Founders - #33 Levi Strauss: The Man Who Gave Blue Jeans to the World

Episode Date: August 12, 2018

What I learned from reading Levi Strauss: The Man Who Gave Blue Jeans to the World by Lynn Downey---[0:01] Levi was one of the men who set that firm foundation[17:35] I do not have at this time a specific occupation...I will share the fate that has been assigned to me[22:29] Enduring hardship for the ultimate goal[29:24] A hole in the market[42:00] Levi starts his business cold[54:18] The dangers of shipping by sea[1:04:42] Inventing Jeans by accident[1:10:00] Overnight success 20 years in the making[1:17:40] How Levi was able to serve customers who were illiterate or spoke another language ----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

People write and read biographies because their subjects stood out for doing something, for being something out of the realm of the everyday. They created something new, solved a problem, sparked a movement, altered established courses, method, and thinking. That's what Levi was. He didn't invent blue jeans, but without him, the most iconic garment in fashion history might never have been more than just duck cloth pants on the rear ends of Nevada's miners and teamsters. Without Levi's business sense and vision, which allowed him to see the potential of those little metal rivets, the overalls might have seen the light of

day, but they would not have thrived. Levi didn't run orphanages and kindergartens, but he saw to it that their doors were kept open for those who ran them and for those who desperately needed the safety of their walls. He wasn't a teacher, but he gave enough money to a growing university so that its teachers could steer new generations of students towards the future. He didn't hold any political office, but his good advice, solid bank account, and respected voice were sought out by politicians and policymakers. His vast dry good business allowed families in remote locations to have a few comforts in the midst of hardship. San Francisco is famed for first and for icons of all kinds. The cable car, the Golden Gate Bridge, the beat generation, the summer of love,

the rise of the hippie, Liberation, and The Tech Revolution. These inventions, designs, and cultural revolutions blossomed because San Francisco had a solid core for them to spring from. That core was commerce. Without the gold that the city's past rested on, its future residents would have had no place to come to. And Levi Strauss was one of the men who set that firm foundation. Okay, so that was actually towards the end of the book that I want to talk to you about today, which is Levi Strauss, The Man Who Gave Blue Jeans to the World by Lynn Downey. So before we jump into the book, reviews and ratings on Apple podcasts are extremely important. And you probably already know this because undoubtedly you've heard other podcasts reference this fact.

And so I've thought a lot about a way, like what is the best way to encourage people, because it's so important, to leave ratings and reviews? And a lot of you have already done so, and you've done just because you wanted to be kind and you enjoyed this podcast, which I really appreciate. But I think when something I've learned from studying and reading all these books is, you know, humans do respond to some incentives. So I was trying to figure out a way to have some kind of mutually beneficial exchange. So because it's important to me for the podcast to get a lot of ratings and reviews, how can I basically reward you for taking a few minutes of your time? So I actually came up with an idea that I think is, well, right now it's the best idea that I have in regards to this. So I think the best way than just asking you is to offer you something of

tangible value. So here's what I propose. If you leave a rating and review on Apple Podcasts or iTunes, if you take a screenshot and then you email it to me at foundersreviews at gmail.com. I'll also leave the email address in the show notes. I will email you back a link to short little podcasts. They're like short little versions of founders that I'm doing only for people that leave reviews. So they're not going to be on my main feed. These podcasts are not going to appear on the main feed. They're not going to appear on the subscription, the Patreon only podcast either. It's literally only for people

that leave reviews. And if you've already left a review, then obviously just email me and I'll send you the link as well. I already have one done, but inspired by Steve Jobs, there is one more thing. This is not a one-off trade. If you email me a screenshot of your review, not only will I send you a link to the podcast I've already completed for this purpose, but I will continue to email you reviewer-only podcasts in perpetuity. I plan on doing these shorter review-only podcasts about three to four times a year. And as I thought about it, I think it's a pretty fair trade. For a minute or two of your time, I will send you hours of work on a reoccurring basis. Okay, let's get into today's book.

So we're going to start out in Levi's early life. So the book says his early life, like that of his fellow Jewish newcomers, began as humbly as what 19th century Bavaria had to offer. So he was born in a place called Bavaria, which I had never heard of, so I had to look it up. And it turns out during the time that he was born, he was born into something called the Kingdom of Bavaria, which only lasted from 1805 to 1918. And it was a German state that succeeded from the former electorate of Bavaria. Or maybe it's Bavaria. I'm not sure. But I want to describe for you the reality of his early life

and why his family eventually fled to America. And it has something to do with this thing called, it's a German word, so I don't know how to pronounce it, but it translates to the Jew law. So I want to describe to you what his society was like. So it says, the boy whom America would transform into the man called Levi Strauss began life with the first name Loeb. Young Loeb was born into a society that believed it had quote-unquote emancipated its Jews and given them the rights of full citizens. In reality, Jews had only those rights that made the Bavarian government and Christian society comfortable. It gives a little background of what was taking place in like the 10th century. Up until this point, it says,

over the next 700 years, so from let's say 1000 to around the time where the story picks up, over the next 700 years, Jews were repeatedly expelled or exterminated, allowed to return, and then forced to leave their homes again. At the end of the 17th century,

they began to trickle back in to what becomes Bavaria. And here's some restrictions. They were allowed complete freedom of worship but rabbis had to have command of the German language only villages overseen by a local police force could have a rabbi congregations without a synagogue could worship in private homes but Jews could not have secret private gatherings for any other reason once in in effect, this German word appears again, I'm just going to call it the Jew law. The Jew law decreed these traditional occupations off limits and Jews were forced to take up farming and crafts. There were some exceptions though. Men who were already engaged in peddling before 1813 and could not learn any

other trade were allowed to continue. Others learned a new trade on paper, but practice the old one in reality. So his dad was like rather old when he had like eight or 10 kids. And he was something known as something called a peddler. So when they're using the word peddler in this book, it's really like a door to door salesman where they were poor enough. They were too poor to have a store, but doing well enough that they could still support their family. So all of the goods and products that they would sell, they had to carry with them. And so the Bavarian government eventually said, no, like the only Christians could do this, Jewish couldn't.

So it says, the Jew law left its mark everywhere, from individuals to entire villages, and the Strauss family were among them so I'm not going to spend too much time on his life before he gets to America but there are some some parts that some highlights I want to hit that I think are interesting so it's talking about his dad he says he continued to work as a peddler even though the Jew law forbade its practice nearly 50 years old when Loeb was born born, he could not pick up a new profession. His sons, however, were not so lucky. They could not follow in the family business or choose any other traditional Jewish trade. Loeb was expected to become a farmer, tanner, weaver, cobbler, soap maker, or other small craftsmen. And even though they might find

training or work, they would have to do it alone. The new rules regarding marriage made most men ineligible as husbands, and the available women were snatched up by those who were. So the restrictions of the Jewish law in Bavaria at the time even applied to like things you could do in person and like your personal lives like who you could marry what kind of work you could do if you could gather like large groups of people where you could worship all kinds of just stuff that's frankly none of the government's business so the the next note I left myself is said they're looking for tolerance and the freedom to be left alone and it says the Jew law was designed to make proper citizens of Bavarian Jews. And it

did for the United States as the government gave with one hand and took away with the other thousands of Jews left Bavaria to find religious and social tolerance across the ocean. So his dad winds up passing away. His, and this, this happens, what I'm about to describe to you happens over a few short years. His dad passes away, leaving his mom a widow. She remarries. The second husband dies as well. So now at this time, Loeb is one of the youngest of the children. And most of his older brothers have already left for America.

And says, now a double widow in possession of two homes with no husband are grown male children to protect or support her, Rebecca, which is his mom, made the only logical choice she could. It was time to move to America. So the process of getting out of Bavaria was not that simple. It took him, I think, almost two years to finally petition the government. And we're going to, we get some of Levi's first words on record in a plea for him to emigrate to America. And this is now Levi speaking, and he's about 17 or 18 years old at the time. And he says, the favorable news that I've received from my stepbrothers in America has convinced me to follow them, even though I do not have at this time a specific occupation. But my brothers will And I love this sentence. I thus joined my mother in her plea. Now, the book spends a great deal of time talking about how dangerous these voyages across the sea were at the time they're doing it. And yet the conditions in many of these countries in Europe were so poor that people risked their lives to come to America. And I'm just going to read you a one-sentence description of the dangers that I think give you an idea.

But on a personal note, I think this is something that really sticks out to me because I've talked about this on the podcast, I'm pretty sure, in the past. But my own father was born in Cuba, and he was a baby right after Castro took over and forced to flee. They wound up in New York first. So they ran away from the communist government like, you know, hundreds of thousands, not millions of Cubans did. They landed in New York first and then eventually settled in Miami where there's obviously a large Cuban population. But the reason I bring that up is because what I was thinking about here

is you have Rebecca taking, I think it was Levi and his younger sister, and getting on a boat. Many of these boats were, they crashed at sea, they disappeared, people died. And it was so bad, and they were under such persecution in Bavaria that she risked not only her life but the life of her children. And I saw this when I was growing up because we would have people come over.

So there's something called like in the Cuban culture where it's like a big celebration of, like they celebrate basically Christmas on Christmas Eve. And usually they do so with a party, they eat pigs and dance and do all this other stuff. But anyways, we'd either host these gatherings or we'd go to these gatherings when I was a kid, and inevitably, every single year, there would be people that had fled from Cuba on rafts, man-made rafts, and that's like that's a there's being a

generous description of what they actually did you can google this if you're really interested in it and uh i don't know i got to meet these people when i was younger usually through a translator um because i don't speak spanish but and they only did um but you just realize how like again this i guess this thing is, these kind of situations are, you know, you see them in history constantly.

You're even seeing them now in some places in the world, modern day, but just the idea that you would get on something that, you know, I mean, it's just a man-made raft, and you would go across 90 to 120 miles of open ocean with no tools, knowing that many people that have done so died doing so just to get away and have opportunity. I don't know It's just it's something that i've always thought about. Um and i've always kept with me and that's why I don't know. Maybe that's why i'm kind of an advocate for entrepreneurship because I think like people should have the freedom to To make their own way in the world um at a fundamental level and you see when that freedom is denied the uh the great

lengths people will go to to get that freedom so to me that's almost like a universal human desire so um this one sentence description of the dangers I'm not going to talk I mean you obviously know these ships could uh could crash and everything but it's also they're cramped in uncomfortable quarters. And it says, and not even the largest chamber pot could hold the volume of vomit that accompanied the seasickness of the first few weeks on the water. So I'm going to skip over that, the entire section of the journey, because it's kind of outside the scope of what we want to discuss here. And so now we, at this point in the story, he is arriving in New York, his stepbrothers have started. So everybody just comes here.

And what's interesting to me is we talked about last week, how entrepreneurship and starting new companies is at like a 40-year low in America where you think it should be the exact opposite, right? Well, what's interesting to me is like when you immigrated here a couple hundred years ago, you had little choice, but like you could try to get a job, but most families just try to start their own business. And a lot of them were just peddlers. So they try to have a trade and then sell that, or they try to produce or resell products or whatever they could. So his brothers came over, they started out as peddlers. They eventually worked their way up and got their own store. And then this is a little description and I love this.

And it's called, it's talk, they're talking about enduring hardship for the ultimate goal. And it says, if they did experience hardship, they knew it wasn't forever. It was just something that had to be endured on the way to the ultimate goal, self-employment, and that was achieved with hard work, good connections, and help from the family. Peddling was usually the first rung on this ladder, and the storefront came next. Becoming a manufacturer, managing factories and middlemen, and employing relatives was one that many men reached, meaning one status that many men reached. There were also a few merchant princes

who commanded glorious department stores or fabulously successful wholesale businesses. So right there, it's just, it's kind of the whole spectrum of what you see even now today, where you can have a one-person business or a little creating something and you're just selling it to people or maybe like what people call like a mom-and-pop shop or whatever you want to call it all the way up to you

know giant corporations so obviously the scale is different today but there was variance in the size and and how the businesses were organized even back then so there's another sentence I just want to read to you it's the motivation to leave making a good living and enjoying true personal agency was denied them in Europe, but encouraged and celebrated in the United States. So a few pages later, we find out like what is Levi's as a young man, an immigrant to New York? What is his life like? And so the book says, from the day he arrived in America, young Levi's life was a round of family, worship, and nose to the grindstone application to learning English, and every detail of the dry goods business. So his family is in the dry goods business.

The way to think about dry goods, because I don't know if that's commonly used, I actually had, the book is a description, but I did, I tried to find a way to summarize it for you. And this is the best one-sentence summary. It says, in the US, a dry goods store carries consumer goods that are distinct from those carried by hardware stores or grocery stores. So a lot of this was like garments, textiles, stuff like that.

So that's, they're in the dry goods business. He and his family were helping to create the new New York, one that bustled with both people and industry and with commercial links to settlements springing up along America's rivers, lakes, and into its rich westward farming country. So now we're going to get into the main. I'm going to spend a few pages here talking about the background at this time, right? And there's so many parallels to today. I just, this is one of

my favorite things about trying to document the history of entrepreneurship. And so it's the gold rush. This is the revolution that is taking place that Levi built his entire business on, the foundation in which he built his business on. So it says, the story is well known. On January 24th, Midwest native and amateur geologist James Marshall was working on the tailrace of a sawmill that he was building for Swiss entrepreneur John Stutter on the American River near Sacramento. He used the millrace as a giant sluice. And after flushing the millrace to bedrock, he looked into a small, still pool, put his hand into the freezing depths, and brought out the nuggets that would ignite one of the gold rush, for our purposes, let's think of it as a metaphor for the technological revolution that we're living through right now, the internet revolution, if you want to get specific. So this is a description of the opportunity caused by the gold rush.

A reporter writing in the February 19, 1852 issue of the New York Times stated that the furbile symptoms, I had to look up this word, furbiles like fever, of the California gold rush were not a passing fad. Here then is a limitless opening for industry and talent, he wrote. If anything describes the approach to the challenges of the gold rush, it is the words industry and talent. With foresight gained from the years of hard work and good news from those who were already in California, merchants realized that the best way to make money in mining was not to squat in a snow-fed river, but to have dry clothes ready for those who did. This is also known as pickaxe retailing. That in a revolution, instead of trying to make money in the actual revolution,

you should be making money selling tools to those that are doing that. That's at least one strategy. Having perfected the peddling and then wholesale and retail merchandising of American goods while in New York and in Ohio River towns, merchants who went to California went there well prepared.

Few of them ended up as peddlers, mostly because California had enacted an onerous tax on peddlers. But these merchants knew that opening stores in the small towns that blossomed throughout the gold region was the best hope for success. Some stayed in New York and supplied California retailers exclusively. As the port city nearest the gold fields, San Francisco was perfectly suited to be the way station for goods and men. Immigrants like the Strauss brothers came to New York just as demand for ready to wear clothing arose and then exploded. As more young men joined the middle class, they enjoyed a growing prosperity,

but this didn't always mean that they could afford tailor-made and personally fitted trouser shirts and vests. Most of them could not actually. So they talk about the people that open a store. They enter the clothing business relied on tiers of producers and manufacturers. Workers in their homes are in small shops produced for jobbers, who then sold the goods to wholesalers and then distributors. Okay, so that's the channels we're talking about. These men, in turn, had retail customers who got the items into the hands of the final purchaser or consumer. By 1853, this interconnected system made the ready-to-wear clothing business one of the biggest industries in the country, with New York as its hub. garments prized by the new white collar class, but also covered the rougher shirts and trousers worn by farmers, laborers, and soon California gold miners. Okay, so the Strauss family is already in the dry goods business before the gold rush. And so they were uniquely positioned to take

advantage of this. And you're going to see that by just doing the best job they could, they wind up, you can't predict opportunity in the future, right? But if you, sometimes you're lucky enough to be in a situation where you're already in a good position and you can take advantage of a huge opportunity. Levi's actually already, I think he's like 20 years into a successful career as a wholesaler and manufacturer of dry goods. And that's when he has an even larger opportunity to do the blue jeans. But we'll get there. So they identify a hole in the market. So by 1852, the Strauss family was surely hearing many stories about the travels of their fellow Jews and their successes in California. Friends and neighbors shared letters from relatives out

west and commercial ties were made and strengthened, and it became obvious that the gold rush was not a fluke. Although some people went to California for a while, made a handsome profit, and then came back to New York, the majority decided to make California their permanent home. Merchants helped little gold rush towns prosper, they helped build small cities into major ones and provided everyone from minors to comfortable families with what they needed. In fact, by the early 1850s, it was obvious that more than sturdy work clothes and boots were required. That's the whole. Gold meant wealth, but wealth was relative. It wasn't just about buying the

most expensive house furnished with French imports. There were other dreams beyond material goods. To a laborer, enough gold could mean no more calloused hands or a back no longer bent under a hod filled with bricks. Middle-class white-collar clerks longed for an escape from the stifling regiment of the office. At the conscious level, the rushers thought only of holding the gold in their hands, but at the deeper level of true desire, gold meant freedom. Some people had it very clear in their minds that gold was a means to an end and not an end in its in and of itself it was another avenue to achieving the goals this is important it was

another avenue to achieving the goals that consumed them from the minute they hit american soil economic autonomy support for their families and participation in a shared community with freedom from fear. So the note I left on that page was another meaning of wealth. Human nature doesn't change. And a quote from Thomas Edison. So one of the benefits of me reading all these books and then recently I've had to go back and listen to some of my old podcasts because I've been taking notes and trying to make sure that I catalog everything that I've learned. And so all of this stuff, there's so many times where I just

read like a paragraph and it's, you know, my mind just compares it automatically to something that's seen before. And so I want to read something from the biography of Thomas Edison that I read like two years ago. It's called The Wizard of Menlo Park. And it really made me think of that paragraph I just read to you. And I would say like my own personal like life goal, and has been for a while, well, it's something that's not new because this is a summary of Thomas Edison in 1869, okay? So it says, and I think this probably applies to a lot of people that are listening to this right now. And it says, having one's own shop, working on projects of one's own choosing,

making enough money today so one could do the same tomorrow. These were the modest goals of Thomas Edison when he struck out on his own as full-time inventor and manufacturer. The grand goal was nothing other than enjoying the autonomy of entrepreneur and forestalling a return to the servitude of employee. Edison's need for autonomy was primal and unvarying. It would determine the course of his career from beginning to end. So it's a really amazing thing about books, and I think podcasts too, or anything that you're learning, whatever medium you're choosing, is that you just never know these ideas that stick on your mind. But I remember that.

I haven't read that maybe, what, a year and a half, two years? I don't know the exact time frame, but a long time. And immediately when I was reading this Levi Strauss book, I was like, oh, I got to go pull that Thomas Edison book because that's what it sounds like. And that's why I love, I think I've talked about this before and maybe this is helpful for you, but I don't just like read books. Like I, if you were, if I could show you pictures of these books, like they're constantly marked up. This one has probably 50 different post-it notes sticking out. All those post-it notes correlate to highlights or underlines that I've made in the book, summaries of what's in them.

I write indexes on the back pages to try to like a quick one page reference to what's in the book, like my own index, not like obviously a lot of these books have indexes, but it's really an index of ideas. Because what happens is I usually don't just read them once I go back and I pick it up and, you know, know instead of spending reading the book having to read the book like i can find these um what i'm looking for easily and i also talked about why uh what's something that's helpful if you really love a book one you know if i really love a book i want the hardcover or the physical format in my house um just because i like having them and then i'll also usually buy the Kindle book of books I really love

because Kindle lets you search for specific phrases and terms that you might want to go back and review. Because like I said, you're constantly changing. The ideas that are resonating with you today, if you go back and revisit them a few years from now, you'll probably gain additional meaning from them. Okay, so Levi, let's see. Now we're going to see,

so we know what's going on with Gold Rush, right? And there's this huge opportunity, and Levi is eventually going to leave New York to go out and try to build the family business, his own business, which turns into Levi Strauss Company, which is something I didn't know. I had to do additional research preparing for this podcast,

and I didn't know Levi Strauss is still privately owned. I thought, you know, it's such a well-known brand that, of course, it probably went public or whatever the case is. No, it's family-owned and has been since he founded it in the 1800s. Okay, so Levi was 23. He had five years of New York dry goods experience under his belt and he was unmarried and he is going to be the one responsible for building the family business in California and it says if Levi had shown no talent for commerce if he had succumbed to New York's

temptations and spent his nights and nights in dissipation or if he decided to take up different line of work he wouldn't have been right for the job. The fact that they did send the youngest brother on what was known to be a dangerous journey and risky commercial undertaking meant that his much older brothers had complete confidence in his abilities. Something I repeat constantly is how lucky we are to be alive in the age of the internet and how it makes building businesses while never easy way easier this section is fascinating like all I thought about when I was reading this book I was like wow like I have no reason to ever complain if I have any kind of hardship given what this guy had to go through to do what he's doing so it said next few pages it's a play on words one of my favorite books that I read is Nick Bostrom's Superintelligence, Path, Dangerous, and Strategies.

And so I left a note up for myself to summarize. This part is Getting to California, Paths, Dangerous, and Strategies. With news of the gold discovery in California made its way east at the end of 1848, frenzied men brought out their pick-and-shovel inventories of hardware stores and said goodbye to worried families. Knowing that they were steamers leaving for Panama, steamer is a boat, kind of boat, they headed by the hundreds for New York to catch the next available boat, clogging docks and the boats themselves.

The reason to choose Panama can be summed up in one word, speed. There were three ways to get to California from the east and midwest at the end of the 1840s. One was in a clipper ship going around Cape Horn at the tip of South America and then up the coast of San Francisco. Residents of New York and other mid-Atlantic states usually chose this route because to head overland, you'd have to get to a jumping-off place like St. Joseph or Independence, Missouri, a hard trek on its own. Once chosen, both of these routes could take from three to six months or longer, and each had its own unique dangers. Trails across the country were unmarked, with scarce or bad water. Indian attacks were rare but always on immigrants' minds, and diseases like cholera claimed more lives than historians will ever know. A clipper ship journey meant frigid cold and searing heat, and the rounding or doubling of the horn was such a horror it inspired dozens of seafaring songs. A typical

refrain was, I wish to God I'd never been born to drag my carcass across Cape Horn. If speed wasn't the object, either of these routes would get a traveler to California eventually. But if it was gold, speed was essential. Getting to the American River as soon as possible meant choosing one of two Central American routes. One created by Commodore Cornelius Vanderbilt in Nicaragua took travelers on a very wet journey on the San Juan River and Lake Nicaragua, and then on a road the rest of the way to meet San Francisco-bound steamers on the Pacific. The Panama route was more popular and conditions improved as the 1950s

progressed. Keep in mind, there's going to be, I think, a two-part series I'm doing on the Commodore on Cornelius Vanderbilt very soon. I don't think you could do a podcast on the history of entrepreneurship without mentioning him. He used used a character to say the least um okay so it talks about they've you know they started out in the 40s doing this by the 50s they got better at it and here's a description it says the ships puffed from new york through the caribbean to the uh to the mouth of some river that i can't pronounce on on Panama's eastern coastline. Their passengers loaded themselves and their baggage into bunghos. So I'm not familiar with this word.

It's B-U-N-G-O-E-S, bungho, bungo. And what they are, they're flat-bottomed boats piloted by indigenous people that took an average of two days and nights to reach one of the two trailheads. Now remember, I'm spending time on this section because this is describing what Levi had to go through to get to California before he even was able to found his business. Travelers then either rented a mule or walked the final 18 miles to Panama City, sometimes waiting days or weeks for another steamer to take them to San Francisco. By the time Levi Strauss landed in Panama around Valentine's Day of 1853, the crossing was a more organized and modernized operation. The Panama Railroad was partially

completed across the Isthmus by this time. In addition, the steamship companies put more ships into service, so the men and women who made it to Panama City rarely had to wait more than a day or two for a boat to take them to San Francisco. Although the river transit had its dangers, alligators, drowning, yellow fever, now this is the crazy part one of the crazy parts the trails were the most worrisome part of the journey travelers were at their most vulnerable because both roads went through narrow canyons or dense jungle which gave highwaymen plenty of places to hide robberies and murders happened on the trails at all times of the year. Though they mostly targeted those going home from the gold fields, their packs full of plunder of the American river. So Levi,

he survives that. He gets to San Francisco. I just want to share this one part that's relentlessly resourceful. I just love when people, like they come up with these clever, entrepreneurs come up with these clever ideas to build businesses out of stuff that's like in plain sight. It's just like you had to come up with a good idea to do this. So, you know, people are rushing San Francisco because of the gold rush. And I'm just going to read it because it's funny. It brings a smile to my face. Hundreds of gold-fevered sailors abandoned their vessels as soon as they made landfall in San Francisco, staying only long enough to outfit themselves for the trip inland.

Wildly entrepreneurs hauled the ships right up to the shoreline, made them secure and turned them into warehouses and lodgings. I love that. All right. So this is where he starts his business. And I don't know if I left myself as Levi starts his business cold. So he arrives in San Francisco. The plan is he's going to found the business. His suppliers are going to be his brothers who are manufacturing stuff in New York. So let's manufacture stuff in New York. We'll ship it to San Francisco. Levi starts a business where he can wholesale and then market up and wholesale and start making money. But at the time, he has no contacts in San Francisco. So he has to start his business cold. So he has to wait a few months because like I just described, you could ship something from New York to San Francisco, but it takes a long time. So they ship it out in January, they expect it to arrive in May. With this information

in hand, knowing that three shiploads of dry goods would start arriving at the end of March, he hit the pavement to find his first customers. The easiest and most efficient way to get started was simply to call on the retailers already established in San Francisco. It lists a bunch of the companies, the company names are not important. So the retailers already established in San Francisco. It lists a bunch of the companies. The company names are not important. So the retailers, hotels, and restaurants would also be on his list. So he just goes, doesn't have any context. He just goes door to door, hey, you're a retailer. I'm a wholesaler.

Can I offer you something? Can we build a relationship? It was simple as that. So it started out from very humble beginnings. As you'll see, and I'm going to share share the good thing about this book is one it's written by a an employee of levi strauss that was hired as an historian of the company and so i the part i'm not going to include it all in the podcast but is in the book is uh there was a great fire in i think 1906 that destroyed all of um the levi a lot of the levi strauss uh company documents So she had to go back and spend several years. She traveled to like where he was born down to South America,

all the places that are important to the Levi Strauss story to like recreate and obtain information. And she was also able to find like public records of like income, like how much money they were sending. Cause a lot of stuff was on like ships. I don't know what they're called, like lot of stuff was on um like ships uh i don't know what they're called like registers of the the stuff they're carrying uh there's a specific term that escapes me at the moment but you know if you're let's say you want to ship a thousand tons of

gold or whatever you know that what's on the boat and and then we can know what gold was worth at the time and you can kind of guess basically it's a it's a it's a way to work backwards and find out revenue numbers and then we also find like profit margins, it's a way to work backwards and find out revenue numbers. And then we also find like profit margins and stuff. And I'm gonna, I'll of course share that on the podcast because that to me is interesting and it gives you concrete, like a concrete understanding of the success that the company was having.

What I love about this book is she gives a lot of background on San Francisco. And I just think it's fascinating to understand the history of places. Kind of gives you an idea of why certain industries started in specific places as opposed to others. So it says, in 1855, journalists and occasional politician, his name's not important, compiled and published a remarkable book called The Annals of San Francisco. This enormous tome recounted the history of the city from the early exploration period to the current day.

It covered everything from the history of the city from the early exploration period to the current day. It covered everything from the history of the post office, to benevolent institutions, to the great fires, to a month-by-month accounting of the events from 1853 to 1855, with copies of the California Constitution and the city's charter thrown in. It is a clear-headed look at San Francisco's personality as well as history. In describing the city's life during 1853, the authors wrote that San Francisco was still, as in its early rowdy years, a place of hard labor and wild delights. Okay, so skipping ahead, I've left myself three notes on this. It says the financials, which we're going to get into numbers, which I think is fascinating. History doesn't repeat itself.

Human nature does, which, you know, we talk about all the time. And this time is not different. So now we're going to, at this point, I'm fast forwarding. He's already built his business. He starts getting shipments from his brother. He sells it and just slowly and steadily just starts building this up little by little. And over the next two years, Levi continued to build his business and fell into a comfortable commercial routine of taking in shipments from his brothers and finding new customers.

The following year was busier. This is 1855. And in July, Levi made the first shipment of gold back to New York to fill the coffers of J. Strauss and Brother. This is his brother's company that he's getting dry goods from. And to pay for future shipments of dry goods. That month, he sent $10,041, equivalent to nearly $250,000 today. So remember, this is a booming, booming industry. These numbers are going to get crazy.

I want to give you some background before I continue, though. What's remarkable about this activity is that in February 1855, a financial panic brought much of San Francisco's business to its knees. A property owner and builder of a wharf that he named for himself, Henry Meigs, had a lot of loans that he could not repay. So he skipped town for South America, leaving enormous debts behind him and causing city bankers to become very nervous. At the same time, a dry winter meant less water in the gold regions, which meant less gold to mine and deposit into San

Francisco banks. The banks could therefore not make loans, or they made them with exorbitant interest rates. When a railroad supported by investments of the bank of, not important name, went under, the bank, which is one of California's two largest, did too. This was followed by the failure of another named bank, not important, which was California's largest bank. A run on San Francisco banks caused nearly 200 bankruptcies. Though the city had financial ties to New York and other urban centers, the panic of 1855 was, the most part a local phenomenon, thanks to the city's economic anarchy in the first years of the gold rush. Despite the panic, Levi sent five more boatloads of gold to New York between August and December,

making a grand total of the year over $80,000 or $2 million in today's currency. This pile of money was worthy of the word used to describe it, treasure. So when you're sending stuff back, that's the term the shipping companies would use. The reason I included that part is because one of the overarching themes of this podcast is something that is really important for all of us to internalize is that because human nature remains relatively constant throughout history, we should understand that economic booms and busts are inevitable. So I have a book while I'm recording on the table that I read a few years ago that I recommend that's not about founders, but it's equally important. It says, This Time is Different, eight centuries of financial folly. And it basically is a pretty in-depth look into 800 years of financial crisis.

And it's, listen, it's not like, it's not like a book you're going to read underneath a tree just for fun. You know, there's a lot of economic data in here. But even if you just looked at the charts, buy the book just to look at the charts and the index. In the indexes, they have historical summaries of banking crises. And the book's price is worth it just looking for that. It's not just relegated to the United States. It's everywhere constantly. And to me, it's just a reminder that instead of trying to time when economic booms or busts, you just need to make yourself robust so you can wither the inevitable storm and understand that it's not forever. It's just fantastic and really mind-blowing. Okay, so on the very next page, we're starting a new chapter, and we're going to get into something that is just mind-blowing to me and more numbers here because again i i love numbers in general i just think it's fascinating so uh well let me before i read you my note let

me read the this part of the book so um customers who shop the retail stores in the mountain towns which sold dry goods cigars liquors clothing fancy goods farm equipment and hardware paid for the purchases in gold dust the store owners would use the dust to pay their own suppliers, employing a method unique to the gold rush. They gathered up enough dust to pay a small collection of invoices from their own suppliers, and then sent both the paperwork and the gold to one of their main San Francisco purveyors, such as Levi Strauss. Levi had a scale in his office to weigh the gold dust and figure out its value

according to purity and the current rates. Generally, gold dust circulated at $17.50 an ounce in the early years of Levi's business. After weighing and measuring the dust, he could then use it to pay off all of his customers' miscellaneous bills, depositing the remainder to his account as credit against that customer's future business. In essence, Levi and other merchants acted as bankers for their own customers. So you know what this made me think of? And before I get into like the inflation caused by the gold rush, something that's taking place in present day that's interesting is this boom of cryptocurrency that's happened over the past, let's say, five or six years. And I have no idea whether it's going to last and it's going to fundamentally change,

even though I am intrigued by the idea. So I'm just not in the business of trying to make predictions because I think it's like you just can't. So what's funny to me, though, is how people are like, oh, the criticism of cryptocurrency is like, oh, it's not real money. And I'm like, yeah, it's not real money. But did you know during the gold rush, people paid in gold dust? Just this idea of means of exchange exchange or currency if you want to use that that that um that term again having an understanding being well read of history you realize that those these things change all the time later in the book there's and i'm not going to cover it there's like people are fighting and killing each other over uh the difference between

using what they called sound money meaning money backed by gold versus greenbacks versus using silver and it's just you realize oh okay like people are gonna fight over currency all the time and just realize that what we use for currency changes constantly throughout throughout time so i just think that's probably valuable all right so although the extravagant prices of the early gold rush years had fallen the cost of living in san francisco was still on the high side check this out meats cost and i'm gonna Francisco was still on the high side. Check this out. Meats cost, and I'm going to convert it. I'm not going to, so for this, I'm just going to convert it to today's money. Meats cost $10 a pound. Butter was $27 a pound. A dozen eggs, 34 bucks. And so that's really expensive, but we would love if this was the case today. Rent, $500. And that was expensive

for them. Running a business could be just as expensive. There was so much to pay for. Insurance against the losses of goods while they were being shipped, water damage from the voyage, theft, freight rates from New York to San Francisco could be anywhere from 10 to 50% of the value of one of the cargo. How crazy is that? But that wasn't the end of it. After the steamer arrived in port, merchants had to pay fees to pilots, the harbormaster, and the wharf owners. Then men like Levi had to hand over custom duties, pay for the cost of transporting the shipment from boat to the warehouse, rent on the warehouse itself, and finally an annual city license, which fluctuated according to a merchant's monthly receipts and even with all these expenses Levi's business is doing fantastically well says in the

year 1856 Levi shipped over two hundred thousand dollars in treasure in New York worth an astonishing five million dollars today this on the next page was interesting because it's something you see today too because of the way the state constitution was written individual cities in california had something called the home rule meaning that they could make their own laws as long as it did not violate the u.s constitution in san francisco that meant doubling of both taxes and city expenses by 1856 and why are they why are they doubling taxes because they had to make up for other stuff which again this still happens today it says fires bank failures and the dumping of unwanted goods by merchants unable to sell them

did not keep elected officials from raising taxes and imposing new license fees on all business owners. So now we're going to talk about another headache that he had to deal with two headaches the dangers of of shipping by sea and then this this um this prejudice in issuing credit to jewish people so let's get some details here it says the business was increasing too the california beer board of equalization published a list of the city's personal property assessments in the august edition of the san francisco evening it said levi strauss was worth $20,000, equivalent to nearly 50, excuse me, half a million dollars today.

So he's making a great amount of progress in just a few short years. It says, okay, so here, this is actually a huge issue. So he's gonna lose about $2 million here, $2 million in today's money, that is. So in August 1857, he arranges to ship his goods, gold, and he says it's worth nearly $2 million. I'm going to skip over that because it's not important.

And it's on a boat called the Central America, okay? And the Central America, so he ships this in August. He finds out at the end of October that the Central America had gone down in a hurricane 130 miles off the North Carolina shore with the loss of over 400 passengers and all the cargo and treasure. This was a great and sorrowful calamity for San Francisco as many people in the city had friends or relatives among the dead. For merchants, it was a financial catastrophe. More than 30 companies or individual business owners had sent a total of, and I'm just going to translate it to today's worth, a $40 million of treasure on the ship. So this one boat going down cost merchants in San Francisco $40 million. So it says, and then here's the repercussions from that. The loss of the Central America meant that over a million dollars in gold was now at the bottom of the Atlantic and not in New York bank vaults. This causes another panic.

So depositors began to withdraw their accounts at a frightening rate and the entire American economy shriveled. It took literally two years for recovery to take hold. There's a bunch of financial panics in Levi's life and this is just one of them. And then this is what I want to get on the same page. It talks about, well, let me, I guess, get there. Wholesalers who lost money could not buy more goods if their credit was not top-notch. So of course, in most financial panics, you see this tightening of credit. And it was difficult to collect debts from local customers if they had also been affected by the disaster. Levi Strauss survived and actually prospered because his suppliers were his own brothers. He did not have to worry about saving his credit

rating with an Eastern jobber. So you're probably familiar with the Dun & Bradstreet company, still exists today. At this time, it was called something else, Dun & somebody else. So they would make these reports, they'd collect data and make these reports on the credit worthiness of businesses. And if the business was owned by Jewish people, in the report on the company, they'd have a warning, basically, that, you know, Jewish people were not to be trusted. So, like, I just, I don't know, just, I guess, again, I don't think we're unfortunately going to ever be done with humans being prejudiced against other groups that are not like them but it yeah it's just so

stupid so he had to deal with that the way he got he got around that is obviously you know he didn't need the credit because his credit was his own family um and into into that end his family even though they were separate companies was was kind of like vertically integrated. Skipping ahead a little bit, now he's expanding his investments. He does a bunch of other businesses. His main business forever is Levi Strauss & Company, but he's just very industrious and constantly interested in expanding

not only his personal net worth, but I would say the overall GDP of the industry he's operating in. So it said, Levi ended the decade of the 1850s with a preview of his own future. In addition to enjoying continuous commercial success, he started to buy stock, snatched up valuable real estate, and expanded his philanthropy and became interested in politics. And a few pages later, there's another more loss at sea. In this case, he loses about $2 million.

And it's on a steamer called the Golden Gate. It was carrying passengers, mails, and treasures from Panama to New York. It caught fire in its galley, and over 175 people drowned, and all the papers and gold went to the bottom of the Caribbean. So in that case, he lost $2 million on that one boat. And this is just, again, I'm bringing this up because it's just a reminder of the realities of the troubles and tribulations

that he had to endure to build his business. Oh, and this is another reminder. So what's interesting to me is the focus of this book is happening in California, right? And when I think of, but it's, all these events are taking place during the U.S. Civil War. I read Team of Rivals, this biography of Abraham Lincoln. Fantastic book, goes into a lot of detail, specifically about the time from when he ran for office up until his his assassination. So most of it's about the Civil War. But it always focuses on like, when I think of the Civil War, I think of like the East Coast.

I never thought about the West Coast ever before this book. And maybe because I live on the East Coast and so I'm like predisposed to just kind of apply it to things I'm more familiar with. But this paragraph, I just wanted to put this in the podcast because it gives us more context about all the events that are happening while he has to build his business. And it says, During the war, California gold was as essential as beef to the Union's war efforts. In order to obtain and secure good credit with allies, Britain and France,

gold was a vital backing for the government's currency. Between the start of the Civil War in 1861 and its end in 1865, Levi Strauss shipped $31 million worth of gold in a four-year period. Levi's friends and competitors sent equally large volumes of gold, all of which led Ulysses S. Grant to say, according to legend, that California and its gold helped American Lincoln, or American Lincoln, helped Abraham Lincoln win the war. Okay, so we're almost to the point where we get to the whole, the main thing he's known for, which is the blue jeans.

But this sentence reminded me of an opportunity to throw in one of my favorite quotes, the Peter Drucker quote that entrepreneurship is not an art or science to practice. And it's a description of Levi, and it says, being a merchant was not just what he did, it was who he was. And then finally, this is a description of Levi's business right before the invention of jeans. So I've just jumped over like 20 years here. So, but I want to get to the jean part. And the reporter, there's a profile of Levi written

by a reporter and it says, the reporter was especially taken with the staff's efficiency. If a city merchant should call at 8 o'clock in the morning, he might have purchases of the amount of $50,000 and have every article delivered to his store by 1 o'clock in the afternoon on the same day. If time is money, there is no need of argument on this point. The article also uses the surprisingly modern corporate concept of empowerment when talking about how business got done. In the absence of the principles, if a purchaser should call in to buy $500,000 worth of goods,

the chief salesman is empowered to act in every particular as if he was a member of the firm. That's just another example of decentralized command. The reporter titled the article with a phrase that must have been gratifying to Levi, our solid merchants. This reputation was already well known outside of San Francisco as well. And Levi's good name, this is the most important part and why I included this, and Levi's good name would soon bring him an unusual business opportunity, a giant leap in profits, and the need to create an entirely new department for his headquarters. Okay, so with that foundation, he's able to capitalize on this opportunity. And we're going to be introduced to Jacob Davis, who is the inventor of jeans. It says, Jacob Davis liked to tinker. Like Levi, he was a Jewish immigrant and started his working life in the clothing business. And he

was always thinking about how to improve the way things were done as well as how to improve his own life. An inventor at heart, he also found a way to reinvent himself. So I'm going to skip over a bunch of this where he has a bunch of different businesses, probably five or six different ones before he stumbles upon this. And this is how he invents jeans by accident. Then in the spring of 1868, another massive silver discovery was made. He's living around the Nevada area. A new rush was on, and men from all over the state needed to outfit themselves to try their luck yet again. Jacob Davis realized that he could take advantage of this opportunity and began to specialize in making tents, wagon covers, and horse blankets.

But Jacob had been thinking about some ideas he had for clothing-related inventions. With inventing and improving on his mind, he decided to add a little something extra to the pants to please his customer. Remember, he's a tailor by trade. And then didn't think much more about it, but other people soon would. One of the fabrics that Jacob used most often in making wagon covers and tents was something called duck or ducking. It was a sturdily woven cotton fabric similar to canvas in appearance, but much stronger. But he'd also use duck to make pants for the teamsters in town, or sometimes he used denim.

Jacob needed to buy more fabric, but didn't know of any places locally where he could get it. Good thing that Levi does. But he did know about Levi, Strauss, and company. Remember the book we were just talking about? He had a good reputation. And so this is where some of his relatives had purchased some things from Levi previously, where they brought the amount of duck fabric, and they were in town in San Francisco,

so they brought the amount of duck fabric that Jacob needed. So through relatives, Jacob gets this fabric that he needs from Levi. And a few months later, he's in a shop and a woman comes in. So it says, a woman came into Jacob's tailoring shop. Her husband needed a pair of cheap pants. This is kind of funny. She came into the shop to place their order. He had worn out his last pair of trousers and she hoped to get him a new pair before the new year. Jacob told her that he needed to have her husband's measurements, and she tartly replied that he could not very well come because he had nothing to put on. So he's pantless. The woman told Jacob her husband was really rough on his trousers,

and she asked him to make the pants as strong as possible. Using the duck fabric he had bought from Levi Strauss and Company, Jacob sewed up the trousers, thinking about how he might make them sturdier. As he recalled, I was making horse blankets and covers for the Teamsters at the time, and had used rivets for the straps and the blankets. Those straps were not sewn with seams, but they were riveted together.

So when the pants were done, the rivets were lying on the table, and the thought struck me to fasten the pockets with these rivets. I had never thought of that before." So he makes these pants. People see her husband, who now has pants and can go out in public, walking around, and they eventually want these new riveted pants, which we are going to come to know as jeans, which happened by accident because they just happened to be on the table. He's making these pants at the request of this lady to make them stronger. So he's a tailor. He's got a family of sports.

He's got a wife and kids. But he's had a bunch of businesses that didn't work out, right? But now but he's had a bunch of businesses didn't work out right and but now he's like damn i stumbled onto something and these people really want it but i don't have enough money to reinvest into this business so he tells his wife he's like yeah i'm gonna you know i'm gonna build another business and his wife is really upset and you're gonna see how this this twist of fate uh winds up he winds up becoming partners with Levi over this. Based on his past experience, Jacob thought he might be able to patent his new style of pants,

but his success as an inventor was not adding to the family bank account. Applying for a patent was not cheap, and by the spring of 1872, Jacob's wife Annie was at her wits end with how much time and money he had put into inventions that did not live up to their billing. In tears, she begged Jacob not to go down that road again.

He knew he had to try to patent his process, though. He was afraid someone else might steal his idea, which he was sure was a moneymaker. So he decided to take a different route. This time, he would get a partner. He writes a letter to Levi Strauss. They already had a business relationship because Jacob was ordering for, I think over two years, ordering products from him. He's like, listen, I invented this new thing. I don't have money for the patent. I'm willing to offer you 50% if you'll pay for all this stuff. Within like three weeks,

Levi acts on this and the deal is done. So it goes really fast. I'm gonna skip ahead a little bit. I just wanna give you this couple sentence of the context of the time we're talking about and all the new inventions. It says, in 1871 alone, 19,000 applications were submitted for new utilities or inventions

to the patent office. 11,000 of these were granted. This was the era that saw the invention of the safety pin, the elevator, the typewriter, and the dynamite. I just love the idea that you can invent something and if it's revolutionary enough, it can stick around for hundreds of years because we use, well, I guess the typewriter. We use a lot of those still. Another skipping ahead a little bit because there's so many parts where, again, I keep using the metaphor of the gold rush as a way to think about the internet revolution that we're in right now. And so as anything, when there's a revolution, there's a high demand for services, right?

So today, some of the highest paid laborers, if that's what you want to call them, are programmers for services, right? So today, some of the highest paid laborers, if that's what you want to call them, are programmers and engineers, right? I just, I was listening to a podcast where they're saying that, I think it was Reed Hastings of Netflix talked about that he wants fewer engineers, but he wants to pay them a lot.

So he was even saying that he wants to pay Netflix engineers a million dollars a year, right? So check this out. Although garment production was expanding by the late 1860s, not everyone thought it was a good bet. Wages, which is weird because listen to the description, wages for the men and women who could cut and sew clothing were among the highest in the country due to a shortage of skilled labor. Women often worked out of their homes rather than in factories, but they still

commanded top dollar. And the next note I left myself is overnight success 20 years in the making. It talks about Levi's tolerance for risk. It says nothing in his actions indicates that he sought out risk for its own sake, but he knew the clothing business. So it's like, why would you do this for Jacob, right? And he knew it from the hem up. Again, I think of, that's why it's so important to, for, for us to share these stories, because like, if you're an entrepreneur founder, you really look at it like a craft and it's something you study, even when you're not working. It's something, you know, you just think about, you want to be good at whatever you're doing. I'm not saying you have to dedicate every waking moment to it. In fact, it's probably not a good idea, but you know, it's,

it's, if you're interested in something, depth is way more important than width. So it said, when Levi's deep knowledge of his customers' needs met Jacob's riveted pants, it's no wonder Levi jumped on the opportunity and made his decision so quickly. For 20 years, he had been importing and distributing a vast array of clothing and dry goods. By 1872, his retail base stretched from Montana, Nevada, Arizona, California, and the Pacific Northwest to Canada, Mexico, Hawaii, and Japan. He knew what kind of people needed what kind of clothing and where they needed it. So it's because he had already spent 20 years of his life learning about this industry that he was

able to identify the opportunity to jump on it and even though he was very successful even if he never invented jeans he'd be very successful but um even to this day i think i looked it up yesterday uh the levi strauss company is doing like six billion dollars a year in sales so the size and opportunity of creating this new pair of work pants, which is much larger than anything. The magnitude's larger than anything he was doing. This is an interesting idea of rebranding. So when Levi and Jacob discussed their patent-riveted pants, they knew they had to use a different word with their customers and in advertising, and that word was overalls. Today, this word conjures up the full-length denim garment with straps that buckle over the shoulders worn by farmers and country singers but in 19th century overalls was a word that meant sturdy pants worn by cowboys

lumberjacks and other laborers laborers like the people in the gold rush Levi and Jacob also understood that their product that the product they were about to put on the market was both familiar and new. This is a really, I love this part. Like I love this idea. So they understand that the product they put on the market was both familiar and new. Jacob, as a tailor, knew how to make a garment that men would want to wear, that they were used to wearing. What was new was the rivets. Customers could see them there reinforcing the pockets. But the pants were not so strange that men would not want to try them. The rivets were simply an addition to the typical work pants they were used to buying. And if the storekeeper did his job well,

these customers would want to buy the riveted pants instead of the unriveted ones. It's a really interesting thought if you're building a product or a service or a tool to think about how to make it both familiar and new. This is just a slight improvement on something that already existed and yet captures a huge percentage of the market and almost all the profits. What do I mean about capturing profits? A few pages later, we're introduced to the healthy profit margin that Levi's used to, or not used to, but is going to experience with these pants. Because of the rivets, keep in mind they're patented, so they're the only ones that can make it, at least for 17 years,

and the additional labor time needed to apply them, the pants commanded top dollar. The wholesale price was $19.50 per dozen, with Levi Strauss and company seeing between 33 and 40 percent in profit. And this next section is something we talk about all the time, that books are the original hyperlinks. And I'm just going to read this because it was interesting to me. So the New York Times publishes an article titled San Francisco Millionaires, a carefully prepared list of individuals and firms in San Francisco whose reputed wealth exceeds one million dollars. The writer referred to the individuals as towers of strength, and Levi was listed as a millionaire in his own right. Though the company was not listed, it was worth much, much more. Levi shared this millionaire list with a formidable collection of San Francisco

personalities whose interests represented nearly every enterprise that had shaped the city and, to the great extent, the American West. So this is always fascinating to see how people at different times, how their fortunes were built, which is completely different from present day. And I'm just going to list some of them. They were the founders of the Bank of California. Also on the list were two of the Bonanza Kings, men who made fortunes in the Nevada Silver Rush. So the reason I said this section is about books of the original hyperlinks

is because there's names listed here, some of which I'm not listing just because there's so many of them and there's no way – it's just too hard to remember them all. But I found some biographies on some of these people and I've already ordered the books. So hopefully some of these appear as future founder episodes. So it says, The Bonanza Kings Who Made Fortunes in Nevada at Silver Rush. The cattle king, cattle kings whose wealth came from land and beef. The

presidents of Wells Fargo Bank who also had interest in water systems and mining. His name was Lloyd Tevis. In the 19th century Tevis was the very definition of capitalist according to this article. There was also the founder who built the first iron foundry in San Francisco, Union Iron Works. Oh, and this is interesting. And last but not least, Leland Stanford,

who was one of the owners of the powerful Central Pacific Railroad, which would later be joined by the even more powerful Southern Pacific Railroad. And Stanford was later a president of the SP,

had already been governor of California, would later be a U.S. senator, and of course, would create the university that bears his name. So I found a few biographies on him that I ordered as well. Okay, so skipping that part, this is growing the GDP of the state and talks about how Levi just had very narrow interests. He didn't get involved in any business venture that was not tied to the development of the state or its industry. He also put his voice and his name to causes that would either further the expansion of trade or prevent it from being restricted.

I mean, we kind of know the end result, that the jeans, they held the patent for the first 17 years. It built a massive company. So, you know, we've been talking about, hey, he sends a couple hundred thousand dollars and it's worth millions of dollars in today's today's money and This this sentence is really all we really need to know about the size of the business and this is in their times dollars So it doesn't translate What it mean we mean in today's currency, but based on the other numbers in the book, it's hundreds of millions. The introduction of the riveted clothing to the company's inventory contributed to mind-boggling sales of $3 million by the end of the 1870s. So order of magnitude more than he was doing. And this is something, they have really good ideas. So there's

not too many, too much, too many, there's not too many examples, more numbers in the book besides the one I just told you. But I love this idea about branding and understanding your customer and communicating. And it made me think of the parallel to the podcast revolution that's happening right now. So let me get there first. So in the book, there's, you know, like most hardcover books, there's like pictures in the middle. And they show some of the ads that Levi and Strauss Company did. And they're really interesting to look at. And so here's a description of one and

why it's important. In 1886, the leather patch on the overalls and other products were redesigned. In place of the company name, address, and language about the patent was now an image, a finely drawn image of two horses, each attached with harnesses to either side of the pair of riveted overalls. A man with a whip stood next to each horse, encouraging them to tear the pants apart, which is obviously a futile effort. Above the men and horses was a banner saying, Copper Riveted. This two-horse design was quickly registered as a trademark and was used on products and paper advertising and is still in use to this day. A specific design that could be associated with the company's riveted overalls five years ahead of the event could go a long way toward keeping customer loyalty when competitors' products hit

store shelves. It also had a cultural function. Check this out. Some new Westerners were either illiterate or did not speak English as their first language. Many people navigated the world through symbols. Think of the three balls outside a pawn shop, which before I read this book, I didn't even notice. Now, every time I drive, I was in the car yesterday and I passed a bunch of pawn shops. I was like, oh my God, there is three balls there I never noticed it's like like three balls connected like okay, you've probably seen it So he says think of the three balls outside of a pawn shop are the striped barber pole a Man could go into a store and ask for the overalls with the two horses on the label so this made me think of

Something I've always fascinated with like how to really think about, you know, because I know I'm obsessed with podcasts, but I don't know how obvious it is to everybody else, how big of a revolution this is. So I was listening to a podcast, and somebody was describing, somebody that podcast was describing what they feel is taking place. And I'm just going to read the quote I wrote down when I was listening to that podcast. And it said, there is a technological, and you'll understand when I'm done why it relates to what I just read. There is a technological revolution. It is a deep one. The technological revolution is an online video and audio, immediately accessible to everyone all over the world. What that has done is it has turned the

spoken word into a tool that has the same reach as the printed word. It is a Gutenberg revolution in the domain of video and audio. It might be even deeper than the original Gutenberg revolution because it isn't at all obvious how many people can read, but lots of people can listen. And so I think a lot of us that may have been educated or read a lot or whatever the case is, kind of take that fact into, like I just assume assume that everybody can. And, you know, the numbers are not at all clear, but you know, there is a substantial amount of the population that either can't read at all or has difficulty reading. So the idea of the value of, hey, what is the value of putting Levi Strauss and company if the people coming to the country to

do the gold rush can't read or speak another language. They don't understand, but they understand an image just like what the Gutenberg revolution and podcast is. There's a lot more people that are going to listen to something than read it. We know this. Look at the numbers of people, like even in America, like the average American, I think, reads like less than one book. The average person reads less than one book a year. And then the numbers from there, it's not that much better. To the point where like people that read like more than 10 or 12 books a year, I think are like 1% of the population. I think that's what the numbers are.

It's been a while since I saw it. But it's something like that. And to me, that's shocking. Because, you know, I've told stories before. Before my mom died of breast cancer last year. And one of the stories she'd always used to tell me is that even when I was a kid, that I would like eat, I would never not read. So I'd be eating cereal at the breakfast table and I'd be reading the box of cereal. Like I would just constantly read. So to me, it's like second nature, but that's just, I'm, you know, my, my opinion is kind of shaded by my own

experiences. Like that is for all of us. And so I don't know. I just think that's amazing how like podcasts give you the ability to understand information without having to read. So much so that there are some company blogs I like to read, right? And I sent an email to one of them a little while ago because I never think to look, to check. But sometimes like maybe somebody tweets like an article from them and I'm like, oh crap, I really like I got some value out of there or whatever the case was. And so I emailed them, I'm like,

why don't you guys just make this a like podcast too? It takes no time to set up. Like it could literally just be somebody there reading the article. I'd subscribe to the feed and I'd see everything you did. So I didn't get a response, but I think that's a really, like, I don't know. It's just such a better idea. As much as I can, I'm trying to move most of my consumption to audio. I like it because I can be doing other things. Like I can be in the gym, I can go for a walk, I can be reading, or not reading. I could be driving. I don't know. Like to me in 2018,

it just makes complete sense. If you have a company blog, again, you don't, I'm not saying replace it with an audio, just, it should be a supplement to it. You don't even have to make another, like a lot of people are using podcasts for distribution, right? Like you don't even have to make and hire other people to do it. You literally already have the content right there. So I don't know. Just a random thought. So let's see.

Okay, so there's only a few other things I want to share with you. And well, okay, so this is kind of like an aphorism. And I think if you have to like an aphorism and i think if you explain have to explain an aphorism it kind of loses a little bit of its value and you're if you're listening to this you're clearly smart enough to understand this but i think this is just kind of it's a great way to show some wisdom and personality that levi had because he seemed to be a very calm and methodical person so let me just read that i'm not going to explain it so i'm just going to let it linger mr strauss was very quiet affable always immaculately dressed joe was a really was really an admirer of him so joe was he was let's see he was promoted to

salesman and he had most of california and part of oregon in his territory this is uh this is the guy Joe. And now what I'm reading to you is written up by another early employee named Henry Richmond, who was writing up some informal remnants that's laid in his life about Joe and about Levi. So this is Henry talking about an interaction that happened between Joe and Levi. Mr. Strout was very quiet, affable, always immaculately dressed. Joe was really an admirer of him. In 1898, so this is towards the end of Levi's life because he dies, I think, in 1902, 1903.

In 1898, Joe was at the San Francisco headquarters charging around to various department heads, intensely discussing and arguing. Mr. Strauss walked up to Joe and asked if he could see him in his office. When Joe was seated, he asked, meaning Levi asked, Joe, did you have a good year? Joe proceeded to inform his boss what a fantastic year he had had. Mr. Strauss listened quietly and patiently until Joe finished, and then he said, remember, Joe, the more business you do, the more problems and trouble you'll have, end quote. End of conversation. Xmas greetings were exchanged, and Joe left. Joe never forgot that talk. He spoke of Mr. Strauss with great admiration every chance he could. And this is where I'll close the podcast. During the week

of September 22nd, Levi began to feel unwell. On Wednesday the 24th, he felt bad enough that doctors and a nurse were called to the house. Liver congestion was the diagnosis and levi was ordered to bed by friday the 26th he felt well enough to have dinner with the family with the rest of the family that evening a nurse had been had been this is something before i uh finish this this paragraph when it talks about um something interesting to me and something i think we might have got away from at our own detriment was um the entire life in that he for his entire life from the time he went to san francisco and then his relatives uh started to join him later and he had a lot of them they all lived in the same house they all worked in the same business um levi employed all of his relatives they all lived

together they took care of each other there was was like 20 people living in Levi's house, including like, he had like eight or 10 nieces and nephews. And I don't know. I just, I think that's a lot better arrangement than what we do now where we kind of silo. We have a family that kind of spreads out in silos. I don't think that's a good idea. Okay, so it says, by Friday, he felt well enough to have dinner with the rest

of the family that evening. A nurse had been in attendance earlier in the week and was still on hand as Levi went to bed around eight o'clock. A little while later, the nurse had heard him groaning. She went to his bedside and asked how he felt, and he replied, oh, about as comfortable as I can under the circumstances. He then turned his head on his pillow and peacefully died.