Andreessen & Horowitz 2

Supported by Greenhaven Road Capital, finding value off the beaten path.

Ben Horowitz and Marc Andreessen released their (annual?) conversation from an a16z conference. That event included the podcasts with Charles Koch and Ted Sarandos. This is our second post with the a16z founders, almost to the day! Marc Andreessen and Ben Horowitz, July 15.

This episode is hosted by Steven Johnson who asks about Andreessen’s and Horowitz’s see it to believe it moment. Ben said that his was when he first saw Mosaic, “because for years in tech there were all these ideas about what was possible. From all the things that you ought to be able to do, but you could never actually quite get. Mosaic was it. It was all there. You were like, ‘Oh my god, the whole world is right there.’”

These lightbulb moments are all around us. Malcolm Gladwell talked about them with Tyler Cowen.

David Lynch said that he didn’t know ‘artistic painter’ was a job. When a friend told him his dad painted, Lynch thought he meant houses. Paul Rudd said something similar to Marc Maron.

Andreessen’s moment came via the television. Watching Night Rider and seeing KITT speak Andreessen said, “I think I fell off the couch.”

knight rider film GIF

Johnson also inquired about their relationship and asks how Horowitz and Andreessen argue so well. It was Marc’s interview with Tim Ferriss that first suggested we argue well. Horowitz explained it like this.

“We are close enough in personality but different enough in skills that we often see things from different angles. A lot of it is Marc himself. Marc like to take the other side of an argument. He just enjoys taking the other side, that’s his thing.”

It takes “a level of trust and we can really go at it in way that for most people you’d go, f-you, you can’t talk to me that way.”

It’s not easy. Dan Egan said he underestimated how difficult it would be to make sure people felt respected and heard, and still disagree. But good arguments make better companies. In Brad Stone’s book, The Everything Store, he wrote, “Amazon’s culture is notoriously confrontational, and it begins with Bezos, who believes that truth springs forth when ideas and perspectives are banged against each other, sometimes violently.”

Andreessen goal though isn’t to be right. “The way I think about is this; it’s more important to have a successful partnership than being right on any particular issue.”

Their opinions evolve as they see two-thousand pitches a year. These are “some of the smartest people in the world in all the domains they are operating in.” Andreessen said, and, “After that it’s hard to pick up a magazine because you’re seeing this stuff months or years before it shows up in the press.”

Marc’s reading habit is an experiment this year. He’s trying the Talebian suggestion to barbell the content. “I’ve stopped reading newspapers and magazines…I only read books and social media.”

Why books? “Books have probably become the great underestimated source of information relevant to our daily lives.” Audiobooks, for example, are great while washing the dishes. What books does Andreessen like? He called Finite and Infinite Games “a great book that goes through history where politicians and philosophers thought the world was zero sum and huge battles were fought but three-hundred years or so ago Adam Smith and a bunch of other really smart thinkers noted that you can gain from trade and it’s good for everybody.”

We’ve done posts just about books here; China Books and Deep Books.

You could also listen to music. Horowitz quoted hip hop in his book The Hard Thing about Hard Things because it’s, “a very capitalistic form of music. The main theme of hip-hop is, how do you build something out of nothing, how do you compete.” This is a “perfect analog for entrepreneurship.”

These books, tweets, albums, and songs are mostly heard in Silicon Valley, a place with a secret history. Why there? “It’s the place where the really smart engineer, programmer, sales manager, marketer – on the margin – is more tempted to move to,” said Andreessen.

But it’s still an amalgam. The duo suggest reading The Tinkerings of Robert Noyce.

It’s a place making collaboration software by engineers who must be present. Andreessen thinks the relocation advantage has a psychological explanation. “It just so happens in the form of traditional companies it’s better to get everyone in the same room.”

But that’s for traditional companies. In other instances brainstorms (like at IDEO) and arguments are deafening.  George Lucas moved from San Francisco, not so much for what it offered, but to get away from Hollywood. Warren Buffett lives in Omaha. Ken Burns lives in New Hampshire.

Toward the end of the conversation, the discussion turns to ideological biases. Andreessen said that people look at Blockchain and:

“If people walk up to this idea from the right they’re like, ‘what on earth is this decentralized hippy thing?’ And if they walk up from the left they’re like, ‘Oh my god it’s got money in it must be evil.’ You gotta wrap your head around it and we see it as a third model for innovation. Many of the smartest mathematicians, programmers, theorists, and economists are obsessed with this.”

They fail to do what Ben and Marc do well, argue. Hans Rosling wrote that holding two contradictory ideas in our head is difficult but necessary. Rosling wants people to shift their thinking from A or Z to A to Z. How? Be like a financial reporter, talk to short sellers or conduct your own Ideological Turing Test.

Another path toward incorrect conclusions is stepping outside our circle of competence. Horowitz and Andreessen are not worried about artificial intelligence. Ben said it’s “pretty low on my list.” Andreessen said, “The thing that drives me crazy about this is the freaking physicists. It’s like, I’m a computer scientists and I don’t have crazy conspiracy theories about black holes.” To which Horowitz added, “It’s hard to find an AI expert who goes, ‘Oh yeah, this is a big problem.’”


Thanks for reading.


The Work Required to NOT Have an Opinion

Supported by Greenhaven Road Capital, finding value off the beaten path.

This is my favorite Farnam Street post. It’s simple. It’s short. It’s eternal. It’s inspiring.

It’s about the idea of seeing things from your point-of-view and from at least one other.

Tom Wolfe said to be the man from Mars.

Bryan Caplan created an Ideological Turing Test.

Sam Arbesman suggested to look things up.

In his post, Parrish has great ideas. Watch out for confirmation bias. Don’t overestimate your circle of competency. Develop more than a chauffeur’s knowledge.

Parrish’s post inspires work and is sound advice. But there’s more to do. The opportunity cost to know everything is beyond high, it’s impossible. Instead, we should be comfortable saying I don’t know and I don’t care. Like a pop song chorus, let this be the refrain in your head all summer.

Jason Zweig wrote that investing in index funds, “liberated me from the feeling” and “gives me more time and mental energy.”

Like exercise, coffee, politics, diet, and religion, we each have a blend of ego and humility. Too much humility and people will walk all over you. Almost literally. Too much ego is your enemy.

IDK and IDC is a shimmy away from ego and a two-step toward humility.

Writer Katherine Boo advises to, “Wean yourself off of the tit of your own ego.”

WGL President Warren Lagarie warns, “What separates you from knowing a good deal is your ego. We always tell our interns, ‘Your ego is not your me go.'”

John Boyd warned people they could be or they could do. Being is ego, doing is not.


One answer is space. Pause. Let your opinion float past. Avoid the instant reaction to retweet, to speak, to dash off a letter to the editor about the obtusity of someone.

At first IDK and IDC felt like giving up. But like Zweig notes, it gives you more energy for other things. Things you do or want to know, things where you do or want to care.


Thanks for reading.

Ron Shaich


Supported by Greenhaven Road Capital, finding value off the beaten path.

Ron Shaich is the co-founder of Panera Bread and (former, retired) CEO. He spoke with Guy Raz on How I Built This about going from handing out Tollhouse Cookie samples to opening hundreds of Panera Bread stores.

Shaich’s see it to believe it moment happened in college.

“We were in a local convenience store across from the Clark University campus and they accused us of shoplifting. I came back to campus, I was in my door room with a few friends, and I said, ‘Why are we shopping there? How the heck can they treat us like that?’ We can do this ourselves.”

Shaich grew up volunteering in political campaigns and never considered business as a career. “I didn’t see myself as a business man. It took a while to make sense. But in so many ways, running a business is no different than running a campaign. A campaign is a business where one day it ends. A business is a campaign that never ends.”

He got permission from Clark to open a store. He spent the summer figuring out logistics. It opened in the fall selling cookies, munchies, and drinks. The store took over. “I was more invested in that store than my own academic life,” Shaich said.

There is so much potential in moments that unveil the possible. David Lynch for example, didn’t know that being creative was a job. When a friend told him his dad was a painter Lynch wrote, “I thought maybe he might have been a house painter.”

With his eyes opened to the world of business Shaich headed to Harvard for an MBA, class of 1976. After graduation he got a job with The Original Cookie Company as a district manager. “I spent my time opening dozens of these cookie stores around the country.”

On one trip through Indiana, Shaich wondered why they always opened in malls. Wouldn’t urban centers, with more people, be better? Shaich said, “The reality of the cookie business, of any business, is that you gotta pay the rent. So the question is, what’s your volume?”

He suggested a change of strategy. His boss said no thanks, we only open mall-based retail units. Shaich again sees something that doesn’t make sense to him and decides to do it the way that does.

With what he’s saved and loan from his dad, he opens a cookie store in downtown Boston.  “We took the Tollhouse recipe right off the bag and I would stand out front and hand out samples. Then we would adjust the recipe based on what I would learn talking to customers.”

Whether aware of it or not – I’m not sure what they teach at HBS – Shaich is talking to his customers. Tiffany Zhong helps people who don’t learn it at school, Harvard or elsewhere. Marcus Lemonis said that customers are your first investors. Jenn Hyman did it with Harvard undergrads while she got her MBA – maybe they do teach this.

Shaich baked, questioned, gave change, questioned, experimented and asked more  questions. He told Raz that this cycle is the whole point of business. Don’t do it for the money he cautions young people. Do it because you like it. “I just love the process of figuring it out. I love doing the work. I was working one-hundred hours a week and it never felt like work. It was joy.”

But it wasn’t a business, yet. Shaich had $400 in sales the first day. That’s fine, but it’s a lot of work to sell that much in cookies. Shaich needed something else. But what?

In the ask-questions-then-make-small-bets part of the process, Shaich noticed something. No one came in before noon. People might not want cookies before noon, so what do they want? Baked goods. He approached Au Bon Pain, and “I became their licensee for the one square block around the cookie store.”

Business was good but Au Bon Pain was bad. Well, not bad, disorganized. “To this day I’m sure I still owe them money.” Shaich saw another opportunity. He bought the company and combined the two.

While talking to a customer one day, Shaich got an idea. “I would be in a restaurant and have a customer walk up to me and they’d ask to have their baguette sliced.”

Why? They wanted turkey and cheese on it.

“You didn’t have to be a Harvard MBA to say, the real thing here is that the baguette is not the end, it’s the platform to sell sandwiches. My whole view of business is that if you really focus on listening and seeing you’ll learn amazing things.”


“In their behavior, these customers were showing us the opportunity.” Sometimes customers come to you, sometimes you go to them. Before Patrick Collison started Stripe he talked to people in the Bay Area about a payments service and found, “this pond was actually a much larger ocean.”

Shaich added sandwiches.

Competitors arrived.

Pepsi tried to imitate them. Sara Lee too. Though under funded and less educated, Shaich survived. Why? They talked to customers and gave them what they wanted. Soon Shaich acquired the St. Louis Bread Company. Their nineteen stores were doing more business with larger footprints that cost half as much. What gives?

Their success was because they were the third place. Shaich describes it as “the kind of space where you want to sit and do an interview, a place for a bible study group, for a team meeting.” He rebranded everything as Panera Bread (except the St. Louis market) and begins to expand.

“I’m always looking for the deeper trend. Post World War Two fast food was special.” This was Harry Snyder‘s and Ray Kroc‘s story. The same story played out with Milton Hershey‘s and Coca-Cola after the Civil War.

By 1998 Shaich had one-hundred fifty stores. But there was something more. A great secret to unveil. It was more of Panera. He sold Au Bon Pain. “I wasn’t downsizing. I was focusing. In retrospect it looks brilliant but going through it was horrible. Au Bon Pain was like my first child but sometimes you have to march forward.”

By 2003 Panera had one-billion dollars in sales. “I never do a victory lap. The time to worry about tomorrow is today.” That mindset paid off in 2008.

“Our whole view was to make smart bets and one of those smart bets come from a contrarian perspective. Pre-2008 recession the whole world was in a go-go-go kind of context. Everyone was levering up and taking on debt. At that time we held back. When the recession hit -as Warren Buffett put it, that’s the time you make a fortune – our sales were still strong and we invested in growing even more quickly during the recession. Real estate prices were down twenty percent and construction costs were down twenty percent while our competitors were ripping costs out of their P/L trying to keep their costs down.”

Panera is again a private company. Shaich sold it because there’s too much short-term-ism in public markets. When you have such short-term pressure on CEOs they react and what that means is cost cutting and they avoid the transformative events that drove the success of Panera.”


Thanks for reading. In the spirit of the post, I wrote this in Panera Bread Cafe 4194.


Martina Navratilova

Supported by Greenhaven Road Capital, finding value off the beaten path.

Is tennis the best sport metaphor for life? It has immediate feedback. It’s mostly individual but with some coaching. It’s mostly skill with sprinkles of luck. It’s a game where effort yields rewards.

We’ve touched on the game before. Brad Gilbert coached us to play games within the game we could win. Andre Agassi wrote about the two games of tennis. Timothy Gallwey encouraged us to let go of judgments but do not ignore our errors.

Let’s ‘play another.’ These notes are from Martina Navratilova’s conversation with Tyler Cowen.

Copy and paste what works. wrote that Navratilova “seemed to hit bottom” in 1981. After a 6-0, 6-0 loss to Chris Evert, Navratilova was introduced to Nancy Lieberman, and she told Cowen, “I thought I worked hard enough, but then she introduced me to running suicides on the basketball court.”

Lieberman taught Navratilova to play basketball, not tennis. Martina liked basketball enough they played most days after lunch.

Tony Hsieh saw that selling shoes without trying them on was already working – via catalogs. Ted Sarandos saw that comic book shows and movies were already working – via Hollywood. Carl Turner Jr.’s father saw that dollar sales worked.

Navratilova couldn’t do exactly what other tennis or basketball players were doing, but she could do her own version of it.

Focus. About writing in a journal each day Navratilova said, ” It worked because it really centers you. It narrows it down, whatever long-term goal you have.”

Journaling for Navratilova also allows her to keep track. “It’s always good to keep track, whether you’re playing points — keeping track that way — or just measure your progress or maybe regress some days.”

Counting and marking improvements is something Jocko Willink advises in his Field Manual. Dan Ariely said that we needed reminded of goals. It’s too easy to get stuck in your inbox, and “Every time you’re doing something, you’re not doing something else.”

Finish line fallacy. Sometimes literal, in the case of Amelia Boone. Sometimes more metaphorical in the case of tennis rankings. Navratilova never got sucked into this fallacy. ” If you tried your best and your best ranking ever was number 10, then the other nine players were better. But if the other nine people weren’t alive, you’d be number one.”

Besides a focus from journaling, Navratilova focused on excellence rather than perfection. “It’s good enough to be excellent. That’s good enough. You don’t need to be perfect because perfection just happens by accident.”

Scott Malpass has the same mindset. “At the end of the day we don’t really care much about what other people are doing. We’ve got our own risk tolerance, our own mission. We are going to do what we need to do for Norte Dame.”

**Conditions matter.** “The one thing growing up in a communist country, perhaps the only good thing about it, was that it was OK to be a female athlete, or anything, really.”


Tennis as an individual rather than team sport helped too. “I was lucky that I could come out (as gay) because I knew I could still play tennis no matter what happened. Endorsements, I didn’t care. I lost a lot of money, but I just wanted to play tennis and be true to myself. I knew I could still play no matter what. The ranking is this — you get to play.”

Alice Waters‘s life is different if she never goes to Berkley. Andy Weir‘s life is different without the internet comments section.

Fortunately, conditions can be designed. Landscapes help eliminate drug gangs. Landscapes help us run faster. Landscapes help us be more creative.

Don’t guard the line. Asked about doubles advice Navratilova advised:

“Well, the biggest thing in doubles is cover the middle. People cover the line too much, and you may get passed once or twice down the line, but you will get 15 balls go through the middle…But if it’s down your line, everybody’s embarrassed because it’s my line. So people guard the line with their life, and they leave the middle too open in regular doubles.”

Some things look bad and some things are bad. Conventional wisdom (and the base rates) in doubles tennis tell players to not guard the lines as much as they do. Yet players do because they look bad.

This is a major issue in professional sports and the application of analytics. During the 2012 Pittsburgh Pirates the players were apprehensive (at best) about shifting in the field. Like tennis, it was easy to see the balls that went where the players used to be. Much harder was seeing the plays that worked because of where the players were.


Thanks for reading.

Jack Reacher

Supported by Greenhaven Road Capital, finding value off the beaten path.

Spoilers, like Reacher’s elbow, arrive fast and unexpectedly in this post.

The Jack Reacher story by Lee Child is an ongoing, twenty-two book, series with the title character as a former Military Police officer acting as a good guy Goliath.

Reacher has survived, in part, because of his good decision-making. Let’s take some snippets from The Midnight Line and see how.

Have good systems. Reacher mostly traverses the country in buses. How does he choose where?

“At the (bus) depot he did was he always did. He bought a ticket for the first bus out, no matter where it was going. Which turned out to be an end-of-the-line place way north and west, on the shore of Lake Superior. Fundamentally the wrong direction. Colder, not warmer. But rules were rules, so he climbed abroad.”

Whether it’s wearing or eating the same thing or acting and choosing one way, good decision makers systematize certain things. Reacher’s system is designed to fight temporary sentimentality. Though unattached, each book includes some romantic interest. Reacher created a system to avoid his weaknesses and keep him on the right long-term path.

Notice the details, like how tall is Jimmy Rat? When you’re Jack Reacher, with hands as big as catchers mitts, you win most fights. But Reacher doesn’t enter fights blindly.

“Reacher stayed where he was. The bike (motorcycle) the new guy had glanced at was one of the three with silver runes. It was a huge as all the others, but the footrests and the handlebars were set a little closer to the seat than most. About two inches closer than the new guy’s, for example. Which made Jimmy Rat about five-eight, possibly. Maybe skinny, to go with his name. Maybe armed, with a knife or a gun. Maybe vicious.”

Paying attention to the details Reacher knows he’ll fight seven, not eight guys. He’ll know who Jimmy Rat is once he goes in the bar. He knows he’ll be armed.

Like his compatriot in the land of fiction, Sherlock Holmes, who admonished Watson for not knowing how many stairs led to their residence, Reacher looks for important details.

Keep options. Reacher’s observations of the motorcycles lead him inside, then back out again, this time not alone.

“The seven guys fanned out in a semicircle, three on Jimmy Rat’s left, and three on his right. Reacher kept moving, rotating them the way he wanted, his back to the street. He didn’t want to get trapped against someone’s rear fence. He didn’t want to get jammed in a corner. He didn’t plan on running, but an option was always a fine thing to have.”

Gene Kranz wrote about the Apollo 13 disaster that we saw in the movie, “Generating options was our business, and options remained as long as there was power, water, oxygen, and propellant.”

Avoid emotional decision-making. Soon after orienting himself among the bikes and the bar, Reacher wanted his opponent to take action. If they rushed him, he’d lose. But he educates the reader, on how to fight seven guys. You don’t. You take down one and fight six. The another to fight five. He needed them to come one at a time, he needed them lathered.

“He (Reacher) said, ‘Then I guess I was just born lucky. This is like winning the slots in Vegas. Ding, ding, ding. I got seven big girls all in a line.’ Which got a reaction, like he wanted it to. Like he needed it to. Motion was his friend. He wanted moving and momentum. He wanted them raging and blundering. Which he got.”

Seeing the world The Midnight Line is about Reacher’s attempt to find a character named Sanderson. In one scene he tells her sister:

“It gives us a wounded Marine officer and a wounded army officer in the same place for six months. Such a thing could go either way. They would have been the worst addicts in the history of the world. Or they could have been doing better, with each other’s moral support.”

Reacher would agree with Hans Rosling when he said, “If you have strong opinions which are not based on facts you’re going to have problems sooner or later.” Reacher thinks like Phillip Tetlock; chances of this and chances of that.

But ambiguity is hard to explain. Here’s the Wharton Moneyball crew expressing the challenge:


Liquidity. Two-thirds through the book Reacher finds Sanderson. She’s an addict. She wants to stay where she is – at first. But she can’t. Her dealer will confess and the authorities will come.

“Sooner or later he’ll say the wrong thing. It would be prudent to assume the clock is already ticking. We might want to revisit the timescale for getting out of there. No point still being around when the supply cuts off. Definitely no point still being around when the Feds show up. I know how hard this is for both of you, but those kind of problems would make it much worse.”

Investing plans and non-fiction best-sellers both need liquidity. Financial Crises all have a liquidity component. Owners need to sell to buyers. Reacher needs to leave before the Feds arrive. As they say, timing is everything.

Lifestyle creep. Reacher’s addict needs pills to keep going. There’s a good sequence toward the end of the book about getting a few more. For her it’s pills. For other people it’s lifestyle creep. When talking about getting the addict help Reacher said:

“You can get IV’s at home. With a certain kind of doctor. Your sister will find one. The kind who will also advocate a very long slow glide path, when it comes to dependency issues. The kind who might want to maintain your current habit for at least another year, while you settle in.”

Sanderson has so much to look forward to, except the loss of her pills. David Ogilvy put it this way, “Winning a new account is a heady experience, but losing one is pure hell.”


Thanks for reading.


Amelia Boone

Supported by Greenhaven Road Capital, finding value off the beaten path.


Shane Parrish is a ruminative interviewer. In The Knowledge Project, his preparation shines through , today we’ll highlight the episode featuring Amelia Boone.

Experiences in college, law school, and adventure racing helped Boone realize the finish line fallacy. That is, there is no finish line in life. A mistake is to think there is one. Worse is to make somebody’s finish line yours. Boone “worked her butt off” in college and law school to land in a great law firm. She succeed. Then, “I look around that law firm after the first year and I said, ‘Okay, what’s next?'”

What’s next was obstacle racing. There she learned the same lesson. “You’re not always going to be successful when you go out and do your own thing, but it doesn’t bother me if someone else beats me, what bothers me is when I beat myself.”

At the 2016 BH meeting, Charlie Munger said about GEICO’s performance, “I don’t think it’s a tragedy that one competitor had a little better ratio one period.”

Jason Fried warns people about becoming the next Jeff Bezos. “His success (Bezos) is one that’s very very hard to achieve…most likely you won’t get there…the odds are stacked against you…and if you think that’s the only way you’re going to be miserable.”

Becoming the next so-and-so is impossible. And #winning may not even be wanted. If you become like Bezos or climb a podium like Boone, success isn’t all there is.

Boone said, “As motivated as athletes are to win you see so many people winning races that are so miserable at the same time.”

Jim Carrey wishes people could be rich and famous to see that being rich and famous isn’t so rich.

The (former) richest person in the world agrees. William Henry Vanderbilt inherited the Vanderbilt empire – then expanded it. Yet he lamented about a friend:

“He isn’t worth a hundredth part as much as I am, but he has more of the real pleasures of life than I have. His house is as comfortable as mine, even if it didn’t cost so much; his team is about as good as mine; his opera box is next to mine; his health is better than mine, and he will probably outlive me. And he can trust his friends.”

Instead, Vanderbilt should have focused on the process. Boone said, “But you realize it’s never going to be enough sitting at the top. It’s never going to be enough to win a race…For me it has turned into the love of the process.”

But what blocks this is the ego. “I had to check my ego and realize it’s all a process…If you get completely fixated on the outcome you’re going to drive yourself nuts trying to achieve it.”

Yet, de-egoing isn’t enough. You also have to get past social norms. “Part of the joy in racing is marching to my own tune. To do that sometimes you have to be bold. I have to say, ‘this is what everyone wants me to do as an athlete but it’s not what I’m being drawn to right now so I’m going to go off in this direction,’ and having the ability to say that and recognize that that’s okay.”

It’s a dichotomy to balance. I’m right vs They’re right.

Boone found her answers through practice. Parrish asks about how she succeeded so suddenly and Amelia replied “Like any skill it’s through practice, habit, and repetition…The more exposure the better you get.”

Jeff Annello said it applies to mental pursuits too, “I think an efficient decision maker is like a chess player that has studied a lot of games, and can very quickly call to mind other moves that have been made and what the best moves are.”

Arnold too.


Boone gets her reps (reps reps) in the morning. “I realized that I function best early in the mornings and that people are totally different. My number one things for people is to realize, where is your golden hour of the day. Mine is when the sun comes up.”

Related to ‘circle of competence’ (what I know and don’t) is ‘knowing thyself’ (what I can do and not). In his book, The Rough Riders, Roosevelt recalls being asked to lead a regiment into Cuba. Teddy wrote, “while I believed I could learn to command the regiment in a month, that it was just this very month which I could not afford to spare, and that there-fore I would be quite content to go as Lt. Colonel if he would make (Leonard) Wood Colonel.”

Boone can get up early. Roosevelt could ride a horse but not command men.

If Amelia Boone were just a lawyer at Apple she wouldn’t be interviewed by Parrish and others. She’s there because of her obstacle course racing success. Yet so little of that success is thanks to the physical. Getting up early, managing the ego, and knowing thyself are all mental aspects.

Though few people will scale a slope shouldering a log, everyone can approach obstacles like Amelia Boone.


Thanks for reading.

Carl Turner Jr.


Supported by Greenhaven Road Capital, finding value off the beaten path.

Carl Turner Jr., former CEO of Dollar General joined Barry Ritholtz for a conversation about family, business, and faith. What I liked most was the old-fashionedness of Turner and his company – and that old-fashionedness still works. Flashy is fun to write about and we do plenty of that here with theSkimm, Rent the Runway, and Airbnb and Uber. But, young companies make it and old companies survive doing similar things. What works works.

The right four chords are hits in any decade. In that spirit, let’s say the four business chords are customers, humility, luck, and independence.


Carl Turner Sr. came home from a sales visit and announced that the wholesale business wasn’t working anymore. “We need to go into retailing. We need to be directly in touch with our customers.” Being in touch with your customer, said Turner Jr., “is a good principle in retailing.”

Why? “Problem solving genius exists where the problem does.”

Yvon Chouinard put it this way: “We knew what we wanted. I heard someone say that if you wait for the customer to tell you what to do you’re too late. We were our own customer. I think that was the secret to coming out with products.”

Turner is like-mined. “My idea was to recruit great associates from the customer base and they could help us build the company because we would build with associates who could understand the customer because they were the customer.”

Dollar General’s focus on customers extended to their expansion strategy. “We wanted to open the stores where we understood the customers.” That was in Kentucky and Tennessee.

Ali Hamed thinks tech has a disconnect:

“I think the tech world has this problem where we go out and say ‘We think we’re really smart and the rest of the world is really dumb, and so why don’t we build apps to make their lives more like ours.’ What you end up doing is building products with judgement at their core. But when you find founders that are building products for themselves and their friends you find products with empathy at their core. That empathy translates to features and functions that understand the seemly non-pragmatic nuances of a given industry.”


“Luther Turner, my papa, was wonderful. He only had a third grade education. He was the head of the family after his father was killed and he had to make it all work at age eleven. What Luther had going for him, was that he assumed that everybody he met was smarter and that he should learn something from everybody he met.”

The best performers balance ego and humility. Sam Hinkie told Patrick O’Shaughnessy, “it’s not clear I’m right about anything I’ve said today.” Guy Spier said he could just be the luck investor who flipped heads many times in a row.

The humility/ego balance takes form as small bets. That’s what Turner’s father did.

“Carl Sr. was a country boy who observed what the city boys did in retail. He noticed that the Louisville and Nashville department stores would run big, full-color ads once a month; ‘Dollar Days Sales – everything priced on the even dollar.’ He knew those city boys were making money with those sales or they wouldn’t spend that much money on the ad.”

Turner Sr. got an idea.

“He said to them (his staff), ‘We’re going to take a store where we failed operating the Junior Department Store, in Springfield Kentucky, and we are going to open a dollar store. If that store succeeds where we previously failed that’s a pretty good test.”

Leadership should encourage ideas from all over the company and have the humility to try things. Gregg Popovich explains it this way, “I don’t care where an idea comes from. You have to be comfortable enough in your own skin to realize that an idea can come from anywhere.”


For Dollar General, “The timing happened to be right, because it was right after the second world war, and it worked.” Much like Harry Snyder‘s In-N-Out (also after World War 2) or Milton Hershey‘s chocolates (after the Civil War), timing matters.

Instagram and Kayak both had founders that saw the smartphone and thought this is kinda interesting but none of the founders realized how big their idea actually was. Success arrives holding the hand of serendipity.


Investors note that you can’t be the market and beat the market. It’s true too for businesses. Ritholtz asked Turner Jr. about competition and he said, “We always considered our competition to be everybody else in retailing. The landscape of retailing provided all kinds of competition.” But he was never concerned about what other people were doing.

“A good retailer leader observes the competition but doesn’t copy them.” If the Turners tried to imitate Sam Walton as he created Wal-Mart, Sam Walton would have crushed them. They had to be different. Turner said, “What you need to learn is apply in your company what that competition seems to do well in their company.” See: The Dollar Days sales.

Rory Sutherland put it this way. “One of the reasons stupid, or pig-headed people do well, and when they do well they do really well, is because they are ignoring all the category norms everybody else thinks are important and they’re emphasizing  something completely different.”


Thanks for reading.