The Pomp Podcast - Billionaire Reveals The 41 Principles That Built a $125B Empire | Chase Koch

Episode Date: September 9, 2026

Chase Koch is a member of the Koch family and leads Koch Disruptive Technologies at Koch Industries, one of the largest private companies in America. In this conversation, we break down the 41 principles behind Koch's management system, the values-first hiring philosophy that's helped grow the business 10,000x, and the story behind acquisitions like Molex and Georgia-Pacific. We also discuss Koch's evolution into a tech company and the power of finding your comparative advantage.=====================Arch Public is an agentic trading platform that automates investment strategies across Stocks, Commodities, ETFs and Crypto. Whether you’re rotating into AI & Gold, allocating to the S&P 500, or accumulating Bitcoin, Arch Public executes your plan 24/7 without ever taking custody of your assets or funds. Sign up today at https://www.archpublic.com, and start your FREE automated trading strategy! =====================Need liquidity without selling your crypto? Take out a Figure Crypto-Backed Loan, allowing you to borrow against your BTC, ETH, or SOL with 12-month terms, 8.91% interest rates, and no prepayment penalties. Or check out Democratized Prime (https://figuremarkets.co/pomp) and earn ~8.5% APY on real world assets. Unlock your crypto’s potential today at Figure! https://figuremarkets.co/pomp Figure Lending LLC dba Figure (NMLS 1717824). Loans subject to approval. Crypto collateral may be liquidated. Terms apply - see full disclosures at https://figure.com/disclosures/ =====================Uphold is the easiest way to buy and sell crypto unlike any other platform allowing you to trade in just one step between any supported asset. Check them out at https://www.uphold.com/pomp/ This video includes a paid sponsorship with Uphold. I’m compensated by Uphold for promoting its products and services and may receive commissions from referrals. Terms apply. Not available in all jurisdictions. Digital assets are risky and may result in the total loss of your capital.=====================0:00 - Intro1:22 - What is Koch Industries? (scale, history, private company)9:09 - Charles Koch's principles & the Sunday economics lessons18:43 - Hiring philosophy: values first, skill second, credentials last32:05 - Koch as a tech company: Infor, software & AI35:30 - Horizontal capabilities & the Molex acquisition41:47 - Turning acquisitions into principle-based cultures47:03 - Origin story & lessons from near-bankruptcy failures56:50 - Builder vs. operator: finding your comparative advantage1:02:54 - Applying principles to society, bitcoin & individual sovereignty1:08:50 - Stand Together: philanthropy, education & micro-schools1:19:39 - Investing philosophy & finding the next big deal

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You gotta try breakfast at A&W. What better way than with a delicious Pratt organic coffee, starting with just $1 all day, every day now until December 31st. You gotta try breakfast at participating A&W locations in Ontario. And so if you look at Coke like macro, high level, one of the largest private companies in the country, today we touch the majority of the economy, as I mentioned. and operate in about 60 countries, 145,000 employees and growing. I would say the biggest differentiator of Coke and why we've been able to grow now over 10,000 X since the early 60s is because of... Ladies and gentlemen, we have a very special treat today.

I'm going to sit down with Chase Coke. He's a member of the Coke family, which owns Coke Industries. They're one of the largest private companies in America. Chase recently wrote a book with his father Charles. It's called Becoming a Principle-Driven Leader, 41 Principles to Build an Enduring Business. In this conversation, Chase and I go through. What is it like to build Coke Industries?

How do they apply these 41 principles? What exactly can you use these principles to transform your life, your business, and broader society? This conversation is fascinating because it takes us behind the scenes. We understand that only the business deals that they've done, the failures that they've had, but also how they apply these principles in their business, in their investments, and into technology.

And I think that you're going to take away a lot from this conversation. It's one of my favorite conversations I've had on the podcast in a very long time. Chase is an incredible person, and it's very fun hanging out with him. And so here's my conversation with Chase Coke. All right, Chase, I thought a great place to start is Coke disruptive technologies. I think it's kind of been your baby inside of the organization. And really, to me, is a microcosm of so much of the principles that has made this business amazing.

What was the original idea for creating this disruptive technology group? Well, the original idea, we hadn't really, we had dabbled in venture capital back in the early 2000s, but we went away from it. But this was 2016, 2017, and it started with like where my passion was, really. And I've always been kind of cut out of this cloth of innovation and this principle that we actually talk about in our book called Creative Destruction, which is Joseph. of Schumpeter's principle of you've got to disrupt yourself from within. Otherwise, the market will do it to you and you'll become a dinosaur. And since I was a little kid, I always wanted to be working on the next thing, the next curve, not like what was right in front of me.

And I've been working in the operating businesses since I was 15 years old. And so again, back 2016-17, this is when technology really started taking off and reshaping industries. And I was in our ag business at the time, in our fertilizer business. And I saw an opportunity to, well, first of all, I saw what technology was doing to our value chain. And there were two companies and two founders that really kind of rocked me back. And I was like, something is happening to ag and we need to be paying attention. We need to understand the creative destruction that's happening in our industry. One was Climate Corp, which was David Friedberg, who ended up, you know, really looking at data science for the first time

in agriculture and looking at weather data, looking at soil data. And he built a company around that and sold data analytics to farmers. And I remember having a relationship with him because we were working on actually swapping data. I was working on enhanced efficiency fertilizers and the uptake of nitrogen. for farmers and how to optimize that so they could do more with less. And he was all the data science behind it. So we started working on doing data exchanges to help each other.

And then he calls me one day and says, actually, Monsanto just bought the company. I was like, you're just getting started. You got like 10 to 20 million of revenue, you know? And he said, yeah, but they paid me $1.1 billion for it. And that was like the first shot across the bow, I think, in technology and agriculture. And that just woke me up. Because you were like, that's crazy. They paid so much money for our company.

I think it was that, but also just the wake up of the value that was being created with data science. And we hadn't really been focused on that. And so that one and then another friend of mine, I'm all despondi, that created Farmer's Business Network, which was basically the model of the Amazon of agriculture and being able to go direct to farmer and some of the, some of the services. that he was providing, I thought was really, really interesting. And he can only do that because of the technology,

where the technology was going to enable that business model. So I just basically went to the team and went to Coke leadership and said, we have to be a part of these companies. Because that is going to enable us to see what is going to disrupt our core business with our nitrogen production assets and our global trading business. But I'll also just be a part of that next curve, whatever it's going to be. And so that was the birth of Coke disruptive technologies. We started looking at it from just an ag perspective, but we talked as a leadership team.

We said, if we're going to really invest in companies like Climate Corp and Farmers Business Network, we should be doing that across all of Coke. So what are the companies that are going to disrupt Coke long term, and we need to see those early, and we need to actually have skin in the game and invest in them in a meaningful way. And so that was the birth of Coke disruptive technologies. But I would say back to the principles at play and why I wanted to do that. One, I talked about creative destruction and how important that is for the future of Coke. But two, the mutual benefit. And that I felt that we could offer Coke as a laboratory because we, Coke touches

the majority of the economy. We're like 80% of the various industries because we're very, very broad. And so when you look at that from a technology founder's perspective, so imagine a software company, they want to sell to all these industries, right? So to be able to have one phone call and to Coke and be able to sell 10 different operating companies across the economy, that's pretty valuable to a new startup. And so we can help them as a customer, like that as a supplier, as a subject matter expert, we have 140,000 employees. We're in 60 countries.

So I was like, that is a laboratory for a founder. And so the benefit that we can bring them by being that capability provider, not just money and capital, but by really bringing capability to them in a differentiated way, that was the benefit to them. But the benefit to us, the mutual benefit side of that was we're going to see around corners in ways that other companies can't.

What is Coke Industries? I think that's like a question. I asked a couple of friends before we did this, and I said, what do you want to know? And that was probably the number one question was just like, I know it's successful. I know it's, you know, the first or second largest private company in America. I know they do 125 plus billion dollars of revenue and this like amazing thing. How? What is it?

Maybe let's start there. Yeah, well, I mean, I think because we're private, that is, that's probably the number one question because we don't, we don't report publicly. And I think also there's a learning there. You roll back the clock 15, 20 years ago. We didn't do a good job of getting our story out. And so that's one of the reasons why I'm excited to be here talking with you is like, I want to get the story out.

Who is Coke? What do we do? Why do it? What are our principles? And so if you look at Coke like macro, high level, one of the largest private companies in the country, my grandfather. father started the company back, the predecessor company to Coke back in the 40s. My father took over in in 1961. Today, we touched the majority of the economy, as I mentioned, and operated in about

60 countries, 145,000 employees and growing. And I would say the biggest differentiator of Coke and why we've been able to grow now over 10,000 X since the early. 60s is because of our principal-based management framework that my father basically kind of founded and had the help of many, many leaders at Coke really comes down to the empowering people from the bottom up with principals, not top down, telling people what to do. And the only way you can scale a company in our view, in our experience, is when you have a principal based framework that you can empower people with, help them understand the principles,

and let them run. It's interesting. The way that we originally got connected was I read your father's, one of his books, Good Profit, and I wrote this kind of notes that I took on it. And in the book, he defines what good profit is, this idea of actually being able to derive it based on these principles versus, you know,

kind of political advantage or regulatory capture. Yeah. But the second piece that I think, if I had to take one thing away from it. And I've just almost like, you know, you find like a kindred soul, right? Or you find like somebody who has this idea and you're like, oh, my God, I can't believe somebody else thinks this way. Yeah. Is he had gone back and he had studied all the great civilizations and basically said, what made these civilizations or these economies work?

He did. And in the book, he outlines, here's a couple of core principles that he had identified. And then he was like, well, how do we take these and put them inside of a company? And I don't think a lot of people think of a business the same way they think of an economy or a civilization. But when I was reading about maybe your personal experience, it sounds like he, in that process, also, would sit you down every Sunday?

Yeah, and, like, give you, you know, a version of Sunday school, but kind of the economic version. You're exactly right. Yeah, you want me to get into that? I would love to hear what was going on these conversations. Yeah, it's fascinating. And it's been such a journey for me as Charles Koch's son. And I would say, my sister would say the same.

But, you know, to your point, he studied, he studied, he's a very much, he's a very much, he's a he's so intellectually curious. He always wanted to know how does the world work and what drives human progress. And he studied everyone. This is starting, it was, you know, middle late 20s, he got the bug. And he just went down the rabbit hole

and read all the philosophers, Hayek, Von Mises, Milton Friedman, economics, philosophy, history. But he also, he studied, this is what a lot of people probably miss. He applied the scientific method to his own learning, which means you try to disprove your hypothesis as much as you try to prove it. So, I mean, he studied Mao, he studied Lenin, Hitler, and like, why did they make the decisions that they did?

But then you're right, from there, understand these principles, good principles and bad principles, the ones that drove human progress and the ones that made us go into the into decline and then said, okay, now let's look at different countries. Why did Venezuela not succeed? And why did Chile as a comparison? Hong Kong versus China, North Korea, South Korea, and just studied that and then pulled out the principles that drove the most human progress, to your point, and then brought those and said, does this work inside a company?

The same principles of what has driven human? can they work inside a firm? And that was in early 80s were the first experiments on what is now principal-based management. But as a kid, back to your point, I don't know, I must have been 10, 11 years old, my sister's two years older than me. He wanted us to learn the same things that he was learning that he was passionate about. So we'd have Sunday philosophy economics lessons. And you can imagine, like my sister is a much better student.

better student than I was. She's still way smarter than I am. But, you know, she would be, like, kind of front of the classroom, taking it all in and just... Reciting it back to... Well, because he would, he would quiz us every 15 minutes. Okay, what did I just talk about? There was always accountability. Always. And I'd be there, you know, with my hat kind of pulled over my eyes, half asleep, you know, and I'd be the failing... As a 12-year-old boy does. Yeah, the failing student in in the philosophy course. But what I would tell you, going from that as a kid to when the light bulb actually went off, it was probably my late 20s. And I was running one of the business units of the fertilizer business. I spent about a decade in our Coke fertilizer. And I was running our international

business, and we were building a fertilizer terminal in Brazil. And Brazil is one of the biggest import markets, agriculture is their biggest industry. And I went in with a few other leaders very naively into Brazil thinking, oh, we're going to build this high-speed terminal. It's going to be great. Farmers are going to get their product faster. We're going to run a more efficient system at the port. It was in Paraguay, Brazil.

And we spent a year working on this. And we got the deal done with the local partner. Very excited. We thought we'd have the terminal built within nine months. ended up taking us four years. And so, you know, bureaucracy, red tape, protectionism, all the principles that my father was telling me about when I was 10, 11, 12 years old, you don't get it until you actually live it.

Experience it. I experienced it myself. I felt the pain of that. I felt the pain for those that worked, you know, in that value chain, the farmer, the terminal operators and like there's there's not progress there's not innovation there's not creative destruction if you put all these barriers around a business it can't advance it won't get better and so i lived that um and that's when i was like light bulbs going off mutual benefit um openness creative destruction um you know a number of other principles at play there but then i was like

like, okay, I'm going to start to really pay attention. I'm going to start to study this. I'm going to see how that applies to my job and my life. The other thing that was really interesting, I think, about my sister and I growing up in the family of Charles and Liz Koch was the focus on values and principles at the dinner table. So yeah, there's the economics and the philosophy part of it, but just the accountability when he'd, and amazingly,

he'd be home from work at 6 p.m. every, he's building this amazing. amazing company, but his focus on developing us as kids was, I look back on it now with, you know, three kids myself. I'm like, how did you do that? But he did it, and he did it by consistency and accountability of values and principles. We'd come home, you know, six o'clock, he'd sit down and say, okay, what are the five things? Love, courage, faith, honor, and loyalty. That was our, you know, we were little kids, right?

And those were five, like, almost family principles. Yeah, our value system that we started with. Now, it would evolve over time into economic principles and that sort of thing. You know, a lot of fun, a lot of fun. Let me tell you about good profit versus bad profit. But my point being is that we'd sit down and Elizabeth and I would both have to articulate a story from that day on how we exemplified one of those principles. So I share that because it's these principles, they're not just business principles to, you know, build a great business.

You can apply them to anything and everything. You're building a nonprofit. You're running a sports team. You're raising your kids. These principles apply to everything. And what was amazing about my father was his consistency to apply it to everything. I would say consistency, but also courage. because, you know, I mean, when he applied them more broadly

outside of business, he caught a lot of hell for it, you know? And there's a lot of folks in the media that pounded him for what he believed. But if you have courage and conviction over something there, and you've studied something about, you know, what drives the most human progress over time, and I want to help the most people that I can, you'll take the arrows for it.

And that's what he did. And I think, This goes to why we wrote this book. I think what the 41 principles and becoming a principle driven leader that we have in there, that is really a navigation tool for someone that's building a business or, like I said, hopefully help them in every aspect of their life. Because we are living in a time of unprecedented uncertainty, whether it's economic uncertainty, whether it's, you know, are we going to lose our jobs to AI or a lot of divisiveness in our culture,

we believe that a clear principles framework, it doesn't have to be our 41, these are just the ones that have helped us the most. But if you don't have a clear framework or tool set, how are you going to navigate all this uncertainty? If you don't, you're just going to blow with the wind and like whatever, you know, especially the next generation, what's trending, what's cool, what people are liking on social media.

So we feel like we got lucky with the timing of putting this out. Like, we are at a time of unprecedented uncertainty. How do we get these principles out to as many people as we can to help them with that framework? You know, what's interesting is tolerance is the virtue of those who don't stand for anything, is a famous quote. And, you know, you mentioned, And I think that your father, but really the business, and I think it's very obviously talking with you,

you almost start with like, what do you believe as an individual? Yeah. And then what do you believe that a company stands for, which is just a collection of individuals? And then what does society stand for? And a lot of that divisiveness, et cetera, I think, is there's a clash of ideas, right?

At the societal level, which, frankly, I don't think that there is, like, a one-size-fits-allel-allel. People always disagreed. Totally agree. For centuries, they will disagree well after we are all. gone. Right. But in an individual level, I'm always surprised that, you know, even if you're just interviewing a candidate for a job and you're like, you know, what do you want to do with your life? Like the intentionality is, you know, sometimes not there or, you know, what type of company

do you want to work at? And they're kind of like, you know, one that pays me well. Yeah, totally. Whereas I feel like you guys almost are so clear in what you individually believe, and what the company believes that it does probably serve as a huge magnet for talent. You got 145,000 people that work for you. Yes. But I wouldn't be surprised if it actually repels away some people too. But my guess is that you guys aren't upset about that. Like it's kind of like, hey, we want the right people to come here and work here, right? Yeah.

No, I mean, so one of the principles that we have that we really frame up, spent a lot of time on in the book is talent. And I would say, you know, what principle-based management is our biggest competitive advantage that we have in the market. It's our operating system. It's how we do business. And one really critical element of that is our talent vision and how we apply the principle of talent.

And that is we hire on values first, skills second, and credentials last. I would say that's one of our biggest differentiators as a company. What does that mean? So I'll give you some examples. So most companies, I think, are the opposite. Credentials first. Where'd you go to school?

What companies you worked at before? Well, is your GPA and all that? And we feel like, all that's nonsense. I mean, yes, you have to have a gift. You have to have an intelligence that the company needs, you know, and fill a gap that we have. But we look at it as we want someone that is contribution motivated. This is another principle in the book. Very, very important.

Someone's contribution motivated. They want to come in. They don't think they know everything. They're humble. They're open to a challenge process and that they it's all I call it like we want the farm team kids The kids that they didn't have to work on a farm, but they come with that grit and that value system of work ethic and that they They've got to earn their position. They have to earn the money that their That their base salary and their bonus just because they came from an Ivy League school and they have a 4.0 doesn't entitle them to anything

Right. And so that has served us very, very well. And honestly, that's one of the reasons why we like being in in Wichita, Kansas, in the Midwest. And because we feel like we have access to a lot of that talent. And some of these overlooked universities, maybe that some of the other big companies don't focus on. They're like, we want the cream of the crop, the kids that have the work ethic that

are contribution-motivated, and bring them in. And again, I would say that is probably the biggest differentiator that we have. I mean, it's all about your team. You know, we all know that. And it's who you hire, but also who you fire. And, you know, when you have people that come in that are the opposite of contribution motivated, and you're wrong. I mean, and the company ours who we're wrong a lot. Hopefully our numbers are getting better in terms of how many times we miss this.

But if you hire someone that's more destructively motivated or deficiency motivated and comes in with that entitlement mindset or victim mentality or even worse yet, destructively motivated where it's all about power and control, if my father were here, he would say the biggest failures that we've had across the company is where we let a destructively motivated leader, really smart individual. end up being at the top of the company, and we leave them there too long. Because what that does to the culture of the entire, because everyone looks at the leader. It eats way. Right? Everyone looks at the leader and a reflection of the leader's behaviors

and the expectations of the leader and how he or she holds themselves. So everything downstream of a destructively motivate a leader is going to be a problem, right? It takes years to clean that up. So it was interesting. We had our board meeting last week, and I was looking around the room. We have 12 different business units.

And five of the 12 were basically, I call them kids, but kids that I grew up with when I came back from, I graduated in Texas A&M and then came back in and was finding my way around Coke. These were young guys that I worked with. They were right out of school, 21 to 24 years old. And they're now running five of the kids. 12 businesses at Coke. So that speaks just to our talent model. It's like not only values first, skill, second, credentials last, but then once they're in, if they make a contribution, there's no

corporate ladder. They can go from this business to that business, running supply chain to being CEO of a company. I'll give you one example. The gentleman that I worked with in business development when we bought Georgia Pacific back in 2005, largest acquisition we, Coke has ever done still to the stay. I think he was 20 years old, 21, and he was the lead finance and analysis on that entire acquisition at 21, and now he's the CEO of Guardian Glass, which is a global glass manufacturer. I'm just like looking around the room going, This is a, it's amazing. It's an incredible story.

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check them out using the link below. When you're going through the interview process, right? It's, I think the way you get at, like, what are your values is very unique. Because what you guys aren't screening for, from at least my understanding is like, you're not really like, hey, who's woke, who's not. Like, that's kind of like high level, very simple stuff. Yeah. But it's actually this like contribution mindset, right?

It's understanding almost of like, hey, do you understand what a comparative advantage is and how you implement it and, you know, the ability to do some of the, what are you doing in the interview to kind of suss this out? Great question. And we're learning all the time, yeah. Yeah, and I'm asking from the perspective of people who are watching this are, you know, people who run tech companies, they may be small business owners,

some of them may even be big business owners. And like, I think that's one of the big questions people always have is like, how do I get better at analyzing the person sitting across from me as to whether they will be a good fit for my company here? Well, and the downside of getting that wrong is huge, right? Just like we talked about, the wrong, destructively motivated leader,

or if you miss on a hire, it basically costs you two years. Because you're going to wait nine to 12 months to actually make a decision, give that person a chance that it doesn't work out, go back into the market to try to refill that role. That's another six months probably. And then there's another 12 months of development of that end. So the real cost of a bad hire is significant. So to your point, having a great capability on how you do that up front is a huge.

competitive advantage if you can figure out. So the way the way we do that is I mean each business has their own you know kind of HR capability and the business leaders are responsible for their own process and how they do that. So this is not a cookie cutter approach. But what we try to apply is an interview-based model. Well, let me start with the pipeline of talent as well. Back to where you what pawn are you fishing in matters, right? And if you have a values first mindset, you want to be fishing in the right pond

that fits your business. So we do that. But then the second thing is the interview process itself is we try to get a lot of different people that are skilled at different principles. So whether it's respect, humility, challenge process, innovation and creative destruction, you may be very good at the, you know,

asking questions around innovation and how thoughtful they are. Give me examples when you've, you know, transformed a product or a system, a process, improved a plant, whatever. But I may be better at sussing out, whether it's humility or integrity or respect and some of these very squishy kind of subjective principles. So what we try to do is get a team of seven or eight people to all hit, you know, basically hit the interview process from different angles. And then we have like a 360 review process where, you know, everyone raised their hand,

would you hire this person or not and why? And give me the examples that you went through on why you're confident this individual is strong on the value side. It's a lot more about the values than the actual skills. Because we believe once you get them in, if their contribution motivated and they have the right raw material to learn, that they can come in and learn and we can teach them.

We take a, and this is also, like, you have to take, it's long-term thinking versus short-term thinking, even on the talent development side. So that's what I would say is, and now what we're doing is applying AI to this. And so we're working with a company called Happy Robot. Okay. That is...

What a name. Yeah, exactly. I can't explain why it's called that. But it's pretty interesting. I just got a kind of a review on this and some examples of how we're leveraging it. Because even when you're doing it at scale, I mean, think about what I just described. That takes a lot of human capital in time. And it's the most important decision you make, who you're going to bring into the company.

But if you can complement that with artificial intelligence and automate some of these things to where the top of the filter, you're getting to who are the contribution motivated people of these candidates, and these are the top 10 of the 100 that we've talked to, you can make it a lot more efficient and hopefully improve your batting averages as well. Yeah, when I was at Facebook, the product manager interview track is very similar. They have three people who interview.

One is more of a technical interview. One's more kind of an analytics interview, and then one is just pure company culture interview. They do not tell the candidate, you know, who's doing what? And then afterwards, I forget the exact details, but I think it was all three have to go into the room and has to be at least two strong hires and no one can be a, you know, weak to a strong no hire.

Yeah. And when you're like going through the interview process, you're kind of just like, hey, I'm talking to these people, you know, meeting whatever. When you're on the other side, like, oh, this is way more analytical. This is way more intense than I thought. How did I get in here? You know, type of attitude.

Almost like when you're doing the interview, ignorance is blessed. You don't want to know. 100%. 100%. But, you know, one of the things that I think is really interesting is you mentioned AI. And, you know, we started a conversation with this disruptive technologies. But I think when most people think of Cook Industries, they think of the very hardcore agricultural stuff and probably things that they historically have to the business. I think I understand that you guys are starting to push in, like, from an actual product standpoint and service standpoint, you guys are starting to touch more of like the AI industry. And it's related from a capability perspective.

Yes. Probably not industries that people would expect you guys to be showing up in. Yeah, absolutely. I would say there's a big misperception, and you started there. So I'm glad you came back to this of who Coke is. A lot of people think of Coke, like, where we started as a, you know, a large private, industrial company. I thought you were out pumping oil yourself.

Yeah. I did do a lot of that. I had all the teenage jobs every summer working in refineries and feedyards and gas liquids plants. So I cut my teeth on that. That is true. But if you look at Coke today, I mentioned, We touch the majority of the economy.

We're in everything from wood products to glass manufacturing to agriculture. But we're more of a technology company than an industrial company. I think that's a better framing for what reality is today. We've invested 50 billion over the last eight-ish years. And those are two- In technology. In technology, sorry. And two examples that are two of our, I would say,

12 different business platforms that we have are just pure technology companies. One would be In-4 that's actually has been based here in New York City, but that's ERP software, right? So when we acquired In-4, that brought us north of 30,000 software engineers overnight. So you can imagine from a capability lens what that did to teach us technology and how we should be applying. Why would Coke buy an ERP software platform? Like, again, you know, oil, hay, cattle. You said it in your question, capabilities. We recognize that we are behind in software and how our businesses were running. We had some old, you know, a lot of different software systems

that were kind of holding some of the companies together with bubble gum and bailing wire. probably just we were underinvested there. So I think when the N4 opportunity came around, we saw that that could be a new capability for Coke, not just a new business, but you could teach the rest of the companies about how to run a business more efficiently, how to understand our customer better,

how to have better analytics in our supply chain, right? And so that's, that's kind of getting into our business development, approach as well. And if you look at, if you look at the history of Coke, I think this could be helpful to your audience as well, and the evolution of it, one of the biggest differentiators was our application of the principal capabilities. So how did Coke go from being a small Southern Oklahoma crude oil gathering company to one that touches the majority of the economy? A lot of people's like, well, how does all that make sense? And it is these principles that we're talking about, but one in particular is capabilities.

We have looked at the growth of Coke through the lens almost like of horizontal capabilities as opposed to vertical industries. So when you think about business that way of like where, where am I strongest? What have I demonstrated to customers where I can add unique value and build competitive advantage? Koch started around engineering, heavy operations, so refineries, pipelines, things that required significant investment that were difficult to operate. We had a strong capability there, and then trading in logistics. We're pretty good at moving product from point A to point B and really optimizing that for the customer.

So when you combine those three things, those were our core capabilities that we looked at and said, okay, instead of, well, we want to get bigger in pipelines. We want to go from whatever, 20% market share to 40% market share or the same in refining where we started. We looked at it and said, where can we apply those three capabilities across other industries that are maybe slightly depressed where we can get in at a reasonable valuation, test and learn and bring those capabilities horizontally into new industries, whether that was in fertilizers and agriculture. Like we ultimately, we got into that in rough in 2003, buying farmland out of bankruptcy. Georgia Pacific, 2005.

Wood products. How do how does pipelines and refineries relate to that? Well, those three capabilities I described, we could bring that value to wood products. We could bring that to agriculture. So I would say that's a very very... different way to look at business, business development, where you want to grow, because a lot of companies, and I think public companies fall into this trap as well, it's just how do I just get more market share in my vertical industry, whereas we look at it horizontally. I've heard your dad, Charles, and you both talk about this, where this, like, capability component, it almost prevents you from thinking of we're an oil company. Yeah.

We're, you know, agriculture business. It is very much, hey, we're really good at moving things. Right? That's right. It kind of doesn't matter. What else can we move? Yeah. That's it.

And I think that some of the great businesses have done that. And you can even look at something like a Berkshire, like what is their kind of competitive advantage? It's like they're really good at allocating capital. Yeah. And it kind of doesn't matter what the underlying businesses, they're in everything from candy to, you know, Apple, right? Yeah.

But they're really good at understanding business and underwriting, you know, risk and downside and then allocating capital. You guys, I think, do that. But what I think people probably don't understand is a lot of these opportunities, my understanding Some of them are offensive where you guys are going out. But you guys also have become so large and so well respected that I think you guys get a lot of phone calls. Yes.

And people are like, hey, there's a thing in bankruptcy. You know, are you guys interested? Or it sounds like maybe even the ERP software was more of like somebody brings it to you rather than you guys are hunting for ERP software. Yeah. And so having that framework of like, we know what we stand for, we know kind of what we want to be in.

We understand what our capabilities are, but we also understand we're weak. When those opportunities come up, I'm assuming it makes the decision making much, like, more efficient in terms of do we want to spend time this or not? It does. But we are, a lot of people would think, okay, we've got some five-year plan to grow the

company in which industries we want to be in. We're much more reactive and opportunistic. And so Molex is a great example of this. We acquired Molex in 2013. Molex is one of the largest connector companies in the world, connectors and cables there and everything from your iPhone to. healthcare devices. They've got a whole health care with Phillips MetaSize. They're in automobiles as well with as autos that are basically computers on wheels. And then we're in data centers as well,

the connectors and the cabling. So when we got that opportunity, and that was owned by the Crable family, and that was a public company for 30, 40 years. But the Crable family had majority control over that. But they wanted to, they didn't have a succession plan. And they wanted the ability to maintain the brand and the legacy over time and look at a company that would continue to invest in it and would be a great long-term home. So that opportunity came about because I think we had built that brand over time. And the Molek story is amazing.

because we ended up acquiring that. We convinced the Crable family that Coke would be a good home for it. We acquired it. But we didn't know anything about cabling and connectors at the time, but we have a team that is within the Coke Equity Development team that is excellent at analysis, looking at industries, but also being a capital solution provider and understanding the family in terms of what are their goals

and then how do we wrap a capital solution around that? solution around that. There's a lot of different examples that we've done there in family-owned businesses specifically. But with Molex, we looked at that and that team said, like, look, the future is IoT. Like this room, right, it's going to be connected. There's going to be data so you can optimize it, whether it's a plant, a product, IoT is a way of the future. And we don't really understand that. That is a capability gap for Coke. So when you look at the mutual benefit of the Molex deal, we could help the Crable family, but they could help us by getting into IOT, but then applying our principles to that to help it grow, stay private, can, you know, get into

new areas like data centers that we got into. And that's been one of the most interesting stories, I think, of any acquisition that we've done. There's more I could say there, but I would say when we bought that one of the most important principles was changing paradigms. Because as a public company going private and going from top line thinking and worrying about revenue and revenue growth to bottom line value creation. And a more, and then also shifting from there was a lot of top down, I would say, decision making as well, where we've tried to move that culture over time to bottom. up empowerment. And it's a case study in terms of transforming the return on capital of a business

with principals. And so there's more I could say there, but both on the business, like how we think about growth at Coke, that's a great example, filling a capability gap with technology, but then also having to change a paradigm culturally within the organization. So how do you take a business? Let's use this example or another business. You acquire the business. they're giving you the business and selling it to you because reputation, you've got the capital, you understand what they need, et cetera. But then I'm assuming that the operating principles and the operating, you know, kind of day-to-day tempo is very different, especially for a public company versus going to

private, top line revenue versus profit-oriented. And you said something to me one time, which I just keep thinking about is like the holy grill of every business owner is what if your people knew what to do without you having to tell them. Yeah. Well, I'm glad that was memorable for you. I was like, oh, this guy, if he can teach people to do that, that would be amazing. Yeah. Yeah. But like, how do you implement or get to that end result with whether there's

Molex or another business that you guys acquire? Because I think it's different. If you're starting a company, you get a handpick, okay, here's the people we're going to put it into it. They already come with our operating principles. They already understand how we do things. Right. That's the DNA of the company from day one is Coke. Yeah. It's different when you buy a company and you bring it in. Now you almost have to, you know, kind of change the plane or build a plane while you're in mid-air. Yes. And so you're trying to get all of the people now have to go from maybe top-down leadership to, no, you're going to know what to do without us telling you what to do.

Yeah. But we're not going to change many of the people. Yeah. I mean, your statement is right on. And when people have never heard of Coke, never heard of principal-based management, I always say, imagine a business where people at scale, people know what to do without being told. And people are like, well, that sounds wild, right? Just like your reaction to me on that.

But to be clear, that's that's a lot. That's a vision. That's not reality. But you have to start with, like, what is the culture that you're aspiring to have? And so if you have that as a mindset, then you truly have, you're moving towards bottom-up empowerment as opposed to top-down control and dependency. Let's take the other side of that where you have the smartest guy in the room, the leader that is setting all the strategies, that is making all the big calls.

and then telling the 10 other leaders around the table, you do this, you do that, you need to go get this customer and that. You're missing out on all of the knowledge downstream of that leader to empower those other 10 leaders to say, you're closest to the opportunity, you're closest to the customer, you're closest to the problem, go figure out and innovate the best way to create the most value. I'll give you an example of this.

like my, and so this is my father's approach. And as we talked about before, it kind of, the culture is downstream of the leader. Like, you know, if my father ran Coke top down and he wanted to make every decision, well, you're going to have that throughout all the supervisors within Coke. But his approach is more, my comparative advantage is around these abstract concepts and principles and how do I teach leaders this to carry it into the business and then let them run, right? So the rest of the leaders see that and are like, oh, wow, I have permission. He's empowering me. Now I have permission to empower my people. Am I running my

business top down? Am I telling everyone what to do? Am I acting like the smartest guy in the room? And so that is I think one of the, I'd say, the biggest differences culturally. But to your point, doing an acquisition and where you bring in one that was run more from top down and there's a lot of dependency on the leader to make call of the shots, it takes years. It takes many, many years to do that. And you have to change out talent. You've got to get the right leaders and the right roles. But I think once you have the leaders that really have a principle-based approach, you see the results almost immediately. And also the results from the water cooler talk in the company. What do the employees really say about their, do they love what they're doing? Are they self-actualizing? Do they feel like

they're empowered? Do they have a flexibility to innovate? And so, but, but yeah, growth is a challenge from an acquisition standpoint. I don't know why I never thought of this before, but do you think that Charles got some of this idea because his father, your grandfather, said to him, come back and run the company and you can do whatever you want, except for, you got to get my permission to sell it. Yeah. I mean, like you had an example.

Fred, Fred, leading by example there. And he said, come back and run Coke engineering. And he knew my dad didn't have a lot of experience in it, but, and he started him on a really hard business. For context, for those that don't know, Fred Coke is your grandfather. And he had Coke engineering, your father, Charles. That's right.

Probably was not that interested in coming and running the business. And basically your grandfather convinced him to come back by saying, here's the keys to the kingdom. It's not a huge business, but we got something that started. That's it. Go knock yourself out, do whatever you want, except for sell the company. Yeah, I mean, in case and point, this was a time where when he came, my father came into the company, and my grandfather asked him to do that, there was only 300 employees at Coke.

Today, I mentioned there's 145,000. So I remember my first job, I was 15 years old. I was employee 8,548. And so to say, we- Who's counting? Yeah, yeah, right. But it just, it goes to you, we've seen so much in terms of the both failures and successes of the company.

And I, just high-level message, you know, from the book and all the learnings and all the stories. that we tell we learn a hell of a lot more from failure than we do success. It's interesting this idea of failure, because one of the themes that I take out of the multiple books I've read now, I think even actually, I've read some of the books that I would say

that critics have written, and I always like reading, you know, there's a book that was written about one of the Murdox, right? There was a book that was written about Peter Thiel, and it's very much like the negative slant. And what I find interesting about them is like, one, you kind of get both sides of the story, right? But the anecdotes from the critics are always, like, the most absurd, you know, kind of things, whatever. Sure.

But throughout every single book, one through line, and even in some of the public commentary, is we almost went bankrupt. We almost went bankrupt. And it's like, you know, Purina. And, like, we can go through, like, maybe there's four or five of these examples that are constantly talked about. And so, like, how much of the success that the business has today was you had to be willing to take the risk of almost putting the business out of, you know, almost going out of business in order to drive, you know, 10,000 or 10,000 X growth?

Yeah. Well, we didn't have to make those dumb decisions. But what the way we describe it is that we learned a lot from those failures. And we learned what principle we missed or probably set of principles that we missed to basically dig ourselves out of the ditch and transform and started applying the principles. So, purine is a great example. And we tried to basically, in the ag world, basically be part of the entire value chain. It was called the gas to bread spread.

Everything, you know, pulling natural gas out of the ground to make the nitrogen. It was then planted to grow the food and then pizza crusts at the grocery store. And what you realize is that... We had very quickly, in a short period of time, completely violated almost all of our principles. Where are your true capabilities? Where can you add value? We violated experimental discovery. We plunged into things and made huge bets without really understanding them. And yeah, I mean, like that Purino was bankrupt the day we bought it. Because we didn't apply the scientific method, another one of our principles,

to the diligence process and said, what are all the reasons we should not do this deal? And so when you have that mindset and everyone's full board, we gotta get this deal done, we gotta have this whole gas to bread spread vision, then what you're gonna do is look the other way on some of the diligence. And so we find ourselves day one out of the, you know, that we acquired a bunch of out-of-the-money hog contracts

that were hundreds of millions of dollars underwater. So, I mean, just think about two principles I went through there. I went through there, where are your true capabilities, focus on that. Don't try to grow into all these different value chains that you have no business being in. But then also experimental discovery, it's okay to fail. But make a responsible sized bet that is basically,

you know, that is close to or equal to the size of your knowledge. Right? And we talk about failure as it's not a failure if you're really driving experimental discovery and the value of the learning exceeds the cost of the loss or the failure. And so I think that's being a private company, thinking very long term.

If you're worried about, you know, it's like we got a little red ink in the next three months, you're not going to be driving those experiments, right? And so we try to have a very robust experimental discovery culture to where every capability, every individual, every business, they're coming to the quarterly business reviews with, here's where I'm experimenting, here's where I'm innovating. And they're not beat down because they're like,

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I read a book about, talked a lot about legacy. And one of the things that it talks about is, you know, the rise of meritocracy has a lot of benefits. Yeah. But there are certain examples

throughout history where actually meritocracy is a negative and one of the examples uses, like, take a farmer. If you're like the fifth generation farmer, you're not like, who's the single best farmer who can go get 10% better yield

out of this farm? Yeah. You're like, hey, I want this to continue to provide for my kids and grandkids and great grandkids, et cetera. You train your kids to take this thing over. Yeah.

When it comes to failure, do you have an advantage because there's this element of like, you are part of the Koch family? And if somebody else was in that disruptive technology, like in a weird way, six months, nine months, 12 months, two years of losses, like at some point do they kind of get whacked, right? It's like, hey, this isn't working.

But almost in a weird way, maybe there's some genius to, you know, you and your father, et cetera, saying, like, no, let's put the person who actually has the intestinal fortitude to be able to see this very long term and know that the losses are going to come early in disruptive technology. Like, is that an advantage? I mean, I think the outcome of that could be

that wasn't part of the thought process. It was just more of, there's a market opportunity. We need to be in venture to see, you were talking co-disruptive technologies and why I started that. and that aligned with my comparative advantage and my passion of where I could add the most value. You were uniquely positioned to do it from your interest. Yeah. Now, I'm not running that anymore because it had been built up and it was growing and it was in a position where I know where my weaknesses are.

And you mentioned like, you know, I don't know if we're happy about our failures or how, but I learned a hell of a lot from being in roles that I shouldn't have been because what I realized is I'm a builder, not an operator. I'm not a good option. And what is, you've said this couple times, I've seen, like, what is the difference between those in your mind? I would say, I'll just give you concrete examples of different roles that I've had. I was, I mentioned I spent a decade in our fertilizer business and I had a lot of different roles. I learned everything from supply chain to sales, marketing, the accounting of it. And then ultimately, there was an opportunity, my boss came to me and said, hey, I'm going to go build an

energy business with this fertilizer business, you've been in the fertilizer business for seven, eight years now, you're the right one to take this over. It's like the third largest profit driver in Coke. So what an incredible opportunity. But that, I mean, this was a complicated business, production assets and, you know, all of, we had one of the largest positions in North America to make and trade nitrogen. We had a global business to trade, nitrogen, phosphate, potash. And so we operated in 30 countries in this business for 5,000 employees.

And it was incredible opportunity for me. But very quickly, I realized that operating a day-to-day business and running a really large team was not my bag. And there was someone that was much better at it than me. And so when you think this is the principle of comparative advantage. I think being intellectually honest to where is your real gift, and also where is it not? And what is that gift relative to everyone else on the team?

That's a real important part within comparative advantage. And by you being in a role, what is the trade-off relative to what someone else can do? But also what you could be doing. It sounds like really basic. I think sports teams apply this really well, the quarterback versus the wide receiver. it's like obvious who should be in what role. But for whatever reason in business, it's more challenging to truly apply comparative advantage.

You've got egos that get in the way. You want the big title. I feel like I have to have hundreds of people reporting to me and that's my status and I've really made it if I have that job. We think all that is BS. And I'm like living proof of that because I had that job and I realize that I'm much better

at networking, business development, origination, like looking at a one. The zero to one is much more you're... And so that's what I mean by not a good operator, much better builder. Yeah. And so it took me, you know, until I was late 30s to realize that, early 40s.

And but you realize through failure at different roles that to find that out and then be in the right role, go figure out what the right role is for you. You can create a lot of you. to create a lot of value. And oh, by the way, the fertilizer business is gonna be run by someone that is a great operator. So I find this is pretty common, I think,

especially in people who are interested in technology. It's such a disruptive, fast-paced, like, dynamic environment that they are constantly looking at, what is the new technology now, what is coming, how can I be disrupted? Like, they're just a personality and a mindset and stuff is very different than the person who's like, maybe a Warren Buffett who's like,

I'm betting on things that don't change. Yeah. Right? Like, that's a very different approach than the people who are looking for, like, what is the thing that is going to make a massive change? Yeah. And just naturally, if you were drawn to disruptive technologies,

then, you know, it's kind of hard to have two sides of your brain. That's right. It's like, I also enjoy the things that will not change for 20 years. That's right. I mean, one of our principles is, it's Maslow's principle of self-actualization. And I think it's so important. You can't, you have to talk

about self-actualization through the lens of comparative advantage, like in my story and realizing what I wasn't good at relative to others and what I was good at relative to others. And that's how Coke disruptive technologies was formed, basically out of the failure of me being president of Coke Fertilizer. So like... Do you look at it as a failure? No, because of the value, the learning of like what I'm not good at relative to... Because the business was still doing fine. We just looked at it. That's why it's weird you use the word failure, right?

It's because like the business was still doing. But failure relative to potential, right? Relative to what you could be doing. And so I think this is maybe an interesting takeaway for your audience. If you really understand and apply the principle of comparative advantage on your team and you said everyone is in the right role, optimize around their gift relative to what everyone else on the team is doing instead of looking at your role in a vacuum, think if it's a team of 10, team of 100, team of 100,000.

If you had everyone in the right role, put all egos aside, think of the value and the competitive advantage that you'd have. You would have, you would field the best team and kick everyone's ass. And I think it's overlooked. And then to me, that is one of the most, even at Coke, right? If there's one that we could change the trajectory of our application. And like my father always says, well, I'd score coke on principal application at about four out of ten. Really?

Yeah. Because he always looks at it and says, once he sees the principles being applied, the horizon keeps moving further. So the potential is greater. So you're always a fourth. Yeah. It's always opportunity to be a worry. Like the godfather of principle of base management. It's a little bit tongue in cheek, but there's a lot of truth to this.

that too, because the more you apply the principles, the more potential you see. It's funny talking to you because out of the entire book, comparative advantages, probably the thing that I, you know, grabbed hold up the most and was like, this one principle can be applied everywhere. And I think that as an individual, as a company, it's very obvious, but even in society, right?

If you think about over the last, I don't know, 100 years, the United States was really good at certain things. And then we kind of like gave some of those away. Yeah. And now we're trying to break it. bring them back and we're thinking a lot about like, well, do we have a talent advantage? Do we have a capital advantage?

Do we have certain manufacturing capabilities and others don't? Yeah. Geography-wise, we have a huge advantage to just two oceans and friendly neighbors, whatever. But I do think that that's probably one of the aspects that is most misunderstood about kind of the Coke enterprise, right, is the same thing, and you guys highlight this now.

It's like you can transform yourself, you can transform a business, or you can transform society. That's right. These 41 principles, plus, you know, many others that probably didn't make into the book, they can be applied at any scale. And whether it's a two-person company or a 100,000-person company is the same as you as an individual

versus society. That's right. To me, that's actually the value of the principles. I, we definitely agree with that statement and kind of your takeaway from it. And, you know, as I, as we began this interview, I talked about that we live in unprecedented uncertainty as a society.

And if you look at the next generation, like Gen Z in particular, I think there's a crisis of purpose and that there's so much focus in what other people like, and where we fall into this collective illusion of, well, if I'm going to be accepted in society, I have to like what everyone else thinks. Well, the mitigant to that kind of behavior, behavior and that thinking is having a very clear framework of principles, right? So you don't, back to what we were saying before, like blow with the wind. And so, but going specifically to the principles and the society that I think we want, which is where the country was founded and right there in the Declaration of Independence is principles

like mutual benefit, right? We want a society of mutual benefit where people win. because they're helping others. And if you think if we're working together and I help you win and you want to help me win, well, the pie grows. This isn't a zero-sum game that sadly so many people look at society through that lens. We need to go from zero-sum thinking to mutual benefit. If I help others win, I'm going to win too.

We need to go from tribalism and divisiveness to openness and empathy, putting yourself in someone else's shoes. We need to go from, we talked about bottom up versus top down. We have way too much top down control and dependency. I saw a stat recently a very disturbing stat that 52% of Americans think that we can't solve our own problems anymore.

And that so the government needs to come in and fix it. Right. Whereas if you think of bottom up and we believe in people that they are the solution because they're closest to the problems, then we can have a society of mutual benefit. We can remove barriers from the top down and we can really advance the American dream and why so many people from all of the world have wanted to come to America to experience that. Go build a business, build a family, go build the next SpaceX that no one thought was possible. Right? So that's at a high level, at least how we see these principles that we're looking at and we apply that has grown Coke over 10,000 X. We can, you can do that across society too and drive the most human progress. As you're talking, I don't think that you would consider yourself and hold yourself out as a bitcoiner. Right.

I don't think that I'm not. I don't think that Charles Coke's got a bag of Bitcoin somewhere, right? But what I do find very interesting is the like Bitcoiner mentality, and there's millions of these people, they're very, I think, individual sovereignty. They're very much, you know, I want to take control of my own life. I want to improve my situation for my family and my kids, et cetera. I think that they have a strong belief in this kind of bottoms up type approach of accountability,

personal responsibility, et cetera. But also I think that there is maybe like forget even what the principles are. Just a belief that, like, you have to know yourself and you have to stand for what you believe in. Yeah. Even if it's different than what other people believe in or your neighbor or whatever, just like knowing what your principles are, it's really, really important.

And then having the courage and intestinal force to stick to them, forget, you know, whether it's Bitcoin, whether it's principles-based management, whatever. It's like the people I think I respect the most, and, you know, that I've interacted with, they have a set of principles that they have done the work to discover. And then they just say, look,

we don't have to agree. This is what I believe. Yeah. And I think there's a lot of other people who agree with me, and I want to go, you know, build my thing with people who see the world the same way I do. That's it. And that seems to be like the Coke one. I think you're right.

And it gives you a framework to say yes and say no to things based on your value system and based on your principles. And, you know, you're asking about how we view this societally. And, well, we, you know, we, you know, we, you know, we, you know, we, you know, you know, We've talked a lot about the business side, but I'd say I spend about a third of my time, and my father spends half of his time on an organization called Stand Together, which is all of our philanthropy and social change, which is basically the whole idea of bottom-up empowerment and believing in people and believing those that are closest to the problem are the ones

that are the solution to the problem. And we have hundreds of examples, because we work on stand together. is this organization that has been built up over, we started in 2003, but my dad's been working on social change for most of his life, 60 plus years. But he realized that if we were going to make a really big impact and create movements that help people around some of these biggest problems, some of the biggest problems in the country, that you needed a network effect of that. We needed partnerships.

We needed preferred partnerships. that all believe in these principles and this idea that every human being has a gift, but there's all these, there's new barriers stacked up against people every day that make it impossible for them to unlock the potential of their gift. And that's what stand-together is about. So we work on poverty, addiction, violence,

criminal justice reform, transforming education, very, very broad-set, problem set. But we have over a thousand, business leaders now that invest their philanthropic dollars, invests their time to get behind a problem that they care about most. And now we're leveraging culture to do that at movement scale now with sports, music, media, YouTube, and getting these principles out that we've talked about and trying to help people at scale.

What's an example of something specific at stand together that you guys do where the principles are kind of used to affect change. Yeah, I would say, I'll start on education. I think that's something that every household in America cares about. Nobody wants their kid to be dumb. No one wants their kid to be dumb. I think everyone's generally concerned with the, especially the K-12 education system.

We believe it's broken, but there's some really positive bright spots. And so our vision for education, in applying these principles into the institution of education is one of going from a one-size-fits-all, teach to test, teacher at the front of the classroom model, you know, working from textbooks to individualized education. And now that we have new models and technology that gives students the ability to do that at scale, we have a huge opportunity in front of us. I always use the example of what Salcon created with Khan Academy, with leveraging technology to meet a kid where they are in their learning journey. And kids, you know, 30 kid classroom, they're all at different levels, right?

But for them to master a class, mathematics or physics or whatever the subject is, they can do it on their own terms. And they're not trying to graduate every everyone from grade to grade. The Alpha School is another great example. They're leveraging AI for the first two hours of an eight-hour day, basically cramming the curriculum into the two hours and then giving them the freedom to choose based on what they're passionate about different projects they want to work on. Do they want to stand up a podcast because they're passionate about that, learn public speaking?

All these things that are. so critical to when you get out in the real world, that's what you have to know. Financial literacy. Almost no school teaches that. And these new models, these microschools, the alpha schools that I'm describing are teaching that to kids in kindergarten and like first through third grade. What an advantage, these practical things. So the thing that's most exciting about education to me is that prior to COVID, only 20%

of families were open to a new model for their kids. Post-COVID after families have seen, you know, when their kids came home and they saw, they're learning more on YouTube than they were at school, that 80% are now open to a different model. And that's why we've invest, we have something called the VALA Fund, which is basically venture capital for education entrepreneurs, that we pulled together with a Walton family,

that we've put, But we created a fund and others stand together partners have invested in this. But we've built over 5,000 micro-schools across the country in the last five or six years. And it's all around these principles of individualized education, helping kids find their gift and putting them on that self-actualization journey earlier in life. We feel like that's, I mean, that's the future. Every, all these other problems, addiction, mental health. issues, our broken criminal justice system are downstream of a bad education.

Right? So if we can really transform the education system in this country, we'll be way better off. I was talking with a friend recently, and he has kids about the same age as mine, and he told me that he created what he calls a chore chart. And so... That sounds like fun. Yeah, three, four years old. What he does is basically he lists out a couple chores, and every night before the kid goes to

they check to see, did you do the chores? And he is, I forget, I think he's paying a dollar a day or something, right? But the idea is just like, hey, you have chores, you have to do. And so, great idea. So I created it for two of my kids. And they're so excited to do chores, I'm sure that will wear off over time, right? But when I started realizing is like, I'm responsible for them knowing this stuff, not somebody else, right?

Yeah. And so I go and I look and I'm like, okay, I don't know, whatever the latest percentage is have kids who, you know, can't read past a third grade level or, you know, whatever. You're like, man, there's this balance. I fully understand there are parents who are working two jobs and they don't have time and, you know, all that kind of stuff. Right. But there's a heck of a lot of parents who are just kind of outsourcing their, you know, education

of their kids to somebody else and saying, well, like, why are you doing a good job? Right. And I always reminded Clayton Christensen, the Innovators Theloma. He wrote another book called How Will You Measure Your Life. It's one of my favorite books. And in it, one of the, like, warnings that he gives is do not outsource the raising of your to other people. And he talks about the soccer coach, you don't know what their values are. You don't know what they're telling your kids.

If you're not at practice, it doesn't mean don't have your kid play soccer. It just means that, like, you also are responsible for telling your kid, you know, how to perform on the field or what the rules are, whatever. Right. It sounds like you guys are in these kind of micro-schools, really empowering the parents, along with a teacher, to say, hey, look, let's shrink down these class sizes and be able to spend more time on the things that actually matter, not just the rope memorization of the books.

That's right. And I think one critical distinction is we don't think about a teacher as a teacher. Think about them as a guide. So the kid, the student has agency. The student gets to decide. And whether it's alpha or the micro school that my kids go to in Wichita, Kansas, they decide what most of their day looks like. And I think that that is a paradigm shift. Right. You know. Can you imagine us doing that? Yeah. No, exactly. I mean, I grew up in a system. I was teach to tests. I went to a great school, but I look at what my kids and so many more kids have access to at a low cost, by the way. And my guess is, like, on this point, right, if we went back in time and somebody showed up for one day in high school, I was like, what do you guys want to do today?

I don't know, we didn't know each other then, but I'm sure that we'd kind of be like, I don't know, like eat candy, not do anything, you know, definitely not be here at school. But if that is just the normal data today, you don't go to the extreme of like, you know, screwing around and, you know, doing the worst thing possible. It's kind of like, well, I think kids do want to learn. I think they do want to do things that are cool.

What we're doing is closing the motivation gap. Joe Leamont says that 90% of why you have a failing student is because it's not motivated to learn. And so what he's doing with these techniques and making it fun and interesting in meeting the kid where they are, is. is closing the motivation. I'm like, oh, actually, well, do I have flexibility in the way I learn? I can do this with gaming and somehow like Fortnite comes into this.

That's my favorite game and I'm going to learn. There's an incentive there of if I really focus on eating my vegetables, right? And learning my math and learning the science and all the things that I get to learn also in the afternoon through Fortnite, and then I can work on projects that I'm excited about. I'll give you an example of my own son, my oldest son, because of that flexibility, one of his best friends, 13 years old,

when Anthropic released Claude Code, one of the kids got really good at it. And he came up the curve quickly, and then my son, Charlie, was like, hey, I want to, let's do a project. together. And then within like a month, he comes home and he's showing me what he's working on. And he's like, Pop, why do you have that spreadsheet there? Like, I don't know, I had something, my workout program, my stretching program. He's like, let me just build your model. So he took that,

and he's 13 years old, ingested that and had an app built on my phone in about 35 minutes. I watched him do it. And then so think if we could have all kids that have this, amazing curiosity and they all have gifts, these tools, and just let them run and let them learn and do it on projects that they care about, you close a motivation gap. And that, that alone will transform our entire education system. Well, your kid does that for you. Yeah. Then builds confidence that they can solve problems, then things critically, then goes in, develops a comparative advantage right? It just feeds from there. Yeah. Before I let you go investing. We spent very little time on that. You all drive a ton of profit. You can reinvest it into businesses. You can go buy new

businesses. There's also a whole universe of investment assets out there you can buy. How do you guys just philosophically think about allocating the money? Yeah. So I would go back to one of our principles, long-term thinking versus short-term thinking. So we apply that to all of our investments. We do invest in pretty much every asset class there is. And I think when you look at Coke, big picture, about half of it is those, is eight operating businesses. And then we have four investment businesses that, as I mentioned, covered every asset class from early stage venture capital all the way to investing in funds and investing in credit

strategies and whatnot. So eight operating businesses and then four like investment. investment, but half of our capital consumed is in the business, but half of Coke is in these investment businesses, right? That's interesting. Yeah. So, and I think that's another thing that people don't know about Coke, but we want to create, we want to have enough optionality and liquidity to where when the next Georgia Pacific,

the next Molex comes around, we have the dry powder so that we can act and we can act quickly. And I think being private with an incredible. board that we can get together within 24 hours on an opportunity that creates a big competitive advantage for us in the business development world. I would say one area that I'm specifically focused on that I think is one of the biggest opportunities for Coke long term is on this trend of generational wealth transfer in businesses, especially family businesses. If you look at the turnover of wealth over the next 20 years, it's north of 100 trillion. So they're just staggering, staggering numbers,

and that creates business opportunity. And so family-owned business in particular, private family-owned businesses that are mature, we're looking at, you know, businesses that have significant cash flow and meaningful EB-DAA. We have proven over time that we think long-term about those and that we can be a great home for those companies,

whether it's a minority investment or, or a full, you know, acquisition. We approach the market, and especially these family-owned businesses and the principles of these companies with a capital solution provider mindset. And we want to, our goal is to be the first call for these family businesses when they run into problems such as succession. They need private equity out because private equity is not thinking long-term, and they need to close a fund, and they want off the,

cap stack or growth capital. And so that's a big part of what I do because I can, I have the ability to tell the Coke story. I think multi-generational company, we've been through all the family problems. So we get it. We get it, right? And so to be able to go into the market and say Coke could be a great home, just like it's been for In4, for Molex. One of the more recent deals we've done is with the DeSoto family with Mitre. There was an opportunity to buy into that company and then supply growth capital to them, but also bring these principles to MI Windows and Doors. We were able to prove ourselves by making a relatively small investment in the company that

ultimately grew from roughly a $300 million investment in that company to $1.5 billion over time because we are a preferred partner to them. And we help them grow from, you know, 60 million EBAA, or sorry, 80 million EBAA to roughly 600 million EBDA over the course of, you know, five or six years through growth capital. And so that's an example of being a capital solution provider, understanding the family's problems and opportunities, and then thinking long term. And so business development, back to your question, that's That's where we want to be, and we hope that we earn that brand over time and continue to hopefully be top of mind in that first call for the next big opportunity.

Well, if, as I've talked with you more and more, I think that one thing that is very clear is I always say that you can't fake good kids, right? And those Sunday lessons, you may have been listening more than you thought. Oh, well, yeah, at some point, my father says... It seemed in there somehow. My father says, I can't remember the quote, but sometimes these ideas penetrate even the dullest of minds. You know what we're laughing about. My brother was laughing the other day. We used to tell our parents that we didn't need a study because we would just put the textbook

underneath our bed and osmosis would work. Yeah, right? Yeah, yeah, yeah. Just end up in our brains and we'll do well on the test. And, you know, your parents are like... It's true, but it's true personal experience and failure. Yeah. That's how you learn.

Yeah. One thing before we close here that I would like to say to your audience is it seems like these principles can be like so daunting, right? It's like in the book we say there's 41 principles. There's no magic number to 41. Those are just the ones that we have found that have really helped us transform and that we feel like apply most to society and apply to every aspect of life. the power of technology to apply principles now, I'd encourage your audience to download and check out

an app that we built called the principal companion that really we launched with the book. But instead of looking at it as I got to read this book and I got to learn all 41 principles and try to figure out how to apply this, that starts with whatever problem that you have right now today. and you engage with it just like chat GPT, one field, whatever your problem is, type it in, and it engages with you in a way that teaches you principles to solve problems. Interesting. So a five-minute exercise.

So you can learn one or two principles, get a win, get some momentum, and then learn more, and it becomes like, well, that helped me with my day. That helped me with my boss. That helped me with my employees. That helped me think about strategy differently in my business. It helped me on how I enter. with the kids at the dinner table. And so I'd encourage them to check that out

and just take the problem you're dealing with right now and see if that gives you momentum in learning one or two principles, and then I think you'll learn more over time. How can people get the app? So they can download it in any of the app stores. So Apple App Stores or Google Play, it's in all the technology platforms. Amazing. The book is called Becoming a Principle-Driven Leader,

41 Principles to Build an Enduring Business. I think the part that I enjoyed the most was because I've read Charles's books. I kind of think I understand how he writes a little bit in his thought process. You and him together. You guys got to write another one now. Well, it was so fun. You know, my mom said to my father after his first book, he said, you'll write your next book with your next wife. And he wrote five and she's still with him.

But as you know, I mean, it is a process. Yeah. But I learned more in the last 18 months than I've learned the last 18 years. But it's probably, you have to write it down. You got it, you got it. By writing it down and synthesizing it and writing it. And I would encourage like, look, every business leader to have a clear set of values and principles and capture the stories of your failures and get those out so those stories aren't lost. That's what we're trying to do with this book and why my dad's on its fifth book.

This is my first one. But is that, Yeah, I mean, we want Coke to learn from these stories. We don't make the same mistakes, but really empower people with these principles. But we offer it outside of Coke, because everyone's like, well, why would you take that competitive advantage and offer it to anyone else? Because we want to see as many people

transform their lives as possible with these principles. We've seen it across social change. We've seen it across nonprofits. We've seen it in our own lives, and we've seen it in our own business. We just want as many people out there to have the opportunity to transform their lives too. Well, I think it's amazing.

I highly recommend everyone go get the book and we'll do this in the future. Awesome. Thanks, Anthony. Appreciate it.