#333 Red Bull's Billionaire Maniac Founder: Dietrich Mateschitz

What I learned from reading The Red Bull Story by Wolfgang Fürweger and Red Bull's Billionaire Maniac by Duff McDonald. ---- Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes ---- Come and build in-person relationships at the Founders Only conference ---- (1:30) "In literal financial terms, our sports teams are not yet profitable, but in value terms, they are," he says. "The total editorial media value plus the media assets created around the teams are superior to pure advertising expenditures." (2:30) "It is a must to believe in one's product. If this were just a marketing gimmick, it would never work." (5:00) He doesn't place a premium on collecting friends or socializing: "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." (7:30) The most dangerous thing for a branded product is low interest. (Edwin Land: The test of an invention is the power of an inventor to push it through in the face of the staunch-not opposition, but indifference-in society. (Indifference is your enemy) (9:00) Nike, Adidas and Vans episodes: Shoe Dog: A Memoir by the Creator of Nike by Phil Knight. (Founders #186) Sneaker Wars: The Enemy Brothers Who Founded Adidas and Puma and The Family Feud That Forever Changed The Business of Sports by Barbara Smit. (Founders #109) Authentic: A Memoir by the Founder of Vans by Paul Van Doren. (Founders #216) (11:00) The lines between Red Bull, Red Bull athletes, and Red Bull events are blurry on purpose. To Mateschitz, it's just one big image campaign with many manifestations. (12:00) He has no plans to sell or take Red Bull public. "It's not a question of money. It's a question of fun. Can you imagine me in a shareholders' meeting?” (13:00) Red Bull’s Billionaire Maniac https://www.bloomberg.com/news/articles/2011-05-19/red-bulls-billionaire-maniac (16:00) He is universally described as a person with great charisma. (16:30) The Invisible Billionaire: Daniel Ludwig by Jerry Shields. (Founders 292) (17:00) He has a fierce desire for privacy. He buys a society magazine to make sure he never appears in it. (22:00) There is no market for Red Bull. We will create one. (24:00) Estée Lauder: A Success Story by Estée Lauder. (Founders #217) (30:00) the NEW Poor Charlie's Almanack: The Wit and Wisdom of Charlie Munger. (Founders #329) (31:00) Gossip and malicious rumors are worth more than the most expensive publicity campaign in the world.” — Dior by Dior: The Autobiography of Christian Dior (Founders #331) (36:00) Control your costs and maintain financial discipline even when making record profits. (38:00) Cult brands have their own laws, otherwise they would not be cultish. (38:00) Red Bull is Dietrich Mateschitz and Dietrich Mateschitz is Red Bull. (38:00) Many companies outsource their marketing and advertising activity. Red Bull consistently took the opposite route: It outsourced production and distribution and takes care of sales and advertising itself. (40:00) Charlie Munger and John Collison on Invest Like The Best #355 Rolex: Timeless Excellence on Invest Like The Best (41:00) If you are making a physical product make it look different from its competitors from the start. (43:00) Everything is marketing. (45:00) Never do anything that compromises your survival. (46:00) He keeps his empire constantly in motion (46:00) All corporate projects like Formula 1, football, Air Race, and media serve the core business: the sale of the energy drink. (47:00) This is a battle for attention. (49:00) Red Bull owns their events. They never relinquish media rights to any event. They invest in making the content and then they give their content to other media distributors for free. A very clever way to multiply their advertising and marketing spend. (52:00) The Bugatti Story by L’Ebe Bugatti. (Founders #316) The Dream of Solomeo: My Life and the Idea of Humanistic Capitalism by Brunello Cucinelli. (Founders #289) (54:00) Why he moved Red Bull’s headquarters to a little village on a lake: The aim was to create a more pleasant working atmosphere. (54:00) On why fitness is so important to him: “Everything that gives me pleasure in life is connected with a certain physical fitness and physical well-being. I like going to the mountain, I like skiing, I like sailing, I like riding a motorbike, I like fooling around - and everything is connected with a minimum of physical agility, motor skills, dexterity, strength, stamina. In order to enjoy it outdoors, I need the indoor program.” ---- Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes ---- Come and build in-person relationships at the Founders Only conference ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested, so my poor wallet suffers.” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  Okay, so I want to jump right into this episode, but I have two very special announcements to make. I'll do so at the end, so make sure that you stick around to the end of this podcast. I'll give you a sneak peek now. One has to do with the first ever in-person founders conference that is happening in 60 days. I'll tell you why I'm doing it, what it is, and how you can attend after this incredible story of the Red Bull founder. I'll see you on the other side. Dietrich Mateschitz is one of the most successful entrepreneurs of our age, a man who single-handedly changed the landscape of the beverage industry by creating not just a new brand, but a whole new category: the energy drink. He is the visionary who brought the world Red Bull. In return for his innovation, the world has made him very, very rich.

• 0:45David Senra?

  Over the last few years, he was taking anywhere from $500 million to $800 million a year in annual dividends, and he had a net worth somewhere between $20 and $30 billion. Mateschitz also runs an efficient enterprise. In 2010, Red Bull employed just 7,758 people, which works out to more than 667,000 in revenue per person. This success is the realization of a business plan that eschews conventional advertising in favor of marketing through its own events, shows, sports teams, and publications. Red Bull has produced its own TV programs, films, magazines, websites, and a steady diet of videos online featuring snowboarders, rally cars, surfers, cliff divers, and concerts,

• 1:30David Senra?

  and a guy jumping from space. Mateschitz calls the multimedia assault "one of the most important line extensions 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." Red Bull also owns four soccer teams. They have a NASCAR team and two Formula One racing teams. He finances the annual $200 million cost of his F1 teams out of the company's healthy operating income. And this is what he said about that. "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..."

• 2:15David Senra?

  That's such a good insight. "...plus the media assets created around the teams are superior to pure advertising expenditures." He then launches into a spiel that he's been delivering for the past 25 years. He explains that Red Bull is not just a drink. Instead, it's a philosophy, one seemingly derived from his own outlook on life, and a functional product used to improve strength and performance and to revitalize the body and mind. Those are his words. He is also quite serious, prone to beginning sentences with the phrase, "It is a must." As in, "It is a must to believe in one's product." If this was just a marketing gimmick, it would never work. And it is something that he believed on because he worked on Red Bull for over the last 40 years of his life. He just recently passed away.

• 3:00David Senra?

  That's why I wanted to do this episode now. This is a little bit about the beginnings of how he discovered this idea. He was on a chance trip to Thailand in 1982, which would prove to be a turning point in his life. He was curious to know what attracted the locals there to an uncarbonated tonic, which they called, a word in Thai I'm not even gonna try to pronounce, which literally translates to Red Bull. He tried some of this himself and found that it instantly cured his jet lag. Not long after that, he was sitting at the bar at the Mandarin Oriental Hotel in Hong Kong, and he was reading a magazine. In the magazine, it mentioned that the top corporate taxpayer in Japan that year was the maker of such tonics. Suddenly, the idea hit him. He would sell that stuff in the West. He then approached a Thai businessman who was selling the tonic in Southeast Asia,

• 3:45David Senra?

  and suggested that the two introduce the drink to the rest of the world. With one crucial change, it would be carbonated. Uh, this is gonna be his partner's. His last name, I'm gonna guess, is Yuva De Ha. And he liked the idea, and so the two agreed to invest $500,000 apiece to establish a 49-49 partnership, with the remaining 2% going to Yuva De Ha's son. So when I said earlier that he was paying dividends, you know, somewhere between 500 and 800 million to himself a year, and his net worth was, you know, somewhere between 20 and 30 billion dollars, that is from this 49% that he owned of Red Bull. In addition to adding carbonation, he also positioned it differently. This would allow for his product positioning masterstroke.

• 4:27David Senra?

  He would sell Red Bull as an ultra-premium drink in a category all of its own. At $2 a can, it was far and away the most expensive carbonated drink on the shelves. This is what he said about that. "If we only had a 15% price premium, we'd merely be a premium brand among soft drinks and not a different category altogether." At this point, most histories of Red Bull tend to depart from Mateschitz and focus on Red Bull itself, which is exactly how he wants it. A curious hybrid of a mogul, Mateschitz has a zest for life that rivals Richard Branson's, but his obsession with controlling information puts him closer to Steve Jobs. Like the Apple founder, Mateschitz pulls the strings behind a consumer cult.

• 5:12David Senra?

  And cults rely on message control. And cults rely on message control. Mateschitz is notoriously secretive. "He is close to some of Austria's most prominent people." This part made me laugh. "He is close to some of Austria's most prominent people." Though Mateschitz says he doesn't place a premium on collecting friends or socializing. "I don't believe in 50 friends. I believe in a smaller number. Nor do I care about society events. It is the most useless use of time. When I go out, when I go out from time to time, it's just to convince myself that I'm not missing out on a lot." And so the little that he does speak, he says very interesting things. This is another thing that I thought was very interesting. "The success of Red Bull defies logic in one important regard. It doesn't taste very good."

• 5:56David Senra?

  Mateschitz says he doesn't care about the taste issue then. He didn't care about the taste issue then, and he doesn't care about it now. This is what he says. "It's not just another flavored sugar water differentiated by color or taste or flavor. It is an efficiency product. I'm talking about improving endurance, concentration, reaction time, speed, vigilance, and emotional status. Taste is of no importance whatsoever."

• 6:22David Senra?

  That part actually shocked me. And Red Bull, I mean, I wouldn't say it tastes great, but it certainly doesn't taste bad. I think maybe the author is exaggerating a little bit here. Maschus has proved his marketing genius, especially in the era, this is another funny thing, especially in the era of crisis management, with his early decision to foster rumors about Red Bull's content instead of trying to squash them. I'm going to go into a lot more detail later on about this, but I want to give you an overview. This is what I'm trying to do. I'm just giving you an overview of who he was and his approach to company building, which I found fascinating, by the way. I've been texting friends nonstop. I was like, I cannot believe all this stuff. This is an example of that. So again, he wants to foster rumors. That is just free. We're going to go into Christian Dior's comment on this,

• 7:06David Senra?

  which I just covered a few weeks ago. He's just like, oh, this is just free propaganda. You need to, don't try to squash them, foster them. And so in the early days of Red Bull, you have all this, like, why is Red Bull so effective? Why is he giving me so much energy? Why is he letting me to party all night? Because I was like, really spreading clubs to begin with. And so he says, his early decision to foster rumors about Red Bull's content instead of trying to squash them. Tales begin to circulate that taurine, which is one of the main ingredients at Red Bull, was derived from bull testicles, or even that it was bull semen. Oh, the company let the gossip travel unchecked and even set up a page devoted to the rumors on its website. He has an incredible, incredible quote about

• 7:46David Senra?

  this. He says, "The most dangerous thing for a branded product is low interest." That reminds me of Edwin Land, founder of Polaroid, Steve Jobs hero, and the patron saint of Founders Podcast. He said something that was fascinating. And he says, "The test of invention is the power of an inventor to push your invention through, not in the face of staunch opposition," which most people think, right? "But staunch indifference." Edwin Land, like Maschus, would tell you that indifference is your enemy. If they're talking about your product, that is a good thing, even if they think that it's coming from the secret ingredient is bull testicles. "Was this all by design? Did he really anticipate that a combination of rumors and public outcry would play such a big part in driving early sales?" Even think

• 8:31David Senra?

  about that. I'm going to pause real quick. I was like, think about if he said, okay, well, you know, I have a new drink and there's like some caffeine in it, some sugar, you know, maybe some B12 or some other vitamins. I've already forgot what he said. But if somebody whispers like, hey, there's this new energy drink and the energy comes from bull testicles, even if, one, I wouldn't drink it because of that, but I won't forget it. That's actually a really powerful insight that he had there. So was it all by design? Did he really anticipate that a combination of rumor and public outcry would play such a big part in driving early sales or talking about the fact that Red Bull was forbidden to be sold in several European countries that he initially tried to launch in? Massachusetts is emphatic. Yes, we expected it. It was part of the strategy from the beginning.

• 9:16David Senra?

  We would make the brand interesting enough that people wanted to get their hands on it. Red Bull's marketing campaign has always been its claim that it can improve athletic performance. To prove it, the company took a page out of Gatorade's book and targeted athletes, except with a twist. Massachusetts zeroed in on the extreme sports crowd. Okay, so that idea is not new. I've done multiple podcasts and read multiple biographies of the founders of companies like Adidas, Nike, and then Vans Shoe. If you realize Adidas started getting a lot of traction by sponsoring, they're making athletic shoes, so they sponsor athletes. Nike sees the success they're doing, and so they do the same thing. There's a lot of stories about them competing in the early days of Nike.

• 9:59David Senra?

  But what was fascinating is Paul Van Doren, who I did a podcast on a long time ago, he's the founder of Vans. What he did, he's like, well, I'm not making athletic shoes, but I like the idea that Adidas and Nike used to gain traction, initial sales traction. And so he copied, he didn't copy the what, he copied the how. And so instead of going to Olympians or basketball players, whatever, he found an underserved niche, which was skateboarders. And so he went out and tried to sign in the early skateboarding industry. And that was a huge influence on the early success of Vans. And so you see Massachusetts using a very similar playbook from Gatorade and then other products that also were very successful targeting athletes. Today, Red Bull underwrites more than 500 athletes in 97 sports.

• 10:44David Senra?

  This state is about, what I'm working off of is like about 15 years old, so it's probably much higher than that. Like everything else at Red Bull, the negotiations that lead to these sponsorship deals are unorthodox as well. Windsurfer Robbie Nish recalls the first time he met Matta Shits almost 20 years ago. "We talked in the courtyard of his office, and pretty soon we realized that we were both really into cars." "That was the end of our business meeting, because he wanted to show me his Ferrari GTO. So 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. That's a million-dollar car. But he said I was either going to drive the Ferrari back or walk back. I was so scared that I drove it like my grandmother. The lines between Red Bull, Red Bull athletes,

• 11:29David Senra?

  and Red Bull events are blurry on purpose. Another great idea. This is why I kept texting people about this guy. To Matta Shits, "It's just one big image campaign with many manifestations." So let me read that again. "The lines between Red Bull, Red Bull athletes, and Red Bull events are blurry on purpose. To Matta Shits, "It's just one big image campaign with many manifestations. Potential customers might actually attend one of the dozens of global events that Red Bull puts on. It could be a Red Bull soapbox race in Los Angeles or a motocross spectacular in Brazil the week after." This is what they said about that. "This is fun stuff, and it's a lot more interesting than writing a check to buy 30 seconds during the Super Bowl. Despite the fact that he's approaching 70, he maintains quite a clip. He still moves like an athlete. He rides horses, rides a motorcycle,

• 12:14David Senra?

  pilots his planes, and last year competed in an off-road motorcycle race. He has long insisted that he has no plans to sell or take Red Bull public. It's not a question of money, he said. It's a question of fun. Can you imagine me at a shareholders' meeting?" Matta Shits has certainly created some enviable havens for himself, like Richard Branson. He has his own private island in Fiji. He bought it off of Malcolm Forbes. When I asked him what motivated him to buy a vacation home so far away, he resorts to quoting Malcolm Forbes himself. 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. Matt Schuss also says that he's always been attracted to the idea of having his

• 12:58David Senra?

  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. Okay, so that was an excerpt not from the book that I'm going to talk to you about today. That's an excerpt from this long-form piece in Bloomberg called "Red Bull's Billionaire Maniac." The book that I am going to talk to you about today, as far as I know, is the only biography ever written about the founder of Red Bull, and it is only available in German. My friend, Cameron Priest, who's been a longtime listener of Founders, and he's probably over the years sent me, no exaggeration, at least 40 great biography recommendations, actually helped me translate it into English. The translation's not the greatest, spending several hours

• 13:43David Senra?

  reading what is technically English, but in a way, the words were organized. It's almost like you're reading a different language. So what I did is I just pulled out a bunch of highlights and tried to rewrite them into explaining the main ideas that Matt Schuss used to build, you know, one of the most valuable private companies on earth. And I think the story is incredibly important because, even though he's not American, he's Austrian, he lived something like the American dream, from employee to billionaire, and did that with just one brilliant idea. And as we go through this, you'll see a lot of his ideas actually interact well together. So he has this really unique, but I would say cohesive, company-building philosophy that is completely unique to his personality and the way he wants to live his life. Like you said, he could have taken it public, he

• 14:26David Senra?

  could have sold out. He's just like, I just want to have fun. I'm making plenty of money. Somehow, I think I'll survive making $800 million a year, and I never want to stop because I'm having fun. And so he was working on Red Bull up until he died. So before I jump into how he views Red Bull, as he calls it a "marketing conglomerate," I want to go over what they talked about, they hinted at, in that article, just how private and secretive and how he was just obsessed with controlling the message. He's just a very private person. He was always, always promoting Red Bull and never promoting himself. And so the author of this book, and I apologize, I'm butchering all these names, I've already mispronounced that, like half a dozen things, his name's Wolfgang. For Weger, I'm just gonna call him Wolfgang. So he actually runs into, as he's writing the book,

• 15:11David Senra?

  he actually has a chance encounter with Dietrich. And he tells him that he's writing a biography on him. And Dietrich does not like that. And there's gonna be some wild stuff here. He is neither interested in an authorized biography or in a case history about Red Bull. I was able to have a brief, personal conversation with him. And when he found out that he wanted to write a book on him, he described the publication of a book that he had not authorized as, quote, "a disaster." So you and I have talked about this maxim over and over again. Very common in the history of entrepreneurship. Bad boys move in silence. They find an advantage. They don't like telling, they don't like broadcasting how successful they are. And they certainly don't want to tell you what their next move is. And so this entire book, right? It says it's, there's a strict prohibition

• 15:56David Senra?

  of discussing internal matters. So if you are an employee of Red Bull, you can't say anything about what's going on. So most of the people interviewed in the book are actually former employees of Red Bull. But this is fascinating. They unanimously, these people have left the company, right? But they unanimously express positive opinions about their former employer. He is universally described as a person with great charisma. So the way he is with employees and people he knows is very different than the way he is with journalists. With journalists, he's extremely shy and reserved. And the few times he's done interviews, he's done some with like these European publications. He did one with The Economist, with Bloomberg. This is what he says about that. "My philosophy is very simple. Since it's not me on the shelf for sale, but Red Bull,

• 16:40David Senra?

  it's perfectly logical that Red Bull is at the center of our marketing activities and not the person. Naturally, I also have a pronounced desire for privacy." And then we see he utilizes an idea that you and I talked about. On episode 292, I did this episode on this guy named Daniel Ludwig. The name of that book is called The Invisible Billionaire. When Daniel was alive in the 80s, he was the richest American and no one knew who he was. So I think there was only like one picture of him. And Daniel actually, Ludwig actually paid his PR team to keep his name out of the press. Mateschitz does the same thing. The press office of the Red Bull headquarters is a press prevention office

• 17:19David Senra?

  whose task is to say nothing and find a justification for why their boss is unavailable. And so even though Mateschitz was one of the greatest promoters that we've probably seen in the last half a century, public relations was not a part of the company's marketing strategy. And the interviews that they do do, they're only granted to select publications and select journalists. And I really need to hammer home this point about how extreme he was in doing this. There, he's in Austria, he's the richest man in Austria, right? And there's a society magazine, so like, you know, I guess we'd call it like, kind of like a tabloid or like a gossip magazine in the States. But he actually buys it. He buys this magazine just so he will not appear in it.

• 18:02David Senra?

  And he was actually asked about this and he actually confirmed, he's like, well, the best way to prevent me from appearing in it is to own it. And so this is tied to his very strong desire. He wants to control the message, he wants to tell his own story, that's why he's so heavy in them being available in all forms of media. But he's also a perfectionist who has to control his projects, the product that he's making, and the environment 100%. And so extreme success usually comes from extreme characters, extreme personality traits. He actually threatened to have, this is way before this book was actually written about him, but there was another potential biographer, this Russian author, that tried to start writing a biography, an unauthorized biography on Mateschitz. And Mateschitz threatened to have his kneecaps broken.

• 18:45David Senra?

  He didn't like that the author was going to like his hometown, I think he was like knocking on the door of his elderly mother. And it says, "This aroused the wrath of the otherwise charming Mateschitz. You've harassed my mother and I will not tolerate this. As long as a perforated kneecap in Moscow costs $500, you will not be safe."

• 19:05David Senra?

  And so let's go into what he was doing before he started Red Bull. This is one of the most fascinating things because as far as I know, it's his first business that he started and he was 41 years old. He was an employee for Unilever. But way before that, and what's fascinating, he calls himself like a very lazy student. So he actually chose marketing as his major. And it was perfect because he's one of the greatest marketers I've ever seen. But he had to work his way through college. He was actually working at like a steelworks company. And he'd also take jobs as a ski instructor and a tour guide. But he didn't think he was that good at school. He called himself a lazy student because he took 20 semesters to graduate. And he says normally you finish the University of Economics at the age of 22 and not 28 years old, like he did. Which was interesting because that he was a bad student because both of his parents, he didn't come from money.

• 19:50David Senra?

  Both of his parents were schoolteachers. So after college, he takes, he starts working for one of the largest consumer packaged goods companies in the world, Unilever. He works all the way up and becomes a marketing director for the international division of a Unilever subsidiary called Blendex. It's toothpaste. He's marketing toothpaste. And he did this for a very long time. He wound up traveling all the time for work. And this is how he's going to discover Red Bull, which I mentioned earlier. So he's on the road three to four months per year. Often they're sending him all the way out to the far east. He's all over Asia. And it might've been fun as a younger man, but as he ages, he did not want to live that life of this frequent flyer, never home. And he has this realization where he said in an interview one time, "All I could see

• 20:33David Senra?

  were the same gray planes, the same gray suits, and the same gray faces. I wondered if I wanted to spend the next decade like this." And so he's around 38 years old when he's having this thought, like this can't, I don't want, I don't want to be 48 and still in the same position. And really what motivated him, this is something he was going to repeat over and over again. He desperately, desperately wanted independence. He wanted financial independence and he wanted independence and control of how he spent his time. And so it's at the same time that he's having these thoughts, that he finds that Thai version, the uncarbonated version of Red Bull. Gives him a lot of energy and curious his jet lag and then reads the article. It's like, wait a minute, the people that make drinks like this pay the most, they make the most money, they pay the most taxes in this entire country.

• 21:18David Senra?

  And so he immediately starts to study the existing products in this very ancient energy drink market. And he would literally grab every single, samples of every single kind of drink that's very similar. He would get together with other people that he works with and he called them, he organized them what he would call energy drink parties. And at the time, they were calling them stimulating juices. So these stimulating juices were all essentially taste tested and, and there was like this giant like self experiment to see not only how it tastes, but also the effects that it had on them. And so one relationship that he's going to make right now actually changes his life because he realizes that there is a Thai franchise partner of a Unilever group, right? They're making toothpaste, but they also produce and bottle that, that tonic drink,

• 22:03David Senra?

  the uncarbonated version of what will become Red Bull. And he pitches them on the idea of them giving him the license to distribute that drink and then add carbonation outside of Asia. And this is when they do that partnership where they both agree to put in $500,000 and then carbonate and then sell this drink in the West. And one main theme that runs through this entire story, that's very obvious when you read about him, whether you read articles, a book, anything you come across, he has profound, profound self belief, belief. Because when he's 41, he quits his job and starts his first company and puts all of the money that he has in it. He doesn't have this like large buffer, he doesn't have a lot of money. And even from the very beginning, and the reason I think I say you have to have a profound

• 22:47David Senra?

  self belief, because there's a, you could see brochures that he was like pitching people on about like the business. I don't, I think he might've been using this to try to raise money. But he says, there is no market for Red Bull. We will create one. And there's this great line in the, the English translation of this German biography where it says, rarely in the world of business has such a bold announcement been implemented into reality like this one. And so creating your own market is also not only do you have to educate the potential customers, but then you have to deal with all the regulators. And so he tries to set up shop in Germany and they didn't even know what the hell an energy drink was. And so he had to, he applied for what was going to be the first ever Europe-wide approval of a new type of indulgence, which is the energy drink, right?

• 23:28David Senra?

  As you might imagine, European bureaucracy is not known for, for fast approval time. So he's waiting over a year to try to launch just in Germany. He gets extremely frustrated. So then he went to packing his bags and going to Austria and he's like, I'm just going to launch in Austria. There's a lot of benefits from that. But it also, one of the main benefits is he had, he launched in a single, small market and for nearly five years, he was able to run experiments and really improve the product, but also figure out the marketing and the messaging because he's only in a single, small market. So I think he launches in 1987 in Austria and doesn't launch to his second market till 1992. So they're launching in just one small market. They don't have a lot of money. They just put up, you know,

• 24:12David Senra?

  $500,000 each. It's not like Matcha Schitt's has any other money. And so when sales didn't take off, he did something that was really smart. He invested some of that money instead of in advertising at the very beginning. He actually made more of his product and he would bring it and deliver it to places by pallet and let people try it and drink it free of charge. This is very similar to, one of my favorite entrepreneurs of all time is Estee Lauder. And in the early days of her company, which she also started when she was 40, I just realized that now, she actually took money out of her advertising budget and instead made more of her product to give away. And this is what she said about that. You give people a product to try. If they like it, it's quality, then they buy it. They haven't been lured in by an advertisement, but convinced by the product itself. We took the money we had planned to use on advertising and invested it instead

• 24:57David Senra?

  in enough material to give away large quantities of our product. It was so simple that our competitors sneered when they heard what they were doing. Today, they're all copying us. And so Matcha Schitt's knew he needed more money. He went to a bunch of banks. They all said no, only one. There was a small, private bank. Oh my goodness. Spangler, I'm butchering these words, but this bank called, I'm gonna call it Spangler, was the only one to actually believe in the product and the concept behind it, and so they actually lent him money. Now, this is another main theme that's repeated over and over again. Mashesits is excessively loyal, and so to this day, that is the only banking house that Red Bull used in that country. This is where they get the early

• 25:39David Senra?

  start. Red Bull started to flourish when bartenders and nightclub operators were convinced that it was a suitable new component for mixed drinks. The energy drink was sometimes referred to as poor man's cocaine. So this spreading in nightclubs and bars actually gives them their initial traction. The first year, they sell about several, it's a several hundred thousand cans were sold in the first year. The next year, that number goes to 1.2 million, and then the year after, so year three, they're at 1.7 million. So they're growing, but they're not, you know, growing crazy fast. They're also spending a ton. This is when they really start putting a lot of their money. I think it's something like over 30% of their gross revenue they spend on advertising. At the beginning, it was even

• 26:22David Senra?

  more than that. But the remarkable thing is they hit their break even point in year three, and they've been profitable every single year since then. And so there's three ideas that he's gonna go into here. One, that he was all in, he had that burn the boats mentality. He wanted to go high end from the start, and he knew that there was no market for this, so he had to create one. And so he talked about the great personal risk that he did in starting the company. He says, "If things had gone wrong, I'd be sleeping under a bridge today." And so he talks about his decision to have a high-priced product, plus use a lot of that revenue from people spending more money on it to actually reinvest into advertising. Red Bull was to become very expensive, and it was a new product for which there was not even a market yet. So it was necessary to create demand first.

• 27:05David Senra?

  Potential customers had to be explained why they now desperately needed Red Bull, which they had not even known existed before. And so one of the things that he does that's very unique, that I don't know if I've heard before, is he hires an advertising firm from the very beginning. It's sound, he calls him his former study buddy, so I'm assuming that this is his friend from college, this guy named Kastner. At this time, Kastner was already a founder of an advertising agency called Kastner and Partners. So Kastner's gonna play a very important role, because he's the guy that comes up with the slogan, "Red Bull gives you wings." Now, here's, I think, a testament to how unique Mashesits is. He doesn't have any money, but he's also a perfectionist. And so he keeps turning down over and over and over again, all the different marketing and advertising campaigns that they're trying to come up with.

• 27:50David Senra?

  And you're like, well, how could he be doing that, David? Like, he has no money. All this time is going by. I think it's like a year and a half that they're working on this. So they finally figure out the positioning and the actual initial launch of the marketing and advertising. And so he actually paid for this initial work with labor. He had no money, so he actually helps out in the agency as a freelance employee just to pay for that marketing and advertising that the advertising agency that his friend started is doing on behalf of Red Bull. Another important point. Everybody's telling this is a bad idea. His friend immediately recognized its potential. And he said, if this is pursued consistently, this idea will lead to success. So again, Mash is very self-confident, has a ton of, as you can imagine,

• 28:33David Senra?

  has a ton of self-confidence in himself and the idea that he's doing. But it is very helpful for other people, especially people that you trust and admire. Because he said, he says that Castner was a very clever fellow, and he knew that he was a perfectionist like me. And so you have somebody like that, that you know is smart, that you admire, you trust their judgment. They're like, no, everybody else might be telling you this is a bad idea. But if you pursue this consistently, you give it, like, it will lead to success. And so Castner was talking about this time. He's like, listen, the birth of this campaign was not easy. Because for a year and a half, he's just rejecting every single suggestion that I have. I think they went through 50 different ways to, either slogans or ways to market it. Mash just rejects every single one of them. But Castner understood his friend. He says he wants the absolute best.

• 29:18David Senra?

  He believed in his product to the end of his days. And so even after 50 failed attempts, they're having this conversation where they're like, well, anybody that drinks Red Bull becomes damn strong. So that's the conversation they're having. That's how they were thinking about it. It's like, well, You drink it and you become strong. Like, what's the, what's the right tagline or motto for that? And in the middle of the night, Castner has the idea that Red Bull gives you wings. And so he calls Machesz in the middle of the night and immediately Machesz is like, "Yep, that's it." So it was, it was a, the, the fact that that was a good idea was immediately obvious to both of them. The thing about how crazy that is, you're fighting for a year and a half, going through 50 things. He calls you, you hear it, you're like, "Yep, that's it, let's go." And so now they had the branding and the tagline. They wanted the advertising to be, this is the, the traits that they were looking for.

• 30:01David Senra?

  They wanted it to be self-ironic, non-conformist, smart and rebellious. And their point was that they, that's how they viewed their own personality. And so they're like, "We're going to put a lot of our own personality into this." And so now they're up and running. Five years, they're still in, just in that small, single market in Austria. Five years in, then they, they expand to Hungary. That's the second market that they open up. And then they start adding market after market after market in Europe. Now, this part was a bit confusing to me, but it seems that the formation of the European Union was one of the waves he surfed. If you listen to episode 329 on Poor Charlie's Almanack, there's something fascinating that Charlie Munger would talk about that because several times in that book, he will analyze like outside success. And he's trying to teach people like, "Well, what, what would account for the success of

• 30:45David Senra?

  like a Les Schwab or Sam Walton?" And he goes through, and one of the ideas that he has, he says surfing is a very important model to understand. And so it seems like these, this brand new formation of the European Union was one of the waves that Machesz surfed. Because if a product is approved to be sold in one European Union country, it is automatically approved in another one. So it says, Berlin, Berlin, remember, he's trying to get into Germany, finally allowed Red Bull for the German market as well. This made Machesz one of the first big EU beneficiaries. The approval was only possible through a detour. Red Bull managed to get approved in Great Britain. Great Britain was not in their sights at that time, but an EU law laid tracks for

• 31:29David Senra?

  approval in Germany. And so practically the next day, Red Bull set out to conquer the market in which it actually wanted to settle down. So it's talking about Germany. Now, here's the crazy thing. Way before they launched in Germany, there was a black market. People were selling cans of Red Bull on the black market. So let's go back to this idea that I've seen a bunch of times, but the, the one that comes to mind most, is most top of mind right now, because I just covered Christian Dior's autobiography and he talks about this, is that rumors and innuendo, you have to think about them, is great free propaganda. And so Christian Dior says, The relative secrecy in which I chose to work, sounds a lot like Maschusitz, right? The relative secrecy in which I chose to work aroused a positive whispering campaign, which was excellent free propaganda.

• 32:12David Senra?

  Gossip, malicious rumors are worth more than the most expensive publicity campaign in the world. That is the end of Christian Dior's quote. This is what this book says about it. And again, I have to rewrite this because the translation is kind of funny. But there was a thriving black market for Red Bull in Germany long before it was approved. Remember, it's banned and people are flocking to it. So they're actually, people are, there's a, people are making money by smuggling it in from Austria into Germany. And so all that does is increase the desire for it because now you're drinking something that's, oh, my God, this is illegal. And it actually made it more charming because it's more forbidden. So this is the foundation of this cult-like following that Red Bull had at the very beginning.

• 32:54David Senra?

  And it is in Germany where they're spreading these rumors that the drink contains an extract from bull testicles. There was also a rumor that it was secretly enriched with amphetamines. Remember, this is spreading in clubs and bars and stuff like that. And it says the company did not, did nothing to counter these bizarre rumors. And again, I want to repeat that excellent quote that he had. As Maschusitz once lectured, "The most dangerous thing for a branded product is low interest." Then they get approved, right? In the first three months of a legal market presence, they sell 33 million cans in Germany alone. This idea is not new to you and I, right? This idea is like, if something's banned, it's all it is is free propaganda. It's free advertising. It's going to drastically increase the amount of demand.

• 33:38David Senra?

  If you remember on the Michael Jordan episodes and also on the Nike episodes, when the NBA banned the original Jordan shoe, at the very beginning Nike's like, oh, hopefully we're going to sell like, I think it was like $4 million or no, I think it was $3 million by the fourth year. And then the NBA bans the shoe and they make a smart decision like, just keep wearing it, Michael, we'll pay the fine. And so instead of hitting, I think, $3 million by the fourth year, they did $125 or $126 million the first year. And so Matt Schis does something that he does for his entire career. He really pushes the pace. They launch in Germany and his marketing budget, right? So right now, the entire revenue of the company at this time where we're in the story, they're doing 70 million euros at that time.

• 34:22David Senra?

  They're in a few different markets. He sets the marketing budget for Germany at 10%, just that one market, more than 10% to 7.5 million euros for that year. And then I learned something that was actually surprising because you go look like Red Bull, essentially just has Red Bull. They might have like different versions, right? But they essentially sell one thing. In the book, there's all kinds of examples, like they have this coffee and this cola line. But in the early days, you could tell that he's learning from his mistakes and eventually goes and really puts like all of his energy behind one arrow. Because, let's see, he's a couple of years into the company. It's in 1989. He comes out with this drink. It's a lemonade drink called the Red Rooster, which is like maple and lemon syrup.

• 35:06David Senra?

  It sounds disgusting, by the way. But they launch it and just complete flop. And I went and searched all the other drinks that are mentioned in the book that were still in operation and none of them seem to be in operation today. So I think he obviously learned from his mistakes. He's like, well, Red Bull has this power law outcome. It's really silly for us to like try to introduce anything else. We should just stick with that and put all our energy and money behind the one thing that we know is, you know, a smashing success. And so this is where they just start hitting new markets after new markets. By 1997, they're opening new markets, which are new countries, nearly on a monthly basis. And every time they hit a new market, sales just keeps like, now you just see this like huge spike in sales on the graph.

• 35:49David Senra?

  And then he also launches in America, was very fascinating. So he actually launches in one state. He serves, he's like, well, I think it's working in Europe. It should work in America. And so he just launched in California as a way to test a single market before expanding nationwide. He'll mention multiple times the fact that he hates banks and is very afraid of debt. And so most of the growth is just fueled from actual the profits the company's making. And so he's able to do something that's very rare, which he's able to control costs and maintain financial discipline, even when they're making a lot of profits. And he preaches that to his employees over in Nürburgring. His employees have to argue and justify the expenditure of the smallest amounts, even at the same time that the company's annual record profits were being produced.

• 36:34David Senra?

  And so as I was reading how he interacts with his employees, there's something, if you listen to the Anna Wintour episode I did on episode 326, I said if Anna had a tagline, it would be, I have to make sure things are being done right. I feel Mattressist was the same exact way. And sorry if I'm mispronouncing his, his name. When he died, there was a bunch of different reports. I went on YouTube to try to figure out how to pronounce his last name and they're all like European press reports. So they all pronounce it differently. But anyways, this idea, it's like, well, his, the role he's making, you know, he talks about the fact that he's a control freak, he's a perfectionist. He, he's going to make sure things are being done right. And so former employees are saying, there's always a great deal of pressure to perform. One can make a mistake, but you can only make the same mistake once. So he expects a lot, but he also provides a lot.

• 37:20David Senra?

  He pays salaries that are above industry average. And in addition, this was wild. Every Red Bull employee, from the secretary to the board, has a company car. Past employees repeat the same thing, that he is extremely loyal. They describe him as a gentleman. They say if you've helped him once, he will never forget it. And there's also some bizarre things. When I got to this part, this is the note I left myself when I read this part, I go, uh, cause he's talking about, you know, it has a cult-like following outside. And then you get the, the, the, the idea that there's a cult-like following inside. And I read, I wrote to myself, am I reading this right? They drink special water only available internally. And so at these internal company events, they drink this

• 38:00David Senra?

  thing called Luna Aqua, which is mineral water that is allegedly only drawn at, at the full moon. And they say it's advertised that it supposedly awakens the spirits of life. And so they serve it to Red Bull employees and then a bunch of Red Bull athletes or anybody in like the Red Bull family. And I think it might be served at Red Bull events as well. And so there's this great quote in this section that I think applies to this. Cult brands have their own laws. Otherwise, they would not be cultish. And again, to you and I, when we describe something as cult, that's not a pejorative. This is a very positive thing. A lot of the greatest companies in the world, a lot of the greatest brands, you could describe them as a cult-like following. And Red Bull definitely has that. A lot of

• 38:42David Senra?

  the culture and the ideas of Red Bull, it sounds, it's just really the founder's personality at large. The accepted code of conduct for Red Bull people is set by Mattressist himself. He is a fine and elegant person who values a cultured tone of conversation and good manners. You're supposed to hold doors open for the ladies and you do not get drunk in public. Red Bull is Mattesits and Mattesits is Red Bull is a quote from a former employee. And so let's go into this idea that he views Red Bull as a marketing conglomerate. Again, marketing is our core competency. We're going to outsource everything else. Red Bull has no production facilities or warehouses. Many large corporations outsourced their marketing and advertising activity. Red Bull consistently took the opposite approach.

• 39:24David Senra?

  It outsourced production and distribution and takes care of sales and advertising itself. Basically, Red Bull is just a large marketing machine. Production, bottling and delivery, which require simple manual labor are outsourced. Now, this is also speaks to being a gentleman, being more like an old school way of approaching things. The main relation, so when he's outsourcing all the bottling and the production, right? His main bottler relationship was sealed with a handshake. The bottler is this family business that has been around for over 100 years. He meets with the lead, the head of that company, right? It's in German, I'm not even gonna try to pronounce it. They agreed to produce Red Bull on a handshake. That was in 1987.

• 40:09David Senra?

  And they still have this collaboration. This is what 40 years, how many? Yeah, about 40 years. He says, "We are hopelessly loyal to each other." Mattesits once described his, that's how he described his relationship with his bottling partner. For Dietrich Mattesits, a handshake among men is still worth something. So Charlie Munger said something that was excellent. There's actually two, he said this in, Charlie Munger said this in this interview that he did with the release of, the republication of Poor Charlie's Almanack. It's on the Invest Like the Best podcast feed. If you haven't listened to it, I keep talking about this, it's so important. It was released December 5th, 2023. It is Invest Like the Best, episode 355. It is John Collison, co-founder of Stripe, interviewing Charlie Munger in that.

• 40:56David Senra?

  Podcast, which I've listened to, I think, four times already. Charlie Munger says something that's fascinating. He says, "Trust is one of the greatest economic forces on earth." He is constantly trying to maneuver. In his whole life, he maneuvered himself into a high trust. I think he calls it like a web of, a seamless web of deserved trust. Where it's like, you know, in some cases, we have, just have a handshake or an agreement. We don't even have a contract. And there's another great Invest Like the Best episode on Rolex. It's on the founding of Rolex. And the founder of Rolex did this exact same thing. One of his important suppliers, I can't remember what, what part of the watch they produced for him. But they had a handshake deal, no paperwork at all, that lasted 70 years. So again, I think this all ties to the, the great way that Charlie described that.

• 41:40David Senra?

  That trust is one of the greatest economic forces, forces on earth. This is the trust that Mateschitz had with his main bottler. And if you really stop and analyze everything else, the way he's, he set up his business, it's like, well, why would he do that? Well, this asset light approach frees up funds for marketing. He was building a marketing conglomerate from the very beginning. He understood that at the very beginning. He's going to outsource anything that's not his core competency. Something else, you see that he thinks like a marketer. So if you remember, James Dyson had this great realization from trial and error in his career. And he says, "You should, if you're making a physical product, make your product look different from the start." Talked about it at a huge advantage, right? He's distributing his vacuum cleaner in the same place everyone else buys vacuum cleaners.

• 42:25David Senra?

  You go to a store, he said, you'd see like a line of like, let's say, five vacuum cleaners. You see four that look like very similar. And then a fifth one is like, what the heck is that? Doesn't mean you're going to buy it, but you're, again, indifference is the enemy to the inventor, right? He's like, "You might not buy my vacuum cleaner, but you're sure as hell going to notice it." And Mateschitz did the same thing where he made the can, I think everybody's seen what a Red Bull can looks like. No, no other can looked like that back then. Now, some have copied this. But he made that tall, slim can with the intention of looking different and standing out from every single other thing that would be on the same shelf. And one hilarious little story is Red Bull has its own private like aircraft fleet. It's called the Flying Bulls. They use them for a bunch of events.

• 43:08David Senra?

  The can holders in those planes only hold cans the size of Red Bull. I thought that was cool. I also thought it was cool when asked, he was asked like, why, why he did that? And Dietrich said, "Everything is marketing."

• 43:23David Senra?

  Let's go back to this focus that he has. He puts all of his energy behind, you know, one arrow. I sell Red Bull, I sell energy drink called Red Bull in a can. Might have a couple of different variations, but I don't do anything else but that. And so as the brand got more and more popular, he got assaulted with all these offers to like, "Hey, let's license it. We can make Red Bull gummy bears and we can make Red Bull underwear and Red Bull perfume." And he said no to every single one. He does not want to use the Red Bull brand for anything else but to sell the actual energy drink, to sell cans of Red Bull. All marketing is just made to sell more energy drinks. And so I found this fact in a couple of different places. I, it's insane to me. Like, I can't believe this is true.

• 44:07David Senra?

  So he talks about the fact like he hates banks. He does not like debt. He's aiming for fun and for durability over every single thing else. And so his motto, it says absolutely no debts to a bank. And he has stuck to that since the founding of the company. Only in the second year of Red Bull did it accept minor bank financing, which we talked about earlier, that he's still loyal to them. But the company says that they only spend what they've already earned. And so all the growth and expansion has been funded, self-funded. And this is the crazy part, to not go into debt. There were no dividend payouts of Red Bull until 1999.

• 44:48David Senra?

  So you're talking for the first, what, 15 years of the company? He essentially just lived off of his own salary as the, as the managing director of the corporation and that all the profits had flowed back into expansion. And so how many people would have been able to do that? 15 years, you're just making, I'm sure the salary is great, but nothing like, I mean, why is it paying off? Because then in the 2000s and the next for like 20 years of his life, he's paying himself, you know, I've seen all kinds of reports. He made 100 million this year, he made 165 this year, he made 400 that year, he made 700 this year. His son inherited, after his dad died, his part of the, of Red Bull. And his son's dividend this year was $615 million.

• 45:31David Senra?

  So that is a crazy, crazy dedication to no dividends for 15 years, living off your salary and then plowing everything back into expansion. And then by that time, the company is so valuable that you essentially just are living on unlimited money. And when he talks about this, I think you get insights on to why, like, why that was so important to him. If you really think about it, I think, I think it was Warren Buffett said, it's either Warren Buffett or Charles de Gaulle, but to win, you must first survive. And so the way he's operating his company is what he's saying here without saying is like, we're never going to do anything that could potentially compromise our survival. And here's a quote from him. "I have been raised on the motto that one does not incur debt. We at Red Bull spend the money that we've earned, not that we might earn someday.

• 46:13David Senra?

  We never want to endanger the existence of the company, not even for a second." And so this constant expansion is something, another, another theme that just flows through this entire story. I love General George Patton's speech to the Third Army. I listened to it to like hype myself up. And I don't know, I probably listened to it hundreds of times. But there's something that he says, that Patton says to his soldiers in that speech when they're fighting, they're about to fight the Germans, that I think is very similar to how Machiavelli kept, it says that he was, he kept his empire constantly in motion, that he was constantly trying to grow and expand it. And so Patton tells his army, or his soldiers, that I don't want to get any messages saying that I'm holding my position. We're not holding a goddamn thing.

• 46:57David Senra?

  We are advancing constantly. And when I'm getting to this section about the fact that the Red Bull empire, you know, through the founder, is, he's constantly keeping that empire constantly in motion. For some reason, that, that quote from Patton popped in my mind, goes back to this idea that Red Bull, as viewed from the founder's lens, is a marketing conglomerate. His economic empire is a marketing conglomerate, and hence the entire activity of Red Bull is to be seen against the background of marketing. All corporate projects, like Formula One, football, air races, media, serve the core business, which is the sale of the energy drink. And he was way, way ahead of his time on this. Economics, especially in the consumer goods industry, he said, is essentially a battle for attention.

• 47:41David Senra?

  Red Bull throws more material into this battle than all of its competitors, focusing primarily on sports and increasingly on culture and recent history. No other company spends nearly as much money on advertising and marketing, meaning other company in the same market. And something that he picked up, too, was the importance of differentiation. He says, "You learn this in the first semester of marketing, that you have to differentiate yourself. Consumers want the original, not the copy." So he even applies that not only to his product, but also to the way he markets, like all these media events and these crazy things. So these outrageous and unique events, like the guy jumping from space. If you think about like why that's so smart, an outrageous and unique event will get covered for free in other media. So essentially, he, this is multiplying his advertising and marketing spend for free.

• 48:24David Senra?

  And so some of the things that they spend money on, it says about half of the marketing budget is spent on unusual, unusual sports as running in the Himalayas, skydiving over the English Channel, surfing on the Amazon, or mountain biking in a mine. That's crazy. These events may not attract too many spectators, since they don't take place around the corner, meaning in person, but due to their extravagance, they attract interest from numerous media outlets and thus reach a larger audience. And so even his approach to like sports sponsorship, right? You would think, okay, there's, you go to any sports event, you see, you know, this beer's advertising and this company's advertising. He buys, so he has bought the, his Formula One teams, his football teams. The crazy thing is when he starts, he's essentially, what he's saying is like, hey, I don't want

• 49:07David Senra?

  to just sponsor, I want to own, and then I want to rename it to the company. So his soccer teams, they rename the teams, the Red Bulls, so that is their actual name. And then the logo on the jerseys is the Red Bull logo. And this is what he says about it. "Our philosophy in sports sponsorship is not to run around with a suitcase full of money and buy advertising space. We don't want to be like Marlboro on the Ferrari, but we want to, we want to be integrated into the sport. That's why we own an F1 team. We want overall responsibility and to make our own difference." He calls F1 a very important marketing tool. And then he makes sure that all of his marketing and all the events and all the stuff that he's Investing in, it's very, he has a very symbiotic relationship with other media,

• 49:50David Senra?

  like other larger distribution forms of media. So what they'll do is like they put, they control everything, right? They put up the money for the event, they make the event. Then they make sure that they never relinquish media rights to every event. So as a result, they've produced hundreds and hundreds of hours of material every year from like TV shows, radio stations, print. And then they'll go to other TV broadcasters, other radio stations, other newspapers and magazines, and they will give them their content for free. And so when they put on the Red Bull Air Race, the Red Bull Air Race World Series, that content that Red Bull made and owned, they gave it to over 70 different television

• 50:34David Senra?

  stations all over the world and said, hey, we put all this money into this. Here's something that people, that you can't get anywhere else, that your customers will find, your watchers or listeners, whatever, your audience will find interesting. Here, we don't want anything for it, you just play it for free. And because the media outlets don't have to pay to produce that material, they jump all over it. So again, a very clever way to just multiply his advertising and marketing spend. And so I mentioned earlier that he has developed his own company building philosophy, one that is very unique to him. And so he talks about the fact that even though he went to school for business, he just doesn't really believe a lot of the stuff that he was taught. And so it says, "Massachusetts has amassed his wealth, has amassed his wealth despite, or perhaps precisely because he's at odds with some basic business principles. If someone says to him that the primary goal of a company is to maximize profit,

• 51:18David Senra?

  he simply declares that to be incorrect. He thinks longer term and more broadly than his competitors. I just don't believe everything I learned at business school," he has repeatedly said. He never tires of emphasizing that money was never his main motivation for starting his own company. Rather, the driving forces were longing for freedom and independence as well as finding joy in the work. This is why you don't retire, right? If you, if you love what you do, you're, obviously he's making a bunch of money in it, you're free and you have complete independence to control what you work on, who's around you, there's nothing better than that. Our motto, going back to a quote from him, our motto is the journey is the destination. I don't want to go to the summit to stand at the top, but to do the climb up.

• 52:03David Senra?

  One of the great, one of this maxim I have saved on my phone, this great line that I think about all the time and I try to apply it to my work. I love the climb, I don't care where the summit is. You don't last 40 years into the same business if that's not true for you. It is true for Mateschitz. It's like, I don't care. I'm having fun. I'm free. I'm independent and I get joy from the work. And I think in addition to all that, I think one thing that helped the longevity is the fact that he decided to move. Originally, the company was headquartered in a bigger city called Salzburg. And he winds up moving the headquarters to this tiny village that I can't even pronounce. And it only has 1,500 inhabitants. It's like almost all Red Bull. The local governing, like the local politician, said that if it wasn't for Red Bull,

• 52:48David Senra?

  the place would be impoverished. And now I think it's like one of the richest communities in Austria. And so he actually moves the company headquarters to this little tiny village. This is very similar to the idea. Like if you listen to the podcast I did on the founder of Bugatti, he did this exact same thing. That's episode 316. Brunello Cucinelli. You know, it was a huge, again, Bugatti did his business till he died. Brunello Cucinelli is still alive, but he's been doing his business for like 45 years. That's episode 289. This idea is like, okay, you're controlling the product that you work on. You're controlling who's like who works in the company. But you should also put a lot of time and emphasis like where you're actually doing your work. And I'm fascinated by these people that actually build like physical manifestations,

• 53:29David Senra?

  almost like their entire, like building their own like miniature world inside of the world. I guess George Lucas did the same thing with Skywalker Ranch. But we see this idea again with Mateschitz. This little community is on this picturesque lake in some word I can't pronounce. And he said, they asked like why he, why he moved it there. And his answer was simple. The aim was to create a more pleasant working atmosphere. Now, there was one funny thing I have to add, though, because people are having these rumors about why he did this. And it goes back to the fact that he's secretive and likes to control his environment. It also said that he wanted to build a network of underground tunnels so he can move from building to building without being seen. And then more about the fact that his business is kind of like his personality at

• 54:14David Senra?

  large. He stays incredibly fit. He loves extreme sports, aviation, riding his motorcycle. And he constantly talks about he refuses to ever get married. I'll tell you this funny sentence on that. They call him the top bull, which is hilarious. I don't know if that's just, it's the German translation in English. I hope not. I hope they actually called him the top bull because I thought it was funny. The top bull takes care of his body, keeps fit, and is in amazingly good shape for someone almost seven years old. He says, "Everything that gives me pleasure in life is connected with a certain physical fitness and a physical well-being. And so it is pure selfishness that I do something for my fitness. I like going to the mountain. I like skiing. I like sailing. I like riding my motorbike.

• 54:56David Senra?

  Everything I do is connected with a, with physical agility, motor skills, dexterity, strength, and stamina. In order to enjoy it outdoors, I need the indoor programs." So he's saying his dedication to physical fitness to be able to perform well in the outdoors. He has to be dedicated to his gym routine, his workout routine. And it says, "He is a, he is a declared opponent to the marital state. He was never married his entire life, just has his one son. And what I love most about him is that he was true to his authentic self to the very, very end. One thing he's categorically ruled out again and again, exiting the company in the form of selling his shares. I hardly even allow this question, he said. We could have done it a dozen times already. Our view on this has

• 55:40David Senra?

  not changed. We neither have the desire to do so, nor is there a need." And this is the one exception. Of course, one can never say never for a strategic minority stakes. Sometimes they can be helpful and indeed make sense. Mateschitz has also consistently and categorically ruled out a stock market listing. A sale or an IPO is not even remotely tempting. And when asked if he's going to retire, he answered, "I'm having more fun than ever."

• 56:11David Senra?

  And that is where I'll leave it. I will leave a link below to the German version in case you happen to speak German. Also leave some links to some long form, like longer form profiles written about Dietrich in The Economist and in Bloomberg, in case you want to do any further reading. That is 333 books down, 1,000 to go, and I'll talk to you again soon. Okay, so I hope you enjoyed that. I had a lot of fun researching and reading and learning about Matt Schitt, and I think there's a bunch of ideas and his approach to company building, and really just the way he lived his life that are going to stick with me. So I want to tell you about two things, and they're really related. So one, I want to give you an update on Founders Notes. Founders Notes, I really feel, is the world's most valuable notebook for

• 56:56David Senra?

  founders. And I can say that because I've been compiling and adding to it and editing it nearly every single day for the last five years. And if you think about the story about how Founders Notes came to be, one, it's the best possible way you can support the podcast and yourself. So if you haven't subscribed and haven't invested in a subscription yet, highly recommend you do. You can click on the link in the show notes, or you can just go to foundersnotes.com. Everything I ever do, because I'm about to tell you about a conference called Founders Only, always has the S, just like the podcast, Founders Podcast, Founders Notes, and now we have the Founders Only Conference. But I think these two things are related to like, why I'm doing an in-person conference that is targeted on, the mission is to build real relationships

• 57:41David Senra?

  between founders. I've seen the difference in my own life of creating these relationships with founders. In fact, I'll just, basically, I'll just tell you about both these at one time. I was, I've had this idea for a long time, and I'll tell you how it relates to Founders Notes, too. But I wind up having a conversation, it was very fascinating, with a guy who was, his job, he was hired by a bunch, he was hired by a family office, so, you know, a very wealthy family office in Texas, and his job was to introduce and do these in-person events for other people in other family offices. And the reason they put so much time and energy and resources behind that was, he had

• 58:25David Senra?

  a great line. He said, "Because a relationship between these two people, like these two investor or founder types, they produce nonlinear returns." You and I have talked about this idea over and over again because they're in all the books. And I've put a maxim to it that relationships run the world. This is something that I had the pleasure of speaking to both Sam Zell and Charlie Munger in person. And this is something, they said it in different ways, but the same idea was behind it, that invest heavily in the relationships, build a seamless web of trust, find the most talented people you possibly can, and work with them, because relationships run the world. And so if you think about how Founders Notes came to be, is I didn't, like, I started

• 59:06David Senra?

  building a relationship with one of the co-founders of Readwise. His name is Tristan. And it's because Tristan sent me a DM. He was listening to the podcast all the way back in 2019, realized that I was kind of psychopathically reading. And he's like, hey, I built an app that makes it really easy for you to store your notes and highlights. So then you can search them and you can recall them and they have all these interesting features. You might want to check it out. And I didn't even know what it was. And then I immediately start using it. I became not only a super, a super user, but they told me that I was their best salesman unintentionally, because I would go on, I would go on all these other

• 59:46David Senra?

  podcasts. And I'd be like, this is the best app I pay for. I use it every day. I've become friends with Morgan Housel, who's obviously, you know, one of the bestselling authors of the last, you know, decade. He wrote Psychology of Money. And then he just released a new book. And I should do a podcast on his new book, too. It's called Same as Ever. And a main theme is that, that human, human nature just repeats. But anyways, Morgan had heard me on a podcast describe Readwise as a smart Twitter feed. And so he winds up signing up using it. And he's like, oh, that's exactly what it is. And so anyways, over the years, I've been adding to this. I have over 20,000 highlights in Readwise that I can search, I can constantly reference. And what happened was I kept having people ask me over and

• 1:00:30David Senra?

  over again, how do I get access to your notes and all your highlights and everything else that you have? And so I wind up, because I had a relationship with Tristan, this is going to relate to the conference, this all makes sense in a minute. And so because I had a relationship with Tristan, I contacted him. I was like, hey, I think we have an opportunity to work on a project together. And the result of that project is Founders Notes, which again, I think is the world's most valuable notebook for founders, because what you see When you sign up for Founder's Notes, you see exactly what I see. You have an exact replica of my Readwise. And so what that allows you to do is you can search every single one of my highlights by book, by keyword. I just did this yesterday because I was like, man, I'm becoming even more obsessed with making Founder's Podcasts and like finding other ways to teach and like share these lessons.

• 1:01:15David Senra?

  And, you know, I was like, am I going crazy? And I obviously know I'm not because obsession, I mean, this is every single person in the podcast that we cover was obsessed with what they were doing. And I just decided, I was like, let me just go through. And it's, and I started reading highlights just by searching the term obsession. I was like, oh, Anna Wintour was obsessed. Christian Dior talks about their obsession. Bill Gates talks about his obsession. The founder of IKEA, Ingvar Kamprad, talks about becoming obsessed with his work. Napoleon, Christopher Nolan, James Dyson, Leonardo da Vinci, Arnold Schwarzenegger, Estee Lauder, Steve Jobs, Jeff Bezos, Mike Ovitz. And so it just reinforces this idea that if you want to get to the top of your profession, which I definitely do, you know, obsession is a prerequisite.

• 1:01:58David Senra?

  So that's one of the main ways when you get access, you'll see the first thing you do is search for highlights. You can also do this thing called the highlight feed. That is what Morgan Housel called the smart Twitter feed. What the highlight feed is, it's going to show you a random, think about like any kind of really social network. It just shows you like a piece of contact after another. Instead of, you know, the ramblings of these crazy people on the internet, it's highlights and notes from all the different books and founders that we covered. So I just clicked on it. I see something here from Jeff Bezos, from David Ogilvy, some of Yvon Chouinard. It's like history's greatest founders talking to, directly to you every single day. And so that's why I say it's like, if you have access to this, whether you already have access or you want

• 1:02:42David Senra?

  to subscribe now, keep it up in your browser. I never X out of it unless I do it by accident. So you can do the highlights feed. You can then go by books and search and, you know, and then actually read, let's say you just want all the highlights from an individual book. That's what you want to read that day. And then the other feature is favorites, which what that means is when I go, I, so I reread my highlights every day. And as I do this, I'm constantly Favoriting the ones I like. So I have, you know, 700, 800, something like that. Favorites right now, that number will constantly go up and it's updated because I'm doing this constantly. And so you can see what I'm reading and you can see what I feel is like even. Highlight is special in one way, right? And then now I'm saying, oh, I reread these highlights and this is something even more special, something I want to remember. So anyways, that is a general overview.

• 1:03:27David Senra?

  What I wanted to update you on is there's two features that I haven't discussed. One is, and we're going to make this, I just talked to the team at Readwise yesterday. We're going to make this more obvious. If you, when you subscribe and if you go under billing, you can actually invite and give access to one other person for free. So let's say you want to give it access to a co-founder, a very important person on your team. You can do that for free. This is available by default. If you already have a founder's no subscription, you can do this as well. So every single subscription is, comes with an additional one for free. The second thing, and then I want to get onto the conference because I think it's really important. And we only have 60 days, so I got to move on that.

• 1:04:07David Senra?

  I didn't want to talk about features before they're released, but I've had so many people, a lot, there's a lot of like AI founders that have reached out. That have already subscribed and want to help on this, but this is already in development. There's going to be a founder's GPT version. I should begin testing it myself in the next week or two. And you'll be able to actually communicate, ask questions and use that chat format, which is becoming extremely, extremely popular. And so the important point is if you sign up now, as I keep adding features and obviously keep adding more and more data to it. The price will go up, the point is if you sign up now, you're locked in at that price. So all the additional improvements that I do and all the additional features that I do, you'll never have to pay any additional money.

• 1:04:48David Senra?

  If you're already running a successful company and you already understand the importance of constantly being in touch with the knowledge of history's greatest entrepreneurs. And you want an easy way to reference their ideas, to search through them, to find ideas that you can apply to your own company. Then I would encourage you to test it out for a year. You'll have access to the world's most valuable notebook for founders. And I really do believe the value that you'll get will be incredible because I use the product every day and I get incredible value from it myself. So. Relationships. This is another thing that people have requested a lot over the years. They want to meet other founders that listen to founders. One of my favorite quotes from Paul Graham, and he's got a lot of great quotes, but he talks about the importance of being around other ambitious people.

• 1:05:32David Senra?

  And so he says ambitious people are rare. So if everyone is mixed together randomly, as they tend to be early in people's lives, then the ambitious ones won't have many ambitious peers. When you take people like this, they're very ambitious, and put them together with other ambitious people, they bloom like dying plants given water. Probably most ambitious people are starved for the sort of encouragement they get from ambitious peers, whatever their age. So for the last several months, I've been kicking around this idea, like what would a founders conference look like? First of all, it's called Founders Only. You can go to foundersonly.com to apply. You can see the dates. It is happening in Austin, Texas, March 12th through the 14th. It is going to be limited to 150 people. I rented out an entire venue.

• 1:06:15David Senra?

  It is a private venue, not available to the public. I spent a few days there before. I absolutely loved it. Once you get past the guard gated gate, you never have to leave again. So all you have to do is get yourself to Austin, Texas, and then every single thing else is taken care of, accommodations, food, the entire event. You never, literally, you literally never have to leave the compound. So that's Austin, Texas, March 12th through the 14th. So a little over 60 days from now. It is going to be limited to 150 people. You have to be a founder of a company. CEOs with founder mentality are welcome too. It should be unlike any other conference that you've ever been to, because my stated goal, the mission statement, the North Star, is to help other founders build relationships with other founders.

• 1:07:00David Senra?

  To that end, that's why I've limited it to just 150 people. That's why I chose the venue where it's at. It is also why, before the conference, I'm going to talk to every single attendee, every single person, one-on-one. I want to gain an understanding of who you are, what your business is about, and what is important to you. And then I'm literally building a founder map. And that way, I can literally match founders together who I think should know each other. I think this is incredibly important. That's why I'm going to dedicate so much of my time to doing this. I am the only one doing this. I have a world-class events team behind me that are taking care of all logistics, but I'm the one matching all the founders individually, myself. And obviously, I will be there the entire time. I will get there before anybody else does, and I will be the last person to leave. I think this is going to be incredibly

• 1:07:44David Senra?

  important because I've seen it in my own life, that before I had these relationships and the network I have to after, it's not even remotely the same. Relationships really do run the world, and I want to help other founders build relationships with other great founders. If you're interested, if you're willing to travel to Austin, Texas, and be there from March 12th through the 14th, go to foundersonly.com. I will obviously leave a link in the show notes as well. foundersonly.com. And do so as soon as you can, because this is limited to just 150 people. Okay, so that's it. Go to foundersonly.com, founders with an S. Go to foundersonly.com if you want to attend the conference and build relationships with other founders. And then go to foundersnotes.com to get access to the world's most valuable notebook for founders. As always, thank you for listening, and I'll talk to you again soon.