A:And so then it's about speed and in this world, there's not that many moats in finance, and so one of the few, I think, is research.
Speaker A:We can talk about that, but if I can delegate a decision and we can correct later if it's not the right decision, I'd rather encourage speed as long as we avoid the one that's critical and wrong.
Speaker B:Right.
Speaker B:That makes sense.
Speaker B:And I guess decision making being so critical, but such a critical part of the business, not everybody's comfortable speaking truth to power.
Speaker B:How do you make sure you're getting the right advice and the right information to make the best decisions you can?
Speaker A:Yes.
Speaker A:Throughout my early finance career, I was fortunate to have a lot of great mentors, and I learned the power of frameworks.
Speaker A:I think when you give a team a framework, it can be a positive crutch because it forces groups to respond without too much bias.
Speaker A:Right.
Speaker A:And so, for example, at each of our strategies, ventures and endurance, we have a framework to evaluate each company for ventures.
Speaker A:It's.
Speaker A:There's six criterion, including impact, which we have to speak to.
Speaker A:And the beauty there is we ask everybody in the team to fill it out in some capacity on a deal.
Speaker A:And to your point, like maybe a junior resource isn't comfortable coming to talk to me.
Speaker B:Right.
Speaker A:But if they are forced to put something on paper, you know, it's a good way of saying everybody's equal in this discussion.
Speaker A:If you put your thoughts on.
Speaker B:I like that.
Speaker B:That's excellent.
Speaker A:So we have, we have those frameworks that have become very helpful for us.
Speaker B:Great.
Speaker B:Maybe switching to career learnings.
Speaker B:You know, how we're all dealing in complex environments with probably too much information that we have to filter through.
Speaker B:How do you better understand a situation that you're confronted with?
Speaker B:What, what, what sort of either frameworks or processes do you put in place to, to be able to make these decisions?
Speaker A:Yeah.
Speaker A:The beauty of this job is that it surprises me every day.
Speaker A:And we are trying to grow a meaningful finance firm here.
Speaker A:And there are surprises across the team, across the portfolio, across the LP base.
Speaker A:Because of our growing scale, I've been very fortunate to meet executives in our portfolio, LPs who have the access to.
Speaker A:And my type, a person usually says, oh, let's solve this problem.
Speaker A:And I jump right to my desk with a pen and paper and.
Speaker A:And that's like the most unproductive few minutes.
Speaker A:And then I'll step up and I'll go see our CEO, Katie McLean, who's a pillar of our firm.
Speaker A:And she'll say, john, call xyz, call Paul on This topic.
Speaker A:And so I think that one of the best ways to handle uncertainty is to build a network around you for people to call when the uncertain moment emerges.
Speaker A:This isn't rocket science.
Speaker A:There are smart people in our networks who want us to succeed.
Speaker A:Which is, which is nice.
Speaker A:And knowing who to call is actually the most important part of that decision.
Speaker B:Yeah.
Speaker B:Excellent.
Speaker B:And let me ask you, what would you give as advice to the 21 year old John Tough, given your experience in hindsight benefit today.
Speaker A:So firstly I would have said go to Chicago and do bioethanol and biofuels and but beyond that I'd say, you know, only a few decisions matter in a career.
Speaker B:Yeah.
Speaker A:That really can put you on the right trajectory.
Speaker A:And I think choosing the market that we chose, which is a big massive market, climate, energy, industrials, it was, you know, it wasn't vogue for a good part of my career.
Speaker A:You know, the social, local, mobile of the technology trend was all the rage and lived in the Bay Area.
Speaker A:Right.
Speaker A:It felt very hard to stick with it.
Speaker A:And so if I would see myself I would have said, you know, pick that market, it's a big one and just be comfortable being different, be comfortable staying with it when it's not the cool thing to do anymore.
Speaker A:You know, climate isn't the cool thing it was even a few years ago.
Speaker A:And again, I love that.
Speaker A:Like to me that's when, that's when alpha is made.
Speaker A:That's when team conviction is earned.
Speaker B:Right.
Speaker A:When portfolios surprise you to the upside.
Speaker A:And so just kind of, the persistence is really important.
Speaker B:I like that a lot.
Speaker B:Okay, now a little fun for our audience to get to know you a little bit more personally, John.
Speaker B:Okay, I'm going to do rapid fire questions.
Speaker A:This is new, I like it.
Speaker B:And you can just give me the immediate answer.
Speaker A:Sure.
Speaker B:If it's really difficult, I'll let you have a few passes.
Speaker A:Okay.
Speaker B:No, I want it.
Speaker B:Okay, ready?
Speaker B:Favorite movie of all time.
Speaker A:Great question.
Speaker A:I have three, I have to say.
Speaker B:Okay.
Speaker A:Number one, Top Gun.
Speaker B:Yes.
Speaker A:My eldest son is named Maverick.
Speaker A:So Yeah, yeah.
Speaker A:Number two is Gladiator.
Speaker B:Yes.
Speaker A:My middle son is named Maximus for the lead there.
Speaker A:And then wait, I can't wait for three.
Speaker B:I got to a child's name as well.
Speaker A:No, my daughter didn't get the same number.
Speaker A:Three is actually more.
Speaker A:I have this one Bruce Springsteen concert that I listen, I probably watch on, on, you know, on TV like every other week and I will, I've probably watched the, the London concert 250 times in my life.
Speaker B:Fantastic.
Speaker A:And it's just a great way to decompress.
Speaker B:Love it.
Speaker B:Okay, you answered one of my other questions already.
Speaker B:Then how about book or film that most change your understanding or perspective on a subject?
Speaker A:Yeah, there's a.
Speaker A:There's a lot there.
Speaker A:But the one that jumps out is it's easy to look back at companies and say, of course they were successful.
Speaker A:And you don't understand the meandering perspective they took.
Speaker A:Shoe Dog by the Phil Knight story is one that just like I absolutely love because you see it how many different ways it could have died along.
Speaker A:Along the path.
Speaker B:Incredible.
Speaker A:And.
Speaker A:And just like he was, he was obsessed with the idea, but that's only so much.
Speaker A:You have to be persistent.
Speaker A:And so I just love, like knowing the grit that goes into that type of execution.
Speaker B:That's a good one.
Speaker B:Okay.
Speaker B:Cubs or Sox fan?
Speaker A:So I'm a Cubs fan.
Speaker A:Adopted Cubs fan.
Speaker A:My wife is from Chicago, so we moved to Chicago.
Speaker A:I love.
Speaker A:My sons are now Cubs fans.
Speaker B:Okay.
Speaker B:Dog or cat person?
Speaker A:Dog.
Speaker A:Like, I wish I could have like 10 dogs.
Speaker B:I figured I could have guessed that one.
Speaker B:Smoother.
Speaker B:Chunky peanut butter.
Speaker A:Smooth.
Speaker B:Okay.
Speaker B:What's your guilty pleasure, John?
Speaker A:Guilty pleasure.
Speaker A:Beyond the late night Springsteen, because they can go pretty late.
Speaker A:I would say that this is gonna be corny.
Speaker A:So I'm coach Tough on the weekends.
Speaker B:Coach Tough.
Speaker A:I'm Coach Tough.
Speaker B:You're a tough coach.
Speaker A:I'm a tough coach.
Speaker A:I have been teaching soccer to my kids for the last like six or seven years now straight.
Speaker A:And if you've seen the movie by Will Ferrell, kicking and screaming where the coach is just a little too intense.
Speaker A:Yes, that's me.
Speaker A:That's me.
Speaker B:Is that you?
Speaker A:So occasionally I'll step back.
Speaker A:Like, it's just.
Speaker A:They're just like six or seven years old.
Speaker A:Right.
Speaker A:But I do love just like getting out there and be on the field with kids.
Speaker B:Love it.
Speaker B:Okay, so your guilty pleasure is overly intense coaching.
Speaker A:Yes.
Speaker A:Yes.
Speaker B:What was your last impulse purchase?
Speaker A:Oh, my goodness.
Speaker A:My last impulse purchase was probably a couple new pairs of Air Jordans.
Speaker B:Okay.
Speaker A:You don't need them.
Speaker A:You never need another pair.
Speaker A:But then the color combination is pretty good.
Speaker B:What's been the most consequential relationship of your life?
Speaker A:Oh, man, this is like a dangerous one.
Speaker A:You give perspective to.
Speaker A:I have to give the double answer.
Speaker A:So number one, the thing I told a 21 year old John as well is Mary Jane when she comes in your life shortly.
Speaker A:So my wife, three kids has moved with me everywhere.
Speaker A:It's so important to have that pillar at home, especially with all the travel that this job requires and kind of unquestionable support.
Speaker A:One.
Speaker A:And number two is I have a twin brother, Doug, who's in New York City.
Speaker A:We're.
Speaker A:We're twins, but we're almost different every way after that.
Speaker A:Including.
Speaker A:Look, in that he's been New York City for his whole career.
Speaker A:He's like an accountant and.
Speaker A:And has taken very little risk where I occasionally try to lean into risk.
Speaker A:Right.
Speaker A:But the same thing is he's a family guy and.
Speaker A:And so it's very important conciglier for me on decisions.
Speaker B:That's great.
Speaker B:Something you've recently changed your mind about.
Speaker B:Ooh.
Speaker A:Even with the AI hype.
Speaker A:I. I've been a pretty consistent AI skeptic at our firm.
Speaker B:Wow.
Speaker A: d broadband hype cycle of the: Speaker A:But in the concept of customers, proof can prove you wrong.
Speaker A:We've started to see several businesses that are bucking the trend where the customer purchase is persistent.
Speaker A:It's not from, you know, an innovation division.
Speaker A:It's from a real gm.
Speaker A:And so that's.
Speaker A:That's probably been the biggest one most recently.
Speaker A:And then number two, I'm going to add a second one here too.
Speaker A:I think I was pretty bearish on Europe most of my career until the last three to four years.
Speaker A:And it's very clear that Europe has a huge part of the energy transition and climate story where the highs are high in the US and the lows are low.
Speaker A:The Europe is like, just compounding positive, like part of the climate story.
Speaker A:And I think we as a firm will continue to do more there.
Speaker B:Well, we're with you there.
Speaker A:Yes.
Speaker B:How about.
Speaker B:What are you streaming right now?
Speaker A:My kids are obsessed with the.
Speaker A:The ninja thing and, you know, the.
Speaker A:The ultimate Ninja.
Speaker B:Ultimate Ninja.
Speaker A:And it is pretty wild what these humans can accomplish.
Speaker A:It makes me feel like I'm not doing enough on my desk job.
Speaker B:And do you do that binge or episodic?
Speaker A:It's been pretty binge recently.
Speaker A:Yeah.
Speaker A:So that's the one.
Speaker B:What car, make and model are you personified?
Speaker A:Okay.
Speaker A:Who do I want to be or who do people tell me I am?
Speaker A:So I drive a Jeep Wrangler.
Speaker B:Okay.
Speaker A:And I love the car and I think I kind of want to be, like, cool and like, free like a Jeep, but I'm definitely not.
Speaker A:And so who do I wish?
Speaker A:Who do people claim to be?
Speaker A:It's probably, oh, I don't know, like a BMW X5.
Speaker B:Okay.
Speaker A:You know, like, good utility, but, like, still pretty stylish.
Speaker A:Pretty stylish, you know, but again, like, really want to be that Jeep, Top off, hair flowing.
Speaker B:I'm with you.
Speaker B:What's the last thing that made you laugh out loud?
Speaker A:Other than the chunkier or smooth peanut butter?
Speaker A:Yeah.
Speaker A:I got home from a trip early this morning and I walked in the door and my daughter ran to me and said, daddy, where have you been my whole life?
Speaker A:And I said, where did you hear that?
Speaker A:And it must have been from a show that she had watched on Cinderella or something like that.
Speaker A:But it would just maybe burst out laughing because, again, kids are so funny.
Speaker B:What about your pet peeve?
Speaker A:Effort.
Speaker B:Lack of.
Speaker A:Lack of effort.
Speaker A:If this is one of the things that energize.
Speaker A:Quality is contagious.
Speaker A:If you're not giving your hardest, other people are, you're doing a disservice to your team.
Speaker A:So it's like effort.
Speaker B:It's a good one.
Speaker B:Just a few more.
Speaker B:This is fun.
Speaker B:What do people most get wrong about you?
Speaker A:I can come across as serious.
Speaker A:Sometimes I don't smile enough.
Speaker A:I've been told that.
Speaker A:So.
Speaker A:But at our firm, we really, truly try to have that balance of work life.
Speaker A:I think it is really important to build a firm forever if you want to have a multi generational firm.
Speaker A:But.
Speaker A:So it's the seriousness.
Speaker A:I do take myself too seriously.
Speaker B:Okay.
Speaker B:With a name like Tough, you must have had a childhood nickname.
Speaker A:Oh, yeah.
Speaker B:Your favorite childhood nickname.
Speaker A:So I have a twin brother.
Speaker A:So the Tuff Brothers was just great because you could walk into any place.
Speaker A:And we moved every three or four years from my dad's job across the globe.
Speaker A:And knowing I could walk into a new school with Tough brother moniker.
Speaker A:Nobody picked on you.
Speaker A:Moved to London, England.
Speaker A:Nobody picked on me.
Speaker A:Moved from London to Dallas.
Speaker A:Could have been easy fodder.
Speaker A:The Tough Brothers.
Speaker B:Tough Brothers, Okay.
Speaker B:And did you have an unwanted childhood nickname?
Speaker A:I'm not sure I'd repeat it on this.
Speaker B:Oh, okay, fair enough.
Speaker B:I said I'd give you a pass.
Speaker A:Yes.
Speaker B:Your favorite place in Chicago.
Speaker A:Wrigley Field.
Speaker A:Wrigley Field on a summer day is the happiest place.
Speaker B:It is.
Speaker B:I totally agree.
Speaker B:3 People.
Speaker B:This is the last one, people.
Speaker B:Three people from any era you'd like to invite to a dinner party if you could.
Speaker C:That's really good.
Speaker A:It's really good.
Speaker A:Okay.
Speaker A:Any era.
Speaker B:Any era, any walk of life, any geography.
Speaker A:All right.
Speaker A:Number one would be Bruce.
Speaker A:In the 70s or 80s, of course.
Speaker A:Yep.
Speaker A:Just bring that guy to the table and like, have a good time.
Speaker B:Yeah.
Speaker A:Number two would be I've admired my father forever.
Speaker A:He's still like a big part of my life.
Speaker A:I mean, I would love to have known him when he was like my age now.
Speaker A:You know, just like bring that to the table and just like understand how he was.
Speaker A:Like, he was a great father.
Speaker A:We have three other siblings, so that'd be one.
Speaker A:And then I'm gonna cheat a little bit.
Speaker A:I want to meet me in 30 years.
Speaker B:Ah.
Speaker A:And like, what advice would 30 years from now John give to present day?
Speaker B:Yeah, I like that.
Speaker A:And hopefully it's more of the same.
Speaker B:That's great.
Speaker B:Thank you, John.
Speaker B:You've been a fabulous guest.
Speaker A:Thank you for having me.
Speaker A:Great questions.
Speaker B:Good.
Speaker A:Just to be clear, that was the surprise.
Speaker B:I know.
Speaker B:Yes, it's true.
Speaker A:It was good.
Speaker B:I flung it on him.
Speaker B:Okay.
Speaker B:And that's a wrap.
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