You Get What You Pay For - in a Fund and a Mop...

I love a good deal - on everything from a company to a car and even mop refills. Funny enough, the mop refills provide the simplest, and best corollary here:

As a bachelor, I would actually regularly clean my apartments - and not just when I had company. One of these regular cleaning rituals involved grabbing a Swiffer and doing both wet/dry runs around my apartment. I originally learned how to Swiffer at 15 years old, as a regular volunteer at Ronald McDonald House. 

Ronald McDonald Houses all vary a bit, but can have lots of non-carpeted floor area. I used everything from a traditional mop to a Swiffer - but loved the disposable pads (and they always had a big supply). Naturally, I’ve gravitated toward a familiar friend - and continued to use Swiffer products.

However, after having our first kid, we reevaluated our cleaning materials - and tried to avoid anything with a strong scent (for lots of reasons). Swiffer pads (the wet ones) tend to have a strong scent…and considering our son races around the floor all day, we had to make a switch. 

I ended up getting a Bona mop, and love the lack of a scent - it also does a bit better job at picking things we can’t see off the floor (critical with an infant). While the cleaning pad can supposedly be washed 500 times, I’m skeptical how long it can last, and also wanted to have a few extra pads on hand. I can literally drive 1 mile, and buy a genuine cleaning pad for $6.19 – but am naturally a big fan of generic versions. So, I bought a 3 pack on Amazon of likely Chinese knockoffs (with great ratings) for $7.63. The genuine Bona refills are nearly 2.5x more – and look the same. 

I tried the knockoffs last night after our son’s dinner/nightly food throwing contest - and learned a lesson I’ve learned entirely too many times. You usually get what you pay for. 

Spending an extra $10 or $11 on the genuine pads will not impact me at all. And while I have no issue paying up for something, I’m just wired to be entirely too curious about everything, and naturally cheap. If I don’t have to spend the money, I won’t. If I have to, I’ll do it too. 

Some of this mentality comes from learning the value of money as a kid, and having lots of little entrepreneurial hustles. Some of this also comes from working at Target as soon as I turned 16, and realizing that $7/hour (especially after taxes) does not get you very far. I learned more from my 3 year gig at Target than most of my future jobs - but I’ll stay on topic…getting what you pay for. 

One of my investors recently sent me a pitch deck for a Fund, and asked for feedback. It’s a daily occurrence, and something I like doing (back to my insatiable curiosity). In this case, the question was not about the thesis, or their results. It was centered on their fees and carried interest - which were a bit above market. 

Investors tend to fall in two camps - either barely paying attention to fees/carry, or being laser focused on the economics. I know my investor falls into the latter camp, and was having trouble digesting their economics. In this case, it’s another peer fund, and solo GP. Their results are actually top quartile, and more importantly, been consistent across multiple vintages. They did not just go grand slam swinging, and get lucky - they consistently got on base. So, he was not worried about performance…he was focused on fees/carry.  

Their fees were above market, and their carry was also on the high end. But, they offer a premium product, and strong GPs don’t really grow on trees - they’re actually pretty rare. While he hated the idea of paying above market fees/carry, he also realized that value is also directly correlated with quality. If their results continue, the extra fees and carry will have little to no real impact (especially if this GP can recycle some/all of the fees) vs. most other funds. In the end, he went from a likely “no,” to a likely “yes” (though I want nothing to do with the actual investment decision here). But, back to the mop refills…

The Bona knockoffs look the part, but they have major trouble grabbing anything, and seem to mainly just push dirt around. I will likely end up throwing them away after a few uses, and go back to the genuine Bona pads. I’ll also make the long 1 mile drive and pick up a few refills. 

Paying $6.19 for a 17” x 5”piece of microfiber does not feel great, but it’s the best decision. Trying to save money actually ends up costing money here, and in many other parts of life. I’ll still search for a coupon code, or better deal for most online purchases - but also now know that a generic knockoff is not always better. I also used to laugh at the Rakuten ads, but am now a regular user…hard to beat cash back for something I’m already going to buy.