YouSaid · the spoken record

Isadore Sharp

lines on the record: 74
first: 2021-06-06
most recent: 2021-06-06
sittings or episodes: 1
sources: podcast

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“And finally, how he thinks about competitive advantage. Underlying and justifying my view of the future was what Warren Buffett, the world's most successful investor in his latest year-end discourse has called the only competitive advantage that matters a barrier to entry. This was what I believed our competitive advantage now provided. Our portfolio of hotels was the largest group of authentically first class hotels in the world, a physical product no other company had to the same degree. These were exceptional assets almost impossible to duplicate.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then Izzy's got us some advice for us on continuing to advertise during a recession. It's tempting during recession to cut back on consumer advertising. At the start of each of the last three recessions, the growth of spending on such advertising has slowed by an average of 27%. But consumer studies of those recessions had showed that companies that didn't cut their ads had in the recovery captured the most market share. So we didn't cut our ad budget. In fact, we raised it modestly to gain brand recognition, which continued advertising could sustains, and this is his main point here. It is much easier to sustain momentum than restart it.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“are the underlying reasons for whatever I have achieved. At this point they're expending all over the world they hire obviously local people working there sometimes in different countries. In this case it's Hawaii but they do this in all over the world and what's very interesting is they say it's easier to train somebody brand new than to have them unlearn things like if they were trained if they worked for other hotels they probably learned how to do things a way that's not that will not meet ISIS standards. He's like, I'm just going to meet I'm going to hire people brand new and his thinking behind this was actually really, really smart. More than 3,000 people applied, many with hotel experience that we didn't want. We find that expertise is easier to learn than bad habits are to unlearn. Instead, we hired a lot of people who had been doing backbreaking labor in sugarcane and pineapple fields, people who would feel appreciative of a clean work and nourishing work environment and nourishing meals and a health.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very much like Ingvar Kamprad and the founder of IKEA. He grew, four seasons grew, but he grew much slower than he could have, just like IKEA did, because he's not after growth for growth's sake, if it compromises the quality. So he says, entrepreneurship often breaks down when a company starts to expand. So he's extremely conservative. I think they added five or seven hotels a year or something like that, even though they had access to more money and to people telling them you can go faster. Izzy did not do that. At this point in the story, his dad passes away. His dad lives to be 102 years old, and this is him reflecting on what he learned from his father. First and foremost, of course, was the influence of my father, for he taught me how vital people are to success in business. Dad was the most tolerant, kindest, and most positive thinking person I've ever known. His example and his unquestioning and unconditional faith in me”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“And if we just try a little bit harder, we can do better. So he says what really counted was doing the right thing in the right way, what should have been done long before. So he's talking about like, yes, putting an emphasis, like taking Ritz's idea, putting an emphasis on high quality food, getting world-renowned chefs, partnering with them winds up increasing restaurant sales by 30 to 50 percent. So it was financially a great idea, right? that he borrowed from ritz but his whole point is like above and beyond that we made more money it's like we were doing it the right way this should have been done in the past hotels should not have been using their restaurants just as a way to upcharge or to nickel and dime their customers i really like that what really counted was doing the right thing in the right way which should have been done long before”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he's continuing to rethink the experience that he has for customers. And this is really interesting. Let me read this to you. Remembering that Cesar Ritz made his hotels world famous by hiring some of the foremost chefs, we decided to do something similar. So that's the founder of Ritz Carlton. And Izzy, like all great founders, borrowed ideas from his predecessors. There's actually a book because of this sentence. I went and researched. There's a book about the partnership between the founder of the Ritz Carlton and the greatest chef in history. That's what Izzy is referencing there. And that's going to be an episode coming very, very soon. So why is he doing this? By the mid-80s, we had completely demolished the long-standing stereotype of a hotel restaurant as a mediocre overpriced trap for tired travelers. And so he's picking up, like, I have an opportunity because most businesses are poorly run.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“And this is what I mean about invisible automatic service. He comes up with one of the first companies to actually track the user computer to track what the preferences of their customers and then just deliver it to them without asking, without them having to ask for it. We made this a common experience by setting up early on far ahead of other hotel companies, what we called a guess history system. The first time guests stayed with us, we computerized their preferences in rooms, food, drink, and anything else our employees noted, so that when they returned, we could give them without them having to ask whatever they wanted and liked best.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's strange, but I can't recall being deeply concerned, perhaps because of my depth of involvement in belief in what I was doing. Interesting enough, something that I learned while reading this book that was actually surprising is so four seasons winds up being a public company, but then it's taken private towards the end of his career. He winds up selling majority ownership. Since 2006, I think, Bill Gates and a Saudi prince have been the majority owners of four seasons, and four seasons is private now. I was very surprised when I got to that part of the book. It's a great quote, and then he's got this idea of invisible automatic service. Excellent, this great quote first. Excellence is often just a capacity for taking pains.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“The travel industry, as you probably know, is highly cyclical, usually when there's an economic downturn of any sort, it's impacted to a much larger degree than most other industries. And so the book, he has to constantly navigate through several different economic recessions. And in one case, he has to pledge every single asset he has. So I'm not selling and my back is up against the wall. And the financial situation is so dire that even his vice president of finance, like we need to sell the company, we would work together on many deals, but the downturn was making our business much more difficult than he expected. And now his advice was to sell the company. We could walk out of this a big winner, he said. In my mind, there was absolutely no question of selling. I went back and pledged all of my four seasons stock, knowing, so he had to pledge his stock to get a loan to continue the company, knowing that I had to succeed or I'd lose everything.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“This is more on his philosophy and just this importance of focusing on one thing. He's constantly trying to narrow his focus. I just want to be the best five-star hotel in the world. I don't want to do anything else. Japanese accountants have a saying. Over is the beginning of under, meaning that growth can become addictive, adding volume without value. I wasn't hooked on momentum or quarterly results. I agreed with Peter Drucker who said, doing too many things at once is the most common mistake in business. And now here's Izzy's interpretation of that. If quality is your edge, you can't compromise it.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Insanely high bar for quality, very similar to how Walt Disney had, and he's got to make sure that Verbi gets through his entire organization, every single position, and the people that don't live up to his quality standards, he has to let them go. Enforcing our Credo was the most far-reaching decision I ever made, a painful process, often personally distressing. It is perhaps the hardest thing I ever did, but the fastest way for management to destroy its credibility is to say employees come first and be seen putting them last. Bet, and this is a great last sentence, better to not profess any values than to not live up to them.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“service, focusing employees at every level to one single compelling purpose, pleasing customers. Very similar to what Bezo says. Start with the customer and work backward. That is the best way to create your shareholder value. We see Izzy expressing the same idea here. We're going to see Izzy echo another one of history's greatest founders here. This section is going to remind me of what Walt Disney said when he was building Disneyland. And I'm going to read the quote from that book. It's called Disney's Land. I did it, I don't know, maybe 15 or 20 books ago. But it says, not all of my senior people agree with all these decisions on quality. This is Izzy talking. Why don't we use vinyl instead of leather? They asked. Polyester instead of silk. Most people can't tell the difference. This is his response. A lot of the people we hope will become customers can. I told them. So they're in the rush to create Disneyland, which happens.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not the what that is so powerful Don't copy the what, copy the how because those ideas transfer to any discipline This is something we also learned from Kobe Bryant among others It's so smart what he's picking up here He's continuing how these discussions with these executives and he's talking about he says something right here and I'm just gonna read to you it's a quote he repeats over and over again variations of this quote we are only what we do not what we say we are and something in my own personal maxim that I use in my life is actions express priority It doesn't matter what I tell you is important to me my actions will tell others other people what's actually important to me Actions express priority Giving our customers more value than anyone else I figured would ensure in return would ensure that they return and that would give us a profit so again start with what's best for the customer work backwards that's just another way to express the same idea I kept restating our aim of superior”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he says something very interesting. He gets pushback from some of his executives. He says, the next day I told our senior headquarters people, I want you to come with me to McDonald's and see how they train their people for service. One of them said, look, they're selling hamburgers, and we're selling filet mignon. How can you even compare it? I know what we're selling, I said. I'm talking about how we sell it. And this is something I feel me and you have been talking about a lot the last few weeks. Don't copy the what, copy the how. This is saying that exact same thing. Let's go back to what we learned in the book, Working Backwards. Bezos didn't make another iPod when he had that meeting with Steve Jobs. He didn't copy the what. He copied the how. Steve Jobs' strategy for the iPod and iTunes. Bezos copied the strategy to make the Kindle. He didn't make the iPod. He took the idea behind the hat.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“So then the book starts going into like, how am I going to do this? He's changing the direction of his company midstream is going to wind up having to get rid of a bunch of people. But something about Izzy and all the best founders do this. They go to school and everybody, they learn from every single experience, every person they can. And he's trying to do, he's taking, he's like, okay, I'm going to build the best hotel company in the world, right? He winds up learning about service. Now, this is the 1970s. So McDonald's at the time was different than it is now.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“The strength of that conviction overrode doubt, bolstering my self confidence to press on with an idea that no one else thought would work, but that raised an immediate question how precisely could it be done? So that part about, you know, I'm only shooting for the top, I'm going to charge more money than anybody else has, but the customer will get value for that. I'd rather build the best five-star hotel in the world instead of just another three or four-star hotel that are available everywhere. It's not very different from Steve Jobs line of thinking when he came back from Apple, they're competing on, they lost their market leadership position. They're starting to compete on prices. And he's like, no, no. I want to build the best $3,000 computer. And so he says, rather than competing with commodity PC makers like Dell Compact and Gateway, why not make only first class products with high margins so that Apple could continue to develop even better?”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Who's going to pay that kind of money? More money for a hotel room than anyone's ever paid before. Most of my senior people agree with them. No other company does that, they said. Look at Weston, Marriott, Sheraton. They've got hotels in three, four, and five-star categories. And look how well they're doing. But my mind was made up. We will no longer be all things to all people, I said. We will specialize. We will offer only mid size hotels of exceptional quality. Hotels that were ever located will be recognized as the best. I resolved to sell any hotel that didn't meet our new standards. And this part just gets me fired up. He's wrapping up his thoughts here. I no longer thought of myself as primarily a builder. I was now a hotelier with a clearly defined objective. I believe that what we had done in London we could do anywhere in the world be the best.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“You've got convention people coming in, they're more budget conscious, there's a thousand of them. I didn't like that. So he says those two experiences made him realize, okay, what I would really like to do create a group, this is his life's work now, create a group of the best hotels in the world. And what we really want to do is usually what we do best. I want to read that part again. It made me realize what I would really like to do, create a group of the best hotels in the world and what we really want to do is usually what we do best, his partners Murray and Eddie, disagree with my vision of building the world's best hotels. They felt I was getting delusions of grandeur. You're narrowing your market, they said. How will that ever work? Who's going to pay the kind of money you'll have to ask? This is where we're going to get it tied into Steve Jobs, where we learned in the Johnny Ive. I said it correctly. Johnny Ive podcast, ready?”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Borrowed it against the contract sold it a few years later for $18 million. Until then, I was a builder engaged in development. So this is, and I don't know if I've been clear or enough explaining this to you, but and maybe I didn't even understand until I got to this point in the book, but he's going to synthesize or add some clarity here for us. I was up until here, up until now, I was a builder engaged in developer, a hotelier only part-time. But the contrasting comfort between running a huge convention hotel in Toronto, and that's the ITT contract that he sold, and catering to the carriage trade in the finest hotel in London made me realize what I would really like to do. So he experienced both scopes, right? He had that small, the London hotel, he's like, I want to, I'm shooting for the top. I only want a five-star hotel. No, I don't want to build a 500 rooms, 400 rooms. Let's do 200 some rooms and just deliver literally the best experience in the world versus...”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Experience changed my thinking on hotel investment. I decided that in the future we would protect the company financially by capping our share of ownership at a small percentage of equity, no more than $3 to $6 million per property. This was based on a simple principle. Invest no more than our hotel's fees would give us over the first five years, an amount we could easily borrow on our management contract, and if more money to invest was required, we had the option to reduce our equity or put up our share. And he's doing this for two reasons, and he tells us that's two reasons right now. Besides limiting risk, it established a new business model, four seasons as a management company, not a real estate developer. Now just as bankruptcy loomed, I thought of the ITT Sheridan contract, which gave me eighteen million dollars as my most consequential as well as most productive business deal. Remember that's the one where you put up 3.5 million.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“From plus forty million dollars to negative whatever he could salvage, unfortunately. It's a crazy, crazy business. And I love looking at real estate, really interested in architecture in general. I would love to build physical things. I would just have to find a way not to in like a, not another life because maybe it'd be something I would just do as like a passion project. But I would love the idea of being able to point to like a physical thing that you built that stays, you know, in case he was, but this guy was building buildings. Some buildings been there for 20 years or whatever the case is. I found that very, very interesting. But anyways, Izzy is highly leveraged, almost goes bankrupt. And this is when he's like, forget this. I'm going to focus on hotels. I need to limit my liability. I'm too old at this point. I have too much experience. I have my family, all these employees are relying on me to go out of business. I'm not going to let that happen. So I got to figure out a different way here. That near room.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“As a developer, he's highly leveraged. Actually, it was friends, acquaintances. I don't know, maybe we're friends with a developer a few years ago. And it was really interesting because it was about a decade older than me. And I actually learned a lot from him, but he was talking about the wild swings in his net worth. And he got caught up, unfortunately.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so now we've reached the point where he starts to make a change. My note is huge on this page. So, okay, there's a lot of things happening here. I got a lot of highlights too. Let me read what's about to happen to you. Or let me tell you what's about to happen. A lot of things are happening here. He's getting out of development and into just running hotels. He's got a maxim for us, an aphorism. Do what you really want to do because that is what you'll be best at. And then this reminding me of Steve Jobs on selling $3,000 computers because some people will always pay for quality and not to sell netbooks because they aren't the best at anything. So that's something I learned a few episodes ago in the Johnny Ive book. So let me read to you and we'll see how this relates to that. That near runis experience, so he almost goes broke.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not mistaken. And so they agreed. They're like, okay, no, you make a good point here. And I thought this was this conversation they have was really instructive because we get a good idea of what was important to Izzy, right? So it says, in light of our commitment to end discrimination, why don't you become our new club's first Jewish member? We'll give you an honorary membership with complete privileges. Thank you, I said, but I'm not a club person. I'd never use it. And I just love that. That's the note I left myself. I'm not a club person. My life is work and family. I'm not going to hang out your club. But if you're sincere as I think you are, talk to reporters about your opening and make sure the public knows of your new policy. So again, he's doing something that's larger than himself as well. He's like, I'm not going to take it, but I would like other Jewish people to have the same opportunity that you're trying to give me.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then we know Sometimes it just takes something larger than ourselves to actually realize our potential. Okay, so I want to move back to his career. And it's really important to know that his realization, that four seasons was going to be his life's work was a very slow process. He repeats what I'm about to read to you over and over again. I was still constructing houses, apartments, and condominiums. Neither conceiving, building, and operating our hotels made me think of myself as a hotelier. Throughout the nineteen sixties and early nineteen seventies, even though we'd built seven hotels, I continued thinking of myself as a builder. He's still a builder, he's still a developer, so in addition to the hotels, he's also building stuff for other people. He builds this brand new clubhouse. It's some kind of these old school social clubs. And while he's building it, he's like, listen, I will only take this job if you stop discriminating. I think at the time they would not let in Jewish people. I think you just had to be like a Protestant male.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“You experience the full spectrum of human emotion. You see their tragedy, their triumphs, their saddest times, the best times of their life. And I really do think that the fact that biographies are able to evoke emotion makes the ideas that we learn from reading them more impactful. They're more likely to stick. So one of the things after a son dies, one of the things he's most proud of is that four seasons sponsors, it's called the Terry Fox Hope Run, I think.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“We must each find our own way to deal with the pain of losing a child, and I continue to include Chris as part of our family. Years have passed, but I still say we have four sons. Over time you build a protective shield to fend off your motion, that a child's absence arouses at family events, celebrations and weddings. But there are unexpected times when the When the shield is down and the tears flow You never get over it. Okay, I had to take a break. That was difficult to get through. That's one of the things, though, about reading biographies, reading somebody's life story.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“The night before Chris died, the rest of us ate chicken dinner in his bedroom. We were chatting normally hoping to make him feel included. He didn't speak. He just lay there quietly. Very still looking at the ceiling. I marveled at that stillness which That he had maintained during the three months, he was bedridden. Graceful and easy in his body, never a twitch of anxiety. That last night he was wearing sunglasses, which he had asked for before dinner. He was removing himself the way people do when they are ready to leave the world. The next morning, Friday, March 10, 1978. Chris said Dad, don't go to work today. Izzy stood by his bed, and I lay across the bed, and each of us held one of his big beautiful hands. Now back to Iz That was the day he died. Losing Chris changed my life forever.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, like when you hear about things like this, you immediately put yourself in their shoes. And it's the worst thing you could possibly experience. So Chris slept in our bed and Izzy and I took teams sleeping with him while the other kids slept in Chris's room. Once as I was fussing with the sheepskin, he lay on his bed which lay on his bed because of his bedsores he asked Am I going to die? And I answered it. We hope you recover, but it's possible you may not. No one knows for sure. Once I said to him, There can't be a God, and he answered, Don't say that there is a god. Those were black days and black nights. I remember going up the stairs so heavily with nothing but dread in each step.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Working in a hotel business. In fact, didn't want to go to college because he's like, what do I have to learn? I can just learn everything I want from my dad in the family business. He's going to wind up dying at 18 years old from melanoma. So he finds a tumor, like a growth on his groin. It was just like the size of the egg, and they do a biopsy. And it turns out he's really light-skinned. It turns out to be melanoma. And unfortunately, they don't catch in time. And so I'm going to attempt to read from his wife's autobiography about this point, but it's not easy because if you have kids.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“On the next page, all business proceeds on belief, trying to run a company without a set of beliefs is like trying to steer a ship without a rudder. Okay, so now we're going to take a turn, and I'm going to try to get, I don't know if I'm going to be able to do this. I'm going to try to get through this part. Every time I've read this part, I've had a stop because I have tears in my eyes. This is devastating what he has to go through right now. He has four boys, four sons. The only one of his sons I was interested in.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Later on, after the hotel was built, he winds up having strong disagreements with how Sheridan wants to run the hotel. They start nickel and diming the customers. He's like, this is just not what four seasons would do. So he winds up selling his interests at a later time. So he pits up to 3.5 million, most of which he borrowed. And then at a later time, he winds up selling his interest back to, I think, I can't remember, I think ITT bought it for $18 million. And that's actually important because that's when he realizes later when he almost, that's a huge win, right? When he almost goes bankrupt because he's still a developer at this point, right? Still a builder, he realizes, hey, why don't I just limit my liability and just actually manage hotels? I can hire developers. I don't have to be the developer. There's a great quote.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just letting my thoughts about working for such a large organization sink in. started to make a list of pros and cons as darkness faded. By dawn I knew, without further thought, exactly what my answer would be. Strange as it was, this was the beginning of a generally beneficial habit when facing my most consequential decisions, one that I practiced to this day. I then responded to IT. Look, I said, I wouldn't be much value to you within your organization. I owe my success to my freedom. I think for me independence has an incalculable value, so I am honored by your request, but let's just continue as partners.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you pocket $2 million? His answer was surprising. No, that's not what I'm here for. We're here to become a partner, and they respond, listen, we'll give you a good profit for your work. And he says again, no, that's not the deal I'm interested in. Back to Izzy. I know what he was thinking. He's talking about somebody advised him, one of his advisors, just sell. This is a quick $2 million profit. You're a young man. I know what he was thinking. Two million clear profit was a lot of money for a young man. I've thought about it, I said. I'm not here to sell. Echoing what he told the banker. I'm not here to sell the land. I'm here to build. I'm here to be a partner. And so then, okay, well, you're not going to let us buy you out. Why don't you quit your company and come work for us? We clearly see that you're talented. So this is an example of know why you're here, part two. Later, IT&T wanted to make our relationship permanent. They offered to buy four seasons and give me a job with ITT at whatever salary I thought I was worth. So this is like...”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“During the negotiations of the deal, the company said Look, this deal is way out of your reach. You're not putting much money into it. Why don't we just pay you $2 million in all of your expenses? Anything you've paid up or invested up until now and will take over. So they're guaranteeing him a $2 million profit. You could stop. You don't have to do any of the work now. We'll do it with the construction and management, all the other stuff.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“In that book, and hopefully, we can use his ideas. It says his scandals and triumphs. So we'll take his best ideas, and then hopefully we'll avoid whatever causes scandals. But anyways, let me get back to this. So he goes to ITT and he's like, listen, with my planning and your expertise and money, we can build on this site. So they do this joint venture between ITT, Sheridan, and his company. But I'm going to spare you the details because really what's really the most important part is that Izzy knows why he is here. And the main point here is like if you know why you're here, it simplifies your decision making process, right? So it says here I was with no money and not much expertise up against the smartest people of one of the biggest and richest companies in the world. So he's going to help build it. His company is going to get 49% interest in the hotel for 3.5 million dollars. Sheraton's going to manage it. ITT would finance it. So he's got to come up with 3.5 million. He doesn't have that money, takes this agreement, goes.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I was like, all right, I want to know what does that mean? I want to figure this out. And then the praise on the back was interesting too. The four deadly sins of a business biography are adulation, antagonism, inadequate research, and overwhelming dullness. This book avoids all four and is certainly the best text so far on the most dynamic business figure of our time. And so I go back and start researching them. And I'm not surprised this has happened many, many times where somebody can be super famous in their day, think Henry Kaiser, right? He was like the Elon, how famous Elon Musk is in present day. And yet multiple generations pass and people forget he's not nearly as most people don't even know who he is, right? But then you realize, hey, they spent half of a century working. Like, what is the chances they were able to build these gigantic successful businesses? And they didn't come up with useful ideas that we could use. That's impossible. So Janine is no different. I wind up doing research on him. He was unbelievably well known and famous in his day. So let's see what's happening.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't have the experience. So he says one evening after workout, I was relaxing in the sauna when I spotted an old Time magazine with a picture of Harold Janine on the cover. Janine was then America's foremost business guru. He headed ITT, the world's largest conglomerate. I scanned the article. Janine's next move, it said, would be in the hotel business. So I called IT. And so this is another example of books being the original links. I had this book recommended to me by a listener a long time ago, then reading this whole section because he works with ITT for a little bit. Like it's a main, it has this entire chapter. So it's a main part of the book, right? And I was like, okay, let me go and move that up to Q.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so let's move on to his next big deal. Again, a main theme of his life story is that belief comes before ability. I was also deeply involved in another project, one that seems incredible looking back, for I can't believe my hutspah in embarking on the idea of creating a hotel in Toronto five times bigger than our hotel in London. So the city of Toronto is building a new city hall, and they ask they have a request for proposals about building this beautiful giant hotel next to it, and he sees the opportunity. He says they called for tenders to build upon it a first-class hotel that in elegance and size would harmonize with the new city hall. This would be one of the world's great hotels, and I don't know why I thought I could build it. I had neither the experience nor the money such a hotel required. So he winds up bidding on it, loses out, the other bit winning bids through, and so now it's reopened. And he's like, okay, well, how do I figure out how to do this? I don't have the money.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“My dear boy, he said, It's very simple. You just cut it every week for three hundred years. Gerald winds up being a mentor to him. So he says he was always a delight to be with. And his role in my life was critical. I asked him about it several years after our London hotel had opened. Gerald, Sir Gerald, how could you have trusted me with such an important project when you knew if things didn't work out I couldn't have covered my obligation? My dear boy, he said, over time you make a judgment about people, you develop a belief and a trust. Those many meetings of ours were not primarily about business per se. They were about the foundation of business, trustworthy relationships. This is something I've long believed without giving him much thought, but from then on in every deal it would be in the forefront of my mind.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Great early successes in life. He says, the first year that London property opened, it was named Europe's Hotel of the Year. And it won that title twice in its first 10 years, plus additional awards, something no other hotel had done before. Its occupancy was consistently the highest in the city, and it's still of one of London's most successful hotels. And it was during this process that he builds a relationship with an older, he just learned a lot. He soaked up information from everybody around him. This is an older, much successful, much more successful businessman. His name's Gerald Green. Not Green. His Sir Gerald Glover. So this is something, well, first of all, this is one of my favorite sentences or favorite paragraphs in the entire book. So it's talking about, you know, he had an old school manner, very polite, but he winds up staying, spending a lot of time with him. So he says, once standing at his front door overlooking a lawn that seemed to go on forever, I asked him, how do you maintain it so beautifully? This is one of my favorite sentences.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“All the way to London for lunch every few months for four years to close the deal of a lifetime. And part of the reason is they had to figure out like, is this somebody we can trust? Is this somebody we can build a relationship? But also they thought he was crazy because his idea is like the only way I'm going to take this job because everybody told him, listen, London cannot support another five-star hotel. There's not enough customers. Competition is too tough. They started referring to him as a crazy Canadian for even suggesting this. He's like, no, I know it can. If we do it better, and he identified, he's like, listen, we're only going to focus on, and he winds up taking this idea for four seasons. He's like, a lot of the people building five-star hotels, they also have three-star hotels and four-star hotels. And then their five-star hotels have too many rooms. He's like, no, we're going to narrow the scope. We're only going to be a five-star hotel, and we're going to have, instead of having 500 rooms, we'll have 200 rooms. So we can make sure that level of quality is consistent across every single guest, right? And this winds up being one of his...”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Budget while vetting some world class hotels, we decided to average cost. We spent every other night in the cheapest lodging available, no messing around with the in between. So because I want to stay and I want to research in the best hotels in the world, I can't afford to do, the only way I can afford to do that is I have to alternate between a night and the best hotels in the world and a night in the worst hotels in the world. And I think both of those are actually learning experiences. Okay, so there's a part in the book that plays out over an entire chapter. I'm going to give you a summary here. He winds up meeting, remember, he's not a hotelier yet. He's still a developer. Eventually he realizes and he almost goes bankrupt being a developer. So he realizes, no, I need to do, I just want to do hotels. So he's building hotels for other people ears, right? And he meets a group of very conservative old school English businessmen. And the summary of this section is sometimes you have to fly.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Years Cecil to give them the money says something interesting here the hotel was successful that Cecil congratulating me for reaching the pinnacle of success, which seemed to imply that business from here would be somewhat anticlimactic. Nothing could have been further from the truth. So it's like, oh, success? No, no, no. We're just getting started. Okay, so it's been eight years since he was married and went on that honeymoon at Niagara Falls, right? And so they take a trip. He takes a multiple week trip with his wife to London. He's going to research. He wanted to research successful hotels. He's still only building in Canada at this time, but he knows he wants to expand it to Europe and then eventually in America. And he does something here that's really interesting, more like a barbell strategy. So it's either zero or 100, no messing with in between. I thought this is fascinating. Because we wanted to stay on budget, remember he's not. He doesn't have a bunch of money yet, because we want to stay on budget.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“He had his own fitness club. These people have been around forever. But it says, so I was like, okay, why don't you open your own fitness club in the hotel? The hotel would be the first location of his fitness institute, which was also the first kind of health club in the world. He was obviously famous, so he was able to leverage Izzy was able to leverage Lloyd's already existing fame into hotel guests. He gave us a welcome publicity for the first several years. The club was so successful. It changed the industry. No one would now think of planning a hotel without a health club or fitness center. The inn on the park, this is the name of his hotel before four seasons. The inn on the park was the first. This is another milestone. And it's a combination of all these different unique experiences that he's giving his customers that they can't get anywhere else at the time that contribute to making this project a success. He goes back. This is really interesting. The person that he kept hounding for three years.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“To have these like thin towels that don't do anything. So he has four seasons one of the first people to do these fluffy cotton towels. So he says, again, we discussed ideas that set us apart from competitors. We were surrounded with picturesque parkland. We provided bicycles for rent and maps for walkers. We discussed smoking. Remember this is back in the 1960s. We discussed smoking, how tobacco smoke bothered a lot of non-smokers. So why don't we ask our guests if they smoke, I said. And if they don't, we could designate some floors as non-smoking and segregate them. And we did. This is the beginning of what became a worldwide practice. And really what's happening here is when you start with the ideal customer, what he discovered, right, through trial and error and through just common sense is, then when you start with the ideal customer experience, that forces you to invent solutions to your customer's problems, right?”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Invigorating shower. They want that today, they'll want that 10 years from now, they want that 20 years from now. So I can build my business on top of those things, right? And so for Jeff, he's like, okay, people will want low prices today. They want low prices in the future. So I can build around that. They'll want fast delivery today and they'll want fast delivery in the future. And I want to build around that. And I think the third one, if I remember correctly, I'm going off the top of my head was like a wide selection. And so he identified a bunch of things that they will not change. So any investment I make in optimizing for these things will pay dividends many decades into the future. And we see Izzy doing the exact same thing here. He talks about going through and testing, I forgot the amount maybe dozens, maybe hundreds of different mattresses, finding the showerhead. I think a lot of people have had experience. You check into a tell and you turn on the shower. It's like, you know, the water pressure is not there. So he found the best shower head to optimize for water pressure. He talks about what he hated going to hotels where they”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of managers have left their own devices will start to do things that are best for the company, right? It's very natural to just think about things from our perspective. Izzy just put he's just like, okay, what is the ideal experience for the customer? And he starts to identify things. And a lot of the things he mentions now might even seem very common to you if you stay at a hotel. A lot of them were brand new and a lot of them were copied by his competitors, which is mentioned a bunch in the book. In building our first hotel, I had been concentrating on customers. What would our customers want most? I had little hotel experience, but enough to know that what most people wanted. A quiet room, a good night's sleep, and an invigorating morning shower. So that part also reminded me about Jeff Bezos talks about, listen, you should build your business on things that will never change. And so when he was building Amazon's retail business, he identified very similar to what Izzy's discovering here. Today, people want a quiet room, a good night's sleep.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“He risks everything on the second hotel. I decided to go ahead. I first saw only one difficulty, but it loomed large. How do you build a 200 room resort without any money? This was literal fact. My earnings barely covered my rising family costs. To build I would have to leverage the entire 100%. If the hotel should not prove successful, a loss so great I could be in the debt for the rest, I could be in debt for the rest of my life. And it's during this construction of the second hotel that we really start to see his very simple operating system. I feel we've talked about it over and over again in the last few podcasts. I mean, there's an entire book, The Bonus episode I just did on Amazon's process of building new products called Working Backwards. Izzy's doing the exact same thing. It does not, it could all be so simple. That does not mean simple does not mean easy. But it's like, why don't we just start with what is best for the customer? As we saw in the Kinko's book, a lot of...”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source
“Four seasons. It sounded right and that was the extent of our market research for a name Okay, so that first motel, it's a moderate success. He immediately starts building another one. There's a lot of things that are happening that is interesting about his early career. And it's another main theme of the book, that belief comes first. His belief came way before any actual evidence of success. So he says, our second hotel was even more of a gamble than the first. I was putting more scarce capital in a business I didn't really know. I was still primarily a builder constructing houses and apartments. But even before four season success rationalized my desire to build a second hotel, I was seeking a suitable site for building another one. I recognized the drawbacks while envisioning the possibilities, which created a subconscious belief in success. I liked it, and that subconscious belief that he's liking that's being instilled in him causes him to go all in.”
2021-06-06 · Founders · #184 Isadore Sharp (Four Seasons) · IDENTIFIED FROM THE TRANSCRIPT · source