Founders

Amancio Ortega is one of the wealthiest people in the world. Ortega is the founder of Inditex, a pioneer of fast fashion, an entrepreneur with over 60 years of experience, and has created a business model that is studied in universities that he could not access. His life story is inspiring, educational, and full of valuable ideas for future generations of founders. This episode is what I learned from reading This is Amancio Ortega: The Man Who Created Zara by Covadonga O'Shea. ----Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. ----Join my free email newsletter to get my top 10 highlights from every book----Notes and highlights from the episode: I remembered a comment that Luis Miguel Dominguin made to me years ago, when he was at the peak of his glory and his son, still a child, played in the garden of his house. "This child will never be a bullfighter. To face a bull you have to go hungry.” The important thing is to set goals in life and put all your soul into fulfilling them. I have dreamed of growing the company since I was nobody. We gave it every day. My priority has always been the company, and I have committed myself to it, with full dedication, from day one. Ortega is a man of mission. He is so convinced of what he is and what he has to do. I was convinced that I had to dominate the customer. Ortega starts with the customer and work backwards: “I am going to manufacture what the customer wants.” I met Ortega when Zara did not exist. He only had the factories. In those years when nobody thought about technology within our sector, in which there was almost no computer science or mobile phones, he wanted to have a good team in technology. He built a groundbreaking and avant-garde textile distribution company. Inditex's business is centered around one simple premise – to be quick at responding to the market. Their main advantage: an astonishing ability to detect fashion trends, assimilate them, and make them a reality on the hanger at a bargain price, and all in less than 15 days. Ortega wanted to integrate design and manufacturing first, then complete the chain with distribution and sales in his own stores, turning the customer into his source of privileged information and not just the receiver of a commodity. I refuse to recognize that there are impossibilities. I cannot discover that any one knows enough about anything on this earth definitely to say what is and what is not possible. — Henry Ford There are no mature sectors where everything is already discovered, but rather companies or managers with closed minds who resist innovation. Logistics is a fundamental part of the circle that completes Inditex’s vertical integration process. Inventory control in all locations around the world is as important as getting the design right and producing in a short time; that's why Inditex has invested time, effort, and a lot of money in establishing logistics centers with the latest technologies. Traditionally, the seller ensures high margins at the beginning of each season, but endures several months of discounts to get rid of stock; the customer knows, therefore, that in the long run they will get the same items at lower prices. Ortega's company renews its clothes in stores around the world every week and twice weekly in Europe. The buyer knows that they will always find new items, but probably won't be able to get what they tried on seven days ago. In this way, customers understand that if they see something they like, they have to buy it immediately, because in a few days it will no longer be in the store. It's about creating an atmosphere of scarcity and opportunity. Ortega has created a business model that is studied in universities to which he could not access. I consider myself a worker who is immensely fortunate to have done what he wanted in life and to continue doing it. It's the most beautiful company in the world. I want a company with a soul. Ortega stayed focused on his one great objective: To enable the entire world to dress well. Ortega refuses to settle halfway to excellence. He is a man with a lot of personal charm because he is not false. He does not have ulterior motives. He can be very tough, impulsive, very sure of himself, but very truthful. Ortega does not like to lead sitting in a chair. He has never liked praise. More than once I've told him: 'What a beautiful collection, how happy the customers are!', and he always interrupts me and asks me: 'Now tell me what's wrong.” When asked on his advice for future generations of entrepreneurs: “The first thing is that you like what you are doing, that you are passionate about your work. I insist on this idea because it is very important. It has to be something that you would almost pay to do.” Simplicity is the heritage of geniuses.  ----“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. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from rereading James J. Hill: Empire Builder by Michael P. Malone. ----Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. ----Founders Notes gives you the ability to learn from history's greatest entrepreneurs on demand. You can search all my notes and highlights from every book I've ever read for the podcast. Get access to Founders Notes here. ----Join my free email newsletter to get my top 10 highlights from every book----Notes and highlights from the episode: —He had unlimited energy, was stubborn, had a temper, was supremely arrogant and he did more to transform the northern frontier of the United States than any other single individual.—One of the things he learned from history and biography: The power of one dynamic individual: Like so many other nineteenth-century youths, young Jim Hill fell under the spell of Napoleon. He came to believe in the strength of will, the power of one dynamic individual to change the world, the conquering hero. (He says that the railroad entrepreneurs conquered the distance between remote communities in the American west)—He accustomed himself to handle a large workload.—If you want to know whether you are destined to be a success or a failure in life, you can easily find out. The test is simple and it is infallible: Are you able to save money? If not, drop out. You will lose. You may think not, but you will lose as sure as you live. The seed of success is not in you. –James J. Hill—He held people’s attention as he engaged them in characteristic rapid-fire, highly animated conversation, gesturing expansively and driving home his point with jabbing motions of his hands—the embodiment of high energy.—He worked incredibly hard, sometimes laboring late into the night, falling asleep at the desk, then getting up for a swim in the river and a cup of black coffee, then going back to work.—“Rebates existed in other industries. I just applied them to oil.” Rockefeller said. [Don’t copy the what, copy the how]  —John D: The Founding Father of the Rockefellers by David Freeman Hawke. (Founders #254)—"The very best employee at any job at any level of responsibility is the person who generally believes that this is their last job working for someone. The next thing they'll start will be their own. — Max Levchin in The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley by Jimmy Soni. (Founders #233)—Hill drank little, worked hard, and confined his socializing to respectable settings. As always, he read incessantly. He permitted himself few distractions in his relentless drive to achieve wealth and status.—Inefficiency disturbs him greatly.—James J. Hill loved eliminating steps.—Genius has the fewest moving parts.—Hill limited the number of details. Then he makes every detail perfect.—Hill called vertical integration, rational integration.—Hill always gets out quickly in front of the emerging trend.—Hill had an entirely pragmatic business personality. When competition suited him in a market, he competed fiercely. But when competition became wasteful to him, he did not hesitate to end it, even if this meant joining with old enemies and creating a monopoly.—Hill was making profits owning steamboats. Then a competitor from Canada starts running the same route and the rates and profits dwindle. Hill discovers a neglected maritime law that prohibited foreign ships from operating in American waters. Hill then persuades the US Treasury Department to enforce the law against his competitor. The competitor has to transfer ownership to an American. After that Hill then merges with that competitor and forges another monopoly.—This railroad is my monument. — James J Hill—As man emerged into history, he became a road maker; the better the road, the more advanced his development. — James J. Hill.—By 1885 Railroads brought in twice the revenue than the federal government.Railroads were the nations largest employer.The railroaders were the largest private land holders in the country.They owned more than 10% of land in the United States.—Hill identified an opportunity hiding in plain sight: Unlike most who viewed the Saint Paul and Pacific as a near-worthless derelict, Hill viewed it as a miracle waiting to happen, a potentially wondrous enterprise simply lacking competent leadership. He studied the road constantly, reading every scrap of information he could find about it and boring anyone who would listen with endless detail as to what it could one day be.—He possessed a priceless advantage compared with most other nineteenth-century rail titans. Rather than coming from the outside world of finance, as most of them did, he arose from the inside world of freighting and transportation, and he knew this world in all its complexities. He was about to demonstrate how certain well-established, regional capitalists on the frontier could challenge and even best larger eastern interests.—Being obsessed is an edge. Hill was obsessed getting control of the bankrupt Saint Paul & Pacific rail line:  Hill, who knew the road better than anyone else, constantly argued to his friends, the potential prize defied description. He seemed completely fixated on the project. Many years later, his friend recalled that Jim had spoken of it to him “probably several hundred times” during the mid-1870s.—James J. Hill finds what he is best at in the world at, at 40 years old, in a field where he had no direct experience.—“It pays to be where the money is spent” — James J Hill—James J. Hill was very easy to interface with. He had an easy to understand organizing principle for his company. Hills credo: What we want is the best possible line, shortest distance, lowest grades, and least curvature that we can build.—He had appreciation for those who had dirt underneath their fingernails.—Many observers would later compare Hill with Villard. The comparison was inevitable. “While Hill was building carefully and checking his costs minutely Villard built in ignorance of costs.” Like other transcontinental plungers, Villard did in fact build rapidly and poorly, much of his main line would later have to be torn up and rebuilt. He had rushed to get the massive land grants. Amid mounting deficits and acrimony, Villard was then forced to resign the presidency of the NP in 1884.—Find what you are good at and pound away at it forever.—He simply could not delegate authority and live with the outcome.—Hill on how to build a railroad: Work, hard work, intelligent work, and then more work. — James J Hill.—They managed the finances of the railroad in a highly conservative and prudent manner.  Hill advocated and practiced a policy of plowing large percentages of profits directly back into the property, knowing that the best defense against invading railroads was a better-built system that could operate at lower rates.—Give me Swedes, snuff and whiskey, and I'll build a railroad through hell. — James J. Hill—From the Hour of Fate: James J. Hill had built the Great Northern with deliberate thrift and brutal efficiency. His railroad would become among the most profitable in the Northwest. He didn't need JP Morgan the way other railroad executives did. (Financial strength was kryptonite to JP Morgan)—He cared most about freight, never frills.—The life of James J. Hill certainly demonstrates the impact one willful individual can have on the course of history.—I’ve made my mark on the surface of the earth and they can’t wipe it out. — James J Hill.----“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. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Leading By Design: The Ikea Story by Ingvar Kamprad and Bertil Torekull and The Testament of a Furniture Dealer by Ingvar Kamprad.----Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. ----Founders Notes gives you the ability to learn from history's greatest entrepreneurs on demand. You can search all my notes and highlights from every book I've ever read for the podcast. Get access to Founders Notes here. ----Join my free email newsletter to get my top 10 highlights from every book----Notes and highlights from the episode: Ingvar works on IKEA from the time he is 17 until he dies at 91.The Testament of a Furniture Dealer by Ingvar Kamprad (1976) is a sermon on the culture of IKEA  IKEA’s common goal: We have decided once and for all to side with the many. IKEA will offer a wide range of well-designed furniture at prices so low that as many people as possible will be able to afford them.Billy Durant (founder of General Motors) describing Henry Ford’s one single idea: Durant noted that Ford “was in favor of keeping prices down to the lowest possible point, giving to the multitude the benefit of cheap transportation.” — Billy Durant: Creator of General Motors by Lawrence Gustin Something Ingvar repeats: We will do it a different way.This will not be easy. We must demand much from ourselves.IKEA must have low prices. Ingvar’s dedication to that idea is total. Without low costs we can never accomplish our purpose. The principle can never be compromised: Our policy of serving the many can never be changed.If you are not enthusiastic about your job, one-third of your life goes to waste.Wasting resources is a mortal sin at IKEA.Expensive solutions to any kind of problem are usually the work of mediocrity.Planning is often synonymous with bureaucracy. Exaggerated planning is the most common cause of corporate death.Simple routines have a greater impact. Simplicity in our behavior gives us strength.No reports. No committees. Just done. — Elon in the early days of SpaceX Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX by Eric Berger. (Founders #369) We dare to do things differently.You had to remember he'd been picking up the best ideas from all around the country. — Copy This!: How I turned Dyslexia, ADHD, and 100 square feet into a company called Kinkos by Paul Orfalea. (Founders #181) Concentration is important to our success. The general who divides his resources will invariably be defeated.We can never do everything, everywhere, all at the same time.We must concentrate for maximum impact, often with small means.Concentration means that at certain vital stages we are forced to neglect otherwise important aspects.Constant meetings and group discussions are often the result of unwillingness or inability on the part of the person in charge to make decisions.Only those who are asleep make no mistakes. Making mistakes is the privilege of the active.The fear of making mistakes is the root of bureaucracy and the enemy of development.It is always the mediocre people who are negative, who spend their time proving that they were not wrong. The strong person is always positive and looks forward.Happiness is not reaching your goal. Happiness is being on the way. It is our wonderful fate to be just at the beginning (He said this when he was already 33 years into running his company!)Bear in mind that time is your most important resource. You can do so much in ten minutes. Ten minutes, once gone, are gone for good. You can never get them back. Divide your life into ten-minute units and sacrifice as few of them as possible in meaningless activity.Let us continue to be a group of positive fanatics who stubbornly and persistently refuse to accept the impossible.Ingvar’s family had to rent out all the rooms in their house to strangers to make ends meet.Selling things became an obsession. Trading was in my blood.By 1997 IKEA had mailed out over 100 million catalogs.Ingvar was the first person in the furniture industry to combine a mail order catalog and a furniture store.Cost awareness was to be IKEA’s anthem.Ingvar’s greatest regret was working so much that he missed out on seeing his 3 son’s grow up: Childhood does not allow itself to be reconquered.I have not been able to avoid severe losses. Both fiascoes and triumphs have marked the history of the business.Ingvar would rather his employees make mistakes than be idle.The wave Ingvar rode: Sweden’s housing construction boom. More than 1 million new apartments were built after the war. All of them needed well designed, affordable furniture. The way IKEA was described by its competitors: A monster with seven heads: “If you cut off one, another soon grows.”A golden rule of IKEA: Regard every problem as a possibility. The boycott by the National Association of Furniture Dealers was the best thing that ever happened to IKEA. It forced IKEA down a path of product differentiation and helped them stumble upon the idea of flat packing and self assembled furniture.The laws of IKEA since birth:  -A good cash reserve must always be ensured.-All property must be owned.-All expansion is to be largely self-financed.-There shall be no boasting.We push cost awareness at all levels with almost manic frenzy.Ingvar believes in the ability to wait out difficulties.Ingvar believes in gathering unfiltered intel from the front lines. He makes unannounced store visits and spends time talking to the employees unloading furniture and helping customers.The day he is free of IKEA life for him will no longer be worth living. He loves it, aways wants to lie as close as possible to it, and never tires of improving it.A demon in me says I have so much to do. I am never satisfied. Something tells me what I’m doing at the moment has to be done better tomorrow.Behind this multinational tycoon is a country boy with a fierce sense of being an underdog.He has a peasants distrust of a favorable destiny that keeps his feet on the ground.----“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. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from rereading Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX by Eric Berger. ----Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. ----Founders Notes gives you the ability to learn from history's greatest entrepreneurs on demand. You can search all my notes and highlights from every book I've ever read for the podcast. Get access to Founders Notes here. ----Join my free email newsletter to get my top 10 highlights from every book----Episode Outline: —Numerous other entrepreneurs had tried playing at rocket science before, Musk well knew. He wanted to learn from their mistakes so as not to repeat them.—Elon announces that he wants to start his own rocket company and I do remember a lot of chuckling, some laughter, people saying things like, ‘Save your money kid, and go sit on the beach.’” The kid was not amused. If anything, the doubts expressed at this meeting, and by some of his confidants, energized him more.—Musk was a siren, calling brilliant young minds to SpaceX with an irresistible song. He offered an intoxicating brew of vision, charisma, audacious goals, resources.—When they needed something, he wrote the check. In meetings, he helped solve their most challenging technical problems. When the hour was late, he could often be found right there, beside them, working away.—The iterative approach begins with a goal and almost immediately leaps into concept designs, bench tests, and prototypes. The mantra with this approach is build and test early, find failures, and adapt. This is what SpaceX engineers and technicians did.—"Here was a man who was not interested in experts. He meets me, he thinks to himself, 'Here is a bright kid, let's employ him.' And he does. He risks little with the possibility of gaining much. It is *exactly* what I now do at DysonThis attitude to employment extended to [Jeremy] Fry's thinking in everything, including engineering. He did not, when an idea came to him, sit down and process it through pages of calculations; *he didn't argue it through with anyone; he just went out and built it.* When I came to him to say, 'I've had an idea,' he would offer no more advice than to say, 'You know where the workshop is, go and do it.'  'But we'll need to weld this thing,' I would protest.Well then, get a welder and weld it.' When I asked if we shouldn't talk to sure someone about, say, hydrodynamics, he would say, 'The lake is down there, the Land Rover is over there, take a plank of wood down to the lake, tow it behind a boat and look at what happens.' Now, this was not a modus operandi that I had encountered before. College had taught me to revere experts and expertise. Fry ridiculed all that; as far as he was concerned, *with enthusiasm and intelligence anything was possible.* It was mind-blowing. No research, no preliminary sketches. If it didn't work one way he would just try it another way, until it did. And as we proceeded I could see that we were getting on extremely quickly.  *The root principle was to do things your way.* It didn’t matter how other people did it. It didn’t matter if it could be done better.  As long as it works, and it is exciting, people will follow you."      — Against the Odds: An Autobiography by James Dyson by James Dyson (Founders #300)—Elon personally interviewed the first 3,000 employees of SpaceX.—His people had to be brilliant. They had to be hardworking. And there could be no nonsense.—SpaceX operated at its own speed.—Pony Express ad: “Wanted: Young, skinny, wiry fellows not over eighteen. Must be expert riders, willing to risk death daily. Orphans preferred.”—I’ve never met a man so laser focused on his vision for what he wanted. He’s very intense, and he’s intimidating as hell.—SpaceX had juice with the best students in space engineering. The freedom to innovate and resources to go fast summoned the best engineers in the land.—Talent wins over experience and an entrepreneurial culture over heritage.—He always made the most difficult decisions. He did not put off problems, but rather tackled the hardest ones first. And he had a vision for how aerospace could be done faster and for less money.—He didn’t want to fail, but he wasn’t afraid of it.—The speed SpaceX worked at relative to its peers could be jarring.—No job is beneath us.—No committees. No reports. Just done.—Most of all he channeled an intense force to move things forward. Elon wants to get shit done.—SpaceX likes to operate on its own terms and its own timeline.—90% of the book is SpaceX failing.—Elon spent much of the flight poring over books written about early rocket scientists and their efforts. He seemed intent to understand the mistakes they had made and learn from them.—SpaceX is in this for the long haul and, come hell or high water, we are going to make this work.—Who knows your customers? Find the person that knows your customers and then hire that person to sell your product to them.—No work about work, just work. Shotwell wrote a plan of action for sales. Musk took one look at it and told her that he did not care about plans. Just get on with the job. “I was like, oh, OK, this is refreshing. I don’t have to write up a damn plan,” Shotwell recalled. Here was her first real taste of Musk’s management style. Don’t talk about doing things, just do things.—Within its first three years, SpaceX had sued three of its biggest rivals in the launch industry, gone against the Air Force with the proposed United Launch Alliance merger, and protested a NASA contract. Elon Musk was not walking on eggshells on the way to orbit. He was breaking a lot of eggs.—A Pegasus launch cost between $ 26 and $ 28 million. SpaceX’s price was $6 million. Musk wanted it front and center on the company’s website. This sort of transparency was radical at the time.----“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. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast