Has Inflation Stolen Our Courage? Why Great Entrepreneurs Build During Uncertainty (#203)
Updated: Oct 26
THE PICTURE OF WEALTH · EPISODE 203
Does economic uncertainty demand patience, or has waiting become a habit? In this solo episode, Dustin Serviss explores how inflation shapes ambition, why owners build through difficult markets, and how competence creates the confidence to act.
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This transcript was generated from the episode audio and lightly edited for readability. It may contain transcription or speaker-attribution errors. Refer to the recording for exact wording.
In this episode
Shrinking ambition. Dustin says the bigger story isn't rising prices but what inflation is doing to how we think, with "I'll wait until rates come down" becoming a habit.
Every decade has a reason not to begin. From his grandparents' Depression to the dot-com collapse, the financial crisis, covid and AI, each era felt like the hardest time, yet each produced extraordinary companies.
Builders in hard times. He admires Canadian owners who built machine shops when mills slowed, started fabrication businesses when banks weren't lending, bought competitors others avoided and hired talent during recessions.
Conviction before capital. The first investment private equity makes, he argues, is conviction: the willingness to underwrite uncertainty and improve something patiently.
Caution versus paralysis. Protecting liquidity, strengthening the balance sheet and cutting leverage are discipline; caution becomes paralysis when confidence disappears, not the opportunity.
Start with the pain. If he were starting a business in Canada today, he would ask what problem has become more painful because of inflation, and he ends on confidence built through competence versus confidence borrowed from a rising economy.
Chapters
[00:00:00] Has inflation changed how we think more than what we pay?
[00:00:37] Does every generation face the hardest possible time?
[00:01:13] Do great investors confuse discomfort with dysfunction?
[00:01:48] What did Canadian business owners build in hard times?
[00:02:23] Why does opportunity look ordinary before it looks obvious?
[00:02:59] Is conviction the first investment private equity makes?
[00:03:35] When is caution wisdom, and when is it paralysis?
[00:04:14] Does disruption eliminate opportunity or redistribute it?
[00:04:51] What would Dustin ask before starting a business today?
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Transcript
[00:00:00] Dustin Serviss: Has inflation stolen our courage? I've been thinking about something lately, not inflation itself. Everyone is talking about inflation. I'm more interested in what inflation is doing to the way we think. Because I don't think rising prices are the biggest story. I think shrinking ambition might be. Listen to the conversations happening around us. It's too expensive to start a business. I'll wait until interest rates come down. I'll invest when things feel more certain. I'll make my move after the election. I'll wait until the economy settles. Maybe. But when exactly has the economy ever settled?
[00:00:37] Dustin Serviss: Every generation believes they arrived at the hardest possible time. My grandparents had the depression. My parents lived through double digit interest rates. I've watched the dot com collapse, the financial crisis, covid, inflation, supply chain disruptions, and now artificial intelligence rewriting entire industries. Every decade has a reason not to begin, yet every decade produces extraordinary companies. That fascinates me because while most people see uncertainty, someone else sees mispriced opportunity. That's a completely different mindset. I think that's one of the defining characteristics of entrepreneurs, And it's certainly
[00:01:13] Dustin Serviss: one of the defining characteristics of great private equity investors. They don't confuse discomfort with dysfunction. They know markets cycle, capital cycles, interest rates cycle, human emotion cycles. The question isn't whether uncertainty exists, The question is whether you are prepared when opportunity arrives. I have always admired Canadian business owners. Not because they built companies during easy times, but because most of them didn't. They built machine shops when mills slowed down. They started fabrication businesses when banks weren't lending. They bought competitors everyone else wanted to avoid.
[00:01:48] Dustin Serviss: They hired talented people during recessions because those people suddenly became available. They quietly compounded while everyone else was reading headlines. You rarely read about these people. They don't spend much time on social media. They aren't chasing attention. They're building cash flow. They're improving operations. They're investing in people. They're solving real problems. And over twenty or thirty years, those decisions compound into remarkable businesses. That's not luck. That's behavior. Somewhere along the way, I think we have become conditioned to wait for perfect conditions. Perfect interest rates. Perfect confidence.
[00:02:23] Dustin Serviss: Perfect timing. Perfect certainty. Private markets don't really work that way. The best acquisitions rarely happen when everyone feels optimistic. The best businesses aren't always started when money is abundant. They are often built because someone noticed something others ignored, a customer nobody was serving, an industry everyone believed was too boring, a process nobody wanted to improve. Opportunity has an interesting habit. It usually looks ordinary before it looks obvious. There's another pattern I've noticed. People often say they wish they could invest like private equity, but they overlook the first investment private equity makes.
[00:02:59] Dustin Serviss: It isn't capital, it's conviction, the willingness to underwrite uncertainty. To spend months understanding a business while others are chasing headlines. To improve something patiently rather than hoping markets do the work to create value instead of simply waiting for value to appear. That philosophy extends well beyond acquisitions. It's how remarkable careers are built. It's how families build wealth over generations. It's how communities become stronger, by investing in productive assets, by investing in capable people, by investing in businesses that solve real problems, not because conditions are perfect, but because the long term
[00:03:35] Dustin Serviss: need remains. Now let's Steelman the opposite view. There are absolutely moments when caution is wisdom. Protecting liquidity, strengthening your balance sheet, reducing unnecessary leverage, preserving optionality those aren't signs of fear, they're signs of discipline. Good operators survive because they respect risk. But there is another version of caution that slowly becomes paralysis, the business that never launches, the acquisition that never gets pursued, the investment in yourself that never happens. Not because the opportunity disappeared, because confidence did. I've started wondering if inflation hasn't simply raised prices.
[00:04:14] Dustin Serviss: Maybe it's raised the psychological hurdle required to act. That's a subtle difference. One is economic, the other is cultural. History suggests something encouraging: periods of disruption don't eliminate opportunity, they redistribute it, capital doesn't disappear, it reallocates, talent doesn't disappear, It moves. Customers don't disappear. Their priorities change. Every major economic shift quietly creates a new generation of builders. The question is never whether opportunities exist. The question is whether we're still willing to look for them. If I were starting a business in Canada today, I wouldn't begin by asking,
[00:04:51] Dustin Serviss: what's the cheapest business to start? I'd ask, what problem has become more painful because of inflation? Because pain creates demand. Demand creates businesses. Businesses create cash flow. Cash flow creates options. And options create freedom. Maybe inflation hasn't stolen our courage. Maybe it's simply revealing who is borrowing confidence from a rising economy. And who has built confidence from within? Because confidence built on markets rises and falls with markets. Confidence built through competence compounds quietly, patiently, for decades. And maybe that's the real picture of wealth.