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Barnett

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2022-11-29

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2022-11-29

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1. “To look back on when your children are adults. And then he ends on this fantastic quote that puts this into perspective. I wish that I had known sooner that if you miss a child's play or performance or sporting event, you will have forgotten a year later. The work emergency that caused you to miss it. But the child won't have forgotten that you were not there.”

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2. “And then he actually ends the book on something that's very important to me. It's why the title of episode 222 is My Personal Blueprint. It's this idea that entrepreneurs are prone, founders are prone to get wrong. Like, how do you balance your life? How do you balance your work, play, meaning having fun, children, health, and money? And this also ties into what you and I talked about the very beginning of this podcast. Like the decisions that we're going to make are going to resonate. They don't just affect our lives. They affect the lives of everybody around us right now that we're actually going through life together, right? But also future generations. And I think if we view you and I view our decisions like that, we're going to make better decisions like, hey, not just today. What is this going to happen? What's the consequence of this 10, 20 years from now? What if my grandkids read about the decision I'm going to make today? Will I change that? Will that change what I'm about to do here? What do you want?”

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3. “Think he's still alive to the States. I think he's in the late 80s. But this is a quote that Barnett learned from him. Leonard Lauder of Essay Lauder told an audience of entrepreneurs, don't communicate your success. So that's another idea from his dad. Be a sleeper. Leonard Lauder says, don't communicate your success.”

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4. “Their lifeblood of my organization, but they have direct contact with the customer. And so Barnett has three questions where he's like, This is, I ask these people three questions in a way to force to get honest feedback. Number one, what am I doing that you like? Number two, what am I doing that you do not like? And number three, what am I not doing that you would like? I highly suspect you may get muddy answers for the first two questions, but that third question will probably give you some useful ideas. What am I not doing that you would like? Another lesson from his dad, Bad Boys Move in Silence. You and I talk about this over and over again. Dad was the ultimate extrovert. Yet he told me that the right strategy was to be, quote, a sleeper. That is, not to be known for success when it did come. Interestingly, this thought was also confirmed by Leonard Lauder of S-Day Lauder when I covered, so in that book, the autobiography of S.A. Lauder, Leonard is still like a young man, partly at the beginning of the book. He's in college, actually.”

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5. “And then he talks about towards the end of the book, he talks about the more successful you get, the more people around you that rely on you for the success. It's really hard to get honest feedback. The greatest, I don't know why things certain things stick in my mind when they do, but I read the founder of UPS Jim Casey. I read a biography of him back on episode 192. And he realized this too, where he's just like, man, I can't sure if the information I'm getting from my executive team is not filtered. So he would just every time he was out and about anytime he saw a UPS, you know, the UPS brown trucks, he'd ask his driver to pull over.”

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6. “A light bulb on top of your cranium will flash the answer that best fits you and your situation. It may be a combination of your thoughts and some you received from your mentors. And he ends this chapter with one of my favorite Charlie Margaret quotes where Charlie's really talking about the role that he played with Buffett in Berkshire. Just a discipline. This is so important. Just a discipline of having to put your thoughts in order with somebody else is a very useful thing.”

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7. “When we found out that less is indeed more. Focus is a lever of your success. So then he brings up another lesson that he learned from his dad in a chapter called Digging Out the Answer. I'm always delighted when someone in a group can view a scenario in a wholly different way and suggest an unexpected solution to what seemed to be an intractable problem. I've seen it happen so often I'm convinced nearly any problem can be solved by bringing together a variety of smart people to brainstorm. My dad quoted a slogan for the tactic that was printed on the agenda for every executive meeting. All of us know more than one of us. And then he quotes his dad again at the end of this chapter. There is always an answer. And he goes back to this idea of the importance of having mentors, of learning from other people. But I like the way he thinks about this. My personal vision of mentoring is that no individual advice will necessarily fit you. I see mentoring as a process of brain marination when your brain is adequately marinated. You will look in the mirror and”

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8. “Is another example of the importance of focus and not only focusing your time and attention, which you're focused on, but also focusing your product line. You wouldn't think that a company called Hellsberg Diamonds sold luggage or radios, but at one time they did. And so this is him correcting that mistake. We had decided the future course of Hellsberg Diamonds was indeed in diamonds and that we should discontinue non-Julie lines of merchandise. We phased out lines of merchandise such as China, crystal, silver, luggage, and radios. We believed that the dollar volume of business would decrease, but the profits would increase on a store, an individual store level. We're like, hey, we're going to cut all this crap out. The dollar volume of the business might go down, so our revenue might go down, but our profit would increase our profit margin would increase wrong. We were wrong. Both volume and profit went up.”

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9. “Good people hire good people, but I fear the reverse is also true. Max kept repeating A players hire A players, B players hire C players. So the first B player you hire takes the whole company down. And he ends this chapter with a quote from Bill Gates that I've never seen before, which illustrates this point effectively. The greatest thing you could do for your competition is hiring poorly.”

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10. “And then, like, almost every entrepreneur Barnett spends some time talking about the importance of making sure you're only working with and hiring the very best people you absolutely can. He actually got something from another entrepreneur. He says, Larry Bossetti, former head of Allied Signal, said good people, hire good people. I fear the reverse is true also. When I got to that page, made me think of something Max Levshin said in that book, The Founders, which is a story of PayPal and the entrepreneurs who shaped Silicon Valley, written by my friend Jimmy Sony. That's actually episode 233, if you haven't listened to it. But Max said something that was very interesting. It's like at the very early days of PayPal, they kept the bar for talent, like exceedingly high. You know, this is like the genesis of the PayPal mafia, which is well known in Silicon Valley and the technology industry. And Max would repeat over and over again. And he was doing this almost 25 years ago. And he says something very similar to what this guy just said.”

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11. “Then this is Barnett on making sure that you're prepared to take advantage of luck. He calls this on how to have uncanny luck. This is going to remind me actually. I think we talked about this. I'm pretty sure it was in the Peter Tails book zero to one. It might have been in Paul Graham's essays. But it was a quote from this famous explorer called Rold Amundsen. And he says, victory awaits him who has everything in order. Our luck, as some people call it, this is what Barnett says. An example of luck would be my chance meeting with Warren Buffett on the streets of New York. I was prepared because I had been attending his annual meetings for a few years, and I felt I knew the kind of person he was. I was also in New York dealing with the very subject I spoke to him about, which was selling the company, and there was top of mind, and it was a top of mind awareness of my mission. Add in the unmitigated gall to walk up to him, introduce myself, and offer to sell the company to him, and you have an uncanny case of”

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12. “Voice that is in all of us. Your inner voice talks to you through your gut feelings. Your gut feelings are intuition emanate from your unconscious mind. He says your unconscious mind is a repository for all of your life experiences and then some and he compares Warren Buffett using his intuition to buy as part of the way he bought Hellsberg Diamonds. When Warren Buffett bought Hellsberg Diamonds, he felt so positive about the deal that he cut out the usual due diligence to speed negotiations. Sure, Buffett did his homework, but he also had a strong intuitive response. I can smell these things, he said, and this one smells good. Trusting your gut isn't meant to replace using your conscious brain, the two work together, and then he's got another great quote to end this chapter from Warren Buffett, who says, my idea of a group decision is to look in the mirror.”

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13. “So then Barnett gets into the importance of the more experience you get, the more you should start to trust and actually follow your gut. This is something Steve Jobs talked about later in life he got, the more he valued his own intuition. He said intuition is a very powerful thing. More powerful than intellect, in my opinion, and it's had a big impact on my work. So that's Steve Jobs. This is what Barnett said about that. To some people, his ideas put the company. He's talking about his dad. I should have backed up and read something on the next previous page. So it says like many successful entrepreneurs I've since met, dad relied on his intuition as much as he relied on his business plans and market forecast. To some people, his ideas put the company on a limb. But to him, the ideas felt right, and usually they were right on. Dad, listen to other people. He loved mentors. But perhaps because he started out so young and had to rely on himself, remember he started out on the business when he was 14. He learned the value of tuning out other people's voices when they became a distraction and listening to that pristine interval.”

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14. “That is a really good because he's like, hey, I can show you how to do this. You can take the ideas, rehash them, gain attention, and then you get more listeners that he got attention by showing, hey, I actually have actually provide value to you as well. So I just like that idea. Most people never pick up a phone and call. That's what separates the people who do things versus the people who just dream about them. You have to act.”

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15. “To act And so, Barnett's point is like, what's the risk reward ratio? Right? They say, no, they never answer or they don't want to talk to you. Okay, I wasted, you know, a couple minutes of my time. Or you wind up having a conversation, you learn something valuable for your business, maybe making millions and millions of dollars over the course of your lifetime and are you develop like a lifelong friend. It's like that's a fantastic. And I don't mean just go out and spam people. I would find a way if I was doing this, I find a way to like provide value to them first and then ask them the question. I had one of the best cold messages I ever received was from this like, I think it was like a 21 year old kid still in college at the time. His name was Michael actually. And he just messaged me. I didn't know who he was. Then he had listened to the podcast and he's like, hey, I took this idea that I learned from your podcast. I made a video on it and I got”

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16. “The incredible, wonderful, and unavoidable truth is that seeking the help of others can put you light years ahead of other people who beat their heads against the wall, trying to reinvent the wheel. There is an interview, I've mentioned this a million times, according to this, I first took notes on this in August 4th, 2019. And Steve was talking about the fact that he just picks up the phone and call. I always ask for help. And more times than not, people will help. And he says, I never found anybody that didn't want to help me if I asked him. I called up Bill Hewlett. That's obviously one of the co-founders of HP when I was 12. He answered the phone himself. I told him I wanted to build a frequency counter. I asked if he had any spare ports I could have, and he laughed and laughed and laughed. He gave me the parts and then he gave me a summer job at HP working on the assembly line, putting together frequency counters. This is his punchline here. I have never found anyone who said no or hung up the phone. I just ask. Most people never pick up the phone and call, and that's what separates the people who do things versus the people who dream about them.”

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17. “Kinkos because I just referenced the fact that they had similar ideas a few chapters ago. You have the experience of thousands of experts and mentors at your fingertips. And then he brings up something that Steve Jobs said that I've tried to use as well because I think he's just genius advice. He's like, just reach out and ask somebody. In his case, he's like, pick up the phone and call. That's exactly what Steve would say too. But he's like, listen, maybe you try to get in touch with somebody. Maybe they're going to be unwilling to talk to you. But what's the worst case scenario? You wasted a phone call. What a fabulous risk-reward ratio. Many business people will reach out to share what they've learned. Why not listen to many people ponder with they have to say and then follow your own instincts?”

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18. “At the very last page is just like a reading list of all these books that were helpful for his business, and the main theme of the book is like learning from the experience of others. He talks about the fact that he does not think he was the smartest person in his company by far. And so one way to fix that problem was just find out what people smarter than him had thought. Humans have accumulated incredible amounts of knowledge over hundreds of years, and it's constantly being refined through experience. This reservoir of knowledge and human experience creates tremendous opportunities and advantages for you as an entrepreneur. You are heir to the discoveries of many entrepreneurs who skin their shins trying something new. It is likely other entrepreneurs before you have experienced the same challenges and problems and found ways to surmount them. You do not need to invent a new industry to start a new business, studying an existing industry and studying an existing industry and just do it lots better. Henry Ford did not invent the automobile, nor did Kinko's invent copying. That's funny that he mentioned.”

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19. “I spent a few hours actually in a used bookstore yesterday. This place was a treasure trove. I left with like six or seven books. I think I got seven books for $100. And one of them, the most expensive book, was actually a biography first on Benjamin Fanklin first published in 1938. It is a beautiful leather bound book. It was wrapped in plastic, never been actually opened and used. And that was that one book alone was 40. So it's 40% of the cost because it was $40 out of the hundred. I can't wait to get to it though. So I'm almost going to feel bad about taking notes and marking up that book, but I'm going to. And then we move ahead. This is about barring wisdom and knowledge about your business. Again, main theme of the book. He's going to talk about his father. He's going to talk to his grandfather. He's going to talk about his mentor. He's going to talk about the books he reads, fact he leads.”

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20. “Business. So that's what he's describing here. We elected to pull out of our lease in one of the first 11 covered malls in the United States. This was a nearly fatal error causing us to waste years of precious time and resources. And he did it because one of his prize mentors, like, hey, get the hell out of malls. Years later, we and our advisor realized that our avoiding malls was not the right posture. We pursued malls, locations slowly at first, and then vigorously later. And so this is what he learned from that. He who takes bad advice is the one and only culprit in the scenario. Advice is advice, not a command. That is fantastic. Advice is advice. It's not a command. The mall locations later became the success of the company. We nearly put ourselves out of business by staying out of them. And then he quotes one of my heroes, Benjamin Franklin, who said the only place where fools may learn is the school of experience.”

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21. “Jumping ahead a little bit. This I absolutely loved because you and I have talked about this theme over and over again. None of this works if you can't trust your own judgment when you're learning from history, when you're learning from other people, you're going to find conflicting advice. The only one that knows if it's actually going to work is you. So it says one of my most prized mentors shared his wisdom. You don't need shopping centers. You need business districts. I took that as gospel and did not think things out on my own. Remember, none of this works if you can't trust your own judgment. I took that as gospel. In this case, he's not even using his own judgment, right? And I took that as gospel and did not think things out of my own. The country was about to explode in the mauling of America. We elected to pull out of our lease in one of the first 11 covered mauls in the United States. This ends up being his entire business. It takes place almost exclusively in malls. And he's like, hey, we'll just run away from this giant trend that could help our business.”

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22. “Intelligent direction and skillful execution. It represents the wise choice of many alternatives. And I guess I should have told you what that chapter is from. His whole point is that the execution that matters. A ton of people have ideas. Execution is actually the key. So I just skipped over that and gave you the two maxims at the end because I thought it illustrates that point better.”

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23. “Fantastic. I love this maxim. This is from Alfred Adler, who apparently was a psychologist and author. And he says, trust only movement. I've been rereading a lot of my highlights from the two or three books that I read on Andrew Carnegie, and I'm pretty sure I'm getting ready to reread his autobiography because it's just been top of my mind so much. I've been spending so much time thinking about it. But he says something very similar. It's like, I love that maxim. It's like, hey, we're only going to trust only movement. Andrew Carnegie says, as I grow older, I pay less attention to what people say and I just watch what they do. That makes me think of my favorite, one of my favorite maxims, which is actions express priority. We are only what we actually do, not what we profess to believe. Here is a few great quotes. One person, this is the importance of belief, one person with a belief is equal to a force of 99 who have only interest. And the second one is, this is actually anonymous quote, quality is never an accident. It is always a result of high intention, sincere effort.”

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24. “And so this is Barnett's version of that. You've probably seen this sign everywhere. If you go into a shop or a store rather, says, hey, don't bring your food and drink, no food and drink. He's like, well, I'm just going to do the opposite. Bring it all in. Let's go. One of the best things we did was to invite shoppers to bring their food into the store with them. Ice cream cones, hot dogs with mustard? No problem. The standard store sign in a mall says no food or drink. Ours said your food and drink are welcome here. We were trying to say we are here on your terms and we are different. Just a few quick lines here which I thought was fantastic. He puts a premium on speed and urgency. He says you need to constantly be moving with a sense of urgency by acting with a sense of urgency. You are modeling the behavior that you want from your associates. So he's saying this starts with a leader and works its way down. Nearly any action or communication means far more when done urgently. And then he quotes this.”

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25. “Staring our customers in the face. I told our coworkers, so Paul wouldn't ever use the term employees. He hated that term. He considered everybody co-workers. I told our coworkers that the occasional hit that we took for a bounce check cost far less than we lost and could not quantify by creating a subtly hostile atmosphere.”

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26. “It says, Hey, each of our stories began to implement the new system are total focus on buying and selling diamonds and not being in the banking business brought incalculable dividends. And so reducing that lesson down back to that proverb, which is fantastic, only a full test the depth of the water with both feet. I'll send them Barnett talks about this maxim that he learned from his dad that business is people, and he actually, if you just treat people better and don't create inhospitable environments, you wouldn't imagine that cut that companies do this for their customers, but you probably see it every day in your day-to-day lives, that that's actually an advantage and an edge that you can have. This is going to remind me of Paul or Falla. I always pronounce his name incorrectly, but it's the founder of Kiko's. I covered his fantastic autobiography called Copy This back on episode number 181. But let me actually read that section from the copy of this book because I think it's fantastic and it's going to”

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27. “Who were experts in such things? And so one principle at play here, he's like, listen, if you're going to test something, you think it's important, it's going to be really important to the future of your business, put one of your best people on it. That's what they did. They picked a great store. They didn't do a test and a crappy store and then couldn't figure out, did it work because it's a crappy store? Did it work because it was a crappy idea? It's like, well, no, this guy's really good. He's really smart. He's one of our best. Let's let him test it. And it wind up being success. And then this is what they did next. After our test of outsourcing customer credit, we could now say to the other stores it had proved to be successful. As each of our stores began to implement the new system, our total focus on buying and selling diamonds. So remember, he talked about the importance focus. He said in a previous chapter that focus is your lever to success. And the implementation of that is obviously a competitive advantage because I'm not sure humans in general can focus on many things and certainly not in today's day and age. So that is also going to be a main theme over and over again that focuses a lever to success. We just see this here.”

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28. “And then he quotes this great African proverb on this chapter that's about the need to test your new ideas. And it says only a fool tests the depth of the water with both feet. And so in the 1970s and before, it was a long established idea in their industry that you should handle the financing and the credit, extending the credit to your customers yourself. And then one of Barnett's executives was like, no, I'm pretty sure we could outsource this and then just focus on the one thing that we're actually really good at, which is selling diamonds. So he says the stakes were high in terms of the loss of interest income and fees from outside providers of credit. So Marty chose one of our best store managers to test his idea that jewelry stores could make more money if they focused on selling diamonds. So this is his hypothesis, right? We're actually going to make more money if we focus on selling diamonds and left the credit business and interest income to banks and other lenders.”

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29. “Maybe other people would be mad. Hey, we're a customer of yours for 30 years. How dare you change our relationship overnight? You could have put us out of business. We're done here. Barnett did not do that. He says, did we continue to do business with both banks? Yes, absolutely. Never burn a bridge was our mantra. And we still wanted two suppliers. And then he has parting advice in this chapter. Get your second sources now when you do not need them.”

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30. “Paragraph of the letter, which would rescind the bank's obligation if our credit worthiness changed. To our shock and surprise, the bank refused to loan us the money. One particular director of the bank felt that we were not creditworthy. So they just sent out a bunch of checks. There's not enough money in their bank account to cover those checks. They're in dire need. And so the bank's not budging, even though they've had a relationship with them for 30 years. We'll come back to that in one second. So what do they do? We immediately drove over to the Security National Bank where the family that owned the bank had served my dad for untold years. Now, that guy who had worked with his dad, now his son is in the bank. So this guy named Morris Brendenthal Jr. had only one question for us. How much do you want? So back to Barnett. We came to the precipice and we were saved by the two supplier principle when at death's door you may be saved by a relationship. We were. Did we continue to know this is what he means about?”

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31. “Then he talks about another idea that he's learned from his father. This is going to happen in the mid 1960s. His father had this idea of, he calls it the two supplier principle. And then this is the first time he mentions this, or the first time I mentioned to you, but it's mentioned a lot in the book, that his father and everybody in the company is like, don't burn a bridge. Do not burn a bridge. It's repeated over and over again in this book. And so this was the first introduction I heard about the two supplier principle. One bitterly cold January in the mid-1960s. I went to our bank, one of the banks actually, to the first national bank of Kansas City to make our routine loan. We needed to cover the checks that we send out the day before to our suppliers for the immense amount of merchandise we had bought for the Christmas season the month prior. We had a longstanding relationship with First National Bank going back 30 years. We had gotten the usual letter reassuring us that a $500,000 line of credit was available to us when we needed it. We hardly noticed that the last”

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32. “The importance of keeping your ego in check that it could be used to drive you, but you should hide it. People do not like arrogance on other people. And his father misquoted a bunch in the book at the end of these chapters, which was just referencing these maxims he puts in there. And this is the way I could basically you could summarize the main idea in the entire chapter in one sentence, and it's a quote from his father. It says, big people grow, little people swell. So again, the name of the chapter is keeping your ego in check. Big people grow. Little people swell.”

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33. “Going to a locally owned grocery store. He says, I went to the grocery store to get a few items. Unloading the groceries, I found that the home phone numbers of the owners, Mike and Libby, were listed right on the sack with the invitation to call if I was not happy with the store. It was clear that the owners took responsibility for good service. What I also liked about the book is at the end of every chapter. He's got all these quotes that he loved, usually from other founders or other interesting people throughout history. You know I'm a sucker for maxims. This one I actually read biography on Thomas Watson. It's called The Maverick in the Machine. Thomas Watson Sr. in the Making of IBM. I did that a long time ago. I think it's episode 87, but he put this at the end of one of the chapters that I really loved, a quote from Thomas Watson who said, to be successful, have your heart in your business and your business in your heart. Another lesson from his father.”

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34. “Words in 2003. Now imagine how much temptation and distraction we're exposed to on a daily basis almost 20 years later, way more than the world in 2003. This is the last thing I'm going to read to you from this section, but this sings to my soul. Commit yourself to be the best. Define what that means and focus on the head of that pin like no one in your industry. I got to read that again. Commit yourself to be the best. Define what that means and focus on the head of that pin like no one in your industry. And he's got another great idea. I'll probably reference SD Lauder several times, episode 217. If you haven't listened to it yet, highly recommend you do. She was maybe the best practitioner of Paul Graham's idea that you should do things that don't scale. What Barnett says here is that just providing super service is actually a friend to the entrepreneur. It's something that you can do that giant companies can't. And so he talks about.”

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35. “Behind this, each activity you undertake exacts the price of not being able to pursue alternative activities. This is sometimes called opportunity cost. What is the actual cost of sending a highly talented person to create an average performance out of a dry well rather than sending him or her to a gusher that can be turned into a super gusher? Then he extends this idea by talking about something he learned from Warren Buffett. Perhaps one of the key reasons Warren Buffett has been the world's most successful investor. He does not buy turnaround opportunities, something that Buffett spends a lot of time discussing over many years in his shareholder letters. He doesn't believe Turnaround's turnaround. He does not buy turnaround opportunities only successful companies. Focus is your lever to success. Do not underestimate the incredible amount of mental discipline it takes to focus yourself and your teammates. Wonderful alternatives and seductive opportunities abound and temptations to go in multiple directions are unlimited.”

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36. “I know they're $50,000 a year. Much conventional practice dictates committing great effort to the weakest segment. When I discuss this with my friend Steve Lieberman, he's a hot dog magnet who ran hundreds of carousel snack bars in shopping centers for many years. He said, you make more money closing bad stores than by opening new ones. His philosophy made sense. We decided we would rather spend time and effort on a $4.5 million store that could ultimately achieve six million in revenue than on lower volume store with less potential. So instead of trying to bump up 50,000 and dedicating all these resources, let's focus on somebody that's already doing well and get an extra 1.5 million is what he's saying here. Did this mean we gave up immediately when things did not work? Absolutely not. You have to store lack great people, proper merchandising or other controllable variables. There's that word control again. By all means, we fixed it. However, our attitude became to upgrade the herd annually, closing the weakest stores each year. And then he goes into his reasoning.”

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37. “We jump ahead to another lesson. Remember, he started out the book saying, Hey, I don't even have any unique ideas. I just listen when other smart people say things. And if it makes sense, I'm going to use that for my business. We see this idea. So the Node Life myself has upgrade the herd annually, or what is the highest and best use of your time? I guess, you know, I'm going to read you this Charlie Munger quote that popped my mind when I got to this section. Charlie says, intelligent people make decisions based on opportunity costs. So in other words, it's your alternatives that matter. That's how we make all of our decisions. He's saying that's how him and Warren make all their decisions. Let's jump into this lesson that Barnett learned from another founder. When you're operating a group of retail stores, there's always a usual bell curve of weak to great performing stores. At one point, we were struggling with the store doing $800,000 in volume and through gargantuan efforts trying to get to $850,000 in annual sales. So one store trying to increase it, it's struggling, they're trying to bump it up.”

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38. “The greatest job in the world. Okay, so now we jump into all the different lessons that he learned before he sold to Warren Puff. It starts out with one that he learned from his father, says you should only concern yourself with things that you can control. When growing up, I was intrigued that my father only concerned himself with those business elements that were controllable. He refused to acknowledge the depression and did quite well during that period. He was unwilling to talk about recessions or 20-inch snowfalls. He only thought about and talked about those conditions within his control. Dad was a great believer in not sweating the small stuff. He taught us to concern ourselves only with those things which we over which we have control. I thought he was unique in this until I realized this is one of the key common traits of highly successful people. Those folks are never victims. They take what comes and handle the situation. The rest is a waste of time.”

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39. “Kansas City Worlds baseball team. He became a pharmaceutical. This is why I want to read a book about him. He's giving us like a one paragraph description of his life. He became a pharmaceutical salesman in the 1950s and turned his love of people and a phenomenal success. He beat every quota and earned more than his boss. The next year, the boss reduced his territory up for the challenge. Kaufman sold even more. Again, earning more than his boss. The next year, his boss cut his commission. His boss sounds like a terrible person. By then, Kaufman had had enough. He quit and started his own pharmaceutical business, packaging his own products in his basement and selling them from the trunk of his car. That's exactly how Phil Knight and the story of Nike begins. He did the exact same thing. Sold shoes out of the trunk of his car. How bad do you want it? In 1989, Kaufman sold Marion Labs for $6.5 billion. And so he's going to bring up some lessons that he learned from Ewing Kaufman several times. That's the first time.”

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40. “We're going to, one of my favorite lessons that his dad taught him, which is actually lesson number one, which I'll get to, I think, indicates the kind of family that his dad set out definitively to try to build. It's this idea that you're the master of your own destiny. Like everybody has bad shit that happens to them. So what? What are you going to do about it? So he says, I made my mistakes and had my share of failures. All successful people have failures. Despite missteps, entrepreneurs are a special breed who do not give up on their larger goals. And then this is another example of him having positive role models. He finds role models through books. He finds role models through his family. He finds role models through mentors and talking to other entrepreneurs and business people. This is the first one. I got to see if there's a book on this guy because this is remarkable. His name is Ewain Kaufman, who wound up being Barnett's mentor. He says he was a founder of Marion Laboratories and a former owner of the”

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41. “Euphoria and terror, right? Frightening and thrilling. We are addicted to the ones in the tens. We are not living how most people live lives of quiet desperation, right? That famous throat, that famous quote rather, you know, their range bound between maybe four and sixes. Entrepreneurs, we get a lot of ones, but we also get a lot of tens. I became president of Hellsberg Diamonds in 1962 at age 29 when my father became ill. So think about that. His dad, his dad's at 14 has to take over because his father had a stroke, got sick. Now we see that Barnett Jr. 29. His father's ill. So he's like, I need to jump in and do exactly what my dad did. I was nervous and definitely not ready. I made mistakes and had my share of failures, all successful people have failures. And the one thing I love about this guy, he's just super positive. I mean, maybe you could say, yeah, you'd be positive too. You sold your family business for a fat bag of cash to buffet, but I do love his optimism, his”

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42. “Feels the thrill of making his own money. He starts making his first sale and he says, I began to have confidence that I could do this. It wasn't work. It was fun. And another main theme of the book is like, hey, listen, I didn't start this business. I didn't found this business. People might not even consider me an entrepreneur, but he has found a mentality and that's the way he thought about himself. He thought about even at such a young age, like, I'm going to take ownership of this. I was an entrepreneur, a master of my own destiny. I could do whatever I set my mind to. Anything was possible. These are all lessons that he got from his dad. Like, I try to do the same thing with my kids. I try to hype them up. It's like, I don't care what you do. Just know that if you really love to do it, you can do whatever you want to do. I could do whatever I set my mind to. Anything was possible. I can't tell you where other entrepreneurs get their drive, but I'll bet many catch the bug young like I did. That feeling that you're your own boss, that your future is in your hands, is a frightening and thrilling prospect. That's something you and I talk about.”

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43. “The year that is happening, his dad is 14, has to take over the jewelry shop. That would mean this is the year 1917. At 17, so now three years later, dad moved the business into a larger, grander building, and with high spirits of youth proclaimed himself a diamond merchant. The shop sold the same mix of rings and watches as everyone else, but that label let the world know that he had big plans for himself and his family business. And so we see his dad through his action saying, hey, I was forced, I was kind of like thrown in. You're going to teach me how to swim? He threw me into the deep end of the pool as like a metaphor for that. He does the same exact thing to his son. So he says he nurtured and demanded that same positive drive to succeed, whatever the challenges in his three sons. He gave me summertime employment when I was 15. Dad knew the importance of learning by doing. So of course he started me off in selling. And so he made me.”

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44. “So that was playing through my mind as I worked my way through the book. I have a lot of highlights. So let me jump into, he gives us the background. He starts off. There's like, you know, 70 miniature chapters just about lessons he learned, what he said. What did I learn before I sold to Warren Buffett? But he starts the book talking about what he learned as a young child growing up in this family business. My father was 14 when he took over the family business. My grandfather Morris had a stroke and there was no one else to run this little jewelry shop in Kansas City, Kansas.”

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45. “Explaining how he makes this hands off approach work, Buffett said that it was because the managers operate with total autonomy and they do such a terrific job we don't really need anyone to supervise them. Managers of Berkshire's subsidiaries run their own shows. When we get somebody who is a 400 hitter, we don't start telling them how to swing. Now back to Barnett. I think if my dad, Barnett Sr. and my grandfather Morris had still been alive, they too would feel proud and comfortable that our family business, which started in nineteen fifteen from a single store in Kansas City, Kansas had grown by nineteen ninety four into a group of one hundred forty three stores in twenty three states with total sales of two hundred eighty two million dollars. As Buffett himself finally described the deal that began on a New York sidewalk.”

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46. “What my favorite holding period for securities is, and I said forever. And that's exactly the way we feel about our businesses. When we were ready to leave his office and asked if a cab could be called, he insisted on walking us to the elevator, writing it down with us, and standing on the street to wait with us for the cab. Typical Buffett treatment. Warren Buffett's approach to purchasing companies is very straightforward. He will give you an answer immediately if he has any interest, and he will immediately give you a non-negotiable price. Let me interrupt this real quick. I read another, I read an entire book called Jim Clayton, First A Dream. It's episode number 91 of Founders about this novel.”

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47. “Really rapidly. Not long after we send this another example of that, not long after we sent buffet our financial information, he called us and told us he wanted to talk. Soon we were in his office in Omaha negotiating a sale. And this is more on the speed of the process. This can be the fastest deal in history, Buffett said. But what about due diligence? I asked. Surprised at how fast the negotiations were moving. Most suitors demand to see every scrap of paper you've ever generated and to interview every top manager. This wasn't Buffett's way. I can smell these things, he said, and this one smells good. That would not be my last surprise. I asked about a non-complete clause. You will certainly want that, won't you? I said. Buffett shrugged. You wouldn't do anything to hurt this company, he said. When a guy says that to you, he has you on your honor for the rest of your life. When Buffet buys a company, he's not looking for a quick resale to make a buck. He told us someone asked one time,”

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48. “This is another example of why I've repeated over and over again. I've said this many times to you. I think Berkshire's at Warren Buffett's shareholder letters may be the greatest example or the most successful example of content marketing in the history of business. The amount of opportunity, unique opportunity that flows to Buffett or that has flowed to Buffett as a result of this is just remarkable. This is another example of that. But one night I reread the chairman's letter in the Berkshire Annual Report. There was Buffett again inviting companies that meet his acquisition criteria to send him information. And he would promise complete confidentiality. While shaving the next morning, I looked at the slow learner in the mirror and began to scold myself for procrastinating. He told you in person it would be confidential, he told you in writing. Do you want it set to music? Send him the information. So I finally did. Not long after we sent Buffett our financial information, so Buffett also talks about the fact that you'll get a response from him.”

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49. “Determine which job to take, Warren's answer was simply get a job you love at a company you respect. His people orientation was obvious, and since I had been taught from day one by my dad that business is people this was most impressive. Buffet recounted the story of how he acquired our company to shareholders this way. Burnett said he had a business that we might be interested in. When people say that, it usually turns out that they have a lemonade stand with potential. Of course, to quickly grow into the next Microsoft. So I simply asked Barnett to send me the particulars, that I thought to myself will be the end of that. In fact, it almost did end there. I promptly went home and sent Buffett nothing, afflicted with hangups about confidentiality. But one night I reread the chairman's letter in the Berkshire Annual Report, and I'm just going to interrupt this real quick.”

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50. “I had purchased four shares of Bershire Hathaway stock in 1989 just so I could attend Berkshire's annual meetings and pick up some of Buffett's wisdom, so that is five years before he randomly runs into them on the sidewalk in New York City. So I'd purchase the shares so I could attend Berkshire's annual meeting and pick up some of Buffett's wisdom. His presentations are warm and unpretentious. He genuinely enjoys people. He's often quoted saying great people do great things. He also likes to say we only buy companies that we trust. My first visit to a Berkshire Hathaway annual meeting was quite a revelation and taught me a great deal about Warren Buffett and his philosophy. My notes included higher seven footers, that is, higher people with incredible abilities. Another very, very strong impression was obtained through an answer he gave a Kellogg business school student who asked him,”

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