Small Giants | Bo Burlingham | Talks at Google

Hi everyone.

Thanks for coming. I'm pleased today to welcome Bo Burlingham, here to talk about his book Small Giants Companies that Choose to Be Great Instead of big. Bo joined Inc. Magazine in 1983 as a senior editor and became executive editor six months later, a position he held for the next seven years. In 1990 he resigned and became editor at Large in order to fulfill his desire to go back to writing. He subsequently wrote two books with Jack Stack, the co founder and CEO of Springfield Remanufacturing Corp. And the pioneer of open book management, the Great Game of Business, which has sold more than 300,000 copies and a stake in the outcome. Building a culture of ownership for the long term success of your business. Before joining Inc. Beau freelanced for various publications including Esquire, Harper's, Boston Magazine and Mother Jones and was managing editor of Ramparts magazine from 1992 to 1997. Bo served on the board of the Body Shop, the US Subsidiary of the international cosmetics company. He was also a founder with Tom Peters of PACWorld, an international networking group. Welcome Bo and thanks for joining us.

Thank you very much Pam. It's really great to be here inside Google. I feel like I'm getting to do something that a lot of people dream about doing, but not very many actually get a chance to do. When Rico Paterni actually told me about this series and asked if I would be interested in speaking, speaking, I jumped at the opportunity. I've heard so much about Google and of course I've used Google as long as it's been possible to use Google and I've heard what a great company it is, but I have no idea. I don't really know very much more about it. I would just recommend that in the future, any authors that you have come to visit, you advise them to come half an hour early so that they can use the massage chair in the. It's really quite something. Greatness is what I want to talk about today. Specifically, what is it that makes a company great? Now you might think that greatness would have something to do with success and the way that we measure success. So how do we measure success in business? Rate of growth, return on investment, Ebitda market share and so forth? The question is, can you measure greatness that way? Well, I suppose it depends a little bit on your point of view. If you happen to be an investor in a publicly traded company, those are very important numbers. And if you can find a company that can consistently deliver to you great return on investment year in year out over a long period of time, you'd undoubtedly think that that was a great company. But what about the 90 plus, 90%, more than 90% of companies in this country who don't have investors of that sort of sort? Including the companies in my book, they look at. Hold on. They believe greatness has little to do with. With the standard measures of success in business, not that their owners don't care about profitability or making money. All of the companies in my book have been profitable over a long period of time. That was actually one of the conditions that I put on in selecting them. And they are all growing as well. But they view profitability and growth as the byproducts of what they do, not the goal. Now, one of the people in my book is a guy named Danny Meyer. Danny Meyer is the founder and CEO of Union Square Hospitality Group in New York City. Any of you from New York, any of you spend much time in New York? Okay. You're undoubtedly familiar with the Union Square Cafe and Gramercy Tavern. Basically, for the last eight years, Union Square Cafe and Gramercy Tavern have been rated by ZAG at the number one and two most profitable, most popular restaurants in the entire city of New York. They're both part of the Union Square Hospitality Group. The only thing that changes is that sometimes Union Square Cafe is number one and Gramercy Tavern is number two. And sometimes Gramercy Tavern is number one and Union Square Cafe is. Is number two. Danny Meyer said to me when I was interviewing him, he said, I've made much more money by choosing what to say no to than by choosing what to say yes to. I measure it by the money I haven't lost and the quality I haven't sacrificed. Now, in that he could be speaking for all of the other owners in my book, like Danny Meyer, they believe that greatness is about being great at what you do. It's about having great relationships with your customers and your suppliers. It's about being a great place to work and creating a great place to work. And it's about being a great citizen of the community, and it's about having a great life. You know, they would say that it has absolutely nothing to do with. With size or with getting as big as possible as fast as possible. And I have to say that I agree with them. I've been at Inc. For 23 years now. I've had the opportunity to see literally thousands of companies. And I can assure you categorically that getting big as possible, as fast as possible is not a sign, is not a path necessarily to greatness. Which is not to say that you can't be a great company if you get very big very fast. You guys know that from firsthand experience. But it's extremely difficult and extremely unusual. And in that, I think that the guru of greatness himself, Jim Collins, would agree as well. When I asked him to do a blurb for my book, he wrote something very complimentary. It's actually on the back of the book. And among other things, he said that big does not equal great, and great does not equal big. And he's been trying to get that across to people for a long time, but nobody seems to listen. Let me tell you a little bit about how this book came about. It all started actually with a company in Ann Arbor, Michigan called Zingerman's Community of Businesses. Zingerman started out in 1982 as a delicatessen. There were two guys there. One was a Russian history major at the University of Michigan, the other was a guy who was in the restaurant business there. And they decided that what Ann Arbor really needed was a world class delicatessen. And so they started this delicatessen with the goal of creating something that was really going to be great, unique. Lo and behold, over the course of the next 10 years, they actually succeeded. By 1992, Zingerman's Deli had been written up in Gourmet Magazine, in Bon Appetit, in the New York Times and Esquire magazine. Whenever anybody made a list of the great delicatessens of the world, Zingerman's was on it. Now what happens when you're that good and you're that successful is that you have lots of opportunities. And in fact, they were being deluged with people who wanted to set up Zingerman's Delis. In other college towns around the country, they could see Zingerman's Delis in Berkeley, Zingerman's Delis in Palo Alto, in Madison, Wisconsin, in Columbus, Ohio, and Cambridge, Massachusetts. It seemed like a natural. And in fact, many people would say that when you have a success like that, that is what you ought to do. But the founders of Zingerman's thought about it and decided that this was absolutely not what they wanted to do. That they had set out in business to create something that was great and unique. And when you start replicating something, it's no longer unique by definition. And often it's not very good, let alone great. So instead they spent a long time thinking about what it was that they actually did want to do. And they came up with another plan. And that plan was that instead of franchising, instead of going national, instead of taking in outside investors which would allow them to spread all over the country, they were going to create other great unique businesses in the Ann Arbor area. Other great food related businesses in the Ann Arbor area. They had a plan to create 15 by the year 2009. They've got eight right now. This is one of them. It's the Zingerman's Creamery. They make world class cheese and gelato. There's a Zingerman's Coffee Roastery which makes great coffee. There's a Zingerman's bakery called Zingerman's Bakehouse actually, which has received all kinds of awards for the quality of its baked goods. They have these eight different companies all in Ann Arbor and the goal was to make each of them great and unique in its own right. Now they realized that in doing this they would get a lot of other benefits. For example, number one, they would be able to maintain their very close ties to the Ann Arbor community. Number two, they'd be able to offer opportunities for people in the company to move up and to do other things. Number three, they'd be able to serve their customers better because they would have control over the quality of a lot of the stuff that was going to be in the stores. So they have done this and actually I went out to visit them and I think the thing that struck me as extraordinary was here was basically a little $12 million business at that time. It's doubled since I was there. And they were able to attract an incredible group of people to come work there. They had entrepreneurs who'd actually sold their businesses to go and work at one of the companies there. They had big company executives who'd left and taken a dramatic cut in salary in order to go and work in one of these businesses. They had people who been in very. Had high jobs in major accounting firms who'd come in to do that. There was something about this company that was magic. After I wrote the article up, we printed it in ink. It was the COVID of our 2000, January 2003 issue and it was called the Coolest Small Company in America. After this article came out, I began to wonder, were there other companies out there like this? Were there other companies that had actually reached this position where they'd had the opportunity to get very big very fast, but had chosen not to because they wanted. Because they thought that that would get in the way of them doing other extraordinary things? And so that's really what I set out to Do. In the beginning, I have to say I had no idea. Even though I'd been at Inc. For 20 years at that point, I had no idea how many of these companies I would find. I had no idea where they would be geographically, I had no idea what industries they would be in. All I really had was a set of criteria based basically on what I had seen at Zingerman's. The first criterion was I was looking for companies that had reached a crossroads. In other words, they'd had the opportunity to follow the well worn path of successful businesses, go public, get acquired, franchise, go national, what have you. And they'd chosen not to do that in part or in large part because it would get in the way of other goals and they would have to be driven by the, the expectations of the people who were investing them. Accordingly, the company would have to be private and closely held. You know, when you take on outside investors, whether you go public or you take on private equity investors, you have certain obligations, their legal obligations and their moral obligations. And the obligation is to give the investors what you promised them when they gave you their money. And generally what they want is a very good return on investment. These were companies I was looking for, companies that didn't want to put return on investment first. They were going to put other things first. And they realized that in order to be able to do that, that they couldn't have outside investors. So I was looking at private and closely held companies. Thirdly, I wanted companies that were recognized inside and outside its industry as being the best at what they do. I wanted the people who knew them best, their competitors, other people in their industry, to say, this is a company, this is a company that is the best. Fourth, I looked for companies that had been in business for 10 years or more and had been consistently profitable. I didn't want companies that had risen a tide in an industry and then had never been through hard times. I wanted companies that had experienced all of the ups and downs of business and managed to get through them. And finally I had to deal with the size question and I really wasn't sure what I should, you know, how to do that. I ultimately decided that what I needed to include was companies that operate on what I call a human scale. By that I mean a company in which the owner, the chief executive is still able to meet with and know who is hired in that company. So those were the five criterion. I would say that probably the most important of these actually was the first one, because I was looking for companies that didn't decide not didn't do chart their course by default. They didn't go along with the crowd, and they had really made their own decisions about what they wanted to do. So what did I find to begin with? I found that there were many, many more of these companies out there than I ever imagined. They were in every part of the country. They were in almost every industry. The exception were certain industries in which you have to achieve certain economies of scale in order to be successful. But every other industry, I found examples of companies that met my criteria. Because I had so many great companies out there to choose from, I was able to be selective. And I wound up choosing the 14 companies that I considered the most interesting and by most interesting, these were companies that I felt had been most creative in deciding what they could do with. The freedom that you get when you decide not to grow as fast as you can and you decide not to bring in outside investors, that's what you get back, is freedom. And I wanted people who taken the most advantage of. Of that. Now there's something. There's another thing here which I noticed in going around to all these companies, and it's something that I think perhaps you can relate to. There was something about all of these companies when I went into them that I could just sense immediately. You could sense walking in the door, you could sense looking at the bulletin boards, you could sense talking to the people or talking to the customers. It was hard to say exactly what it was, but you knew it when you saw was. I came to think there was sort of this kind of magnetism. I came to think of it as sort of the business equivalent of charisma. When a leader has charisma, you want to follow that person, you want to follow him or her. When a business has charisma, you want to be associated with that business. You want to work for that business, you want to buy from it, you want to sell to it, you want to be associated with it in any way. You want to wear its caps and T shirts and what have you. And I needed to come up with a name for that. And actually one of the companies in the book gave me the name Mojo. That's what all these companies had, was Mojo. And to a large extent, what my book became was an analysis and a search for where that mojo came from and how these companies had managed to hold onto it. We all know of companies that have had Mojo and lost it. Pam mentioned that I'd been on the board of the Body Shop for five years. Well, I hope it wasn't because of Me. But the Body Shop lost its mojo. Ben and Jerry's, for example, was a company that had lots of mojo back in the 1980s. It lost it. Apple Computer, I would say, had mojo and it lost it. We can all come up with those examples. What I. Well, it may have gotten it back. I don't know. I have to. But I remember when actually when Inc was founded and we were writing about Apple in those days, we wrote about it the same way that people write about Google now. And it wasn't that long afterwards. It was the ideal place to work. And you had, I don't know, as they had bidets in the bathrooms or massage chairs, but it was a pretty cool place to work. And that all went away at a certain point. Again, I'm not familiar with what's happened since then, but in any event, what struck me about these companies that I was visiting, that not only did they have it, but they kept it. And somehow they figured out how to. They figured out a secret of how to keep it. And that's really what I really wanted to find out, how they had done that. So I looked at what they had in common and here's what I came up with. The first and most important factor in this mojo was that their leaders knew who they were and they knew what they wanted out of business. The truth is that if you're going to make the kinds of choices that these people made, you have to know who you are and you have to know what you want out of business. Well, I can answer that for you if you like. You know, if you take the Zingerman's people. The Zingerman's people, obviously, in order to make the decision they made, they knew what they wanted out of business and they knew who they were. I don't know. Are any of you familiar with Clif Barr? Have any of you read. Okay. Have you read Gary Erickson's book? Well, I would highly recommend. In fact, I'd recommend having Gary come down for this series because he's a great. He's written a great book called Raising the Bar. And he's one of the companies in my book. He was at a certain. You know, he started all of those energy bar companies, started at pretty much the same time, Power Bar, Balance Bar and Clif Bar. And they all grew very fast and they all wound up in the Inc. 500 and so forth. And then Power Bar was sold to Nestle, I believe any event, Power Bar and Balance Bar was sold to Kraft and Nestle and Clif Bar was suddenly this little company competing against these giants. And Gary and his partner decided that they and were told that they couldn't possibly survive against all these people. And so they got an offer actually from Quaker to buy the company for $120 million. Now there are two owners to this company, Gary and his partner. They're 50, 50 partners. Still. Gary felt a little bad about this decision, but he said, you know, he sort of justified it to himself. At least he'd be able to protect the brand. He'd be able to protect the jobs of the people who work there. Of course, a week before or a couple weeks before the sale was to go through, Quaker informed him that, number one, they didn't want him and his partner to stick around after the sale. And number two, they were moving the company to the Midwest. That's Gary on his mountain bike. At that point, sort of all his excuses for selling the company went away, and he started to feel really bad about what he was doing. Well, it gets down to the morning of the sale. I mean, literally, the lawyers have been working over the weekend. The Quaker people have flown in. Everybody is there. Gary and his partner are waiting in the office to get the ride to the lawyer's office to sign the papers. And suddenly Gary has a panic attack. And he says to his partner, look, I've got to go out. I've got to leave here. So he walks out of the. I've got to get some fresh air. So he walks out of the office and he starts to walk around the block. He gets halfway around the block and he bursts into tears. He just feels terrible about what he's going to do. He goes a little further, and suddenly a thought occurs to him. I haven't signed anything yet. Suddenly he feels great. He continues, goes back to the office, walks into the office, says, send everybody home. This deal is not going through. I'm not going along with it. Well, there was a little problem because his partner had sort of been counting on the $60 million. But the truth was that they couldn't sell it. They had to agree because they were 50, 50 partners. In the end, Gary didn't do the deal. He wound up having to pay off his partner because she was a 50% owner and not a 49% owner. She wound up having the leverage that was needed in order to get what she wanted, and it wound up costing Gary $80 million. But he got to keep the company, and he got to. And you know, he will say, and has said many times that it was the best decision he ever made. He never really wanted to be a. You know, he wouldn't know what he would do with his $60 million anyway and so forth. The point about that is that you can't make that kind of a decision unless you know who you are and what you want out of business. The second criterion, or the second aspect of Mojo was the commitment to be absolutely the best at what you do. You know, these are the companies actually, in my book, I can just say a little bit about a few of them. City Storage is the company those of you read Inc. Magazine are familiar with Norm Brodsky. It is the largest independently owned record storage business in the country. Rhythm and Hughes won the Academy Award. That's Babe. They won the Academy Award for Babe. They are one of the great computer special effects companies in the country. Anchor Brewing. Well, I guess it could be argued beer aficionados, of which I count myself among them, could argue as to whether or not Anchor Brewing is still the best. That's a matter of opinion and taste and so forth. But what is undeniable is that Anchor Brewing started the whole microbrew revolution. I mean, you know, we wouldn't have Arrogant Bastard, which is my favorite beer, without Anchor Brewing. Righteous Babe Records is the. And Righteous Babe is the company of singer songwriter Ani DiFranco. You know, back in the early. You must know Annie DeFranco. You're young enough to know Annie DeFranco. Sometimes I speak to audiences and I say Annie DeFranco, and I get this sort of blank stare from them. But Ani, you know, was being courted in the early 1990s. You know, she, along with Alana Morissette and, you know, Sarah McLachlan and so forth, everybody wanted to sign her up. And she decided that, no, she didn't want to be part of a large corporation, so she started her own business. All of these companies are recognized for being great at what they do. And the truth is that all of them wind up competing against themselves. They operate in a world where they regard their toughest competitors as what they did yesterday. And they focus on that, and they focus on constantly improving themselves. The third element of Mojo, I found, was being rooted in a community. By that, I mean that. Well, I'll tell a story from Danny Meyer. That's Danny Meyer, and those are some of his restaurants. Danny talks about something he calls the Mona Lisa principle. And what he says is, I don't know anything about lighting in museums or I don't know very much about art either. But I do know that if the Mona Lisa were in another museum, in another city, in another country, it would be different, you know, it would be a different experience going to see the Mona Lisa. And basically what he says is that he applies that same standard to his restaurants. He regards a restaurant as being part of the community in which it's located. You know, there's no better example of this. I think one of the greatest examples of this I saw was actually Zingerman's. Zingerman's is, I believe, the only for profit company, at least the only one I know of, that has actually started its own not for profit company. It's called Food Gatherers. Basically it came about because one of the founders was reading an article in a magazine and it was about how the photographers in New York had gotten tired of throwing away all the food that they were taking pictures of. And they thought that it was a needless waste. And so they began going around and collecting all the food and then giving it to homeless shelters, what have you, people who needed it. This guy, Paul Saginaw said, gee, that's a neat idea. I'll bet you there's a lot we have food like that, you know, food that we'll give to our employees to take home or that, you know, throw out because it's not quite what we want to have in the deli or in the restaurant or what have you, but is still perfectly good. I wonder if there are others. I wonder if there's a need for this. So he went out, he investigated it, and he started Food Gatherers. In its first year, food gatherers collected £86,000 and distributed £86,000 of food. Today it distributes two or three tons a day. This is, you know, Zingerman's is a company and this is just one of many things that ties Zingerman's to that Ann Arbor community. It is a real presence in that community. And it's not only that the community is not only that it gives back to the community, that it makes a, you know, has that impact on the community. It's also the community has an impact on them. And that's true of all of the companies in my book. It's a two way street. It's almost impossible, if you look back, it's almost impossible to think of any of these companies anywhere else. They are rooted in their community. Once a company gets above a certain size, that's really not possible anymore. I mean, you take a company like Whole Foods, for example, great company, but it's not an Austin company anymore. It's a National company. And in fact, once a company gets above a certain size, you actually want to make the experience similar wherever you go, so you work the other way. So that was the third characteristic that I found. The next one really had to do with the relationships with customers and suppliers. These are companies that cultivate close, personal, one on one relationships with the people who use their products or services. And almost to the point, well, Clif Bar is a good example. I mean, they regard their customers not actually. I mean, obviously they consider the distributors and so forth to be their customers, but really they do everything that they can to have as much contact as possible with the end users. They do very little traditional advertising. Instead, what they do is they sponsor all these events and. And they send their own people out to take part in these events so that they can interact with the people who are actually using their product. Echo. Echo is, you know, when you see a truck backing up, it goes beep, beep, beep, beep. Well, there's actually one company that dominates that industry, and it's Echo. It's in Boise, Idaho. They make the backup alarms and warning lights. And they have a system. They're an engineering company. They're a very customer friendly engineering company. They have something they call the Vault, which is when they're working on something with a company, they can put the design in the vault and that company's engineers can actually go in there and they interact on that basis. I would say probably the best example of this and the one that really struck me the most was really Righteous Babe. These are Ani's fans who are also obviously the customers of Righteous Babe. Righteous Babe. They make a point of staying as close to these people as possible. Everybody who writes a letter to Ani or to Righteous Babe gets a handwritten letter back. It's not necessarily for Ani, but they hire people whose job it is to be in that office and send personal letters back to everybody who writes. In most other record companies, you know, Everybody has an 800 number you can call. Most other companies outsource it. Righteous babe has their 800 company. It's called 800 on her own, which is answered in the office. There was a case, really, when I was up there, when I was reporting on Righteous Babe and doing my research there, where a guy called up. He'd missed an Ani DiFranco concert. He was a young kid. He'd gotten. There'd been an accident or something and he'd missed it. He obviously had other emotional problems. He called up and somebody. The person who answered it said, this guy, sounding suicidal, the president of the company got on the phone and for the next hour, talk to this guy until he was sure that there was somebody around to make sure that he was okay. And before he hung up the phone, the young man who called said, you know, I knew you'd be there for me. That is something that Righteous Babe treasures and they hold on to, and they make sure that they don't lose it. Now, you can also get the same feeling from talking to their suppliers. Their suppliers are. Now, who are their suppliers? Well, they've used the same company to make the CDs in Buffalo from the very beginning. That company has become a substantial company based on the business it gets from Righteous Babe. They've used the same printer in Buffalo, and they've insisted they do it all in Buffalo. If you go to the promoters around the country, they are like people who've been doing this for years with them. And you get the feeling in talking, whether you're talking to their fans or to people in the company or to the suppliers, that they're all doing the same thing. There's hardly. You know, it's just they're different parts of the same process, the same thing that they're doing, and they're all sort of in it together. So number five in terms of the elements of mojo was create what I call a culture of intimacy. I really like to refer to Herb Kelleher, who is the founder and the genius behind Southwest Airlines. Media people, business journalists, were always asking Herb Keller, what was the secret of Southwest Airlines success? Why was it the only profitable airline around? And they would look at its turnaround times and the fact that it used these little airports instead of the major airports. And he'd say, that has nothing to do with it. Our secret is our culture. That's what allows us to do all of these other things. And once he was being interviewed by somebody from the Wall Street Journal who said, well, Herb, what is the secret to your culture? He said, it's very simple. It's caring for people in the totality of their lives. In other words, you don't just care about your people as employees. You care about them as human beings. That is what I found with all of these companies. Here's one around here. It's in Redwood City. It's W.L. butler Construction. There are probably other construction companies like this. This is the one that I knew as soon as I spent time around here in that company, that it belonged in this book. I mean, this is a company where they had Single mothers. Well, you know, it's sort of what I The sense I pick up walking around here. Except this is, of course, a much smaller company. It's got 120 people in it. It's a general contractor. It is Target's absolutely favorite contractor. Has given its Supplier of the Year awards and all kinds of things. You know, they have education programs for everybody in the company. The people who work for the company are Hispanic. You know, they have English classes for all the Hispanic people. They had a lot of single mothers who were working in the company, and they were having trouble because sometimes their kids would get sick and they had to travel a long way away. The only company built a building and rent it out at very reasonable rates to the single mothers so that they could be nearby and so they could bring their children into the office, into work if they were sick and couldn't go to school. You know, here's another one, City Storage in Brooklyn. I could say a lot about City Storage. I've spent a lot of time with Norm Brodsky. I write his column with him in. In Ink magazine. Let me just tell you one quick story about them. You notice that water? That's the East River. You notice in their logo there's two big buildings. That's what was the World Trade Center. When you are at City Storage, you look out and you see the whole Manhattan skyline. On September 11, as those events were unfolding, they were trying to decide what to do, and they decided to call a meeting to tell people that they could go home. Because, you know, in New York, everybody knows somebody who knew somebody who worked at the World Trade center, and it was obviously freaking out the entire workforce. So they held a meeting. And the guy who's running the meeting, the president of the company, was standing with his back to the water, and suddenly everybody in front of him starts gasping. And he turns around, and the first tower has just fallen. He says, look, anybody wants to go home now can go home right now. If you want to stay, we'll be here. We'll be here for you. But, you know, do what you think you need to do at this point. Well, you can imagine what the effect that would have on a business. And it was devastating. And it lasted days, weeks afterwards. And the owner and his wife, Elaine. The owner, Norm Brodsky and his wife Elaine. That's. Elaine, you know, were just. They brought in grief counselors. They did everything that they could, but they still couldn't break this feeling of depression that was in the. In the workforce. Finally, they had an Idea, the people in the workforce, they had set up a basketball thing that during the lunch hour, people could. Who worked at City Storage could play basketball. They decided, okay, what we're going to do here is we're going to have a tournament. And the winner of this tournament, the team that. We're going to set up teams randomly, and then we're going to have a grid and an elimination thing. And the winner of this. Of the tournament is going to get. Every person there is going to get $5,000. But there's a catch. At the end of the tournament, that team has to beat a team of three, consisting of the three owners of the business. Norm Brodsky, the president, and Sam Kaplan. Now, I don't have to tell you, these are older guys. Lewis, the president, is perpetually on a diet and so forth and so on. So everybody said, oh, no, this thing is rigged. We're never going to win it. Any event, they went through and they had this tournament, and at the end, everybody gathers for a big party, and this is going to be the game to decide it. All right? Before the game is to begin, Norm takes the team aside and said, look, no matter what happens here, you've won, so don't worry about it. They come out, they sing the national anthem. They're all suited up, they're about ready to start, and in come the Harlem Wizards. And Norm says, these are our cousins, and they're here. Now, I understand all these three guys who run the business are Jewish, and in they come, and there's like this. Well, you know, it had this, like, remarkable effect on the company. It just sort of changed everything. And really, from that point on, you know, it really overcame, you know, the feelings that had been just so hard to dissipate. Finally, and this is critical, it's very important to love what you do. Now, for some people, that's easy to understand. Anita Franco is an artist. She loves music. Everybody in that company loves music. The people, their customers love music. Their suppliers love music. They all love music. It's easy to understand how you could be passionate about music. Norm Brodsky is another case. Those are boxes behind him. What Norm's business does is they put boxes on shelves. So how do you get passionate about putting boxes on shelves? Well, believe it or not, they are passionate about putting boxes on shelves. Norm says he likes nothing better than to walk into his warehouses and smell cardboard. And they do run the business with that. With that passion for it. In fact, you see it in all the businesses. I mean, one of the people Who I always like to point to is Fritz Maytag. You know, he bought Anchor Brewing, is a 100-year-old company, more than 100-year-old company. It was failing. He bought it in 1976 for about $3,000. He knew nothing about brewing. Today you go and talk to Fritz Maytag, and he knows everything about brewing. At the drop of a hat, he'll start telling you about the effect, about the discovery of hops and how hops changed brewing forever and about how hops were so important because they allowed beer to be sent from England to India. That's where India Pale Ale came from, because they preserved it. The beer didn't go bad. You know, he'll tell you about the effect of refrigeration and how refrigeration. He'll tell you the history of beer going back to the Sumerians, and it's not only for himself. He takes his people every year up to the Oregon border with California, where the barley is grown that they use. And they all sort of spend time at the farm and work on the machines and so forth. He takes them to Europe to visit breweries. So, you know, he is utterly passionate about that. And that is something that you can say about everybody else in this book. That's not. You know, that sort of goes against the grain of a lot of what you hear in business. People say, don't fall in love with your business. You hear that all the time. Because the implication being if you fall in love with your business, you can't be objective about it. Well, these guys have managed to fall in love with their businesses and be objective about it. So those are really the six elements of Mojo that I found and that I write about in the book. And so now we've got a few minutes left, and we come to the key question, and this I'm going to turn back on you. Does Google have Mojo? Tell me. Oh, come on now. I was assured that this is not a silent group. Tell me, why do you think Google has Mojo? Ag. All right, but then here is the next question. How can you keep it? The key question here is the companies that I know of that have had it and lost has had something to do with the fact that they're public companies. They get into a situation. In the beginning, everything's great. The only ones out there, they've got these very high gross margins. Then other people come along and say, gee, that's great. Look at those. I'm willing to do this for less gross margin. Soon the arena gets very crowded. You've got lots and lots of competitors. And the problem with the companies that are the pioneers here is that they've gotten used to all these other things that they were able to afford because they had these very high gross margins. And suddenly they're not able to afford them anymore, and it becomes tough. And the demands of the public market are to continue to provide the return on investment that investors have grown too used to and expect to keep getting. I don't know. I'd be curious to know. I mean, obviously I'll watch Google with a lot of, as I'm sure all of you will, with a lot of interest in terms of seeing how you manage to navigate these waters. I certainly hope that Google can keep its mojo. Certainly my impression that Google has a lot of mojo, and I wish you every success. But let me turn it over to you now for questions. Is there anything that I can explain or talk to you about further that you are curious about here? Yes. So you seem to say that a lot of these smaller companies are driven by the private sector. What happens when the founders get old and they pass on? Good question. I have a whole chapter in my book on that. There are only three companies in my book that have been successful in going through the process of succession. The others, you know, there's one company, City Storage, where Norm doesn't worry about that because he says he doesn't expect the company to last beyond him. But managing that in this culture with this tax system, you know, is very difficult to do. One of the companies, O.C. tanner, has been through a succession successfully and a transfer of ownership and a transfer of leadership. What it did was the owner, who was the founder, put all of his stock in a trust, what's called a 100-year-old trust. And under the terms of that trust, the company can't be sold, it can't be taken public, it can't be merged as long as that trust is in effect. Fortunately, his successors, in terms of the leadership have been. He's had very, very capable successors. There's another company in Boise, the company Echo, the backup alarm company. The person who really sort of made that company a small giant had a heart attack. He had to get rid of his. He had to stop being active in the company, and he wound up selling his stock to the employees. The other people in the book are still grappling with that question, but it's a very good question. Yes. Two things I wanted to. Okay, Testing 1, 2. Well, two things I wanted to thank you for coming out here. I'm also from Boston, so it's great to have someone from Cambridge. Those socks. Yeah, exactly. Well, you gotta be careful about that. Yeah, I know, I understand. And I was also curious if you had been invited to talk at any American automotive companies like General Motors, because I kind of feel these lessons would have helped them a lot. I kind of feel that you sort of outlined what they haven't done over this in the 70s and 80s, and they're at that point of losing their mojo and trying to get it back right now. The companies, the places that have actually wanted me to speak, interestingly enough, have been people from organizations and from companies that. That probably need this least. I do have a number of speaking engagements lined up with venture capital associations and private equity firms that hold these big fairs where they sort of match the venture capitalists or the private equity companies with the companies who come there. I haven't heard yet from General Motors. General Motors generally takes a long time to discover these things and, you know, I wish them the best, but I have not. I have not heard a word from them yet. Anybody else? Okay, we should probably wrap this up. It's about one o'. Clock. I want to thank all of you for coming. I will be around if any of you have time. I know that you've got other things to go to, but I'd be happy to sign books if you would like to have your books signed. So thank you very much and good luck with Google.