Notes from dinner with LNG exec

I recently had dinner with a mentor of mine who is the president and board member of a liquefied natural gas (LNG) project.

The company started with an assumption, raised $700 million, is now worth over $10 billion, and accounts for over 15% of US export capacity.

I had heard stories about its formation, but I wanted to get the TL;DR on their initial motivation and mindsets.

The story went something like this:

A Universally Accepted View

In the early 2000s, the rumor was that future demand for natural gas was going to exceed current supply, at least in the US. This was the "universally accepted idea," and clearly, someone was going to take advantage of this opportunity. We can likely equate this to statements like "AI is going to replace humans" or "non-electric vehicles will be banned." Essentially, the world had gravitated toward this idea, the market was primed, and framed in people's minds was that this industry was moving in that direction.

Locate How You Will Fit In

The world now believes and agrees that a shift is happening, but identifying how large that shift is going to be is the first step. The example here is that they believed the global LNG opportunity was going to be $X. Double-clicking on that, what exactly were they going to do about it, and what did their slice of the pie look like? What product or service were they going to offer? In this case, they had located the only two locations in the US that could be accessed by tankers for the transport of LNG to Asia, Europe, etc. The example here would be: out of the global $X market, and based on our vision for the project, we believe we'll be able to take Y%. Side Note: he called it "a view of what you're going to sell."

First Movers

However, a very limited number of people are actually going to make a move. In this case, and the main difference between people who scream "doomsday" and witness the world changing before their eyes, instead of being the cause of that change, is making a bold move, staking a claim. In their case, they purchased the rights to use a plot of land that another company had; effectively stating that was theirs, as that company wasn't using it. Then proceeded to sign a 100-year lease with the municipality. That is commitment.

Side Note: When asking for the ONE trait all the various leaders he had worked with had in common, commitment was THAT. This means if you believe in that particular vision, you'll need to be aggressive in making the first move and later use it as leverage.

Bonus Point

It was effectively three people pitching to energy conglomerates who made this happen. In this case, they were people who had worked together for over 10 years, with very specific roles, and executed on those roles. He was able to recruit people he had worked with for over 10 years while working with the Indonesian Government, and who were proven to deliver. This is often not possible in startups, as most folks have less than a decade of experience, and their roles have likely been flexible. That's why discernment and character judgment are essential here. That, in itself, is invaluable. Pick the wrong people, and everything falls apart (note to self).

In Conclusion

It took about two years taking this on the road for them to raise the first $500 million; another $200 million was raised briefly after. The company is still privately owned, with the CEO and Chairman holding over 60%, and it's valued at over $10 billion, with future commitments for the next 30 years from several world governments to supply a now very-in-demand asset.

TL;DR

• Intercept a globally accepted view; the market has to be primed to receive your message.

• Identify how you are going to fit into the global market and how much you will get.

• Initiate by aggressively committing to be a first mover