FRED smith

episode 4

Fred Smith founded Fedex 46 years ago. He's still running the business today that employ's over 500,000 people and has a market valuation over $56 Billion.

Despite the hi-tech and enormoity of the company, Fred brings a powerfully simple world view. He believes deeply in people and thrives in a world of change.

Join Chad, Mike and Special Guest Gary Hoover as they deconstruct the lessons from one of the greatest living innovators. 

OUR FABULOUS GUEST 

Gary Hoover of Hoovers World. Video's of Gary's talks can be found at Hooverbits

The Lifetime Learner's Guide to Reading and Learning
by Gary Hoover

Interviews + Articles

Why good leaders make you feel safe | TED Talk
Simon Sinek

BOOKS MENTIONED IN THE SHOW

Leaders Eat Last: Why Some Teams Pull Together and Others Don't
by Simon Sinek

Changing How the World Does Business: Fedex's Incredible Journey to Success - The Inside Story
by Roger Frock

Servant Leadership [25th Anniversary Edition]: A Journey into the Nature of Legitimate Power and Greatness Kindle Edition
by Robert K. Greenleaf

The Visible Hand: The Managerial Revolution in American Business unknown Edition
by Alfred D. Chandler Jr.

They Made America; From the Steam Engine to the Search Engine: Two Hardcover – 2004
by Harold, et al. EVANS

Transcript

Welcome to the moonshots podcast. Hello to everyone. I'm your cohost Mike Parsons. And as per usual, I am joined by the man himself. Mr. Chad Owen. Hi, Mike, how are you? Doing well, I know you're on vocab vacation in, in Colorado. What's it like out there right now? Uh, it's beautiful. The sun's about to set and I'm looking over the mountains.

I cannot complain well as we jump into another episode of moonshots and we have a really exciting show today because we have. Uh, much to offer you, not only in a great deep dive, into one of the greatest living innovators, but today, July 21st, 2017 episode four, we're going to bring a special guest. Chad, would you like to introduce to our listeners our very special guests?

Of course we are joined today with Gary Hoover. He is the founder of Hoovers, hoovers.com and also the founder of books. Stop the first big box book Superstore, uh, down in, in Austin, Texas. She say hello to everyone, Gary. Hi. How is everybody today? All over the world. It's great to be here. Well, thanks for jumping on the show, Gary, uh, for our listeners.

I think, uh, I have to have to say, I have to thank Chad for coming up with the idea of bringing on a guest. I think it's something we'd love a lot of feedback. Uh, from you, the listeners, as we've been getting tons of good feedback, rich, I'll read some of that later in the show, but Chad, this was your idea to bring out on, tell, tell us why you thought Gary would be able to offer us some interesting thoughts and ideas on, uh, on the moonshots.

Yeah. Well, first of all, Gary is a fellow university of Chicago graduate. And, um, I think we pride ourselves on being lifelong learners. So I wanted to bring Gary onto the show today because I know he has an immense library. I mean, how many titles do you have at this point, Gary? Uh, about 57,000 books. He's essentially bought a building to house all of his books and he.

He kind of lives in the corner, in the corner, right. That's for sure to say Gary, that, um, when we were in our pre show phase, uh, an hour or so ago, and, uh, I mentioned that we're recording with me here in Sydney. Gary said, well, you know, I've given a ton of talks. Uh, I've been to conferences all over Australia.

And I think it's fair to say, um, that you are not only a sought after. Uh, innovation and entrepreneurial thinker. You're also a published author and just a man brimming with history and ideas, which is it fair to say all loosely, coupled by entrepreneurial-ism innovation, new ideas, things that disrupt the status quo.

Uh, yeah, I mean, I grew up in a general motors factory town in Indiana and as a kid, I mean, it was a town of 60,000 people in 27,000, worked at general motors. So it was life itself and nobody can answer my questions and say, well, who started this? And why did they start it? And is it a good company or a bad company?

And are the people that run it smart or not? And, uh, nobody, none of the teachers going to answer my questions and I discovered fortune the big American business magazine and started subscribing when I was 12 years old. So then I'm now 66. So for 54 years, I've been studying enterprises. At first. I was obsessed with large companies, but I've gone on to do I dunno, seven or eight startups on my own and, um, teach entrepreneurship.

I was at the university of Texas at their business school as entrepreneur and residence. And. Speak all over the world. So I'm really just fascinated. How do people achieve great things? How do they work together in groups, whether it's a, for profit or a nonprofit organization, what makes a great leader?

What makes a great enterprise? How do they, how do they survive over the years? So many companies are around for a couple of three years and get sold and then everything changes. And just to me, nothing is more fascinating than how enterprises are built of all different types in every industry and every corner of the globe.

Brilliant. Brilliant. Well, thank you so much for joining us and once my pleasure, once again, we need to thank Chad because not only did he recommend, uh, you as a, as a guest on the show, but Chad, you, you recommended you were absolutely in the corner for this. Entrepreneur and innovator that we're going to do a deep dive in.

Do you want to set it up first? Well, it was all because of Gary really. He, uh, he sends out a great news, his letter at Hoover's world and with the title of, you know, the greatest living innovator and Mike, you know, seeing as you and I doing a podcast for a couple of weeks now about the greatest innovation, my, my ears kind of perked up.

And it was a name that I didn't know. Fred Smith who founded FedEx back in 1972. And so Gary's bold claim that he was the greatest living in, um, you know, I want to, to do my research and see if that was a, you know, was a credible claim. Yeah, they get the greatest active because bill Gates is still alive, but, uh, uh, Fred is still running the company he started, which is almost unbelievable.

It is. So we're going to dumb it, dive really into the world. Of, uh, Fred Smith from FedEx. Uh, it is a remarkable story. I want to where Alison is. There's a lot to learn here and it's more than just the technology and the automation that underlies FedEx. I think there, there is yet on this show to be a entrepreneur that can offer you so many.

Great thoughts. So simple and concise, not only about how to create a great company, but I think how to live your life as a leader and how to get the most out of every single day. So before we jump into the clips, uh, of Fred let's. Let's swing over to the news tracker and track. What's been happening with the companies and entrepreneurs that we've covered so far in the show.

And, um, I think when we, when we look at Tesla at an Ilan, I think it has to be the news of the week was definitely the first model three. Uh, the first production model has actually hit the road, which was. A little bit of a surprise for everyone. I think it was a little ahead of schedule, which is a little bit, unlike a Tesla, a little bit infamous for some slight delays in production.

Gary, did you get a chance to get your eyes on the model three yet? Did you, did you see the metal on the road? Uh, no, I haven't seen one yet. I saw the pictures online and yeah. So I can tell you that it's, it's actually, it's a really nice, uh, vehicle and, uh, for the, for the listeners, one of the most innovative things that Elan actually did with this is that he asked his customers who would like to purchase this car last year to put a down payment.

On the car more than a year before they would receive it. And thousands of people did it. So he raised hundreds of millions of dollars from his customers with no interest charges, with no dilution of shares to fund the production, which was just another. Uh, innovation, um, absolutely breathtaking in terms of what a smart way to raise capital.

And I can tell everyone that the, the, the Tesla three, it's a very curvy, uh, Tesla. Chad, did you get a chance to look at the photos? Yeah. I mean, it's very tempting, you know, to put down that, uh, that deposit. But, uh, I think for all of their vehicles, they really hit the designs out of the park. They do, they are beautiful.

What's the sticker price on the new one. It's actually not so much. I believe a study starts at 35,000 us. Yes. That's what I was thinking. Yeah. So it's a better value. Uh, no, you know, the whole thing of the deposits that's been around a long time. I think John DeLorean did that and then got sued out the wazoo.

Um, and, uh, but you know, Hey Kix. Yeah, there's a producer, Chris Robertson, Austin. He's raised over a hundred million dollars for his game. He's currently developing without giving up a penny of equity right now. Here's an interesting question, Gary, if. Ford or GM tried to ask for a cool 5k upfront a year before the car was, was do, do you think that have many takers on one of their cars?

I think it totally depends on the product. I think it's really unlikely that they would have a product that would, uh, uh, you know, justify that maybe if they put a, a Neiman Marcus name on it or something, but, uh, you know, no, I really think it's about the product and how hungry people are. You know, I don't know if you remember beanie babies and everything else when there's a shortage of.

Product and some luxury marketers really believe in shortages and making people clamor and think, Oh, I better get it now. Or I'll never get one. And, and, you know, people have done that for private jets, you know, but I'm big deposits when the plane was first announced. So it's not a wholly new idea, but, uh, but it's certainly a very well in my bookstore chain, we were the first one to have a loyalty program and.

People paid us money. We'd raise a hundred thousand dollars at the grand opening of a store. And that helped finance the inventory, which gave us the broad selection, which is what the customers love. Wow. And we essentially gave it back to them as a discount over the course of the year that worked out.

So they came out ahead, but it helped. Uh, fund our business. So I I've always believed that, um, looking at your customers and suppliers as a source of capital, in addition to that negativity, uh, most people skip those, those two and they have, they in your employees have the most to gain from the success of your enterprise.

Well, you know, uh, there was also some good automotive news for Uber last week and probably some first good news in a while. Um, Waymo who was tussling around with Uber over, you know, the alleged theft of paintings in server Waymo has actually dropped. Their claims, uh, we with Uber. So perhaps this signals the start of quite a times for Uber and, uh, helps them get back on track obviously after Travis resigned his, uh, CEO's so well, not so fast there, Mike, uh, cause it wasn't there an HBR article.

Oh man. Essentially Uber is, is fundamentally illegal and that it should be shut down. Oh, my gosh. Um, so, um, you know, I, I read this article, we'll have it in the show notes on moonshots.io. It was a pretty visceral attack, uh, establishing that Uber is fundamentally illegal and it did an interesting thing and it paralleled, uh, the fact that it's an illegal business, which was why.

They had so much struggles with their internal culture is, you know, the, the author really argued that these two things were connected, which I thought was quite an interesting idea. We've got, got a link to it in the show notes, have a listen. It felt a little, Mmm, a little deliberate in, in going after them.

I don't know if it was clickbait or something more than that, but it is interesting because there is this fine line when companies are challenging, the status quo between staying. In the interests of customers and the community versus breaking rules that are there for a reason, Gary, they're probably, they're probably not the first company in history to ride that line.

What comes to mind when you think of other companies that I've sort of sailed that very fine line? Oh, goodness, over and over again. And I haven't read the Harvard business review article. First time I've heard, heard them referred to as possibly offering clickbait. Um, the, Hey, um, yeah, I heard Steve case.

He came to Austin and spoke and he was, he was a, it was down on what Uber was doing. This was a couple of years ago. In terms says, look, we can't fight government. We've got to work with them and partner with them. Uh, but the reality is we have all these laws on the books. You know, I may or may not know Austin was a center of a fury and still hasn't died down where the city council kicked Uber out.

And everybody said, well, we don't want to defer to this big company with all its money and all that evil. And the reality, if you study from an economics viewpoint, is that, um, uh, they, you city council was defending the taxi monopoly, which had been put in place for many years and a big private equity firm in Houston owned all the big cab companies in Texas.

Nobody knew that or talked about that. Being a business researcher, I dug into it right away and it's really it's uh, the, the old monopoly fighting the incoming disrupt. Or Thomas Edison tried to shut down the, the, the big movie industry. It's a more complex story than that, but it all Zucker who really created the, uh, the first great studio paramount.

Uh, he did a bunch of illegal things. Um, there have been retailers, uh, it was in Queens, New York, a guy named Jerry, and he did TV ads. He opened on Sunday and of course that was against the law. And so he was in jail. He did a TV ad from jails and look, customers I've gone to prison for you, uh, Costco and people like that.

Um, they fought resale price maintenance, which gave, um, manufacturers the right to set prices and they won that was made illegal and an Apple and a bunch of people went to court and got a change some years ago. So that now we're back to where we were in the thirties and forties, where a manufacturer could demand a retailer.

Use their prices or not, not be shim. Um, I tend to be on the side of the disruptors. We have a lot of laws on the books that have been there for a long time. Nobody knows why they're there. Well, except the monopolist. And, and the only time when the mile probably really works is when the government defends it.

And so we've really, um, It's a very complex issue and everything, but no, no. A long history of, uh, uh, Southwest airlines spent, I think two or three years in the courts, just trying to get the right to fly because the big players, American and Braniff, if you remember that one, uh, they said, Oh no, we can't let this upstart come in.

They can't do this. And they can't do that. And Fred Smith bought a lot of that too. Fred Smith encountered this. When he was fighting the regulations shortly after Southwest was, was kind of winning their regulation battles because the government wouldn't allow. Planes without people, you know, to make these trips.

And, and FedEx was the first, you know, all package, no passenger airline, and the government's, you know, laws and regulations just simply wouldn't let them planes and they wouldn't let him fly bigger planes later on. He saw a lot of adults. So, so the, the, the fight against regulation monopolies is, is a big theme.

Not only, uh, if, uh, for some particular industries or companies, I believe that that heavier industry type, but, you know, if you look at entrepreneurs like Branson, I would argue that he's actual strategy is to, and two categories where there is a monopoly. Protected by regulators and he just calls it out and says big, bad, ugly, evil empire.

Let's fight against it. I think that's his whole business strategy. I certainly did that with, um, British airways, my first visit to Australia, Amana transportation lover. In my first company, I started on my college campus was a charter bus company. And so I have this odd fascination with buses and motor coaches.

So I get to, um, I went to Brisbane for our stomachs. As soon as I got there. One of the first places I went to was the bus station. And there, I saw all these people traveling long distances across Australia. In, uh, buses and that, that had already, essentially gone away in the United States with the rise of cheap airfares in Southwest.

I mean, everything it's come back now. The bus industry is growing for the first time in the U S and many years due to new innovators and disruptors. Then in any case, I go to the Brisbane bus station. I'm like, what is going on here? Here's this relatively affluent society. And they're traveling these long distances by buses that airplane.

And, and I said to myself, I said, Hey, it means one thing it means the airline industry is, is, uh, under regulation and is set up to, uh, serve business travelers and keep prices high. And I said to myself, man, won an opportunity for somebody to come in. And bring in low fares, but it would be a big fight. And I think it was two or three years after that.

It was certainly after that the grandson went and Australia in the airline business. Right. So, so that same goes also, uh, if you take a look at the incumbent. Telecommunications provider in Australia, Telstra. Um, same for them as it is for Quantas in the airlines. The interesting thing about Australia for our listeners that are based outside of the country is the Strayer is roughly the size of America, but only with 20 plus million people, not the, what is it?

Three, 300, 350 million people live in the U S. Yeah, yeah. Somewhere in that range. What I want you to imagine. So essentially America, with a 15th of the people, New York city, New York has about 20, 21 million in the Metro area. The argument always is that, you know, high regulation and government protection is required because you can imagine running a infrastructure in Australia is very expensive because it's geographically as big as America, but you don't have the population.

Uh, the size of the U S that's paying taxes. So it's, it's a tricky, tricky balance there, but for sure it really hurts us. Um, one of the, without doubt, surprising things in returning to Australia was going from a home internet connection in, uh, San Francisco. That was well in excess of 100 megasecond. And the best I can do in Australia is 35.

Uh, and a lot of the country has. Very expensive data plans and so forth. So prime prime for Richard Branson and many other innovators, but let's talk about what are our final, uh, innovative before we get into, into Fred, which is obviously Jeff Bezos and Amazon, um, a lot of positive feedback on that show.

So thank you to everyone that, that did listen since recording the show. Uh, Amazon had a small event. Which was their Amazon prime day, which turned out to be the biggest day for them in many respects, the most sales, but they also had the most new customer signups in a day in their history. And, um, it just speaks to the potential on the scale of Amazon.

But I have a question for Chad and Gary do either of you, you guys remember a couple of years ago when the first Amazon prime day actually occurred. I don't, it was like two or three years ago and it was a flop and it was an app. Uh, they were accused of baiting customers that would have like, literally an inventory of a hundred products that were ridiculously cheap and dragging everyone in.

And, and it became like a, like a fast, the first Amazon prime day. Three or four years ago, it was, it was a complete joke. And in a very short time, they've turned it into the biggest single retail moment in the company's history. They're estimating almost a billion dollars in sales, just in one day, one day, one day.

Uh, now if that's not a Testament to a learning organization to turn around, what was it all. In essence, a flop only a few years ago to the biggest retail day. And they've still got all those great, uh, American traditional days for big sales. Um, so this is just their day. This is just their sound. And that's a class case of taking money from your customers and having them help finance your business.

And I think you can make a case that their entire corporate profits are less than what they take in prime or revenues. And that's the same model as Costco, which charges an annual fee. The great innovator Saul price invented that concept in the 1970s in San Diego. And, um, and. Amazon just last year in 2016 for the first time passed up Costco to become the largest company in revenues headquartered in the state of Washington.

Yeah. Yeah. Not surprising, not surprising. Well, let's segue to another enormous company, but it certainly didn't start like that. And that is FedEx. And we're going to talk about Fred Smith. We have managed to get our hands on a very recent interview, um, that he did on, in fact it was June 20 of this year and he did it with the Tennessee governor bill Haslam.

And my first comment, uh, on the, the, the interview was. Having lived in the U S this was the most folksy, uh, Tennessee, uh, conversation by two true blue guys. Um, this is like a really charming interview. Isn't it? Yeah. Yeah. I really enjoyed it. So, so to set the scene for, for our listeners, you've got Fred Smith, the founder of FedEx.

Uh, what's important to note here is Fred is still the CEO. Uh, the company now sits at the remarkable size of 500,000 employees and he was employee. Number one, he was CEO then, and he's CEO now, which is remarkable in itself. Before we jump into the, the clips that we've pulled from this, obviously there'll be a link to the full interview on our show notes.

You can get those@moonshots.io, but I want to ask you, Gary, what stands out? What makes Fred from FedEx so special for you? Well, you know, he's run that company for 46 years and there's plenty written and discussed about, uh, is it a different breed of person that can create a company from the person that can really build and maintain a company?

And, and, you know, you saw bill Gates or a Henry Ford do both, but the vast majority of business leaders are one or the other. Fred Smith is an extreme case of a person who. Started it dreamed it up as a kid essentially, or twenties, you know, in his twenties. And, and now he's, uh, 72 years old. Uh, the company is large largest, uh, airline in the world and revenue, the largest airline in the world and market capitalization it's worth more than American, right.

And United combined, I think they did $58 billion in the last 12 months or whatever. Um, And he hasn't lost, lost control, uh, driven out you've been driven out or sold out. Uh, and, and he's done a remarkable job. It's still an amazing company. It's a, the, it has more employees than any other company than solicited among the hundred best companies to work for in America.

Today, while I was listening to one of the interviews, my FedEx guy showed up and I took my Amazon box from him. And, and I said, I was just listening to Fred Smith on the internet. And he says, Oh yeah, he's quite a guy. Um, it really is exceptional. The Elon Musk and the Jeff Bezos is in the world have, uh, 20 plus years to go to prove to me that they're of the caliber of Fred Smith.

Very, very true. I thought it was remarkable. Uh, and he spoke about it, this, I mean that the paper he wrote at college, that was the outline of the idea for FedEx, uh, which was that the, the economy was fundamentally changing and automation, you know, uh, okay. You know, shipping and delivery was going to be essential.

Um, he actually received a, a C for the paper, um, which. In the light of the last 46 years is, is just such striking that, that, uh, as a read the idea, maybe it sounded audacious. Maybe it didn't thread it together, but boy did Fred Smith, uh, stick with it and, and a remarkable journey, not only in his career, but his entire life.

So I want to ask you, Chad. What, what sticks out to you as some remarkable things about Fred Smith? I think the two stories that stand out to me is it took them about 20 or 21 months. You know, from idea and inception to making their first deliveries and Fred Smith had all the salespeople go out and make sales calls and he was getting all the numbers back and they were saying, Oh yeah, you know, we're going to have 3000 packages on our, on our first day.

And Fresno, he knew that that was way too high. And he, he dug into the numbers himself and said, do you know what I'm going to cut that number by 90% to 300 packages, which is. In his mind is still kind of a, an ambitious goal. And what actually happened was the first night, the dis you know, the, the courier salesmen as they were called, they're not truck drivers.

They're courier salesmen called in six packages to be delivered. So he launches his company and he has six pack. He has about a dozen planes and six packages to deliver. And so, you know, rather than. You know, fold up the company and, and, and do this giant pivot. He spent four weeks revamped, everything, doubled his Salesforce, and then they came back with a much, much, much better volume of packages.

And I just think everyone's talking about lean startup and, you know, learning and experimentation, but I think. Fred and his management team were some of the first, uh, at least in, in my experience, uh, and, and studying of history that the first team to really embody that, um, you know, and they, they learn from the same people, you know, Deming and, and other, you know, you know, systems thinkers of the time.

Yeah, I, I liked that same chat that you're calling him almost says the original lean startup practitioner, just some 46 years before Eric was gone. Yeah. Maybe not the original, but just a much earlier one. You know, I think, I think we can kind of forget to look at these examples from the past and, and. And learn from them.

I think, I think there's a lot to learn from, from this story. And just another interesting aside, he, he put all of his money into the company to found it, and he, even his sister, he, his and his sisters. No inheritance. He put into the company kind of against his sister's wishes. I mean, it worked out for them in the end.

And when the checking account had $5,000 and they owed $32,000 to the fuel companies to pay for jet fuel, he comes back from Las Vegas after a weekend. And his, his management team is like, well, wait a minute, where did we get $30,000 in the bank? And he was like, yeah, can tone ask questions from, from vain and his sisters?

His sisters actually sued him and he had to buy them out for just a few million dollars. And I haven't gone to dig, but I wonder if they later bought into a FedEx because you know, he's clearly a multibillionaire, but no, they were so upset. They sued him, took him to court. Yeah, the scale and the, and the, the twists and turns in their stories is really remarkable.

So I think that that sets us up perfectly to do, jump into the clips. And I, I wanna, uh, Point out for our listeners. We have got such a breadth of, of insights and learnings for you. I think we're gonna really tackle everything from, uh, what happens at the very beginning of a company and, and really knowing if there's a product market fit.

There's some great life lessons around learning and motivation. And as a, as a bit of a. Not of the, uh, of the cap to Jeff Bezos from our last episode, we've got a great comparison that Fred gives as the difference between Amazon and, uh, and FedEx, which I found very helpful because. I was probably more on the Amazon camp than the FedEx camp prior to doing this research.

So we've got a lot of, a lot of goodies, um, uh, for us, uh, to get into. So let's start with the first group and I'm going to set this up for everyone. This, this first clip is Fred talking about what happens for larger companies and how they going to, and in this case, how FedEx tackles the idea of innovating while you're, you're a large company and to set the scene for those of you.

Who are in small companies in startup, you know, you have a lot of flexibility, um, and you know, it's blue skies, but obviously when you're in a large organization, nobody wants to make the million dollar mistake. And so a lot of large scale companies. Often end up suffering from what's being, you know, client closed called the, the innovator's dilemma.

So, you know, once you get big, the thing that, that made you big ends up squeezing the life out of you. Now, Fred tackles this in this first clip, which is all about change and how you deal with that as a large organization. So let's go to that first clip. So we embrace change and at the heart of change is innovation.

Because if you don't innovate, quite frankly, you die. And, um, we reward innovation. We encourage innovation. We don't punish innovation attempts that fail. So mommy, sad to say, but how do you reward innovation in that larger structure? Because some of those innovative, innovative, creative people can think I can go do something on my own and I won't be limited within a salary structure of a fortune 10 and some of them do.

And that's, that's a great thing for them if that's what they, what they want to do. But I think there are a lot of people inside. The FedEx system that understand that we value innovation, we'll fund innovation. We'll take a chance. And that's hard to find, as you just mentioned in a lot of very large companies.

So I would propose to you, Gary, there are very. Few large companies that conquered that, that innovator's dilemma being able to do very disruptive new things once they become large. So when you heard this, this Quip M in particular fact that they don't panic for failure, what was your takeout when you heard this from, from Fred?

Oh, uh, you know, obviously that's, that's great. Uh, the real question is, does that really pervade the organization? How deep does it go? I was reading something today about, um, I would say their leadership and student side federal express, and they take all their top people aside and for a week and, and, uh, yeah, the commerce, the people that are going to become the leaders and they go through this leadership.

University or Institute or whatever they call it. And at the end of the week, usually Fred Smith speaks with them. And at this one session he was saying, look, I want you to come up with ideas and you need to, we need to innovate all this. And then they kind of like, well, but our Boston noise listened to us and everything.

And it was interesting. One of the little insights came out of it was the people organizing and said, well, when you have a new idea for your boss, do just go on and talk to him about it. Or have you written up your. IDN and, and not a single one of them had ever written one of their ideas. And they talk about the critical importance of writing an idea down.

It's one reason I'm maybe in the minority these days and believing in old fashioned business plans, even just for yourself. Because as I point out in the thing I was reading, when you write it down, you have to think it through. You have to look at what you said. It goes into print that gives it a little more solidity, but just that process.

But I think it's very difficult. I think it'll be very interesting to see what happens at federal express after Fred, uh, retires or moves on, um, And how you maintain that because you're right. Uh, um, yeah, it appears very, very few big companies. Now there are exceptions, you know, if you study 3m, which you could make the cases, they're only really durable high tech company in American history, that's, that's maintained strengths over 'em.

You know, 50, 60, 70 years. I mean, no, IBM couldn't pull that off. And it was the greatest technology company in American history, but it didn't last, I mean, still around, but it's a shell of its former self in so many ways. And, uh, neither will Microsoft or Apple. I was at, you know, just BM. I think it was only a day or two ago.

They announced the something in the order of the 40th. Straight quarter of negative growth for the company. Um, well, I missed that. No, that's really sad. It was, it was the greatest tech company in American history and what Thomas Watson, senior and junior did is truly unbelievable and awesome, but no tech by its nature.

Doesn't last, you know, I I've given talks and gotten some real pushback in the Austin area, you know, Samsung alone invested $7 billion in our town and, um, new fab. You know, fabrication plans and I'd always say, look, the chip clients are great, but in 20 years, the only thing I'm sure of is they aren't going to be there.

You know, they aren't going to be chip plants because of all technology by, by definition moves, moves on. I said, we need some chip plants like potato chip plants because a brewery or a potato chip plan or so plant has got a reasonable shot at being here in 50 or a hundred years, but not, not a tech factory.

I think, I think the setup he did there, where is he? He basically says change, change is a constant. And, uh, you know, he was his referencing, uh, help me out here, Chad, I think he was referencing Marcus a really, uh, when he was talking about change, this was like, Oh, well, if Marcus are really has had a building, the Roman empire change was the only constant in life.

It seems that that, that, uh, point of view, um, Is is the starting point for why they push into innovation constantly and over time, because they, they are somehow able to accept, change as a constant. And my, my experience, Chad, you've made great films with, um, really large organizations, such as Nike, as well as, uh, startups and so forth.

But in your experience, you must see just how hard it is for larger organizations. To embrace, change and innovation. For me, it all comes down to the people involved. And Fred Smith, one of his kind of founding principles at FedEx was to invest first and their people, their own federal express employees that would then deliver outstanding exceptional service.

So service is kind of the second pillar and then great people and great service would deliver them profits. So everything he did was about people, service and profits. And so I think for me, um, you know, Gary, you talking to the FedEx guy, delivering your Amazon package, he knew who Fred Smith was. He knew that he was an interesting guy.

And I think, you know, the kind of joke is that, you know, FedEx people bleed purple, uh, because they believe so much in the company and what they're doing. I think as a practical thing to go along with all that too, is when you study it, you see FedEx has this open door policy and anybody, any time at any level can walk into any officer and Fred Smith, you know, himself meets with people at all levels of the organization or of Keller at Southwest airlines.

You know, it was a ritualistic thing that every year I think on the. The day after Thanksgiving, right? Whatever, their busiest day, you know, he handled baggage and it was symbolic and they just didn't one day a year. But man, the meaning that has to people, I would say when I meet a retail CEO, my first question is what share of your time do you spend in the stores?

And in this era, we are so caught up in the big deal, the transformative deal. The big announcement, the big merger, uh, what's going on with wall street, what's going on with Goldman Sachs. Uh, none of that matters, none of that matters. Ultimately, you know, the less time you spend with accountants and lawyers and venture capitalists, the more time you spend on your business and your customers, I would say that the biggest thing that, um, if, uh, you know, there's a listener out there.

Who works at a large organization? I think a sandbagging, a protective zone where experiments can happen that are free of risk is crucial. I think that the most important thing to do is to make them small experiments were all large scaling innovation at large companies get stuck. Is that things get too big.

They required too many sign offs. I think the biggest thing you can do, if you're in a large organization, create a sandpit, create a small, fun place for small experiments that are free or of the, uh, the bureaucracy see, and the entanglement, um, that comes with organizations. And I think if you want to read up on this, if you want to get deeper on this.

There is a great model for doing this. Uh, it's, it's a classic that I think Gary is going to give a big thumbs up to and it's the skunkworks methodology. Uh, this is such a great practice, um, for creating small, independent teams that are completely autonomous, that can go off and make small experiments and work at a rapid rate.

And I think this is truly a transformative practice. If you're thinking how to create change in a big organization, ties into Jeff Bezos thing as a two pizza groups, you know, um, where you don't want any group that you can't feed with the, uh, with two pizzas, that's the biggest group you should have. And also another thing that comes in some of Fred Smith's stuff is.

Getting the right people in the room. I've been in so many big companies where, Oh, you got all the senior vice presidents in a room, but where's, where's the clerk. Where's the cashier. Where's the delivery driver. Because the issue you're talking about, they're a key part of it. And you can have the senior vice president and the delivery driver in the room.

At the same time when Henry Luce created fortune magazine, he took a handful of the best writers. He knew and editors, and he stuck him in a room and he said, look, you've got, and I think he may have given him a year or something, but he said, You, I want you to make the greatest business magazine the earth has ever seen.

This was in 1930, 1929 and 30. And he locked him off in a room and said, you know, come out when you've got it done. And they did so on the, on the people point, I think Chad, you and I have seen when we've done these rapid prototyping sprints, where we bring people together, it's not always the big cheeses that bring the magic in those sessions.

Is it. No, I I've always found it to be the people that are closest to the end user or the consumer. They're the ones that have the biggest breakthrough. And that was something very encouraging to me in reading about the early days of FedEx in that. Fred Smith was in calls with, and even writing in the trucks and writing in the jump seat pilots to understand exactly, exactly what was happening on the ground.

And I think that was why they were able to make a lot of, a lot of their leaps and bounds in the early days that they did. Absolutely. When, when Zuiker, uh, was at the very early stages, a great in the movie industry, he would sit in the theaters. I had owned nickelodeons and moved up to bigger theaters and he'd sit there.

He didn't watch the film. He watched the audience and he watched their reaction. He'd find a good place where he could watch everybody from. And he learned what made for a great movie and nobody else in the industry. Got it. He was the only guy that got it. And, and the other thing I'd say too, is talking to customers at Hoovers, even after I was no longer in charge there, our CEO, every Friday, he would personally call up like a dozen customers and the salespeople would give him a list all the way from, uh, a small back then it was a hundred dollars a year for the lowest subscription up to the people paying a hundred thousand a year.

And they'd always have to give him one small, one medium, one large, you know, um, And, and another thing I really believe in is the customer council at, uh, at Hoover salsa. When we were a book publisher, we sold books to live reference books, to libraries. Uh, every year at the books, always convention, we would have, uh, one or two pieces, whatever it took.

And we had the, she was the head of the Queens public library in New York city. We had a university librarian. We had a. The corporate librarian led maybe six librarians. And every year we would sit down with them and say, well, what would you do different in our books? And we made sure every year when we went back, uh, we had done at least one of the 30 or 40 ideas they would give us.

So they wouldn't feel like we were ignoring them, but truly talking your customers, listening to your customers and doing it on their grounds, you know, you don't like when you deal with the banks and laws and law firms and accounting firms, they take you to their dining room. And try to impress, you know, I want them to come out and see my facility and what I'm doing.

Mm. Yeah. That's I think that's really true. So getting the right people in the room that, that have, you know, that, that close contact with customers there at the coalface and also creating a safe area for experimentation. I think, I think that's the real takeouts from how FedEx has done it. We've got a, now an interesting bridge to our previous.

So Chad, do you want to want to set up this next clip? Yeah, I, I think what's fascinating in this talk between the governor and Fred Smith is just the economic impact that accompany, like FedEx not only has kind of in the local markets, but just the amount of business that they facilitate across the globe.

Um, and just moving things around, uh, in the way that they do. And he has some interesting thoughts about. And, you know, uh, other retailers like Walmart and specifically Amazon. So, so here he is kind of giving his thoughts on some big retailers that are using, uh, logistics companies like FedEx. So Walmart was built around a very innovative logistics system.

That was almost the antithesis of what Sears and Kmart had done. And what Amazon recognized was the profundity of mobile devices, where you could see products display, and then they took advantage of, of that to use direct shipping to I'm at things from a different channel. So their logistics footprint is unique to Amazon, but it's really an adjunct of the retailer.

Not an adjunct, not the other way around. So if you look at FedEx is business, the vast majority of our business is not e-commerce 85% plus is business to business. It's defense, relaters, it's airplane parts is auto parts. It's a diagnostic kits. It's the replenishments for, uh, various, uh, companies and, and retail supplies and so forth.

We do a lot of e-commerce. But it's still only about 12% of the retail land. So for me, what jumps out about that is if you actually listened to our last show and are with Jeff and this show with Fred, from FedEx. They both acknowledged the same principle, which is FedEx is in the shipping business. And Amazon is in the retail business.

Jeff clearly says we'll augment services from FedEx. And in particular, I think he mentioned the poor old, British postal service, which has let them down. I was actually living in the UK at the time when that happened. There's this scandalous thing where lots of little Christmas presents for kids. Didn't actually get.

Uh, to the homes on time, because the posters basically broke. Interestingly, he points out, uh, where they do most of their business. And what it shows me is that in this case, both, uh, entrepreneurs know what business they're in. And I think this is the big learning in this know what business you're in because making a big investment in, in shipping.

And when that's not, your core business could be a fatal mistake. Peter Drucker referred to the concept of the corporation. That was a, his first major book. And I still think he's the greatest management thinker we've ever had, certainly among ones who wasn't a manager himself and, um, that each leader, uh, organization really has a concept of what it is.

And I think people underestimate the importance and power of that idea. Yeah. Um, so Gary, big question. Can you think of companies that got confused about, um, what business they were in and have made mistakes? And, you know, Fred is so clear what businesses and he's not worried at all about Amazon, some speculate in the press.

Well, Amazon's got 40 jumbos. How, how much trouble is FedEx really in? And he seems pretty clear on it. Are there examples of other companies that are either very clear or perhaps not as clear and has made some pretty bad mistakes? Well, certainly through history, uh, he could be the majority of the fortune 500 qualify as getting confused at one time or another.

They, uh, you know, uh, and it's a difficult thing because I got to believe in experimentation and trying things, but. Uh, you guys probably a little too young, but in the 1970s, we call it the conglomerate era. And that was when Harold Geneen of ITT bought a part for an insurance and share it and hotels and everything else.

You can get his hands on Charlie. Bluehorn over at golf and Western bow paramount. Pictures. And, uh, Jimmy laying out of the Texas bud, um, uh, started with LTV, uh, areas, space company, and then he got into carpets and ran affair airlines, and the whole thing was, Oh, we can run any business and a more recent cases, Jack Welch.

At general electric, where he took what was a great technology company, although data tech, no algae in many cases, but still it was attacked me and converted it into conglom. We're financial services became the, almost the tail that wagged the dog. And then when the, you know, what hit the fan in 2008 and everything, and they realized we shouldn't be in these businesses, we don't understand that when an MLT, his successor had to shed the financial stuff and split it off.

Um, that's, I don't know. It's, it's more common than the exception that, uh, big companies get to a point and, and many times they just don't see the opportunities in their own field. If you study Kmart, they reached in and they were a one wonderful, hot. Company. I was a stock analyst on wall street covering retelling in the seventies and they were the hottest thing we'd ever seen.

They were growing like mad. They were incredibly profitable. They dominated the discount store industry in America. Yeah. And then, uh, they, they matured. They didn't invest in new, um, cash registers technology and stuff, and then they sell. They must have said to themselves, or this isn't sexy for wall street.

So they bought borders, bookstores, and they bought a home improvement store chain. They bought a sporting goods chain about a couple of others. They went into specialty retail. Well, they, their management, their board had to been saying themselves. Well, we've done everything that can be in discount retailing.

There's not a big growth future in it. And at that point, Walmart was a fraction of their size. Um, we didn't even look at Walmart. You know, they, they were only a 10 year old while the companies were the same age, but Walmart was it. Tiny side share of, uh, of, um, of Sears or Kmart they were, but I figure something like when I looked at him in 1973, they were one whole one, 150th of the revenue of Kmart and Sears combined today.

I think Walmart is something like 18 times as big as Sears and Kmart combined. So. Really over and over. People are always, the grass is greener on the other side, managements get bored. They go, Oh, I've been doing this all this time. I got to do. And you see all these time a transformative transaction, or I'm going to buy this company, you know, I'm going to do this big deal.

I'll be on the front page of the wall street journal. They may not say that to themselves, but that's obviously what's going on their egos. Get ahead of 'em. You know, and, and they, and they've, they've stopped believing in their own business. Uh, Fred Smith still believes that there's a future in logistics.

You know, there's a future in retailing. Yeah. I just, I love the confidence of Fred Smith and thinking that well, this business business logistics business is big enough for us to continue to grow this company, you know, forever into the future. And he's not letting himself get distracted by how can we deliver.

You know, fidget spinners to, to people, you know, we're in the business of delivering, you know, mission critical, big iron types of things to, to business customers that will always pay a high premium for that next day service. Yeah. And I, I, I think where, where you see again, the similarity between Bezos and Smith.

Obviously different generations, different businesses, but the proximity they have to their customers helps them stay on track. And I think this certainty, you can feel it when they're talking the clarity by which they see the situation. And I think that they are also close enough to their customers, um, that they, they.

I appreciate the business that they're in. I think blockbuster was an example of a company that got disconnected from the fact that, that they were really delivering a vehicle of entertainment and they thought they were running physical DVD stores. And I think that was their mistake. You could, you could look at, um, many other companies in history.

I think Kodak is another one who literally invented the digital camera, but they thought they were in the film business, not the capturing memories business and this, this, uh, this view of keeping close to your customer. So you can actually stay very, very focused on your core business. Gary, you know, you work with a lot of entrepreneurs.

How do you keep them focused on the business that they're in? Well, I mean, I think just the things that you and we've been saying, uh, you know, talk to a lot of customers, everything, but, but I will step back a bit on the, the whole thing of, you know, what industry are you in? And there was a very famous article written, I think Harvard business review probably a long time ago called marketing myopia.

And it was saying, well, the railroads didn't realize they were in the transplant patient business. I thought they owned a railroad business. Yes. That's really easy to say when you're not running company, if you take blockbuster. So I met the founder of blockbusters. He was thinking about opening the first store.

He came to my, we had a grand opening of our bookstore in Dallas and it came to learn. Cause I had written my own inventory control system. Uh, in a language called DBAs to and early relational database for microcomputers and cause there was nothing available off the shelf that would meet the needs. I knew we had to have to run a giant bookstore with a lot of titles and he came to learn from it.

But when you look at their decline, cause I tracked them pretty closely over the years and they changed hands several times and a lot of issues, Wayne Huizenga the great entrepreneur got involved. But when I came to that point with Netflix coming up, you know, they ha you can't get out of a lease. The least is the one thing.

When you have a retail store, you can adjust payroll, you can adjust advertising, you can adjust inventory, you can adjust everything, but your leases only in bankruptcy. Can you get out of it? And then, so you're sitting there with 10 year leases on hundreds of thousands or even millions of square feet of space.

So in many ways, and, and Kodak, which I've been studying intensely, uh, for a long time, but recently I've been reading a lot. I'm going to do an, uh, one of my newsletters on George Eastman. Um, they really were a chemical company. And if you look at it, even though the Eastman Kodak is essentially gone, the British employees pension fund now owns the rights to the film business.

Um, They were a chemical company and Eastman chemical is still a giant chemical company that came out of the side of them. And so even though they invented the digital camera, I'm not saying they didn't make a lot of mistakes and I'm not. If I ran it, I would've done it differently, but. Man it's, it's very tricky.

And the airlines did. I mean, the railroads did, in fact, Pennsylvania railroad helped found TWA one of the first big U S airlines and they actually were playing around with aviation. So how you define it, how you, how you understand also change because. Wherever arrows, the market changed while the federal government, the U S built highways, uh, at no cost to the truckers and, and the relative live on cost.

And the railroads had to build all their own stuff and their own stations and everything. The U S government built the airports and created the air traffic control system on the taxpayers, Nicole. Whereas the railroad had the build all that themselves. Um, And, you know, I think it's a tough thing. Uh, but, uh, but clearly retelling is going to be around in one form or another forever.

Logistics is going to be around in one form or another forever. And, um, you know, one thing I would add too, just in all the things that we've said is that although rarely comes up, uh, FedEx is made strong by having a strong competitor. And I see this in tech companies all the time, where they poop, who their competitors and everything.

And I'm sure inside FedEx, they say bad things about ups, but I wrote a guest editorial for the Austin business journal a few years ago where I made the case that ups was the greatest single American company. Today, uh, it is the most valuable transportation company in the world. It's the only one it's worth.

Even more than federal express. It is a machine. Nobody can name mr. Casey, the founder, nobody can name a visible CEO. It's bigger than FedEx, more valuable than FedEx. And the having somebody like that out there, cause it is an awesome company that just makes both those companies better. And I think a lot of people, um, underestimate the power of having somebody that good as your arch rival.

Well, I would say that what's interesting when you draw the analogy between FedEx and Amazon. The other thing that has distracted me as you were talking is that the founder is still leading the company. And it seems that that, that, that is also the people that have the original insight original. Aha. Um, actually has.

Some inner stamina, if you will, just to keep the company on track. And in fact, our last clip that we'll do later, we'll actually tell our listeners how, uh, how that all started for, for Fred Smith, how he actually knew him. There was such a big opportunity with, with FedEx. So stay tuned for that. Okay. So now we're going to move to, to our third clip.

Completely different, uh, attacked for a moment. Fred has actually, you know, achieved a lot of things in his professional career, but he's also kind of overcome a lot of challenges, he's health as a kid. But the other thing, uh, that, uh, he was able to do was, uh, he made it to the Marines and he actually served in, in, uh, And Vietnam and, um, truly remarkable when you think about all the things he's achieved in his life.

And so obviously, you know, the governor is asking, um, Fred, what did you learn? Uh, from no time in the Marines? I think he had a great response. So let's have a listen to what Fred learned from his time in the Marines. So it was hugely important because the Marine Corps tells you how to, how you, how you go about motivating people to withdraw that discretionary effort up to and including risk in their lives.

And that's a big part of military leadership. So I, a lot of things that I did in the Marine Corps, obviously I'd just soon not remember, but because that was a tough way to make a living in those days, it was Clint will tell you, but. The principles I learned in the Marine Corps about leadership and management.

That's a different matter and I've always valued those greatly. So there is he, he actually, for all of the organizational things, um, that you think he could have lifted from the U S army, how they move, you know, uh, troops and machinery and resources all around the world. He actually went for motivating others.

And what I loved in that. Was that the reference to discretionary effort and he doesn't put it at like, Hey, we need you to come work on the, on your Saturday or stay back late tonight. Uh, he he's like, it's the biggest, uh, the biggest effort of all, you know, people putting their lives on the line and, and motivating others.

So you can only imagine the scale of that challenge when you have 500 employees. I wonder, Gary, what, what do you see in companies? And in those that do a good job of motivating their people. I mean, Chad talked about, you know, FedEx employees, you know, bleed purple, what do FedEx and others do to actually make that happen?

Well, some of the things certainly in larger companies is a lot of the best ones, you know, have their management or leadership institutes. General electrics actually is one of the most famous ones of a Crotonville on the Hudson. I think it's called and, uh, you know, hamburger, you right? Crocs kneel, uh, to run their people through even a book stop.

When we were only doing about $70 million a year, we had started our own. Training system. I mean, it was very expensive and to take people off the floor and out of their stores and take a week or two weeks here, the container store, one of America's great specialty retailers, kind of a restaurant recently, but, uh, they're famous for their average employee and like a month, a year, year of training.

So that's part of the one thing I'd say too, you know, we can't all join the Marines. Learn that way, but I can tell you, I learned so much from having some great bosses and I had some bad ones too. And about half, what I learned was, wow, I'll never do that, you know, but, uh, and, and that's when I mentor a lot of young people that are, maybe want to become an entrepreneur, but not sure the right path.

And I haven't launched anything yet and urge them to be patient. But I also think that's, that's one, one of the arguments for no go work. For a big company find the best company you can and work for them for a few years and learn about management. Um, and it, it can be incredibly valuable too, because later when you do your startup, you're either competing with those big companies are buying from them or selling to them.

And the more you understand about how big companies think and how organizations work, uh, those are pluses too, right? Again, I've had other friends. My, one of my best friends is 26 and he dropped out of college and he's starting companies. And. He's not going to have any of that kind of corporate experience.

I've at times tried to talk him and though pick six months or a year or something and you know, two years and try it out. But so there, there are a million there's many paths to successes. There are individuals. Uh, but, but that is, uh, one of the reasons I think it, it often is beneficial to, uh, you know, find, yeah, you look at the fortune list of the 100 best companies to work for that.

So. Can't beat that for a place to start and thinking about which company in this industry, the industry I want to learn. Cause you know, we study all these greats and there really are committed to one industry. I'm a serial entrepreneur. I've been in different industries, but never at the same time, always sequentially, but in my heart, I will always be a merchant and a retailer and a, that is my most beloved industry.

And most of the grades, um, spend their life building one company in one industry. Hmm. I think the theme that I see with Fred is he obviously has created a culture within the organization where they are, uh, from at least from the outside, they seem very attentive to the growth and development of their own staff.

Um, Not only with the university. Um, but he was even talking about writing the manual that management get given he is personally writing it. So that instantly tells you how important it is. I would say what characterize his great cultures that I've either been part of, or I've seen from the outside. Is this genuine attention to the wellbeing of your staff beyond that, of delivering profits for the company.

And the great twist to that is the more effort that they put into the development of their staff, the more money they end up making. It's just not putting them in those priorities in the wrong order. And that that's certainly something that I've seen. So question for you, Chad. When you've witnessed highly motivated teams and organizations, what are the lessons you, you learn from them?

And what do you see? It's sort of the driving force of a highly motivated team. I think Fred, the history of Fred having the army or the Marines, as an example for him, you know, that was his example of leadership and how to get people to do things in this case, risk their lives, you know, to accomplish their missions.

But I think at the core too, it's ensuring the success of everyone else. You know, having each other's backs and you do well and you survive by making sure that everyone else. Survives, you know, so it's kind of a military selflessness, if you will. And I've found that in the highest performing teams that is also very prevalent, you know, it's, it's not about one person succeeding or outshining everyone else, but if the, if the team can figure out how to kind of put themselves aside a little bit and just really focus on the task at hand and being sure that they're setting each other up for success, then that's, that's when I think teams can really become high performing.

Yeah, absolutely. I see that thing to my childhood sporting teams, to the companies that are I'm involved with. I see that pattern around the one interesting thing in the mention of the Marines is, is it does, this is a very handy tool for our listeners. Um, there is a book that personally I really enjoyed by a guy called Simon Sinek, who we've mentioned on the show before.

And it wasn't the start with why book, but it was the. Great leaders eat last now have had their, either you Gary or Chad heavier. If you read this one, I haven't, but I know his stuff is pretty cool. Why and everything I have, he has a great Ted talk. Um, we'll put in the show notes where he explains kind of his main thesis for, for great literacy.

Last. So, sorry, one thing Gary just wanted to, to, to build this bridge is the idea of that book is taken from the Marines. The same thing that Fred's mentioning and the reference point, check this out. The reference point is that apparently when the Marines go to the mess hall, the youngest, most junior lieutenants always get to eat first.

And the most senior commanders and captains, they laugh and he builds this story that why they are also motivated in the Marines is one of the biggest contributing factors. Is that young, uh, lieutenants? No. That there is an entire infrastructure and group of people who put them first, and this sets the tone for the culture, the mission, and how they go about getting the job done, which, which is remarkable.

So great leaders eat last is the book. We'll put the link to that in the show notes and in the Ted known, uh, in the Ted talk as well, but let's, let's figure it out to Gary. Cause you were going to build on that. Oh yeah, this is just kind of tangentially related, but you can find online Fred Smith was at some sort of a conference or meeting about George Catlett Marshall, the great general and a Winston Churchill said that George Marshall was the greatest individual he ever met in his life.

And Fred was talking about how a Marshall, when he was in charge of world war II and everything that he promoted a bunch of very young officers over the heads of much more senior ones. And I'm pretty sure Eisenhower was one of those who was leapfrogged. And Marshall was always looking for who are the really bright young people in this organization who are the future of it.

When I worked for the great federated department stores in their glory, days in the seventies since now been renamed Macy's and doesn't have quite the energy and had them. Uh, but I remember a friend of mine. She was assistant manager at one of our stores and a company probably had 400 stores and 50,000 employees.

I don't know, a big company looming Dales and all that jazz. And, um, they flew her up to Cincinnati, the headquarters one time and much to her surprise. They took her to a, I think it was a room. And on, in that room were pictures of, I forget, 50 or 70 people and hers was one of them. And it was the very top management at the corporate headquarters that was keeping track of these people.

Five, six, seven levels down in management. That they thought were stars and, and that they would reach for, if some competitors tried to hire them away and that they were going to go out of their way to develop them. And that's something that men, you don't see that in a lot of companies where they really are, are listening to, uh, I had some of the issues like that in my own companies.

I said, why are you fighting so hard to keep that person from leaving the company? They're just a clerk. Yeah, and we can hire more clerks. And I said, no, we can't hire somebody like her. I mean, don't let her go because she's going to be a store manager and then a regional manager and a vice president, and maybe run the company someday and you can see it in their eyes.

Yeah. Yeah. I find in my own personal experience, like the, the best thing that I can do to motivate others around me is, is really, I just put on like the mentor hat. Uh, the, the coaching, uh, hat. So I try to be, as, you know, if you will open source with everything that I know and to, to try and teach and share and inspire people.

With innovation, which is exactly why, you know, I do the podcast as well. And it's interesting. I had an experience recently where I sat down with the entire, um, uh, business and project management team from, from my thumb at quality loans. It's a big group of people. It's a large companies over 200 people in the company.

And I sat there with two of the big teams. And took them through a really rigorous, fun, a deep dive for three hours on innovation. And they were as. Engaged as any engineer or designer, uh, has been in the same things. And I think that they just didn't, um, uh, usually in their, in their Curry is have people come and, and share what they know and their passion for something.

And I found the, the response there. Was really, uh, not only motivating for them, but for me, because, and all I did is simply sitting them down and just take them through signing ideas in innovation and they loved it. And I think it's this stinging and others putting them before you, I think that's the big learning here that we're getting from Fred.

This is how you motivate others. I think this is the thing that, that our listeners can take out of this. You can find a book it's called servant leadership. I forget the author's name right now, but there's a whole, there's a literature out there about, um, yeah. Great, great leaders are our servants. Yeah.

Okay. Well, we'll find a link to servant leadership and we'll put that into, into the notes as well. So that gets us to the halfway point. I think just to recap, it seems like change is a constant, um, and being fearless in the pursuit of innovation. Uh, ring fencing it, um, you know, as Fred said, investing in it, promoting it, um, and really listening to the ideas that people have, that was a big lining.

I think staying very close to your core business and, and being using the customer as an agent, not only for innovation, but also for keeping. Keeping on track. That was definitely a big theme. And, and obviously putting others before yourself in terms of motivation. So lots of goodies, uh, a huge spectrum of inspiration from Fred there.

Yeah. We've got a couple more clips coming up. Um, again, some classic frayed, uh, philosophy coming, but before we do that, let's, let's jump over to Chad and hear Chad's a famous book recommendation. Yeah. So I've had a lot of fun digging into all of these innovators in the history of, uh, Of the businesses they've started.

And I looked for something a little different this time. The book I found was called changing how the world does business. FedEx is incredible journey to success, the inside story. And it's written by a man, Roger frock, who was there from the very beginning. He was a consultant that Fred Smith hired before he incorporated federal express, uh, essentially to come up with the plan on how essentially to help him write the business plan.

So Roger was kind of tasked at figuring out the operational side of things and how many planes and where we should. You know, put our hub and what cities we should open in first. And then he had a different firm kind of do the marketing and kind of customer research side of the business plan. And then those three teams, Fred, and then the two consultant teams came together to found the company.

And this book spends a lot of time, you know, in the first two or three years of the company. Because that's when Roger kind of had most access to Fred and was general manager of the company kind of like Fred's a second in command. And for me, it was an interesting kind of half personal memoir, half, you know, saga in, in kind of inside baseball.

And it's a really quick read. It's just about 200 pages and I'd recommend anyone that is interested in. You know how a company kind of survives the internal politics, because it really gets into why. Why Fred hired the people that he did, you know, fellow Marines and air force commanders, and also how he kind of fended off, you know, aggressive fanciers and, and ultimately kind of prevailed after I think it was about three and a half or four years before they reached profitability, but it was a very long slog.

So I would recommend changing how the world does business to anyone interested in, in the early days of FedEx and kind of the personal, uh, interpersonal intrigue that goes with starting a very capital intensive company that had raised a lot of money from very onerous members of wall street. And you would try to try to get rid of him too well.

Did they really? They hired, uh, uh, the youngest air force four star general, the board. This essentially made them take a leave of absence for a couple of weeks. He came back, they had hired this new guy that completely disrupted the culture. He wanted his own parking spot and he wanted the corner office with the wood paneling.

He essentially took Fred, you know, office and the new office building and it went, ended up happening. Is Fred still ran the company, uh, You know, in spite of this, this person that the board had installed and he didn't last, you know, I think he lasted about 18 months and then he was out in front and Fred was back in, but Fred had.

Also, he was going to tender his resignation because, you know, they weren't going to be able to reach profitability. You know, they were going to have to default on some of their loans, but Roger, the author of this book and several of the other top managers convinced him before. Essentially the day before he went before the board of directors that, you know, the company could not survive without him because he was so integral to the day to day operations and the, just the success of the company.

So, um, again, as you can tell, there's just a ton of very interesting and fascinating stories, you know, about, about how business get, get built and kind of survive all of these, these tough challenges. Uh, great. Uh, herb Callahan, uh, answer, uh, he was asked at a conference. I was at, uh, what happens if after you retire the board, appoints somebody who doesn't share your values and doesn't get the Southwest airlines concept.

And he said the employees would drive them out within a year. Yeah. And that's exactly what happened at FedEx. I say really? It really speaks to not only the leadership ability of Fred Smith, but just his character. Um, and I'm not going to say like, you know, he's, um, without fault, because I think, um, as the company grew, you know, from.

Just himself and three employees at first, now the 500,000 and he's had to depersonalize some of his relationships, you know, he's had to, he's had to be the, the more stern Marine commander type, um, with, with some people and, and not. You know, their friends or buddies, because I think that was the biggest insight for me.

Like with the management team, you know, they realized, Oh, Fred's no longer our friend. Like, you know, like now we have a real business and real revenues and, and now we're taking care of a hundred thousand people or 250,000 people, not just our, our, our little circle. So imagine how close you get with someone that you work with for 10.

2030 or in his case, 46 years. Talk about the lines blurring between, are we coworkers or friends? I mean, at the enormous amount of time and you know, their families and, and so forth. But the other thing that this makes me think about is how on earth does Fred. See the difference between Fred and fed ex because your life would be so intertwined.

Your identity, your day is spent in the same thing for 46 years. Uh, what a feat to have some objectivity at all at the end of that. For what it's worth the Alfred P Sloan. The, I believe the greatest manager who ever lived the man who built general motors, uh, he was asked once since he'd seen, um, the man who, um, made him the head of general motors, PRS DuPont, another brilliant man.

And he was a venture capitalist really behind. Uh, general motors financing. And he's the one that picked Sloan, who was a younger guy in the organization. He said, this company is a mess, drop a plan for where we go in the future. And he saw Sloan's plan. He made him the head and he built it into the greatest company in the world.

Um, But, uh, they asked him, well, why did you think a DuPont gardens, which are now a big public, uh, botanical garden outside of Philadelphia or Wilmington in that area? And he, so I never saw him and he made a point to never become friends with anyone he worked with. And when they went to a point, his successor, he refused to participate.

He said, that's up to the board. I'm staying out of it. It was a very. Interesting sounds cold. Uh, and, and, and I've got to say the real test of what Fred Smith's done will be when he does step down. Yeah. Because it's hard enough when you have this, then later for 10 or 20 years, look at Steve jobs and everything with his limited number of years when you got 46 years.

And I have a list of, I think about. 40 books that I think are the most important books that haven't been written. Yep. They need to be written. Some of them maybe I'll write someday, but one of those is why do great leaders, people lose their successors when you study the history of business over and over, you'll have the most amazing people.

I mean, Hey, uh, I hate to be rude, but, but look at, um, Gates and Ballmer. And they were buddies. I heard bomber speak. I thought he was brilliant when he was the number two guy. Uh, and then, you know, that company just flat-lined under his leadership. Wow. Oh my gosh. Think about all the terrible acquisitions hated, I mean, talk about blowing the cash BOMA really.

And then to see, I think where you see the starkness is, uh, under new leadership, how improved Microsoft really has become the last few years. And it has still has a lot of cash and has enormous potential, but over and over, you see the, the next and, you know, um, the, the next leader of federal express will be somebody who wasn't there at the revolution.

You know, if you study the history political revolutions, there's a gang that was there at the revolution and that, you know, Blood, sweat and tears, and then you've got their successors and they weren't there. And sometimes there's a transition period where one of the lieutenants takes over. And so they have some of that, but then soon enough you get people that, that didn't, didn't go through all that early stage agony.

And it's very, very difficult. I'm I'm extremely, I was on the whole foods market board directors. So it's going to be very interesting as I'm. You know, uh, power shifts and things change. Can they maintain the trauma, uh, really incredible spirit and attitude. You're talking about a company that's very employee oriented and wonderful company to work for, but you know, how will that evolve under what's perceived as a much tougher kind of environment at Amazon.

I think you're absolutely right. Calling out the culture thing there. That's probably the one thing where I think the company's, uh, furthest apart on, I think the interesting thing to come back to your, um, question Mark around succession. I felt that that was a big theme of the book. Good to great. Which is one of the all time classics, um, by an author called Jim Collins.

And he pointed out that companies. That get better when the founder. Uh, relinquishes the role, enhance it over to a successor was actually one of the criteria is if I remember correctly that he had for that book, meaning that he judged a great company, a was often founded by a fabulous, uh, found, uh, and that man or woman would do a great job, you know, breaking the ice, but great companies actually got better.

When the transition to a new leadership, uh, was a net positive. And to, to your point, Gary, like so many times, uh, being a, uh, an absolute mess. Um, and yeah, you see, you see companies just totally losing trajectory. I think Microsoft is one of the biggest cases of that in recent history, but it looks like it's back on, back on track.

It's a, it's very parallel when you study the great family enterprises. You know, sometimes the kids are just idiots and just, it gets, you know, and then other times like IBM Watson jr. Who everybody thought was a Playboy and would really screw up dad's business, uh, turned out to be every bit as smart as the old man and took the company to a higher level.

So, and the one thing I'd say to you, you mentioned him Collins and I'm a fan of his and the belt to last and good to great. Are very much worth reading, but it also, he's a classic case of showing how, how hard it is to predict the future of an organization, because you can go into my Hoover's world.com and see one of my newsletter articles where I pull apart what he considered these things.

Companies that were built to last, he studied, I think 20 or 30 companies. And in each industry he did a comparison of, okay. Here was the great one built in the last year was when it was, well, I did an analysis and, and uh, actually the ones he didn't like, uh, outperform the companies he did, like by quite a margin over the following 10 or 20 years.

And some of the companies he thought were great. Uh, went bankrupt. Uh, and so it's just very difficult to predict what's going to happen around that next corner, especially with a change in leadership. Yeah. Yeah. And that's, and that to me is, is the fun of it. The way things can change. And it seems like Fred is totally alive.

Uh, he's excited by the idea that things can change and that. Uh, he seems very energized by that, which, which is where a lot of their innovation comes from. I want to set up the next clip because another place, I think Al is the source of his Spiration and the thinking that he does, and he can not be underestimated as a great thinker, really comes from their practice of learning.

And so here talking about how he thinks about learning. And being a student of history. So you have to, if you want to play at a high level, whether it's politics or medicine or, uh, sports, uh, uh, or business, you have to absorb the lessons of history or you're going to make a terrible mistake that has already been made before.

Cause there'd been a lot of things done in human history that, that are there for the. For the asking in terms of reading about it. Okay. So what we can see here is that despite 46 years, and one of the biggest companies in America that employs 500,000 people, Fred is an advocate of always learning and being a student of history.

I think throughout the interview, he references. Um, so many great commanders, uh, people who've helped, uh, write government acts Mahaka Cerilios from the Roman empire. He can call upon wisdom and the wisdom of history, um, from all different facets. And I think this is what makes his, his worldview so enormous.

He not only can he reference history. Um, the, the governor asked him, Hey, what's going on on the economy? And it was like listening to Robert Shiller or some great economists. He could literally just being, being, being around the world, coal off some numbers and some facts. And he even can riff about, you know, some of the things that the American government do can, can do to improve the economy.

And I, this all comes from, from his learning. And I, I'm very interested to ask you, Gary. I mean, if I remember your new book is all about learning and how to do it, you must have loved this to hear that that Fred is such a student of history. Uh, yeah, that's an a hundred statement and I will also tell you her Keller, her, or who I got to know a bit, uh, he really.

Reads and loves his history. And, and that's, I, I made the statement, it costs our business society, billions of dollars, probably a trillion dollars, our total lack of understanding of business history. Um, I've met people at general motors that have never even heard of Alfred Sloan, including executives. Uh, it's just awful out there.

How little we know. And the business world about history. And yet when you study the Greek,  Winston Churchill said, you know, you've got a, um, a study history. Steve jobs said, you can not forecast the future. Looking forward. You have to look to the past to connect the dots. Um, It's so important and, uh, no, he's he's right on.

And, and obviously he views that as a key part of his success. So I'm interested to know, uh, Chad, how do you incorporate learning into the storytelling that you do and for our listeners, uh, who are tuning in for the first time? Chad is, uh, a great storyteller. All things are around innovators.

Entrepreneurs people looking to disrupt, disrupt the status quo. So I'm interested, Chad, like how do you incorporate learning into your practice? Oh, I try and watch as much media as possible and learn, you know, not only from what the Vimeo and YouTube stars are doing today, but just kind of those classic elements of storytelling, whether that's radio dramas that you were talking about in the pre show, Mike and, and, and the war of the worlds, um, radio broadcast.

I think for me, there are always going to be those timeless. Nuggets of wisdom. Um, you just have to do the digging to uncover them, uh, which is why I've enjoyed this process with you so much. Is that I go and look at the history of a company like FedEx and, and a founder and leader like Fred Smith that I really would never have come across beforehand, but now I have such a.

Deeper understanding of how important it is to surround yourself with the right people and how important it is to focus on, you know, the service of your company and how that will ultimately drive profits. Um, so I think for me, and I've actually started essentially any piece of media that I consume, whether that's a book or YouTube video or a podcast, I will write down kind of the one thing that I need to take away.

From that. And I just have a catalog of those, um, so that I can always kind of go back to, uh, and refer to them. And I think this goes back to Gary, you talking about just, we need to be writing these things down and re putting our business plans and our ideas to paper. I've found that that's been a very beneficial practice for me in just the past couple of months.

If I could throw out a tip for our listeners, um, uh, uh, the history of American business, which is so, um, unknown really, uh, most, most of the greatest business leaders in American history. Um, most people under 30, I've never heard of most people under 60. I haven't heard of. Uh, so the book to start with is called the visible hand.

By Alfred Chandler and that's the single best book on the history of American business and how it all came about. Just an amazing book. And then another one by Harold Evans called they made America, which is a brief stories of a lot of our greatest innovators, but a big chunk of them. People have never heard of.

He picked a very diverse group from cosmetics to technology and a lot of great unsung heroes of mine. Those two books are the best place to start. To begin to have some sense of the big picture. Cause we, we have such a, I call it a Kronos centricity. We believe our own time is unlike any other time that the rate of change is faster than it's ever been, that everything is unprecedented and that the, uh, the past doesn't matter.

And man, that sign was Fred Smith. That is, that just costs our society. Billions of dollars. Gary, can you just give us those two books again? So Alison's, Karen can grab that just visible hand by Alfred Chandler and he wrote several other great books. One is called scale and scope in which he looks at European companies after he had written the visible hand.

The visible hand is a story of American business and it's book inventing the electronic century, talks about how the, uh, America let. The consumer electronics business get away from is how RCA and the kingpins really blew it. So anything by Alfred Chandler he's he's dead now, but he was the, he was a Harvard professor at Johns Hopkins before that just the, he was his amazing guy and the other one is called.

They made America. By Harold Evans, Eva in S and M make sure and get the hardcover copy, not the paperback because they left all the photographs and the illustrations out of the paperback. And those add so much value to understanding that history, if you get the hardcover version, they're both hanging there.

They're both readily available. The visible hand is, uh, is one of the most important business books ever written and continues to sell well after. 30 40 years. The, um, I'm just thinking about all the, the amazing book, uh, suggestions we're giving in, in the show where we're almost becoming the, the innovators book show where this is exciting.

I think the Kindles and the, and the Amazon orders are going to be going crazy. I want to bring, if I can add, I have to say my book includes my 160 favorite books, and many of them are about history and the big picture. Right. So we'll be sure to, to put a link to your book, and this is the lifetime learners guide to reading and learning.

You got it. All right. Okay. In the, in the show notes, it goes, so, uh, Chad, we got, we've got one more clip. Um, feels like every show we, we get you almost to the end and it's like, we could talk for so much more. Um, but do you want to set up this, this last clip, which I think is a really appropriate way to, to wrap up the Fred show?

It's a nice, uh, practical nugget. If you will, from Fred really just about. Keeping your eyes open, being aware, staying close to the customer and, and to not just blindly, uh, guests, when you're, when you're trying to, to, to run your business. And so here he is with his, uh, our final thoughts from Fred first thing is you have to be very objective about what you're trying to do and have to have a business concept that has a competitive advantage.

I mean, there's no sense, quite frankly. And starting a business that 10 other people are doing the same thing, because you're going to be able to make a living, but that's at best what you're going to be able to do. So if it's real estate, maybe you have the killer location for whatever it is. If you're a restaurant or what have you, but you have to have a point of differentiation and competitive advantage, and you've got to be damn sure that your innovation or your thought.

Has that competitive advantage and you can sustain it when I was putting together FedEx, federal express in those days, way back when I had commissioned and I didn't really have the money to do it, not one, not two, but three completely separate and independent studies to verify the market that I thought that existed for these high tech and high value added parts and pieces that had no way to be moved.

Uh, at that point, you know, technology was out running the logistics system. So I was very sure that the solution that we had was competitively superior and it was, it just sold like gangbusters again, you know, Fred being kind of one of the original, uh, you know, validators, if you will, um, He sought so much information because he knew he was going to have to spend tens of millions of dollars to get his business off the ground.

And, you know, the venture capital world was very different in the seventies than it was today. You know, you had, uh, I mean, you, you had similar recessions and things like the oil crisis and whatnot, but, um, You know, his fundamental value as the founder and entrepreneur of that company was de-risking it for himself, his employees and the people that invested.

And so. He invested all of his time, not only commissioning these studies, but he personally went to Washington for weeks at a time to get the regulations passed that would allow them to fly the cargo and eventually fly the larger planes because otherwise their business would, would cease to exist practically overnight.

So what role do you think. Conducting not conducting one or two, but three different studies. How do you think that affected him once he knew there was a big product market fit opportunity for him? How did that affect the way he behaved? I think it gave him the confidence to recruit the operators that he needed to, to run the company and also to entice the investors, to give him the money and.

He didn't just go into a room and collect it information and not do anything. Everything that he learned from these studies and everything he learned from, from lobbying in Washington, he would get on the phone immediately after these meetings and, and call back to the home office and, and share what he learned because they could make those changes right then and there.

So. In everything from how the planes were laid out and in the way that they were loaded and unloaded to where they were parked or in the, where they were getting the, um, the ramps to operate in and, and airports, all of these things he would, he would learn. And then, and then relay immediately back to the home office so that they could implement it in the business right away.

Yeah, I can't think of many, uh, better pieces of advice, uh, that he, all we could give to anyone, the innovators, entrepreneurs starting then to follow Fred's advice, which is to know the product market fit. And that means. Really going beyond a guest. And I think I would characterize of the last decade of all the different startups that are, I haven't met many, the vast majority.

I guessing the opportunity. They guessing the market. Few people have ever said to me, in recent years, we conducted three deep research initiatives, studies, or even paid for them. Furthermore, to know that there's a product market fit. It's often anecdotal. Yeah, I did this. So this opportunity, which may or may not be true, but we're not messing around when we're starting a company.

Uh, the stakes are big and I think he demonstrates some of the rigor. Uh, that you can actually do before you start anything. And I think you're, it gives you the confidence when you see it, when you know the opportunity exists. I think it gives you a, a huge amount of confidence and direction. And I think that that's obviously very infectious too, to all the people around you.

Um, bless you, Gary, who else strikes you? As an innovator or an entrepreneur who, who also showed such a great dedication to knowing and not just guessing an opportunity. A boy, man, that's that's a big question. Um, uh, Mo most of the grade. Uh, people that I've studied all through history, knew their industry and you know, and one way or another, even a Michael Dell who dropped out of college probably knew as much about PC marketing as IBM did you know before.

But Chad sat through some of my long. Classes and, and knows the one thing I harp on over and over is do your homework. Uh, I I'm with you, I think maybe less than 20%. And I've, I've seen probably 10,000 business plans and pitches probably less than 10, 20% of them really do their homework and know their industry.

And no matter how you do it, whether you're outside studies, my own goal in each of the companies I started was to become the best expert in the industry on that industry before I started. And I don't. I don't think I ever achieved that, but I came pretty darn close, you know, and, and part of my training working for big, there's a learning how to do analysis of opportunities for those big companies.

And so I did all my own research, but Hey, between consumer surveys, visiting every competitor all over the United States, um, and, and a lot of little tricks, like, uh, when I first went to the booksellers convention and all the bookstores are there, all the publishers are there. 90% of them have been thinking the same way for 30 years.

And I went over and I introduced myself to the editor of a publisher's weekly, which is a main trade magazine or was, I think still is for the book selling business. And I talked to Daisy, the editor. And she, and I said, okay, what, who are the 10, most exciting bookstores in the country? Who's doing something innovative.

What should I learn? Why do you think? And we ended up, well, I don't know, I guess the next six or seven years that I was in the business every year, she and I would walk the entire floor, go past all the booze, just she and I, because she was the one person I could talk to because a good editor of a good trade magazine knows the industry inside out, especially as they've been at it several years.

And she was the one person I could really talk to about the future and see the bigger picture you can't. And one thing I'd say too, because when I preach all this study history, know your context, know what industry and know how it's worked in the past. Don't just discard it or make fun of it, but learn from it and learn from the best.

Even if your model is. Really different and people say, Oh, I'm too buried. You know, I've got nightmares here. And my right hand person just quit and I can't raise money. And I said, look, every business person is buried under the details of the business and the short term issues. What makes a difference is that person that takes 10% of their time that takes every Sunday afternoon or takes every, you know, Friday night or whatever.

And just three hours a week of, of reading these kinds of books or. That alone will give you, put you light years ahead of your competition. You just, just like bill Gates. He has to have his think week. Then later you up to two weeks here where, you know, he'd go off in the woods. And a friend of mine picked the books he would read and he'd read anthropology and, and all this other stuff.

He wasn't reading books about how to be a great software company, CEO. Yeah. He was reading this incredibly diverse, a list of books and, and he separated himself. You know, he was like no emails and no business communications and just a week, a year. And I'm sure that seemed like a nightmare to a lot of corporate CEOs, but, um, it's one 52nd of his life.

And, um, and one thing I've got to say an overarching thing from listening to all this stuff with Fred, I listened to that whole interview with the governor of Tennessee and I listened to several others. There's a good little thing on the internet about his 10 lessons for success. Yeah. The one thing that becomes clear is this is, this is truly a wise man.

This is an exceptionally intelligent individual. And at the same time, when I work with all the entrepreneurs, I don't want somebody to run around. So all, you know, I'm, I'm not brilliant. I'll never be a Fred Smith. The reality is that there are so many different types of intelligence. I recently met with a senior executive at one of the biggest computer companies.

Clearly a guy with an incredibly high IQ and an even higher self confidence. And you know, at the end of it, we were talking about some whole different subject about the museum business actually at when I got home. And I was saying, man, that guy just, isn't very smart. He just is not very smart. You know, he might have 160 IQ and he may have been a great success inside of a very confined, structured organization where he, he gave orders I think.

And they were followed, um, But as far as, as real wisdom of understanding the world at large, he was really shortsighted. And what you see in a Fred Smith it's exceptional. And when we find people like that, we should learn everything we can from them. It's true wisdom. I had four of my college teachers when were well prizes AF after I had him in class, I say, well, they wouldn't have won them without me, but I was cutting class to start little businesses, but that, you know, uh, at least one or two of those.

Guys were truly wise and you could tell it, they had this broader perspective. That's one reason I love Peter Drucker. He is, he's the only guy who understood demography, sociology, anthropology, business, economics, wall street, and could knit it all together. And that's what you see in French Smith. The more I listened to him, the more I realized, man, he is really.

Uh, it just is a one of a kind and for him to devote his life to this single pursuit is pretty amazing. I'm sure he would have won a Nobel prize if he'd become a scientist. Um, very, yeah, but, but that shouldn't scare us normal intelligence people off. So, so, um, let's do, let me ask you a specific followup question, assuming you, you have the appetite and the motivation.

And our listeners out there might be standing a new product or a new company, and they want to, they want to learn. Okay. And we've talked about some themes of, of writing and reading and so forth. Can you give, uh, have you seen something recently that someone has done to learn and to, to understand the business?

That could be a good suggestion, a good practice, uh, for our listeners to conduct, if they're at the early stages of their product or company. Uh, for sure. Three things I give a course of like a two or three hour course called how to become an expert in any company or industry and, and do it much faster than most people do it.

Three key things. One go to the trade shows and talk it up. Man can hang out at the cocktail parties, uh, go meet the editors of the magazines and everything go to every booth, go to the ones nobody else is talking to. Just get a feel for it. And you can even at a trade show, you can sense is this an industry that's caught in the past or was Stella just a bunch of bikini clad models, which is fine, but, or is it a, you know, you can tell from the trade show, isn't one that's advanced, listen to this speakers.

Second thing, read the trade, press one of the biggest things and getting your hands around an industry area around it is to know the jargon. Every industry's got its own jargon and it's like a curtain to keep the outsiders out. And the insiders in you've got to penetrate that. Current. And then the fastest way is to read whatever trade magazines there are.

And, you know, most of them are online these days. A lot of them are free and easy, and I subscribed to probably a dozen free newsletters. So I get the daily airline industry report, the daily hotel industry, the daily restaurant industry, the daily retail dive, and they're all free, you know, And then the third thing is trade associations go to the website of the trade association.

Some of them are incredibly deep with information often free, and those things are all linked together. Sometimes it's the trade association that holds the convention or publishes the magazine, but there is so much, it's so much easier now than when I was doing it in the seventies and eighties. When you'd have to go to a library and Xerox.

So you had to go on the internet and gather, but you also got to go out in the field. You got to go to those trade shows and pick up the phone and call the editor of electronics weekly. Yeah. Or whatever the thing is. They'll talk to you, um, and ask him your questions. I mean, the world is out there just waiting to give us information bus along and we've just got to, so like a giant cafeteria and man, the, the curious they eat well, they pig out.

I'd like to add a corollary to that, to the absolute favorite activity that you had us do, Gary, in your course was go to a shopping mall and just pick a store and just simply observe for, I think it was like an hour and then we all came back and. Yeah, I was just fascinated. If at how much you can learn just by that observation.

And so kind of my fourth addition to the things you can do is go and immerse yourself in that environment of that company. You know, go, go to the Apple store and just sit there for an hour and watch how people interact and what they're buying and how, how much they're walking out the door with and how many people are walking out the door with how much product.

Or, you know, how many planes are landing and taking off. And how many of them are commercial passenger flights versus cargo flights? I think that was just one thing that's stuck with me for, for years, Gary and I thank you for giving me that. Good. No, that's everybody's favorite class. I've probably run 300 people through that exercise over the years and, uh, no, no, the powers of observation and to be Frank, the, and I love gadgets.

I'm a gadget collector. I, my iPod and everything, um, That's that hurts us in a lot of ways. People, I can't tell you how many young people that go through life with their eyes and their ears. And the other thing that I think is a, is a high risk strategy. Is it dependent upon being dependent upon the opinions of friends?

I say all this, well, you know, I, you know, social media and we all hook up and I find out what movie they liked and I go see that movie. Hey, I've been watching movies since I was a little kid. I don't have a single friend. Whose advice on movies? I trust a hundred percent. If I really lucky, they might hit 60% and go out and, and discover it for yourself and, and tying into all that.

The one book everybody must read is the innovator's DNA, Clayton Christensen, couple of other guys. Uh, it is the only book I know that really hits it on the head. What are the real roots of breakthrough ideas? And, and observation is one of the six key concepts in that book. Fantastic. Well, I mean, it is definitely a, we have hijacked the concept of a book review show for innovations that's that's for sure.

Gary, um, I re I think it's been a really wonderful to have to have your input. Um, before we wrap up, though, I think everyone wants to know what was Chad like as a, as a student was, I mean, did he turn up a lot to class or tell us. Oh, everybody comes to all my classes. I didn't take attendance. Uh, yeah, it's addictive.

Right? Chad, it's different though. You have to admit that it's not like most classes. No, I think I, I. Love I've, I've found that the people I enjoy spending the most time with are the curious minded people. And so, Mike, you know, I got to give a big shout out to you, you know, as the inspiration for this podcast.

And Gary I'm so glad that we could induct you into the club as the first guest host. Great fun. I enjoyed it. Yeah. And we would, we would love to, to, to get you back again. So if, if you're open to it and you don't get, um, sidetracked in the 33 room library that you live in, um, we, we would love to invite you back to the, to the show, Gary.

Well, I have plenty of time. Books are best read between midnight and 6:00 AM and my experience as good. I had to use a flashlight under the covers or get in trouble. Now I'm free to do it and not get in trouble. Yeah. Yeah. Now, and especially on hitting on the history stuff, because people really need to learn that.

And I, I'm trying to put more and more of that on Hoover's world and hopefully write some books in the future and, um, make talks, um, people were really in to learn from these grades. And then the other thing too, is I really believe the best way to teach entrepreneurship is to study the great. Uh, people because people love biography.

You learned that they were human. I mean, when you mentioned that, you know, Fred Smith, wasn't perfect. Well, he's human, so no, he's not perfect. You know, and, and we all make mistakes, Sam Walton's famous or they ask him, why are you so great company? Or we do all these things, right. Well, why, how are you doing right?

Cause we did them wrong 20 times for him. We finally figured out how to do them. Right. You know? And. Just from reading the stories and what they go through. And cause I made people, Oh, woe is me. It's the end of the world. Oh, you ain't seen nothing yet? Well, one of my favorite things to say to young entrepreneur is you thought you had a bad day.

You don't have any confidence. You're going to have a lot worse day. You know, you need to buck up because you know, it's, you haven't even started making mistakes yet. You're going to make some doozies. And it's true. And, but when you read the stories of people and the real individuals and dig deep into the history, because we don't know how Elon Musk is going to turn out, pretty clear out Bezos is going to turn out, uh, poor.

Uh, um, I want to say kind of like hyper Nick, but that's the wrong name? The humor guy, you know, um, he's human too. I reckon. Um, you know, it's a, the case is still admin and will what jobs spill, which is. Truly, truly unbelievable. In many ways, the most amazing me of our era I've ever studied, but you know, where is Apple going to be in 20 years is going to be another IBM.

And the ditch is going to be another federal express going on to record, right. Sales and earnings. Um, Only time and leadership and this heart and soul of those organizations is the only way we'll find out. And that's another great advantage of studying a, I wrote a thing, the three greatest companies in American history, uh, which were, uh, Pennsylvania railroad, um, general motors and IBM and my not so humble opinion, but you're going to learn a lot more from old dead companies.

Cause you can see the full cycle. And you can see what killed him so many ways. You can learn a lot more from old stuff. I have more books from the 1920s and thirties, and you can imagine, and every page is, is exciting. And I learned something from, and you can't learn much from Elon Musk in terms of how do companies end and where do they go wrong?

You know, you know, the it's interesting. You say that Gary, because as I mentioned earlier, I think about blockbuster and Kodak, um, Who had clear opportunities to be truly great, but declined them. Uh, quite literally in declining, uh, blockbuster had the chance to invest in Netflix. Kodak obviously created the digital camera and then candidate.

Um, the, the reality is those two things. I think they're a little bit, yeah, closer than the founding of GM and IBM. However, um, there's so much in those, uh, I mean maybe the, the, um, uh, one episode we could do of the show is the failed moonshots and deliberately go to some of the biggest, the biggest Whoppers around.

I love that idea. Yeah, we could definitely do do that. And, um, what's great is that, you know, often, um, people will, in the end human nature is to tell the true people will come out with the true reasons for why things didn't work. And I think there's as much in that as the successes. Sorry. Thank you. Thank you.

Once again, it's been, uh, just so so much information. I can't believe that. We've run probably close to two hours. Chad, you're the official timekeeper and where have we run to. Yeah, we're at a right about two hours, but I just, I don't want to thank all the listeners of the show. We love getting your feedback and, you know, we wouldn't be doing this if it, if it weren't for all of you.

So please go to moonshots.io. Uh, you'll be able to find all the show notes. I don't know the dozen or so book recommendations from today's show. Um, as well as the link to the interview with, uh, the governor and Fred Smith and, um, Let us know what you think, uh, about this show with, uh, with a guest host.

And if you have an idea of someone you'd like to see us profile, go ahead and give us that feedback. And before we let you go, Gary, I'd just like you to let us know, you know, how, how we can find you, you know, where are you on the internet. Um, and, and, and I'll give you this opportunity to tell us about your book again.

Oh, okay. Great. Well, first of all, thank you so much for having me on here. It's been a great, uh, joy and, uh, and I've learned a lot and, uh, uh, celebrate Fred Smith and federal express is a, is a worthwhile thing to do. Uh, let's see. Anybody can always email me@garyhoovatmsn.com and old school email address.

But I refuse to annoy my friends by changing it. Um, And, uh, and, uh, my website is Hoover's world.com. Word Hoover's world.com and it's got all my newsletters on there. Also publish them on LinkedIn pulse. Uh, the new book is called the lifelong learners guide to reading and learning. And it's on Amazon as a, um, Print book.

And as a Kindle book, I think they're running a special now for the Kendall prime subscribers, whatever. Uh, and I've got a book on, on Amazon too. That's just as a, uh, ebook and yeah, you can also get it through Hoover's world own my guide to retailing, which really covers all the principles of retailing and talks about the major players.

Um, I wrote a book some years ago called the art of enterprise it's available through Hoover's world. If you click on the button about my book, some classes and things, but always, I always love hearing from people and their thoughts, comments, and, uh, and again, again, particularly learn learning lessons of history.

I kind of find that as my own kind of unique niche in the whole world, if a business etiquette ed education and edification. Wonderful. Wonderful. Well, Gary, it's been a joy to get to know you over the podcast. So thank you once again, there'll be lots of links in the show notes, uh, to all the books that you've inspired us with and to your own recent book, which is very impressively is still sitting at five star average writing.

So maybe on another podcast, you can tell us how you, how you writes great books as well. So w w where he gets to know, um, I want to think to your earlier point, uh, Chad, I want to thank Dave from Amsterdam who wrote us in some feedback to the Jeff basis show. So it was extremely inspirational and he really loved the flywheel effect that we broke down.

And I have to thank you for that chair. Cause you were just. Going deep on that one and how we really pulled out the customer obsession that Jeff spoke about. Um, so thank you today. He's he's really interested. Um, As well on how companies can do more experimentation. Uh, so we will, uh, we'll get into that theme.

We may even pick, I've got in mind, we, a couple of entrepreneurs who are quite big on this. We might dive into how to conduct experience, how to run skunkworks and all that kind of stuff. Good stuff. So staging, JV, and thanks. Thanks for your feedback. So swinging it back over to you, Chad, um, w boy, a big show, lots that we covered.

I've got to ask if you, if you're taking out just a couple of things from what we discussed with Gary, uh, today, and, and really getting into the world of Fred Smith and FedEx, what are the big three that you're taking home? A big three. I think. The aspiration to be as well read and the student of history.

I think, I think that really hit home with all of us. I think that that goes a lot towards explaining how Fred Smith has spent, so, you know, long lasting there at, at FedEx. So I, you know, I'm committed to continuing this investigation alongside you. Uh, as we, as we try and break down, you know, uh, more and more innovators and companies.

Hmm. I love that one too. Chad, that was, that was awesome. I think, um, you know, one of the things that, and I, I have to credit Gareth is the writing things down. I have to, this really confirmed my belief in the power of writing as a way to clarify your thoughts. I loved the fact that he conducted these three different studies to make sure the product market fit that really.

Kind of, it was a bit of a punch in the face it's like, yeah. Cause I'm, I hardly meet anyone. That's that short of a product idea. Um, it's, it's truly, uh, some absolute timeless classic truths to entrepreneurship and innovation, so, yeah, really fantastic. Um, so Chad, where, where can everyone find the show notes and, uh, what are your thoughts about who we should do next?

Oh, I don't know. I, uh, I saw your list of people who, who we should do. I I'm actually being a, you know, a student in Chicago for four years and actually having worked at Harpo studios, I'm fascinated by Oprah and her story. Hmm. But you've also got. You know, we've also got some really great, uh, names queued up like bill Gates, Astro teller from Google, Tim O'Reilly from O'Reilly media.

These are all people in Melinda Gates and the Gates foundation. Um, you know, so we'd love to hear from you guys listeners on who you'd like us to, uh, to focus on next. If you like Oprah, have you ever heard of Madam CJ Walker? Yeah, I'm just going to give you some, you know, so there was some bait out there for you guys.

Look her up. Madam CJ Walker, a hundred years ahead of Oklahoma. Oh, that sounds great. Madam CJ Walker. Okay. There you have it. Folks. That's a wrap for our Fred Smith and FedEx show. Check us out@moonshots.io. Gary. Thank you. What book are you going to be reading this evening? What's on the reading list. I sit right here and I have a w two from Amazon today, and four from bookstores yesterday.

And about 15 others. If you read my book, you'll find out I rarely spend more than 15 to 30 minutes with a book. I figured out a system to suck the information out of them pretty efficiently. So I'm always reading four or five, but at the same time also have a 1960 survey of American consumer preferences, uh, that I'm going through.

So, um, I'm always trying to gather information and figure out how I can tie it to something I already know, because that's how you remember it. I feel that my, my deep dive into the functional requirements of an admin system, which is a huge piece of software we're building at the moment pales into comparison to your 1960s customer preference.

You gotta do it, bro. You gotta do it both. That's true. Um, are you still, you're still on vacation technically, even though you're recording a show with us. Yes. Yes I am. But it was more than worth it. Thank you so much to both of you. Great. Well, thank you to you both. And that's a wrap for the Fred Smith show here on the moonshots podcast.

Check us out on moonshots.io. Thanks everyone.