#279 What I Learned Before I Sold to Warren Buffett
What I learned from reading What I Learned Before I Sold to Warren Buffett: An Entrepreneur's Guide to Developing a Highly Successful Company by Barnett Helzberg Jr. This episode is brought to you by: Tiny: The easiest way to sell your business. Quick and straightforward exits for Founders. Capital: Banking built for Founders. Raise, hold, spend, and send—all in one place. Tegus is a search engine for business knowledge that's used by Founders, investors, and executives. [5:00] Then, right there on the sidewalk I told one of the most astute businessmen in America why he ought to consider buying our family's 79-year-old jewelry business. "I believe that our company matches your criteria for investment, I said. To which he replied, simply, "Send me the information. It will be confidential.” My conversation with Buffett lasted no more than half a minute. [8:00] My dream buyer for the family business all along was Warren Buffet. [11:00] "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. That wasn't Buffett's way. "I can smell these things, Buffett said. "This one smells good.” [12:00] First A Dream by Jim Clayton. (Founders #91) [13:00] Buffett on his management technique: “Managers run their own shows. They don't have to report to central management. When we get somebody who is a .400 hitter we don't start telling them how to swing.” [14:00] I was always taught that many, many people were out there developing ideas I could use. I have found that to be true throughout my life. These thoughts and ideas have all been borrowed or stolen from many wise people. Think of the world as your garden of marvelous people and ideas with unlimited picking rights for you. [17:00] Cable Cowboy: John Malone and the Rise of the Modern Cable Business by Mark Robichaux. (Founders #268) [23:00] Despite missteps, entrepreneurs are a special breed who do not give up on the larger goals. [24:00] It's not hard to express the quality we're looking for in metaphors. The best is probably a running back. A good running back is not merely determined, but flexible as well. They want to get downfield, but they adapt their plans on the fly. — Relentlessly Resourceful by Paul Graham [25:00] Entrepreneurs are driven to succeed. They possess an almost naive belief that nothing can stand in their way, they are mentally deaf to those who belittle their chances, they love to compete, and they have the skills of broken field runners who take the bumps and bruises along the way, change course when necessary, and stay focused on the goal. If this is not you, don't try to fool yourself. It's not worth it. Thinking you can start your own business or wanting to be your own boss, just because you hate your job, when you really have no desire or stamina to go it on your own, is courting disaster. Where there is no real will, there is no way. Some people are more enamored by the concept than the reality. They would rather contemplate the beauty of the mountain from the base. The entrepreneur wants to climb the mountain first, briefly appreciate the gorgeous vistas from the summit, and then find the next mountain. If you possess this obsession of seeing your own creative notions succeed and are willing to pay the price, then you have no choice but to pursue the life of an entrepreneur. [29:00] He taught us to concern ourselves only with those things 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. [30:00] Upgrade the herd annually: "You make more money closing bad stores than 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 annual sales of $6 million than on a lower-volume store with less potential. [32:00] 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. Commit yourself to be the best, define what that means, and focus on the head of that pin like no one in your industry. [32:00] Estee Lauder was a master at doing things don’t scale. — Estée Lauder: A Success Storyby Estée Lauder. (Founders #217) [33:00] To be successful, have your heart in your business, and your business in your heart. —Thomas Watson The Maverick and His Machine: Thomas Watson Sr. and The Making of IBM by Kevin Maney (Founders #87) [38:00] Only a fool tests the depth of the water with both feet. —African Proverb [40:00] Some of our partners created an inhospitable climate for customers. Some posted negative signs. At one store a manager hung a sign in red warning customers that they would be charged a steep fee if they bounced a check. It said, "The bank doesn't make copies and we don't cash checks." That really got me boiling. I jumped up on the counter and ripped it down as customers and coworkers looked on, amazed. That may sound extreme, but I needed to make the point in a memorable way. I didn't want signs like that staring our customers in the face. I told our coworkers that the occasional hit we took for a bounced check cost far less than what we lost-and couldn't quantify-by creating a subtly hostile atmosphere. — Copy This!: How I turned Dyslexia, ADHD, and 100 square feet into a company called Kinkos by Paul Orfalea. [42:00] Nearly any action or communication means far more when done urgently. Trust only movement. [42:00] One person with a belief is equal to a force of ninety-nine who have only interests. —John Stuart Mill [43:00] None of this works if you can’t trust your own judgement. [46:00] 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 skinned 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. [47:00] You have the experiences of thousands of experts and mentors at your fingertips. [47:00] 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 [48:00] I’ve never found anybody that didn’t want to help me if I asked them for help. I called up Bill Hewlett when I was 12 years old. He answered the phone himself. I told him I wanted to build a frequency counter. I asked if he had any spare parts I could have. He laughed. He gave me the parts. And he gave me a summer job at HP working on the assembly line putting together frequency counters. 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 is what separates the people who do things, versus the people who just dream about them. You have to act. —Steve Jobs [53:00] "Max kept repeating, 'As hire As. Bs hire Cs. So the first B you hire takes the whole company down." — The Founders: The Story of Paypal and the Entrepreneurs Who Shaped Silicon Valley by Jimmy Soni. [54:00] “The greatest thing you can do for your competition—hiring poorly.” —Bill Gates [59:00] 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 weren't there. — I use Readwise to organize and remember everything I read. You can try Readwise for 60 days for free https://readwise.io/founders/ — “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast
