Founders

What I learned from reading The Operator: David Geffen Builds, Buys, and Sells the New Hollywood by Tom King. 

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He told me he had recently read Buffett: The Making of an American Capitalist, Buffett was Geffen's hero.

Geffen—with searing focus, unyielding drive, and outlandish nerve—had devised and implemented strategies to propel himself to the top of the heap of Hollywood powerbrokers.

I used to have phone conversations with David that would leave me sweaty.

David might not have realized it, but he was being educated by a master entrepreneur. Batya succeeded in teaching him the value of hard work and the possibilities of life under even the most difficult circumstances. She was a brilliant businesswoman who could account for every penny that went into and out of the enterprise. She kept her overhead low by driving hard bargains with her suppliers and by closely monitoring her expenses.

His mother determinedly drilled into him the same advice she often repeated to herself. "You may not be very tall, but you will stand head and shoulders above everyone," she declared. "You think of yourself as head and shoulders above everyone else, and you will be."

Arriving in Hollywood for the first time, David thought he had found paradise. It was even more intoxicating than he had imagined. His life's ambition was soon established after he read a new biography of MGM studio boss Louis B. Mayer called Hollywood Rajah. "I want this job," he thought to himself.

He simply did not have the attention span that college required. He was eager to get into the real world.

She told Geffen that some of the brightest lights in the entertainment business had gotten their start in the mailrooms of the major talent agencies. Although it was not a glamorous job, it was a way to get a foot in the door.
 

Having tossed aside all notions of right and wrong, David Geffen simply lived by different rules than did the rest of society around him. Unconstrained by traditional ideas of acceptable social behavior, he was free to use all of the resources at his fingertips to achieve his lofty goals.

Geffen simply worked harder than anyone else.

The music department, he said, was the place where a young agent could make a name for himself. Brandt's advice had a profound impact on Geffen. He at once rejiggered his career plans.

It was not an undying passion for music that made him decide to try to make his fortune in the business; he did it because he might get rich quickly.

Geffen recognized that publishing was one of the areas in the music business where the real money was being made. Long after an artist's star has faded, publishers benefit financially for years to come, pocketing royalties whenever a group records a song or sheet music is sold.

Having studied Clive Davis, he decided that he, too, had the savvy to make it in the record industry. It was not much of a stretch for him to envision David Geffen, the music mogul.

He remained unsettled and plagued by feelings of insecurity and dissatisfaction. He was driven by a devil that constantly told him he needed to be bigger, more, and something else. He simply was not the kind of man who was going to stand in one place for very long.

While he saw himself most of the time as the smart, fast-rising star he had become, there seemed to be fleeting, dreadful moments when his confidence shattered and he was gripped with fear.

The way Geffen saw it, there was a natural synergy in owning both a record company and a management company. They could use the management company to book and promote the acts it was recording on the label and vice versa. Controlling both sides of the business. But the real advantage, Geffen explained, was that they could use the record deal, which came complete with Atlantic financing, to cover the overhead at the management company.

From the day he opened his new business, Geffen had his eye fixed on the bottom line. He had the foresight to avoid the pitfalls that had proved fatal to so many others who had launched record labels before him. He was overhead averse and did not feel the urge to redecorate or to hire a large staff.

For all his money, David Geffen was turning out to be rather frugal. He well understood that the delicate balance between profit and loss can be upset if expenses are high.

Playing fair, Geffen had learned, was difficult and time-consuming; lying, on the other hand, was easy and effective.

Just thirty, he claimed that his net worth was about twelve million dollars.  But he was surprised to realize that the millions of dollars he had just banked and the trappings he had been able to acquire with it did not make him happy. It hit him when he was in London on a business trip, lying on a bed in a posh hotel, smoking a joint, and staring at the ceiling. All his life he had dreamed of being a multimillionaire, thinking that money would solve his problems. It had not, and he fell into a deep depression.

Geffen saw immediately that Katzenberg had the hustler-like qualities that he himself had displayed at that age.

Used to the relatively quick turnaround of record production, the slow-moving nature of the movie business made him agitated, nervous, and bored. Key to his recipe of success had been his ability to move quickly; but in the movie business, that same pacing proved to be a detriment, and it began to drive him crazy.

It was to be the most important negotiation of Geffen's life, and he successfully extracted an extraordinary deal that within a few years helped make him one of the wealthiest men in the country. In pulling off the deal, he showed himself to be a shrewd, remarkably focused strategist. He had an uncanny ability to understand people, recognize their weaknesses, and capitalize on them. The negotiation also showed once again that Geffen had that rare ability to envision success: He clearly understood his power and knew how to get what he wanted.

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There was one thing Calvin Klein did not tell Geffen: His privately held fashion empire was on the brink of bankruptcy.  Geffen surmised that the company should be transformed from a manufacturing firm to a design, marketing, and licensing company.

"You guys stink at manufacturing," he said. "You need to get out of that business."

Instead, Geffen continued, the company needed to focus on what it really knew: how to design and market the Calvin Klein brand name.

"Calvin, you should only be focusing on the aesthetics," Geffen said. "You should just be designing the clothes and overseeing the marketing and advertising."

Geffen reprimanded Klein and Schwartz for excesses they could not afford. Among other things, he told them to sell their company jet which cost them $2.5 million a year to maintain. He also told Klein to fire his chief financial officer and helped him hire Richard Martin, a top executive at Price Waterhouse, the accounting firm he himself used.

Here was the "fixer" in action: David Geffen was now involved in the kind of problem solving that energized him more than anything else.

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The idea of Geffen joining Katzenberg and Spielberg seemed a bit odd. For one thing, Geffen was Hollywood's greatest entrepreneur and nearly all of his successes were ones in which he alone had made the decisions.

"If I have to sit and convince somebody why I'm enthusiastic about something, I'm already depressed." The idea of himself as a partner was a strange one for David Geffen.

I've been working on myself, and my demons and my nonsense and my fucked-up-ness for a long, long time. Which is not to say that I'm still not a little fucked up. I think you get better and better in tiny increments, and you die unhealed.

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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 Distant Force: A Memoir of the Teledyne Corporation and the Man Who Created It by Dr. George Roberts. 

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Henry was much more than a salesman, mathematician, engineer, inventor, and chess champion. He was a student. An observer of the history of manufacturing, of the progress and growth of corporations from the days of Henry Ford, the growth of General Motors, the manner of successful corporations in growing by acquisition. [0:01]

Henry reminds me of de Gaulle. He has a singleness of purpose, a tenacity that is just overpowering. He gives you absolute confidence in his ability to accomplish whatever he says he is going to do. [2:00]

Henry spent time doing exactly what we are doing — learned from entrepreneurs and great people of the past. [3:45]

According to Buffett, if one took the top 100 business school graduates and made a composite of their triumphs, their record would not be as good as that of Singleton, who incidentally was trained as a scientist, not an MBA. / Here is a direct quote from Buffett: The failure of business schools to study men like Singleton is a crime. / "Henry Singleton of Teledyne has the best operating and capital deployment record in American business.” —Warren Buffett [8:30]

Genius is an oft-misused word, but it cannot be denied that Henry Singleton brought exceptional brilliance to the creation and development of the enterprise he undertook. . .Many of these strategies, new at the time, have now become commonplace in the business world. [12:57]

My only plan is to keep coming to work each day. I like to steer the boat each day rather than plan ahead way into the future. —Henry Singleton [14:36]

Within eight years of founding Teledyne had bootstrapped their startup investment of $450,000 into a company with annual sales of over $450 million. [17:24]

Henry’s early faith that semiconductors would become the dominant factor in future electronics, even while this was still being debated by others in the industry. [31:15]

Henry’s three great ideas

Recognizing the future importance of digital semiconductors when this technology was in its infancy.

Acquiring and organizing a selection of financial companies to provide a strong financial base [The idea Henry learned by reading Alfred Sloan’s of GM’s book]

His innovative strategy for stock buybacks [40:30]

Henry knew where he could create the most value and focused on that. Are you doing the same? [50:16]

There is no speed limit: In the company’s first six years net income rose from $58,000 to $12,035,000 [52:20]

There are ideas worth billions in a $30 history book. [56:10]

Henry Singleton the teacher / Claude Shannon on being smart and quiet [1:06:45]

By 1977 Teledyne was the largest shareholder in nine Fortune 500 companies. But Henry didn’t want control. He didn’t even want a board seat. [1:13:40]

There are companies that will sell one division and buy another because today this divisions generally sports a low multiple and the one they’re buying has a high multiple. That absolutely turns me off. The whole concept is repulsive. We don’t do things like that. We look at the economic long term possibilities. —Henry Singleton [1:17:05]

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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 Sneaker Wars: The Enemy Brothers Who Founded Adidas and Puma and The Family Feud That Forever Changed The Business of Sports by Barbara Smit.

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This story begins at a time in history when money and sports were still two separate worlds [0:01]

A family business struggling to survive / drafted into WWI / Adi Dassler’s EXTREME resourcefulness and personality / [3:15]

Early distribution and marketing of sports shoes [10:06]

The Dassler Brothers were opposites: Adi was the quiet craftsman with soul in the game. Rudolf was ostentatious and loud. [12:46]

The chronicle and biography of Adi Dassler: A story about someone obsessed with making high quality products [14:00]

Was Adi Dassler a Nazi? / My experience with the totalitarianism of the Castro regime / tearing up thinking of having to risk the lives of your children [24:30]

Adi Dassler reminds me of Henry Royce [29:30]

The difficulties of building a business during World War II [32:15]

Adi starting over at the age of 46 / How the Adidas stripes came about [38:15]

Athletes start requesting bribes to wear Adidas / How the payoffs happened [46:00]

Breaking into a new market was a slow, labor intensive process [50:45]

While Adidas and Puma are distracted fighting each other, opportunity opens up for Phil Knight and Nike / pursue your crazy idea / famous last words: “it’s just a toy”, “jogging isn’t a real sport”, “Nike is not a threat because we have more demand than we could service” [55:05]

If you have a business that makes you miserable, somewhere along the line you lost the plot. [1:06:45]

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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 Man Who Solved The Market: How Jim Simons Launched The Quant Revolution by Gregory Zuckerman 

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The story of the greatest moneymaker of all time [0:01]

Simons prefers to move in silence [1:40]

Unknown Unknowns > Known Knowns / Wise people always know exactly why something won’t work. That is why I never employ an expert in full bloom. —Henry Ford [2:42]

A one word summary of the book: PERSISTENCE [4:15]

Simons’ early life / Only the arrogant are self-confident enough to push their creative ideas on others. —Nolan Bushnell [4:44]

Advice from his father: Do what you like in life, not what you feel you should do. [6:16]

Personality: Jim had a persistent and burning desire to be wealthy [7:20]

A seed has been planted + Jim’s existential crisis [9:55]

Lessons from codebreaking that Jim applies to his business later [14:08]

Jim Simons at 29 years of age: Fired, father of 3 young children, no idea what his future holds [20:00]

Jim Simons at 33 years of age: Genius and madness are next-door neighbors [21:44]

Jim Simons at 40 years of age: Jim finally makes the jump. Only misfits understand misfits [22:55]

Jim’s first trading style [28:00]

We all go through times like this: DON’T QUIT! [29:15]

Jim Simons at 44 years of age / Jim’s partner doesn’t see the point in developing automated trading system / Giant success followed by giants failures [34:30]

Back to being filled with self-doubt [37:15]

Our mind loves playing tricks on us [38:00]

Jim Simons studied the past to gain an information advantage [41:00]

Finally, the new strategy starts working! / Even with wild success people will tell you that you are wrong [46:55]

Business is like nature, it doesn’t care if you arrive at the right answer from the wrong reasoning. [52:50]

Emperors want empires [57:02]

Life advice from an 82 year old Jim Simons [1:02:40]

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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 Sol Price: Retail Revolutionary & Social Innovator by Robert E. Price.

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What was it about this man that engendered so much admiration and respect? [0:01]

Sol Price’s early life  [4:39]

Sol Price was a misfit / “If you want to understand the entrepreneur, study the juvenile delinquent. The delinquent is saying with his actions, "This sucks. I'm going to do my own thing.”  [5:40] 

Learning to love being productive / Sol Price on the importance of time / DO IT NOW! [12:20]

The beginning of FedMart [16:00] 

Sol Price learned from other founders [21:25] 

Sol Price’s business philosophy [28:50]

What happened when Sol opens a pharmacy in FedMart / A creative solution to being cut off by gasoline suppliers [36:25] 

Sol Price’s idea on teaching and “alter egos” / “You train an animal. You teach a person.” —Sol Price [39:13] 

The intelligent loss of sales [42:00] 

The idea for Price Club [52:37] 

What Sol Price meant to his son [1:05:28]

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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. 

----

“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 Score Takes Care of Itself: My Philosophy of Leadership by Bill Walsh. 

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[0:01] I believe it’s much the same in one’s profession: Superb, reliable results take time. 

[4:55] How Jack Dorsey describes The Score Takes Care of Itself: He took at team that was at the bottom and brought them to the top. He focused on the details. He didn’t say you need to win games. He said you need to tuck in your shirts. You need to clean your lockers. This is how we answer the phones here. He set a new standard of performance. 

[6:53] Bill Walsh on his father / What he learned from his early life 

[10:15] Bill Walsh on why should you care about your standard of performance: Pursuing your ambitions, especially those of any magnitude, can be grueling and hazardous, and produce agonizing failure along the way, but achieving those goals is among life’s most gratifying and thrilling experiences. 

[14:15] A great description of the book: Bill Walsh loved to teach. This is his final lecture on leadership. 

[16:20] Bill Walsh built a new culture. He calls it his Standard of Performance. 

[20:30] Make a commitment to be the best version of yourself— even when your current external results may not warrant that belief 

[26:16] The prime directive was not victory  

[28:45] Winners act like winners before their winners  

[32:20] Bill Walsh experiences the entrepreneurial roller coaster 

[37:00] An incredible story about his idea of the west coast offense 

[46:20] Be unswerving in moving towards your goal 

[47:25] Sweat the little details but the right little details 

[49:00] Don’t focus on your competitors —spend that time making yourself better so it is harder for them to compete against you 

[50:00] Don’t let anybody call you a genius / If you sleep on a win you’ll wake up with a loss / Success Disease 

[54:15] Without a healthy ego you’ve got a big problem  

[58:05] There is no mystery to mastery  

[1:03:05] A pretty package will not sell a crappy product  

[1:04:16] Avoid burnout: Can you imagine how burned out you must be to wait fourteen years to return to doing something you love? 

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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 Les Schwab Pride In Performance: Keep It Going! by Les Schwab. 

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16 ideas from the book: 

Intensity is the price of excellence —Warren Buffett

I am 68 years old now. And I've run it in overdrive my whole life. I've always wanted to be the best tire dealer, not necessarily the largest tire dealer.

The people serving your customers are the most important people in your company:

We have had over the years some people in the office that sometimes think they are more important than the stores. The office serves only one purpose, and that is to serve the stores. Some of our office people sometimes wonder about this. But I’ve warned them, don’t bitch to me because that is the way I want it. If you want to go out and start at the bottom changing tires and work into a manager job, then hop right to it. If it weren’t for those men in the stores working their butts off in all kinds of weather, missing meals, God awful hours, etc. you wouldn’t even have a job.

If you’re not serving the customer, or supporting the folks who do, we don’t need you. —Sam Walton 

Let the people at the store level and your manager know you are behind them. They are the ones who make you successful, not the person in a nice office who has nothing to do today but to send out another damn directive. If it doesn't help the store, tear it up and tell the store to tell the office to go to hell.

There are no shortcuts around quality, and quality starts with people. —Steve Jobs

People are the success of our company. Most anyone can sell tires. The only difference between a Les Schwab Tire Centre and most any tire dealership is the people working there.

Sharing profits with your employees is a way to build people. Be unselfish for good reasons.

We share 50% of our profits with all the employees in the store. My thinking has always been if I give away half the profits I still have half. If I share $10 million with people I still have $10 million left over. I don’t understand why businessmen can’t do this. It is being unselfish for good reasons. It helps a lot of people.

Helping others succeed provides deep satisfaction:

Success in life is being a good husband, a good father and you end up being a second father to hundreds of other men and women. Last night I attended a wedding of a young man from our office. This young man told me that two men had influenced his life, his father and me. That’s worth more than money.

Promote from within —There’s no problem you can’t solve if you know your business from A to Z

In our 34 years of business, we have never hired a manager from the outside, nor have we ever hired an assistant manager directly to that job. Every single one of our more than 250 managers and assistant managers started at the bottom changing tires. They have all earned their management jobs by working up.

Most businesses are poorly run. If you are on the ball you can beat them.

We are different from most American corporations, as we think the most important people in the company are the people on the firing line; the ones who sell, do the service work and take care of the customer. Most American corporations have the fat salaries for the top people and treat the people at the end of the line as peons. I guess that is why, if you are on the ball, you can beat them on any type of fair competitive basis.

Decision making should always be made at the lowest possible level:

A company starts, it grows, and as it grows, more and more of the decision making moves to the main office. And this is one hell of a big mistake. The decision making should always be made at the lowest possible level. Give your manager the authority to make his own daily decisions, under certain guidelines of course, but let him run his show.

You can innovate by doing the exact opposite of your competitors

Most tire businesses had a small showroom and all the tires were hidden in the warehouse. My thinking was to reverse —to make the showroom the warehouse.

“Never, ever, think about something else when you should be thinking about the power of incentives.”—Charlie Munger One benefit of sharing profits with employees —less theft from within:

Now that we share with all people, if any one employee sees another employee steal they are a weak kitten if they don’t report it. Why? Because this man is stealing from them, from his children. If he won’t fight for his children, he can’t be very much. For a company as large as ours we have very little dishonesty.

Pay the highest wages possible

The company paid low wages and had a lower overhead. The flaw was they didn’t get —with the low pay— near the quality of employees we had.

Get out of your office

If the store manager runs his store right, he doesn't have to spend hours and hours looking at the office reports; if he's doing okay the records will show it. In fact if he spends too much time in his office reading the mail, it is a sure thing his store will suffer. Sell tires, give service, keep expenses low, make sure everything is billed out, keep good communications with employees, be careful with credit, watch for leaks —do these things and you'll come out all right.

Stay out of your office

Stay out of a store for 30 days and you've forgotten 50 percent of what you know.

Once you get on the ball, stay on the ball. OR as Sam Walton said when asked how he built Wal Mart. “We just got after it and *stayed* after it.”

If we think there is a free lunch, if we rely on last year's results and ask for pay for non-productive items, then this company will turn the corner, too, and then we too will start down the hill. And once you start down, it is mighty hard to turn around. If we become complacent, brother it's all over with.

There’s a rule they don’t teach you at Harvard Business School. It is: If anything is worth doing, it’s worth doing to excess. —Edwin Land

Whatever you do, you must do it with gusto, you must do it in volume. It is a case of repeat, repeat, repeat.

Time Stamps: 

[0:01] I hope to pass on some of my theories of business. Should we fail to follow these policies, I would prefer that my name be taken off the business. 

[1:55] "If you want to read one book that will demonstrate really shrewd compensation systems in a whole chain of small businesses, read the autobiography of Les Schwab, who has a bunch of tire shops all over the Northwest. And he made a huge fortune in one of the world’s really difficult businesses by having shrewd systems. And he can tell you a lot better than we can.” —Charlie Munger  

[8:55] The meeting between James Sinegal (the founder of Costco) and Jeff Bezos in 2001 and how it changed Amazon. 

[13:23] Les Schwab’s early life/ his father’s alcoholism / on his own at 16 

[18:10] How Les Schwab made more money in high school than his principal. During the Great Depression! 

[21:00] Runnin' Down a Dream: How to Succeed and Thrive in a Career You Love by Bill Gurley 

[25:55] How Les Schwab starts his business at 33 years old 

[28:22] Les Schwab’s unique ideas on profit sharing / being good at sales is like being a magician 

[34:45] I had made up my mind to do it differently 

[36:30] Determined to be independent / early days full of struggle / modest initial goals 

[39:09] Cap your downside and don’t build a business on someone else’s property 

[45:20] My thinking was to reverse it. / The idea of a tire showroom  

[48:28] How to get the incentives right 

[57:03] Be kind. We are all temporary. The death of his son. 

[59:30] Falling out with his partners over money 

[1:02:44] Unselfish for good reasons 

[1:06:00] Life is hard for people who think they can take a shortcut 

[1:09:17] The company isn’t for sale. The stock will remain in the family / What would I do with the money? 

[1:11:55] Success in life is being a good husband, a good father and you end up being a second father to hundreds of other men and women. Last night I attended a wedding of a young man from our office. This young man told me that two men had influenced his life, his father and me. That’s worth more than money.

[1:15:00] Most companies put the emphasis on the wrong part 

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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 Leading By Design: The Ikea Story by Ingvar Kamprad and Bertil Torekull.

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[0:01]  He aims to give his company eternal life 

[3:45] Early life and entrepreneurship  

[8:00] The beginning of IKEA 

[11:40] Learning entrepreneurship by imitating 

[16:30] IKEA almost dies in infancy / how Ingvar worked his way through it 

[26:00] Ingvar’s greatest regret in life: Neglecting his children for his business. “Everyone with children knows that childhood does not allow itself to be reconquered.” 

[32:20] Only those asleep make no mistakes. — Ingvar Kamprad 

[36:00] Thinking of the first store as a laboratory 

[43:43] Why IKEA stumbled upon self assembled furniture 

[46:30] A summary of the early history of IKEA 

[49:00] How Ingvar managed 

[54:00] Why Ingvar refused to go public 

[1:03:30] The IKEA Company Bible: The Testament of a Furniture Dealer 

[1:19:10] Ingvar the Misfit  

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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. 

----

“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 Richest Woman in America: Hetty Green in the Gilded Age by Janet Wallach. 

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[0:10] She was  the smartest woman on Wall Street, a financial genius, a railroad magnate, a real estate mogul, a Gilded Era renegade, a reliable source for city funds.

[0:19] “I have had fights with some of the greatest financial men in the country. Did you ever hear of any of them getting ahead of Hetty Green?”

[1:10] I go my own way, take no partners, risk nobody else’s fortune.

[1:29] She was considered the single biggest individual financier in the world.

[1:58]  A Mind at Play: How Claude Shannon Invented the Information Age by Jimmy Soni and Rob Goodman (Founders #95)

[2:55] Watch your pennies and the dollars will take care of themselves.

[3:31] Don’t close a bargain until you have reflected on it overnight.

[4:00] I am always buying when everyone wants to sell, and selling when everyone wants to buy.

[4:51] I never set out for anything that I don’t conquer.

[5:55] To live content with small means; To seek elegance rather than luxury, And refinement rather than fashion; To be worthy, not respectable, and wealthy, not rich.

[7:27] Her father’s advice: Never owe anyone anything.

[9:44] By the time she is 13 she is the family bookkeeper.

[11:53] She paid attention when he (her father) repeated again and again that property was a trust to be taken care of and enlarged for future generations. She obeyed when he insisted that she keep her own accounts in order and later praised the experience. “There is nothing better than this sort of training,” she said.

[13:28] Hetty hungered for money itself.

[14:08] List of financial panics discussed in the book: Panic of 1857, Panic of 1866, The Long Depression 1873-1896 which had several panics within, (Panic of 1873, 1884, 1890, 1893) Panic 1901 and Panic of 1907.

[16:18] She was a master at studying what happened before her.

[16:31] The First Tycoon: The Epic Life of Cornelius Vanderbilt by TJ Stiles. (Founders #54) and Tycoon's War: How Cornelius Vanderbilt Invaded a Country to Overthrow America's Most Famous Military Adventurer by Stephen Dando-Collins (Founders #55)

[17:15] Clever men like Russell Sage, a future role model for Hetty, kept substantial amounts of cash on hand and used it to buy stocks at rock-bottom prices. John Pierpont Morgan told his son there was a good lesson to be learned from other people’s greed and good bargains to be found in the aftermath. In future times, Hetty would always keep cash available and use it to buy when everyone else was selling. Much later, Warren Buffett would do the same. But most people watched their money wash away in the flood.

[23:57] This was the start of the contrary investing she followed for the rest of her life: buying when everyone else was selling; selling when everyone else was buying. “I buy when things are low and nobody wants them. I keep them until they go up and people are crazy to get them. That is, I believe, the secret of all successful business,” she said.

[26:46] Hetty, like Claude Shannon, Warren Buffett, and Ed Thorp, collected a lot of information. Hetty read more and studied more than most other people.

[28:07] The opportunities were enormous for those with the stomach to take the risks.

[30:25] The markets may change, the methods may be revamped, but as long as human beings are propelled by greed and ego, they are doomed to repeat the mistakes of the past.

[31:11] She had a pile of cash when others were scouring for pennies, but she also had a deft mind and the colossal courage to push against the crowd.

[36:17] Hetty’s investments were not always known: she purchased property under fictitious names, bought stocks under other identities, and was praised by shrewd observers for how closely she held her positions.

[37:41] Williams greeted his new customer with all the courtesy and respect due a woman of her wealth. “I have observed that many a tattered garment hides a package of bonds and that gorgeous clothing does not always cover a millionaire,” he told his colleagues.

[44:14] The Fish That Ate the Whale: The Life and Times of America's Banana King by Rich Cohen (Founders #37)

[45:52] Hetty didn't like the idle rich. She respected authentic achievement.

[48:48] Companies who stocks had skyrocketed collapsed when their lack of capital was revealed.

[49:22] The HP Way: How Bill Hewlett and I Built Our Company by David Packard. (Founders #29)

[49:30] More companies die from indigestion than starvation. —David Packard

[50:58] She used her intelligence to increase her wealth, her independence to live as she wished, and her strength to battle anyone who stood in her way.

[55:24] They sought her out to sell off their possessions. As rates rose, more and more of “the solidest men in Wall Street,” she said, from “financiers to legitimate businessmen,” came to call, begging to unload everything from palatial mansions to automobiles. “They came to me in droves,” she recalled.

[59:30] When it comes to spending your life, there have to be some things neglected. If you try to do too much, you can never get anywhere.

[59:53] You see this advice over and over again. You just got to figure out what that thing is that you want to focus on. No one can answer that question for you.

[1:00:14] I think the key to a happy life is getting to the end of your life with the least amount of regrets as possible.

[1:00:24] She prized the life she led. “I enjoy being in the thick of things. I like to have a part in the great movements of the world and especially of this country. I like to deal with big things and with big men. I would rather do [this] than play bridge. Indeed, my work is my amusement, and I believe it is also my duty.”

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