Founders

What I learned from reading Billy Durant Creator of General Motors: The Story of the Flamboyant Genius Who Helped Lead America into the Automobile Age by Lawrence Gustin.

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[0:32] DURANT MAY BE THE MOST IMPORTANT AUTOMOBILE PIONEER: Of all the colorful men who propelled the United States into the automobile age, Billy Durant was perhaps the most unusual, and from an organizational standpoint in the pioneering era, the most important. Durant had a hand in shaping the beginnings of three of the four major American automobile manufacturing corporations that exist today.

[4:16] HIS LIFE STORY HAS A SURPRISING END: The guy founded General Motors, Chrysler, and Frigidaire. Three gigantic, successful companies. How does he die with no money?

[6:04] DURANT TRIED TO PROTECT HIS INVESTORS: He had an attitude, not a common among men of big money. He tried to protect the people who invested with him, even if this protection would break him. Finally, it did. And when he was unable to save the dollars of his supporters he plunged from multimillionaire to bankruptcy.

[10:29] DURANT WAS SKEPTICAL OF AUTOMOBILES: Durant starts out as an automobile skeptic. He builds the General Motors of horse-drawn transportation and then takes that same playbook and uses it again to do the same thing in the automobile industry once he gets over his skepticism.

[17:08] IF SOMETHING IS IMPORTANT TO YOUR BUSINESS YOU NEED TO CONTROL IT: We have seen this over and over and over and over again in these stories throughout the history of entrepreneurship. If something is important to your business, you need to control it. Durant line up a big contract for the buggies only to find that Patterson chanced upon the same buyer and told him that since the product was actually being made at his factory, the buyer could save money by buying directly from him. Durant that from then on they would build all their own vehicles.

[19:12] DURANT ON SALES: Assume that the person you are talking to knows as much or more than you do. Do not talk too much. Give the customer time to think. In other words, let the customer sell himself. That system works best when you have a good product. Look for a self - seller. If you cannot find one, make one.

[21:48] ON CONTROL. HENRY FORD REALIZED THIS. THE DODGE BROTHERS DID TOO: We started out as assemblers with no advantage over our competitors. We paid about the same prices for everything we purchased. We realized that we were making no progress and would not unless and until we manufactured practically every important part that we used. We proceeded to purchase plants and the control of plants, which made it possible for us to build up the largest carriage company in the United States.

[31:36] DURANT WAS AT THE RIGHT PLACE, AT THE RIGHT TIME, WITH THE RIGHT SET OF SKILLS: For the first time, he began to see that the automobile had a future. The stockholders of Buick were so desperate that they were willing to turn over controlling interest to him. And perhaps most important, the Durant-Dort Carriage Company had a large, idle factory. 

[39:11] IT WAS HARD TO RAISE MONEY FOR GENERAL MOTORS: I had a long, hot session with our friends in New York yesterday and was pretty nearly used up at the finish. If you think it is an easy matter to get money from New York capitalists to finance a motor car proposition in Michigan, you have another guess coming. Money is hard to get owing to a somewhat unaccountable feeling of uneasiness and a general distrust of the automobile proposition.

[44:25] BILLY DURANT’S MASTER PLAN FOR GENERAL MOTORS: Durant's aim was nothing less than to gain control of some of the biggest and best automobile companies in America. But he also wanted to get in on the ground floor with companies just starting. Durant: “They could be purchased by exchanging small amounts of stock, and who could tell what their patents, products, and inventions might bring? The automobile industry was in its infancy, the public was fickle, the only sure road to power and success was to have a wide range of products. I figured if I could acquire a few more companies like the Buick, I would have control of the greatest industry in this country. A great opportunity, no time to lose, I must get busy.”

[51:30] DON VALENTINE TEACHES YOU BUSINESS IN TWO MINUTES: There are two things in business that matter, and you can learn this in two minutes --you don't have to go to business school for two years: high gross margins and cash flow. All companies that go out of business do so for the same reason- they run out of money." —Don Valentine

[55:10] GENERAL MOTORS RUNS OUT OF MONEY! DURANT IS FORCED OUT: The bankers demanded control of the company. Durant had no choice but to accept. Automotive historians have generally described the terms as exorbitant. And Durant, in his memoirs, fumed: “The $ 15 million loan finally offered had outrageous terms which I was forced to accept. Under the terms, I received $ 12,250,000 cash ( not $ 15 million ), for which I gave $ 21,600,000 of the best securities ever created — the enormous interest of $ 9,350,000.

[57:57] DURANT’S STRATEGY FOR CHEVROLET WAS TO FOCUS ON THE LOW PRICED MARKET BECAUSE IT HAD MORE DEMAND THAN SUPPLY : Henry Ford couldn't build enough cars to satisfy the entire demand for a low priced automobile.

[1:04:50] THE UNUSUAL HAPPENS, USUALLY. BILLY DURANT IS THE OPPOSITE OF HETTY GREEN OR MARK SPITZNAGEL: In 1920 the boom that had followed the end of WWI came to a rather abrupt halt and the United States slumped into a sharp recession. The price of GM stock began to decline steadily. GM sold 47,000 cars a month. By November monthly sales were down to 12,000. Durant realized GM needed money.

[1:10:26] BILLY DURANT’S LIFE SHOULD HAVE HAD A HAPPIER ENDING: All that can be said for certain about Durant’s last days at GM is that his activities in the stock market placed him in an extremely vulnerable situation. Louis Kaufman said in 1927 that had Durant not become involved in the market he would have been worth $500 million and still in charge of GM. 

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading The Dodge Brothers: The Men, the Motor Cars, and the Legacy by Charles Hyde.

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This is the story of two small town machinists who became enormously successful automobile manufacturers in the early years of the auto industry [0:01]

Early life and first jobs [3:02]

Moving to Detroit: Arriving at the right place, at the right time, with the right skill set [6:28]

Horace Dodge is a gifted engineer like Henry Royce (Founders #81) was + Inventors and bicycle manufacturers [12:00]

How The Dodge Brothers first described their business [16:40]

Doing work for Ransom Olds, Founder of Oldsmobile [18:20]

Crucial decisions in the early days of the company [23:33]

In a gold rush don't dig for gold. Sell pick axes [24:44]

The Dodge Brothers almost bankrupted Ford for lack of payment [28:22]

The Dodge Brothers got very rich off of Henry Ford [33:28]

Why and how the Dodge Brothers built their own car [36:00]

Comparing The Dodge Brothers organizational structure with that of Ford and GM [41:00]

The Dodge Brothers view on advertising [43:04]

How and why they worked so well together [46:13]

A bond so tight it could only be separated by death [50:58]

Their greatest accomplishment [52:01]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned by reading My Forty Years With Ford by Charles Sorensen.

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Henry Ford’s greatest achievement and his greatest failure [0:01]

Henry Ford had one, single idea [4:15]

Henry Ford’s management style [5:46]

The paradox of Henry Ford [8:27]

Henry Ford’s greatest advisor [11:30]

A great story about The Dodge Brothers [16:20]

Why and how Henry Ford bought out all of the shareholders of Ford [19:15]

Henry Ford would tell you to not divert your attention [27:15]

Henry Ford would tell you to not be afraid [28:20]

Henry Ford would tell you to be firm in what you want to accomplish but flexible in how you do it [31:45]

Why Henry Ford and The Ford Motor Company are worthy of study [36:20]

The difference between a pioneer and an expert [39:45]

Henry Ford would tell you not to worry about titles [47:40]

Henry Ford would tell you to focus on individual contact over collective speeches [49:52]

Henry Ford would tell you don't let your team grow stale [50:10]

Henry Ford would tell you that you can’t foresee everything. Even things that should be obvious. [50:50]

Henry Ford would tell you to never stop learning [51:32]

A description of Detroit and the early days of one of the most important industries ever created [55:14]

The story of the Model T: Henry ford was groping and fumbling toward a low-cost car. [59:14]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Born of This Land: My Life Story by Chung Ju-yung.

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For a long time I was known as the bulldozer. [0:01]

How Chung’s son remembers him: He had a wonderfully positive disposition and a rigorous work ethic. [3:15]

Memories of his father + Half century of struggle + Why he is writing this book [9:25]

Running away from home. Four times. [12:15]

A different level of poverty. [15:40]

How struggle shaped his personality + Why he had to run away for the last time [17:15]

On his own + Early jobs before the birth of Hyundai [19:24]

On simple tasks + The fundamental principle of his life + Hard work paying off [21:15]

Getting into the auto repair business + More struggle + More perseverance [25:55]

Why you should emulate bedbugs. [31:00]

Hyundai Auto Service Center + Hyundai Construction + Disaster strikes again + The Korean War [33:11]

His management style + Don’t waste time if you want to be remarkable [39:30]

Go where the money is: Hyundai must go abroad to escape poor domestic conditions. [42:15]

The beginning of Hyundai Motors + Chung had only one speed: GO! That is not always a good thing. [45:57]

Ships or how a great idea starts as a small idea [53:26]

Why determination is more important than intelligence [58:10]

Find something you love to do and do it until you die. [1:06:39]

Don’t covet luxury. [1:08:49]

Be diligent. [1:15:40]

Positive thinking is the road to happiness. [1:16:48]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Samuel Bronfman: The Life and Times of Seagram’s Mr. Sam by Michael R. Marrus.

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The story of Sam’s rise to fame and fortune from a hard life on the Canadian frontier is inherently dramatic and yet touches a familiar nerve in a broad spectrum of the population. There is something in Sam’s response to his disappointments that most people recognize in their themselves. [0:01] 

I found out about the Bronfman family on Founders #53 Mike Ovitz when Mike Ovitz brokered a deal that led to Seagram buying MCA Universal for $5.7 billion. [2:58]

Generational Inflection Point: A single individual that changes the trajectory of his entire family for generations to come [3:35] 

Why did his family have to flee Russia? [6:42]

Sam was ashamed of the poverty is family endured and NEVER forgot it [10:45] 

Sam starts running his own hotel at 23 [14:35] 

Sam figures out a new plan to overcome the powerful temperance movement / The good ones know more. — David Ogilvy [18:00] 

The advantages of Sam’s mail order strategy + Copying and improving on his competitors [20:12]

Some people just want it more [22:23]

Sam would tell you to focus on the long term [24:26]

Sam would tell you don’t waste any opportunity and be a learning machine [31:50]

Sam would tell you to learn from the best [35:44]

Sam would tell you to think big and appeal to interest [37:20]

Sam’s view on money / Go First Class [42:04]

After prohibition is lifted Sam goes on a buying spree / Default aggressive [48:53]

Sam does something brilliant: He repositions whiskey as a luxury product [53:02]

Sam’s personal curriculum [57:30]

How Sam’s business survived WWII [59:00]

The company proved to be one of Sam’s shrewdest moves; bought with only $50 million in borrowed cash it was sold [by his heirs] in 1980 for $2.3 billion [1:03:35]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Benjamin Franklin: An American Life by Walter Isaacson.

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He was, during his 84 year long life, America’s best scientist, inventor, diplomat, writer, and business strategist. [0:01]

On Founders #62 I covered Ben Franklin’s autobiography [4:10]

The family produced dissenters and nonconformists who were willing to defy authority, although not to the point of becoming zealots. They were clever craftsman and inventive blacksmiths with a love of learning. Avid readers and writers, they had deep convictions, but knew how to wear them lightly. [5:00]

The industrialist Thomas Mellon, who erected a statue of Franklin in his banks headquarters, declared that Franklin had inspired him to leave his family's farm and go into business. "I regard the reading of Franklin's Autobiography as the turning point of my life. Here was Franklin, poorer than myself, who by industry, thrift, and frugality, had become learned and wise, and elevated to wealth and fame. The maxims of poor Richard exactly suited my sentiments. I read the book again and again, and wondered if I might not do something in the same line by similar means." [13:10]

Franklin is learning how to deal with people and to change his behavior to get the outcome he desires: Being argumentative, he concluded, was a very bad habit because contradicting people produced disgusts and perhaps enemies. Later in his life he would wryly say of disputing: "Persons of good sense, I have since observed, seldom fall into it.”[17:50]

Ben Franklin understood marketing [22:10]

Ben Franklin would tell you to keep reading and learning so you are more interesting to talk to. This produces positive externalities. [23:50]

Franklin’s plan for his business and how to overcome an entrenched competitor [30:00]

Franklin would tell you it is foolish to avoid all criticism [33:28]

The Ben Franklin method for making difficult decisions [34:15]

As Franklin is building his business he is focused on self improvement: A list of 12 virtues he thought desirable [35:56]

Most of Poor Richard's saying were not totally original as Franklin freely admitted. "They contained the wisdom of many ages and nations. Not a tenth part of the wisdom was my own." / Picasso had a saying good artists copy; great artists steal. we have always been shameless about stealing great ideas --Steve Jobs [38:25]

Franklin telling you how to turn adversaries into allies. [41:38]

Halfway through his life, Franklin realizes he has enough: "Lost time is never found again." [43:25]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading The Professor, the Banker, and the Suicide King: Inside the Richest Poker Game of All Timeby Michael Craig.

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Some Texas banker was playing poker with over $15 million on the table. 15 million on the table? This much cash would weigh over 250 pounds. [0:01]

Founders #38 Jeff Bezos and Elon Musk The Space Barons: Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos [4:12]

Poker players are misfits / Poker as a capital intensive business / How to avoid going over the edge [6:51]

The early life and personality traits of Andy Beal [12:20]

Other founders mentioned in this episode: 

#59 Howard Hughes: Hughes: The Private Diaries, Memos and Letters; The Definitive Biography of the First American Billionaire.

#65 Kirk Kerkorian: The Gambler: How Penniless Dropout Kirk Kerkorian Became The Greatest Deal Maker In Capitalist History.

#67 Conrad Hilton: The Hiltons: The True Story of an American Dynasty

[19:24]

Professional poker players were the ultimate independent businessmen. They had no bosses, no employees, and no set hours. [20:36]

He came. He saw. He was conquered. [26:01]

The entrepreneurial emotional roller coaster + Bet on yourself [28:20]

A young Andy Beal’s adventures in entrepreneurship [36:30]

Beal Aerospace [49:45]

How Andy Beal finds an edge in poker [55:04]

The difference between knowing and doing [1:07:49]

The benefits of facing tough competition: Andy had played abasing the best poker players in the world for nearly 300 hours. It was impossible to stick around against this level of competition and not improve. How can we simulate an environment like this for ourselves?   [1:09:45]

What a bizarre, nonchalant way to start an important day [1:14:20]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Black Titan: A.G. Gaston and the Making of a Black American Millionaire by Carol Jenkins and Elizabeth Gardner Hines

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The grandson of slaves, born into poverty in 1892 in the Deep South, A. G. Gaston died more than a century later with a fortune worth well over $130 million [0:01]

A 10 year old’s first business idea [5:35] 

A.G. finds a blueprint to follow: A.B. Loveman [9:00]

The remarkable story of Carrie Tuggle and The Tuggle Institute [12:10]

The influence of Booker T. Washington [13:35]

The power of positive examples [15:27]

Joining the army for discipline and opportunity / Lessons from World War I [18:32]

Keep your eyes open. Study the people around you. How do they live? What makes them tick? What do they need? [25:05]

A. G. Gaston was relentless [27:20]

The parallels between Andrew Carnegie and A. G. Gaston [30:26]

Exhausted, depressed, and hopeless right before his big breakthrough [33:38]

And thus these poor devils keep themselves always under — Benjamin Franklin  / Both Benjamin Franklin and A. G. Gaston valued industry and frugality [38:00]

A fundamental change in philosophy for a young entrepreneur [44:30]

A.G. starts a funeral insurance company / Inspiration from the life of Booker T. Washington [46:40]

CAP YOUR DOWNSIDE! [51:41]

Personality: Focus on only on what you can control and have a bias for action [54:00]

A.G. starts The Booker T. Washington Business College to help train potential employees [56:00]

A.G’s singular focus is on mastering his craft [57:50]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Plagued by Fire: The Dreams and Furies of Frank Lloyd Wright by Paul Hendrickson. 

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[0:01] Frank Lloyd Wright suffered a personal catastrophe that would have destroyed a man of lesser will and lesser ego. 

[7:20] Ben Franklin writing about vanity 250 years ago: Most people dislike vanity in others, whatever share they have of it themselves; but I give it fair quarter wherever I meet with it, being persuaded that it is often productive of good to the possessor. 

[12:38] He held a press conference on Christmas Day to explain his actions. He said ordinary people can not live without rules to guide his conduct. He - Frank Lloyd Wright - is not ordinary. 

[13:44] Frank Lloyd Wright had a single minded pursuit of his own potential. 

[18:50] Nothing is at last sacred but the integrity of your own mind. 

[19:30] Find something you love to do and don’t stop until you die. 

[23:00] Everything is malleable. Including the truth. 

[25:25] All Frank Lloyd Wright had was a complete faith in himself. 

[31:57] Frank Lloyd Wright had a point of view—a conviction— and he tied his point of view to larger ideas. 

[35:29] Frank Lloyd Wright was terrible with money: So long as we had the luxuries, the necessities could pretty well take care of themselves.  

[36:20] The early career of Frank Lloyd Wright / his mentor was one of the greatest architects ever 

[39:30] You are going to go far. You’ll have a kind of success; I believe the kind you want. Not everybody would pay the price in concentrated hard work and human sacrifice you’ll make for it. 

[50:05] Wright turned down a fantastic opportunity. He preferred to bet on himself. 

[53:28] Wright’s mid life crisis and the abandonment of his family. 

[56:00] We’d like to be painters, we’d like to be poets. We’d like to be writers, but as everybody knows—we can’t earn any money that way. What do you want to do? When we finally got down to something which the individual says he really wants to do, I will say to him you do that—and uh—forget the money. If you say that getting the money is the most important thing, you will spend your life completely wasting your time...

You’ll be doing things you don’t like doing in order to go on living, that is to go on doing things you don’t like doing, which is stupid! It is absolutely stupid! Better to have a short life that is full of what you like doing than a long life spent in a miserable way. And after all, if you do really like what you’re doing, it doesn’t matter what it is—somebody is interested in everything—anything you can be interested in, you will find others who are...

But, it’s absolutely stupid to spend your time doing things you don’t like and to teach our children to follow in the same track. See, what we are doing is, is we’re bringing up children and educating them to live the same sort of lives we are living—in order that they may justify themselves and find satisfaction in life, by bringing up their children, to bring up "their" children, to do the same thing. So, it’s all retch and no vomit—it never gets there. Therefore, it’s so important to consider this question...

"What do I desire?" —Alan Watts 

[1:01:50] The volume of work Wright completed after the age of 60 was astonishing. A third of his total output came after the age of 80! 

[1:17:30] What the tumultuous relationship of his parents gave Frank Lloyd Wright: “A will and inner strength that seems unquantifiable.” 

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast