Dietrich Mateschitz: Red Bull's Unconventional Billionaire Founder

All I could see was the same gray airplanes, the same gray suits, the same gray faces. All the hotel bars looked the same, and so did the women in them. I asked myself whether I wanted to spend the next decade as I'd spent the previous one. He was 38, a glorified toothpaste salesman who had hit a wall. And from that, Dietrich Mateschitz went on to found a company that paid him a record dividend of $865 million. Months before his death in 2022, $765 million the year before that, in the middle of a pandemic, and after he died paid his son, who inherited it all, $615 million in a single year, and that was considered a down year, the smallest payout in 3 years. When Dietrich died, his net worth was over $20 billion. He was the 71st richest person in the world. His son Mark, who inherited his 49% stake, Is worth roughly $43 billion today, around 37th in the world and Europe's richest millennial. Which just goes to show the compounding that's created. His son is worth double the father 3 and a half years later. The machine that Dietrich Mateschitz built compounded so hard that even dying didn't slow it down. This is the story of Dietrich Mateschitz. Welcome to Ambition, a show about the most ambitious people in history. And what we can learn from them. I'm your host, Justin Gordon, an entrepreneur based in Los Angeles. My main source for this episode is The Red Bull Story by Wolfgang Vorweger, updated English edition published in December 2024, originally published in 2012. I also used the article Red Bull's Billionaire Maniac by Duff McDonald from Bloomberg. And this story was so fun to put together. I actually had a Red Bull for the very first time at poker last Friday. Before this episode, as I was doing the research and reading this book, I felt I needed to so I could properly create this episode. And I am drinking one as we create this as well. Let's get right to it. So Dietrich Mateschitz was born May 20th, 1944. He's born in Austria and he's born in one of Austria's most important industrial areas. He's mostly shaped by his mother during childhood. She was a teacher, even taught her own son during primary school. And his parents separated when he was very young. Now, a note for this entire story: Dietrich is very private, so he rarely talks about his childhood. There's not a lot about his early days, but from all accounts, he grew up largely without a father. He began studying naval architecture at the Vienna University of Technology in 1962. He said he went to Vienna not for studies, but for the city. After 4 semesters, he'd had enough of the technical subjects and switched to the University of Economics, majoring in marketing. He financed his studies working in steelworks and as a ski instructor and tour guide. It took him 20 semesters, 10 years to complete his degree. And one of the interesting things about actually his story in terms of why he went to Vienna University and how he got there, he said, quote, I chose the university for the city, not for the university, but I could only find one course which wasn't available in Graz, which was ship construction. So I convinced her that I had one, only one desire in life. And that was to become a ship engineer. So the whole thing was his mother didn't want him to attend that university. So the reason why he chose it is because of that, which I find just hilarious and smart. It also reminds me actually of Dave Portnoy, founder of Barstool Sports, how he got into Michigan, which was that he applied to their liberal arts college and got rejected, but he wasn't deterred. So he discovered a secret entrance, which basically circumvented the admissions committee. He got into the nursing school and then knew that he could transfer into the liberal arts college. Once he got into school. I just love how entrepreneurs are wily and creative and find ways around obstacles in front of them all the time. Dietrich would say later about school, I was a bit behind in everything. Normally you finish university at the age of 22, not 28, and then just kept adding up until I started my own business at 40. He also said in a Forbes interview, life as a student is enjoyable, which may be why he took so long to get out of school. But no matter, the freshly graduated academic took a job at Unilever, one of the world's leading multinationals in food and consumer goods. He quickly proved himself in marketing and sales of the toothpaste brand Blendex. Not a bad job, and it allowed him to save enough money to later establish Red Bull. His annual salary at the end of his employee tenure was around €143,000, princely at the time, but the job was demanding. There was constant deadlines, number crunching, and stress. This led him to plan for self-employment one day. He wanted financial independence and above all, control over his time. That theme is going to come up repeatedly. And it very much so reminds me of Thomas Edison. So I wrote a deep dive on Thomas Edison back when I was writing Just Go Grind. And there's a quote in Edison's biography that says, quote, having one's own shop, working on projects of one's own choosing, making enough money today so one could do the same tomorrow. These were the modest goals of Thomas Edison when he struck out on his own as full-time inventor and manufacturer. This is very much Dietrich Mateschitz. And 1982, a chance trip to Thailand changes everything for him. This is the turning point for his career. Curious what attracted locals to an uncarbonated tonic called Krating Daeng, and I am terrible at pronouncing all these words, so if they are wrong, I apologize. But essentially, one definition says it's Thai for water buffalo, another says it's Thai for Red Bull. But he tried some for himself and found it instantly cured his jet lag. Not long after, he was sitting in the bar at the Mandarin Oriental in Hong Kong. He read that a top corporate taxpayer in Japan was a maker of such tonics, and the idea hit him: he would sell the stuff in the West. Around this time, together with other kind of field sales colleagues, he organized full-fledged energy drink parties where these stimulating beverages were sampled through self-experimentation. He loved the effects and wanted to get involved. He was absolutely fascinated by this concept, and he brought it up during his toothpaste negotiations in Bangkok, meeting the owners, these Chinese Thai chemists and businessmen, Chalo Yovidhya and his son Chalerm. In 1984, Madschitz acquired the license to distribute this drink outside of Asia. He translated the name into English, and together with the Yovidhya family, he founded Red Bull Trading GmbH. With both partners investing $500,000. They both got 49% of the business, with the remaining 2% going to Jovita's son. And Jovita and his son remained silent partners. Then in 1984, at 41 years old, Madzic resigns from his well-paying job at Unilever. This began a creative phase during which he earned no income but had to spend an enormous amount. He needed to adapt the original recipe for the European taste and market. Which required numerous laboratory experiments. The most noticeable change was carbonation, with the essential ingredients unchanged and only the mixing ratio adjusted. He also developed the marketing concept for market entry. During this phase, he invested his entire savings, which was around €350,000. He'd say, quote, I didn't renew my contract with Blendex and spent 2 or 3 years developing the new product, including its design and marketing strategy. This is a huge risk, by the way. It's a pittance for a product launch, but a huge sum for a founder with no other prospects if things went wrong. Just think about this. He's 41 years old. He's been working at Unilever and he goes all in, invests all his savings into this company. And can you imagine if this doesn't work, what happens? Sure, he can maybe get another job again, but this just wipes him out clean. And also he's taking this product to a new market, so he has to adapt it to the market. This reminds me of Sy Newhouse, who we talked about in the first episode, how he took this newspaper, one of the newspapers he bought, which he bought many of the newspapers, but he changed it into a, quote, fluffy paper for suburban housewives because he found out through surveys that this is what they wanted. They want to be entertained, and he just adapted the product to them, and it worked tremendously well in this new market of housewives, which no one at the time was going after. And he found this area. This is just what Dietrich Mateschitz is going to do with Red Bull. But even from the beginning, it does not go well. So before he launches, he hires a marketing research firm to test Red Bull's acceptance in the market, and it was essentially a catastrophe. People didn't believe in the taste, the logo, the brand name. They hated it. But he was convinced he had a winner, so he just ignored the research and set up his offices and got to work. There's something to be said for trusting your intuition. Now, there's always survivorship bias, of course, with these companies that make it, but Of course they make it, but how many others failed? But in order to make it, you do have to trust your intuition. You have to make things happen even if the numbers go against you. It's obviously one data point, but he has others in his mind that he's looking at that he's going to trust to be able to bring this to market. And for Dietrich Madschitz, he didn't care about the taste issue then and doesn't now. He said, it's not just another flavored sugar water differentiated by color or taste or flavor. It's an efficiency product. I'm talking about improving endurance, concentration, reaction time, speed, vigilance, and emotional status. Taste is of no importance whatsoever. It's important to understand what you are selling and to who, and he has a very clear idea of what this product is going to be, its effects are going to be, and he's going to pour a lot of money into marketing to make this all come to reality. And a big chunk of money early on went to developing this marketing concept and this whole marketing strategy. Originally, it was going to be based in Germany, but there was little support they got in Germany, so they actually had to change. So because of these legal system in Europe at the time, and being unfamiliar with this category of an energy drink, he had obtained the first ever European approval for a new type of beverage. And the German authorities, they treated the request like an indecent proposal. When more than a year went by waiting with no results, Dietrich was like, "I've had enough of this." Basically, he's like, "I need to go somewhere else." He packed his bags in frustration. He left for Austria. And it's thanks to this German bureaucracy that Red Bull is an Austrian company today. Which also reminds me of last week's episode with the Wright brothers, talking about how the environment you are in is such a critical part of the company. You have to go where the environment is favorable. It's just like the Wright brothers when they went to Kitty Hawk. That was the environment they needed to invent powered flight. So they went there. They did what they had to do. It's the same though, Dietrich right here. He has to go to Austria because that's where he can launch the beverage. And it's also really strategic as well. So he moves to Austria at the end of 1986, choosing Salzburg as the headquarters. He enjoyed spending time there and the city was central. So 10 years later, the company moved to another place, Fuschl am See, a village of 1,400 on a cold, crystal clear mountain lake, which is actually still the global headquarters today. But he originally moves to Salzburg. But even in Austria, approval still had to be won. They had to go through toxicology assessment, declarations of harmlessness from food experts, specifications of all raw materials, and statements from doctors, chemists, pharmacists, and lawyers. This prolonged battle likely accounted for his lifelong aversion to bureaucratic hurdles. And remember, he quits his job in 1985. Finally, April 1st, 1987, Red Bull was approved for sale in Austria, and Austria offered a real advantage. So Dietrich Mateschitz could test this concept for Red Bull at a much smaller scale before conquering larger countries, expanding, all of that. Sales were slow to take off, and Mateschitz personally delivered pallets of his drink, distributing it as a free promotion, which is very much like other companies have done in the past. I know The DoorDash founders, I did a deep dive on them as well for Just Go Guide. And the DoorDash founders, even later on in 2023, there's an article. They were billionaires by that time. They were doing deliveries once a month or once a quarter, still keeping in touch with the product as time went on. And that was the best way to do so by actually doing deliveries and figuring out where the issues were. Early on for Dietrich, the company and him, he had to face severe financial difficulties. Only the small private bank Spangler believed in the product and the concept, never abandoning Mateschitz. The Salzburg Bank is one of the few companies actually permitted to advertise Red Bull as a reference customer. And one of the very fortunate things for Dietrich and Red Bull— fortunes improved when bartenders and nightclub owners were convinced it was suitable for mixing cocktails, and it was sometimes referred to as the poor man's cocaine. This alternative use at nightclubs, bartenders, et cetera. You just never know where your product's gonna catch fire and get distribution and how it's gonna be used. It's the same thing as actually Slack. So how Slack came to be, Tiny Speck, a company that created a game called Glitch in 2011. Glitch struggled, so the game didn't work and they couldn't really find a sustainable audience for it, but they had this internal tool that they used during Glitch's development. And this tool simplified communication and that evolved into Slack, which was actually founded by Stewart Butterfield. It evolved into Slack, which then became obviously a multi-billion dollar company. So you just don't know how your product's going to evolve, use cases for it. You may have to think deeper on the alternate use cases. And obviously for Red Bull, this ended up being for bartenders and nightclub owners. Early on, and it evolved a lot since then. But despite initial difficulties, several hundred thousand cans were sold in the first year. In 1988, that number rose to 1.2 million, and by 1989 it was 1.7 million. And revenue in 1987 was about €800,000, which sure sounds decent for a first year, except that expenses were roughly €1 million, and that was mostly in advertising. Especially year one to break into the market. And Red Bull only broke even in its third year. It's important to note too that Red Bull's story is atypical for Austria. Austrian companies historically succeeded with sophisticated technology. Austria has always been a land of engineers, not merchants. Mateschitz took tremendous personal risk in building this company, a brand and a meager $500,000 from him. And starting capital was essentially nothing at the time for this. And during this 3-year kind of startup phase, the only financial support actually came from the German tax office, funny enough. Dietrich was quoted to say, if things had gone wrong, I would be sleeping under a bridge today. And of course they do not go wrong. They go incredibly well, which we're gonna get into now. So how does Red Bull come How does this thing take off? In the 3 years between founding the company and getting the product approved, Madschitz did his homework thoroughly. He was clear that he wanted to position his beverage as a high-end product in the top price segment. That meant advertising at its finest. Red Bull was to be quite expensive despite being a new product with no existing market. So the challenge was to create demand first. For this, Madschitz turned to his former college classmate, Johannes Kastner. Maticius would say of Kastner, Kastner was a clever guy that I knew. He's a perfectionist like me. As a team, we are unbeatable. They worked together for a very long time and indeed were unbeatable, and they nailed their positioning. So one thing to take note of this I have to highlight is that if you go high end, you need marketing a lot more, especially as a new category. And they had the right slogan, which was so clutch. And here's how it happened. Kastner played a central role in Red Bull's steep rise. He came up with Red Bull gives you wings, and the fresh, cheeky comic commercials. But in advertising, there's almost nothing new. The comic-style commercials are reminiscent of the HB Manchán Bruno that British tobacco company BAT used to promote its HB cigarette brand on television. While Bruno calmed down with an HB cigarette at the end of each sketch, the cast and their character would always take off with Red Bull, which I'm sure you have seen. And it brings to mind an important point. Studying the past, finding ideas, campaigns to model. There's a lot to be learned from history, which is obviously why you're listening to this show as we dive deeper into the most ambitious people in history. That passage is just a great example of that. Finding ideas for the advertising campaign from past campaigns and adjusting them to the one that he wanted. The actual birth of this, because it's tough to work with Dietrich, was hard to say the least. So for a year and a half, Kastner worked on proposal after proposal, nearly 50 in total. Matuschitz rejected all of them. Kastner was so close to quitting, he reportedly said, we need to part ways to remain friends. He continued, I was done, broken and empty, and I didn't know how to proceed. I couldn't think of anything, and I saw no way to work things out with Didi. That's what he called Dietrich. Another partner at that firm said, Matuschitz always seeks the absolute. He believes in his product until the end of his days. And believed that the previous strategy plans wouldn't lead to the goal. The time was very difficult for both, and our boss didn't know what to do next. Lucky for them, the groundbreaking idea came in the middle of the night. Kastner called Mateschitz, who was immediately awakened and approved the slogan with a simple, that works. And funny enough, throughout all of this, at the beginning, Dietrich didn't have the money to pay his advertising professional. So he worked as a freelance employee at Kastner's agency. Kastner and Maticich created 7 client presentations together, all of which were rejected. And I just love hearing that because in the early days you do whatever it takes to survive. We're talking about years before he got a product to market. He goes to this business trip in 1982, 1984 discovers he's going to actually do this thing, quits his job in 1985, and it's not in market until 1987. So he has to pay the bills somehow. He put so much money into this. So he's literally working as a freelance employee at an advertising agency to be able to have the money to pay them so he can bring this product to market. It just brings to mind, it's like, what are you willing to do to succeed? And this slogan, this gives you wings slogan that you've all heard, was the exact thing that Mateschitz needed to convey that Red Bull had these tangible effects. That enabled his product positioning masterstroke, selling Red Bull as an ultra-premium drink in a category all its own. At about $2 a can, it was far and away the most expensive carbonated beverage on the shelves. And Dietrich would say, if we'd only had a 15% premium, we'd merely be a premium brand among soft drinks and not a different category altogether. That's one of the most important lines there about creating a whole different category. He knew what he wanted from Red Bull from the very beginning, and he nailed the positioning. He nailed the marketing. And he spent a ton on marketing, which we'll talk about coming up here. And one of the things he would say about this all coming together, he was convinced that from product to brand to advertising message, that the product itself had to meet expectations. He'd say that no marketing budget in the world can bring back a disappointed user. So once you have a good enough product, then you can market the crap out of it to grow it. Especially in a category that you're creating yourself. But it doesn't work if your product is trash. And these campaigns they used for Red Bull were so good that Kastner won like the Austrian State Award for advertising 3 times in a row between 1993 and 1995. So later on, as it continued to use different campaigns over time, and we're going to get into a lot of the marketing and different ads and different ways they got the brand out there. But one of the things Dietrich would say is we were always looking for a more creative, different point of view. And one of the ones we're going to talk about later is the Flugtag. I think I'm probably saying that wrong, but this wacky, wacky competition where people compete to fly the farthest over water in homemade flying machines. And I literally had to watch this as I heard this, and I just watched the video from 5 years back, which has like 6 million plus views and It's of the top 8 designs, which are very impressive and you can't look away. It is fascinating. And you can see why this marketing for them works so well. Even in the research, I'm still smiling and laughing about all these different campaigns they've done and all different ways they got their product out there. It's ubiquitous. It's crazy. And for 5 years, Madschitz played it relatively safe in Austria. So in 1992, he began expanding internationally, starting with Hungary. In March 1994, Federal Health Office in Berlin finally approved Red Bull for the German market. So remember, he launched in 1987. So 5 years. Can you imagine? He didn't even like start this that time. He had started years before that with the marketing and the idea to start it. The idea to actually begin this thing. And it already takes like 7, 8 years really from the very start. So all of these things just take a tremendous amount of time. And think about the expansion into the German market. In 1994. That's 10 years after he decides to start this thing. And from the very beginning, there's a certain way that Dietrich Mateschitz decides to go about building Red Bull. So they outsource all their distribution. They worked with one company until 2003, then ended in a year and a half. They have their German subsidiary take over distribution, wasn't as successful as Mateschitz wanted, and then they get a new distribution partner in like 2005. So they completely outsource distribution of the product. Which means they need good partners for the long term if you're going to take this approach, which Dietrich Mateschitz was very good at. He built relationships with a lot of people that were influential for his business and lasted a very, very long time. And as they're expanding into different markets, it's pretty crazy how they do so. So Red Bull had been consumed in Germany long before approval. Obviously the product launches in 1987. 1992, it goes into Hungary, as I mentioned. 1994 is when they get into Germany. So it's already being consumed by them. Cans were smuggled in large quantities from Austria to Bavaria. This is a product where image plays a central role, and the illegal import gave it the added allure of the forbidden, making it even more cult-like. Outrageous rumors such as the drink containing extracts from bull testicles or being secretly enriched with amphetamines fueled demand. Before the Bavarian ad campaign even started, 60% of Munich residents already knew the brand, which I find to be just insane. And the company did nothing to counter these rumors. As Masch had said, the most dangerous thing for a brand product is low interest. In the first 3 months of legal market presence, 33 million cans were sold. The can factories couldn't keep up and deliveries were suspended for the first 3 months in the fall of 1994. That is just— Insane to me. And Mateschitz just proves his marketing genius with his early decision to foster these rumors instead of quashing them. He just lets them go. He lets people think whatever they want and just spreads more and more of the, the myth of Red Bull. And Dietrich Mateschitz was asked, was this on purpose? He said, yes, we expected it. It was part of the strategy from the beginning. We would make the brand interesting enough that people want to get their hands on it. Now, I think that might be slight revisionist history with that, but I think from how strategic Dietrich Mateschitz was, it's believable that they actually did want that, those rumors and everything. And there's some people who said in different sources that he started certain rumors as well, but who knows if that's true. He's so secretive, he wouldn't really say much about it. And Red Bull aimed for about €70 million in sales in 1994, which was a threefold increase over the previous year. And 10 years later, Annual profits alone would be 5 to 6 times that. The marketing budget for the first year in the new market was €7.5 million, which was exceptionally high for the time. Then Red Bull was introduced in Switzerland in October 1994, and there had also been a thriving black market before approval in Switzerland as well. There was a growth hiccup in the early years. In 1989, Madschitz introduced the soft drink Red Rooster, which was a mixture of maple and lemon syrup. Unlike Red Bull, Red Rooster proved wingless, became a shelf sitter, and caused losses of millions of shillings. Critics later saw parallels with the wellness brand Carpe Diem, introduced in 1997. Which to me just proves that you don't need every product to be a home run to be incredibly successful. Yes, they tried new ideas, they tried new products that didn't work out, but they didn't know what was going to work and what wasn't going to work. They had to try new things. They had to be pushing the boundaries and trying new stuff. It also reminds me of, I wrote a deep dive on Jeff Bezos and he's talked about wandering, how wandering is not efficient, but wandering in business leads to breakthroughs, which you have to allow yourself some time then to wander. And Dietrich did the same, not only from a product perspective, but also from a marketing perspective and testing many, many, many different things, which we'll get to soon. And then in 1996, Red Bull ranked only 46th among Austria's highest-grossing brands. But it wasn't until 1997 that the company started conquering new markets almost monthly and revenues soared. The steepest climb came in 1999 when revenues more than doubled over an already record year. And I'll paint a picture here. In the late 1990s, the internet is gaining worldwide popularity. The big business of dot-coms was obviously huge at the time. Dynamic, stylish women and men dominated the scene, always youthful, always winning. Red Bull fit perfectly into this. It became more than a drink. It became a lifestyle symbol of seemingly perpetual economic ascent. After all, its slogan promised to give you wings. And they did this with an 8.3-ounce can that cost $2, at least double that of a 12-ounce Coke. But it packed 80 milligrams of caffeine, more than double the larger Coke serving. By 2004, consumers downed 1.9 billion cans. And generated $2 billion in revenue, which Forbes reckoned that Mateschitz's 49% share was worth about $2 billion by this time. By 2010, Red Bull was available in 161 countries, the US being the most important market as of 2010, with more than 1 billion cans sold. And they entered this in 1997 with California as a testing ground, and they expanded eastward. In 2005, it hit 50% market share in energy drink sales. For the first time, and Red Bull Sugar-Free surpassed the light versions of Coke and Pepsi. There are also rumors around this time that other companies wanted to buy them, which of course they would be, but Dietrich had no, no plans of this whatsoever. He never wanted to sell. Of course, with any success, you're going to have competition. There were numerous imitators to Red Bull. Monster copied its advertising concept significantly and managed to dethrone the original as the US industry leader in 2008. And their founder became a multibillionaire as well. You can look him up. And Red Bull's US CEO had to step down because of this. But Maastricht was at least externally unruffled, saying they were monitoring the developments. New competition also emerged on home turf— private labels and discounters with their own energy drinks. In the summer of 2010, a report came that Red Bull had lost 20% of its market share in the Austrian retail sector. But even back in 2005, Dietrich wasn't concern. He'd say, we created the market. If you appreciate the product, you want the real one, the original. Nobody wants to have a Rolex made in Taiwan or Hong Kong. But Red Bull's U.S. market share had fallen from 75% in 1998 to 47% in 2005. Smaller piece of a fast-growing pie. And John Sischer from Beverage Digest would say, Coke and Pepsi came from nowhere in the water business to having the top 2 brands. They could easily become major factors in the energy drink category too, which they will take stakes in other companies, as you'll see. And as Dietrich expands from markets in Europe and the US, he also goes into China in 2011 after delays. And then also in September 2011, special editions launched alongside regular and sugar-free in 3 colors and flavors in the classic 250ml can. They have cranberry, blueberry, and lime. And with its unique position, Red Bull attacks Coca-Cola and Pepsi in their core competency. In spring 2008, the group introduced its own cola in 11 Western European countries. In May 2009, the Hessian Ministry of Health banned Red Bull Cola in Germany after traces of cocaine were detected, and the Federal Institute of Risk Assessment found one would have to consume 7,000 to 8,000 cans to experience a cocaine high. The ban was lifted after three months. I just find this hilarious. But unfortunately for Dietrich Mateschitz and Red Bull, unlike the original, the forbidden allure did not create hype for the cola. Mateschitz initially announced in 2008 he expected the same revenue from cola as from Red Bull, but success never materialized. And in summer 2011, the company withdrew its cola entirely from the American market, saying a nationwide U.S. introduction. would tie up considerable resources outside the party scene Red Bull itself organizes. And Red Bull goes back and forth with competition. So Coca-Cola countered with its own energy drink, Burn, in fall 2008, then an energy shot in late 2009. And Red Bull had to react, launching its own shot, which was 60 milliliters, in fall of 2009, which is the same caffeine as a can, no carbonation. So they go back and forth in these competitions, essentially acting and reacting. back and forth, but they continue to test new markets and Red Bull continues to grow. And it's also a reminder for anyone building any company, there are a tremendous amount of challenges you're going to have to fight as you expand, as you bring a product to market, as you launch new markets. You just have to attack them head on and make logical arguments, push and push and push and continue to push, which is what Dietrich Mateschitz did. Throughout his time at Red Bull, he just always found more ways to get his brand in the hands of consumers and stay top of mind constantly. And how did he do this? How did he stay top of mind? Dietrich Mateschitz would say everything is marketing. And by even one of his own statements, he said he drinks between 5 and 12 cans a day and claims to never experience any negative side effects. And people would say he's either like a medical phenomenon or at least a very skilled salesman, which obviously he's an incredibly skilled salesman. And Red Bull operates differently in basically all regards. Yes, marketing, but also the company itself. I mentioned they outsource distribution. And even when selling 4 billion cans each year by 2012, there's no factory building. There's no production facilities or warehouses, not even a fleet of trucks to drive the drinks that most logistics companies have. While many large corporations outsource their marketing, Red Bull took the complete opposite approach. It outsourced production and distribution and focused solely on sales and advertising. Essentially, the company is one massive marketing machine. This is a theme, by the way, that comes up this entire book. They consistently take the opposite approach. Dietrich understands his core competency very, very well, and he just hammers that home again and again. As far as production and filling, it's exclusively carried out by Rauch. It's called Rauch Frischstoff. I'm definitely butchering that name, but it was a family business founded in 1919, and the partnership is very lucrative for them. They have 1,400 employees and €113 million in 2011. At least they generated revenue. But it started in an unexpected way. At the beginning, Madschitz had neither money nor intention to build production facilities. So the budding entrepreneur, armed with little more than an idea, approached Franz Rauch, the patriarch, and offered him a stake in the business. After tasting the drink, Rauch outright rejected the offer, convinced it would never be a commercial success, which he came to regret that decision obviously many times over. And Madschitz once described the relationship as hopelessly loyal to each other. Experts estimated over 40% of the fruit juice company's revenues Comes thanks to Red Bull, and to keep it that way, Rauch invested 60 million euros into its facilities, which was set to have its own railway connection to expedite delivery of raw materials. There's no written agreement, and for Dietrich Mateschitz, a handshake between men still holds value. Since the end of 2005, Rauch Schweiz AG also produces Red Bull. By now, 50% of all cans are produced there, mainly for the U.S. market. Which, just to take a step back there, they have their own railway connection for faster delivery. How do you make things easier on your producers or your suppliers? How do you take advantage of any opportunity to get an edge? That, that part just stands out to me more than I think it should, but I just love how they do that. Also, Red Bull created a Swiss subsidiary which was designed to protect the company from ongoing US and EU trade tensions. So with a facility in neutral Switzerland, Red Bull believes it's out of harm's way. The company also closely monitors the euro-dollar exchange rate. A 10-cent drop in the dollar would mean a loss of over €100 million on a billion-plus US cans. If Europeans one day found Red Bull unaffordable, Madschitz said they'd set up production in the US. For now, he's sticking to the Austria-Switzerland setup. That commitment led Rauch to double capacity. In its Wittenau facility in 2007 from 1 to 2 billion cans per year. And this is just the importance of long-term commitments that allows your partners to grow with you. You have to invest in them because Maastricht and Red Bull invest so heavily in this partnership. The other company then invests in their facilities to handle more for you. It's this long-term partnership, this long-term thinking that breeds great results. And also Their growth, so Red Bull's growth, creates the ability to then develop more supply. It is just a phenomenal relationship that works out incredibly well for them. And it just showcases again that Dietrich fully understood what he needed to build. A distinct brand had to stand out, as well as a big marketing budget and a unique campaign, and then outsourcing repeatedly. He just outsources so much of the other things that he doesn't think are as important. As the sales and marketing of the product. Just has this incredible self-awareness and awareness of the business, of what he's good at and what he needs to build to make this company a success. Another company that works with Red Bull is Rexham, the world's leading can maker. They've been a Red Bull partner since 1987, and the design of the Red Bull can, which I'm sure you've Probably all seen by now. Yeah. Was conceived Rexham. It's this sleek, tall can that helped establish the product as distinctive from the very beginning. The can's design is protected worldwide. Even the blue and silver color combination is registered as intellectual property in many countries. And Rexham also designed special can holders for the Flying Voles, Mattress Shits' private aircraft fleet, to fit the uniquely sized cans. That's just ridiculous. That's so crazy to me. Can you imagine this airplane that has cupholders just for the size of a Red Bull can? I love it. And another way that Mateschitz operates is that he believes very much so in not diluting the brand. There's been licensing offers over time, and Mateschitz has rejected all of them, preserving the exclusivity of the Red Bull brand, even at the cost of millions in fees. The brand set in motion a money printing machine whose rotation speeds up year after year, despite more than 140 competitors launching similar products. The global market share was 70% in this book at the time. And as Red Bull is growing and growing and growing, they become obviously this massive company. Dietrich Mateschitz would say, I try to avoid headlines myself. It's a waste of time, and the main shareholder feels the same way. So they're shareholders of the world's most successful marketing conglomerate, and they shy away from the public. And they have so many subsidiary companies that handle various sectors, yet Red Bull GmbH itself has fewer than 300 employees, meaning no supervisory board is required. Only recently did Red Bull deviate from its restrictive information policy and officially share record revenues for 2010-2011. So obviously this book is from like 2012, so That was recent at the time. And it just reminds me as well of Cy Newhouse we talked about in episode 1. And this concept of like real G's moving signs like lasagna. Both are privately owned companies that became multi, multi-billion dollar companies. And they do not care about the publicity for the company founder. And Dietrich Mateschitz would emphasize that they have no intentions of transforming their advantages into disadvantages by implementing like big corporation structures. He's personally declined 20 board positions, and they operate with a lean structure. Red Bull was estimated to be valued at around €13.4 billion in May 2011, and the brand was worth a little over €6 billion in 2004 and €11 billion by 2007. So zero to €13.4 billion in what, 25 years? It's pretty crazy. And one thing you'll learn about Dietrich Mateschitz is he's incredibly loyal. One of his former employees would say, he's a gentleman. If someone has helped him once, he won't forget it. There's another time when a longstanding employee passed away from cancer, but Maticius had ensured she received the best medical treatment available. And her salary continued even when she could no longer work. He's very loyal. He proves that repeatedly. And much like Cy Neuhaus operating relatively lean, he's the same way. So at the top, there was a handful of regional managers. There's a 5-member board of directors and Dietrich Mateschitz as managing partner. And employees from different subsidiaries rarely interact, even in close proximity. There's no shared seminars or events or celebrations, just an internal internet platform. And there's also this unwritten yet universally accepted code of conduct for Red Bull employees that Mateschitz personally sets. A former employee described it as He's a refined and elegant person who values good manners and proper etiquette. You hold doors open for ladies and don't get drunk in public. Even as a private individual, you're a business card for the company. There is a strict prohibition on discussing internal matters encompassing every detail about the company. Even the author of this book itself that I read for this podcast said he could only rely on former employees. And they all speak positively and describe Matischitz consistently as someone with great charisma. And in talking about his management style, he would say that managers waste far too much time on personal protection and lobbying. All the reporting, as is common in large companies, also leads to very entrenched patterns of behavior. And I'm a rather unconventional manager. For example, I hate reading reports. If anything, I only skim short summaries. A lot of things happen verbally here, directly, without many hierarchical barriers. And he also said that bad managers are those who merely maintain the status quo. They are highly paid administrators who desperately try to preserve the existing system without preparing innovative paths for the future. Also, one more thing is that I don't believe that good management is based on luck. A third of success is the right product. If you have that, Then it's a stroke of luck. And the revenue arc just tells the story of how good this has paid off with the luck. And we'll get to the marketing. I know, probably thinking about this, but we're gonna get to the marketing soon. But in 1987, the year of entry, so they did €1 million in revenue. In 2002, 15 years later, they'd already been up to €626 million. By 2004, €1.7 billion, which is just crazy. 2007, €3 billion. 2008, €3.3 billion. And the 2009 crisis was actually the first downturn in revenue. They're down by €55 million, which was tough. But then by 2010, the best year in history again, they're up to €3.8 billion. And then in 2011, €4.25 billion. This is just like a crazy progression. And it's crazy how fast these things can grow. The margin of the cans after cost is 70% despite the budget competitors. And Madschitz never considered changing the exclusive pricing strategy. The company's liabilities to banks also consistently amounted to exactly €0. He doesn't trust financial institutions. His motto is no debt with a bank. He's held that since founding. Only in the second year did Red Bull accept minor bank financing. To avoid debt, there was no dividend payments at Red Bull until 1999. All earnings were reinvested into expansion, which obviously paid off very well. And Dietrich would say, You mustn't confuse the creativity of the Red Bull brand with our business practices. When it comes to financing, we are extremely conservative, even old-fashioned. I was raised with the motto, you don't go into debt. That's also a virtue. And then in 2003, 16 years after the public launch, Dietrich says, now comes the phase of acquisitions and line extensions that are independent of the core brand. We are marketing people who are interested in brands that we believe we could awaken from their dormant state. We're good troubleshooters, but poor stewards and administrators. And remember, his business is really a marketing corporation. The entire activity of Red Bull is viewed in the context of marketing. All corporate projects— Formula 1, soccer, air racing, media— serve the core business, the sale of energy drinks. Conversely, the core business fuels the corporate projects, and he dedicates roughly equal time to both. In practice, the broadening was executed over 60 subsidiary companies. But let's get into a little bit more of that marketing, which I know you've been waiting for. Nowadays, practically every Austrian newspaper reports on Red Bull in some form daily. Brand awareness approaches Coca-Cola or Pepsi levels, nearly 100%. And more importantly, people don't just recognize it, they buy it. Dietrich Mateschitz would say, the identification of the target audience with Red Bull is very high, and we were the first. You learn that already in your first semester of marketing at university. You have to differentiate yourself. Consumers want the original, not a copy. And because media reports on Red Bull in some form daily, it's great free exposure. It's actually incredible free exposure for Red Bull, and they get this repeatedly. And it starts with the presentation of their products, which has evolved from traditional advertising communicating functions and benefits to conveying an image. You know, use this or that and you'll become more irresistible. Smoke this or that cigarette, you'll experience freedom. Drive this or that car and you'll belong to a group that has truly succeeded. Drink Red Bull. It may not quench your thirst due to the small can size, but it gives you wings. And then they start sponsoring so many different sports organizations. And it starts in the 1980s when he paid a Formula 1 star Gerhard Berger, to stroll the paddock with a can of Red Bull in hand, posing for photos. Now Red Bull is the drink of the rich, beautiful, and famous. Robbie Williams and Demi Moore swear by it. Red Bull isn't just a drink of film and pop stars. The Hells Angels celebrated their 50th anniversary not with liters of beer, but with Red Bull cans in hand. Such things happen when the image, uniqueness, lifestyle component and credibility of a brand are in line. Product placements of this kind, as seen in many Hollywood films, are neither influenced nor financially feasible. And attention is a scarce resource. It becomes scarcer as interesting uses for it increase. Red Bull throws more resources into this fight than all of its competitors combined, relying primarily on sports and more recently culture. No other company comes close to spending as much on advertising and marketing. More employees are engaged in these endeavors than in the original core business of trading the energy drink. In the company register, the main business activity of Red Bull GmbH is simply listed as exploitation of the Red Bull brand. By unwritten law, one-third of revenue is invested in advertising and brand maintenance. With 2011 revenue of €4.25 billion, that's €1.4 billion at its disposal. Just think about how much money they're spending on marketing and advertising. It's crazy. And it just reminds me of the whole Charlie Munger quote of taking a simple idea and taking it very seriously. They took a simple idea of their product, they're going to market the crap out of it, and they just did it repeatedly. But they didn't just do it in a way that was paying superstars. They relied on much cheaper talent, these hip youngsters and students and fringe athletes. Hundreds of them around the world in the first decade or two. And Dietrich Mateschitz would say, The resources allocated to areas such as traditional advertising, event marketing, sports sponsorship, etc., are carefully considered. There's a high degree of budget discipline. You must not mistake the lightness of being in the Red Bull brand's image for our corporate philosophy. There is no what does the world cost mentality, only the question of correctness and meaningfulness of the projects. And about half the marketing pie goes to unconventional sports. Things like running in the Himalayas, skydiving over the English Channel, surfing on the Amazon, mountain biking a mine. These events don't draw many spectators in person, but their extravagance attracts media interest and reaches a much larger audience. And I just watched a video of theirs, so I had to see their YouTube channel. In 2026, The year I'm making this, 28.8 million YouTube subscribers, and they had 118 million views in the last 7 days just on their channel. I watched a video, by the way, it's called the World's Fastest Camera Drone vs. F1 Car featuring Max Verstappen, which is phenomenal, by the way. It's so entertaining. The content is so addicting, and obviously that's only their, their channel. They have so much other reach. It just makes me think about like, how can you be more creative with your marketing? They take it many levels deeper to get exposure that you can't buy. And if your event itself is obscure, if it's unique, media will cover it and it'll get you even more exposure than it would have otherwise. It's actually reminding me a lot of Party Round back in the day. They had all these drops they would do. And also even TVPN, the daily tech news show. And how creative they are with their marketing and their ads. And if you forgot about PartyRound, they did Helpful VCs back in July 2021, Startup Ipsum, Burn the Runway, Quit Your Job Grants, Poached Eggs, The VC Puzzle, Startup Supreme, PartyRound Mag. They did a ton of stuff. It was so creative and I was always very impressed with them. Shout out to Jordy Hayes for those. And Red Bull, With their events, they were not only spectacular but original. Their original competitions are organized, like soapbox races, a paper airplane world championship, the Red Bull Flugtag, which I mentioned before, was self-built, terribly humorous flying machines gliding from a ramp into water. In all its engagements, Red Bull follows a consistent path. When the company gets involved anywhere, it does so only as the main actor and under its own name. Name. Again, it's important to recognize that Red Bull events and athletes are filmed and photographed by camera teams the company commissions. Videos, photos, texts, and interviews are then provided to the media for free, and the media eagerly picks them up. Free advertising for the Kana empire. And DJ Mag has created a new category of sports sponsorship, not only by budget size, but also in how it's utilized. Red Bull supports not just energy, strength, and endurance, but ingenuity, creativity, and above all, humor, intelligence, and likability. He'd say that we have actually redefined sport sponsorship, and the company doesn't believe in short-term commitments or one-off actions. They prefer long-term partnerships, primarily with individual athletes, and there are no contracts, only verbal agreements promising support to help athletes fulfill their dreams. I think that piece is very important. I work with a lot of different companies for the LA Grind and the SF Grind, these local media companies I have in Los Angeles and San Francisco, and the long-term sponsorships and long-term partnerships are the best. You don't get the same results from a one-off, one ad, one event. You get the results from someone who's bought in over time, over a long period of time, which going back to TVPN, they sold annual sponsorship deals. Like F1 teams do for their show, which I think is incredibly smart. Red Bull took this long-term approach. And again, it all stems from knowing that your product is good. You know you're doing sales and marketing, you're committing to it fully. You're taking this simple idea very seriously. And they're pounding this home 1,000 different ways. And by the time this book was published originally in 2012, nearly 600 athletes from around 100 different sports are under contract. From paragliding and cliff diving champions to daring motorcycle and mountain bike enthusiasts, tracking field athletes, all of them convey this kind of image of youthful, dynamic, innovative, and they stand out. And the athletes' achievements symbolize and boost Red Bull's success. A former marketing manager would describe it as, the athletes were our spokespeople. An important note was that all combat sports were avoided. Violence did not align with their image. Interestingly, Match has established a prize for the best stunts in movies, the Taurus World Stunt Award, which was presented since 2001. Another great example of an athlete they worked with was Felix Baumgartner, who jumped out of a helium balloon in October 2012 from a world record 38,969 meters, which was just crazy. And to give you an idea of what Matic was like, there's a story about Robbie Naish. He's a windsurfer who recalls his first meeting with Matic almost 20 years ago. This was back in 2011, an article from Bloomberg. He'd say, we talked in the courtyard of his office in Fuschl and pretty soon realized that we're both really into cars. That was the end of our business meeting because he wanted to show me his Ferrari GTO. We went driving off into the mountains, and after 15 minutes, he pulled over, got out, and told me to drive back. I didn't want to. It's a million-dollar car. But he said I was either going to drive the Ferrari or walk back. I was so scared. I drove like my grandmother. I found that hilarious. All of this, though, all of the sports they sponsor, it conveys a very simple Message. Physical activity and Red Bull go hand in hand. They belong together. It actually makes me think of my own business. Like, how do you simplify the messaging? They use very simple, simple messaging, just applied a thousand different ways. And through all this marketing, Madschitz, along with his energy drink, they established another product, Red Bull Sports. Homemade and guaranteed to be spectacular. It's another brand promise. They're always gonna be spectacular in some way. I mean, I even went in San Francisco with friends. I went to a Red Bull racing event in San Francisco in the marina. They took over a whole street. We're racing motorcycles and an F1 car back and forth. It was crazy. It was super packed. Like everyone on the streets, everyone climbing buildings just to watch. And it was free. A tremendous branding event for Red Bull. Of course, other brands are playing defense as well. So Coca-Cola extended its expiring sponsorship of the Olympics until 2020, back in 2005, which preemptively prevented Red Bull from Olympic entry. But Red Bull garners the most press coverage for Formula 1 and soccer, in addition to the other sports that they get coverage of. Ice hockey, beach volleyball, ski jumping, and more. Because of that, on some days, the logo can be found on every single page of the sports section in major newspapers. That is tremendous brand exposure. And Dietrich Mateschitz was asked whether Price Is Advertising mattered more than winning. He'd say, I have to be careful how I phrase this because for me, It doesn't hold such high importance. What's clear is that we are ambitious and wherever we are, we want to be at the top. This means that we want to belong to the top 15 in European football and the top 4 in Formula 1 in the medium term. The most pressing challenge is to keep alive the spirit that has characterized Red Bull until now and to find expansions from the Red Bull brand that are more innovative than chewing gum, fashion, or sports items. And how Dietrich Mateschitz goes about this is unsurprising to me if you know anything about him. He's definitely more of a modern entrepreneur. He prefers younger, different traditions in sports, like cheerleading at American football games or air shows during the Hanukkah weekends in Kitzbühel. For him, this turns sports into a work of art, an event with genuine flair. He'd say it's a marketing tool. The only thing is, those who participate should not be reduced to extras. He'd also say, what I never wanted was merely imprinting our logo on sports and then later calculating how much airtime it received on television. They could give me all the banners in a football stadium and I wouldn't take them because I'm missing the qualitative aspect of it. Our philosophy is that we are an integral part of the sport. And because they're such an integral part of the sport, the lines between Red Bull, Red Bull athletes, and Red Bull events are blurry on purpose. To managers, it's one big image campaign with many manifestations. You may see Reggie Bush in a Red Bull hat on TV, a YouTube video of Shaun White secretly training on a private Red Bull halfpipe, or one of dozens of global events like the Red Bull Soapbox Race in LA. This is fun stuff and a lot more interesting than writing a check for 30 seconds during the Super Bowl. They also commit fully to sports. They have this diagnostic and training center established in 2003 because Dietrich Mateschitz essentially believes that his athletes deserve the best sports performance center they can get. Dietrich would say that we're maniacs about quality, and he'd hire the best performance coach that money could buy. Mateschitz would say at one point, stay focused, stay hungry, and never lose sight of your goals. Just like an athlete. He is the same, just incredibly driven, incredibly ambitious, just like the athletes he sponsors. And one of the most important sports he gets into is soccer. They're going to call it football. I am in the United States, so I will call it soccer. But Dietrich Mateschitz was far from a fan initially. The rowdy, beer-drinking hooligans were particularly distasteful to him. He resisted supporting or acquiring a club for a long time, but eventually realized that Red Bull couldn't do without the world's most important sport. When the opportunity presented itself, the corporation took over the football club Austria Salzburg in spring of 2005, saving the traditional club from relegation after poor purchases and mediocre performances. Dietrich would later describe how the game had evolved and how it would change. He said it's not just drunken fans with latent violence anymore. Football has become more respectable, an intelligent, fast-paced, strategic game, and it's the most important sport in the world. Two months after the takeover, Austria Salzburg became FC Red Bull Salzburg, and the old emblem was replaced by the Red Bull logo. And since UEFA doesn't allow sponsors in club names, international tournaments they compete under FC Salzburg. And of course, like many fans were. Pissed about this. They were vehemently opposed to the break from tradition, leading to disturbances during the first few matches. And despite the protests, Red Bull charged forward like a herd of bison. Many fans received lifelong stadium bans. Some were rescinded, but there was a lot of drama with this. But as we learn in the story, Dietrich just moves forward. He does not care. He presses forward through everything. And not only did he change the name of the team for Red Bull, He also evolved his purchasing policy, heavily influenced by the interests of the main business, of course, which is selling cans of Red Bull. At the end of 2006, 2 Japanese players were signed just months before Red Bull began selling its energy drink in Japan. So it's just like perfect cohesion of the business and then the sponsorship of this team. And he's obviously strategic about everything he does. Despite the protests, Matic's players dominated the 2006-2007 season. And became champions with a 19-point lead over second-place S.V. Reed. In 2007, he declared, I am a converted former non-football fan. And then in 2010, he'd say, every path to success is also an emotional one. You have to identify yourself 100% with the goal and the content. It's the same for us in football, though I had merely underestimated the extent to which an emotional attitude toward football can be reached. And they had 2 more titles in 2009, 2010. In the spring of 2007, they'd opened a training center in Salzburg for €10 million, and then they'd also get involved in the MLS. So in March 2006, Red Bull purchased the New York/New Jersey MetroStars. The entire deal cost about $100 million, including a share of the new stadium being built in Harrison, New Jersey. And like Austria Salzburg, the MetroStars were immediately renamed, eventually becoming the New York Red Bulls. At the time, significant investments in expensive foreign players were limited in MLS. Dietrich Matic would say in the New York Times, we need to adapt our thinking a bit. We believe the MLS is a smart business model. Eventually though, regulations are relaxed, and by the end of 2010, Americans were a minority in the squad. The most significant transfer was French striker Thierry Henry in 2010, previously of FC Barcelona. Red Bull also developed a youth section and soccer academy in the US and launched Project 1000 in fall 2006, where 1,000 freely accessible soccer fields in the United States would be created by the end of 2009 through a collaboration with parents, schools, and authorities. The ambitious dreams fell significantly short. However, In my own research for this, that was from the book. But in my own research afterwards, while Project 1000 fell quite short, years and years later, they would invest heavily, heavily, heavily in youth soccer, youth football. The Red Bulls Academy became one of the best homegrown pipelines in MLS, and in April 2026, the club opened the RWJ Barnabas Health Red Bulls Performance Center in Morris Township, New Jersey, a $100 million, 80-acre campus with 8 full-size pitches housing the first team, the MLS Next Pro second team, and the entire academy under one roof. And Brazil's national team actually selected it as their base for camp in the 2026 World Cup. The stadium in Harrison is now called Sports Illustrated Stadium. This all stems from Dietrich's understanding and his ambition to grow the sport of football or soccer because that grows Red Bull's revenue. He invests early in everything. So if he's going to commit to an idea, which is sports are going to drive the brand and the revenue of Red Bull, I mentioned he takes it seriously. That means he has to invest early on to build the sport, and he does it. He builds up the sport. And takes on ambitious projects to establish this soccer academy. It's just he's always thinking of how he can invest either upstream or downstream to help out his businesses, because if the sport grows, Red Bull grows. Always thinking with these long-term bets, and I just love his way of thinking. They also go on to buy a team in Germany, a team in Brazil. They just Does not end. You see the same thing establishing either academies or investing in the youth for the leagues. In Germany, the team they acquired because it can't be named Red Bull, the name can't be. It's called RB Leipzig. And because the book doesn't cover it, I did a little more research. Yeah, were these good decisions to invest in this? And emphatically, yes. RB Leipzig won 4 promotions in 7 seasons and reached Bundesliga for 2016-2017 season, roughly on his like 5 to 7 year timeframe of what he thought it'd be like relatively successful. And even more crazy, Red Bull Salzburg won 10 consecutive Austrian titles from 2014 to 2023 and became one of Europe's great talent factories. Haaland, who was just kind of taking the World Cup by storm, he played there as well. Like, this is crazy, the investments they make into these teams that become not all juggernauts, but very formidable. And Matic would say the hostility that RB Leipzig faced in Germany, because teams typically don't like them bursting tradition, he'd say that this so-called animosity is actually very limited. To put it in mathematical terms, we're talking about a mere 0.00-something percent of all football fans. It's the usual fringe groups who either don't understand anything, don't want to understand anything, or have other motives. This difficult-to-understand activism only becomes a problem because it's picked up by the media and used to generate headlines. I think this is just a great perspective and point of view on the naysayers and the haters. It is a small, small percentage, and he just pushes on. He knows the majority are good with it. The vocal minority gets the headlines, so he pushes on. I just love it. And as we're going to learn here, Dietrich Mateschitz has something called vroom vroom syndrome. Essentially, he loves motorsports. He's a huge fan of motorsports in all its varieties. He openly acknowledges it. His entry into Formula One happened as early as 1995 when Red Bull began sponsoring the small private team with Swiss owner Peter Sauber. For a short time, Red Bull even owned two-thirds of the racing team's shares. And at the end of 2004, Red Bull surprisingly buys the Jaguar racing team and renames it Red Bull Racing. The purchase was just $1 million, but the follow-up costs must be considered because motorsport obviously is incredibly expensive. They had to invest €230 million in the first 3 years alone. At least around €1.5 million per week. And Jaguar had emerged from the former Stewart team in 2000, and in 4 seasons never came near the top. No race victory, no pole position. Ford decided to sell to Red Bull due to chronic lack of success, and Dietrich emphasized it was simply good manners to establish consensus in acquisitions, which is why he consulted his Thai business partners on this one. But after Jaguar, they were not done. Mateschitz had an appetite for more. In September 2005, he took over the Minardi team founded by Giancarlo Minardi in 1980. It was a perpetual backmarker that had survived only through special payments from Bernie Ecclestone, notable mainly for nurturing young talents like Alonso. And Mateschitz decided to develop it into a junior team alongside Red Bull Racing. And of course, people want to keep the Minardi name and its 20-year tradition. But once again, Mateschitz is not swayed by these, these pleas. It's always going to push forward. The team remained in Italy but was renamed Scuderia Toro Rosso, Italian for Team Red Bull. And by acquiring this second racing team, it just proves that Red Bull demonstrates their desire to not play small. In the pinnacle of motorsport, they are going to take a massive position. They also hired the chief designer Adrian Newey, who designed cars for Red Bull Racing with Renault engines, while Toro Rosso used Ferrari engines from 2007. Mattich's midterm goal for Red Bull Racing was to be among the top four teams. The annual budget was said to be around 150 million euros, rising to 185 million. Plus another $50 million per season for Toro Rosso. Just 2 years later, the ambitious announcement became reality in 2009. 6 wins, 6 second places, 4 third places, 5 poles, second in the Constructors Championship. In 2010, Red Bull Racing won both the Constructors and Drivers Championships, mostly attributed to Sebastian Vettel. In 2011, they were a dominant force In both. And Sebastian Vettel's rise would not have been possible without Madschitz's support. At 20 years old, Vettel got his Formula 1 opportunity through the Red Bull Junior Team, a training program for talented young drivers. Again, we see this with their investments in sports. They don't just sponsor a team. They don't just have their logo somewhere. They buy a team. And they don't just buy a team. They invest in the entire sport, which helps their team, which helps them sell more drinks. Understanding this, they go deep. They take a very simple idea and they go deep, very deep on establishing themselves in the whatever league, whatever sport they're in, and that pays dividends for them. That may be the whole point of this entire book and its entire story of Red Bull. Simple ideas taken very seriously. The junior team has the same playbook as the soccer academy. They're building up young talent, which makes me think of like, how can you build up young talent for your organization or your company? This is actually one of the marks against Si Newhouse we talked about in episode 1, where he didn't quite do enough to build up his employees for the future, which was a mistake. They ended up doing okay. They still made billions of dollars, but it was a mistake and did cause them challenges in the future. For Red Bull, these investments paid off Mightily in F1. So Sebastian Vettel won 4 consecutive Drivers' Championships from 2010 to 2013. A decade later came the second dynasty with Max Verstappen, who won the Drivers' Championship in 2021, 2022, 2023, and 2024. Now, I watched that last race of 2021. So very controversial race with Lewis Hamilton, who was leading. There was a safety car. They restart him. He ends up losing. This whole thing. Nevertheless, an incredible run by Red Bull for sure. And the newly designed RB19 won 21 of 22 races in 2023, which was one of the most dominant cars in Formula 1 history. Red Bull founded its own engine division, Red Bull Powertrains, in 2021 and began producing its own power units with backing from Ford in 2026. After the Honda partnership ended in 2025, and Toro Rosso became Scuderia AlphaTauri, is now called the Racing Bulls. Of course, in anything they get involved with, they go deep, as I mentioned. So in Formula One, their involvement was accompanied by parties, glamorous motorhomes, and creative events. They even had a three-story raft that was built for the 2007 Monaco Grand Prix, which is just extravagant, by the way. Transported over 80 kilometers of open sea, a floating party house with a swimming pool for 800 guests. Creative marketing was also reflected in the Formula Unas. Rather than hiring professional models, they selected female motorsport fans in each host country. Despite the focus on parties, the involvement was driven by more than fun. The philosophy was to be integrated into the sport rather than just purchasing advertising space. That's the most important part. They are fully integrated into the sports and they're going to make the most out of everything. They're going to make it spectacular. They're going to create a spectacle and they're going to be unconventional in almost every way. They don't always succeed. Of course, they try to go into NASCAR. By the end of the 2011 season, involvement was terminated due to a chronic lack of success. In 5 years, the Red Bull team won 2 out of 172 races. But again, they're going to try new things. If it doesn't work, that's fine. They're not afraid to take bets and pull back and adjust if they need to. They also get involved in ice hockey. In 2005, they organized the Red Bull Salute Invitational Tournament for the first time, attracting top international teams. Analogous to football, Red Bull aimed to establish a Champions League in ice hockey. It just shows the ambition. If they get into anything, they're gonna do it in an interesting, unique, kind of different way. This is a great example of that. Separately, in the early 1990s, they get into flying and airplanes. So a pilot secured the first Red Bull sponsorship of his aircraft, and the Flying Bulls were born. The company emerged in 1999 from the former Red Bull Airshow GmbH. Red Bull and the Austrian Armed Forces jointly host the Airpower Show. Every two years, the air races were among the most spectacular and widely recognized events Rebel organized. It was essentially a Formula One race with airplanes, which is crazy. Held in places like Abu Dhabi, Rio de Janeiro, Istanbul, Budapest, right in harbors and city centers, settings deliberately chosen to attract spectators and media. One thing to take note of. Anything that fails for them, they're very protective of that. They protect their brand image, and failure is not really meant to be a part of the Red Bull image. So they sweep that under the rug. Anytime something fails, they just don't cover it, or they don't cover it much. They just don't want to talk about it much. But they create so many spectacles that they get massive amounts of attention. This attention, though, is focused on Red Bull because Dietrich Mateschitz Much like Si Newhouse, we talked about in episode 1, very private. For him and for Si Newhouse, there's no benefit in being public personally. For Dietrich Mateschitz, he's extremely shy and reserved with journalists, which contradicts his profession. He'd say, My philosophy is quite simple. Since it's not me on the shelf to be bought by Red Bull, it's quite logical that Red Bull is at the center of our marketing activities and not the person. And actually, the press office at the headquarters is primarily a press prevention center tasked with saying nothing and finding reasons why the boss or anyone else cannot or will not respond to inquiries. I find this funny. And dealing with media works on the carrot and stick principle. Outlets that behave positively toward the corporation occasionally get a personal audience with a top executive. Neutral reporters can hope written questions get answered, and negative press is punished with resolute disregard. All inquiries politely but firmly declined. And when it comes to Matteschitz, he's a perfectionist who wants to control his projects and environments 100%. He attributes his reluctance towards microphones to his desire for privacy. Television and radio Leave much deeper, more personal impressions in print, and that's precisely why he does not want them. When he invested in Seitenblick Verlag, a rumor circulated that he bought the society tabloid solely to avoid appearing in it. Madoc has personally confirmed that there's some truth to this, saying, perhaps this is the best way to prevent myself from appearing in it. As the Rebel Empire expanded starting in 2007, they began evolving into a TV network. In June 2008, Red Bull TV went on air, though only as a mobile television and as part of a joint venture. And then the fall 2009, Red Bull TV became available via digital satellite. In the US, Red Bull collaborated with Bunim/Murray Productions, the company behind MTV's The Real World, to create reality TV formats for Red Bull athletes. So they are very, very invested in this media piece of it as well. And they do this by acquiring key technical talent for any new venture with specific knowledge needed for the next wave or phase. They do tons of joint ventures in collaboration and apply proven formats to their business. This also reminds me of Si Newhouse. I know I brought him up again and again, but he's so memorable because at one point in time he owned the most newspapers in the entire US. And the only one he actually started from scratch did not succeed. He was just very good at buying newspapers. And then making them into incredible properties. Find it much better to buy them and just apply his extensive knowledge into, quote, making them pay, as he would say. And for Red Bull, given how many subsidiary companies they start, there's a lot of partnerships, a ton of partnerships actually to grow this. And what we see is they buy relatively cheap failing assets, whether it be sports teams or others, and boost them with capital and new talent. And obviously make the business model behind it that they want you to sell cans of Red Bull. That's the goal. They add creativity, they add innovation, and Dietrich does not settle. In one of these examples, he like buys a regional channel and you think that, oh yeah, that's it, right? They're going to have this regional channel. No, they're going to buy a regional channel so they can expand and go national. It's just always expanding. They also expand with print, like the Red Bull Bulletin, which was a groundbreaking publication initially tied to Formula 1. Production occurred inside a semi-truck right by the racetrack, equipped with a mobile printing press. The newspaper was distributed just 20 minutes after the race ended. The team included around 30 established motorsport journalists, photographers, and cartoonists. The content was well-researched, witty, and lively. In true Red Bull style, it quickly gained almost cult status among F1 fans, initially exclusive to the paddock, then appearing at the first FC Red Bull Salzburg game and also at ski races. They also created special editions which were included in major daily newspapers, reaching a broader audience. In fall of 2007, the publisher announced the Red Bull Bulletin would become a monthly lifestyle magazine distributed alongside Austrian regional newspapers with a circulation of 1.1 million. I just— Marvel at how much distribution they get across every medium. It's just insane. And worldwide circulation by 2011 ends up being 3.2 million copies. In the Bloomberg Businessweek article by Duff McDonald in 2011, Madashitz calls the multimedia assault, quote, our most important line extension so far. As a major content provider, it is our goal to communicate and distribute the world of Red Bull in all major media segments, from TV to print to new media to our music record label. He hopes Red Bull Media House will turn a profit, but as with his sports teams, he's willing to wait. He'd say, in literal financial terms, our sports teams are not yet profitable, but in value terms, they are. The total editorial media value plus the media assets created around the teams are superior to pure advertising expenditures. I think this is so great and another one of those long-term bets. I'm not going to cover all the brands that they launched, but they also launched a kombucha, a health brand, a coffee brand, all these different aspects with varying levels of success. All of which underperformed compared to Red Bull, but they weren't zeros. And one of the cool things they have as well is Hangar 7. Like the headquarters, it's a manifestation of Mateschitz's lifestyle in glass and steel. Hangar 7 and its lesser-known neighbor Hangar 8 are far more than covered aircraft storage. The 2 futuristic halls are essentially the second headquarters of the empire and an attractive event venue Where Mateschitz showcases his ventures. Inaugurated in summer 2003, the Grand Air Show. These also host the trendiest presentations and the most fantastic parties. It's a further extension, as we see again, of the brand. They even have a restaurant there. It's not just a restaurant, it's one of the 4 best in Austria. It's just like the idea of they don't just sponsor a sports team, They sponsor sports teams in every major league across multiple niches, which is just incredible. And it's insane how the depths they go. And Mateschitz personally has tons of different businesses himself on top of what Red Bull has. One of the most interesting things I find is that since 2003, he has owned a Fijian island of Laucala, purchased whole from American publisher Steve Forbes. For a reported $10 million. Malcolm Forbes, his father, is buried on the island, and Mateschitz built a $100 million luxury resort on the island, initially slated for 2007, opened in 2009. Mateschitz originally heard about from a friend, George Harrison, the ex-Beatle, who had planned to buy the island himself before his death. Asked what motivation he had for a vacation home so far from Salzburg, he quotes Forbes himself, quote, He gave a nice answer, which was, doesn't everybody want their own South Pacific island? Well, in my case, he was right. I did. He also says he has always been attracted to the idea of having his own independent state, the country of Red Bull, which would have the shortest set of laws in the world. The rules would be simple: nobody tells you what you have to do, only what you don't have to do. And the fact that he buys a private island is not surprising. We know he keeps his private life incredibly secret, almost obsessively secret. So secret that employees— there's like myths around him. Even his own employees doubt whether he actually existed. One of them, an American employee, when he actually did see Mateschitz, he said, oh, you really exist. And in one of the craziest stories of how private and how much he cares about being private, a journalist set out to write a biography of Mateschitz. And he had this reputation for investigative work, He'd go very deep, and he began researching Matshitz's surroundings in his hometown and even his mother. And this provoked anger from the otherwise charming Matshitz. Quote, "You have harassed my mother. I won't tolerate that." And apparently, he is said to have added, "As long as a perforated kneecap costs $500 in Moscow, you won't be safe." It was a clear threat, for which Matshitz apparently apologized a few days later in a personal letter. But wow, the seriousness he takes. Being private is pretty insane. And he also keeps his inner circle. He'd say, quote, I don't believe in 50 friends. I believe in a smaller number, nor do I care about society events. It's the most senseless use of time. When I do go out from time to time, it's just to convince myself again that I'm not missing a lot. And it's clear that he's unconventional, not only in business but also in his personal surroundings. His desk at Hangar 7, there isn't a computer or phone, but a bronze model airplane. And for him, a handshake between men still holds weight. He'd say, our view of doing business is not about outwitting each other. You can also succeed through performance and straightforwardness. That's possible. And with some business partners, he forgoes written contracts or he has them drawn up later. And he also reminds me in some ways Of Michael Jordan. Michael Jordan: The Last Dance, the documentary series, which was incredibly well done. He always talks about— and I took it personally. There's a meme that says that as well. Dietrich is kind of the same way. And it said in the book, objects are said to have flown across the room during fits of anger. He's an absolute alpha male, a former longtime employee describes him. I'm On the other hand, the top bull is at least outwardly always ready to delegate authority. Asked what role he intended to play as owner of 2 Formula One teams, none. You will certainly never see me at the pit wall with a radio, headset, and stopwatch. That will be reserved for the experts. But he would say, "I'm somewhat the quality control for sales, marketing, and communications." As long as something is good. I don't need to see it. But if it's bad and I haven't seen it, it falls on someone's head because if they had come to me, I probably could have told them how to do it better. And he'd also, continuing with a trend here, was unconventional about many things. But here's another example. You've certainly noticed that we don't have a purchasing company in Hong Kong or a brand holding in some tax haven. In the early loss-making years, I once said I looked forward to the time when we could pay a lot of tax. Now that time has come, and I don't see it as our most urgent task to prevent taxes through risky constructions. And personally, Mads just loves sports, as you can guess from all his sponsorships, often extreme sports, of course. And he himself pushes the limits, even risks his life. While surfing in Thailand, offshore currents and strong winds drifted him further and further from the coast, and he could hardly get the sail out of the water. He'd say, after fighting for 4 hours, I managed to pull it up once more. Stand once more, get back on it once more, and then through some lucky coincidence without falling again, I came back that seven to eight kilometers to the coast, twenty kilometers further up or down from where I'd started. I was reminded of it for almost two years because the muscle tears in my forearms hurt even with the slightest effort. Another time, heliskiing, he overestimated his abilities. Quote: Two or three times. I was in situations where afterwards, when I was back on the plane, I was so thankful and happy that I still had hands, feet, and my head intact. I thought it was a good experience, but I better leave it at that. And these experiences were possible because he takes care of his body. And it's surprisingly fit for someone over 60 at the time of this book, of course. 2 to 3 hours with a personal trainer in the gym 5 times a week is what he committed to. He'd say, I have such a strong laziness component by nature that I don't do anything alone. As I got heavier and heavier and my condition got worse and worse, something had to happen. Everything that brings me joy in life is connected to a certain level of physical fitness and physical well-being, so it's pure selfishness that I do something for my fitness, certainly not out of ambition. I enjoy going up the mountain, skiing, sailing, riding motorcycles, fooling around, Everything is connected to a minimum of physical agility, motor skills, dexterity, strength, and endurance. To enjoy it outdoors, I need the indoor program. And one of the last things we're going to talk about today is just the value of relationships. We've talked about a little bit, but friendships are what helped him build an empire as well. Obviously, he did a lot of great work himself, but one example was Gerard Berger. The Formula 1 driver? Their friendship dates back to the 1980s. At the time, Berger was nearly broke and constantly searching for sponsors. Mateschitz was in the pre-launch phase and similarly cash-strapped. Nonetheless, for a small sum, he struck a deal with the young driver in 1986. Remember, he officially got approval in 1987. Berger's first victory at the Mexican Grand Prix made him an Austrian hero overnight. A sought-after advertising figure, Mateschitz had invested wisely. After the Grand Prix victory, ORF aired a television portrait in which Berger strolled across a sandy beach, stopped, and quenched his thirst with a can of Red Bull. This marked the brand's first television appearance. Mateschitz would recall, the day after the broadcast, all of Austria was asking what he had been drinking. And we were sold out. Mateschitz would also have a business friendship with the former Volkswagen CEO and the Audi CEO, and the book lists a ton of different people that he's met over time that he either did business with or invested with or something. And even Arnold Schwarzenegger would say about him, quote, he's a daring businessman, but he's also quite visionary for an Austrian because he thinks in terms of the whole world. It's one thing to think that way in America. But it's much more rare when you come from a small country like Austria. And it's important to note that he wasn't motivated by money. He'd say that money was never a driving force for me. What counts is freedom and independence, the joy of work, and seeing projects come to life. He'd go on to say, the journey is a destination. I don't climb a peak to stand at the top, but to ascend to the top. The top is the end. And with freedom and independence being his motivations, finding joy in the work itself, it reminds me of a Richard Branson quote. He said, I don't think of work as work and play as play. It's all living. And for Dietrich Masić, he chose to stay private as a company as well. He'd say that it's not a question of money. It's a question of fun. Not only that, can you imagine me in a shareholders meeting? At the time of this revised edition, when Madschitz is 68 years old, it was heard that he was largely withdrawn from day-to-day operations, spending about 3 days a week in the office. On the 20th anniversary of market entry, he said that the brand is as young as ever, although you can't say the same about me. I'm still enjoying it more than ever. And that was one of the most important pieces of the entire book. And that's where we're going to leave it today. Thank you so much for listening to the show. If you enjoyed it, please leave a rating and review. Apple Podcasts, Spotify, Overcast, you can leave a star on an episode. I'd greatly appreciate it if you could tell a friend, it would help spread this show. I'm enjoying this tremendously. We're only 3 episodes in. Hope there's many, many more to come. This was so much fun to do this episode with Dietrich Mateschitz. I think it's been incredible journey learning about his story, how different of approach Red Bull took, and I hope you enjoyed it. Talk to you in the next episode. Thanks for listening.