Founders - #26 My Life and Work: The Autobiography of Henry Ford

Episode Date: May 2, 2018

What I learned from My Life and Work: The Autobiography of Henry Ford.---A theory of business (0:01)If an old idea works then the weight of the evidence is all in its favor. The Lindy Effect. (7:30)All people are not equal (11:00) "That is why I never employ an expert in full bloom" (15:00), "I quit my job on August 15th, 1899 and went into the automobile business" (19:30)Henry Ford's philosophy on constant change (25:00)Henry Ford's 3 conclusions about business (26:00)Traits of a prosperous business (29:45)I cannot discover that anyone knows enough about anything on this earth definitely to say what is and what is not possible. .We get some of our best results from letting fools rush in where angels fear to tread. (34:00)Fix the problem. Do not think money will be the solution. (40:00)Overcome fear. Be free. (44:00)Fuck your feelings (52:30)Henry Ford's 4 principles of business (56:00) ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

Power and machinery, money and goods, are useful only as they set us free to live. They are but a means to an end. For instance, I do not consider the machines which bear my name simply as machines. If that was all there was to it, I would do something else. I take them as concrete evidence of the working out of a theory of business, which I hope is something more than a theory of business, a theory that looks toward making this world a better place in which to live. The fact that the commercial success of the Ford Motor Company has been most unusual is

important only because it serves to demonstrate in a way which no one can fail to understand that the theory to date is right. Considered solely in this light, I can criticize the prevailing system of industry and the organization of money in society from the standpoint of one who has not been beaten by them. As things are now organized, I could, were I thinking only selfishly, ask for no change. If I merely want money, the present system is all right it gives money in plenty to me but I am thinking of service the present system does not permit of the best service because it encourages every kind of waste it keeps

many men from getting the full return from service and it is going nowhere it is all a matter of better planning and adjustment. So that's from the introduction of the book that I want to talk to you about today, which is obviously the autobiography of Henry Ford. It's called My Life and Work. And it's just an amazing little book. It's out of copyright now, so you can pick one up for like five or six bucks on Amazon if you want the paperback version. And it's a really quick read. It's about 136 pages. No fluff, no bull crap. So in that paragraph, Henry Ford is touching on two main themes, I would say, that are present throughout the book.

And one is the act of service, which is extremely important to him. And the second is frugality and frugality as an anecdote to waste. Let's go ahead and jump into this book. I've talked about it previously that I really like reading about the personalities and the misfits that are great founders and entrepreneurs all up and down history. But even more than that, I love reading autobiographies. So some of my favorite books that I've read is just, I feel when a founder is writing an autobiography as opposed to somebody

writing a book on them, they just, they don't waste any time and they get right to the point. So this is a, there's not like a cohesive story here. He's just telling his ideas on business, which is why I think it's a no brainer. If you're interested in founding a company or building anything or starting anything that you should read it. It's very plain language, very fast, and a lot of the stuff I'm going to share to you today are just like basically, I would consider them almost aphorisms because usually they're a paragraph or two at most. And what I love about the book is you definitely get a good feel of not only his theory of business, which he makes explicit, but his philosophy on life. So here's some of his ideas on ideas.

Well, I'll just read it. I have no quarrel with the general attitude of scoffing at new ideas. It is better to be skeptical of all new ideas and to assist upon being shown rather than to just rush around in a continuous brainstorm after every new idea. Skepticism, if by that we mean cautiousness, is the balance wheel of civilization. Most of the present acute troubles of the world arise out of taking on new ideas without first carefully investigating to discover if they are good ideas. An idea is not necessarily good because it is old or necessarily bad because it is new. But if an old idea works, then the weight of the evidence is all in its favor. He's kind of talking about the Lindy effect, but he's talking about it a

hundred years before it's written about. Ideas are of themselves extraordinary valuable, but an idea is just an idea. Almost anyone can think up an idea. The thing that counts is developing it into a practical product. On the very next page, this is, I would say, he talks about the nature of work and how he feels it's, well, the natural thing to do is work, is the direct quote. And he's not a very big fan of idleness or leisure. Now, he does believe in the freedom of your ability to choose one,

but he makes the distinction throughout the book that a man of leisure should not be upset if he doesn't get the same results out of life as a man of work. So let's just read this one paragraph on the natural thing to do is work. The natural thing to do is work. To recognize that prosperity and happiness can be obtained only through honest effort. Human ills flow largely from attempting to escape from this natural course. I have no suggestion which goes beyond accepting in its fullest this principle of nature. I take it for granted that we must work. All that we have done comes as a result of a certain insistence that since we must work, it is better to work intelligently and four-handedly, that the better we do our work, the better off we shall be.

And we're still in the introduction here, so he's just kind of laying out the way he looks at life. This is something that is really interesting to me, because keep in mind, this book was written in I think 1920 or thereabouts um so it's almost 100 years old and something the reason I love reading these books uh that you know most of the books that we cover here are not they're not new releases these are books that have been around for a long time in this case maybe 100 years sometimes 20 years but what I love about uh what I'm, you know, I'm reading more and studying more, I think, than I ever have

in my life, even when I was back in college, just because, you know, reading, I've been reading about three of these a month and then having to take notes, you really, even though I know this to be true, I'm really astonished how much human nature doesn't change and how we kind of people throughout the entire in the past have a very similar problems to the ones we do today and they react in a very similar way so something about this that that shows up throughout the book too um it's interesting because we were having i feel culturally we're having a discussion now and it's and he takes what i would consider uh maybe an unpopular but true opinion in my opinion and uh it's that all people are not created equal so let me uh let

let's hear him describe what he means by that there can be no greater absurdity and no greater disservice to humanity in general than to insist that all men are equal most certainly all men are There's that service word again. The men of larger ability are less numerous than the men of smaller ability. It is possible for a mass of the smaller men to pull the larger ones down, but in doing so, they pull themselves down. It is the larger men who give leadership to the community and enable the smaller men to live with less effort. So what I mean is why I think that might be maybe unpopular or political. I even hate using the word, but like politically incorrect now, even though I agree with that statement, is this idea that like the equality of outcome,

where I don't believe in the equality of outcome. I believe in the equality of opportunity. But the idea that everybody should wind up in the same place is it's just silly and um i think he's really picking up that there there's never been a time in history nor there is there any evidence in human nature that that men are equal um and like he's saying there's some people that are going to be more talented and have greater ability and those people are going to be a lot smaller percentage of the population than the people that don't he goes through this uh and i'm not going to cover on the podcast but there he made some um changes to like things

that even affect us now like the eight day uh he like kind of made the uh the amount of hours more uniform he increased wages did all these other things and he talks about how there's just he was deploying tens of thousands of people this time but how even if you were to offer the vast majority of people more money, and in exchange for more money they have to take on more responsibility, they won't do it. I think it kind of speaks to how he arrives at this conclusion. Not only did he get to where he was through tinkering and through having ideas and following through and working on them,

but he was comfortable taking on more responsibility where when he'd offer that same opportunity to thousands of other men at the time, they would decline. So I don't know, I like this idea. It's something that even though if it's uncomfortable for people to speak about, which I don't think it really should be, I think it's, you know, we're doing a disservice

when we're lying to our kids or telling this lying society that everybody's equal um that doesn't mean like they should be treated differently it's just you need to let people again this entire podcast is on misfits rebels uh juvenile delinquents these people do not fit into society and i would argue that society is a lot better because they don't fit in because you see what they do henry ford if you know the story of Henry Ford, it's likely very common to working day and night at an electricity plant, then coming home and working on your gasoline-powered motor for five years, and then going through multiple iterations of forming a company just so you

can sell what we call cars, he's calling machines. It's not a normal person at all. So I don't know, just a random thought. so he's got a lot of ideas in here that really resonate with me um so this part is called never employ an expert but he's also talking about well you'll see here a few years before it was while i was an apprentice i read in the world of science an english publication of the silent gas engine which was coming out in England. I think it was the auto engine. It ran with illuminating gas, had a single large cylinder, and the power impulses, being thus intermittent, required an extremely heavy flywheel. As far as weight was concerned, it gave nothing like the power per pound of metal that a steam engine gave, and the use of

illuminating gas seems to dismiss it as even a possibility for road use it was interesting to me only as all machinery was interesting i followed in the english and american magazines which we got in the shop the development of the engine and most particularly the hints of the possible replacement of the illuminated gas fuel by a gas formed by the vaporization of gasoline. So that part is really confusing, but it was important to include because we're going to see how he thinks and the conclusion he arrives at.

The idea of gas engines was by no means new, but this was the first time that a really serious effort had been made to put them on the market. They were received with interest rather than enthusiasm. And I do not recall anyone who thought that the internal combustion engine could ever have more than a limited use.

So let me stop there before I continue. So he's telling us about, he's following the idea because keep in mind, this is the early 1900s. Excuse me, this is the late 1800s. And electricity is all the rage. So everything, people think that the possibilities of electricity are almost limitless. That if you were going to make an engine, of course, you're going to make an electric engine. If you're going to make a horseless carriage, of course, it'd be an electric horse, horseless carriage. Okay. So they received, okay. So I do not recall any who thought that the internal combustion engine could ever have more than limited use. Okay. So at the time, this is

what he's been working on for a while. No one gives a shit at all. They include most of the people that he's working with say, because they're in the electrical industry, they're saying you're wasting your time for it. So he's saying, hey, they didn't think the internal combustion engine, now think about how prevalent in our modern world that the internal combustion engine is, would have more than limited use.

And this is the important part. All the wise people demonstrated conclusively that the engine could not compete with steam. They never thought that it might carve out a career for itself. That is the way with wise people. They are so wise and practical that they always know just why something cannot be done. They always know the limitations. That is why I never employ an expert in full bloom. If ever I wanted to kill opposition by unfair means, I would endow the opposition with experts. They would have so much good advice that I could be sure they would do very little work.

So that's a very counterintuitive thought thought in my opinion and i think it just comes about by empiricism by actual trial and error he realizes oh shit uh the experts are only telling me what i can't do instead of what is actually possible through trial and error um i love that moving on this is another great uh another great thought to keep in mind. No work with interest is ever hard. During the first several months, he's talking about he has a workshop out back, and this is before he ever starts a company, he makes just one prototype. He obviously tries with the engine. I mean, he makes one car or what's soon to be a car, but this is right before that happens.

During the first several months, I was in the night shift at the electric light plant, which gave me very little time for experimenting. But after that, I was in the day shift. And every night and on every Saturday night, I worked on the new motor. I cannot say that it was hard work. No work with interest is ever hard. I always am certain of results. They always come if you work hard enough.

Skipping ahead. So this is him going into the automobile business. So this is a note I left myself. Going into the automobile business, no one thought that this would be valuable. Now 3.5 percent of gdp and the bicycle is reasoning by analogy so we'll see what i mean by all that the edison company offered me the general superintendency of the company but only on condition that i would give up my gas engine and devote myself to something really useful see there's more evidence

of this pushback he's getting this whole time i had to choose between my job and my automobile i chose the automobile or rather i gave up the job there was really nothing in a way of choice for i already knew that the car was bound to be a success i quit my job on august 15th 1899 and went into the automobile business he's saying for i already knew that the car was bound to be success this is before he sold his first car but he'd been working on it for a while and he kind of knew the utility. So it continues. It might be thought of something. It might be thought something of a step for I had no personal funds. What money was left over from living was all used up in experimenting. But my wife agreed that the automobile could not be given up, that we had to

make or break. There was no demand for automobiles. There never is for a new article. They were accepted in much the fashion as was more recently the airplane. At first, the horseless carriage was considered merely a freak notion, and many wise people explained with particularity why it could never be more than a toy. So that's why I wrote, no one thought it would be very valuable. You see this a lot where people confuse something new with, oh, it's just a toy. So then I looked up. I'm like, okay, well, 100 years later, how valuable is the and in limiting it just to the united states not including how valuable it is to the world it's 3.5 percent of gdp for the largest economy in the world

like it's that's the almost the exact opposite of this where they said uh it was merely considered a freak notion and many wise people explained why it would never be more than a toy. This is just another reminder. So no man of money even thought of it as a commercial possibility. I cannot imagine why each new means of transportation meets with such opposition. In the beginning, there was hardly anyone who sensed that the automobile

could be a large factor in industry. The most optimistic hoped only for a development akin to that of a bicycle so i included that last sentence in there because i think it's important something we talked about a lot on the podcast is something that's that's that um a lot of these these people that we cover in these books that are uh are is the idea that you need to reason from first principles and really try to go at the at the very bottom level of what you think is true and then reason up from there which is which sounds of course you want to do that but it's actually really hard and once you realize uh understand the idea of reasoning from first principles in your day-to-day life you're going to constantly see that us humans all we do is reason

by analogy so this is something new right it's a gas-powered internal combustion engine a horse's carriage a bunch of different new developments and they're saying okay well this this you might have something there mr ford but the the most you can hope for is that of the bicycle humans score in the abstract we only we we love to jump on things that we see so the bicycles out it's popular it's a means of transportation it has two wheels, all these other similarities, I guess, in that case, the automobile or the machine had four wheels.

But you jump onto, okay, this is another form of transportation, so therefore it can only be like this other form of transportation. So I just bring that up because I think it's endemic and I think not only is it important for us to catch in our own thinking, but then when you see – like when you're developing a new product or service or whatever it is that you're making or you want to do and you start to see it get introduced into the world, you're going to start to see this exact same – the same kind of thinking that was present in 1899 with Henry Ford is present today and will be present 100 years from now and probably 1,000 and 10,000 years from now if we're still around a species. So I don't know. I think that's extremely important.

And maybe I'm just speaking to myself, but hopefully that idea resonates with you. This is another idea he has. And, again, you're seeing this pattern here. Most of the notes I have, you know, I probably have 20-something notes I'm going to share with you. This is another idea he has. And again, when you're seeing this pattern here, most of the notes I have, I probably have 20 something notes I'm going to share with you. They're like little aphorisms, little paragraphs, maybe even a sentence or two. So this one is start small, build through earnings. And he's talking about how to build a business. My idea was then and still is that if a man did his work well, the price he would get for that work, the profits and all financial matters would care for

themselves and that a business ought to start small and build itself up and out of its earnings. If there are no earnings, this is the great part. If there are no earnings, then that is a signal to the owner that he is wasting his time and does not belong in that business. And throughout the book, he talks about, you know, they would produce one a day and then maybe three a day. And then they start making like 100 cars a day. And people are like, this is impossible. And then 1,000 cars a day. And it's just starting small. And he grew it very very slowly um so he he has a this is his philosophy this is henry

ford's philosophy on constant change and also i noticed a tendency among many men in business to feel that their lot was hard they worked against a day when they might retire and live on an income to get out of the strife. Life to them was a battle to be ended as soon as possible. That was another point I could not understand, for as I reasoned, life is not a battle except with our own tendency to sag with the downpour of getting settled. If to petrify is success, all one has to do is humor the lazy side of the mind. But if to grow is success, then one must wake up anew every morning and keep awake all day. I saw great businesses become but the ghost of a name because someone thought that they could be managed just as they were always managed. And though the management may

have been most excellent in its day, its excellence consisted in its alertness to its day, and not in slavish following of its yesterdays. Life, as I see it, is not a location, but a journey. Even the man who most feels himself settled is not settled. He is probably sagging back. Everything is in flux and was meant to be. Life flows. We may live at the same number of the street, but it is never the same man who lives there. Moving ahead, there's three conclusions that he arrived after his first year in business. What I most realized about business in that year, and I have been learning more each year

without finding it necessarily changed my first conclusions, is this. Number one, that finance is given a place ahead of work and therefore tends to kill the work and destroy the fundamental of service. Two, that thinking first of money instead of work brings on fear of failure and this fear blocks every avenue of business. It makes a man afraid of competition, of changing his methods, or of doing anything which might change his condition. Three, that the way is clear for anyone who thinks first of service, of doing the work in the best possible way. So moving ahead, Jeff Bezos has this quote where he says there's two kinds of businesses,

the ones that try to find a way to charge more for their product and ones that try to find a way to charge less for their product and ones that try to find a way to charge less. Henry Ford's definitely a fan of the latter. So this is a demonstration of what price means. Our little wooden shop had, with the business we were doing, become totally inadequate. And in 1906, we took out of our working capital sufficient funds to build a three-story plant, which for the first time gave us real manufacturing facilities. In the year of 1905 to 1906, we made only two models. One, the four-cylinder car at $2,000, and another touring car at $1,000, both being the models of the previous year, and our sales dropped to 1,599 cars. Some said it was because we had not

brought out new models. I thought it was because our cars were too expensive. They did not appeal to the 95%. What he's referencing there, any references throughout the book, that you should design what you're making to appeal to 95, basically make it so affordable that almost anybody can purchase it. I changed the policy in the next year, having first acquired stock control. So he just uses that one sentence there. He's going over an entire fight that he had with his first company about gaining control because one of his partners kept wanting him to make these like really silly like expensive like six thousand dollar cars if you want to learn more about that

i think i covered it in a previous podcast on henry ford um it's called i invented the modern age uh it's a great book too uh but you can go back and listen to the podcast if you want okay so sales dropped to 1599 cars he, I changed the policy next year, having first acquired stock control. Yeah, he definitely did. For 1906 to 1907, we entirely left off making touring cars and made three models of runabouts and roadsters. The big thing was the cheapest car sold for 600 and the most expensive for only $750.

So it went from two models, one at 1,000, one at 2,000, down to three models, anywhere expensive for only $750. So he went from two models, one at a thousand, one at 2,000, down to three models, anywhere from 600 to $750. And right there came the complete demonstration of what price meant. We sold 8,423 cars, nearly five times as many as in our biggest previous year. So throughout the entire time he ran Ford Motor Company, he constantly looked for ways to eliminate waste and therefore passed the elimination of waste in the form of lower prices onto the customers. Here's traits of a prosperous business, according to Henry Ford. The business was considered extraordinarily prosperous. We had plenty of money. Since the first year, we had practically always had plenty of money. We sold for cash, we did not borrow, and we sold directly to the purchaser. We had no bad debts, and we kept

within ourselves on every move. I have always kept well within my resources. I have never found it necessary to strain them because inevitably, if you give attention to work and service, there's that service word again, the resources will increase more rapidly than you can devise ways and means of disposing of them. So basically, if you focus on just making the best service and making your customers happy, you're not going to know what to do with all the money. And then this whole idea of living within resources, never straining yourself, that to me, that's just another happy, you're not going to know what to do with all the money. And then this whole idea of living within resources, never straining yourself, that to me, that's just another word for frugality. And go back to the podcast on Sam Walton, on Jeff Bezos, on Yvard Chouinard, all you see frugality

over and over and over again. And I think that's the difference. That's why I love the anecdote of when Jeff goes crazy in that meeting because one of the new executives he poached from might even Walmart might have been somewhere else brought up in the meeting that hey executives for Amazon should be allowed to book first-class seats and you know Jeff Bezos explodes the vein pops out of his forehead he starts hitting the table and he yells that's not how an owner thinks and I I think there's a very big difference between a professional executive or a professional CEO compared to the way these people that build the companies actually think.

And realizing Jeff's point was, you sitting in first class, how is that better for our customer? The answer is it's not. It's better for you. And I don't necessarily give a shit what's better for you. I give a shit about it's better for you and i don't necessarily give a shit what's better for you i give a shit about what's better for the customer so i found this this uh paragraph kind of interesting uh in the way he he thinks because i don't think this is how most humans think even though i think it's it it's actually correct if a device would this is an entire

chapter getting into production and creating uh like a way to make cars faster and cheaper. If a device would save in time just 10% or increase results 10%, then its absence is always a 10% tax. Remember what I just said, the human score and the abstract? Even if we're losing 10%, let's say we don't buy this piece of machinery, the service, and we lose 10%, it's very hard because that loss is abstract. It's very hard for people to understand that and then be proactive. But he's organizing his business this way. If the time of a person is worth 50 cents an hour, a 10% saving is worth $0.05 an hour. And then he reasons up through here. If the owner of a skyscraper could increase his income 10%,

he would willingly pay half the increase just to know how. The reason why he owns a skyscraper is that science has proved that certain materials used in a given way can save space and increase rental incomes. A building 30 stories high needs no more ground space than one five stories high. This is a great metaphor so we can visualize this. Getting along with the old style architecture costs the five-story man the income of 25 floors. Save 10 steps a day for each of 12,000 employees and you will have saved 50 miles of wasted motion and misspent energy. Those are the principles on which the production of my plant was built up. We're getting into some more contrarian,

I would say counterintuitive advice here. Especially I feel in today's day and age where we're constantly obsessed with data. Henry Ford's going to take the opposite approach. The factory keeps no record of experiments. The foreman and superintendents remember what has been done. If a certain method has formerly been tried and failed, someone will remember it. But I am not particularly anxious for the men to remember what someone else had tried to do in the past, for then we might quickly accumulate far too many things that could not be done.

That is one of the troubles with extensive records. If you keep on recording all of your failures, you will shortly have a list showing that there is nothing left for you to try. Whereas it is by no means follows because one man has failed in a certain method that another man will not succeed. We get some of our best results from letting fools rush in where angels fear to tread. I refuse to recognize that there are impossibilities. This is maybe my favorite sentence in the entire book and kind of encapsulates my worldview. deletes like my world view. I cannot discover that anyone knows enough about anything on this

earth definitively to say what is and what is not possible. The right kind of experience, the right kind of technical training ought to enlarge the mind and reduce the number of impossibilities. It unfortunately does nothing of the kind. Most technical training and the average of that which we call experience provide a record of previous failures, and instead of these failures being taken for what they are worth, they are taken as absolute bars to progress. If some man calling himself an authority says this or that cannot be done. Then a horde of unthinking followers start the chorus. It can't be done.

To me, that section kind of echoes what he was saying earlier about not employing an expert in full bloom and then not all men are created equal. So this next part was kind of humorous. It's really interesting because I'd read this book previously um And then I went back and reread it this week And this is after I did that the podcast and read the book, uh, james james dyson's autobiography And you're gonna if you listen to that podcast or if you read that book, this is going to sound familiar to you Now a business in my way of thinking, is not a machine. It is a collection of people who are brought together to do work and not to write letters to one another. Remember, James Dyson said that he wouldn't allow memos in his company.

It is not necessary for any one department to know what the other department is doing. If a man is doing his work, he will not have time to take up any other work. It is the business of those who plan the entire work to see that all the departments are working properly towards the same end. It is not necessary to have meetings to establish good feeling between individuals or departments. It is not necessary for people to love each other in order to work together. Too much good fellowship may indeed be a very bad thing, for it may lead to one man trying to cover up the faults of another. That is bad for both men. When we are at work, we ought to be at work. When we are at play, we ought to be at play. There is no use trying to mix the two. The sole object ought to be able to get the work done and to get paid for it. When the work is done, then the play can come, but not before.

This is really interesting because I feel today where there's a lot of like hyperbole around, you know, because all kinds of companies are competing for the best qualified employees. And you see some kind of this marketing around like, oh, we're a family, or there's like a familial atmosphere, we're friends. And that's the exact atmosphere that you don't want, according to Henry Ford. And you may not see this too much at like smaller companies or startups or founder-led companies,

but you damn sure see it at large companies, which I always like to poke fun of and, and, and, you know, just criticize the really weird ways they work where it's like, it's not enough that you give the time. Think of it, you're an employee at a large company, but now you have to go to this, you know, this dinner meeting. And now instead of spending time with people, you actually choose to be around your family, your friends, the hobbies and interests that you have, you're forced to dedicate more time to being around people that are selected for you to be around. If you're an employee at a large company, you're not choosing the people that you work with day to day in many

cases. And then for large companies to not only make you spend more time after work, I think that's just, honestly, I think it's immoral. I think it's unethical. I think when you're running your own company, you should provide an environment that allows your employees to work to the best of their abilities, to challenge themselves. But when work is done, work is done.

You shouldn't constantly try to encroach on the personal lives of your employees especially under the guise that it's that's family it's not family it's it's it's with your family you're almost socialistic you know i just finished nassim taleb's skin in the game and he has this he talks about like dependencies uh uh like your relationship between uh people dependent on scale and how like your thoughts of what should be what you might want to do at like a federal level is different from the thoughts you'd want to do on like the state level is different than what you want to do on the city level and it's very

different from what you do on the family level most families right operate in almost socialistic tendencies right they're like many socialist countries that's not a way a business is run they're financial so the idea that you can mix the two you're gonna have to make certain decisions That are based on finance that is not going to look at all similarly to the decisions you'd make for your family Which are not built on finance. So I think it's it's uh, it's just another example of like bullshit corporate culture that i'm just not a fan of All right. So let's skip ahead. Um Oh, this is a great part. So he has an almost entire chapter and I'm not going to have time to read it here, but he goes through what I think a common mistake do, that there's a problem in your business and

you think throwing more money or in this case, borrowing more money is going to fix it and it's not going to fix it. And he does this amazing uh they were short by like they keep large balances but they had like something like 80 million dollars that they had to pay out and at the time they only had about 20 million in their bank and so he goes about how he wound up getting himself out of the situation it's probably like i'd say 10 to 15 minutes of the book it's really fascinating but I think this is almost a good summary of why he would approach a problem like that. It's called Fix the Problem, Don't Think Money Will. We are not against borrowing money and we are not against bankers. We are against trying to make borrowed money take the place of work. We are against the kind of banker who regards a

business as a melon to be cut. The thing is to keep money and borrowing and finance generally in their proper place. And in order to do that, one has to consider exactly for what the money is needed and how it's going to be paid off. Money is only a tool in business. It is just part of the machinery. You might as well borrow $100,000 lathes as $100,000 if the trouble is inside your business. More lathes will not cure it. Neither will more money. Only heavier doses of brains and thought and wise courage can cure. A business that misuses what it has will continue to misuse what it can get.

The point is, cure the misuse. When that is done, the business will begin to make its own money, just as a repaired human body begins to make sufficient pure blood. Barring for expansion is one thing. Barring to make up for mismanagement and waste is quite another. You do not want money for the latter, for the reason that money cannot do the job. Waste is corrected by economy. Mismanagement is corrected by brains. Neither of these correctives has anything to do with money.

So a few chapters later, he continues this thought, and this time instead of using the word money, he's using the word capital. Capital that is not constantly creating more and better jobs is more useless than sand. Capital that is not constantly making conditions of daily labor better and the reward of daily labor more just is not fulfilling its highest function. The highest use of capital is not to make more money but to make money do more service for the betterment of life. Unless we in our industries are helping to solve the social problem we are not doing our principal work.

We are not fully serving. Skipping ahead, this is where he's kind of laying out more of a philosophy on not just work but life too. And the note I left myself was overcome fear and be free. More men are beaten than fail. It is not wisdom they need or money oriance, or pull, just plain gristle and bone. This rude, simple, primitive power, which we call stick-to-it-iveness, is the uncrowned king of the world of endeavor. That sentence reminded me of the part in the james dyson book where he's like listen i'm not saying not writing this book to tell you how great i am the only thing the only

positive attribute i think i have is the fact that i'm stubborn so i'm i'm basically he's basically comparing himself to a mule which i think is very similar to what he's talking about what henry forrest talking about is this rude simple primitive, which is just stick-to-itiveness. Just don't give up. People are utterly wrong in their slant upon things. They see the success that men have made and somehow they appear to be easy. But that is a world away from the facts. This is a great aphorism too. It is failure that is easy. Success is always hard. A man can fail in ease. He can succeed only by paying out all that he has and is. If a man is in constant fear of the industrial situation,

he ought to change his life so not to be dependent upon it. If a man lives in fear of an employer's favor changing toward him, he ought to extricate himself from dependence on any employer. He can become his own boss. It may be that he will be a poorer boss than the one he leaves and that his returns will be much less, but at least he will have rid himself of the shadow of his pet fear and that is worth a great deal in money and position

So this I'm gonna interrupt this this this paragraph real quick because I've been having this conversation with friends lately we have a lot of friends that um Have products or services they're selling or small businesses They've created or are there in the process of trying to do so and maybe escape from the job they have so that kind of mixture of people that are you know maybe have businesses they're they might not be completely on like solid financial ground yet and so i've been asking them in conversations here let me pull up the exact uh wording that i've been uh that i wrote to some of them just because i was curious uh especially reading reading this book and the

book and all these other books um and it's just like how important is owning your own business to you is it an absolute must or say someone gave you a remote job with a nearly with nearly complete autonomy and a six-figure salary would you still found a company so in other words like is it something you absolutely have to do? Or you're doing it because you feel it's the best? Like how many people are starting companies just because they feel it's the best opportunity, as opposed to something they absolutely must do. So what he's talking about there is that you don't want to be in a position where you're in fear that employer's favor is changing upon you, changing towards you, right? So I always say that I don't want to be in a position where you're in fear that an employer's favor is changing upon you, changing towards you, right? So I always say that I don't want to put myself in a position where I have to rely on the good graces of other human beings.

Just through my own like life experiences, I don't want to be in that position, and I haven't been in many, many years. Just because I don't – like I'd rather – whatever my fate is, I'd rather be in my hands. So, and then when Henry Ford goes on and continues, he's talking about, listen, your returns might even be worse and you could be a worse boss. So like, what are you doing it for? So when I'm sending these text messages or even having these conversations in person, a lot of the people are actually honest. The response I just got, the last one, this actually happened yesterday, and they're like, the answer to that question I just wrote,

would you still need to found a company? You're like, probably not, as long as I'm able to build financial security. So in this person's case, he wants a little bit more autonomy than his job has. He wants to see if he can start his own business. He never has. He just has a side project

that's making a little bit of money, so he's trying to see if that can actually grow and replace his employment. I think there's nothing wrong with that, that, um, like making that decision, especially if you feel the market is like the market rate for your skills is way undervalued, then, uh, then yeah, you'd be like, Hey, I'm worth way more than this. And if the market's not responding, then of course, like you should go out and do that. But I also think there's a difference between people that, like I would never answer that question.

Would I still have found a company? Absolutely. I don't care. Like let's say somebody offers me a job and I can make $10 million a year. I'd rather make $100,000 a year running my own company. Like there's nothing. I don't think there, and again, maybe that's a, that's not the best example because if you need, like once you reach

a certain level of financial security, then, then, you know, uh, the difference between having like a million dollars and having a hundred million is a lot smaller than the difference between having $0 and having a million. You see what I'm saying there? Like if you have nothing and somebody offers you a million dollars, then take that, right? But if you have a million and then somebody offers you 10, add a million dollars or just using that as a round example, most of the stuff that you need is taken care of. You know what I mean? So that's why I say the jump between 1 million and 100 million is a lot smaller because it's just more of the shit you already have. Nicer things, nicer cars, maybe a maybe a nicer house maybe more travel that kind of stuff but it's not oh i don't know

how to pay my bills as opposed to somebody has zero and giving a million their life change is more drastic so um i don't know why reading this book spawns these thoughts in me um maybe that's one of the reasons i like reading them so much but it just makes me realize like there's there's some people that One I think it's a good instinct to hey, I don't want to be in a position where like I think uh Going back to that one of my favorite quotes. There's no sustaining security only opportunity I think people feel having a job of security and I don't hold that belief because If you don't own the company, you're the last like if you own a company you're the last one to be fired you know as opposed to somebody that

that you know people get laid off and move around all the time so I think when you're when I'm thinking about these things about like we have I have one life how do I want to spend it and for me it's just I'm not gonna be an employee I just hopefully I never have to you know if I if I going to be an employee. Hopefully I never have to. If I fail spectacularly, I need to feed my family, feed your family, then you need to do the right thing temporarily, work yourself back in a better position. What I mean by that is just like Henry Ford, there's just no way this guy could ever be an employee long term.

There's no way. I mean we just covered in the book a little while ago. He quits his job and he has no money in 1899 just because he has to do it so i don't hopefully that tangent made sense and uh there's some kind of value in it for you all right so let's get back to this paragraph um so he talks about he may be a poorer boss than the one he leaves and that his returns will be much less, but at least he will have rid himself of the shadow of his pet fear. And that is worth a great deal in money and position. So there's a value there, even if it's, uh, it's abstract better still still is for the man to

come through himself and exceed himself by getting rid of his fears in the midst of the circumstances where his daily lot is cast. Become a free man in the place where you first surrendered your freedom. Win your battle where you lost it, and you will come to see that, although there was much outside of you that was not right, there was more inside of you that was not right. There was more inside of you that was not right. Thus, you will learn that the wrong inside of you spoils even the right that is outside of you. That part's a little confusing to me, but he continues. A man is still the superior being of the earth. Whatever happens, he is still a man. Business may slacken tomorrow, and he is still a man. He goes through the changes of circumstance as he goes through the variations of temperature.

Still a man. If he can only get this thought reborn in him, it opens new wells and miles in his own being. There is no security outside of himself. There is no wealth outside of himself. The elimination of fear is bringing in of security and supply. So that's why I think the summary of that is just you overcome your fear and you become free. And in the case of the person deciding if he wants to be an employer or boss, what Henry Ford is saying is like, listen, you may start out and you might not be doing well. You might be a poorer boss.

You might be making less returns. But it's better for you to come through yourself and exceed by getting rid of the fears in the midst of his circumstances where his daily lot is cast. Just be adaptable. Things are going to go up and down. That's not going to change who you are. Okay, we're almost done here. So this one I think is extremely important.

I read this great book, and I've talked about it on the podcast before, my love of this podcast. It's called Extreme Ownership, and then the podcast is called the Jocko Podcast. And this is definitely a theme that Jocko hits on a lot. And Henry Ford is writing about almost 100 years ago. And I call this part, fuck your feelings. I pity the poor fellow who is so soft and flabby that he must always have an atmosphere of good feeling around him before he can do his work. There are such men, and in the end, unless they obtain enough mental and moral hardiness to lift them out of their soft reliance on feeling, they are failures. Not only are they business failures, they are character failures also. It is as if their bones never

attained a sufficient degree of hardness to enable them to stand on their own feet. So the reason I included that and what that means to me is like something I learned through Jocko is that discipline is much more important than motivation because motivation is a feeling. And if you feel motivated, then yeah, you might work and get a lot done and be really efficient while that feeling lasts. But motivation is temporary. It's going to disappear and it constantly has to be refilled. So it's much better to rely on discipline. So what Henry Ford's doing there is like, listen, you have work to do. The point of being on this earth is to be of service. And if you're building

a business, make sure that you're putting service service first that means that there's days where you just don't feel like doing it that doesn't matter your feelings are not important and if you're only doing things when you feel like it well henry ford's calling you soft and flabby now not only is this applicable to work um i think it's like in my own life it's been applicable to making sure that you get adequate amount of physical exercise and and there's tons of times where I don't want to wake up at 5 in the morning to work out but I do anyways there's tons of times where I just I'm a little sore just I just don't want to do it and what I learned from these books and and and from discipline equals

freedom and and and these thoughts it's like that's irrelevant. Is your goal to build a business? Then constantly work towards that goal. Is your goal to be healthy so you can live longer to see your kids grow up? Then make sure you do that. None of your goals or none of your objectives, maybe is a better word, should be reliant upon how you feel. And there's one other sentence.

He goes, there is altogether too much reliance on good feeling in business organizations. So let's skip ahead to Henry Ford's Four Principles of Business. This is towards the end of the book. And let's go right into it. In the first chapter, we set forth the creed. Let me repeat in the light of the work that has been done under it, for it is the basis of all our work. So these are the four principles of his company at the time. Number one, an absence of fear of the future or a veneration of the past.

One who fears the future, who fears failure, limits his activities. Failure is only the opportunity more intelligently to begin anew. There is no disgrace in honest failure. There is disgrace in fearing to fail. What is past is useful only as it suggests ways and means for progress. Number two, a disregard of competition. Whoever does a thing best ought to be the one to do it. It is criminal to try to get business away from another man.

Criminal because one is then trying to lower for personal gain the condition of one's fellow man. To rule by force instead of by intelligence. Number three, the putting of service before profit. Without a profit, business cannot extend. There is nothing inherently wrong about making before profit. Without a profit, business cannot extend. There is nothing inherently wrong about making a profit. Well-conducted business enterprises cannot fail to return a profit, but profit must and inevitably will come as a reward for good service. It cannot be the basis. It must be the result of service. And number four, manufacturing is not buying low and selling high.

It is the process of buying materials fairly and with the smallest possible addition of cost, transforming those materials into a consumable product and distributing it to the consumer. Gambling, speculating, and sharp dealing tend only to clog this progression. And finally, I want to close with two positive sentences. There is always something to be done in this world and only ourselves to do it. Everything is possible.