The Marmon Group: The First Fifty Years by Jeffrey Rodengen

Summary

  1. The stories of Jay and Bob Pritzker and how they started their empire with an unlikely acquisition of Colson Corporation. Jay was a financial wizard and he perfected a way to finance acquisitions by using a loophole in the tax code (this became known as the Pritzker Method), he was also universally respected as a savvy negotiator. Bob was the first engineer in the Pritzker family (the rest were lawyers) and he had a passion for plant management. They made a perfect pair for buying and turning around companies. The Marmon Group is a unique, loose federation of companies comprised mostly of manufacturing companies that operate a broad spectrum of American industry. As of 2002, the more than 100 companies have revenue in excess of $6b and produce a mind-boggling array of products. The Marmon Group continues to thrive and grow because of the trust and integrity built into its most basic structure (Berkshire acquired a controlling interest in 2008 and later bought it outright)

Key Takeaways

  1. The Marmon Group member companies are managed independently, at the local level, and a dual reporting structure feeds financial results to the group’s Chicago HQ where each member company is tracked closely by a small group of executives and managers. Beyond that, most operating and capital decisions are entrusted to the individual company presidents. Even acquisitions are managed at the local level. There are centralized resources and expertise which give companies a strong incentive to join the Marmon Group. Although the enterprise was built through acquisition, much of its growth over the years has been organic. Rather than serve as active micro-managers, the cadre of executives in Chicago viewed themselves as a consulting organization that provided tax, personnel, real estate, and other advice to the member companies of The Marmon Group. Operating policies include nearly complete autonomy, trust, simplicity, and effective leadership at the local level. 
  2. A great opportunity for the Pritzkers was a manufacturing company which was ailing. No attention was given to what business the company operated in and whether it would fit well with existing member companies – it just mattered that it was a solid opportunity
  3. Today, The Marmon Group is the Pritzker family’s largest enterprise, no small feat as they own Hyatt, a large interest in Royal Caribbean Cruise Line, many real estate holdings, and various joint ventures and partnerships
  4. Nicholas Pritzker, Jay and Bob’s grandfather, wrote  a small book that has been passed down the generations; the theme of the book is “Your only immortality is the impact you have on your successors.”
  5. “The only reasons owners of Colson and other troubled companies sold to us at bargain prices in the early days was because they had no place else to go.” – Bob Pritzker
  6. The Marmon Group was built from the ground up with virtually no financial investment by the Pritzker family. The brothers built the company by shrewdly investing in, and then greatly improving, poorly performing businesses. These were then used as vehicles to purchase yet more businesses, and the process evolved into a role model for building a conglomerate.
  7. Colson had troubles and in order to not default, they had to merge with another company that had sufficient working capital to finance a new plant – Great American Industries. It was not a smooth merger and some of the holding companies had fraudulently accounted for their inventories (Colson’s biggest piece of business at the time was a navy contract to produce the Mighty Mouse rocket)
  8. The Pritzkers built up Marmon because of ambtiton but also diversification. They understood that a broad-based organization with manufacturing operations in a variety of industries would be protected during normal economic swings 
  9. Pritzker Method – basically we bought a dominant position in a public company, then proposed a merger for cash or securities, finally we brought it private, and then began revitalizing operations and selling off parts of the business that didn’t fit with its core competenciesd. That’s the history of many of Marmon’s deals
  10. Cerro, metal and mining operation, and Trans Union, a spin-off of Standard Oil where it leased rail cars but also got into consumer credit reporting and other services, were Marmon’s biggest deals. The CEO of Trans Union thought it would be worth more to private owners than to a public company because a private owner would value the firm on the basis of cash flow rather than share earnings. Their cash flow per share at that time was almost 3x its earnings per share. 4 years after the merger, the board lost a case which made them liable for $13.5m to shareholders because it was deemed that they sold too low. This was hailed as a crazy verdict but eventually the Pritzkers paid for the $13.5m fine as long as the board members agreed to pay $25k per year for 5 years to the Illinois Institute of Technology and Stanford Medical School. They footed the bill because they thought the decision was unfair
  11. “One of the advantages of working with Marmon is you sit down with the president and make a decision. You don’t write a big book like you have to do in a public company and then hopefully get on the docket and make a presentation to the board to get approval to do something. With Marmon, we could just sit down and have a discussion and move ahead.”
  12. Bob used to teach at the University of Chicago, and he’s more like a professor. When I came here, one VP gave me some excellent advice. He told me to think of the office as patient waiting rooms and Bob is the doctor. He’ll come around, and he doesn’t like to read a lot of information. Don’t send him long reports or any of those kinds of things. He’ll come around and take your temperature and find out what’s going on and how you feel and what he can do to help. It was good advice
  13. The only constants would be internal expansion and reinvestment augmented by a steady pace of acquisition, characterized more by opportunity than anything else. There was no planned growth. In Marmon, “we’re not planners, we’re opportunists. We really haven’t sat down and said, ‘we really should get in this’ and make a plan.”
  14. Marmon moved on potential acquisitions with speed and surety, sending in small teams from Chicago to rapidly evaluate a company’s potential and future. The team considered a lot of factors, including any potential liability, its financial health, morale, tax status, any potential environmental problems, and capacity for growth. One element that was never considered during due diligence was potential synergy with other Marmon Group companies; each company had to stand on its own as a successful enterprise. This, more than any other single factor, became the defining quality of the sprawling Marmon Group. The Marmon Group comprised member companies run by executives who were almost completely autonomous in their ability to make business decisions. The very speed of this process is one of the selling points – wer’re prepared to act rapidly. 
  15. People sold to Marmon for many reasons but namely they wanted to cash out but continue working. They were the perfect home and everybody trusted them
  16. The Marmon Group stubbornly resisted any kind of corporate organization as a matter of principle – the Pritzkers have an aversion to large bureaucracies. They preferred to keep things as simple and direct as possible. “Trust is crucial in running this company.”
  17. Member companies would often bring acquisition ideas to HQ
  18. Marmon businesses operate about 400 manufacturing, distribution, and service facilities, and employ about 19,000 people worldwide. Revenues exceeded $7.7 billion in 2017.
  19. Today, Marmon Holdings, Inc., part of Berkshire Hathaway Inc., is a global industrial organization comprising 13 diverse business sectors and more than 100 autonomous manufacturing and service businesses. These 13 sectors are:
    1. Beverage Technologies
    2. Foodservice Technologies
    3. Water Technologies
    4. Transportation Products
    5. Rail Products & SErvices
    6. Intermodal COntainers
    7. Crane Services
    8. Retail Solutions
    9. Metal Services
    10. Engineered Wire & Cable
    11. Electrical Products
    12. Plumbing & Refrigeration
    13. Industrial Products

What I got out of it

  1. Learned a lot about Marmon’s history and their values – their speed in execution, opportunistic mindset (nothing was “planned”), their focus on trust/autonomy, and the fact that they never considered synergies between their companies all stood out to me.

The Systems Bible: The Beginner’s Guide to Systems Large and Small by John Gall

Summary

  1. The fundamental problem does not lie in any particular System but rather in Systems as Such. Salvation, if it is attainable at all, even partially, is to be sought in a deeper understanding of the ways of all Systems, not simply in a criticism of the errors of a particular system. Systems are seductive. They promise to do a hard job faster, better, and more easily than you could do it by yourself. But if you setup a System, you are likely to find your time and effort now being consumed in the care and feeding of the system itself. New problems are created by its very presence. Once set up, it won’t go away; it grows and encroaches. It begins to do strange and wonderful things and breaks down in ways you never thought possible. It kicks back, gets in the way and opposes its own proper function. Your own perspective becomes distorted by being in the system. You become anxious and push on it to make it work. Eventually you come to believe that the misbegotten product it so grudgingly delivers is what you really wanted all the time. At that time, encroachment is complete. You have become absorbed. You are now a systems-person.

Key Takeaways

  1. Systemism – mindless belief in systems, that they can be made to function to achieve desired goals. The strange behavior (antics) of complex systems
  2. Systems Never Do What We Really Want Them to Do
    1. Malfunction is the rule and flawless operation the exception. Cherish your system failures in order to best improve 
    2. The height and depth of practical wisdom lies in the ability to recognize and not to fight against the Laws of Systems. The most effective approach to coping is to learn the basic laws of systems behavior. Problems are not the problem; coping is the problem
    3. Systems don’t enjoy being fiddled with and will react to protect themselves and the unwary intervenor may well experience an unexpected shock 
    4. Failure to function as expected is to be expected. It is a perfectly general feature of systems not to do what we expected them to do. 
    5. “Anergy” is the unit of human effort required to bring the universe into line with human desires, needs, or pleasures. The total amount of anergy in the universe is constant. While new systems may reduce the problem it set out to, it also produces new problems. 
    6. Once a system is in place, it not only persists but grows and encroaches 
    7. Reality is more complex than it seems and complex systems always exhibit unexpected behavior. A system is not a machine. It’s behavior cannot be predicted even if you know it’s mechanism 
    8. Systems tend to oppose their own proper functions. There is always positive and negative feedback and oscillations in between. The pendulum swings 
    9. Systems tend to malfunction conspicuously just after their greatest triumph. The ghost of the old system continues to haunt the new
    10. People in systems do not do what the system says they are doing. In the same vein, a larger system does not do the same function as performed as the smaller system. The larger the system the less the variety in the product. The name is most emphatically not the thing
    11. To those within a system, the outside reality tends to pale and disappear. They are experiencing sensory deprivation (lack of contrasting experiences) and experience an altered mental state. A selective process occurs where the system attracts and keeps those people whose attributes are such as are attracted  them to life in that system: systems abstract systems people 
    12. The bigger the system, the narrower and more specialized the interface with individuals (SS number rather than dealing with a human)
    13. Systems delusions are the delusion systems that are almost universal in our modern world 
    14. Designers of systems tend to design ways for themselves to bypass the system. If a system can be exploited, it will and any system can be exploited 
    15. If a big system doesn’t work, it won’t work. Pushing systems doesn’t help and adding manpower to a late project typically doesn’t help. However, some complex systems do work and these should be left alone. Don’t change anything. A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and can not be made to work. You have to start over, beginning with a working simple system. Few areas offer greater potential reward than understanding the transition from working simple system to working complex system 
    16. In complex systems, malfunction and even total non function may not be detectable for long periods, if ever. Large complex systems tend to be beyond human capacity to evaluate. But whatever the system has done before, you can be sure it will do again
    17. The system is its own best explanation – it is a law unto itself. They develop internal goals the instant they come into being and these goals come first. Systems don’t work for you or me. They work for their own goals and behaves as if it has a will to live
    18. Most large systems are operating in failure mode most of the time. So, it is important to understand how it fails, how it works when it’s components aren’t working well, how well does it work in failure mode. The failure modes can typically not be determined ahead of time and the crucial variables tend to be discovered by accident
    19. There will always be bugs and we can never be sure if they’re local or not. Cherish these bugs, study them for they significantly advance you towards the path of avoiding failure. Life isn’t a matter of just correcting occasional errors, bugs, or glitches. Error-correction is what we are doing every instant of our lives
    20. Form may follow function but don’t count on it. As systems grow in size and complexity, they tend to lose basic functions (supertankers can’t dock)
    21. Colossal systems cause colossal errors and these errors tend to escape notice. If it is grandiose enough, it may not even be comprehended as an error (50,000 Americans die each year in car accidents but it is not seen as a flaw of the transportation system, merely a fact of life.) Total Systems tend to runaway and go out of control
    22. In setting up a new system, tread softly. You may be disturbing another system that is actually working
    23. It is impossible not to communicate – but it isn’t always what you want. The meaning of a communication is the behavior that results
    24. Knowledge is useful in the service of an appropriate model of the universe, and not otherwise. Information decays and the most urgently needed information decays fastest. However, one system’s garbage is another system’s precious raw material. The information you have is not the information you want. The information you want is not the information you need. The information you need is not the information you can obtain. 
    25. In a closed system, information tends to decrease and hallucination tends to increase
  3. What Can Be Done
    1. Inevitability-of-Reality Fallacy – things have to be the way they are and not otherwise because that’s just the way they are. The person or system who has a problem and doesn’t realize it has two problems, the problem itself and the meta-problem of unawareness
    2. Problem avoidance is the strategy of avoiding head-on encounters with a stubborn problem that does not offer a good point d’appui, or toe hold. It is the most under-rated of all methods of dealing with problems. Little wonder, for its practitioners are not to be found struggling valiantly against staggering odds, nor are they to be seen fighting bloody but unbowed, nor are they observed undergoing glorious martyrdom. They are simply somewhere else, successfully doing something else. Like Lao Tzu himself, they have slipped quietly away into a happy life of satisfying obscurity. The opposite of passivity is initiative, or responsibility – not energetic futility. Choose your systems with care. Destiny is largely a set of unquestioned assumptions 
    3. Creative Tack – if something isn’t working, don’t keep doing it. Do something else instead – do almost anything else. Search for problems that can be neatly and elegantly solved with the resources (or systems) at hand. The formula for success is not commitment to the system but commitment to Systemantics 
    4. The very first principle of systems-design is a negative one: do without a new system if you can. Two corollaries: do it with an existing system if you can; do it with a small system if you can.
    5. Almost anything is easier to get into than out of. Taking it down is often more tedious than setting it up
    6. Systems run best when designed to run downhill. In essence, avoid uphill configurations, go with the flow. In human terms, this means working with human tendencies rather than against them. Loose systems last longer and function better. If the system is built too tight it will seize up, peter out, or fly apart. Looseness looks like simplicity of structure, looseness in everyday functioning; “inefficiency” in the efficiency-expert’s sense of the term; and a strong alignment with basic primate motivations 
      1. Slack in the system, redundancy, “inefficiency” doesn’t cost, it pays
    7. Bad design can rarely be overcome by more design, whether bad or good. In other words, plan to scrap the first system when it doesn’t work, you will anyway
    8. Calling it “feedback” doesn’t mean that it has actually fed back. It hasn’t fed back until the system changes course. The reality that is presented to the system must also make sense if the system is to make an appropriate response. The sensory input must be organized into a model of the universe that by its very shape suggests the appropriate response. Too much feedback can overwhelm the response channels, leading to paralysis and inaction. The point of decision will be delayed indefinitely, and no action will be taken. Togetherness is great, but don’t knock get-away-ness. Systems which don’t know how much feedback there will be or which sources of feedback are critical, will begin to fear feedback and regard it as hostile, and even dangerous to the system. The system which ignores feedback has already begun the process of terminal instability. This system will be shaken to pieces by repeated violent contact with the environment  it is trying to ignore. To try to force the environment to adjust to the system, rather than vice versa, is truly to get the cart before the horse
      1. What the pupil must learn, if he learns anything, is that the world will do most of the work for you, provided you cooperate with it by identifying how it really works and identifying with those realities. – Joseph Tussman 
    9. Nature is only wise when feedbacks are rapid. Like nature, systems cannot be wise when feedbacks are unduly delayed. Feedback is likely to cause trouble if it is either too prompt or too slow. However, feedback is always a picture of the past. The future is no more predictable now than it was in the past, but you can at least take note of trends. The future is partly determined by what we do now and it’s at this point that genuine leadership becomes relevant. The leader sees what his system can become. He has that image in mind. It’s not just a matter of data, it’s a matter of the dream. A leader is one who understands that our systems are only bounded by what we can dream. Not just ourselves, but our systems also, are such stuff as dreams are made on. It behooves us to look to the quality of our dreams
    10. Catalytic managership is based on the premise that trying to make something happen is too ambitious and usually fails, resulting in a great deal of wasted effort and lowered morale. On the other hand, it is sometimes possible to remove obstacles in the way of something happening. A great deal may then occur with little effort on the part of the manager, who nevertheless (and rightly) gets a large part of the credit. Catalytic managership will only work if the system is so designed that something can actually happen – a condition that commonly is not met. Catalytic managership has been practiced by leaders of genius throughout recorded history. Gandhi is reported to have said, “There go my people. I must find out where they are going, so I can lead them.” Choosing the correct system is crucial for success in catalytic managership. Our task, correctly understood, is to find out which tasks our system performs well and use it for those. Utilize the principle of utilization
    11. The system itself does not solve problems. The system represents someone’s solution to a problem. The problem is a problem precisely because it is incorrectly conceptualized in the first place, and a large system for studying and attacking the problem merely locks in the erroneous conceptualization into the minds of everyone concerned. What is required is not a large system, but a different approach. Solutions usually come from people who see in the problem only an interesting puzzle, and whose qualifications would never satisfy a select committee. Great advances do not come out of systems designed to produce great advances. Major advances take place by fits and starts
      1. Most innovations and advancements come from outside the field
    12. It is generally easier to aim at changing one or a few things at a time and then work out the unexpected effects, than to go to the opposite extreme, attempting to correct everything in one grand design is appropriately designated as grandiosity. In dealing with large systems, the striving for perfection is a serious imperfection. Striving for perfection produces a kind of tunnel-vision resembling a hypnotic state. Absorbed in the pursuit of perfecting the system at hand, the striver has no energy or attention left over for considering others, possibly better, ways of doing the whole thing
    13. Nipping disasters in the bud, limiting their effects, or, better yet, preventing them, is the mark of a truly competent manager. Imagination in disaster is required – the ability to visualize the many routes of potential failure and to plug them in advance, without being paralyzed by the multiple scenarios of disaster thus conjured up. In order to succeed, it is necessary to know how to avoid the most likely ways to fail. Success requires avoiding many separate possible causes of failure. 
    14. In order to be effective, an intervention must introduce a change at the correct logical level. If your problem seems unsolvable, consider that you may have a meta problem
    15. Control is exercised by the element with the greatest variety of behavioral responses – always act so as to increase your options. However, we can never know all the potential behaviors of the system
    16. The observer effect – the system is altered by the probe used to test it. However, there can be no system without its observer and no observation without its effects
    17. Look for the self-referential point – that’s where the problem is likely to be (nuclear armament leading to mutually assured destruction)
    18. Be weary of the positive feedback trap. If things seem to be getting worse even faster than usual, consider that the remedy may be at fault. Escalating the wrong solution does not improve the outcome. The author proposes a new word, “Escalusion” or “delusion-squared or D2“, to represent escalated delusion 
    19. If things are acting very strangely, consider that you may be in a feedback situation. Alternatively, when problems don’t yield to commonsense solutions, look for the “thermostat” (the trigger creating the feedback)
    20. The remedy must strike deeply at the roots of the system itself to produce any significant effect
    21. Reframing is an intellectual tool which offers hope of providing some degree of active mastery in systems. A successful reframing of the problem has the power to invalidate such intractable labels as “crime”, “criminal”, or “oppressor” and render them as obsolete and irrelevant as “ether” in modern physics. When reframing is complete, the problem is not “solved” – it doesn’t even exist anymore. There is no longer any problem to discuss, let alone a solution. If you can’t change the system, change the frame – it comes to the same thing. The proposed reframing must be genuinely beneficial to all parties or it will produce a destructive kickback. A purported reframing which is in reality an attempt to exploit will inevitably be recognized as such sooner or later. The system will go into dense mode and all future attempts to communicate will be viewed as attempts to exploit, even when not so motivated
    22. Everything correlates – any given element of one system is simultaneously an element in an infinity of other systems. The fact of linkage provides a unique, subtle, and powerful approach to solving otherwise intractable problems. As a component of System a, element x is perhaps inaccessible. But as a component of System B, C, or D…it can perhaps be affected in the desired direction by intervening in System B, C, D…
    23. In order to remain unchanged, the system must change. Specifically, the changes that must occur are changes in the patterns of changing (or strategies) previously employed to prevent drastic internal change. The capacity to change in such a way as to remain stable when the ground rules change is a higher-order level of stability, which fully deserves its designation as Ultra-stability 

What I got out of it

  1. A fun and sarcastic read about systems, their general behavior, how difficult they are to change, and much more.

The Elephant in the Brain: Hidden Motives in Everyday Life by Kevin Simler

Summary

  1. Human behavior is not always what it seems as it tends to be driven by multiple motives and some of these motives are subconscious or we are at least not fully aware of them. We are designed this way so that we can chase selfish motives while attempting not to appear selfish to others. Our brains try to get past this by keeping us in the dark – the less we know, the less we’ll give away. We are strategically self-deceived – individually and as a society. In a word, the “elephant in the brain” is selfishness and this book shows why only by confronting it can we begin to deal with it and what’s really going on. This book shines the light on certain real world examples where self-deception is rampant 

Key Takeaways

  1. Elephant in the brain – an important but unacknowledged feature of how our mind works, an introspective taboo
  2. We pretend like we know what we’re up to but we often don’t and this gets us into trouble 
  3. People are judging us all the time. Namely, our motives. Because people are judging us, we downplay our selfish motives and make our selves look as good as possible. This applies not only to our words but also our thoughts. In some areas of life we are more likely to point out selfish motives (politics) but in others (medicine) we are more likely to gloss over and act like everyone’s intentions are pure 
  4. By studying primates we can get a good idea of what our social interactions really mean. Distance gives perspective. Social grooming in apes is about hygiene but also politics, prestige, status, hierarchy, and reciprocation. Similar for humans 
  5. The major social interactions which fall into this category for humans is sex, hierarchy and politics. Inter-species competition is at the root and is rarely discussed. Collaboration is the flip side of the same coin. A lot of energy is wasted with competition. Imagine how much shorter redwoods could be and how much energy they’d save if they could agree on a height maximum. This is one of our species superpowers – turning wasteful competition into fruitful collaboration. Norms define these behaviors and is part of what we try to deceptively overcome. We hold ourselves back collectively for the greater good. The norm isn’t defined by how it is explicitly defined but by which actions are punished and to what degree. Weapons originally and later gossip and reputation helped keep people in line and follow norms. However, everyone cheats and it is intentions even more than actions which are judged. Humans are incredible at spotting cheating because our brains are adapted to it – meaning humans have always cheated as it gets you the reward without the cost if you can pull it off. A little discretion can go a long way if you’re trying to cheat – think of the brown paper bag used when people want to drink in public. 
  6. The most honest signals are expensive to produce but even more expensive to fake. 
  7. We deceive ourselves but blame others and project our own failings or guilt onto others. Self-deception can be used to protect ourselves but if our mental models help us navigate the world, why would we have evolved to react this way? Information is the lifeblood and you’d think that with less or incorrect info we’d be worse off. This is the old school of thought. The new school is that self deception is used for manipulation and is self-promoting. We deceive ourselves to better deceive others. Lying is hard to pull off, is cognitively demanding, and we are afraid of getting caught so not admitting it to ourselves is easier. We are not as opaque as we believe and our thoughts can be quite transparent to others but if we don’t know something, others won’t be able to see it. Modeling the world accurately isn’t the be all, end all of our brains. It is reproduction and in this case self deception helps us further this goal 
  8. 4 types of self deception in mixed motive scenarios 
    1. Madman – you’ll do anything to attain your goal and others know it. Intimidation
    2. Cheerleader – a form of propaganda where you try to change other people’s beliefs 
    3. Loyalist – shows commitment and belief and will go along with the party or person no matter what. Earned trust 
    4. Cheater – turning a blind eye so you have plausible deniability. Throw people off our trail 
  9. The main cost of self deception is that it can get us to act suboptimally
  10. Our saving grace is inconsistency as one part of our mind’s “system” can be aware of something but be hidden from others. Our brains architecture keeps some of our baser evolutionary motives hidden from full view and allows us to act hypocritically without truly realizing it. Our mind is built to help us advance socially. Shame, guilt, and other negative emotions is our brain’s cue to avoid those neural pathways, putting our true desires even further out of grasp 
  11. The most important self deception is about our own motives. 
  12. We don’t always know the “why” behind what we do but we always think we do. We can rationalize anything we do The brain can be thought of as a press secretary – giving internal and external interpretations of the experiences. Your brain is not the king of decisions like we’d like to think, but merely the rationalizer of them. Every time we give a reason we may just be making it up. We know ourselves less than we think. We cherry pick and celebrate our most pro social reasons and hide away the anti social ones 
  13. We are also intentionally blind to many non-verbal cues such as body language because being consciously aware of and in control of them would give away too much and make us feel too manipulative. Body language is an honest signal and is it the sense that it is more costly to fake them produce so we can use it effectively and should rely upon it in many different situations to get a better feel for how others are feeling rather than relying on what they’re saying. Eye contact (an even ratio of eye contact while listening and speaking conveys dominance and high social status), open postures, contact, lean in or back, pheromones, proximity, touch, how relaxed we seem, social status, and more. The beauty of nonverbal communication is that it allows us to pursue illicit agendas with a smaller risk of getting caught and accused as the actions are harder to pin down than outright actions are. That is why being aware of them is slightly dangerous and is why we don’t teach them to our children 
  14. Laughter is designed for social situations, it is a sound which is always used for communication purposes, and laughter occurs in other species. This inter and intraspecies communication indicates to self and others our playful intent and happy mood. This allows for safe social play even when the behavior could technically be dangerous or serious – it is a play signal. Flirting with violating a norm or actually violating it tends to be found funny. Context is extremely important as the same event can be seen very differently. Humor is extremely informative and showing us what is acceptable and what is transgressive, showing us where the boundaries are and are norms and how far we can push it. Since laughter is in voluntary and deniable it is a great window of truth because we can’t hold it back as easily as we can with language and it gives a safe harbor to be able to explain things away if what we laugh it seems inappropriate to others
  15. Language and speech 
    1. Speaking gains you social status if you prove you’d be a powerful ally who knows something which is new and/or useful to you. When you speak you can show off your verbal and mental “tools” which make you a strong ally. That is the subtext to every speech. Speaking well gains you prestige as prestige can be equated with being a strong allies others want to partner with 
    2. This may be why people tend to speak more than listen although listening might be the best thing you can do as you can learn more 
    3. People are more impressed with others who have something interesting to say regardless of where the conversation goes rather than being led to a specific topic the speaker knows a lot about 
  16. Conspicuous consumption influences everything we do, what we buy, how we judge others, it conveys our status, values and priorities
  17. People have forever been obsessed with gossip, news, and media. And although they may say it is for staying on top of global events, the subtext is that they want to be able to know what others are talking about and chime in in conversation 
  18. Art is an impressive display in the sense that it is meant to impress others. Evolutionarily it is hard to describe or explain because it is costly takes a lot of time and does not directly do anything to enhance our survival but one thought about what it signals to potential mates the fact that we have surplus time, energy, health, and wealth to pursue these sorts of things it makes more sense. The gower bird is a great example because the male builds some impressive structures and collects hard to find artifacts and colors to put within the structure which shows the female he has surplus energy and proves he is a qualified mate. What makes this even more interesting is that after they mate the male does not help raise the young at all. His pre-mating structure speaks to his genes more than anything else he could do. Art therefore needs to be impractical in order to succeed as it shows the fitness of the individual who is performing it
  19. Charity, like everything else discussed, is not done for pure charitable reasons or else people would donate differently. There are five main factors which influence what we do and how we give it including: visibility, peer pressure, proximity, relatability, and mating motives. Being generous signals that we have a surplus of wealth time and fitness and we want our leaders to be generous because it shows that they don’t play zero-sum games, that they know how to share, and that they are socially aligned 
  20. Education in large part is the signaling mechanism to show that you have the capability to learn a broad swath of information, prioritize and work hard. It does not necessarily mean that you know these topics very well. Education is a form of conspicuous consumption too as it tends to be expensive and going to college shows you can afford it. It shows which students can learn well but not necessarily how much they know. Colleges also are in some fashion propaganda machines and also serve to “domesticate” young people
  21. As is this case with many of these hidden mode of explanation, things which seem like flaws for the stated function are in fact features of the hidden one
  22. Bringing food to people who are sick is a universal but in today’s age, far more important is that it is homemade – showing you took time out of your busy schedule to make this
  23. Americans spend too much on medicine in an effort to “keep up with the Joneses”. It is hard for most people to act in the belief that doing less or maybe even nothing is the best course of action no matter if it has been proven that it can be better. More is thought of as better because it signals that we care and are cared for. People don’t actually care as much about if something works – they want the best doctors doing the most expensive treatments. Sleep, rest and eating well is not received well when we’re sick. 
  24. We worship and believe in religion because it helps us socially by forming a cohesive community. We become accepted by a group which helps us survive and reproduce. While the skeptic may think of religions as delusions, it is hard to argue against their benefits. Sacrifice is very socially beneficial to show your loyalty and fitness. The boredom experienced in sermons may be a feature and not a bug – you are conspicuously sacrificing your time for the group 
  25. Groups of nice, trusting people tend to out compete groups of nasty people. This has deep implications if you think about it

What I got out of it

  1. Fun read with deep implications. We keep ourselves in the dark to many of our selfish motives in order to better deceive others

On How to Start a Startup

I spent some time carefully listening to and digesting Y-Combinator’s videos on starting a startup and have attempted to make a distilled “teacher’s reference guide” which (hopefully) offers an actionable and informative introduction to their powerful ideas for success and pitfalls to avoid.

*This is Y-Combinator’s content and not my own words. I’ve simply distilled, compiled, and added a few notes.

Worthwhile Resources

Worthwhile Podcasts

Dan Carlin – Maybe the most engaging podcast I have ever listened to. His lengthy series on the Eastern Front in WWII, WWI in general, fall of the Roman Republic, the Mongols are incredible. Dan is a master story teller and its almost impossible to stop listening to him recount these violent and gruesome times in history. Even if you don’t care about history you will find these podcasts enjoyable and worthwhile.

Tim Ferriss – In each episode Tim interviews a master of their respective craft and tries to dissect what sets them apart. I find them so appealing as he helps focus on and draw out actionable tips, routines or techniques we can all implement in our own lives.

Finding Mastery – Michael Gervais is a high performance psychologist and in this podcast he converses with a broad range of high performers and digs into their backgrounds, mindsets and how they think about mastery

Masters of Scale – Reid Hoffman does an excellent job highlighting some of the strategies, tactics, business plans, and more of some of today’s fastest growing companies

Invest Like the Best – Patrick O’Shaughnessy dissects different investors and their approaches in a clear and thoughtful manner.

Worthwhile YouTube Channels

Shots of AweJason Silva is energetic, inspiring and exploring fields aimed towards “cognitive ecstasy” and other mindblowing concepts. These videos are usually just 2-3 minutes long and in them he explores anything from the spiritual to psychedelics (are they intertwined?) and too many other amazing topics to call out. I have gotten sucked into these videos for hours at a time and can’t recommend highly enough.

Big History Project – Started by Bill Gates and David Christian, this series of videos blends different fields in order to attempt to create one coherent timeline of our universe and how we as humans fit into it.

TED, TEDx, TED-Ed – TED (Technology, Education and Design) is an amazing platform aimed to “spread great ideas.” TEDx is the extension for independent organizers and TED-Ed is more focused on creating lessons. Fascinating talks from a vast range of people.

Crash Course – informational and animated videos which aim to simplify and give you a good overview over a variety of different topics

Talks at Google – A collection of authors, musicians and innovators of different fields who discuss their particular passions

Worthwhile Blogs

Tim Ferriss – Most likely doesn’t need an introduction but best-selling author of 4 Hour Work Week/Body/Chef and biohacker extraordinaire. His podcasts are worthwhile too as he interviews famous and successful people and tries to extract what motivates them and sets them apart.

Paul Graham – Paul, co-founder of Y-Combinator, has one of the most fascinating blogs out there – discussing venture capital, human nature, trends, biases and more

Kevin Simler – Kevin’s blog, Melting Asphalt, is incredibly well written and covers a huge spectrum of topics from social status to religion. He takes a different perspective on some relatively common topics and it is fascinating.

Tim UrbanWait but Why? seems like a labor of love. Tim’s older posts are a bit goofy but I have found all worth reading. If you’re ready to tackle what is essentially a book in blog format, the 4 piece article on Elon Musk is fantastic.

Seth Godin – Best selling author, marketer, entrepreneur and public speaker sends out a short, daily blurb with some food for thought. Always quick and worthwhile

Shane Parrish – Entrepreneur and author sends out a weekly newsletter with fascinating insight into books, articles and other interesting reads. I have unashamedly adopted many of Farnam Street’s layout and goals. Imitation is the highest form of respect.

Maria Popova – Author and overall wisdom seeker, Maria sends out a weekly newsletter which also compiles and analyzes a mind-blowing number of books and articles. Her analysis is always fresh and beautifully written.

Kevin Rose – Entrepreneur mostly known for the founding of Digg, Kevin’s The Journal does a great job of compiling interesting videos, articles, tech breakthroughs, apps and more

Intelligent Fanatics – compiling and synthesizing the major lessons from some of the most successful investors and operators, helping us “stand on the shoulders of giants”

Worthwhile Articles

What Comes is Where You’re Coming From in Your Inner Self – Brian Arthur

Want a Happier, More Fulfilling Life? 75-Year Harvard Study Says Focus on This 1 Thing

The Road to Self-Renewal – John Gardner

The Mundanity of Excellence – Daniel Chambliss

The Technology – Paul Buccheit

Driven by Compression Progress – Jurgen Schmidhuber

Principles (videos) – Ray Dalio

Teal Organizations – John Naisbitt

Rules to Live by for Infinite Learners – Reid Hoffman

Invisible Asymptotes – Eugene Wei

Compress to Impress – Eugene Wei

You and Your Research – Richard Hamming

I stop whatever I’m doing whenever Paul Graham, Kevin Simler, Tim Urban release a new post

 

On Machine Learning

I spent a couple months reading deliberately on Artificial Intelligence and Machine Learning and its many off-shoots and applications. After summarizing the books I read and wrangling with the concepts for some time, I have attempted to make a distilled “teacher’s reference guide” or cheat sheet which (hopefully) describes the key terms and ideas in a clear, concise and applicable manner.

*The vast majority of the content is from the books and other resources and not my own words. I’ve simply distilled, compiled, and added a few notes. This is clearly my amateur attempt which I’m sure has many points that experts would refute or disapprove of. Please reach out with any suggestions as I plan to iterate and improve this document over time.

Essays of Warren Buffett: Lessons for Corporate America by Lawrence Cunningham

Summary
  1. An organized compilation of Warren Buffett’s annual letters, broken down by concept. “By arranging these writings as thematic essays, this collection presents a synthesis of the overall business and investment philosophy intended for dissemination to a wide general audience.”
Key Takeaways
  1. Focus on the business with outstanding economic characteristics (favorable and durable moats) and management
  2. People are everything – partner with CEOs who will act well even if they could cheat, who act as if they’re the sole owner, as if it’s the only asset they hold, as if they can’t sell or merge for 100 years
  3. Performance should be the basis for executive pay decisions, as measured by profitability, after profits are reduced by a charge for the capital employed in the relevant business or earnings retained by. If stock options are used, it should be related to individual rather than corporate performance, and priced based on business value
  4. True risk is not volatility but permanent loss of capital
  5. Rather be approximately right than precisely wrong
  6. Put eggs in one basket and watch that basket
  7. Price is what you pay, value is what you get
  8. The 3 legs of the investing stool – Mr. Market, margin of safety, circle of competence
  9. Value investing is a redundancy – aim for focused or intelligent investing
  10. Deploying cash requires evaluating 4 commonsense questions based on information rather than rumor
    1. the probability of the event occurring
    2. The time the funds will be tied up
    3. The opportunity cost
    4. The downside if the event does not occur
  11. Guard against the institutional imperative – CEOs herd-like behavior, producing resistance to change, inertia, and blindness
  12. If you aren’t happy owning business when exchange is closed, you aren’t happy owning it when open
  13. Create the business and environment that attracts the people, management, shareholders that you want
  14. Useful financial statements must enable a user to answer 3 basic questions about a business
    1. Approximately how much a company is worth
    2. Its likely ability to meet its future obligations
    3. How good a job its managers are doing in operating the business
  15. Owner earnings –> cash flow = operating earnings + depreciation expense and other non-cash charges – required reinvestment in the business (average amount of capitalized expenditures for PPE that the business requires to fully maintain its long-term competitive position and its unit volume)
  16. Intrinsic value = the discounted value of the cash that can be taken out of a business during its remaining life
  17. Don’t risk what you have and need for what you don’t have and don’t need
  18. Beware weak accounting (EBITDA), unintelligible foot notes, those who trumpet projections
  19. Directors must be independent, business savvy, shareholder oriented, have a genuine interest in the business
  20. Really only 2 jobs – capital allocation, attract and keep outside management
  21. Choose a cold sink (weaker competition) than best management
  22. Conventionality often overpowers rationality
  23. Risk – we continually search for large business with understandable, enduring and mouth-watering economics that are run by able and shareholder-oriented managements
    1. The certainty with which the long-term economic characteristics of the business can be evaluated
    2. The certainty with which management can be evaluated, both as to its ability to realize the full potential of the business and to wisely employ its cash flows
    3. The certainty with which management can be counted on to channel the reward from the business to the shareholders rather than to itself
    4. The purchase price of the business
    5. The levels of taxation and inflation that will be experienced and that will determine the degree by which an investor’s purchasing-power return is reduced from his gross return
  24. When dumb money acknowledges its limitations, it ceases to be dumb
  25. Need to do very few things right if you avoid big mistakes
  26. Changing styles often is a recipe for disaster
  27. Worry most about management losing focus
  28. If you won’t own a business for 10 years, don’t own it for 10 minutes – materially higher earnings in 5-10 years is what you’re looking for
  29. Time is the friend of the wonderful business, the enemy of the mediocre
  30. Have not learned how to solve difficult business problems, but have learned to avoid them
  31. Never in a hurry – enjoy the process more than the proceeds
  32. “Expert error” – falling in love and acting on theory, not reality
  33. You don’t have to make it back the way you lost it
  34. In commodity-type businesses, it’s almost impossible to be a lot smarter than your dumbest competitor
  35. 4th Law of Motion – for investors as a whole, returns decrease as motion increases. a hyperactive market is the pickpocket of enterprise
  36. Attract proper inventors through clear, consistent communications of business philosophy
  37. It pays to be active, interested, and open-minded, never in a hurry
  38. Avoid small commitments – if something is not worth doing at all, it’s not worth doing well
  39. Deals often fail in practice but never in projections
  40. In a trade, what you give is as important as what you get
  41. The goal of each investor should be to create a portfolio (in effect, a “company”) that will deliver him other the highest possible look-through earnings a decade or so from now. An approach of this kind will force the investor to think about long-term business prospects rather than short-term market prospects, a perspective likely to improve results. It’s true, of course, that, in the long run, the scoreboard for investment decisions is market price. But prices will be determined by future earnings. In investing, just as in baseball, to put runs on the scoreboard one must watch the playing field, not the scoreboard
  42. The primary test of managerial economic performance is the achievement of a high ROE employed and not the achievement of consistent gains in earnings per share
  43. The difficulty lies not in the new ideas but in escaping the old ones.
  44. Ultimately, business experience, direct and vicarious, produced my present strong preference of businesses that possess large amounts of enduring Goodwill and that utilize a minimum of tangible assets.
  45. Nothing sedates rationality like large doses of effortless money
  46. Speculation most dangerous when it looks easiest
  47. Fear is the foe of the faddist but the friend of the fundamentalist
  48. Take into account exposure, not experience
  49. Noah Rule – predicting rain doesn’t count, building arks does
  50. Tolerance for huge losses is a major competitive advantage
  51. Berkshire’s next CEO – temperament is important, independent thinking, emotional stability, and a keen understanding of both human and institutional behavior is vital to long-term investing success.
What I got out of it
  1. An amazing collection of investing, finance, accounting, and management ideas

The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World by Pedro Domingos

Summary
  1. Opening the black box and truly understanding machine learning is deeply important as it impacts every aspect of our lives. This book provides a conceptual model for machine learning, the basic ideas which make up this field. The central thesis of this book is that all knowledge, past, present, and future, can be derived from data by a single universal algorithm – the master algorithm
Key Takeaways
  1. An algorithm is a series of instructions telling a computer what to do. No matter how complex, there are 3 options – and, or, not. Claude Shannon’s breakthrough thesis was that resistors use logic based on these options
  2. Machine learning algorithms can learn by making inferences from data and the more they have of it the better. It is a technology that builds itself and can build other artifacts, turning data into algorithms
  3. Algorithms are absolutely everywhere and are changing how we do business, make decisions, and even fall in love. It is all about accurate predictions and greatly expand this scope
  4. The master algorithm is the key to machine learning, unifying various different thoughts into one ultimate algorithm – a general learner. It may be the best start or path towards a theory of everything that we have
  5. Complexity is a huge battle each computer scientist must face as each algorithm is typically built on top of other algorithms. However, the learner algorithm can overcome this as it is fed the data and the desired result and spits out the algorithm that fits the situation. This type of technology is more like nature. Learning algorithms are the seed, data is the soil and the programs are the crops
  6. Machine learning can be thought of as the inverse of programming as you can feed the desired output and data and out comes the algorithm
  7. ML requires statistical rather than probabilistic thinking. 99% accuracy may be the best you can get. ML automates automation itself, otherwise programmers become the bottleneck
  8. Data is the name of the game and is why network effects are so powerful and why google and other platform type companies have tailwinds at the back.
  9. You need data commensurate with the complexity of the task at hand. The algorithm can only be as good as the data that goes into it so huge amounts of relevant data is the name of the game
  10. Data can be thought of as the new oil and there is huge money in refining it
  11. If something exists but the brain can’t learn it, it is the equivalent of not existing for us
  12. Overfitting is a big problem and occurs when data is stuffed in and patterns are thought to be there that really aren’t. One way to limit this is by rewarding simpler theories and algorithms
  13. Generalizing data for situations that haven’t been seen before is difficult. Accuracy on held out data is the gold standard for testing an algorithms accuracy
  14. The S-curve is the most important curve in the world
  15. The exploration vs exploitation trade off must be considered in life and in algorithms
  16. Nature and nurture work together seamlessly to help us survive – the program and the data
  17. Dimensionality is the second worst issue in machine learning
  18. Clustering – assignment of a set of subsets (clusters) so that observations within the same cluster are similar according to some predesignated criterion or criteria, while observations drawn from different clusters are dissimilar
  19. Law of affect – people move towards pleasure and away from pain
  20. Reinforcement learning – long term algorithms which are programmed to choose the move with the greatest value
  21. Power law of practice – chunking in action, best way to learn
  22. Causality – Being aware of your environment, how your actions impact it and adapting to best get what you want
  23. Relational learning – Best way to understand an entity is to see how it relates, fits in and acts with the entities around it. This way it is not an individualistic exercise, but a holistic, network-type view. Predator and have deeply intertwined characteristics. This may be one of the best ways to understand how the world works 
  24. A man is wealthy if he is richer than his wife’s sisters husband – HL Mencken
    1. Lateral networks
  25. They found that advertising to one of the most trusted reviewers of a product is as effective as advertising to a third of all possible customers 
  26. Some of the most important inventions or discoveries in history have been unifiers – things which took many separate processes can now be done in one. The internet and electricity are two examples of unifiers. The master algorithm is the unifier of ML. It let’s any application use any learner by abstracting the learner into a common form that is all the applications need to know. Out of many models, one
  27. All learners have representation, evaluation, and optimization processes 
  28. Like the brain, genetic search followed by gradient descent may be one of the best tactics. Evolution creates the structure and individual experience molds it to specific uses 
  29. As you interact with algorithms, understand what model of you you want it to have and what data you can give it in order to bring that model to fruition. In the future, everyone will have bots which take your preferences, wishes, desires, etc into account and will navigate the world around you and deal with other people’s and company’s bots to get you the best outcome. Therefore, having the most accurate digital representation of you is important and the company which can safely and securely develop this virtual data storage of people and know what to share, when, and with whom is bound to get incredibly wealthy 
  30. Technology is a phenotype of humans and will help us continue to expand our scope and capabilities
  31. Domingos paints a pretty rosy future where these algorithms help us achieve what we want and automate a lot of what we do today. There will be high unemployment but it won’t matter because the machines can produce what we need so cheaply that basic income is universal and only those who want to work will have to – necessarily in certain niches where computers aren’t as effective as humans
What I got out of it
  1. The master algorithm is a general learner algorithm and the more relevant data you have, the better. Great primer into ML, algorithms, and how they are and will continue to impact our lives

The Scientist in the Crib: What Early Learning Tells Us About the Mind by Alison Gopnik

Summary
  1. In this book we tell the story of the new science of children’s minds. Why? Understanding children has led us to understand ourselves in a new way. The new research shows that babies and young children know and learn more about the world than we could ever have imagined. They think, draw conclusions, make predictions, look for explanations, and even do experiments. Scientists and children belong together because they are the best learners in the universe. And that means that ordinary adults also have more powerful learning abilities than we might have thought. Grown-ups, after all, are all ex-children and potential scientists.
Key Takeaways
  1. The new developmental research tells us that Baby 0.0 must have some pretty special features. First, it must already have a great deal of knowledge about the world built into its original program. The experiments we will describe show that even newborns already know a great deal about people and objects and language. But more significant, babies and children have powerful learning mechanisms that allow them to spontaneously revise, reshape, and restructure their knowledge. This is, notoriously, the great weakness of existing computers. They are terrific at solving well-defined problems, they are not so hot at learning, and they are really awful at spontaneously changing how they learn. Finally, the babies have the universe’s best system of tech support: mothers. Grown-ups are themselves designed to behave in ways that will allow babies to learn. This support plays such a powerful role in the babies’ development, in fact, that it may make sense to think of it as part of the system itself. The human baby’s computational system is really a network, held together by language and love, instead of by optic fiber.
  2. Just as everything about our minds is caused by our brains, everything about our brains is ultimately caused by our evolutionary history. That means, though, that evolution can select learning strategies and cultural abilities just as it selects reflexes and instincts. For human beings, nurture is our nature. The capacity for culture is part of our biology, and the drive to learn is our most important and central instinct. The new developmental research suggests that our unique evolutionary trick, our central adaptation, our greatest weapon in the struggle for survival, is precisely our dazzling ability to learn when we are babies and to teach when we are grown-ups.
  3. We survive by being able to learn how to behave in almost any ecological niche, and by being able to construct our own niches.
  4. The advantage of learning is that it allows you to find out about your particular environment. The disadvantage is that until you do find out, you don’t know what to do; you’re helpless. We may have two evolutionary gifts: great abilities to learn about the world around us and a long protected period in which to deploy those abilities.
  5. For Piaget, learning was as natural as eating. This idea is the second element in the new developmental science. For Vygotsky, adults, quite unconsciously, adjusted their behavior to give children just the information they needed to solve the problems that were most important to them. Children used adults to discover the particularities of their culture and society. Just as Piaget saw that learning was innate, Vygotsky saw that culture was natural.
  6. Success in science is often a matter of finding the right analogies, and the computer gave us a new one. The Big Idea, the conceptual breakthrough of the last thirty years of psychology, is that the brain is a kind of computer. That’s the basis of the new field of cognitive science. Of course, we don’t know just what kind of computer the brain is. Certainly it’s very different from any of the actual computers we have now.
  7. The ancient problems of knowledge are all fascinating, but only the problem of Other Minds is gut-wrenching. We dedicate most of our waking life to deciphering the minds of others.
  8. There are three elements in nature’s solution to the problem of knowledge: innate knowledge, powerful learning abilities, and unconscious tuition from adults.
  9. It’s a myth that newborn babies can’t see, but babies are very nearsighted by adult standards, and unlike adults, they have difficulty changing their focus to suit both near and far objects. What this means is that objects about a foot away are in sharp focus and objects nearer or farther are blurred. Of course, that’s just the distance from a newborn’s face to the face of the person who is holding him or her. Babies seem designed to see the people who love them more clearly than anything else.
  10. Babies spontaneously coordinate their own expressions, gestures, and voices with the expressions, gestures, and voices of other people. Flirting is largely a matter of timing.
  11. One-year-old babies know that they will see something by looking where other people point; they know what they should do to something by watching what other people do; they know how they should feel about something by seeing how other people feel. The babies can use other people to figure out the world. In a very simple way, these one-year-olds are already participating in a culture. They already can take advantage of the discoveries of previous generations.
  12. The terrible twos seem to involve a systematic exploration of that idea, almost a kind of experimental research program. Toddlers are systematically testing the dimensions on which their desires and the desires of others may be in conflict. The grave look is directed at you because you and your reaction, rather than the lamp cord itself, are the really interesting thing. If the child is a budding psychologist, we parents are the laboratory rats. It may be some comfort to know that these toddlers don’t really want to drive us crazy, they just want to understand how we work.
  13. Just as it’s important to infer the nature of other people’s minds in order to survive, it’s also important to infer the nature of the physical world.
  14. We look for the underlying, hidden causes of events. We try to figure out the nature of things. It’s not just that we human beings can do this; we need to do it. We seem to have a kind of explanatory drive, like our drive for food or sex. When we’re presented with a puzzle, a mystery, a hint of a pattern, something that doesn’t quite make sense, we work until we find a solution.
  15. Babies are similarly fascinated by causal relations between objects. Babies in the ribbon-and-mobile experiments actually get bored after a while with the spectacle of the mobile moving, but they don’t get bored with the sensation of their own power.
  16. We used to think that babies learned words first and that words helped them sort out which sounds were critical to their language. But this research turned the argument around. Babies master the sounds of their language first, and that makes the words easier to learn.
  17. Why do we do it? Do we produce motherese simply to get the babies’ attention? (It certainly does that.) Do we do it just to convey affection and comfort? Or does motherese have a more focused purpose? It turns out that motherese is more than just a sweet siren song we use to draw our babies to us. Motherese seems to actually help babies solve the Language problem. Motherese sentences are shorter and simpler than sentences directed at adults. Moreover, grown-ups speaking to babies often repeat the same thing over and over with slight variations. (“You are a pretty girl, aren’t you? Aren’t you a pretty girl? Pretty, pretty girl.”) These characteristics of motherese may help children to figure out the words and grammar of their language.
  18. One odd and interesting thing we know about these machines is that all the big ones start out small. The little machines actually turn into the big ones. If we want to understand the basic mechanisms that make these devices tick, perhaps we should start out small, too.
  19. We’ll summarize this big picture by elaborating on the three ideas we’ve presented in previous chapters.
    1. Foundations. Babies begin by translating information from the world into rich, complex, abstract, coherent representations. Those representations allow babies to interpret their experience in particular ways and to make predictions about new events. Babies are born with powerful programs already booted up and ready to run.
    2. Learning. Their experiences lead babies and young children to enrich, modify, revise, reshape, reorganize, and sometimes replace their initial representations, and so to end up with other, quite different rich, complex, abstract, coherent representations. As children take in more input from the world, their rules for translating, manipulating, and rearranging that input also change. Rather than having a single program, they have a succession of progressively more powerful and accurate programs. Children themselves play an active role in this process by exploring and experimenting. Children reprogram themselves.
    3. Other people. Other people, especially the people who take care of children, naturally act in ways that promote and influence the changes in the children’s representations and rules. Mostly they do this quite unconsciously. Other people are programmed to help children reprogram themselves.
  20. The philosopher Otto Neurath compared knowledge to a boat we rebuild as we sail in it. To keep afloat during his thirty years of wandering, Ulysses had to constantly repair and rebuild the boat he lived in. Each new storm or calm meant an alteration in the design. By the end of the journey hardly anything remained of the original vessel. That is an apt metaphor for our view of cognitive development. We begin with many beliefs about the world, and those beliefs allow us to understand what’s going on around us and to act—they let us navigate our way around. But as we do, we get new information that makes us change our beliefs and therefore understand and act in new ways.
  21. It may seem to us that we make up theories of the world because we want explanations, just as it seems to us that we have sex because we want orgasms. From the evolutionary point of view, though, the relationship is the reverse. Orgasms guarantee that we will keep trying to have sex, and our joy in explanation guarantees that we will keep trying to construct better, truer theories of the world. Getting the world right, like having sex, gives us a long-term evolutionary advantage. Drives and emotions turn those long-term advantages into short-term motivations. Studying babies makes us realize that the biological computers on this planet differ from the man-made computers in this regard, as well. They don’t just compute, learn, reason, and know. They are driven to do all these things and are designed to take intense pleasure in doing so.
  22. Imitation is the motor for culture. By imitating what the particular adults around them do, young children learn how to behave in the particular social world—the particular family or community or culture—they find themselves in. They can draw a bow or dress a doll or even learn such bizarre cultural rituals as pulling a piece of toothed plastic through their hair every morning and rubbing a stiff brush against their teeth every night.
  23. The second important thing about the influence of other people is that the most significant behavior seems almost entirely unintentional. Parents don’t deliberately set out to imitate their babies or to speak motherese; it’s just what comes naturally. Our instinctive behaviors toward babies and babies’ instinctive behaviors toward us combine to enable the babies to learn as much as they do. The third important thing about the influence of other people is that it seems to work in concert with children’s own learning abilities. Newborns will imitate facial expressions, but only much older babies will imitate actions on objects, like touching their forehead to the box. Babies won’t imitate complex actions they don’t understand themselves.
  24. Two things emerge from all these studies. The adult brain is a highly specialized device that responds specifically to specific kinds of stimulation. Particular parts of the brain, even individual cells, are designed to respond to information from the outside world in particular ways, sending that information off to other parts of the brain. In that sense the brain is like a classical computer. The brain is also, however, a dynamic and active system. Its parts are constantly interacting with one another, and often many parts of the brain and certainly many, many cells are simultaneously involved in processing even a simple piece of information. Unlike most computers, the brain has no single place where all the decisions are made or where all the information is stored.
  25. Everything a baby sees, hears, tastes, touches, and smells influences the way the brain gets hooked up.
  26. This early research with animals established an important point—a brain can physically expand and contract and change depending on experience.
  27. One of the other surprises of recent studies on the brain’s plasticity is that social factors can dramatically alter how animals learn. As we saw, white-crowned sparrows can typically learn their species’ song from a tape recording between days twenty and fifty. However, this critical period seems less rigid in the right social context. The sparrows can learn after they are fifty days old if they are exposed to a live tutor, a real bird singing the song in front of them. Interacting with another bird helps the baby bird learn.
  28. Moreover, the representations that result from learning influence how the brain processes new experiences. Experience changes the brain, but then those very changes alter the way new experience affects the brain. The sequence of development seems very important: choosing one path early on may heavily influence which paths will be available later.
  29. One benefit of knowing the science is a kind of protective skepticism. It should make us deeply suspicious of any enterprise that offers a formula for making babies smarter or teaching them more, from flash cards to Mozart tapes to Better Baby Institutes. Everything we know about babies suggests that these artificial interventions are at best useless and at worst distractions from the normal interaction between grown-ups and babies. Babies are already as smart as they can be, they know what they need to know, and they are very effective and selective in getting the kinds of information they need. They are designed to learn about the real world that surrounds them, and they learn by playing with the things in that world, most of all by playing with the people who love them. Not the least advantage of knowing about science is that it immunizes us from pseudoscience.
  30. Children, in particular, have suffered a grievous decline in just the goods that are most important to them: adult time, energy, and company. The child-rearing work that men and women and an extended family did a hundred years ago, and that women did thirty years ago, has to be done somehow by someone. The scientific moral is not that we need experts to tell us what to do with our children. What we need are the time and space and opportunity to do what we would do anyway, and that’s just what we are losing. Grandparents and uncles and aunts have also disappeared from children’s lives just when they are most needed, and grandchildren and nieces and nephews have sadly disappeared from our lives. Perhaps we will construct institutions that allow people whose own children have grown up, or who don’t have children, to be involved with other people’s children.
  31. When we look attentively, carefully, and thoughtfully at the things around us, they invariably turn out to be more interesting, more orderly, more complex, more strange, and more wonderful than we would ever have imagined. That’s what happened when Kepler looked carefully at the stars, when Darwin looked at finches, when Marie Curie looked at pitchblende ore. And it’s also what happened when Jane Austen looked at a provincial village and Proust looked at a madeleine cookie, when Vermeer looked at a girl making lace and Juan Gris looked at a café table.
What I got out of it
  1. Babies are born knowing a great deal and nature has designed adults to teach babies, as much as it has designed babies to learn. Don’t be seduced by new technologies, adult time, energy, and company are probably the most effective approaches to teaching children

Junk to Gold: From Salvage to the World’s Largest Online Auto Auction by Willis Johnson

Summary
  1. This is a story of a man who believes in hard work and treating people right. Willis always says things like, “If you take care of the company, the company will take care of you,” and “Watch your pennies and your dollars will take care of themselves,” and “Don’t forget a lot of people are counting on us.” These values led to his desire to have no debt on his balance sheet, to go public on the NASDAQ Exchange, and to build a great company from the ground up.. “Barry, here’s the thing. I’m not just buying a can of soup for twenty-nine cents and selling it for forty-nine cents,” I explained. “I have ten different services that are growing all the time. Think of us like the local sewer system.” Well, that got his attention. “We’re a utility. Nothing can get rid of us—nothing. Two of the biggest businesses in the world are car manufacturers and insurance companies,” I went on. “If insurance companies don’t write insurance policies on cars, then they’re out of business. If manufacturers don’t make cars, then they’re out of business. They’re always gonna make cars, and they’re always gonna insure them. We’re the guy in between.” I looked him right in the eye and said, “As long as we’ve got the land in the right place to put the cars on, we can’t fail. We are like the septic tanks of the sewer system. You can’t have the system without us.” Barry told me later that after our meeting, he called his wife and told her he had just met the smartest man he’d ever met in business. I don’t know about that; I’d probably give my dad that title. But I do know that despite the fact Barry and I were so different and came from such different worlds, we still understood each other completely. Barry was slick, and I was unrefined. Barry was uptown; I was downtown. But he liked the way I approached business, and I liked his tenacity. We were gonna do business. And we were gonna make some money.”
Key Takeaways
  1. Embrace Adventure and Learn from Second Chances
  2. Don’t Feel Sorry for Yourself
  3. Know What You’re Paying For
  4. Be as Relentless as the Cows
  5. Everyone Is Created Equal, but They Aren’t Always Treated Equally
    1. While my dad taught me how to crunch numbers, build a business, and take chances, Mom played an important role in making me a leader. The most important lesson I learned from her was that no one was better than anyone else.
  6. Take Care of the Business, and the Business Will Take Care of You
    1. Both my dad and I also built reputations in the business world of always standing by our word and never doing business if a deal felt wrong. We both walked away from opportunities that may have helped our businesses but would have crossed a moral or ethical line. To us, the business world was black and white, and a deal you aren’t sure about isn’t really a deal at all. It never ceases to surprise me, though, when others cross that line without even a blink of an eye. I was raised to believe that cheating is the same whether you are taking ten cents or $10,000. And if you could do it once, there was a good chance you would do it again.
  7. Don’t Forget Where You Came From
    1. One of my favorite phrases is, “Sittin’ in high cotton.” It means everything is going well. The cotton’s high, which means the profits are too. But I’ve found you appreciate sittin’ in high cotton a lot more when you’ve had times you couldn’t even find the cotton. It’s those times that keep
  8. Find Something in Common to Unite Around
    1. It took me a long time to figure out what was really going on. That sergeant wasn’t all that concerned about the bed. He was just giving us something to unite around. That bed making brought us together. We all became buddies no matter where we had come from. It didn’t matter if we were jocks or hippies. It was us against that sergeant.
  9. Push through the Fear
    1. So the war taught me how to make the best decisions for the people around me, not just for myself. And the military taught me other lessons too. Having good leaders and a clear chain of command is important. And it taught me cleanliness and order. Keeping things lined up makes for efficiency.
  10. When Times Get Tough, Get Creative
    1. I also learned another important lesson that day. The reason we were able to make such a good deal was because we were the only guys who got dirty. We did our homework and knew exactly what we were buying. As a result, Dad was able to outbid the others, who didn’t know the true value of the yard or had underestimated what others knew about its value. It was also another example of why it’s important to take action and not procrastinate.
    2. All of us would take our lunch breaks in a room above the store. This was before stores commonly installed security cameras, so the room was also a great way to observe customers and catch them stealing. Boy, was that an eye opener. I found out just how dishonest people could really be sitting above that store. That little old lady that you never thought would steal was putting stuff in her purse when no one was looking, or the fat guy was putting pork ribs down his pants and walking out of the store. It made me really think of how theft can affect a business and how you can’t ignore it. Safeway also reinforced the need for order that was established earlier when I was in the army. The aisles had to be organized and clean for people to want to shop and so they could find what they were looking for. That meant paying attention to stock empty shelves, checking expiration dates, and holding specials for items that were overstocked.
  11. When You Make a Promise to Someone, Keep It
    1. Back home and back at the business I loved, I took all I had learned in the military and at Safeway and applied it to dismantling. I tripled the income at the yard by taking good care of customers and calling body shops and mechanics to tell them what inventory we had in stock.
    2. After Dad backed out of the promise he made me, I told myself I would never do that, even if it meant I would lose money. I never promised something to someone that I didn’t do, and I never made promises I couldn’t keep. My word is gold. You don’t have to get me to sign something for me to take my commitment seriously. That was a really good lesson to learn, even if there were better ways to learn it.
  12. You Need to Sacrifice to Build a Dream
  13. Ideas Can Come from Anywhere—Even John Wayne
    1. For those of you not in the business, a dismantling yard primarily deals in used auto parts and recycling scrap iron. I would buy cars—mostly the ones that weren’t drivable and had come to the end of their life—and pay thirty-five dollars to fifty dollars and then tow them to the yard. There, I’d pull all the parts off that I thought I could resell, drain the fluids out of the car (which is called “depolluting”), and then haul the shell to the smelter, where I’d get paid for the iron by the ton. If I had a motor that was cast iron, or any copper or aluminum, I got paid different rates for that as well. At first, when I didn’t have a lot of money, I relied on the scrap iron to make ends meet. As the business grew, I hoped to be able to buy better cars and build up the parts side of the business.
    2. Tammi says she and the other kids all learned how to work and about the value of work during that time. She also says I set a good example for them about how to work hard. But really, I was just doing what I had to do—working late nights and weekends to make the business work. I did make a point, however, of reserving Sundays for family.
    3. While I was building the company, that was our time because building a successful business means nothing if you don’t have your family or your faith.
    4. I did try to use the business to teach my kids some important lessons. Reba tells me I never expected anything from anyone that I wouldn’t do myself, and she’s right.
  14. The Sum of Parts Is Greater Than the Whole—at Least in Dismantling
    1. My dream to build up the parts side of the business was starting to come true. As I was able to buy better cars, Mather was able to stock more and better parts, including motors, transmissions, and rear ends. As this happened, the business relied less on scrap iron, which gradually went from the main revenue stream to a byproduct of the parts business. The better the cars I could buy, the better the parts, and the better the profits. We were also able to pay off all the money friends and family gave us to start the business.
      1. Virtuous cycles, leaping-emergent effects
    2. One other big boost was that I was the first in the industry to dismantle parts, not just cars. Typically, if someone came into a dismantling shop and asked for a 4.6 liter motor, the shop would pull the whole motor out of a wrecked car and sell the motor and everything hanging on it—including the alternator, starter, regulator, smog pumps, air breather, carburetor, and distributor. A fully dressed 318 Dodge engine with twenty-two thousand miles on it might have cost a customer about $400 back in the early ’70s and would have come with a warranty. But if the motor had been sitting for a while, the carburetor might be dried out—the water pump shot or other parts didn’t fit the car just right—meaning there was a good chance the dismantler would have to buy it back to honor the warranty. The customer might also already have a good alternator and not need another one. But they were forced to buy the whole package. That didn’t make sense to me. That’s why if the same customer went into Mather, he or she would find just the motor—steam cleaned and painted and looking brand-new. The additional parts would have been taken out as soon as the motor had arrived to the yard, restored, and sold separately so customers could buy only what they needed. I would sell them just the motor, undressed, for $275—a deal if that’s all they needed. Then I’d sell the other parts separately—the distributor for $50, the alternator for $25, the carburetor for $100. By the time I was done, I could get $700 for the same parts sold separately that were sold together by my competitor for $400. And the customer was happier. I also had fewer buy-backs because I didn’t have to guarantee all the parts on the motor. This caused my profit margins to far exceed that of my competitors.
      1. Making it easier for the customer, adding transparency/ease/velocity can have incredible returns
    3. Whatever made it look nice, we did. That way, when people walked in, it was like they were walking into a real retail store. It made it more personal. They could shop. I know that sounds crazy—shopping at a wrecking yard. But no matter what you are buying, you want it to be a good experience, and you want to find what you want easily. Up until then, people just thought of a wrecking yard as a bunch of wrecked cars in a field that you had to wander through to find what you wanted.
      1. Can use poor competition, low standards to stand out
    4. As I saw the effects Ray’s death had on his surviving wife and kids, it also made me think even harder about the real reason I wanted to be successful—so I could take care of my family.
    5. Even with the larger building to display parts, I knew that to really compete with other auto dismantlers in the Sacramento region, I would need to do something different. I just couldn’t realistically keep every make and model part stocked like the larger dismantlers with more money and space. But I knew of some dismantlers like Al Parker in Citrus Heights who was doing well specializing in only Rambler parts at a small two-acre yard. All the larger dismantlers sold their Rambler parts to him and sent Rambler customers his way because they preferred stocking only hot-selling items that had a high demand. Because Al was the only specialized Rambler dealer in the area, he could draw customers from a large geographical area.
      1. Don’t expect to get different results by doing the same things, you have to act differently
    6. I came back and told Curtis that if we were going to compete, we needed to specialize in a car the other dismantlers in town didn’t want to carry. At the time Chrysler, Dodge, and Plymouth were not cars dismantlers wanted to have because they weren’t hot-selling items. So we made a decision to specialize in Chrysler, Dodge, and Plymouth. All the other dismantlers thought I was crazy. But they were more than willing to sell us their Chrysler parts that weren’t moving and send business our way so they could continue to stock more-popular items. My friend and brother-in-law Mike James says I’m not afraid to break the mold and go where no one else has gone before. I guess I just don’t like people telling me I can’t do something. When people tell me, “Willis, you can’t do that,” it just pushes me to show them I can. It wasn’t that I thought I was better than anybody; I just always thought if you wanted something bad enough and worked hard enough for it, it would happen. And it did. Soon I was drawing on a large area of customers who needed Chrysler parts because other dismantlers didn’t have them. In any one area, there wasn’t a big demand for Chrysler parts, which is why most dismantlers didn’t want to carry them. But in the entire area including Sacramento, Stockton, Marysville, and Yuba City, there was a big demand. There were pockets of General Motors and Ford specialty yards but not Chrysler, so we were filling a need for a big area. It was also cheaper to stock Chrysler parts. At the time we were still partly in the scrap business, so we could buy all the junk Chrysler cars for thirty-five to forty dollars whereas we were paying seventy-five to one hundred dollars for General Motors junk cars. I could go to an auction and buy a wrecked Dodge Polara for twenty-five cents on a dollar compared to a Chevrolet. So I could buy parts cheaper, but the parts were just as valuable, especially since no one else carried them. Before we specialized, Curtis and I were running between $3,500 and $5,000 worth of parts a month at Mather. After specializing, we were running around $3,500 worth of parts a day.
      1. Specializing in a certain niche, even if seemingly unattractive on a standalone basis, can be very attractive when pooled and efficiencies are found – Willis found a 30x in a niche nobody wanted!
    7. Curtis remembers that other people thought I was crazy (or stupid—or maybe both) to spend so much money on a computer for a wrecking yard. But I was never afraid to spend money on technology if it could help us be more efficient. And it turned out that the whole industry would end up computerizing once they saw the benefits it gave people like me and Marv. As large and foreign as this machine seemed back then, it paid off because it gave me a complete picture of the business and the inventory, which in turn gave me more knowledge and control over the yard, which helped me make more money. For example, the computerized system could tell me in a few keystrokes not just how many of each type of make and model doors were in the yard but could also tell me how many right doors we had, how many left doors we had, and what color they all were. If we had a lot of side doors that were the same color, I would discount them to move the inventory. But if we had only one right green Volare door, for example, I could charge customers more because it was harder to find and I could justify the price, which they usually paid because it saved them time and money from having to paint it. This allowed us to move parts faster and maximize our profits. The computer also kept track of the hot-selling items. For example, after we computerized we learned that we sold a lot of right front fenders and left front doors—although I don’t know why. So I made sure we had those in stock. I also started dismantling the right front doors—which didn’t sell as frequently. That way, if a customer needed door glass or a door motor, which didn’t have to come from a specific side, I could sell them out of the doors that weren’t selling very often. This allowed us to still move these parts but not take away from other sales. The customers were happy because they didn’t have to pay for a whole door, and we were getting money for inventory that might have otherwise just sat there.
    8. I did other things that other dismantlers looked at me funny for too, although not for long. For example, all the wrecking yards around Sacramento had agreed to use the same size ad—a little tiny ad—in the yellow pages because it was really inexpensive. Well that didn’t make any sense to me, so I went and bought a half-page, color ad. Curtis jokes that all the other dismantlers were mad at me for a while because they had to do the same thing to compete. I went big—they went big. I wanted to take it to the next level, and the rest of the guys had to try to keep up.
    9. I’d also use the trip to mine other wrecking yards for ideas I could take home and implement at Mather. We’d suck in all their ideas, and they didn’t care if they told us because we weren’t direct competitors. So I would learn a lot about what they did that worked and what didn’t work, like how they were handling antifreeze and tires as environmental regulations weren’t yet developed. Their experiences helped make our company better.
    10. He taught me that you have to do your research and that if you don’t stay on top of reading about other people’s ideas, you never come up with ideas yourself. It’s good to learn from others.
    11. My sister Bonnie said she will never forget how excited Peter and I were. We were excited to buy a salvage auction and to be branching out from the wrecking business. It was a big step, one that would change my life forever. What made the U-Pull-It model unique was the high volume of cars it could turn around. I liken it to the Wal-Mart of dismantling. But it was also a little like the old days of Mather because there was a lot of scrap iron. To keep everything cheap and to be able to retain a high volume, U-Pull-It dealt mostly in end-of-life cars. It got its cars by running ads in the paper announcing, “We’ll buy your junk car.” How much we paid for that car depended on how far we had to tow it and how popular the parts on that make and model were. Popular makes and models would sit out for about thirty days while people pulled what they wanted from it. Less-popular cars would sit for sixty days. At the end of the allotted time, what was left was crushed, and fresh cars brought in with fresh parts. At $70 a ton you can get about $140 for a two-ton car. But if you can sell another $100 or $200 worth of parts out of it, you are doubling your money. Then you multiply that by one hundred cars a day, and that’s where the money comes in because it’s not about how good the parts are on it. If you have three hundred car doors that you would normally crush and you can sell some of them for $5 or $6 each, you’re that much further ahead. We could do this because the customers at a self-service yard like U-Pull-It were also different than customers at my other businesses. These were people who didn’t have a lot of money and were barely getting by. They needed to get their cars running as cheaply as possible to get to work the next day and oftentimes were fixing it themselves. By contrast, Mather dealt mostly with body shops and mechanics, people wanting late-model parts that were guaranteed and as perfect as possible. Most of the customers at U-Pull-It were driving cars just like the ones inside the gates. In some cases, customers would even sell their cars in exchange for one that was slightly better inside. They could buy a car there for $300, drive it until it barely worked, and bring it back a few months later and sell it for $50. Then they could buy another $300 one again. It was a cheap way to maintain transportation. U-Pull-It was also a popular stop for buyers from Mexico, who came with semitrucks and filled them with fenders, radiators, and other parts they would then take over the border and resell. We would give them a discount for buying more than $5,000 worth of parts. The model for U-Pull-It was simple. It didn’t matter what the condition of a part was; all parts of the same kind cost the same amount of money. That put the liability on the person buying it, not the person selling. It benefitted the customers to hunt for the best part they could because they were paying the same amount. In the end, U-Pull-It also had three revenue streams—the gate fee, the parts sales, and scrap iron. That was just three more reasons to like the business, as far as I was concerned. It also had another by-product of business. Because many of the cars were abandoned or forgotten, much of what was left inside had also been forgotten. We created a thrift store out of htese items – baby strollers, CD cases, clothing, and more. Our customers, always looking for a deal, loved the bargains,a nd it provided yet one more revenue stream to the mix.
    12. I was sittin’ in high cotton, running on all cylinders with the Mather Chrysler yard, the mini-truck yard, Today Radiator, Mather Auto Parts, and U-Pull-It. I had also decided to specialize yet again, opening up a foreign auto parts yard next to U-Pull-It under the now well-known Mather name. Foreign cars had become more popular, and I could ship in foreign parts from Taiwan for pennies on the dollar for Datsuns, Toyotas, and Fords. I also sold aftermarket sheet metal from the foreign parts yard. But I still wanted to increase business, especially at the specialized yards. I started a dismantling magazine so I could advertise and allowed all specialized yards in the Sacramento area to purchase full-page ads in it, which I then direct mailed to body shops, mechanics, and insurance companies. I didn’t start the magazine to make money but to be a tool that I, along with other specialized dismantlers, could use to get more business. At first, we just called the magazine Specialized Magazine, a boring name I didn’t care for. We needed to think of something better. Then I remembered from my days growing up on a farm how farmers would store their grain together in a co-op and how other businesses would form similar alliances for a mutual benefit. Since the magazine was a co-op of parts dealers using it for the mutual benefit of advertising, I decided to call it Copart instead.
    13. Instead of waiting for the DMV to find a better way, I went to them and proposed a solution. I would develop a way to create electronic forms and print them from a computer, thereby eliminating the need for the DMV to send out the books at all, saving them money and my business valuable time. I spent about $40,000 building the computerized system for the state of California. Now we could go to the computer and fill out all the paperwork needed and didn’t have to wait for books. It sped up the whole process and was an example of how it pays to fix something yourself instead of waiting for someone else to solve the problem for you.
    14. I got the inspiration to create new services within my companies from Disneyland. When I was younger and I went to Disneyland for the first time, Disneyland wasn’t just a theme park to me or a place to have fun. Disneyland to me was a model of how to build businesses within a business. I paid a fee just to get in the gate. And then when I went to a restaurant, I paid to eat and drink. Then I paid money at the gift shops. I paid for tickets to the rides. Everything I did was another business. I thought, Okay, I’ve got to find a business that has multiple revenue streams within it. Disneyland taught me about building other revenue streams. Every time you can add a revenue stream to the same pipeline, the profit margins change drastically. You are putting more through that pipe. That’s what I always tried to do in my businesses, and it is how we were successful.
    15. U-Pull-It grew up as my children also grew up. As each of them turned sixteen, I would find them a wrecked vehicle from one of the wrecking yards for them to fix up themselves and drive. The kids had to put up half the money—which Joyce and I would match.
    16. My work didn’t drain me; it energized me and drove me. Jay wanted to be like that.
    17. I’d tell him how much I liked a certain motor because it broke a lot. Jay didn’t understand that at first; why would a motor that broke all the time be so great? But I told him, “You’re never going to sell it if it doesn’t break. What are you going to do with a bunch of motors that never break?” It was a big learning curve.
  15. Be Your Customer’s Most Valuable Partner
    1. What if we could clean up those cars—take out the debris, vacuum them out, and make them look clean and new again (outside of the damage)? They would be more attractive to buyers and get more bids, driving the price higher, I thought. I knew I could get the insurance company more money if I cleaned these cars up, but I also knew I would have to charge the insurance companies for that service. That was a problem because insurance companies didn’t want to pay you to clean up a wrecked car. To them it was junk. I had to find another way. I proposed a deal to the Fireman’s Fund. Instead of charging fees, I would keep a percentage of the sale price for each car—20 percent on older, highly damaged cars; 10 percent on newer cars. That meant that the burned-out car I could only sell for twenty-five dollars would only get me five dollars. But I could more than make up for the losses on the badly damaged cars with the 10 percent I got off of the newer cars that could be more easily repaired—especially if we cleaned them up and drew top dollar. The Fireman’s Fund was thrilled because they no longer had upside-down cars and they were seeing their returns go up because the newer cars were getting more bids. And I was watching Copart’s profits go up with the returns. But maybe most importantly, PIP represented a significant shift in the industry. Now the salvage auction was a partner with the insurance company, with the goal of getting the best possible price for each car, eliminating any arguments over fees.
      1. Win/Win
    2. When you buy a business, you can inherit some great talent from that business. To let that talent go is bad business. I learned to really respect the people who came with the facilities we purchased, and many of them turned out to be great, long-term employees who really helped us grow and do well.
    3. Efficiency is what excites Jay. Looking at something and finding a better way to do it is his forte. And that’s something I not only valued but embraced. I’m not the kind of guy who says, “Look, kid, I’ve been doing this for twenty years, and I’m not interested in changing.” I never have a problem if someone tells me something is broken. I have always wanted to do things better and improve on the model.
  16. On Going Public
    1. I had never cared about the stock market. The stock page in the newspaper was as foreign to me as the sports page and about as useful. I hadn’t a clue about Wall Street. But when I heard that IAA was making big moves that could affect my business, I decided I should start to care. Marv sent me IAA’s prospectus, and I read it. Then I read it again. And again. I didn’t understand most of it at the time, but I did understand this: IAA had not been making the money I thought it should be to go public. They were in debt. Going public allowed them to raise a ton of money, and they didn’t even have to pay it back. On the other hand, we were making money, and we weren’t in debt. Even though I knew nothing about going public, I figured if they could do it, so could I. We had a better company.
    2. I know what I don’t know. I also think it’s a good idea to learn as much as you can.
    3. I went down to the library and tried to find a book to explain it all. When you don’t know what you’re looking for, it’s not easy to find it.
    4. Steve told me later that he admired my principles and the fact that failure wasn’t an option for me. But while I was driven, I was also willing to wait to do it the way I wanted, without cutting deals I shouldn’t or selling myself or the business short. John and Steve respected that, which I appreciated
    5. Sometimes people underestimated me because of the way I talked and because I looked more like an Okie farm boy than a polished city slicker. Those people usually lost out. It was a good way to weed out the jerks, though—the Wall Street types who would talk down to me, thinking I was less than them somehow. They didn’t know it, but as they were judging me, I was summing them up too—seeing if they were going to play honest or try to take advantage of me.
    6. I’ve been in business a long time, and if I don’t trust people from a conversation across a dinner table, I’m pretty sure I’m not going to trust them with my reputation or my money. And if I don’t trust them with my money, I’m sure not going to go making money for them. I told Barry, “They’re not good partners. I don’t want to deal with them.”
    7. We all met at a restaurant—which had become my favorite place for these things because deals just go better on a full stomach.
    8. I also knew Copart was mine again. At the time, I had three million shares, making me the biggest shareholder, with 40 percent ownership of the company. I could do one of two things—use my stock as currency to buy other companies or go back to Wall Street to raise more money. Now that Copart was public, raising more money would be easy.
    9. In the meantime, IAA was gobbling up facilities across the country as fast as they could. I knew from my dealings with Bob Spence that their plan was to acquire as many locations as they could and let the yards still run like they had been before they purchased them, even if that meant they ran on separate computer systems and used different business models. IAA figured they’d worry about converting them into one system later, when they had finished growing. My philosophy was much different. I felt Copart should grow slowly, acquiring strategic locations and then converting each one over to the Copart system and business model immediately. Jay had already become an expert at converting yards—taking the lead in changing things over in all the facilities I had acquired while getting ready to go public. I just didn’t want to grow to grow. I wanted to build a brand. I wanted anything with a Copart logo on it to run the same way—same computer system, same pricing, same way of treating our employees—so people started relating our name to a certain way of doing business. We spent time converting things over and converting employees over and teaching them our way of doing things because in many cases, the old way they were doing things hadn’t been working. That’s why they had to sell. That’s also why I think IAA’s approach to keeping newly acquired yards running the same way was wrong. They weren’t fixing what was broken in the first place.
    10. IAA was especially focused on big cities, so we looked at more rural areas. The good news about that is it is a lot cheaper and easier to run a yard in a rural area. There is also less competition. Copart’s board of directors didn’t agree with my approach. They wanted me to grow like IAA was growing—finding locations in big cities like Chicago. I decided what they didn’t know wouldn’t hurt them. I told the board I would look in Chicago, but then did what I wanted to do anyway.
      1. Doing things differently, courage to stand up for what you believe is right
  17. Look Beyond Balance Sheets
    1. IAA would show up wearing suits and riding in limos. I showed up wearing cowboy boots and driving a rental car. Some owners were wooed by the flash of IAA. Some were put off by it. For other owners, it came down to the bottom line—who would pay more? I had the advantage there. IAA bought companies the Wall Street way—based on pretax or after-tax earnings. I had my own method based on how many cars the auction sold and the value of the land. I knew what didn’t show up on the balance sheet of a private, family-owned company—that many of these business owners used a lot of their profits to buy personal cars or pay salaries and benefits to their family members. Many of the businesses were undervalued as a result. I paid a little more for these businesses, but I was also able to see their potential. With my operating systems and business model, I also knew we could increase profits almost instantly. The other philosophical difference between Copart and IAA was that IAA purchased the cars from the insurance companies while Copart charged fees to store, clean up, and sell the cars. The advantage of this was Copart could limit its liability and get a greater percent of earnings per investment, since they were putting out less cash. The downside was IAA could show more revenue on its books, which people on Wall Street saw as having more potential. I didn’t care though because I knew in the long run, it was about earnings. The bottom line is: what percentage are you making on your business? If we are pulling 30 to 40 percent to their 10 percent, we are a stronger company.
  18. Consistency Is the Key
  19. Look for Leaders Everywhere
    1. Loyalty was a trait I valued. Whenever I shake the hand or meet somebody, I really size them up. After that first meeting with Vinnie, I thought, If he’ll stay with the company, he’s going to be a big leader here. Vinnie told me that his impression of me on that first meeting was that of a simple, easygoing guy with a clear vision and who was quick to react. I was a guy who had a lot to get done in a hurry, and Vinnie knew that. In that, we found a common bond.
  20. Admit Your Mistakes
    1. It was just a bad idea, so we went back to the original model. But the good thing about Copart is even though sometimes we have bad ideas, we learn from them and correct them. That’s the advice I also passed on to Jay and Vinnie: Any time you make a mistake or bad news comes and you’re really upset about it, remember there’s a lesson in it. Just chalk it up as a lesson, and don’t let it happen again. When you lose a customer because you bid wrong, don’t get mad at the customer. Ask yourself, “What did we do wrong to not get that contract?” Just like with buying cars—it didn’t work, so we learned that lesson and moved forward.
    2. Even great entrepreneurs make mistakes, but they only make them once because they learn from them. Willis was never afraid to take a risk, but when it didn’t work, it was time to course correct. Making sure you learn from past mistakes was one of the best lessons I learned from Willis over the years.
  21. Keep Your Growth Sustainable
    1. Jim Grosfeld, who was on Copart’s board, gave me some sage advice: “Willis, Wall Street doesn’t care about ups and downs. They hate that. What they like is consistency. If you just make that earnings line just move up a little bit every quarter, every year, you’ll get paid a really good high multiple because then they can figure your company out.” From then on, I concentrated on steady growth, and when I thought about buying another location, I didn’t try to buy it just because I wanted to grow the company. I bought it because it was a good fit and was in a strategic area that helped fill in our network. I learned an important lesson, and that was not to grow too fast. You have to grow slow and steady, or Wall Street will make you pay for it. They always compare you to what you did last time. If you exceed what you did last time, you’re successful; if you come in under what you did last year, they don’t like you.
    2. At one point, I asked David when it would be done. We needed it now, and I wasn’t good at waiting. When David told me it would probably take another eight to ten months, I wasn’t happy. “Well, put more programmers on it—then we’ll get it done faster,” I told him. “Willis, I’m going to give you a lesson in life right now,” David replied. “One woman can have a baby in nine months. But nine women can’t have a baby in one month. The time doesn’t change. That’s the way it is.” CAS (Copart Auction Systems) ended up taking a year to build at a cost of $3 million—huge money at the time. Now he could see how many cars we picked up that day, how many cars we sold that day. It helped us manage our business better and bring it all together.
      1. Irreducible minimums are important to identify and understand
  22. Embrace New Ideas
    1. Jay talked to buyers himself about online bidding, trying to educate them about the new web-based technology. At this time, online bidding had descriptions of cars for sale but no pictures. All the buyers told Jay it was a dumb idea; no one would bid on a car they didn’t look at first, they said. Jay told them, “I’m not asking you to not see the car. I’m asking you to come look at the car the day before the sale, and for thirty-five dollars you can submit a bid on our website and not have to stand in the auction all day or pay a contract buyer one hundred and fifty dollars to stand there for you.”
      1. Removing frictions, making it easier for the customer to do business
    2. Something else amazing with online bidding was happening too. One day, Jay saw a car in San Diego sell to a buyer in Connecticut. We had never imagined cross-state bidding, let alone cross-country bidding. Jay had David call up the buyer and find out how he was bidding on vehicles he was too far away from to come look at prior to the sale. The buyer told him he knew what he was doing, but it would be helpful if Copart put pictures of the cars online too.
  23. Fill in the Gaps
    1. Copart was still physically growing too. Now that the systems were in place, I had a goal of adding six to ten yards per year in strategic locations between existing yards to not only grow the network but also to shorten tow times and cycle times, which is the time between getting a car into a yard and having it be sold and picked up. Every time we added a dot on the map, we saved towing. This was especially important because at the time, about 70 percent of our customers were using the PIP program and we were eating the cost of long tows. Any time we saw our towing costs were too high, we’d try to put a yard between locations to improve our bottom line. If we can tow a car 50 miles instead of 150 miles, that’s money in the bank. The new yards would also free up space in nearby existing facilities, which in turn could take in more cars.
    2. It was all about making the company stronger, without any debt, and having more cash in the bank. We wanted to take care of our employees, the insurance companies, and our buyers.
      1. Stakeholder win/win mindset
  24. Make Doing Business Easy
    1. As the temperatures continued to drop, so did the number of buyers who braved the cold. With fewer buyers, returns also dropped. So I had an idea: Why not bring the buyers inside, into a nice, warm building, and show them the cars on television monitors? People would no longer have to follow around auction trucks in the cold. That’s when EVA (electronic viewing auction) was born. We brought the auctioneers inside and displayed pictures of the cars on one screen and the make, model, and other information about the car on another screen so no one had to go outside anymore. Buyers loved the idea, but to make it work, it required a lot of building. We had to build an auction booth inside the building, get chairs and coat racks, and buy donuts. We had to do more interior things than we ever had before, including wiring these televisions up on stands. It took a big capital investment to get people inside, but they loved it. While about 40 percent of people were bidding online, there were still a lot of people coming to the sale at this time.
  25. Never Stop Improving on an Idea
    1. Internet buyers still wanted more. They wanted a way to increase their bids on the day of the sale too. Jay figured if there was a way people could bid online during the sale, we would get even higher returns.
    2. I learned that from the military. You don’t leave anyone behind.
      1. As a leader, you also have to be on the frontline, facing danger head on; officers have to eat last; group size should be small and manageable (Dunbar’s number)
    3. We had also seen on the news that commercial planes all over were being grounded—not because the government was grounding them but because no one wanted to fly. On the other hand, car rental companies were booming. You could hardly find a car that wasn’t already rented. I told Jay people weren’t going to fly as much after this. Instead, they were going to drive. If that was the case, they were going to wreck more cars. That meant our business was due to grow again.
      1. Willis understood the whole system, and secondary effects
    4. I talked to one of the guys at Salomon Smith Barney and asked if he thought us doing an offering would be OK even though it had only been three weeks since 9/11. I also told him why I thought this was a good time to grow. He told me no one was doing offerings at this time. Wall Street had pretty much shut down since 9/11, and although there were people who wanted to invest and there was money out there, everything had pretty much come to a screeching halt. This made me think, Well, if there’s a lot of money out there and we have a good story to tell, this may be the perfect time to do an offering.
      1. Greedy when others are fearful
    5. We went out on the road show, which we were used to from our first two offerings. Usually you go from one investment company to another, and you only have thirty minutes at each one because their calendar is full. You have twenty-five minutes to tell them about the company and another five minutes to talk numbers, and maybe, if you are lucky, five minutes of questions. Usually there are also only two bankers in the room to make orders because they are so busy. That wasn’t the case this time. In fact, it was totally the opposite. We’d go into a conference room with fifteen investors, and they wanted us to stay because they had no one else coming in—nothing else to do.
      1. Find opportunities for contrast
  26. Ask Yourself, “What’s My Job?”
    1. Because it was easier for buyers to participate and they could do it from anywhere, more buyers bid on each car. The Internet auction also retained the same excitement as live bidding, which kept the competitive atmosphere alive. With more competition, returns went up. In fact, the sale had the highest returns of the entire year. It went over like gangbusters.
    2. It was time to make a major business decision. That decision wasn’t whether we were going to roll out VB2 to all the yards—that decision was obvious, even to the auctioneers who would lose their jobs. So we had to figure out what our job was. We literally sat in a room and wrote the words, “What is our job?” on a board. We decided our job was to help buyers purchase cars easier so we could get the most money for the sellers. That was our job—to get the insurance company more money. That superseded anything else.
    3. I didn’t see it from a seller’s perspective, though. I didn’t expect returns to go up. I wasn’t thinking that by making it easier, more buyers would use it—and that buyers from all over the world would be able to use it. With all those buyers competing over the cars, it was a natural result that the returns would go up. That was the kicker for me.
      1. “Good” decisions are those which have unintended, positive knock-on effects
    4. It goes to show you that any company today has to pay attention to technology and how the world is changing and incorporate that if it wants to survive. You can’t do things the same way and expect to be around in ten years. The world moves too quickly. The moment you snooze, you lose.
    5. Our philosophy is always to be on the bleeding edge and to never let those young kids come up behind us and do what they’ve done to so many industries. We need to hire those kids instead so we can stay ahead of the curve on all the new technology.
  27. Don’t Lose What Makes You Special
    1. It was 2002 when Jay realized something bad had happened to Copart: no one knew anyone anymore. We had gotten so big we didn’t have that mom-and-pop feel anymore. This was especially evident when Jay called up a yard to talk to a general manager one day, and was surprised to find out no one knew who he was. “Jay Adair? I don’t think I know you. Do you work at Copart?” asked the employee who had answered the phone. Copart had become a much different kind of company than when Jay first started working there in 1989. It was big. It was financially secure. It had revolutionary technology. But the vision and spirit we had built the company on was no longer reaching its employees. The employees, as a result, did not act as a team or feel like they were working together. That in turn negatively impacted the company’s progress and its relationship with its customers. So Jay decided Copart needed a revolution. It needed to get back to its roots.
    2. Another catalyst for Jay’s decision to have a revolution was when Copart disbanded its fleet of tow trucks and began to contract with drivers instead. This improved efficiency and cut transportation and insurance costs. But the decision—which meant laying off hundreds of drivers—also hurt morale.
    3. About 75 percent of our workers’ comp costs were for truck drivers. Seventy-five percent of our liability claims were because trucks were driving over mailboxes or knocking down gates. When we added it all up, it was ridiculous. It’s crazy we never thought of it before. After testing it out further, the company decided to get out of trucks altogether. But they needed to find a way to do it that would be fair to the hundreds of drivers who would no longer be on the payroll. Gerry Waters took the lead in an effort to sell all of Copart’s carriers to each driver at a discount. He put together a packet of information for all the drivers that outlined how to start their own businesses, including everything from getting a business license and insurance to lists of lenders that had already been identified as willing to finance their new venture. Copart also promised to favor the new entrepreneurs when choosing subhaulers in the future. Whatever the other local guy towed for, Copart offered to pay more if the driver used to be an employee. Only about 20 percent of the drivers took the deal, with the 80 percent choosing not to take the risk of running their own businesses. Copart found that owner-operated tow trucks worked harder. Each tow represented more money for their business, while regular employees got paid the same no matter how many tows they did in a day. All of a sudden we had people doing more loads in the same amount of time for us—because they were hustling more. They were doing three loads a day instead of two. And they were working earlier and later instead of just punching a clock because it meant more money for them. They were in control of their paycheck. As Copart progressed, the subhaul program progressed with it. Copart began offering incentives for tow companies, like discounts on cell phones and insurance, to sweeten the pot and attract the best companies. It again goes back to the lesson that when something bad happens, like the union problem in Michigan, you don’t need to panic or get mad; you just need to step back and find a new way. And more times than not, that bad thing that happened will turn into a good thing if you listen to the lessons it is teaching you.
    4. There were more lessons. Copart didn’t just learn that it could operate better without its own fleet of trucks; it also learned it needed to change the way it interacted with employees. We learned it wasn’t just enough to treat your employees nice, give them good benefits, and hope they got it. That wasn’t enough to keep the unions out. We treated the employee nice, gave them as many benefits as we could, and treated them like we didn’t want them to leave—because we didn’t. But we didn’t tell them we loved them; we didn’t show them how much they meant to the company. That’s where we had fallen short. This was another reason Jay wanted a cultural revolution at Copart. We had been a nuts-and-bolts company where as long as you got the work done, it didn’t matter if you had fun doing your job or liked the people you worked with or even knew why you were doing what you did. That made us into a place that on some levels really wasn’t a great place to work because it didn’t matter if people would rather work around you than with you. That needed to change. Jay told managers at a conference in 2002 that from then on Copart was going to be a company that didn’t just hire on skill sets or IQ (intelligent quotient); it was going to hire based on attitude—EQ (emotional quotient). We were going to be a company in which people liked their coworkers and had fun at what they did. If that happened, we knew they would probably be more efficient and productive and capable of delivering legendary service. If employees are happy, that translates directly to how we treat our customers and how we can move forward as a company.
    5. Becoming a big, public company, we decided, didn’t mean we had to sacrifice having a culture where people worked hard, had fun, and were rewarded for it. Jay remembered how in the early days he was given the freedom to disagree with me and share his ideas, which helped him grow. He wanted all employees at Copart to have that same opportunity. You should be respectful of your boss but not fear your boss or be afraid to disagree with him or her. If you have the ability to speak your mind, the company benefits too because that’s when great ideas are born. We also wanted to communicate to employees that the most important thing at Copart was keeping a clear moral direction. So many people separate different aspects of life by saying “this is life” and “this is business” and give them different sets of rules. But we look at business and life and family as all intermixing. If you are happy at home, you’re happier at work and vice versa. If you do well at work, you can provide more for your family. Jay also wanted everyone at Copart to treat each other like friends and family. Take care of the company, and we’ll take care of you. Take care of customers like you want to be taken care of
  28. Have a Clear Mission, Vision, and values
    1. To communicate some of these lost ideals and vision, Copart developed a mission, vision, and values statement to guide its business principles and employees. Its mission was to streamline and simplify the auction process; its vision was to continually offer compelling, innovative, and unique products and services to propel the marketplace forward. And the first letter of each of its values spelled out the Copart name itself—committed, ownership, profitability, adaptable, relationships, and trust. But it wasn’t enough to just hang these on the wall. The mission, vision, and values also became a key element in Copart’s training and culture. The CIC—Copart identity campaign—was also launched and introduced initiatives designed to build morale, teamwork, and customer service standards. The campaign included company-wide initiatives, such as the twenty-four-hour rule in which employees must follow up with customers within one day. A weekly cheer was also introduced to bring employees together and build company pride, and employees were also encouraged to wear the company color – blue – one day a week.
    2. I also formed the Copart Private Foundation—a scholarship fund created directly from private contributions made by me and other executives. The foundation was set up to help Copart employees’ children with the costs of college and books. No one who has applied for the scholarship has been turned down. My military background and strong love for my country also prompted me to start a program at Copart that paid 50 percent salary to any employee deployed to an active US military campaign. Positions are also held for six months for those who are deployed. This policy earned Copart national recognition from the Employer Support of the Guard and Reserve (ESGR)
    3. Despite these improvements, Jay was still concerned that the senior management of Copart was still too far removed from the people working in the yards, as was demonstrated when the woman who answered the phone didn’t know who he was. As he was talking to a business associate one day, he thought out loud about how great it would be if he could meet every employee personally and travel to all of Copart’s yards, which numbered more than 110 at that time. His associate laughed at him and commented he would never be able to do it. Was he crazy? That was all the challenge Jay needed to prove him wrong. Jay promised all the employees he would come meet them personally at their yard over the next year. The world tour was born. Jay didn’t know what he was getting into, though. The world tour took on a life of its own, and the spirit and excitement that had been lost over the years returned as employees tried to outdo one another by staging stunts, games, and skits for Jay and other executives when they visited. During the 2005 tour, Jay found himself riding a donkey, being arrested, getting dunked in a dunk tank, and dressing up as Elvis. It was an opportunity for employees to turn the tables on executives and put them on the spot—and as a result, the executives became more like ordinary people in their eyes. More importantly, the world tour also had a powerful message. Jay talked to each yard about where the company had been and where it was going. He told them how Copart’s change-centric culture had made Copart a leader in the industry and how the company would keep embracing change and finding better ways to do things. He explained Copart needed to provide not just good service but legendary service—service that left customers saying, “Wow, how did they do that?” and telling others about the experience. He shared the strength of the company’s future with employees and talked about how the salvage industry was recession proof because people would always be wrecking cars. The world tour really brought the company together. We got to know our employees better, and they got to know us. We got back that mom-and-pop feel we had lost.
    4. Helping out in the Katrina disaster – Through the ordeal, Copart did not pass any of its added costs on to its customers. Copart chose to absorb the costs for a couple of reasons—first, because it was the right thing to do. Copart emerged as an important ally in the clean-up and recovery efforts, with many government agencies asking for and receiving Copart’s help. One of Copart’s first priorities after the storm was picking up vehicles at Kessler Air Force Base in Biloxi, Mississippi, so rescue operations could be made to New Orleans. Copart also absorbed the costs because it wanted to prove to its customers it was not just a vendor but a business partner they could rely on even at the worst possible time.
    5. Finally, I decided to get a second opinion. I called Richard Reese, the CEO of Iron Mountain, who already had operations in the UK. I had met Richard at a CEO group I attended and had asked him for his advice before. “Richard, what’s the most important thing I need to do in England?” I asked. Richard’s advice was quick and direct. “You need to introduce your company’s culture there.” Richard went on to explain that in the UK, business was very hierarchical, meaning managers didn’t like to talk to people many levels below them. “That’s not the way your company or my company works, Willis,” Richard told him. “We need to have that communication between management and the employees—that idea flow—for things to work well.”
  29. Other
    1. Her gut [his wife’s] was always right. She really helped me make good decisions. Joyce always told me she liked to hear about my ideas and see me excited about the next big thing I had planned. There was nothing she felt I couldn’t do, she told me. That’s a pretty amazing thing—when you have someone on your side who feels that way. She knew how much I loved Copart and loved taking it to different places and trying new things. Neither of us really knew if I could ever give that up.
    2. I have only one regret—that I now spend more time with my grandchildren than I was able to spend with my children while they were growing up. I was too busy growing the business to enjoy them as much as I would have liked.
    3. One thing I’ve taught all the executives in the company is that while you may be good in our business, that doesn’t mean you are good in any other business. Don’t get a big head and think you know it all, because that’s when you’ll lose. You’re really good in the car business. You’re really good in the recycling business. You’re not necessarily good in everything else, and you need to understand that. Stay with what you are good at, venture out if you see an opportunity, but pull your horns in if you make a mistake.
    4. Willis didn’t come home at seven at night with his shoulders down like he had just put in another day at the salt mine. His work didn’t drain him; it drove him. I wanted to be like that.
    5. Willis used to say if you get big enough, you can make an industry behave in a particular way.
What I got out of it
  1. Humility, common sense, work ethic, admitting mistakes, being in the thick of it on a daily basis, surrounding yourself with great people and doing the right thing are all key attributes of leaders, as Willis amazingly demonstrates