When in Warsaw

What does business travel mean to you?

Considering the esteemed company this newsletter keeps, presumably it conjures images of sipping champagne in business class, checking into plush hotels, chauffeur driven cars, cool stuff like that. We’re just in from a whistle-stop tour of Poland, where none of the above applied!

Three Body Capital is a startup, which means we’re extremely cost-conscious (translation: tight). So many founders dilute down for seed capital, only to waste it on frivolous stuff they don’t actually need. We want to do things differently, bootstrapping our way to a sustainable, profitable business. And that means ditching the Starwood points for Airbnb.

Which is how we wound up in a shopping mall at 11pm on a Tuesday, frantically searching for mosquito repellent before the shops closed. It turns out that our apartment in Warsaw’s beautiful Old Town – while competitively priced and elegantly furnished – was teeming with blood-sucking organisms. A late-night dash to Arkadia for mozzie repellent was the only option. The good news? Carrefour stocked a wide range of pest control products designed to combat beetles, ants, spiders, even moles. The bad news was they had sold out of mosquito repellent.

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Later that evening (technically it was the next day, as it was past midnight), having consumed slightly too much of the delicious local wheat beer (and a minimum effective dose of some surprisingly smooth vodka) in an attempt to dull the itch of multiple mozzie bites, we realised that the multipack of mineral water we had bought in some haste at the local grocery store, was in fact carbonated. Tired, tipsy and dehydrated, we resorted to decanting all six bottles into a large pot and boiling it in order to remove the bubbles, ladling out mug-loads of hot water whilst we spoke to our wives on the phone and caught up on our work emails. As entrepreneurs, fund managers and deal-makers we are used to dealing with formidable challenges, but this took the concept of problem-solving to a whole new level!

A trip with purpose.

These somewhat bizarre scenes were sandwiched by a comprehensive tour of local asset managers, private banks and venture capital firms dotted all over town.

Warsaw has changed a lot since we started visiting back in the early 2000s. Today it feels like the quintessential European capital – impeccably dressed millennials, Uber drivers aplenty, fantastic food and (fortunately for us) brilliant weather. 30 years of economic progress – and the government's recent spending splurge – means people have money in their pockets and a spring in their step.

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The purpose of this trip was two-fold:

1. Scoping out partners to distribute our funds in Poland in return for our help in distributing their products across our global network of emerging market investors. Clearly the distribution picture on the ground in Poland is challenging right now thanks to recent scandals involving GetBack and others, with banks under pressure from the authorities to repair their balance sheets and therefore closing ranks and demanding a big cut of fees in order to sell into their networks. Despite these challenges, people were open-minded and we came away with the sense that there’s a massive opportunity to build a next generation distribution channel for innovative fund products in Poland. This is true of many markets right now, and it’s a key part of our global strategy here at Three Body Capital.

2. Raising awareness about our private deal network, on both the supply and demand sides. Feedback was extremely positive, validating that there is robust demand from Polish HNWIs for private assets. We were also shown some excellent local deals (both early stage and pre-IPO), which we are now following up on.

We have consciously constructed our business to help clients of many stripes – and benefit from receiving their help in return. This trip was a validation of our approach. 12 meetings in 30 hours and countless Ubers later, we came away from Warsaw with a feeling of immense excitement for the future.

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The long game.

We’re keenly aware that Rome – like Warsaw – wasn’t built in a day. In order to succeed in Poland, we need to demonstrate a long-term commitment to the local market, and that means being present consistently. We’re looking forward to spending much more time in the country, helping our local partners to expand their businesses at home and abroad.

On a personal level, we’d like to thank everyone who took a meeting with this unconventional and wildly ambitious startup – and took the time to provide us with candid feedback on what we’re doing, the opportunities and the challenges. Thanks also to those who opened their contacts books and set up meetings. We were blown away that people would make such an effort to meet with us. They came from all over the country, some driving huge distances to sit down with us and swap stories, and for that we're immensely grateful. We look forward to seeing you all again very soon.

Edward Playfair