#25 The Banana King: How Sam Zemurray Built an Empire from Nothing (Pt. 1)

It was a brisk night in the winter of 1910. Zamuri stood under the clock in the front of D.H. Holmes Department Store, taking in the cheap twinkle of Canal Street. He wore a dark overcoat. At 33 years old, he was already a colorful figure. People passed around Sam Zamuri's stories as if they were snapshots. In this one, you saw the town he left in Russia. In that one, the ship that brought him to America. In this one, the train that carried him to Alabama. In that one, the first bananas he purchased on the wharf in Mobile. In this one, the Central American isthmus where he cleared the jungle and made his fortune. After 10 years in the South, he was known by a variety of nicknames: Z, the Russian, Sam the Banana Man, el amigo, the gringo. He had arrived on the docks at the start of the late century, the last century with nothing. In the early years, he had to make his way in the lowest precincts of the fruit business, peddling ripes, bananas other traders dumped into the sea. He worked like a dog and defied the most powerful people in the country. By 1905, he owned steamships, sidewheelers that crossed the Gulf of Mexico heading south empty, returning with bananas. It was said that he traveled the breadth of Honduras from Puerto Porto Cortés to, uh, another name I can't really pronounce, on a mule because he wanted to know the terrain, to get his hands in the black soil. Another excerpt from this book is: Samsa Murray was born in 1877 in the region of western Russia once known as Bessarabia. It's Moldavia today. He grew up on a wheat farm in a flat country ringed by hills. His father died young leaving, uh, leaving him and his family bereft, without prospects. Sam traveled to America with his aunt in 1892. He was to establish himself and send for the others, mother and siblings. He landed in New York, then continued to Selma, Alabama, where his uncle owned a store. He was 14 or 15, but you would guess much older. I just read an excerpt from The Fish That Ate the Whale: The Life and Times of America's Banana King by Rich Cohen, about Sam Zamuri, America's Banana King. This is the book. It is a really good book right now. Something I've been reading for a long time, probably a month or two. And sorry for, you know, the intro, didn't practice that one. But I read you an excerpt from this book. Incredible book. And I really want to set the story up because the story is incredible. So you have this kid who's 14 or 15. He arrives in America. He's tall. He's penniless. He doesn't have anything. He's an immigrant from Russia. He's stepping into this new world, but he has nothing. But he has ambition and a belief that he is different. And one of the really cool things about this book is this is about Sam Zimmern. This guy has made billions and billions of dollars. He, you know, his dad died young. He's, you know, he's living in a time when, you know, he can't really— he has to find a way to make it. And if you don't have the drive, you're not going to get to the top. And he is in the worst of the worst positions as an immigrant or as a kid. So he one, one time, as it mentions in the intro, he is going up to— he's on, he's on this dock and he sees this weird yellow fruit and this weird yellow fruit kind of does this, you know, like tons of it. And so he goes over to that fruit and he ends up eating his first banana. And he notices after a little bit of time in New York or wherever he's at, he notices that he has an opportunity in overripe bananas. And most companies, even the top of the top, so that would be United Fruit and others, they saw that as a waste. And so in 3 days he flips them for $40. So he gets the overripe bananas, he basically quickens his time and he flips them really quick and he flips them for $40 US dollars, $40, the equivalent. That is the equivalent of $1,300 today for a young immigrant. That is life-changing. When you arrive to America, your father has died young, you know, your mother sent you away. You know, they're literally fleeing the country and you get to America, the land of prosperity, all this stuff. This is early, this is the 1890s going into the 1900s. But for Zamuri, this wasn't just money. It was actually a proof that he could create value in a world that didn't hand him anything. You know, he created value for a customer, for a user, for, you know, he created this value. And this goes along with quote, a quote that he said was, start at the bottom and fight your way to the top. That was his maxim and his philosophy, you know, and this is really the beginning. So he starts at the bottom, he's going into this thing, he's starting at the bottom and now he's fighting his way to the top. He starts with this little niche and he makes $40, you know, that's a lot of money, $1,300 in today's money. He's going full force and that's one of the things. So he, he has this, you know, mindset and philosophy of hustling, resourcefulness. You know, he's seen values where others see none, so much so that even the, these top executives at these companies are not even seeing that. And he's making a really good amount of money. And another thing is that this is a classic founder's mindset. This is a classic uncommon mindset. You know, turning that inefficiency into an opportunity is something that No one does, right? No one does that now. And some of the early quotes and maxims that it mentions in this book that I'm holding up before you, if you can see some of the quotes and maxims in this book, literally in the prologue and intro, or prologue, intro, first chapter, are literally start at the bottom and fight your way to the top. And that's page 12 of this book. Another one is, and this is really Sam's philosophy, he says, you're there, we're here, go see for yourself. Don't trust the reports. Never trust the reports. This reminds me of Elon because this is Sam's philosophy. His philosophy is that we're going to go full force. We're going to see for ourselves, you know, never trust the reports. And this is why does this remind me of Elon? Well, I read Elon Musk, the book by Walter Isaacson, and What Elon did was, well, one, he would— and this is a story that I've told before— he would sleep on, um, every night he would sleep, like when he started SpaceX and Tesla, he would sleep underneath his desk. I mean, it was crazy, absolutely insane, but he did it for a reason. Um, but relating to don't trust the reports, Elon would go down to Tesla's, uh, factory level he would go in and he would literally start asking a ton of questions. He would say, hey, why do we need this? Why is there this battery thing? Why, why do we need this? Because every single little detail saves hundreds of thousands, if not millions of dollars, because they're printing out— printing a ton of cars. And so you see this mentality and it's like, all right, how do we get that? To the point where we don't need to worry? Like, how can we strip it down to its core and see how much we can do? And this goes along with another Zamuri philosophy quote, but also maxim. There is no problem you can't solve if you understand your business from A to Z. Most people that I interact with, most of their problems are because that they don't understand their business from A to Z or A to Zed, as Daniel Priestley or Chris Williamson likes to say, A to Z. The moment you understand your business from A to Z, that's when you don't need to go see the reports. You know it all in your mind. I mean, reports help, but you being able to go see it is absolutely incredible. And so this leads us into the early 1900s. So right now, Zamuri has made his first little bit of money. He's starting to understand the business. And by the time Zamuri is 21 years old, he's— I want to say mastered the banana trade, but I would say he's more experienced and he's built a reputation for hard work, simplicity, and understanding his business inside and out. And he's saved about $100,000 in his bank account. And that's equivalent. I did the math. It's like $3.6 million today. It's insane. So he's the equivalent to a millionaire back in his day in the early 1900s. And granted, this is probably more because it only allows me on the calculator to go to 1914. So if this is really early 1800s or 1900s, I mean, you're looking at probably 5, 6, 7 million today in today's money. So this is insane. But How did he do this? What, what was that key moment? And so he always asked himself a critical question. Can I move or could I move the product faster than it spoiled? Can I move this product with urgency to the point where I can get it out sooner than later before it goes bad? He's dealing with a commodity or a type of What would you call it? A perishable good. And he needs to figure out a way how we can get this to one place faster than everyone else, and that will make us money. He found a niche, he found how to do it, and he did it. So he asked himself that critical question: can I move the product faster than it spoils? And this first principle thinking drives his innovation in logistics and efficiency. and one of his philosophies was that Zamuri believed in simplicity and outside work. He understood that you need to work hard and you need to understand your business from A to Z. And one of his maxims, like we've talked about, is that there is no problem you can't solve if you understand your business from A to Z. You have to understand your business from A to Z. I like doing this. A to Z, Z to A. It's fun. I like the video. We have got video up now for Uncommon Excellence. So if you're listening to this, you can go watch it on Spotify or YouTube. And it's a really happy, like, fun announcement for me. But yeah, A to Z, you can watch me use my hands. A to Z, Z to A. No, but seriously, it's really fun. The— like, you need to understand your business from A to Z. And if you don't, you know, that is where you're going to lose the most money. And you're not going to be able to know who the right fits are for your business. Again, you know, Sam's philosophy, you know, repetition is persuasive. That's why I repeat these. You're here or you're there. We're here. Go see for yourself. Do never trust the reports. Again, this is Elon. Elon's shining in Sam's Murray. Now, this is really cool. So in this book, while I was reading it, I understood, I was able to, I was able to read about the origin of a banana. And I actually want to read this because the origin of a banana is something that I've never thought about before. And it's actually really crazy when you look at it, when you, when you read about it. But it is absolutely one of the greatest things because it might be one of the greatest fruits now that I've read about it, because it's absolutely incredible. The banana's great strength as a crop is also its weakness. It does not grow from a seed, but from a cutting. When the rhizome is chopped into pieces and planted, each piece produces a tree. Even though the plant is not technically a tree, I'm going to keep calling it that. That's what Rich Cohen, the author, says. In fact, the banana does not have a seed. I mean, yes, there is a stone at the bottom of the fruit, but try to plant it and watch what happens. Nothing. And then it says that time and evolution have rendered that stone as useless as your appendix. You know, take that with a grain of salt. This means terrific savings in seeds and in the shipping of the seed and so on. But it also means each fruit— I'm going to go ahead and keep calling it a fruit because I feel funny calling a banana a berry, which is what it actually is— is a clone, a replica of all of its other species, which means nice corporate uniformity. But also poses a terrific danger. If a parasite or a disease mutates to kill one banana, it will eventually kill all members of the species. That's what happened to the Big Mike, and it's happened— it's happening even now to the Cavendish, or Cavendish. So what's really cool about this is that the literal origin story of the banana is that it's like when you see one, and this is how he puts it, when you see one, you're seeing all of them. Because the moment like a parasite could hit it, something could hit it, and and it would affect literally the whole line of bananas, that whole species. I didn't even know there was different types of bananas. I guess it's like apples, like green apples, red apples, golden apples. But that's really cool when you think about that and it makes you appreciate bananas a lot more. So I would read this book just for that, but also to get a business sense of Zamuri. Something really cool. About his leadership style, and most people are not going to find this cool, but I find it really crazy, um, just because this is how committed Sam Zamuri was. He used to import boa constrictors to keep his men in check and also sober, which is crazy. But he used to import these boa constrictors to keep his men in check so that they— that way they didn't goof off, they didn't do all these, you know, stuff that you wouldn't want them doing as a business owner. But he also went there sometimes and he would keep, he would check on them. And now we've gone from the early 1900s up until, so early 1900s to around 1911. And so this is one of the craziest stories I have ever heard from one man. And people would probably disagree with me, like David Tenra, he has heard probably crazier stories because of how many books he's read. But this is one of the craziest stories because in this, I don't want to spoil it, but he, Samson Murray, is facing a threat. And so this is absolutely crazy. The Honduras government, the Honduran government was drowning in debt. And why was that? Well, they had failed on a railroad project. Well, why is that a big problem? Well, the thing is they took out, so they thought Railroads would be the biggest thing. And what happened was they took debt from, I want to say England, and England was like, hey, we need to have that money back. So British bankers, they were upset and America was really concerned because America was like, we don't want them coming over saying, hey, you have a bunch of debt. America didn't want England or anybody from England to come over and basically take over the Honduras government because they had owed so much. I think it's like to this day, $135 million or something like that. But what happens is America goes to JP Morgan and they say to JP, they say, hey, Honduras government, we don't want them coming over here. Can you finance this, you know, $100 million thing for us? And basically pay it all off, pay the bankers so they're, they're cool with it. And now the Honduras government owes you and you can basically tell 'em you, like, you can take whatever you want from them. So he basically does that for 'em and they're trying to pass this in, in the court. And so he says, hey, well, I'll take care of this for you, but now you owe me and you have to pay me a certain amount of tax or something like that. So. They want to try to figure out how to pay him back. And so they basically, they try to raise the duties or taxes on these fruit companies because they haven't been taxing fruit to pay off the loans to JP. And JP has set this like ridiculous thing. So basically he would have a lot. Well, Zamuri, this was like a do or die situation because his company, you know, I'll probably butcher this, the way you say his company name, but QML or something like that starts with a C. Basically it's live or die for, it's like literally live or die for his, his company. So if he, if he gets taxed anything, margins are cut and then he like can't make any money. So he is like. Immense pressure is on Zamori. But the thing is, Zamori is really committed and he orchestrates a coup against the Honduras government. And so he installs this, this former— well, so he installs Manuel Bonilla as the president of Honduras, but he overthrows de Villa. And this is absolutely crazy because Zamori literally goes through and the Secret Service is watching over him, like in the US. They're like watching over him, making sure he doesn't do anything. He takes like— he kind of sneaks away, gets on this boat, comes down. It's like this military-grade boat. He had done all the paperwork to get it, made sure it was in someone else's name, got all the paperwork, got into the boat, went through the boat and went down to Honduras, took over this like little island. Then he started like basically spreading from there. They basically take over the capital and say, hey, it's basically a protest, but like legitimately like a war. So he basically takes out their, their forces, all that stuff, and it's too late for the US government to come and do that. So he installs Bonilla as the next president of Honduras, overthrowing Zelaya. It's Bonilla-Zelaya. So Bonilla comes in. Overthrows de Villa. And basically, Bonilla, he forces everyone to say, all right, yeah, that's fine. You like, we get it. You, you won. You don't like, you get whatever you want. So Bonilla, he takes down the taxes and he grants Zamori favorable concessions. What are those? That's a good question. So on page 96 of this incredible book, he gets some amazing things that I want to read to you because this is absolutely incredible and crazy what he has done. Because when you think about it, he literally overthrew a government to keep his business alive. I mean, that's absolutely insane. He overthrew the Honduras government to keep his business alive. That's what— like, I don't know anyone else in history that has overthrown a government to keep his business alive. Absolutely incredible. So, um, on page 96 it says that Zamori's settlement included permission to import any and all equipment duty-free, to build any and all railroads, highways, and other infrastructure he might need, a $500,000 loan to repay all expenses incurred while funding the revolution. Oh, I forgot to mention, he funded the whole revolution. To overtake the— to overtake the government. All its, uh, yeah, as well as an additional— additional— this is crazy— 24,700 acres on the north coast of Honduras to be claimed at a later date. No taxes, no duties, free land. These were the conditions that would let Sam's and Murray take on United Fruit. So United Fruit is this basically It's this other company that is rivaled to Sam's company. Sam has this company, United Fruit has a monopoly. So what United Fruit has done is they have basically taken all these banana companies or fruit companies. They take percentages in them, or most percentage. They say, hey, you can be part of our thing. And then they let the owner have like 10%. So, Or they take 10% in each company and it makes up United Fruit. Well, he took, he had to because they have to outsource. So they bought 10% of Sam's company. And Sam, what Sam did was he eventually bought that back because he wants to take over their company and they have to sell because they have to break up the monopoly. They can't have a monopoly and they definitely have a monopoly. So there's a lot of things that we'll go into in part 2 of the series, but it's absolutely crazy of what we have right now. And then the philosophy and kind of lesson behind this coup is that Zamouri looked at everything. I can't, I can't understate that enough or overstate, overstate that enough. He looked at everything as a problem to be solved. He refused to feel trapped or powerless. And it's absolutely incredible and crazy what he did. He would've overthrown the American government if he got the chance. Like the, he wanted his company to survive no matter what. And the lesson from this is that this is literally up to this point, this is Zamuri's boldest move yet. And it's really a masterclass in risk-taking and problem solving. He doesn't just react to these problems. He, he rewrites the rules to solve them, but he also plans it out like he has a plan. The amount of things that he got from overthrowing the Honduras government and putting his own president in, he literally is running a country. That's absolutely insane. So another thing is that Sam's, he, he didn't like the taxes. And so yeah, he definitely started hiring these lobbyists and we'll go into this in part 2 because part 2. There was another thing, but this was on the US side. And so we'll go into that because it's absolutely incredible. But the thing is, I want to kind of like stay on Zamuri for a second. He didn't, you know, his story is not just about bananas or even business. It's about defiance. He defied the laws. He defied the rules. He rewrote the rules. It's about standing tall when the odds are stacked against you. You're going to have those odds stacked against you, right? It's going to happen. But when others saw waste back when he was young, he saw the opportunity. That's what started his company. When others, when others felt trapped, he rewrote the rules. He literally overthrew the Honduras government to get what he wanted. It's absolutely insane. And when the world pushed back, he pushed back even harder. And that's what separates the great from the rest. It's what separates the greats from the rest. It truly, it truly does. They are willing to keep on going no matter what happens. So here's the thing. We look at Sam, we look at his story, right? And this whole podcast is, you know, it's supposed to encourage you to go out and be defiant. It's encouraging you to do the things that you want to do, whether it's building that business or not going to college or whatever you are trying to do, whatever you are trying to do, I don't care what you're trying to do, whether it is to go to college or not start that business or work hard, whatever that is, it's like, this isn't just Sam's story. It's, it's a blue, it's a blueprint for anyone chasing success or greatness, right? You know, in, in a way, what is your overripe banana? What is that opportunity that, that you could be seizing to better the world? Naval talks about this, like what is a problem that you can solve for other people that they don't know that they need solving yet? It's all tied back to Naval. Peter Thiel, being a contrarian is not that you go against the tide, but that you think for yourself. Absolutely incredible quote from Peter Thiel. And I wholeheartedly agree. It's not that you just disagree to disagree. No, it's that you actually are thinking for yourself and you're doing things and you're listening to your intuition. I hate this whole talk about listen to your heart. I actually would reframe that to think, uh, listen to your intuition. Why would I say listen to your intuition? Because your intuition does know what's best for you sometimes, most of the times, but listen to your intuition and not your heart. And the thing is, going back to Zamori. You know, what is the opportunity that everyone else is overlooking in your industry? And most importantly, what is stopping you? What is stopping you in that, in that way? And this is just the beginning. You know, Zamuri's coup, or it was, you know, or his coup was bold, but it was only the first domino in a chain of events. I'm really excited to go into part 2 because, you know, Zamuri is a really interesting guy. I really recommend getting this book. If you have a chance. Um, by the way, these are all my sticky notes, uh, based off of the 150 pages I, I read, also all my notes. So I'm really excited to finish this, um, either in part 2 or part 3. Um, but this is an incredible story that I think you guys need to read. So there will be a link in the, um, in the show notes and really just go forth and know that greatness will always come with a cost. You gotta keep moving forward. You know, like, excellence is the capacity to take pain. Isadore Sharp, great quote. Excellence is also the habit that you practice every single day and you keep on doing it, you know? So you have to keep, in order to be excellent, in order to be uncommon, you have to have this daily repetition. James Clear says that in order to get better, or I'm, I'm botching the quote, but it's something like this. Basically, in order to get better or in order to do things, you have to do the boring things. You have to do it day in, day out, every single day. You have to go from day 1 to day 60 and do it every single day. And you have to fall in love with boredom. And that's where I'm going to leave this. Thank you for watching this or listening to it. I really appreciate, you know, just, uh, you taking your time to listen to this. And please drop a follow and share this with others if you think this was helpful. Helpful or informational at any level. Thank you for listening to this. I really appreciate your support. Go drop a follow and hit that notification bell so you can always stay tuned. Also drop a review, you know, really appreciate that. And be like Sams Murray, be defiant, but also be a contrarian. Don't do it because you're going against the, going against the stream of things. Do it because you're actually thinking for yourself. Thank you for listening to this. I believe this is 24, 23 or 24 down, and, uh, I'll talk to you guys again soon.