Founders

Your family asks you to take over a failing factory in a remote part of France. This “family business” comes with a stack of unpaid bills, a small team of workers who haven’t been paid in months, and a banker refusing to extend any more credit. You cut every unprofitable product and go all in on making rubber tires. You have no experience and don’t know a single thing about rubber manufacturing. You have a genius insight that selling tires is a waste of time and instead you should create the conditions for your product’s success. You organize the entire company around this core loop: encourage more driving → which leads to more movement → more movement leads to more wear → more wear leads to more tire sales. A simple and beautiful organizing principle emerges: a tire company will prosper if people travel more, so let’s help them do that. You make promiscuous use of the press. You write columns advertising the joys of the new activity of driving. You draw the maps, create the routes, and build thousands of road signs across France. All for free. Why? Because better signage means longer trips, more driving, and more tires sold. You publish the Michelin Guide — a free travel book with locations of hotels, restaurants, mechanics, and sites to see. You create the Michelin stars which become the global gold standard in fine dining and help people travel far for great food.  You stimulate demand through spectacle. You sponsor races, airshows, and contests with cash prizes. You make smart bets early so by the time cars appear in large numbers you already own the roads. You create the most successful company mascot of all time and create a family dynasty that lasts 100 years.

You're not one person, but two. André and Édouard Michelin, two brothers and one of the greatest cofounder teams in history.

This episode is what I learned from reading Michelin: A Century of Secrets by Alain Germain and The Michelin Men: Driving an Empire by Herbert Lottman.

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save time and money.

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You take over the family pastry shop and transform it into one of the most valuable privately held businesses in the world. Your father dies young. Your uncle does too. Everyone is relying on you and this keeps you up at night. You insist on differentiation and refuse to make me too products. You obsess over quality. You run tens of thousands of experiments. The products you invent will sell successfully for decades. You shroud your entire operation in secrecy. You study your competitors but never tell them what you’re doing. You go to great — almost absurd — lengths to control everything about your business. You have no outside shareholders and no debt. You commute by helicopter so you can perform quality control in person. You insist on constant customer contact and invent new ways to collect information from the customers you obsess over. You build your own machines, control all of your raw materials, and invest so heavily in distribution and logistics that you own the largest private fleet of vehicles in Italy, second only to the Italian army. You love your business and don’t want to spend time doing anything else. When you propose to your wife you tell her that she is marrying a man who will always talk to her about chocolate. You believe creating wealth is a moral duty. 

You are Michele Ferrero. 

This episode is what I learned from reading Michele Ferrero by Salvatore Giannella.

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save time and money.

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Episode highlights:

You grow up in a rough neighborhood in Brooklyn. You drop out of college. Your dad is your best friend but you don’t want to work the docks like him. You’re determined to “do something special.” You get a job sweeping the floor at recording studio. You get fired—twice. You’ll do anything to work in the music business, including working on Easter Sunday. That’s how you meet John Lennon. This is the day your life begins. You focus on being of service. You stay in the room and in the saddle. Bruce Springsteen teaches you what work ethic really means. You work with Tom Petty, Bono, Patti Smith, Stevie Nicks, and countless others. You’ll produce hundreds of songs. You get restless, start a family, and start a record company. You get advice from David Geffen. You figure out your edge is producing the producers. You work with the absolute best, hand them the keys, and tell them to drive. You’re a scrapper, you’re persistent, you use fear as a tailwind, you keep the main thing the main thing, you work all the time, you put 100% into whatever is in front of you. You’re described as fiercely competitive, insanely driven, and brilliant. You can never turn it off and you don’t understand why everyone else isn’t like that too. You start multiple companies, make billions of dollars, and tell the best stories when you go on podcasts after you retire. You are Jimmy Iovine. 

This episode is what I learned from rewatching the documentary The Defiant Ones and listening to these excellent interviews with Jimmy Iovine. 

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save time and money.

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I've read this interview probably 10 times. It's that good. Steve Jobs was 29 when this interview was published, and with remarkable clarity of thought Steve explains the upcoming technological revolution, why the personal computer is the greatest tool humans have ever invented, how the computer compares to past inventions, why software needs to be simplified (You shouldn't have to read a novel to write a novel!) why the future is always exciting and unpredictable, what soul in the game looks like and why his competitors don't have any, why slightly insane people are the ones who make great products, the importance of questioning things and how doing so produces novel insights, why it's dangerous to have layers of middle management between the people running the company and the people doing the work, the importance of hiring troublemakers, why more people should aspire to be like Edwin Land, and how if he every leaves Apple he will always come back.

Read the full interview here

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save time and money.

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Join my free email newsletter to get my top 10 highlights from every book

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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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Highlights from this episode:

When Tamara Mellon’s father lent her the seed money to start a high-end shoe company, he cautioned her: “Don’t let the accountants run your business.” Little did he know that over the next fifteen years, the struggle between “financial” and “creative” would become one of the central themes as Mellon’s business.

Mellon grew Jimmy Choo into a billion dollar brand and her personal glamour made her an object of global media fascination. Vogue photographed her wedding. Vanity Fair covered her divorce and the criminal trial that followed. The Wall Street Journal reported on her relentless battle between “the suits” and “the creatives" and Mellon’s triumph against a brutally hostile takeover attempt.

But despite her eventual fame and fortune, Mellon didn’t have an easy road to success. Her early life was marked by a tumultuous and broken family life, battles with anxiety and depression, and a stint in rehab. Determined not to end up unemployed, penniless, and living in her parents’ basement under the control of her alcoholic mother, Mellon honed her natural business sense and invested in what she knew best—fashion.

In creating the shoes that became a fixture on Sex and the City and red carpets around the world, Mellon relied on her own impeccable sense of what the customer wanted—because she was that customer. What she didn’t know at the time was that success would come at a high price—after struggles with an obstinate business partner, a conniving first CEO, a turbulent marriage, and a mother who tried to steal her hard-earned wealth.

Now Mellon shares the whole larger-than-life story, with shocking details that have never been presented before. From her troubled childhood to her time as a young editor at Vogue to her partnership with the cobbler Jimmy Choo, to her very public relationships, Mellon offers an honest and gripping account of the episodes that have made her who she is today.

In My Shoes is a definitive book for fashion aficionados, aspiring entrepreneurs, and anyone who loves a juicy true story about sex, drugs, money, power, high heels, and overcoming adversity. This episode is what I learned from reading In My Shoes: A Memoir by Tamara Mellon. 

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save time and money.

-----

Join my free email newsletter to get my top 10 highlights from every book

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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

(I fixed the audio and uploaded a new episode!)  "To read Jeff Bezos’s shareholder letters is to get a crash course in running a high-growth internet business from someone who mastered it before any of the playbooks were written." That is the best description of Bezos's letters I have ever read. I just finished rereading these letters for the 4th or 5th time. With clear thinking and ferocious intelligence, Bezos provides a masterclass in building a customer-obsessed, enduring franchise. With relentless repetition Bezos teaches us about the importance of invention, risk-taking, wandering, differentiation, technology, judgement, high-standards, customer obsession, long-term orientation, and why value trumps everything. 

Read the letters on Amazon's website here.

Or in the book Invent and Wander: The Collected Writings of Jeff Bezos

Register for the live event in New York at Ramp! 

Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save time and money.

Join my free email newsletter to get my top 10 highlights from every book

( 15:00 ) Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon success. It's not easy to work here but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren't meant to be easy.

( 24:00 ) We believe we have reached a "tipping point," where this platform allows us to launch new ecommerce businesses faster, with a higher quality of customer experience, a lower incremental cost, a higher chance of success, and a faster path to scale and profitability than any other company.

( 27:00 ) We will continue to invest heavily in introductions to new customers. Though it's sometimes hard to imagine with all that has happened in the last five years, this remains Day 1 for ecommerce, and these are the early days of category formation where many customers are forming relationships for the first time. We must work hard to grow the number of customers who shop with us.

( 37:00 ) Focus on cost improvement makes it possible for us to afford to lower prices, which drives growth. Growth spreads fixed costs across more sales, reducing cost per unit, which makes possible more price reductions. Customers like this, and it's good for shareholders. Please expect us to repeat this loop.

( 47:00 ) Our quantitative understanding of elasticity is short-term. We can estimate what a price reduction will do this week and this quarter. But we cannot numerically estimate the effect that consistently lowering prices will have on our business over five years or ten years or more. Our judgment is that relentlessly returning efficiency improvements and scale economies to customers in the form of lower prices creates a virtuous cycle that leads over the long term to a much larger dollar amount of free cash flow, and thereby to a much more valuable Amazon.

( 55:00 ) Our fundamental approach remains the same. Stay heads down, focused on the long term and obsessed over customers. Long-term thinking levers our existing abilities and lets us do new things we couldn't otherwise contemplate. Seek instant gratification and chances are you'll find a crowd there ahead of you. 

( 56:00 ) Long-term orientation interacts well with customer obsession. If we can identify a customer need and if we can further develop conviction that that need is meaningful and durable, our approach permits us to work patiently for multiple years to deliver a solution.

( 59:00 ) Invention is in our DNA and technology is the fundamental tool we wield to evolve and improve every aspect of the experience we provide our customers.

( 1:00:00 ) A dreamy business offering has at least four characteristics. Customers love it, it can grow to very large size, it has strong returns on capital, and it's durable in time-with the potential to endure for decades. When you find one of these get married.

( 1:02:00 ) We all know that if you swing for the fences, you're going to strike out a lot, but you're also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score one thousand runs. This long-tailed distribution of returns is why it's important to be bold. Big winners pay for so many experiments.

( 1:10:00) When a memo isn't great, it's not the writer's inability to recognize the high standard, but instead a wrong expectation on scope: they mistakenly believe a high standards, six-page memo can be written in one or two days or even a few hours, when really it might take a week or more! They're trying to perfect a handstand in just two weeks, and we're not coaching them right. The great memos are written and re-written, shared with colleagues who are asked to improve the work, set aside for a couple of days, and then edited again with a fresh mind. They simply can't be done in a day or two. The key point here is that you can improve results through the simple act of teaching scope-that a great memo probably should take a week or more.

( 1:12:00 ) Sometimes (often actually) in business, you do know where you're going, and when you do, you can be efficient. Put in place a plan and execute. In contrast, wandering in business is not efficient-but it's also not random. It's guided-by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it's worth being a little messy and tangential to find our way there. Wandering is an essential counterbalance to efficiency. You need to employ both. The outsized discoveries-the "nonlinear" ones-are highly likely to require wandering.

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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

My friend Patrick O’Shaughnessy asked me to come to New York and record a conversation. Patrick had just finished listening to episode #383 "Todd Graves and his $10 Billion Chicken Finger Dream" and he believed there was an important conversation to have on focus and finding your life's work. This conversation was off-the-cuff and from the soul. I hope you find it useful. 

If you'd prefer to watch the episode you can do that on Spotify and YouTube. 

Patrick and I are doing a live show on May 27th in New York. Event details and registration here!

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. 

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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

Jim Simons never took a single class on finance, wasn’t interested in business, and didn’t start trading full time until he was 40. The company he founded —  Renaissance Technologies — has made over $100 billion in profits.

Starting out with the heretical belief that there was a hidden structure in financial markets, Jim decided to staff his “crazy hedge fund” with mathematicians, computer scientists, and physicists. He went to great lengths to collect more historic financial data than anyone else, spent a lot of time recruiting “killers” (people with single minded focus that wouldn’t quit), invested heavily in computers (and the people who ran them), and designed the most collaborative work environment.

Jim was a world-class mathematician, code breaker, exceptional manager of people with exceptional minds, a genius in system design, and deeply understood the power of incentives. He was also incapable of giving up, willing to endure a decade of struggle and pain, and hell-bent on doing something “historic” with his life.

Jim Simons lived a life defined by persistence, unconventional thinking, and an unwavering pursuit of excellence. Studying his life and work is time well spent. This episode is what I learned from rereading The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman. 

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. 

----

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. 

----

Join my free email newsletter to get my top 10 highlights from every book

----

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

Akio Morita was a visionary entrepreneur and co-founder of Sony. Born as the first son and fifteenth-generation heir to a 300-year-old sake-brewing family in Japan, Akio eschewed the traditional path to forge his own legacy in electronics.

In post-war Japan, Akio joined forces with Masaru Ibuka to found Sony. They started in a burned-out department store with limited resources—to build their first product they had to buy supplies on the black market. Akio was determined to change the global perception of Japanese goods as poor quality. From day one he set out to build high-quality, differentiated products, targeted at affluent markets. 

Akio believed in long-term vision over short-term profits, product innovation without market research, and brand building over immediate profits. Against all opposition, including inside of his own company, Akio invented one of the most successful consumer products of all time: The Walkman. It sold over 400 million units and inspired countless other entrepreneurs like Steve Jobs, Jeff Bezos, James Dyson, and Phil Knight. 

This episode is what I learned from rereading Akio's classic 1986 autobiography Made In Japan. 

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. 

----

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. 

----

Join my free email newsletter to get my top 10 highlights from every book

----

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

This is one of the most extraordinary founder stories you will ever hear. Michael Dell started his company with $1000 when he was 19 years old. The revenues for the first 16 years of Dell look like this:

1984 $6M

1985 $33M

1986 $67M

1987 $159M

1988 $258M

1989 $388M

1990 $546M

1991 $890M

1992 $2B

1993 $2.9B

1994 $3.5B

1995 $5.3B

1996 $7.8B

1997 $12.3B

1998 $18.2B

1999 $25.3B

Dell had been profitable for every quarter of its existence. By 2012 the story had changed. The consensus was that Dell was dead. Michael Dell certainly didn't think so — and besides—he was incapable of giving up on the company that bears his name. As he said at the time "I will care about this company after I'm dead!"  Michael takes his company private, completes the largest acquisition in technology history, and remerges perfectly positioned for the age of AI. Michael Dell has been working on his company for over 40 years and it feels like he's just getting started. In his autobiography he shares the most important lessons he's learned. It's a treasure trove for entrepreneurs and leaders. 

This episode is what I learned from reading Play Nice But Win: A CEO's Journey From Founder to Leader by Michael Dell and Direct From Dell: Strategies That Revolutionized an Industry by Michael Dell. 

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Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. 

----

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. 

----

Join my free email newsletter to get my top 10 highlights from every book

----

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