#330 Les Schwab (Charlie Munger recommended this book)
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Back in two thousand and twenty one of the cofounder of my favorite APP, the best APP I pay for, I literally could not make the podcast without IT is called read wise. I've been talking about for years. I've been treating about IT for years.

Every single other interview on other people's Price cast, I go on, I talk about this, and I did this way before I knew was onna partner with them on my own product. So I built this product with read wise. It's called founders notes.

You can see IT at founders notes dotcom and its founders with us, just like the podcast founders notes dotcom, I got A D. M. From trustin, two thousand and fifty, and he used the one that made me aware of read wise.

IT was perfect. And the reason was perfect because I have way more high lights and notes on my books, and most people do. So I have over twenty thousand over the years, i've over twenty thousand highlights and notes for all the books that to read for the podcast, to the read wise APP.

And so in the reason I do is because i'm able to search everything that i've ever done, I use this everyday. I searched every day. IT really is the world's most valuable notebook for founders.

So I contacted the founders, read wise, said, hey, can we do this? Can we actually do this project together? I want to make my own version.

I want people to have access to everything that I see. Literally, if you sign up a founders no com, you are able to search and see every single one of my highlights notes. It's exactly what I see.

And so as an illustrator, just one of the ways that I use this is at the end of this episode, i'm gonna de, this twenty minute episode I made, where somebody asked me like, how did histories greatest entrepreneurs think about hiring? And any time I ask question like that, any time making a podcast, what I do is I constantly searching my rewired APP, which is now available oundle no com. And just IT gives me a complete list of all the different ways that histories greatest founders have thought about.

Whatever subject I happen to be thinking about are working on, are investigating. So at the very end of this, so you're going to hear me speak for twenty minutes and it's answers the question, how did histories gration for you think about hiring? And all that information came from me searching my notes and highlight ts, which is exactly what you can do with founders notes.

To keep in mind, this is made for founders already running successful companies. Those are already running sucessful companies will get the most value of this because it's a way for you to reference the thoughts and ideas of his state founders. And then you know how to apply them to whatever that is going on in your company, the at this very moment.

The other thing I IT is currently Prices at fifty percent, what IT will be. So it's actually onna double in Price. And the reason is because i'm adding a lot of features, think are dial and I have to build up the landing page and everything else you sign up.

Now obviously, as I add features, you you don't have to pay any additional. I truly do believe IT is the world's most valuable noble profoundness and the value you get out of IT will be incredible. You can get immediate over twenty thousand of my highlights and notes right now by going to founders notes dot com.

I wrote this in november, december of one thousand nine hundred eighty five. I did write this one hundred percent with my old forty old type rider. I didn't have a ghost rider I wanted.

In my own words, I hope to pass on some of my series of business to our people, and I hope these theories are used in our business for as long as the lush wab company continues. Should be failed of all these policies to its customers and employees. I would prefer that my name be taken off of the business.

There could be some interested in this book with people who are interested in business. If so, you're invited to read IT. I hope in some way, this book might help you in the business world.

If you are not interested in business, this book will borrow you. And if I were you, I wouldn't waste my time reading IT. That was an expert from the book i'm been talking about today, which is lush swab.

Pride and performance. Keep IT going. IT is the autobiography, lush swab. I want to tell you why I decided to reread this book. The first time I read this book was four years ago.

I was going through all of charly monger's book recommendations back then, and he says something was fascinating. And he said IT at the bircher annual meeting. And he said, if you want to read one book that will demonstrate really compensation systems in a whole chain of small businesses, read the autobots phy of less swab.

Who has a bunch of these tire shops all over the northwest. And he made a huge fortune in one of the world's really difficult businesses by having true systems, and he can tell you a lot Better than we can. And so last week, as I was going through the new strike press edition of the updated and a bridge, a version of portraits omino, in one of the talks, charlie monger actually analyzes what caused the success of lesha b.

Based on his reading of the autobiography at the very i'm going to give you charlie interpretation of the book that you and I are going to go over right now. So let's go and jump into the book. I could, I tell from that exert that came from the forward, the book less this personality.

He jumps off the page. The whole book is like that. He just speaks very clearly indirectly.

So he says, father was not there. He was drunk again. I was born on october third nineteen seventeen.

School was just a railroad boxcar with somewhat cricket windows cut out in one side of the boxcar. There were three of us in the eighth grade. We had to take state exams to graduate from the eighth grade.

We all failed the family farm win cell. As IT was the start of the big depression. The bank took the farm.

My mother thought I might help my father's drinking problem if we move back to organ. That didn't help. IT caused the swab family, many.

We were taught to work at a very Young age. IT seemed the Normal thing to do. So all these sentences that are reading you, they're spread over a few different pages.

But I feel these sentences tell entire stories. Ah he's going to get his first job. He's twelve years old. This is a job he's going.

He's going to work in the newspaper industry up until he try, up until he buys a tire shop in his but I want to tell you this background because you've got an idea of who we're dealing with in the kind of work I think he had. Look at this sentence, or here, I soon got one of the newspaper routes. Before long, I got all three routes.

My family lived in a small two room home. There was no running water. Their living in a logging camp, water was hold by train from town, and you took your bucket to the tap, filled IT and Carried to your home.

There was one community shower. So he's living in poverty on the outskirts of town. His mom decides, hey, both your brother and you, I have SHE.

SHE had a strong desire for both of her sons to attend high school day. By this time, they made decision. He had been in school and two years.

And so this is what happens when he goes from the Oscars down into town. We would come in to town early monday morning and return to the logging camp on friday. After school, we miss much of the school activities and pretty much felt like outsiders.

One of my biggest fears was that my father would come to school on friday drunk. IT would haunt me all week as I was proud, poor, but I had a lot of pride. Many of friday evening, we would have to sit in front of some old moonshine joint until nine or ten P.

M. Until we could get our drunken ride home to the law camps to think about what happening there. The rest of the families back in the logger camp during the week, they're staying uh, in other people's home so they could go to school.

They have to get a ride back to log in from their dead. And the dad, this is a good idea to get math at a moonshine. Join moonshine.

join. Then drive drunk with his two sons in the car back to the logger camp. And here's another example of two sentences.

The town entire story. This was killing my mother. IT was sad times for the sharp family, eventually, last days in town on the weekends.

And he goes back to the one profession, and, you know, he goes back to delivering newspapers in this. Again, this gives you the idea. I was texting a friend about this book yesterday when I was saying, is like, the book is forty years old.

This guide, I don't think, ever finished high school. He had a uh A A middle school in eighth grade education yet he's a business genius. He want a building a multibillion dollar company selling tires.

And there's no way you could look at a childhood and predict that outcome, but you could look at a childhood in the way he approach everything is like this guy is going to succeed to whatever he does, maybe not to the degree of making, you know, a motile our company, but he was not going to end up a loser like his dad. So he says, immediate started to deliver newspapers. I remember my so well my first row.

I didn't know how to write a bike. We never had one. So all the other Young kids deliver newspapers on a bike, right? He's got a money.

Just not the right one. I ran my route for two months in order to get enough money to buy my first use bike, i'd run nine or ten miles a day. I was too proud to complain.

That is the second time that something he says over, over again, the fact that he had a lot, he was poor, he, he know, he knew he was raised in poverty, but he was a very proud person, a very cocky person. And I think he used his pride. And his coaching is fuel.

And I actually think IT served him. So now in the story, he's fifteen years old, january nineteen thirty three, our mother became ill and he was in the hospital. He died ten days later from the monia.

But as much as anything from complete exhaustion with dads drinking problem, the rough log camp life, teaching school and raising babies IT all amounted to just much more than he could handle. A year later, my father died. Almost to the day of my sixteen birthday, he was found dead in front of a moonshine joint.

He had gone so far downhill, and he was working for fifty cents a day for a renter. IT sounds like my father was all bad. This isn't true. Why and how a man can let this happen, the lord only knows.

But he was a hard working, extremely strong man, a gentleman, but a raving manias went drunk is certainly brought sad days to our family, back to this idea that this can be my life is a very powerful motivator. You see him being embarrassed by his current state of affairs and willing to work incredibly, incredibly hard to change things. I wrote my bike during the week, even though I was getting to the age where a boy didn't like being seen delivering newspapers.

But money was much more important then, pride. And this is another example. I said, I believe leh wala was inevitable.

There were eight or nine routes in the town, and I took over the whole town during the summer. I was now making about one hundred and seventy five dollars to two hundred dollars per month. And I wasn't even seventeen yet.

This was the middle of the depression. My high school principal only made one hundred and fifty per month. I thought I was already a man. And so the number of myself, when I read this the second time is he is a money maker his whole life, just like sam sel.

I reminded me if you read sam cell's autobiographical, I covered all way back on episode 0。 Sam had this natural instinct to make money when he was a kid. One of the things that blew my mind, obviously, when he was close the end of his life at eighty one years old, he was one of the best entrepreneurs and investors, a alive.

But even when he was in law school, he was making the equivalent. It's like you and I going to law score right now. We'd be in our early twice and making millions of dollars a year while going to law school saml to the equivalent when he was in loss, going to much Younger man.

So he you see when you read his this guy just has a he's a money maker from day one, and he has that skill. So now we see that less is technically an adult. He's eighteen years old.

He once up getting married and he says, we will soon celebrate our fifth anniversary. I was lucky. We have been very much in love, and we've had a happy marriage.

They want to having two kids and having to deal with and endure the worst thing that every anybody ever has to go through. I'll get there, uh, later on. So he goes back to again, he's gone to stay in the newspaper industry for the next fifteen years. He works from one newspaper to another ones getting recruit. And so there's there's this uh newspaper in band organ that wants that included him away from another newspaper to become their circulation manager and this is where he realizes, oh, actually it's possible that you can know more about something than anyone else and give you a massive edge uh makes me think of that.

One of the main teams in this excEllent talk that the investor bill girly gave, which called running down a dream, how to survive and thrive in a curry love, was the fact that you don't have to be smarter, but you can just you can know more about something than anyone else just by accumulating more information, and you see that less did this. Now, only this is a very rockfalls, the same thing where he actually knew more about the business than his bosses when he was, like, eighteen years old. So like a kind of echo between rock fell b at the same make, the one thing I did know was newspaper circulation work.

And I knew more about IT than the two other minority owners who were technically his bosses is three bosses. The circulation end of the newspaper is usually regarded as the lower end of the prestige. Latter is essentially a sales job.

So that's another, I think, key which will get to in traveling mongers. Analysis of this book later on is the fact that less had a fundamental right. He had a fundamental understanding of human nature.

He had magician like powers with sales, persuasion and incentives. So back to this, I attempted to put some pride. There's I word again.

I attempted put some pride into the circulation. Work didn't matter to him as low status. He's going make a tonne money doing this tony money for his day.

I attempted to put some pride into the circulation work for myself and for others. I was Young, I was coco. But the same cokey ss helped me a lot in going through light.

Fast for ten years is a very common situation. I was now trying, eight years old. I had ambition.

I wanted to go to business as I always want to, to be a businessman, but I didn't have any money. I was going to appear at this point of not knowing just what I wanted to do. Five years later, still working the newspaper business is I was started three years old now.

I still wanted to go to business for my own money was the main thing. Holding me up, my brother and laugh told me to find a business, and he'd helped finance IT. That was all I needed.

And I started to look seriously as I knew time was running out. I believed if you didn't get started in a business at a fairly Young age, you would get into a rut and never make a big decision to jump. And this is so wild, he picks an industry way too.

We get to this. He picks an industry we has no experience. He's like, right well, there is like little tire shop.

They're um franchise at this point was called OK rubber wheldon to say franchise of OK rubber welldrum. And I got I thought the tire business had a future. I remember telling my wife, I thought I was a salesman and a pretty good one.

And maybe that ability could be used in the tire business. This small shop retreat, IT tires, sold new tires and fixed for flats. IT was hard knocker busting dirty work.

The Price of the business was eleven thousand dollars plus inventory. I'm going to see, let's had to burn the boats mentality IT is or never. I'm going on in.

I, R, I sold my house and I borrowed on life insurance with all the expenses, is going to spend about seventeen thousand dollars acquiring this small tire shop. This the time shop. This is going to be nineteen fifty two.

I was just reading this yesterday. The fifth generation, his fifth generation, just sold the company to a private equity firm for a rumor. Three dollars that is going to start in nineteen and fifty two, with seventeen thousand dollars all of IT borrowed.

And so the very first sentence describing his very first day in business is mind blowing. I had never fixed a flat tire in my life. And then this next paragraph, this is one of the reasons that charly monger recommended this book.

Charlie says over, over again. Never, ever think about something else when you should be thinking about the power of incentives multiple times. Important is ominous.

You see ideas as like that. Incentives rule everything around. You never, ever think about something else when you should think about the part of incentives.

The most important rule in management is get the incentives right. This is something that monger repeated over over again. And it's something that less understood in a masterful job.

I remember telling my life many times that if I ever got a chance to go to the business, I had some ideas about sharing with people and about sponsoring people. There are a lot of people who could run a business but never get a chance. Do mostly to a lack of start of money.

Speaking about himself, right? I was going to furnish the money and in some way, share with them in the promotion of our business. You and I are going to get to why this is important, but I want to give you over view because it's going to happen a little bit later on, he says multiple times, even at the very end. He writes, I think this is the third edition of the book, so he's constantly writing, like every five or six series, he writes like an updated, like epilogue.

And he constantly talks about the fact throughout the book and in the updated version that if I failed with the first store, there was never going to be a second store and if I failed with the third store, there was never going to be a fifth store and if I didn't feel with the fifth store going to be a store and now I think, uh, the end of the book have, you know, hundreds of stores. And so one problem, he's going to run into red ways. One, he buys the shop.

You know how many people work in that shop? Him one person. And he does such a great, fantastic job with that, which will go to in a minute it's it's crazy how how good guy that was a grown businesses but then he said, okay, well, do a second shop.

Now here's the problem. I can only be in one shop at a time in the venture. Obviously, he's going through like just visiting shop. He's no longer running them.

And so it's like I need an incentive shocks so these people do their best dam job possible because I can be there everyday that we realize, hey, what if I make them essentially a partnership? Because incentives drive behavior. And if you're the other, they start as one person shows.

But eventually, you know you might have seven or eight people on there where the case is. You'll see how powerful that one inside I just bring i'll share fifty percent that way when i'm not there, you are heavily incentivize to grow and manage the business to the best of your capability. And so when charly saying, hey, this guy made a huge fortune, a really difficult business, selling tires for god sake.

And he did IT because by having shut systems, this is one of the most important systems that he puts in place. And he does IT from the very beginning. So to go back to this, the first month we did twenty eight hundred dollars in sales.

I made a small profit. The first month, february, was even lesson sales when the march I started going. And by june in july, I was doing ten thousand dollars or more per month.

And sales at years. I had one hundred and fifty thousand dollars in sales. The man I bought the business from did thirty two thousand per year, and sales the year before.

Less is the only person in the shop. And in five x sales myself on this page, being good at sales is like being a magian. And so right away, he realizes that the tire business is a bad business because there is complete collusion at this time, but that he's getting started.

All the rubber companies are american and they dominate the entire market and they also collude on pricing, and he's competing against the big tire. re. Companies also have.

Their own stores. And of course, uh, they are gonna give a Better Price on the tires to their own stores and they give to less. And so when he brings up this pointing, this is what they say.

They call the meeting a competitive situation. I call the milking the dealer of his profit. And the great thing about less is he realize all the problem that actually produces the greatest opportunity.

This is one of the waves that he writes his success, which will go into, uh, a little bit later on. And charly talks about a lot, and so less says, I had to contend with this, essentially this this completely and included market. I had to contend with this until I main connections with the toil tire company from japan.

I say, thank god for the foreign re. supply. IT helped the independent tire dealer, which is exactly what he is. He's an independent tire dealer, and his wave he serve, to use the terminology of charging monger, was a massive one. Because the japanese go from like zero percent market are.

And I think within like a decade, maybe even less than two decades, they essentially on the entire market. And so he's GTA find a way to survive. And he said, like, okay, what? I sell new tires, i'm not going to make any money.

There's no profit. All of this profit is coming from retreating tires. And so retreading is very common, especially on large trucks tires.

And so essentially, it's taking a tire that is worn out and then removing the remaining layer of old trade and then just applying a new red so that the tires has fresh red. Again, this saves you from having to buy new tires. This is we're all this profit.

This is going to actually bridge the gap. This is how he's going to be able to survive until he gets a reliable and a Better tire supply, tire supplier and toyo tire company from japan. That is the first he's going to diversifying our suppliers.

But he definitely rides the japanese tire trend he says was impossible. Make a reasonable profit on new tires. And I usually got the retreating and I could make a decent profit on APP by handling the business as a one man on a one minute basis.

He did the sales, the service to credit the whole works. I could Operate very cheaply. I had a theory that went like this, never take a advantage of customer, never take advance of an employee, but take all the advantage you possible could of a ruber company, because they were not being fair and honest.

Today in thousand nine hundred eighty five, I will feel the same way towards rapper companies as they did twenty five or thirty years ago. This is a very important point rate because they try to screw, they try to put amount of business. He decided to fight back.

So is what he talking about. There are much Better people today. Today, I don't want my company to take advances, anyone, even the rubble companies.

But I certainly won't apol anything I to survive twenty, thirty years ago. I am proud that I to fight this goes back to this cock ist. This pride thing is very appearing from the, from the very page's book.

I am proud that I had the guts to fight hard enough to survive this period. I feel strongly that the rubber companies were very unfair to their dealers during the early days of my tire business, but really, in many ways, this proved to work out in our favor. What is he talking about? Promise as opportunities and work.

Sure, you going to screw me over. So bad you miss. I'm to look for Better options. And he found the Better option with japanese. And then he rides a wave, and he destroyed the people that were trying to screw over. And he says, so here, the five major american, Robert companies, have received their justices.

Ds, as two of them have dropped drop truck tires entirely, and the other three are doing very well with truck tire sales, IT serves them right. They earned their failure. So he immediate started to expand.

He once of opening a second, uh, store. Year later, that same store also has one employee and that employee shares in the profit. And looking back thirty years later, this is what he says.

This was a big day in my business career. This was the start of the professional program that we still use today. But this is what I meant, that he repeats something over over again, that, hey, if I mess up on the first store, there is no second store.

If I want to messing on the second store now, there is no fifth store, there's no two hundred stories. And so I have to get the instead destroying day one. Uh, I told Frank that is the first higher.

I told Frank that if this store was successful, I planned to build more. If this store failed, I would go back and just run one store. There won't be the chain of lesh while tire centres that we have today if we had been successful in that second store.

So he's going to open a third store. In this third store, he wants to be independent because the first two are actually franchise of the OK rover wilders, and he's got a contract with them. And I tell you, it's very it's impossible, uh, to read this book and not love less as a person.

And he's like, now i'm going to be independent and i'm going to fight because I don't think what you guys are doing. All right. And he also has he was really talk about this later, but he thought he was like an artist, like he was really give with marketing and advertising as well.

So he goes to the franchise, a company, and he's like, i'm going to open an independent tire store and the guy goes, you you can do that and less goes. Let's not argue. I I just want to be open about IT, so he's like you can do this again. I am going to argue i'm just going to do this anyways like i'm not here for a discussion. I'm just letting you know be the right thing to do.

And so is like I didn't got to figure a new name and he's like, maybe i'll just call this a tire center and then he goes, but that seems too plain and then he goes, well, what if I just call a lesa bed? Tire center has named IT after myself and that's exactly what he does. And so then is like, I know I have a fight so we're just going to we're just going have to fight about this yeah, I really did have a fight now with okay, they were threatened to take all my equipment away from me and cancel me as a franchise member.

And this is his response. When they told him that I lost my temper, and I told them here after I didn't want any more harassment from them. If there anything more to say, sit in court.

I walked the floor night. Okay, this is a very important term that he uses over again. He talks later on how stressful founding and then expanding the company over three decades to hundreds of stores and thousands of employees were.

And so many times in the book he's sharing with us not just the wins, but times or his, almost like depressed and extremely stressed. In fact, he talks about everybody blew their top. I think the three top executives all had a heart attack, including him.

And so he when he when he's and stress and trying to figure what he does, he says, I walked the floor minutes. He is walking around trying to figure out what to do. And he says why he is so stressed because they took my equipment.

IT was a bankrupt me. I was bluefin. But I was determined, as I think back, I think the reason that they didn't take me the core was due to the fact that they lost IT would have messed up the franchise nationwide.

So you know, you pay x amount per year to be to use to be a franchise e and they had a eleven hundred franchise and so of less could prove that they were using him。 That might apply not just to his two stores, but I could jeopardize the contracts and the treatment of the other eleven hundred franchises. That's actually very shoot, unless as part.

And then this is just funny. They keep setting them letter, so says every time they try to cancel me, I would send them a registered letter back, telling them that I will not accept the cancellation. And he winded up working like he once up, getting out of this later on.

But he is in hell of a trouble. The very begin was career that the early days were full of struggle. And he he describes that to you.

And I hear the pressure on me was tremendous. My largest account was way behind on payments, and he worried me to know in my net worth was about the same as what they owed me. If they had gone broke at that time, they would have taken me out with them, and the lesh rob story would have ended there. There's a lot of sam wolton s kind of behavior in this book. I feel that same multon and lesh wala very similar people.

Fact, when my favorite things that last week in porto isomeric was that fanaticism and scale combined can be very powerful fantis m and scale combined can be very powerful thin sam wolton think less wab when he says that I would call dirty that his wife and say, let's get to hell out of town for at least a one night, maybe two nights. And we do just that. But guess what? I would usually visit other tire dealers.

This is exactly, exactly. It's incredible how how similar these great founders are to each other, right? Where some wiltons kids, we talk about his autobahn, you the fact that any time they went on vacation, they just had to accept the fact that no matter where they went, dad was going to go into visit the retail source of whatever he was.

We see the same thing here, and it's during one of these trips where less actually lays out to his wife that his initial modest goals, he says, I had no idea how big this could get. I told dorthy. I was jelling on an idea for the future.

Maybe in the future I could build six or seven or eight stores, something I knew I could buy tires Better if I had the time, meaning finding Better suppliers, which he does. I knew how to advertise and promote what he does. And I wanted to share with the storm managers and make them successful.

He's really describing what charly described later is like this law polo effect, like all these different things that lesh ob did smart and did write over many, many decades that got this nonlinear AR return. And so the first one was, hey, find a Better supplier, right? The wave, western japanese tire wave, knew how to advertise and promote a charlie says, is an artist at that.

I wanted to share with the store managers that the incentive superpower. And then the fourth part is that he was, by nature, expensive. If he gets to six, he's gonna want to get to seven.

And if he gets to seventies, want to get to eight. When he gets two hundred ninety nine, he wants to get to two hundred. That just how we is.

This is how more on how we set up the corporation of very beginning. Each store Operate as a separate entity and each store Operate as a separate business. The store employees share only in the profits of the store they work in.

I'm sure you are you know this, but just in case you don't if you read warn buffets shareholder letters, he talks about existing compensation a lot that the fact is the individual businesses that perch her owns, the person running that business is only incentivize and paid and reward IT or punish based on the performance of that individual business and not burchart as a whole and less takes that exact same idea. I guess he did him before bircher exist because we're stone in, uh, early one thousand fifties there. Another comparison you can make between sandwich lesh wab.

If you know, if you study the early days of sam woltz career, he wants a building A A great franchise. But he made the mistake of not owning the ground upon which he was building. He was renting. He was releasing his store.

When sam goes to re up, the guys like, okay, yes, not going to really to you once up kicking same out of the store, uh opening up the zone, essentially just copying what sam did and then running both owning the building and running the retail shop and this is a great um this is a great scene in uh this is actually not in sam walton automotive phy. There is another biography of some walton I read. I think it's called sam walton, richest man in amErica but it's getting vanier trimble.

I think it's epo de one fifty from a mistaken it's when my favorite scenes and when I say scene is like when i'm reading the book, in my mind I can actually see this happening and his same goes to his lawyers like, surely like, you know that I can do this. This is unfair. How do we get out of this? And you know, sam, still, he's just in experience.

He just didn't know what he didn't know and his lawyers like, no, like that the year screwed here. This guy is going to take. He's not he doesn't assume he can run shally just duplicate what you did here.

And sam is the lawyer talks about the sam is lunching and unclenching his fist and lunching and unclenching his fist and lunching and unclenching his fist. And he says something like, i'm not whipped. I built up this store.

I can do IT again. And so he goes and finds another town. I am not mistaken, pretty sure that next town that he goes to a bend, the argyle um so again, he took problems, just opportunities and and workplace okay, I made a mistake.

That's a big fuck up on my part. I won't let IT happen again. And the reason I bring that up is because in his contracts, when he goes and takes either takes over a store or once a blessing um sometimes he takes over other people s failed tire source.

Sometimes he's just leasing the location to build the zone he always has. He will not sign less will not sign a contract unless he, he is a five year lease with a five year option to buy for another sad on a repeat that over over again. He's like, I already seen, I had already seen the wisdom of owning property, and I wanted a contract so I would own IT someday if I made IT.

And then he'd also cap his doing at this guy again. I love, I just love everything about less like the way he acts. He's very unclear.

Communicator will tell you exactly was important to exactly what he thinks. But he also really a business genius. And so in in every contract, he also would cap his downside.

He called escape clause and he says I had escape clause in the contract that I could turn the property back to him and not have to pay off if the store failed. And there's just a great line that charlie uses to describe them. Later on, he says he was a talented fanatic, and he had to get a hell of a lot of things right and keep them write with clever systems.

And in this next story you can see that, oh, this guy is actually understands marketing and advertising. Again, I know he said this, but monger said that he was an advertising and marketing artist. And so you see this, all the stores are in places where IT snows.

okay? And he winds up going to this company, california called the mohawk rubber company, actually goes to wear that the manufacturing plan. And he wants to watch what they're doing and see if they're any opportunity to like a for improvement.

And he has a product idea that he's going to use for a very long time. So he says, I was I was watching them make a retreated rubber, and I noticed that they use a measuring shovel to add the Warner shells and saw us. You can buy either a rober mix with wana or rubber mix with sodus.

The users in like sleep and snow and icy conditions, right? They had two shovel force, each batch of rubber while mixing. Since we had such a hard time deciding which one was best, walmart or saw us, I asked them, could you put one shovel of wala and one shovel? Or saw us? They said, yes.

I told them to make all of my tires that way, unless I told them differently. Then I went home and I started a big advertising campaign. The new rubber, especially designed for the lush wab company, warned for ice, saw dust for snow.

Many people brought in their old tires and access to redo their tires because the new ruber sounded so good, and they wanted that we use this campaign and this rubber for years, in years, in years. The power of one idea is the fact that is, can be valuable and long lasting for years, in years, in years. And IT took him just going to visit and paying attention.

And then one idea pops with mine, any ones of using that throughout his company, multiple stores for years. Ideas, a great ideas are like magic. And he's got a lot of time to think about his business because just like sam walton, when he's driving through those mountain towns before this, before he gets the plane, the sector sams going from sort of story stories.

Let's is doing these actions on an average day in the early days less we drive six hundred miles a day going around and visiting all of his stores. That's going to mourn his ideas about advertising and marketing. So he writes all of the radio ads, uh, for his company, his self, and he once getting inspired by other ads.

So a lucky strike cigarettes on the largest tobacco producers at this time. And they spent a tony money on advertising, and their tagline was L S, M, F T. That was their slogan.

They use them on their ads. They printed on the cigarette packs, and they would hammered over over again. And they said, lucky strike means fine tobacco.

And so he heard that any ones of telling his wife, who's next time I go look, L, S, M, F, T, that means less swap, means fine tires. I started to use this slogan and immediately, and IT was very effective. And so he comes over the campaign for lady drivers.

And he says, hey, lesh war will change your flat and fix IT for free. If you're a lady driver in our area, call us, we will drive to your house a friendly service man will come to your rescue that's the the tag line on the ad, right? They'll come to your house, they'll change and repair the flat tire for free.

And so this idea over time grew his business was very, very sure. Because think about IT, if somebody comes to your house and fixes retire for free when it's time to get replace those tires and to get new tires, who are going to go to? This is the reciprocity tendency that charlie talks about in his speech at the end of portola ic on the psychology of human misjudgment.

Humans have this embedded, innate and very strong desire that if you do me a favor, I feel the need to repay you. That person is going to the left while tire centre, and they onna buy their tires from them. Any says, I always knew that we fixed all the flat tires in town.

We'd have all the tire business in town. Another one of his ideas that charlie monger loves, invert, always invert you. And i've talked with the open gania pops and igraine y very surprising that you can innovate by doing the exact opposite of your competence.

And so he, this is, he creates the very first tire showroom. And if you go into a tire shop now, this is exactly what they do. They weren't doing at this time.

Most higher businesses had a small showroom. So with the customer acy and all the tires were hidden in the warehouse, my thinking was to reverse, to invert, to make the showroom the warehouse IT would impress people. And that's exactly what he does.

This is the result. I had a lot more tired displayed in the shoreline than any other tire dealer in the area, and customers were impressed. On the very next pages, this illustration of another idea that trively monger repeat za and over again, understand the circle, circle of your confidence.

And so he says, i've often said that I think i'm one of the very best tire dealers in america, but without a doubt, I probably am the worst ranch in america. So he wanted to own a cattle ranch. He did this multiple times.

He wants doing IT successfully many decades into the future. But this is still early as career. And he sucks at ted is very bad. Attempting to be a cattle venture has cost me millions of dollars. I would undoubtedly three or four or five million dollars richer if I never attempted to be a venture. But really, I don't regret that this is excEllent as you only go through life once, and I would have hated to go through life without my cattle ranch experience. Another thing that's interesting is that he was obsessed with keeping everything clean.

So he has his ideas like, well, if we instead of putting on the tires in the backward, the customers can see him, put him in the front, IT will be impressed, like tired supermarket showcase, and you need, he made sure that you have to clean the tires in the store where all the customers are every single day. The tires on display taking about crazy, that is, nobody else was doing this in his business. The tires on display were clean daily.

And so one of the great things about this book is he does all these, like memos, his internal company memo s and they're dated and you could see what he was talking about. And there a lot of them were reprinted in the book. And so I just want to read two sentences from this memo that talks about his obsession with keeping everything clean, because he just was financial, about doing the best job possible for his customers.

A supermarket tire store has tires displayed, a clean share room, tires waxed in an appealing apparent appearance. I sincerely hope I made myself very clear about the first you have to you, you Better clean this everyday, Better not walk into your store. And a Better, if I walk into short, Better be clean.

And he try at six hundred miles a day, so you never know, is going to pop up. I see, really hope I made myself very clear. I love you, but I love a supermarket, tire store even more.

In another memo, he explains, if you remind ine lines, how to get the incentives right. And so he's writing this memo to all the managers. If a bright, Young, ambitious man joins our company and wants to make our company's career, does he do because he likes his manager?

Do you think that this man is going to work ten hours for day just to help you build your store? Do you think that this man is going to work for low pay year after year, just that you could build your profit chair contract into a nice fat next egg? No, I don't think so.

He wants to see results, just like you did when you started up the latter. This man didn't join the company because of the future of the storm manager. He understands that you need to appeal to, not to right to reason, right? They were all inherently self interested.

He just gets IT. That is, man, join the company because of the future of the store manager, over that matter, the future of lush wap persons. This man joined the company because of his future, and so he's talking about trying to get more of the store managers.

So he wanted to promote from within all the time. In fact, one of his main directives to his companies, and one of them, I think, the main ideas he used to build a successor, was promoting from within IT reminds me of the one of my faver quotes from sams a muri. The panicking that said, there's no problem you can't solve if you know your business from a to z.

So I actually want to pause where i'm at in the and read something that less says later on. In our thirty four years of business, we have never hired a manager from the outside, nor have we ever hired an assistant manager directly to do that job. Every single one of our more than two hundred and fifty managers and assist m managers started at the bottom changing tires.

They have all earned their manager jobs were working up. And they also understand every single part of the business because they did every single part of the business another way. He reminds me sam walton and sam wilton had great line together.

Y, when people ask how he more, he says, we just got after IT and then we stayed after IT less. Well, would say that once you get on the ball, he uses the word all all time, like you got to be on the ball, that you stay on the ball. And so directive that he gives to all his employees to represent the book is the fact that you have to focus and you have to avoid complacency.

If we think there is a free lunch, if we rely on last year results, then this company will turn a corner, and then we too will start to go downhill. And once you start down, IT is mighty hard to turn around. If we become complacent than brother is all over with.

And one thing that he repeats out the book that I really love is the fact that if you do stay on the ball, you would be shocked at how bad and such like most businesses are poorly run and and if you're on the ball, you can beat them. And so he's realizing this because he's dealing with all these monopolistic c reber companies. And so he says, as a Young person, I always thought that the heads of large corporations must be human calculators.

As I got deeper into the tire business, as I met many these people, I was surprised so often. All they knew was the policy of the company, ask them a question, and the policy would flow from their mouth in a stream, but they couldn't think on their own. The good people who could think and had guts had dropped out of the company long ago and went out on their own.

I've often said that we should send good year firestone and the other large rubber companies a Christmas card each cheer and thank them for their policies, as their policies made IT possible for us to be successful. He saying, you're mediocrities is my opportunity. And so he was looking for, remember, starts off from day one that I have to fix my supplier problem.

This, the big problem that leads to one of his greatest ideas, and had this idea works like well at this time, tire dealers were, like, constrained and who they were buying. They are terrace m right, and is a whole. How is the supermarket by groceries? This is a thing as a kilo gue supermarket, they may Carry chao gue products if it's the best for their customers, if they get good Prices, they have good really ship with their supplier.

But once they don't, they just move that out. And they and they actually for something else, is that i'm going to do the same thing for tires. I was so discussed with the tire suppliers, I was willing to do almost anything to help my company survive.

In nineteen, nineteen sixty six, I made a big decision. I decided to go straight, independent to buy tires like safeway buys groceries, to buy the best possible, tired, good quality and at the lowest possible Price. This was a major movie, the time, and no one had tried IT before.

The idea was to be a supermarket tire store in no way where we identified or affiliated with any individual rubber company. Let's go back to the fact that incentives drive behaviour. One benefit, one unexpected benefit of sharing profits with employees, less theft from within.

Again, never, ever thinking about something else when you should be thinking about the power incentives. He's talking about the fact that they will to expand. I think at this point, they have one hundred and sixty three stores and people would analyze this company like we're all your controls seems like what we don't have many controls.

why? Because the incentive are controlling behavior. Um we didn't have any controls. The thing they held IT together was that we ran each store as a separate entity as long as we made sure that every tire was built to them, as long as they made sure that every tire they sold was built to the customer, we would come out, all right, as long as the people were honest. Our contracts with the manager said another shoot system here OK.

Our contracts with the manager said that in case of dishonesty, you forever IT all your money in the contract. And so this would accumulate through the year after they had about twenty thousand or so in the their contract. IT helped everyone.

Be honest. Now we share with all the people in the store. Now, this is so important, he is really describing, again, he is just undamned tally, understands human nature.

If anyone employee sees another employee steal anything, then 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 is today, we have very little dishonesty. Every few pages, he goes back in and tells more stories about.

He feels the profit sharing he did is most important thing he did his entire career and he can't multiple times on the books is like, I don't understand why other companies are copying this. And so he calls IT being a unselfish for good reasons, I think, is a good way to think about that. My thinking is always been, if I give away a half the profits, I still have half.

If I share ten million dollars of people, I still have ten million dollars. I don't understand why businessmen don't do this as it's being unselfish for good reasons. IT helps other people, and he talks about the fact that you're helping other people succeed, actually will provide you a deeper satisfaction.

If you just had another ten, nine dollars success in life, it's being a good husband, it's being a good father, and then 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 is worth more than money. And he's writing these words after he already dealt with the worst thing that human can go through, which is the death of his son. Less is gonna be, he's gone to heart attacks.

He's gna be drinks. He says by zone. He's like, the doctor says i'm in bad health.

What he means is i'm fat. Like less talks that way the whole time. But somehow he lives to his almost ninety of phenomena.

King, but his, his, his daughter gonna wind up dying of cancer. Fifty two in his son is going to die a thirty one years old. And so his son works in the business.

And he once have having this accident, he trying to fix to this, this truck tire and the the locker ing, uh, was under too much pressure. And the locker's flies up and hit him in the head. And you know, he's gonna a be alive for a few more years after this, but he was never really the same.

And i'm gna report this to you. His name, his son's name is Harry land. Harry land stopped by the house one night, really broken down.

Maybe I was too rough on him, but the only thing I could tell him was, David, I told you. So I wonder now if maybe I was too harsh on him. He was defeated, bankrupt, broke and really down.

The job was too much for harland. IT was too much for harland. He was about to break down emotionally.

So I had no choice but to take him off the job. IT certainly was hard on me. He made him feel he was a failure, and he was drinking entirely too much.

Harland sqa would have been a tremendous help had he lived a Normal life. He had problems, though, and in some ways he would have had to conquer this problem sooner or later. At two A M on october six, nineteen, nineteen seventy one, my door bell ring, a policeman was at the door.

He came in and told me that harland was dead. He had run into the back of A G truck. I sometimes have thoughts that he might have done this on purpose as he was very depressed.

He was thirty one years old. Harlin left his wife jee, his daughter Diana, ten years old, and his son Allen, eight years old. Absolutely devastating.

And then around this time. He winds up having a falling out with his partners. He had given two his partners, I think, that each own twenty percent of the company.

And they go crazy, they fall out. They have a falling out over money, which is crazy because how small the amount wind up they are today. Not realizing that you're on this rocket ship is working.

Just hold on domestic figure like talk IT out. There's just something with there are not technically cofounder ers of the company, but you see is a lot of cofounder ers. I think programme said the number one break up of in y commentor is not like a external factors is actually, uh, go found a conflict and you just see a lot in these books.

I'm going to read this holding to you and explain to you it's going to happen. But IT there when i'm reading IT this time, I could help I think about the the falling out the ray crock had with the mcDonald brothers and they're falling out over money and and disagreement about like the direction the company is. You're shooting yourself in the foot.

There is a giant opportunity. So few businesses actually work and get to the scale and you ruin IT. It's like hard enough to start a company, a successful company and one that's succeeding more than ninety nine point nine nine percent of all other companies.

And there's something where we just can't help but shoot ourselves in the foot, minding this. This lyric a fifty cent talks about, and he says, enemies stay enemies, but friends, they change. People go crazy over money, my man. And so this is exactly what happens here.

Norm Nelson and don Miller, these are his partners, were both making tons of money, but a lot that money was not being taken out of the company, leave in in salary, salary enough to live on, arrested in the company to be used for expansion. The each own twenty percent of this money. But here's what happens now.

There's they're in how much company make him. Now there are the money that in the company that technical they have, they could have access to its growing and growing. So their, their wives, people are families like you need to push less than this.

We need to get the money. They and their family saw all the money they were making, and their wives wanted to get their hands on some a bit. And so they want having a disagreement about this. And so now norm and done wind up teaming against less.

So now it's two on one, but even though, uh, lessons way more the company on sixty percent to their twenty percent age, I soon found out that i've run into a bustle as both Norman dome team up against me. This is something I never could figure out. This was one terrible mistake on their part issue.

Can use hind sight today, money has funny effects on different people, especially the kind of money that these men were now making. I went home and I was talking my wife, uh, about nothing else that night, at breakfast. The next day, he suggested, why don't want you buy them both out? You'll get by, by some way.

Something hit me. I hit the table. I pounded the table. Dishes fell off and I said, that's the best m idea we've had in six months because this been going over six months.

Uh, in the six months we've been talking about IT agreements that I had with Norman dawn said that I could buy them out a book value at any time by giving them thirty days notice. And so he goes to meet his partner done. You want a swimming pool because they wanted like swimming pool on boats and and you know the stuff people want when they are making more money.

Then you wanted a wiving pool. Now you can have IT. You're going to get two hundred and twenty five thousand dollars.

Norm, you wanted your money. Now you're onna get your money. You'll get around three hundred thousand hours. So he was a buying all these partners that what's the value of this decision to his, the fifth generation that wants selling the company? That's a no thing that's talk about.

I don't want to be confused too much over ever going to talk about, you know, I want my company run this way or take my my god damn name off IT. I don't want the company go public. I don't want to sell the company.

And you could do that all you want. But the guys been dead for a long time and then looking for a long time, I think, about ten years later. And they want to tell the company there's just as weird thing that we legacy continue.

I talking about my own is even possible to have like this motor I generation succession plank is now there five generations out there are like, oh yeah, no great, great grandson, whatever. Didn't want to sell the company, but this company is offering a three billion dollars uh, yeah, we're gonna take IT. So I don't know. Just a thought that in the the back of my mind, yeah, if you're successful comprenez use of having control and influence and in banning the will, the world here will, and yet all that not going to exist when you are not hear anymore, this should think about so anyway, what is getting the buyout?

Twenty percent company for three hundred thousand dollars and then the other twenty percent for two five, which just one part of their contract, not including a salary or anything else, they were eligible for a five percent cash bonus each year today which and when he says today that's one thousand and eighty six, that they may be making over million dollars per year just from that five percent bonus. So they just held for another fifteen years or so. Instead of taking the three hundred grand that day or two twenty five that day, they may be making a million hours per year.

Now why did I say that? That's very reminiscent of this disagreement that ray rock had with mcDonald a brothers. They have this huge fight.

It's in the book grinding IT out, which I made two parts on the last time I made an episode, was like, two ninety three was earlier this year, right? Crock once up, buying out of the maDonna brothers and cost some fourteen million dollars in a bunch of interest to whatever, right? And at the time is a lot of money.

But now he's looking back, many not maybe like two decades after, and he said, oh, this is peanuts because their contract said that they would have they would have a round. They would get half of a percent of all sales in every single, my Donald, anywhere now and in the future. And so even though he's I think he's I think red rock is read that book, what that book is private in the seventies, who knows what to be were today, but if they had just held on instead of taking.

So I think he was twelve millions to the madona d's brothers. And I think they had to pay like two million and transaction cost. But let me let me down on others make twelve million one time.

If they just held on, they would be making at that time that record produce a publish book fifteen million dollars in real ties every year. And that's now you're you're not going to work for that money. You're not going to the office not working in the mcDonald store.

It's just fifteen million dollars as this year and as a girls, sixteen million next year, twenty five million five years from now and just goes on and on and on. So again, people just go crazy. They go nuts.

Money has funny effects on different people. I can cause you to make a terrible, terrible financial decision. And now that i'm thinking about that, let me look for IT.

Uh, something just part of my mind. I'm going to search my read was, uh, there is some doing this one talk to there is a long yeah found IT okay, uh, this is not. So I just thought about another like investor found a partner conflict.

Henry ford, one of his investors, invest in ten thousand dollars. They wind up having, uh, this huge falling out and think about, think about owning a part of the ford motor company, right? Pre model t okay, so this guy, I to read this, i'm like excited and I think i've had too much cafe today.

We just read this. You he got one hundred and seventy five thousand dollars, hardly a bad to this. Is Henry for speaking now.

Okay, he got one hundred and seventy five thousand dollars, hardly a bad return on an investment of ten thousand dollars three years earlier. So that's great. Invest ten thousand hours.

Three years later, you get, you push this issue to get your money out, and you ve got one hundred and seventy five thousand. You did a great right. But if he's stuck IT out for a decade longer, he would have gotten a hundred million dollars, that is bananas, ten thousand into one hundred million and thirteen years.

And instead you took one hundred and seventy five thousand to go back to his partners. Another thing that he will. Peter gran, life is hard.

There's no digital version of this book to search through. But if, if, if, if there was life as hard as probably the thing that who beats the most, life is hard. But again, IT turned out to be the the best thing that could have ever happened to the company.

Greed was entering into the company, and greed destroys their interest. Today would be worth around twelve million dollars each. Again, their active interest would be a trouve million and one thousand nine hundred and eighty five.

When the book came out, their annual bonus would be another million on top. That now this is bananas, right? Because at the time when they did this, when they pushed the issue, the company was only doing ten million in sales.

Uh, the I think this is one thousand nine, sixty seven from the stake. Okay, one thousand and sixty nine, sorry, OK. One thousand and sixty seven they're doing in ten years, that's great.

One thousand and eighty five, they're doing one hundred and eighty million in two thousand eighteen, they did one point eight billion dollars. They could have still been alive in a twenty percent of that company. And instead they sold IT for their interests for two hundred and twenty five thousand hours they could bye a swimming pool.

incredible. This is why log py is so many lessons. And you can like, I hope the hitchen head are, show me itchen heart. But you know, that takes place over, like, you know, three, four pages. It's just above redial.

And IT just makes you think of all the other bike phy and maybe other episode founders that you listen to, you can kind of title all together and really think makes IT a resonate much more than just a list effect. Now another example, I hate to keep doing this, but i'm told you, man, same wallin in lish, wab, very similar people. So sam walton is automatic.

He says, if you are not serving the customer or supporting the folks who do, we do not need you. This dude less is constantly rAiling against office people, even he's an office person. He's like to store people.

The only ones are important. We have had over the years. Some people in the office are sometimes think that they are more important than the stores.

The office serves only one purpose, and that is to serve the stores. The office and accounting people can only tell the stores what they have done. If the store manager runs his story, 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, are looking at reports, IT is a sure thing that his store will suffer. Cell tires, give service, keep expenses low, watch for leaks, do these things and you come out. All right? Our storm managers make more than our office people. Some of our office people, especially some of these M, B, A degrees, sometimes wonder about this. But i've warned them, do not bitch to me, because that is the way I want IT.

If you want to go out, start at the bottom, changing tires and work into a manager job, then hot to, if you warned for those men in these stores working their butts off and all kinds of weather, missing meals and and working god awful hours, you will not even have a job and so that's something you meet less repeats s get out of your god dam office says that over over again. Like stop beginning in your office reading reports, go out and help the customers serve the stores and then want out of your office, you need to stay out of your office. And he continues this line of thinking.

Again, I could help another store manager more in one hour than a professional type management person could in a week. why? Because I had the same problem.

He had done the job. right? Uh, the professional type management loses out and IT doesn't take long. If you stay out of a store for thirty days, you've forgotten fifty percent of what you should know. And when I read that, I thought of this pianist quote that, uh, let me go find the book. I get to pick up poor charlie on act now.

And charlie uses this idea, or this story, this quick story, to ultra idea he talks about, like, once you have the skills that you have to come and use them, are you onna lose them? And he says, skills of a very high order can be intense with daily practice. The famous penis once said that if he failed to practice for a single day, he could notice his performance deterioration, and then after weeks gap in practice, the audience could notice IT as well.

Less robs version of that is if you stay out of the store for thirty days, you've forgotten fifty percent of what you know. And so then less tells a story about how you want of winning this competition with what he thought might be formidable, formidable adversary, this nells entire warehouses. And they made a mistake.

So he will constantly talk about, hey, you need to have a low cost structure. You need to watch your costs. Of course he did, but he didn't did feel that way about wages.

你到底 should pay the highest wages as possible， because the higher wages you pay, the Better quality employee you get. The Better quality employee you get, the more the happier customers will be. And so there's all these like second and dirt order effects that the people are just cut salaries and think about our salaries, h and wages as a part of their cost.

No, they never realized. And a one of doing them and so says, if you made a major mistake and he must have because he went bankrupt, IT was in moving too fast. But he had been concerned for quite a period of time.

They were springing up all over organ. And he got up to twenty four stores. And so we talked what they did, really good advertising.

They did good at holding down cost. But the one mistake they did was that they paid low wages. And the floor here, this is less talking. The floor here was that they didn't get with that low pay near the quality of employees that we had.

And this is the most important part as he's going through and like having this competition had on, hey, say, oh, like, did I make a mistake here? Like should I be doing what he's doing? And so he said, after talking about this for years, so I wondering if I shouldn't cut wages and benefits.

I finally made a decision. And that decision was, if I couldn't be proud of my company, if I could not pay good wages, if I couldn't have good benefits and if I could not have the best employees. And why would I want to stay in business? So we did nothing and we won.

The customer liked us best. Life is hard. This is a summary. This is a summary on the neil new tire warehouse and we dom them.

Life is hard for the man who thinks he can take a shortcut. And so this is an interesting historical fact buried in this. Very hard to find work that a lot of people have not read. So, you know, K, K, R, uh, I think it's like kober travis Roberts in company.

I think they they like a trillion dollars on their asses and and so like one of the biggest investment companies in the world, if i'm not mistaken, well, he back this is now what forty years ago, he's actually interacting with a bunch of like the partners and the reason is I need to bring this up because I mentioned this earlier, how like he could to hate it's going to stay in the family business. Its never gonna for sale but once you die you really know don't have uh a lot of saying this. And so he talks about over over again the companies for sale, all the stock in the family.

He wind up turning down buffet earlier his career. He winds up turning down missile entire. They wanted to buy the company and turns out K, K, R.

Try to buy the company as well. And this would have been shortly after K. K, R was founded.

Uh, because K K. R was founded in one thousand nine hundred seventy six. I'm so glad I resisted the urge to have our stock on the market. I don't want a few investors around the country club asking about our business and question some of our decisions.

They might even ask, how come some of the store managers make so much money? why? Why do they make as much as idea? And I have a college degree, i'd probably lose a customer as my answer would be, he is worth twice as much as you.

And he has a degree too. He learned how to be a businessman. I'd probably add he also learned how to work, something you never did learn.

There's another company that wanted to buy them. And, uh, he wanted meeting with the guy. He takes the call just for fun.

This company was headed by a man in his seventies who made a fortune by buying up privately held companies and letting the present management run them. How many people have used that idea? Successful ly buying up privately held companies and letting the present management run them.

I told them that I didn't wanna sell the K, K, R. People also contacted me, and I spent a day with them. I was more curious than anything.

Everyone knows about K, K, R. They have bought companies out in the billions. They are nice people. If I truly wanted to get out, I would consider them as they have a good reputation with how to handle the companies and employees after they buy IT. And so this is causing him to think about like succession plans and what's going to happen.

And he's very concerned because he says, i've seen companies fail and go down hill and they did and sometimes they disappear entirely after the founder retires or dies. I hope this doesn't happen with our company, where we are in this point less already had way more money ever needed. He could have retired fifteen years ago.

I could come out with and start, he's talking about selling. I can come out with an aston astronomical bundle of money. If I sold the company, what? What would I do with IT? What good is money be? On a certain point, I think the bigger conception about public, about a successful businessman is that is working for more money.

You won't find many truly successful ones that are only working for money. Success in my mind, they obviously liked the money. He's not saying that, right? Successful my mind comes from having a successful business, one that is a good place to work, one that offers opportunity for people and one that you can be proud of to own.

And he goes right back into the fact and insensus drive behavior, and he's very proud of what he's done. IT is very rewarding to create a program and watch your work. There's something in our program that makes a man that several hundred miles from the main office be at his store at seven thirty and then sometimes have to stay nine P.

M. If needed. It's not a big fake policy book. It's not a lot of supervises, which he doesn't have. It's something that our programs created in him right in his heart. He continues on this and he feels that most companies put the emphasis on the wrong part.

We are different from most american corporations as we think the most important people, the company on the firing line, one who sell ones who do service work and take your customer. Most american corporations have the fat salaries and outrageous bonuses for the top people and treat the people the end of the line as ponds. I guess that is why if you're on the ball, you can beat them on any type of fair competitive basis.

And he practices what he preaches. The warehouse executive people should be very happy that the storm managers make good money and make more money in the company company as IT helps them. If jealousy ever creeps in, goodbye lesh wab company.

We have great people. This won't happens as long as i'm alive or kill them. If IT does. Again, fanaticism and scale combine can be very powerful.

They'll find out that life is hard, and you put life is hard in caps is almost like this model, life is hard. And then he continues on this team over many, many pages about the importance of taking care the store. If you take care of the customer, take care the store, then the office is automatically taking care of.

This is a great line I need to do her uh, biography, marik the founder mary kay cosmetics SHE has one of the best in terms of like um how to win friends and influences people if you want to think about those terms, she's one the best lines i've ever hurt. SHE says that mary case said that everyone goes to life with an invisible sign hanging around their neck that says, make me feel special. This can be applied to customers, but across we apply to your employees.

This is what that says. Most men are starved. For personal recognition, any boss who unknowingly are otherwise destroys and employees self esteem also destroys the employee.

Truly work to make this man is successful man. And then you've done something great, great for the man and great for you. Less believe in building up and empower ing something you repeats open over again.

Keep your decision making as low as possible, keep decision making lower. A company starts to grow. And as IT grows, more and more decision making tends to move up to the main office.

And this is one hell of a big mistake. The decision making should be always be made at the lowest possible level. Give your manager the authority to make his own daily decisions and let him run his show. Keep your decision making at the lowest possible level, and then want to close on this book before we get to charlie analysis of this book, I love what he talks about here.

Keep the main thing, the main thing, focus on doing the job to your best ability today that kitch you to tomorrow, and then continue that process of a long career, and you'll be surprised where you end up. So he's looking back and talking about if he didn't do the data day things correctly, they would have never got this far. Most companies that have grown large must have had as many of the same problems that we've had. I think many times are the many things that have happened that I could have stopped us from growing. If Frank had failed with that store in redmen.

This is when they expanded the second store, if the large commercial account I had that owed me so much money had gone broke at the wrong time, if I had won my fight with the OK franchise, if the foreign tires hadn't been available to us, if I had not been able to get through the period of the blow up between my partner and me, if any of my first five or six stores had failed, if I had got out watching and got my mind on my business and the many, many, many more ways that could stop the growth of the lash swap company. Parting advice has reminds me of one of my favorite Edwin land quotes, Edward said there's a rule that they don't teach at harvard business school. IT is, if anything is worth doing, is worth doing to access the less shop version of that.

Looking back on his career says, whatever you do, you must do IT with gusta. You must do IT in volume. IT is a case of repeat, repeat, repeat.

And so with that, I pick up porchon C. I go to talk number nine. And that is where charly analyses as the book that you and I just win over.

And so he says, i'll give you a hard problem. There's a tire store chain in the northwest that is slowly succeeded over fifty years. It's the less swap tire store chain is just ground ahead.

IT started competing with the stores that were owned by the big tire companies. They made all the tires like the good years and so forth. And of course, the manufacturer favor their own stores, and those stores had a big cost advantage later, lesh rob rose and competition with a huge Price discounters like costco and sam's club.

And before that, he competed against cars. And yet here is swap now with hundreds of millions of dollars in sales. And swop is, in his eighties, with no education, having done the whole thing, how did he do IT? And so this is where Charles is going to analyze how he did IT.

And so he says, let's think about this with some micro economic fluency. Is there some wave that swab could have caught? So if you listened last week, this is something that truly talks with over over again his surfing model get IT the beginning of something and it's working and you're riding the wave.

Stay on the surface. He's like you would be shocked at how you just stay. The support is going to take a long way. A lot of people jump off, right, to get mired in the shallows. That's what charlie says.

And so he says, was there some way that shop could caught the mini U. S. A question? And the answer pops in, the japanese had a zero position and tires america, right? zero.

And they got huge. So this guy must to win that wave in the early times. But his slow following success has to have other causes.

And so this is where he goes into this law, plus a result that less gets. This is something that charlie was intensely interested in. He would collect a bunch instances.

You concern, read about this. And so he says, and that's probably would happen here. This guy did a hell of a lot of things, right? And among the things that he did right is he must have harvest the superpower of incentives.

He had a very clever incentive structure driving his people, which again is why monger said at the annual meeting, you should buy the book you're managing. People just read IT just for his incentive structure. He is a bunch in the book, and he must be pretty good at advertising, which he is.

He is an artist. So we had to get wave in the japanese tire invasion. And then a talented fanatic had to get a lot of a lot things right and keep them right with clever systems.

Then IT is not that hard of an answer. We hire business school graduates, and there no Better at these problems than you were. Maybe that's the reason we hire so few of them.

Well, how did I solve this problem? Obviously, I was using a simple search engine in my mind to go through checkless style. And I was using some rough algorithms that work pretty well in a great many complex systems in those algorithms run something like this.

And so he says this applies to lesh war, but IT also applies to a lot of these other super successful companies. And he gives, uh, four factors here. He says extreme success is likely to be caused by some combination of the following factors.

Number one, extreme maxim, ation or minimization of one or two variables. Number two, adding success factors so that a bigger combination drive success, often in a nonlinear fashion, as one is reminded by the concept of break point and the concept of critical mass in physics. Often these results are not linear.

You get a little bit more mass and you get a law. Palu sa result and of s, i've been searching for love pose a result all my life, so i'm very interested in models that explain their occurrence. So cherly is also explaining nuta lish wab.

He uses costco as uh as as an illustration this point. Toyota is an illustration at this point and oracle some at just some of them, but he menu's many more and purchase amenities. Number three, an extreme of good performance over many factors.

That is, jumps. Read out the book, if you read the lush a book, and finally, for catching and writing some sort of way. So that is where I leave IT highly recommend that you if you can get a copy and very hard to get again, limit is only twenty thousand.

I think the entire world you get to copy the book, highly recommend you do so it's fascinating. And IT doesn't really matter what or order you do this. And you can read the lesson b book first and then real his analysis because I I read this book for the first first time four years ago when I read portrait last week.

And like, oh shit, like I should go back and revisit lesh warm and then reading his analysis and then reading the book is really cool. And then going back to his analysis after, I think really adds to IT. So anyway, in any case, I will leave the links down below for both those books.

And if you buy them using that link, you'll be supporting the podcast at the same time. That is three hundred and thirty books down one thousand ago. And I talked to him soon.

okay. So what you're about to hear is this question of us a few months ago actually recorded as a few months ago, they asked, how did history grates? Think about hiring at all the answers.

People think I have a Better memory than I then actually do. You know, if people say you, David, have a great memory, my wife would laugh at that. I forget things all the time.

It's not to have a good memory. It's I reread things over and over over game. Every single answer, every single references about to hear in the shiny minute minute episode, came from me searching all of my notes and highlights.

That option is now available to you, if you like what you hear, if you think it's valuable, if you're already running a successful company and you want an easy way to reference the ideas of histories, great entrepreneurs, a search able database that you can go through at your conventional anytime you want that, you go to founders notes dot com and sign up. I want to start out first with why this is so important. There's actually this book that came out in like one thousand nine hundred ninety seven.

It's called in the company giants. I think it's up to two or eight of founders. It's two state for N, B, A students to remember correctly and their interviewing a bunch of technology company founders and in the see jobs, one of them this is, you know, right I think even before he came back to apple and they were talking about, well, yeah, we know it's important higher.

But in a typical startup, a manager or founder may not always have time to spend recruiting other people. And I I first read this, this tea answer to this, you know, I don't know, two years ago, and I never forgot IT. I think it's excEllent.

Think sets up why, uh, this question so important and you should really be spending existing early basic, basically earlier time doing this in a typical start of commander me may not always have the time to spend recruiting other people then Steve Johnson, I disagree totally, I think is the most important job. Assume you're by yourself in the start up and you want a partner, you take a lot time finding a partner, right? He would be half of your company.

I'm going to post here this idea of looking at each new higher as a percentage of the company is genius. Why should you take any less time finding a third or a fourth of your company or a fifth of your company? When your N A start up the first tent, people will determine whether the company succeeds or not.

Each is ten percent of the company. So why would you take as much time as necessary to find all a players? If three, three other ten, we're not so great, why would you start a company where thirty percent of your people, or not so great, a small company depends on great people much more than a big company does. okay. So to answer this question.

The advantage that um that I have making founders and that you have a big part of listening founders is not only that I you know three hundred and biography of punchiness now but I have all of my notes and highlights stored in my read wise APP and that means I can search for any topic, I can look at the past highlights of books. I can search for keywords so what I did is first of all, like what i've started, do these a um questions as I read them, decide which one i'm going to do next and then think about IT for a few days. I don't put me that just literally that that I know that the next question, just let my brain work on IT in the background for a few days and then i'll go through and searching all minutes.

And so that's what I did here. And so there's a bunch of unit on. I may have like ten or fifteen different founders talking about hiring. The first idea is the most obvious, but I think probably works best when you're already established.

So Steve jobs is talking about, hey, you know, the great weight to higher is just find great work and find the people that did that and then try to hire them when you're Steve jobs, that's a lot easier right then if you're just somebody does have reputation, maybe you have resources made your companies rather new or not is well known. Leave IT all will be. I just did confessions of an advertising men couple episodes ago, the three o six or something like that through seven and he did the same thing.

But he's David og vy at that point so he would find he'd go to magazines, find great advertising, great copyright, and he write a personal letter and then set up a phone call. And he says he went, he was so well known, and you know, one of the best in his field that he couldn't even have to offer a job. Just the conversation.

Then the person would the the he wanted to hire the person never mention IT and the person would apply to him. Um and so again, I think if you can do that, then of course the straight d who find for somebody is great work. Usually you can do this.

I actually a friend. I can't say who IT is. He's doing this right actually um every friend that's really good at doing this.

He's finding people that do great stuff on the unit and then just called called diameter and then getting convinced to welcome things. And that usually were successful like Younger people earlier in korea. There's a bunch of different ways to think about this in a bunch of different ways to priority.

So the first thing that that that came to mind, what I found surprising, is you read any biography on, and he had a couple ideas where he felt the optimization, you know, tables stakes that you're n intelligent in your driven in your heart, working like relisting to this, you should know that, but he prioritized hiring people with social skills. And so this is what he said, the ability to deal with people is as purchaseable a commodity as sugar or coffee. And I pay for, I pay more for that ability than any other under the sun.

There's the two. The second part of this though, and this is also worth, worth, you have access more resources. He, he rockfalls would hire people as he found, as he found out to people, not as he needed them.

It's not like, okay, standard oil has six open spots. Let's go find six canada, right? He come across what he considered a counter person. He didn't even matter what, he didn't know what they were going to do. He like, i'm just gonna ack his team.

And if you really think about the his partner's senator il, he essentially built a company, an executive team of founders of cause, because he was buying up all our company. So very rare. But um there's a line from time I want to be to taking for granted the growth of his empire.

He higher counts of people as found, not as needed. And then I found another idea in the hiring like the actual interview process. So there's this kind of any verbum I did two pisos don't know. I think it's two seventy and two seventy one.

He is the most important american ever uh in history of in in terms of connecting the scientific field, private emphasize and the government the most important person keep a live for the american war effort was F D. R. The second one was vAnnier.

sh. Van va. Bush is like the force gump of this historical. He is involved in everything from the man hand project to discovering like a Young clock shanon to building a mechanical computer like this guy literally has done. Just he pops up in these books over over again.

If you were reading about american business history during world war two and post world war two, you are going to come across the name bin ver. Bush over and over again. Ah I read his fantastic autobiographical LED pieces of the action and I came across this weird highlight and so this is his brilliant and unusual job interview process.

And so he talked about orange ation he's running called AMD at ammirati hire a Young physicist from texas named cg smith. The way I hire him is interesting. An interview of that sort is always likely to be on on an artificial basis in somewhat embarrassing.

So I discussed with him a technical point on which I was then genuinely puzzled. The next day, he came in with a, with a need solution, and I hired him at once. Here's another idea.

This is from no emotional, no ambition. The founder of a tari founder, chucky, she's and Steve jobs mentor. He hired Steve jobs. When Steve jobs was like nineteen editor, he would ask people they're reading habits in interviews. This is why one of the best ways his whole thing was he wanted to build all of his companies, laid on the foundation of creative people. So that's what he's looking for.

He's like I knew, created people, one of the best ways to find creative people, to ask a simple question, what books do you like? I ve never met a creative person in my life that didn't respond with enthusiasm to a question about reading habits. Actually, which books people read is not as important as a simple effect that they read at all.

I ve known many chAllenge engineers who hated science fiction but loved, say, books on bird watching, a blatant but often accurate generalization. People who are curious and passionate read, people who are apathetic in a different don't I remember that that's such a great line and I have a cream bit. I remember one i'm going to read again, a blind, but often accurate generalization.

People who are curious impassionate read, people who are apathetic and indifferent. Don't I remember one particular woman who, during an interview, told me that he had red every book that I had read. So I started watching books I hadn't read, and SHE had read those too.

I didn't know how someone in her late twice found that this much time to read so much, but I was impressed. I was so impressed that I hire her right there and assigned her to international marketing, which is having problems. This is why, this is why i'm reading.

So second to you, a job with a lot of moving parts benefits from a brain that has a lot of moving parts. IT wouldn't be possible to have read that many books without such a brain. So do you see what I mean? Like we start with, see job saying this is the most important thing that your roles, that leader, the company, the founder to do right, and you are in, is so important to study.

This is why glad this this question exists. And while i'm glad that I ve, I took the time and I had, like the four sight OK, I should really organized my thoughts and notes, because there's no way I would have remembred all this without being being able search and read wise, right? But you have rockfish ing.

This is what's important to me you have bush saying, this is how I and I you have known bush saying, well, here's another weird thing that I learned um let me go through what warm buffer s all about this so this is about the quality. One thing that is consistent where the jobs buffs basotho ter till there's just possible over gan, they talk about the importance of trying to find people that that are Better than you. The the hiring bar constantly has to increase and obviously, the large of the company gets that impossible.

Steve jobs, as a great quote, where is like, you know, pixar was the first time I see I saw an entire team, entire company of a players. But they had four hundred players. They had four hundred team members.

He, like at the time, apple three thousand is impossible to have three thousand a players. So there is some number that your company may grow to or just you're just not you're not going to have thousands of a players in my argument. I me know if you get a four hundred of issue.

I mean, i'll take Steve s word for IT on there. And picks are definitely produce great products, but it's probably a lot of lower matter as well. So warm buffett will tell you to use David ogle is hiring philosopher and so warn, said charlie, I know that the right players will make almost any team manager look good again.

That is why it's the most important function of the founder. Maybe directly next to the product, right? Of all the product, actually, because those of people building your product, we describe to the philosophy of ogi im out the founding, the David ga.

This would all would be said, if each of us higher people who are smaller than we are, we should become a company of jars. But if each of us higher people who are bigger than we are, we shall become a company of giants. David a.

Jeff bases rather use the variation of organ's idea, too. Jeff used to say in amazon, every time we hire someone, he or SHE should raise the bar for the next higher so that the overall talent pool is always improving. They talk about this idea, amazon, where the, the, the future harses we do should be so good that if you had applied for the job you are, the haven emails on you will gain in.

That's a very interesting idea. Take your time with recruiting. Take your time with hiring. This is great book on the history of paypal to actually, I recently become friends with the author s name James SONY.

And this is in his book, the the most fascinating thing that I found was that paypal prior speed. So from the time they they are founded to the time they sell to ebay, like four years, jim, he spent more time researching the book then for he spent six years researching the book. I was season because like you took a long on a book and they took to start in the company.

I just speaks, select the quality he want to do. but. That as a by product of that, like obviously, they move fast, but they prior to speed everything else except in one area recruiting, max ledger kept the bar for talent succeeding in the high.

Even if that came at the expensive speed staffing, max kept repeating a higher A S, B higher seas. So the first b you hire takes the whole company down. Let's read that again, a players higher, a players, b players hired c players.

So the first b player you hire takes the whole company down. Additionally, the the company leaders Mandated that all prospects is another idea. You all prospects must meet every single number of the team.

Now the next one is the most bizarre. Makes sense if you study. I did this three part in my realism, three parts in a real.

And I just to read those box again, because the parking is like fifty times is bigger than when I publish his episodes and he's just it's crazy. So he would hire, based on the coin, the self confidence level of the canada. Listen to this.

I have two miles. I don't like lawing. Okay, this is just okay because this is you read about Larry ellison and he's one of these people was like a really easy to interface with because you just know exactly who you what's important to.

That's why I think it's so funny. Ellison insisted that his recruiters hire only the finest and cautious new college graduates. When they were recruiting from universities, they asked people, are you the smart st.

Person, you know? And if they said yes, they would hear them. If they said no, they would say, who is and they would go higher.

That guy and said, I don't know if you you got to smart these people that way, but you definite got the most argan licence. And this is why what the personality the founder is, largely the culture of the company. Apple is Steve jobs.

Apple is still gives to ten thousand lives, right? I just texting a founder friend of mine. He lost the pocket actually about to the podcast he's going to dislike, uh, process is self discovery like he's already started.

A bunch of companies are really successful but he's like I think i'm more of this type of founder than the other type of founder, and that's good that he's doing that because he he's hopefull next mission is like his life mission, you know, and you can get your mission, you to fight who you are. Ellison knew who he was. Ellison swagging combat of style became a part of the company's identity.

This arrogant culture had a lot to do with oracle success. He is another odd idea for you, is he sharp, the founder four seasons, actually could figure out that in his business, which was hotels, right, that hiring could hiring a person could actually be a form of distribution for his hotel. He gave me the idea because of what? What do we know? What do you? I known in our bones that histories, greatest founders, all red biography, they all read by graphs of people that came before them and took ideas from them.

Is he sharp, are trying to build four seasons? What do you think he did? He picked up a biography if seizure rit, the guy that is rescued, his named after the great, arguably the greatest year of all time.

And when he realized, oh, shit, rich, he he says, remembering that these are ritz, made his who's world famous by hiring some of the former chefs, we decided, do something similar. So what he art sees our rich, when now important with August scofield, what season or ritz was to to building hotels, August coffy was to french cooking. And to what happened is important with world famous shifts.

People come into your restaurant that's in the hotel because the world famous shift, and now they know about your hotel, that leads to more get that, that leads to more activating your restaurant that you own, but also leads to more brand recognition of your hotel and then as a byproduct that more people staying at. So hiring as a form of distribution, this is fascinating as a fascinating idea. Okay, here's a problem.

You can identify great people, right? Maybe they even want to come work. Like if you identify them, you've sold them.

Hey, this is, this is our mission. This is what we're doing. And yet humans have complicated lives. They have sources. They have kids.

They have a reason, baby, they can move across the country to work for you even though they want to. So there's a problem solving element that you seen these books on. You have to solve like you've identify the person, you've recruit them.

They can go for some other reason. okay? Well, the great founders are not going to take no for an answer. I read in in this book of lift off, which is about the first six years of spacek. This is what elon mustard they had anticipated.

Ted, his friend's issue, having convinced, must they need to bring this? Bringing Young engineer from turkey on board, IT became a matter of solving the problem. His wife had a job in san for cisco.

SHE would need one in los Angeles, right? As for space sexes at the time, these are solvable problems and island's Better solving problems. And almost anyone else must therefore came into his job interview prepared about halfway through muss told the guy that he wants to hire.

So I heard you don't want to move to L. A. And one of the reasons is that your wife works for google. Well, I just talked to Larry and you're gona transfer your wife down to L. A.

So what are you going to do now to solve this problem? Must could called his friend Larry page, the cofounder of google, the engineer SAT, and stunned silence for a moba. But then he replied, given all that, he would come to work at space sex.

That's really smart. There is another idea when you're promoting or you're onna promote when with or from without, you know that's depending on you, depending on what was going on. I do think this is interesting though. This is again in lush wab, who this is really a valuable chain of a like higher companies in the acidic northwest.

Actually found out about charlie monger, you should read the biography, he said he didn't say to me personally he said IT to in like one of the birch chair meetings that to study leshy had one of the both uh one of the dest uh financial incentive, any company that that try mugger come across. So this is what lesh wab did. He did not want to hire from.

He did want to hire other people from other companies because they might come with that habits. He liked to train his own executives. And so he says in our thirty four years of business, we have never hired a manager from the outside.

Every single one of our more than two hundred and fifty managers and a system managers started at the bottom changing tires. They have all earned their management job by working up. And in another thing, if you're going to hire the best of the best in a players there, a players don't like to be recommendation.

And so this came in Larry Miller automotive phy called driven. He owns like he owned like ninety three companies. Although uta cordial er ships movie, there's all kinds of crazy, but he also owned the the the b mutual.

And what was fascinating, he's trying to recruit Jerry sloan as the coach at at the point. And Jerry slone's only take the job on one condition. And I really like IT.

I really like this idea. If you hire me, let me run the team and business, right? That's what you're hiring for.

One of the best things we had ever done was higher Jerry song as coach at the time. He said, i'm only going to ask you for one thing. If I get fired, let me get fired for my own decisions.

If you hire me, let me run the team slash business. Here's another idea from Thomas Edison that I think is faster really. I the way I think about the founders, like you're developing skills that you can't hired for you, you're going to hire for everything else, but you shouldn't be herself.

And Edison wasn't Edison expressing his views on the premier role of applied scientists, which, what he considered himself, coin the expression, I can hire mathematicians, but they can't hire me. And so when I read that paragraph at the first time, I know I left myself, was develop skills that you can hire for capitalism rewards things that are both rare and valuable. S A lawter will give you your advice that you'd need to hire people, line with your thinking and values.

Hire the best people. This is vital. Hire people who think as you do and treat them well in our business.

They are top, top priority. So this that seems kind of weird, like hire people who think like you. This is obvious ly one right way to build a business.

I think that your business should be an expression in your personal, in who hour as a person at the core. And so I think there is an art to the building of your business. And the reason to use the word art, I don't meaning you like a hot toy.

No pretentious manner. That's me at all I don't give me care about no are at all really. I mean that you're making decisions not just based on economics, like there are non economic important decisions based on how you're building your business.

Like you could probably make more money doing a decision a, but decision a goes against who you are as a person or you just don't like IT or it's just not as elegant or beautiful and so therefore you don't do IT. So that's what I mean about, you know, hire people who think you you do and what, for whatever reason. When I read S A lot to say that I was okay that there's like this art to what she's doing.

One thing that can be helpful recruiting ah this computer. Tio, I think this is the book is zero to one understand that most companies don't even differentiate their pitches to potential recruits and to hiring. So therefore, like they're just gonna as a byproduct that you're going to wind up with a lower overall tent base.

And so he says, what's wrong with valuable stocks, smart people oppressing problems? Nothing but every company makes us these claims, so they won't hope you stand out general and undifferentiated pitches to join your company. Don't see anything about why I recruiting in your company instead of money of instead of many other.

So that idea, your pitch, you're actual, he will tell you you you shouldn't building on difference in the commodity business, but even above and beyond, I like your the the mission that you're trying to engage everybody to join you in that pitch. That s sae you're trying to make the potential recruit should be differentiated, should not if that person is playing to five other other jobs, there should not be like like, they may not like your mission, they may not like your peach, but there shouldn't be able compare anything else. I another quote from no one bushel.

Hire for passion and intensity. That's what he would do, or that's what he did when he found Steve jobs. If there was a single characteristic to separate Steve jobs from the massive employees, IT was his passionate enthusiasm.

Steve had one for one speed four blast. This was the primary reason we hire him. And one thing all these stones are common is that, you know how important hiring is.

And when someone is important, you do IT yourself. This is, again, elon musk on hiring. He interviewed the first three thousand employees at space.

That important was one of musk most valuable skills with disability, determined whether someone would fit his mold. His people had to be brilliant. They had to be hardworking. And there could be no nonsense. There are a tone of phones out there and not money.

Who are the real deal must set of his approach to interviewer engineers, I can usually tell within fifteen minutes, and I can sure I can for sure to, within a few days of working with them, must made hiring a priority. He personally met with every single person the company hired through the first three thousand employees. He required late nights and weekends, but he felt IT was important to get the right people for his company.

And then the close on this, we started with Steve jobs telling us why IT was so important and why should be a large part of how you find time. And now will close with what you do after what do you do after you have the person this what he says, it's not just recruiting. After recruiting is building an environment that makes people feel they're surrounded by equally talented people and their work is bigger than they are, the feeling that their work will have a tremendous influence and is part of a strong clear vision.

So that is the end to that twenty minute many episode. I just really listen to the whole thing and IT IT really does. I think it's a perfect explanation and illustration of why I think founders notice so valuable because some of those books I have read in five, six, and just the ability to have a hertug database of all these, these ideas like this, collected knowledge of some of these used greatest entrepreneurs to reference and then contextually applied our own businesses.

It's nothing short of like it's magic. It's a really the way think about IT. I think it's a massive superpower, gives me a massive superpower.

I couldn't make the power without. I also think if you have access to IT to make your business Better. And so if you already running a successful business, I highly recommended you invest in description. And you can do that by going to founders notes that com.