#42 One From Many: VISA and the Rise of Chaordic Organization

What I learned from reading One From Many: VISA and the Rise of Chaordic Organization by Dee Hock --- Walking away at the pinnacle of success was the hardest thing I have ever done (0:01) Through the years, I have greatly feared and sought to keep at bay the four beasts that inevitably devour their keeper – Ego, Envy, Avarice, and Ambition. In 1984, I severed all connections with business for a life of isolation and anonymity, convinced I was making a great bargain by trading money for time, position for liberty, and ego for contentment – that the beasts were securely caged. –Dee Hock (4:14) Visa was little more than a set of unorthodox convictions about organization slowly growing in the mind of a young corporate rebel (9:03) Dee's first jobs (21:44) Learning how mechanistic, Industrial Age organizations really function (28:17) Useful questions to ask in your organization (34:30) A failure at 36 years old (38:33) The environment from which Visa emerged (46:41) Healthy vs Unhealthy Organizations (55:19) Focus on how your product or company "ought to be" and nothing else. (57:30) I had held fast to the notion that until someone has repeatedly said "no!" and adamantly refuses another word on the subject, they are in the process of saying "yes" and don't know it yet. –Dee Hock (1:03:55) His biggest regret: The fight against duality (monopoly) (1:04:35) How Dee Hock dealt with stress (1:07:00) His biggest regret: The fight against duality (monopoly) continued (1:09:52) Dee's surprising conclusion about his work (1:16:50) ---- 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?

  It is 1993, nine years since I abruptly severed all connection with the business world for life on the land. It is still hard to believe, after 16 years of intense conflict with industrial age, command and control corporations, after 35 years dreaming of new concepts of organization and experimenting with them, after two impossible years bringing one of those dreams into being, after 14 grueling years leading it to maturity, after all that, turning my back on Visa in 1984 and walking away at the pinnacle of success was the hardest thing I have ever done.

• 0:41David Senra?

  The reason is still difficult to explain, but it is not complicated. That inner voice that will not be denied, once we learn to listen to it, had whispered since the beginning, "Business, power, and money are not what your life is about. Founding Visa and being its chief executive officer is something you needed to do, but it's only preparatory." Each time I resisted, "You're crazy! Preparatory for what? And where? And why?" There was no answer, only silence. In time, the voice became incessant and demanding. "Visa's not an end. Give it up, and the business world as well.

• 1:25David Senra?

  Completely, irrevocably, now! In time, you will understand." It was frightening, it was maddening. I felt a damn fool to even think about it. A rational, conservative, 55-year-old businessman who'd never smoked a joint or dropped a drug, listening to inner voices? Absurd! Throw away a lifetime of work, success, money, power, prestige, as though it had no value in the vague hope that life had more meaning? Madness! But the voice would not be silent.

• 2:08David Senra?

  That is from the introduction of the book that I want to talk to you about today, which is "One from Many: Visa and the Rise of Chaotic Organization", by Visa's founder, D. Hock. So, before we jump into that, I want to tell you how I found this book. So, a little while ago, I saw this thread on Twitter, and it was talking about that Visa has a 328 billion market cap today, bigger than virtually every other bank on earth, and yet it started out as a nonprofit owned by banks. And this guy starts to do a Twitter thread on how that happens, like, "How did it become more valuable than its parents?"

• 2:51David Senra?

  And it says, "Since Visa's intermediate rates between banks and clears transactions between issuing banks and acquiring banks, it is the ultimate central ledger or platform for finance." It was originally part of Bank of America, called Bank Americard, but to syndicate this platform beyond BOA, it became a consortium, Visa. Independence, to ensure that central platform didn't take too much economic rent, was insured via nonprofit ownership structure. And then it goes on to talk about that that's how it was organized up until 2008, when it became the, when it went public, and it was the largest US IPO of all time. So, the thread continues, but that sparked my interest.

• 3:36David Senra?

  I was like, "Do I even know who the founder of Visa is?" So, I did some research, and I learned that the founder of Visa is this guy named D. Hock. And if you go to his Wikipedia page, I found one of the most curious quotes I've ever come across from any entrepreneur that I've studied so far. And I'm just gonna read it to you. So, it says, "In May 1984, Hock resigned his management role at Visa, retiring to spend almost 10 years in relative isolation, working a 200-acre parcel of land on the Pacific coast."

• 4:13David Senra?

  And then in 1991, he was inducted into the US Business Hall of Fame. And this is the quote that made me curious about who this guy was and how he arrived at some of these conclusions. And now this is a direct quote from D. Hawk. "Through the years, I have greatly feared and sought to keep at bay the four beasts that inevitably devour their keeper: ego, envy, avarice, and ambition. In 1984, I severed all connections with business for a life of isolation and anonymity. Convinced I was making a great bargain by trading money for time, position for liberty, and ego for contentment.

• 4:57David Senra?

  That the beasts were securely caged." So, to me, that is a founding a company such as Visa and then walking away completely to spend a life, 10 years in working in isolation and physical labor. That makes D. Hawk an uncommon person amongst uncommon people. And so I was like, alright, let me see if this guy has, if there's anybody who's written a biography about him. Well, turns out, part of his time in isolation was he developed a habit of waking up every day at 5:30 and writing a thousand words or more before the day's physical labor.

• 5:40David Senra?

  And so, I came across the book that we're going to talk about today. And also, another book I have in my hand right now, that is actually, it's called Autobiography of a Restless Mind: Reflections on the Human Condition by D. Hawk. And that is what this week's Founder's Members podcast is about. It's the second book. And as you could probably tell, from that quote that he gave during his Hall of Fame speech, his writing is almost poetic. I don't know...

• 6:16David Senra?

  I don't, I think I should start this podcast saying, I don't know if I'm, if I'm even good enough or even understand enough to even do this podcast, even though I read over many sections of the book multiple times, because he has thought more deeply about the way to build organizations than any other person I've come across so far, or at least that's what his writing indicates to me. So, something I just realized I should explain to you. One, I gotta apologize about getting this podcast out late. I usually like to have them at the very latest, when you wake up Monday morning, you know it's there waiting for you. Last week, my little girl, my little daughter, came home from school with the flu.

• 6:56David Senra?

  Unfortunately, a few days later, I succumbed, that's why I sound this way. And I delayed recording every day, thinking that I'm gonna sound better and be better. Eventually, I got to the point where, okay, I can't, I have a deadline, it has to be out Monday no matter what, so we're just gonna have to go with it. And so I apologize the way I sound. I should be back sounding normal on next week's podcast. And before we jump into the book, sorry, there's gonna be two other, just some updates. I made some changes, I've been busy. The members-only podcast feed, which is the way this podcast is supported, now I don't, the big update is now it has its own RSS feed. What that means to you is that

• 7:38David Senra?

  you can listen to the members-only podcasts if you sign up, just the same way you listen to every other podcast. So if you sign up today, you'll immediately receive an email back with that RSS feed. You put it into your podcast player, just like you would any other one, and as I do them every week, they automatically populate. And just one more update before we jump into the rest of the book. If you go to foundersnotes.co, foundersnotes is my email service, where I listen to podcasts with that interview entrepreneurs. I pull out the key ideas and I email those key ideas to you every Sunday. And now there's gonna be a free version of foundersnotes, which is gonna be just a sampling of the ideas that went out that week. And if you want the full version, obviously, it's, you can

• 8:23David Senra?

  get the access to the full version. For a small monthly fee. So foundersnotes.co if you want to see what that's all about. I figured doing a free version of the service is a good way to introduce it to you to see if that's something that you would benefit from. So far, the response has been really good. The open rates are through the roof and the feedback I've been getting, people seem to like it. So I'm very, very happy with it. I think there's a lot of knowledge in these podcasts and it's really hard to spend hours and hours every week listening to them. And so founders notes is an easy way for you to get the ideas, saves you a lot of time and makes you smart. Alright, so let's jump into the book while my voice is still working. So we're going to start off writing the introduction with what the book is about.

• 9:08David Senra?

  So it says, "In 1969, Visa was little more than a set of unorthodox convictions about organization slowly growing in the mind of a young corporate rebel. But this book is much more than the story of the scarcely believable events that brought Visa into being and led to its extraordinary success. It is also the story of an introverted, small-town child, passionate to read, dream, and wander the woods. The youngest of six, born to parents with but an eighth-grade education. It is a story of crushing confinement and interminable boredom in school and church, along with sharp, rising awareness of the chasm between how institutions profess to

• 9:51David Senra?

  function and how they actually do. What they claim to do for people and what they actually do to them. It is about three compelling questions arising from that awareness." So I'm going to read you these three questions. He references them constantly throughout the book, so they're important to understand. Like, what was his frame of mind or what was his motivation from? Like, how do you even start an organization like Visa? And it says, here's the first one. "Why are institutions everywhere, whether political, commercial, or social, increasingly unable to manage their affairs?

• 10:27David Senra?

  Two, why are individuals everywhere increasingly in conflict with and alienated from the institutions of which they are part? And three, why are society in the biosphere increasingly in disarray?"

• 10:45David Senra?

  So going back to what the book is about, it's a story of a lifelong search for the answer to those questions, which had everything to do with the formation of Visa. It's a story of harboring four beasts that inevitably devour their keeper. Now, he's going to reference the quote I started the podcast with. Ego, envy, avarice, and ambition. Not entirely sure I'm pronouncing that third word correctly. And of a great bargain, trading ego for humility, envy for equanimity, avarice for time, and ambition for liberty. It's a story of events impossible to foresee, that sent a man of seventy on a journey more

• 11:26David Senra?

  improbable than Visa, and infinitely more important. What he's talking about there, that journey, is he starts to spread, after nearly a decade in isolation, he starts to give speeches about this idea of chaotic organizations. And we're going to get into what exactly the chaotic organization means. So as he's referenced multiple times, reading is one of his lifelong loves. So at the beginning of the book, we find him at nearly sixty years old, and he's reading this book called Complexity. And this is how the book begins, and then we're eventually going to start flashing back through his early life. So most of the highlights that I've picked out today are all about the struggle, because

• 12:07David Senra?

  there's the struggles he went through, which I think is the most informative for us. So first, he's reading this book Complexity, and he's talking about some of the ideas in the book that resonate with how he designed Visa a couple decades prior. So he talks about "they," and in this case, "they" is the authors of the book. "They speculate that there's something about the nature of complex connectivity that allows spontaneous order to arise, and that when it does, characteristics emerge that cannot be explained by knowledge of the parts. Nor does such order seem to obey linear laws of cause and effect. They speculate that all complex adaptive systems exist on the edge of chaos, with

• 12:52David Senra?

  just enough self-organization to create the cognitive patterns we refer to as order." So I'm going to, before I go to the next page and give you the definition of, he makes up his own word, this chaotic word is something he invented. I would say, the entire book talks about, why can't... He uses different like stories and thoughts. And it leaves the reader asking like, why can't we organize institutions the way nature organizes things? So organizing work like nature, which you'll see is his main, the main thing that influenced him on how to design Visa comes from the amount of time when he was a young child.

• 13:36David Senra?

  He spent most of his time just out in nature. So first, let's, let's go with the definition of chaotic, because that's a central theme to the book. So it says, he got that from combining the word chaos and order. And it says, "One, the behavior of any self-organizing and self-governing organism, organization, or system that harmoniously blends characteristics of chaos and order." That harmonious blend of chaos and order is exactly how he designs Visa. "Characteristic of the fundamental organizing principle of nature." And so now, he comes up with this idea, he's reading this book called Complexity, he comes up with the idea of chaotic. And I love what he, what he says here.

• 14:19David Senra?

  He says, "I returned to bed to finish the final chapters. My last thought before switching off the light is noted in the margin." Now, this is a direct quote from him. "The hubris of science is astonishing. It will come as quite a surprise to countless poets, philosophers, theologians, humanists, and mystics who have thought deeply about such things for thousands of years. That complexity, diversity, interconnectedness, and self-organization are either new or a science." So what he's saying is that this is not a scientific, a result of scientific discovery. The, if you, what he's describing there is exactly what, how nature organizes itself.

• 15:01David Senra?

  It's complex, it's diverse, it's interconnected, and it's self-organizing. So again, why can't, why do the institutions created by man, why don't they reflect that? Instead, he sees, sees the way we organize today as some kind of weird, man-made, like imitation, like poor imitation of the way that different creatures and different organisms have worked jointly together for thousands, if not millions, of years. So, I want to start jumping into his early life. And here's just some, some, some highlights and some stuff that stuck out to me with what he was going through. So-

• 15:42David Senra?

  Well, let's start here, so you have a good idea of his conditions of his early life. He was rather poor. So it says, "Outside, icicles hang from eaves to snow-covered ground. I often weigh an extended bladder and cramping bowel against a 50-yard dash between three-foot snowbanks to the icy outhouse." So there's no indoor plumbing. He was born in, right at the beginning of, right before the beginning of the Depression in 1929. This is an important lesson, though, that his mother teaches him. So it says, "Nothing finer," in quotations, "according to my mother." This is a lesson she's talking about that teaches one to attend to business and not dawdle. So when I came across that word, I wanted to make sure I understood it, so I looked up the definition.

• 16:27David Senra?

  It says, "Not to waste time and to be slow." So from a very young age, he learned that lesson from his mom, and as the book unfolds, you'll see, he definitely didn't like to waste time. And I want to point out this idea of "nothing finer." His mom constantly would talk about that, "Nothing finer, nothing finer." And to me, the lesson he takes away from that is that your current conditions are good enough. And what I mean by that is when you read, if you happen to read his second book, The Autobiography of Restless Mind, he's writing that book when he's in his 60s, and it's just a book of aphorisms. And a lot of that is talking about the key to happiness is to limit your desire. And for type A, gore-oriented people, like, I'm sure a lot of people listen to the podcast,

• 17:10David Senra?

  I'm obviously one of those people as well, that's hard to like get your mind around. So I just finished the audiobook of, a book that's been recommended by a lot of smart people, so I finally had to give it a chance. It's The Guide to the Good Life, The Ancient Art of Stoic Joy. And I couldn't understand this concept until it was explained in that book that, hey, you should, you should live your life always doing the best possible job you can do. And if you do that, if you're always doing the best of your abilities, then life will take care of itself. As opposed to, hey, I have this desire that sometime in the future, that if I don't reach that, it ruins the present. And so this, "nothing finer," is just a different way of saying that, listen-

• 17:51David Senra?

  You at least, yeah, you have to run through the snow to go to the bathroom. But what can you, what like, how can you take a situation that you may, that may be unpleasant and, and learn something from it? So he distilled that, that lesson to, okay, attend to your business and don't waste time. And if you think about it, he's a little kid, he can't choose where he's going to go to the bathroom. So all he can do is he can choose how you react to it. All right. So we're going to learn more about his early life. It says, "It was there in a tiny cottage in a small farming community at the edge of the Rocky Mountains, "that the three great loves of my life arose: literature, nature, and a lovely girl with beautiful brown eyes. "They would have everything to do with the unorthodox ideas that led to the creation of Visa, "although I could not know so at the time.

• 18:37David Senra?

  "When and how I learned to read is lost to memory. "Ours was not a bookish family. "My parents considered themselves lucky to have graduated eighth grade "before pride and necessity drove them to earn their own living. "Where the books came from, I have no idea. "Probably from people who knew the little hawk boy, or the hawk, the hawk boy's a little strange. "He'll read anything." Night after night, now skipping ahead, talks about, um, you know, these are, we, it's really, I think, inspiring for us. It's inspiring for me and I hope it is for you to learn, you know, he started out very humbly. He's talking about, you know, going to the bathroom in the outhouse, having parents who

• 19:22David Senra?

  could only go have an eighth grade education, then they were forced to work to support themselves. And so it says, "Night after night, my mother pulls me from the pages of a book, "opens the oven door, removes a round 15-pound rock, wraps it in flannel, "carries it to my bed, and slips it in between the sheets. "Nothing finer, of course, than an icy room and cold feet on a hot rock "for a kid anxious to again disappear in the pages of his book."

• 19:53David Senra?

  And then just some just random thoughts that he's having when he's really young. He says, "I live largely in a private world of nature, ideas, and imagination. Nothing in my first six years prepared me for the shock of institutions. With school and church came crushing confinement and unrelenting boredom. It was as though everyone began to shed wholeness and humanity at the doors of institutions. Adults suddenly turned into a mob to confront one. Alright kid, you've had the joy of life for six years. That's enough. Grow up. Learn what life is all about."

• 20:33David Senra?

  And this lifelong distaste for institutions or organization obviously heavily influences the choices he makes when he starts Visa. He's still talking about this as a child, though. And he comes to the realization that "Nothing in nature feels like church or school. There's no blackbird principle pecking away at the rest of the flock. There's no super frog telling the others how to croak. There's no teacher tree lining up the saplings and telling them how to grow. Something's crazy. Is it me? I can't begin to think about it in a coherent way, let alone understand the resentment, confusion, and doubt.

• 21:15David Senra?

  But the sense that something has gone awry is powerful." And in beautiful language, he talks about, sums up his young childhood turning into teenage years. "The years passed, alternating between the magnificent mysteries of nature, the imaginative joy of books, the dull reality of institutions, and work, work, work." So that's going to lead us into some of his first jobs. And he gets his first job at 10. So he says, "At 10 years old, I was hand harvesting fruit and vegetables at a penny the pound. At 12, I was thinning sugar beets at $20 the acre.

• 21:59David Senra?

  That was followed by a first salaried job at a farm, laboring on a farm for $0.20 the hour."

• 22:07David Senra?

  At fourteen, I had a job dumping slop in a canning factory. Summer and after-school jobs came one after the other. Mucker at the, mucker at a dairy. Hotter chain dipping dipper under the hundred-degree sun. Orchid spray truck operator. Hod carrier. Laborer in the oafal department of a slaughterhouse. None of it seemed demeaning. It was life. It was making a living. It was what proud men did without whining. So, something that he talks about constantly in autobiography of restless mind is the uselessness of whining.

• 22:49David Senra?

  So I'm gonna go skip ahead. Um, just this paragraph, now he's in college, this is at college, "Another dean put me in the way of the classics and some understanding of both the powers and limitations of the human mind." So, meaning, uh, the classics mean reading books that have been around for hundreds, if not thousands of years. "At the same time, increasing conflict with the college and other organizations inflamed a growing preoccupation with the paradoxes inherent in institutions and the people who hold power within them." So, he got the first, uh, his first introduction when he had to go to school in church at six years old of institutions. And now, at almost twenty years old, that thought is still with him.

• 23:33David Senra?

  Um, and it's, only grows more and more as we'll see as the book unfolds. And says, says, he gets married, it says, "Thus, at twenty, newly married, unemployed, eager to learn, but averse to being taught, emerged an absurdly naive, idealistic young man." And now he's gonna use, he uses the use of, uh, I don't know if it's the use of euphemisms or metaphor, but it says, "An innocent lamb hunting the lion of life." "The hungry lion was swift to pounce." So he'll refer to him throughout the, himself as a lamb. And what's interesting to me, so, uh, he's, he's trying to tell his life story and, uh, all the, like, the,

• 24:19David Senra?

  the, the events that led up to the formation of Visa. But as he does that, he has these like,

• 24:27David Senra?

  He breaks the flow of the book and he has this thing called the old monkey mind. And you'll, the book will be going along and then all of a sudden it'll be like a, an insert and it'll have like this monkey and, and like a, a bar separating this part of text from the main story. And as far as I can tell, the old monkey mind and I is just the result of his deep thoughts. And so he'll be describing something that happens and then going into like usually for a few pages, harping on just one idea in what's going on in his life. So I tell you that because it may seem at times random, but I am moving through this book in a chronological order.

• 25:12David Senra?

  It's just he goes back and forth. Like I said before, I don't even know if I'm, I'm gonna be able to do a good job here because it's so, his thinking is just so deep. I think I would need more than a week to study it. And I read two of his books in the last week and I'm just, he, I've just never come across a mind like this, ever. Okay, so let's go. He starts working in the consumer finance industry where he spends most of his career, all of his career. "In the summer of 1951, the Lamb fell into a job at a small, floundering branch office of a consumer finance company. Within months, the manager departed and his lot fell to the Lamb.

• 25:50David Senra?

  Protected by remoteness, anonymity, and insignificance, four Lams, whose average age was 20, trashed the company manual, ignored commandments, and did things as common sense, conditions, and ingenuity combined to suggest. Within two years, business tripled, and the office was leading the company in growth, profit, and quality of business. Anonymity was gone, and the blind fists of corporate power and orthodoxy began pounding for conformity." You see what I mean about, he's telling, he's almost, it's almost like, uh, he's writing poetry instead of telling his life story.

• 26:32David Senra?

  He's just got a very poetic way of writing, I guess is what I'm trying to get to. So it says, um,

• 26:39David Senra?

  So Orthodoxy began pounding for conformity. Again, you can, our priority tell, he's very, he's anti-conformist. "How much better the lambs could do if they conformed to central mandates? Even if they could be trusted with freedom to use their ingenuity, others could not. Exceptions could not be made without risking anarchy." So, he's feeling that he's gonna be punished for his success. And then, on the next page, and what we're gonna get into, over the next few pages, is, he's learning how, and he uses this term constantly, how mechanistic, industrial-age organizations really function. And so, one of his main themes is that, "Hey, we need to rethink the way we organize people. You're using things that are centuries old, that don't make any sense."

• 27:23David Senra?

  And that, in his opinion, are just, like, an aberration of, should be an aberration of just history, should be gone. Because it's, it's not organized as things were before, and it won't be in the future. I tend to agree with a lot of these concepts. "It was too much for a lamb already dreaming of greener pastures. He transferred to another division and slipped away to open a new office in a small, remote Oregon town, hoping that the pressure to conform was an aberration of former division management, not the true nature of the company. There, the pattern repeated itself. Using the same iconoclastic concepts and ideas, the new office was in the black by the third month. With business and profit increasing rapidly, it soon attracted the iron fist of corporate

• 28:07David Senra?

  power and the itchy fingers of centralized bureaucracy. Confrontation with superiors grew frequent and intense." And it's here, he meets somebody that's like-minded. And this is a guy named Dick Simmons, who, so, there's two options, I guess, if you're confronted with a mechanistic, industrial-age organization. So, in D. Hawk, he rebels. He gets fired constantly, even when he has good numbers. He doesn't conform. Dick Simmons does the opposite. He realizes how ridiculous these mechanistic, industrial-age organizations are, and he uses his intelligence to...

• 28:49David Senra?

  To turn it against itself and you'll see what I mean here. Says now, this is D Hawk talking about Dick Simmons. "He was extremely literate. Exceptional intelligence and perception lay behind the literacy and more than a little cynicism. He detested his job. We swiftly became friends." So Dick Simmons and Dee start working together. Several weeks later, one of their bosses comes by and he's talking to Dee and he says, "Visitors," he told me solemnly, "were occasionally confused about the location of the senior executives' offices. I was to attend to the matter and keep him informed." So he says, "Okay, solve this problem." And now Dick Simmons is asking, he says, "How do you intend to handle it?" he asked.

• 29:36David Senra?

  And this is Dee's response. "Call a sign company, see what's available in brass, either freestanding or wall hung, and have it installed," I replied. His hands went up in mock horror as he came down hard on every other word. "That will never do. You've been assigned a project. It will already be in the department project control log, flagged as important because it involves senior executives. Important projects always take time." So I try to enunciate the words that they have him enunciating. "Yeah, sure, Dick, funny, funny," I replied, reaching for the telephone. His hand closed over mind. "Am I not responsible for your indoctrination?

• 30:21David Senra?

  Trust me, this will be fun and you'll learn something as well." So this is what I mean by he learns from Dick on how to turn the organization's ridiculousness on itself.

• 30:33David Senra?

  So this is the lesson. He says, "What you don't understand is that in companies like this, procedure is more important than purpose and method more important than results. He carefully went over a list of officers deciding on those who would most be most likely to have an opinion on signs and how to make an innocuous approach. During the weeks to follow, I received a fascinating education about both human nature and the nature of organizations. Bored to death and disillusioned with the company, one of the most intelligent people I had ever met casually extracted opinions about, quote unquote, "the sign problem" from various officers." So he's getting these opinions from various officers. "Each opinion different."

• 31:18David Senra?

  I listened as he told Brown, this is the guy that gave him the job, about the sign problem and aroused concern that no one upstairs be offended by what he did. He obtained diverse sketches, samples, and prices from suppliers, exposing them to officers in idle moments to elicit conflicting opinions and avoid decision. Do you see what he's doing here? Fascinated, I watched as he manipulated situation after situation. He suggested a story for the company magazine about executive secretaries, causing a muddle of childish maneuvers by middle managers over who would be identified as an executive,

• 32:00David Senra?

  by inclusion of their secretary and who would be insulted by exclusion. He organized a move to new quarters and induced months of bickering over allocation of space, layouts, furnishing, and windows. So what he's doing here is just revealing that what I suspect from, even though I've never worked for a large company, I have friends and people I'm close to that do. And I suspect the vast majority of what they're doing is what I call fake work. And it's this stuff that he's describing here. He could have, instead of just doing exactly what Dee could have done. Okay, I'm gonna, you want clear signs to figure out where your executive offices? Okay, that could take, you know, less than 30 minutes of my time. This goes on for months.

• 32:42David Senra?

  And then now you see that this Dick Simmons, who's clearly intelligent, is just, he's poking, these people don't even realize he's poking fun at them. Oh, who's, like, they're arguing over stuff like who should be identified as an executive? And who would be insulted? That doesn't matter. None of that's important. Focus on your work. And this is a huge problem with these large mechanistic industrial age organizations, because you see stuff like this constantly. So he says, "He organized a move to new quarters and induced months of bickering over allocation of space, layouts, furnishing, and windows." Again, nothing, is that actually going back to use the... Used what Jeff Bezos says, like, "Customer doesn't care about any of that. And if the, like, we're here to serve the customer.

• 33:25David Senra?

  None of this matters. So focus on what, focus on what matters to the customer, not what matters to you and the politics of the organization. "Not once was a lie told or a person misled. Simmons had more integrity and skill than that." And this is so, such an important sentence. "He simply left murky minds unclarified and petty minds free to fuss."

• 33:51David Senra?

  Caught up in a bureaucratic, command and controlled organization that would, that would not allow him to use his ability constructively on substantive matters. "He skillfully honed it in, honed it, honed it on complicating trivial matters to, to no end at all other than his own amusement." "The difference between Simmons and millions of others trapped in mechanistic industrial age organizations is that he chose to be undeceived, either by self or others. He refused to mean his talent by not using it to the maximum, even if for trivial ends."

• 34:29David Senra?

  And now we're going to see what Dee took away from that. And then the note I left myself is this is, these are useful questions to ask in your own organization that you're building. It says, "I have never forgotten Simmons. Countless times over the year, I have asked diverse groups of people to reflect very carefully on their work within organizations and to make a simple balance sheet. How much time, energy, and ingenuity did they spend obeying senseless rules and procedures that had little to do with the results they were expected to achieve? How much did they devote to circumventing those rules and procedures in order to do something productive with the remainder? How much was wasted interpreting such rules and enforcing them on others?

• 35:13David Senra?

  How much time and talent did they simply withhold due to frustration and futility?"

• 35:21David Senra?

  And I love how he wraps this section up. And this is why I always say it's just, it's just better to spend your time collecting ideas because the idea might, might not be applicable to your life now, but it, something clicks later on where adds value to it and you can use it. So it says, "What Simmons was trying to teach, the Lamb was not then ready to learn. It took him decades to synthesize the lesson. In industrial age organizations, purpose slowly erodes into process. Procedure takes precedence over product." That should never happen. "The doing of the doing is why nothing gets done. Simmons had elevated the doing of the doing to an art form until virtually nothing got done.

• 36:04David Senra?

  At 25, for all his rebelliousness, unorthodox ways, the Lamb was too naive, too well indoctrinated, too enamored, too enamored of rising in the company to see the realities. He thought he saw a bitter, brilliant man damaging a decent company. What he did not see was a mechanistic, command and control company demeaning and discouraging a capable man. The Lamb stepped eagerly into the jaws of the beast. He wanted to believe in the company. He wanted it to be different. He wanted to make it better.

• 36:47David Senra?

  It's an old, old story. The Lamb was determined to change the company. The company was determined to corral the Lamb. It was no contest. Within the year, a badly mauled Lamb was out the door, much wiser in the ways of hierarchical command and control organizations and the people who hold power within them."

• 37:12David Senra?

  Okay, so I'm gonna skip ahead. He works in the financial services, consumer finance companies, different banks for years, a decade and a half. And this is what, I think, one of the most important reasons why we should study not the results of what these founders have done, but how they got there. Because a lot of people buy into this myth that, oh, if you're not young, it's too late to start a company, that, oh, they just got, you know, you get hit with this lightning bolt of a great idea, and then it's just straight up into the right from there. D. Hawk was 36 years old, and he considered himself a failure before he started the Visa.

• 37:53David Senra?

  So, and let me, not only, so he kept going about, like, he believed in his ideals. So we saw, you know, he'd, he'd get sent to a department, he would throw out their company manual, he'd do things the way he thought they should be done, the results were usually good, eventually, they, they tried to control him to get him to conform, he resisted, and then they fire him, regardless if he got good results or not. So the note I left myself is, he's observing human nature, and he's 36 year, 36 years old and a failure, okay? So, this, this is the reality that he finds himself in.

• 38:34David Senra?

  And he's fired once again, and his, him and his wife decide, hey, you should go claim unemployment. And we're gonna see a big insight into his personality here. "One event is seared in memory. The feeling returns as sharp as a throbbing tooth." Now, keep in mind, he's writing these words 30 or so years after the events, so the idea that, like, this is, "The feeling returns as sharp as a throbbing tooth." It says, "A few days after the severance, we were desperate to know what to do," meaning him and his wife. "We had no idea when I might find a job or receive another paycheck. We agreed I must apply for unemployment.

• 39:15David Senra?

  The next morning, deeply depressed, I drove to the nearest unemployment office. A line of people extended out the door and down the sidewalk." That this sentence where he talks about deep depression. He talks about this over and over again in the book that he goes through several bouts of deep depression, which again, I think pierces this myth that people have it all figured out.

• 39:41David Senra?

  It's no, they, they don't give up and then they figure it out. They don't have it all figured out. So, "Sitting in the car across the street, looking carefully at the faces of the people, I could not make myself open the door. One moment, I imagined myself in the line. The next, explaining to a concerned wife, why I had not done so. I told myself that refusal to get out of the car was ridiculous. Just false pride. I was entitled to the compensation. The feelings would probably vanish as soon as the application was filled out and I'd realize how silly such feelings were. But I could not get out of the car. Something deep inside said, 'No! Take me there and I will die.'

• 40:21David Senra?

  Sick at heart, I drove slowly home to explain to a bewildered, pregnant, young mother of two, that entering the line was something I could not do. I did not know why then. I still don't."

• 40:39David Senra?

  So, 36 years old, no job, pregnant wife, two kids already, and completely broke. These are the conditions from which Visa emerges. "The next morning, I began a frantic search for work. Any kind, anywhere, doing anything. Within the month, a miserable job at a pitiful, at pitiful pay appeared. I grabbed it, giving us momentarily breathing room. We were determined never again to be in such a vulnerable position. We swore that, with the possible exception of a home mortgage, we would never again have more debt than cash in the bank. Within a month, I took two more miserable jobs." Skipping ahead a little bit, it says, "With herculean effort, we paid our debts in a

• 41:23David Senra?

  year and a half and put a small sum in the bank." So, he's working three jobs. "I abandoned two jobs to concentrate on the best of the three. A tiny investment company in serious trouble due to corrupt management since departed." So, this is the part where I say is that he starts to learn more about human man, human nature.

• 41:40David Senra?

  The sole owner, a wealthy, thin-lipped, dour man, refused much in the way of salary, but gave solemn assurance of freedom to use unorthodox methods and a substantial share of the profits if success followed. He kept the first promise. Five years later, the lamb sat down with the owner to divide a handsome profit from the sale of a successful company, only to come face-to-face with naked greed and an astonishing display of accounting and contractual ledger domain. I'm not sure what that means. Although worth millions from a variety of businesses, he claimed that the profit he had promised to share must include years of losses that preceded my arrival.

• 42:22David Senra?

  Therefore, there was no profit to share, even though the company fetched a huge premium when sold. He was adamant. If the lamb didn't like it, he could sue. It was no longer a lamb, but no less a bloodied sheep, that looked deeply into those dead, expressionless eyes. Drew a deep breath, and with a tinge of pity and a mountain of contempt, softly said, "Keep the money. You apparently need it more than I do." The dead eyes did not blink. The thin lips never moved. The expressionless face was frozen. The beast, Avarice, had devoured him completely.

• 43:07David Senra?

  The sheep turned and walked out the door. They never saw or heard from one another again. And this is where, how he comes to the conclusion that he's just a professional failure. After sixteen years of unorthodox management and unblemished results, the sheep, by the standards of industrial-age command-and-control organizations, was a failure. The words they used to inflict so many wounds were not without some justification. These are descriptions of, of, uh, other people's description of him himself. Other people's description of him. Jesus, I can't talk today, I'm sorry. Stubborn, opinionated, unorthodoxed, rebellious. My favorite kind of people.

• 43:53David Senra?

  And so, he says, "Throughout the 16 years of successful business failure, the sheep continued to read, to read a lot, poetry, philosophy, biography, history, biology, economics, mythology, anything and everything that satisfied his curiosity about the connectedness and relationship. He mastered nothing, nor did he wish to, but new ways of seeing old things began to emerge, and new patterns slowly revealed themselves. The preoccupation with organizations and the people who hold power within them became an obsession. It was then, in the 1960s, out of the maelstrom of experience, study, and stress,

• 44:38David Senra?

  that the three questions emerged, softly at first, then more demanding and compelling." And those are the three questions I talked about at the beginning. Why are organizations dysfunctional? Why are individuals increasingly in conflict with the organizations? And why are society and biosphere increasingly in disarray? The vague shape of some answers had begun to form, but the sheep had no idea what to do with them. Sheared, bloody, and once again unemployed, he lost heart and wandered into a sloth of despond." And so, this is a description of his circumstances right before he starts FISA. "With three young children, a heavily mortgaged house, no job, little money in reserve,

• 45:23David Senra?

  it was impossible to stay out of a dismal swamp of depression. Day after day, I walked the woods in the misting northwest rain. My constant companion was an overwhelming feeling of failure. What was wrong with me?"

• 45:44David Senra?

  Okay, before I get into him starting Visa, there in one of these old monkey mind in him inserts, he has this question, I think is especially pertinent to the day and age that we find ourselves in. And it says, "Is there some analogy between the industrial machine age as an extension of muscle and the computer age as an extension of mind?" And I think that's what we're seeing now with technology and the age of the internet. We as individuals, or even small companies, or small groups of people can have much more impact. And I like that idea that what the industrial age did to expand human muscle, the computer age is doing to expand the mind.

• 46:28David Senra?

  Okay, so let's, again, I have to apologize. I know my voice sounds like not good, but I do want to get this out to you. So I do apologize if it's distracting. Okay, so this is the environment from which Visa emerged. And it's, he goes into greater detail, of which I'm not going to cover in the podcast, about, it's so hard for me, growing up in the age of the internet, to even understand, like, how would you have a payment system before computers? And as you can imagine, like, how do you keep track of everything? So, you know, before, when they did have credit cards, they'd have to, like, take imprints of them. You may have seen this machine. Sometimes you see them at, like, I still see them every random, just random places.

• 47:12David Senra?

  I haven't in a while, but they would take an imprint of it, which would produce a paper copy. That paper copy would be sent off to the bank or the processing company. There was, there wasn't, like, one central clearinghouse place. So as a result, when he's hired to fix this problem, and I'm going to get into what the problem is in a minute, he finds, like, he goes into one room and he finds, like, hundreds of thousands of dollars of imprints that were never processed at all. So it's just a, it's a huge, huge problem, and Visa's the solution to the problem. And so, this is the environment, so I'm not going to go into all the details, but we're going to see what that kind of, the summary of that environment. So this is the environment from which Visa emerged.

• 47:54David Senra?

  Most bankers looked down their noses at the card business, placing it lower on the scale of respectability than auto dealer financing, only then gaining scant acceptance by banks. Few banks really wanted to be in the card business. Few bankers wanted to be assigned to it. Card operations were located in the least desirable part of the bank premises, and staffed employees who did not fit elsewhere. It's interesting that that's how it was now, where it's a huge source of revenue for banks today. It was both curse and blessing. Most credit card departments were filled with an eclectic mixture of bankers and outsiders, pragmatists and dreamers, liberally laced with iconoclasts, renegades and incompetents. Isolated and disdained, they were lashed by top management to launch a poorly understood,

• 48:38David Senra?

  massive business in an impossibly short time in the midst of competitive frenzy. Strangely, however, the eclectic mix of people contained more than enough of the innovative, adventurous spirits that the resulting disaster required. Many of those who survived would later emerge as a major force in bank management. By 1968, the fledgling industry was out of control. No one knew the extent of the losses, but they were thought to be in the tens of millions of dollars, a huge sum for the time and for the size of the system. It was just rampant with credit card fraud. Drawing on Greek legend, Life magazine, then in its glory days, ran a famous cover story

• 49:22David Senra?

  depicting banks as Icarus flying to the sun on wings of plastic. One, a Bank of America card. So when you hear this word, Bank of America card, that eventually turns into this organization called NBI, which then eventually turned Visa. So just think of Visa. So Bank of America card. So one, a Bank of America card, the other, a Master Charge. Master Charge turns into Master Card. Below was a blood red C labeled losses. The magazine predicted banks would soon plunge down, wings melted, and drown in a sea of red ink. And before I continue describing more about the opportunity and the environment, he has

• 50:01David Senra?

  another one of these old monkey mind diversions, and there's just this great quote that I want to share. And it says, "Today, the past is ever less predictive, the future even less predictable, and the present scarcely exists at all." Everything is accelerating change, with one incredibly important exception: there has been no loss of institutional float. Although their size and power have vastly increased, although we constantly tinker with their form, although we constantly change their labels, there has been no new, commonly accepted idea of organization since the concepts of corporation, nation-state, and university

• 50:46David Senra?

  emerged, the newest of which is several centuries old.

• 50:53David Senra?

  And ever since a few weeks ago, I did a founders' members' podcast on the company Valve. And Valve is the most profitable company in the United States per employee. So they make the most profits per employee. And this whole thing where it says, "Constantly, we constantly tinker with our form, we change their labels, but there's no new, commonly accepted idea of organization since that's not a few centuries old." Valve is actually rethinking the answer to that. And so if you're not a member and you can't afford to be, I understand. Still, the podcast is based off of the Valve Company Handbook, which if you just Google

• 51:36David Senra?

  Valve Company Handbook, you can download the PDF for free. It blew my mind. And I recommend reading it. It doesn't take very long. There's a ton of useful information in there. But I think, this is something I'm personally very interested in, the idea that, especially because of the internet, like, we really do need to rethink the idea of how we organize and work. And it doesn't make sense to apply things that are a couple centuries old to the environment that we live in. And I feel that Valve has put, if you read their handbook, they've clearly put a lot of thought into this. And not only they put a lot of thought into it, but like, the results speak for themselves.

• 52:21David Senra?

  They're creating an organization and organizing work, and the results are, hey, they make more money per employee with less people than anybody else does. And I love that level of efficiency. So I just wanted to share that. If you haven't...

• 52:37David Senra?

  If you haven't read Valve's handbook, I would recommend doing that. I don't, it's not gonna be a waste of your time. So a few pages later, there's this great quote that's also stuck out in my mind since I read it. And he says, "Understanding events and influencing the future requires mastery, mastering of four ways of looking at things. As they were, as they are, as they might become, and as they ought to be."

• 53:03David Senra?

  Valve is looking at things as, as they ought to be, not as they were, as they are.

• 53:09David Senra?

  And the reason that stuck out with me is because I think as we design products and companies, so think about it, what you're doing for your customers, as what it ought to be like, what should that experience be? Like, don't think of like, oh, this is how somebody else did it, is doing it now or did in the past, like, no, no, rethink it. The most common example of this is when Steve Jobs was designing the iPhone, he didn't say, hey, what should our keyboard look like? He said, no, what should a mobile device be? What should it ought to be? And then design from there.

• 53:40David Senra?

  That, I love that. And so we're gonna see, when he designs Visa, he designs it as it ought to be. And he, in one paragraph, in a few pages from here, I think, he describes all of the barriers that were in his way in one paragraph. And what I love is he didn't focus on the problems or the things he had to overcome. He just focused on how should it, what should it ought to be? What should it be like? What's the ideal situation here? And then kept that in mind and worked towards it.

• 54:13David Senra?

  So before Visa, we're gonna learn a little bit more about the problem. It says, "The complex of committees had but one redeeming quality. It allowed organized information about problems to emerge." Talking about what the card clearing system was before Visa. "It took only two cycles of meeting to realize the problems were enormously greater than anyone imagined." Now, remember, before, Life Magazine said there's tens of millions of losses. Wrong. "Far beyond any possibility of correction by the existing committees or the licensing structure, and growing at an astonishing rate, losses were not in the tens of millions as everyone had thought, but in the hundreds of millions and accelerating." This is hundreds of millions of dollars in 1960s. So it's a huge problem here, and no one really knows how to solve it.

• 54:59David Senra?

  Scattered throughout the book, of course, the main purpose of this podcast is just to give you these ideas, their philosophies on, we're getting like the distilled thoughts that he took a lifetime to come up with, and we get to read it in just a few hours, which I think is amazing. So he has some thoughts, I love this, on one page, it's the difference between a healthy and an unhealthy organization, and then, what is the internal threat to a company? Healthy organizations are a mental concept of relationships to which people are drawn by hope, vision, values, and meaning, along with liberty to cooperatively pursue them.

• 55:37David Senra?

  Healthy organizations educe behavior. Educed behavior is inherently constructive. So that word "educe" is really important, because he uses it a lot in the book, and "educe" means to bring out or develop. And he contrasts that with an unhealthy organization. Unhealthy organizations are no less a mental concept of relationship, but one to which people are compelled by accident of birth, necessity, or force. Unhealthy organizations compel behavior. Compelled behavior is inherently destructive. And this is the internal threat to a company.

• 56:17David Senra?

  Businesses, as well as nations, races, and tribes, die out not when defeated or suppressed, but when they become despairing and lose excitement and hope about the future. This quote, I can't stop thinking about, since I heard Elon Musk talk about it on the Joe Rogan Podcast a few weeks ago, he said something that seems kind of obvious when you hear it, but I think applied, like if we apply that lesson to our own lives, makes life worth living. And he said, "I'd rather be optimistic and wrong than pessimistic and right." And so people always ask, like, "Why are you doing the stuff you're doing? You know,

• 57:01David Senra?

  why don't you just take all the money you made and, you know, enjoy your life?" And he's like, "Life has to be worth, like, there has to be something that makes you excited about getting up every day." And for him, the idea of humanity being a multi-planetary species is like the grandest quest you could go on. So this whole idea of, like, your company dying when you lose excitement about the future, I think excitement about the future, another way to put that is optimism.

• 57:26David Senra?

  Okay, so this is the paragraph that I referenced earlier and it says, "My takeaway from this is you should focus on how your product or company ought to be and nothing else."

• 57:36David Senra?

  And this is, this is how crazy, I can't even get over how he's able to do this. He said,

• 57:44David Senra?

  talking about like creating Visa. "Did I think it could be done? No. It was impossible." "Did I think the Bank of America would give up ownership of the program? No." "Did I think banks worldwide could be brought together in such an effort? No." "Did I think laws would allow it? No." "Did I think anyone would seriously listen to such notions or allow them the light of day even if they did? No." "But I did believe it was what ought to..." But did I believe, but did I believe it was what ought to be? "Ah, that was another question indeed, powerful enough to draw me on." So in his book of aphorisms, he talks about the combination of thinking about things on how they ought to be,

• 58:29David Senra?

  and then dutiful effort, just focusing on that and then working at it a little bit every day. And over a long enough period of time is how you make progress. Okay, so I'm skipping ahead. This is what brought Visa into being. So at the time, he's, he's working, he's a vice president for a tiny bank in the Pacific Northwest. All banks everywhere are having the same problems. They're losing tons of money. Bank of America, it's the largest bank at the time, owns the system. So he approaches them with saying, "Hey, I can, I can think I can solve this problem." It says, "They were accepted in part because no one, self-included, thought it was likely that such an organization could be brought into being." "We could not change the banking laws of a single state, let alone laws of nations."

• 59:09David Senra?

  "We could not change the structure or management of a single bank, let alone thousands in the United States and tens of thousands throughout the world."

• 59:17David Senra?

  We had no money with which to purchase the system from the Bank of America. No money to hire consultants, advisors, or other experts. No money to engage in research or hire employees. We had no power to influence regulators, legislators, or others in political power. Traditional means of approaching the problems were close to us. But we were enamored by the emerging concepts, for there seemed to be no better alternative. I was more than enamored. As one of the participants put it 12 years later in a Harvard case study. He had a passionate commitment to the ideas that bordered on zealotry. Only in hindsight does it become clear as the dawn that the need to rely entirely on the power of purpose,

• 1:00:02David Senra?

  principles, and people was what brought Visa into being. It was no stroke of genius. It was plain old necessity. This is such an important point he's making here. Had we power, capital, position, or influence, we would have undoubtedly have used them in the command and control style in which we had been so admirably indoctrinated. And the command and control style is what's causing a lot of problems to begin with. Without them, we were forced to change of consciousness to conceiving larger, better ideas that could transcend and unfold existing institutions and practices. Four vice presidents of four modest banks could not dominate or compel anyone.

• 1:00:46David Senra?

  They could only explain and induce. And so they did. So he's working with four other people, or three other people at the time. He eventually, when he signs everybody up to the system, they decide, hey, you need to be the one running. Bit by bit, though we could not know it at the time, we were building a foundation on which an extraordinary enterprise would self-organize and evolve. Remember, his fascinating with self-organization goes back to his time in nature as a young child. Unfinished to this day. In retrospect, it seems extraordinary. Excuse me, in retrospect, it seems extraordinary. What was taking shape in our minds and hearts ran contrary to conventional wisdom. At the time, there was no complexity theory. There was no internet. There was no world wide web. There was no alliances.

• 1:01:30David Senra?

  There was no information society. The Soviet Union was the evil empire to the US. And the US was the devil incarnate to the Soviet Union. Both professed to have all the answers.

• 1:01:44David Senra?

  IBM, General Motors, IT&T, and other such hierarchical giants were the epitome of management and the shining path to a bright economic future. Science and technology, with a few tens of billions of more dollars, would see us to the promised land where we would be able to control everything. He's saying that obviously sarcastically, he doesn't believe that at all. A bigger, more powerful central government would solve all of our problems. The world was an ideological battleground, contesting which kind of massive centralized power and wealth best solved societal problems. Only a handful of people questioned whether they ever could, ever would, or ever should.

• 1:02:28David Senra?

  He's obviously one of those people questioning that. And it says, "In the beginning, none of the licensees thought that Bank of America would surrender ownership of a trademark and licensing system that assured them a quarter percent or more of the revenues of every participant in perpetuity." But that's exactly what they did, and why are you going to surrender? Because they're not, that's nice if I can get a quarter percent, but if I'm losing so much to fraud and disorganization, they'll never, they're never going to ever collect any kind of profit. So that's the environment that Visa emerges from. A couple pages later, I just want to, so you have another understanding of this word

• 1:03:13David Senra?

  chaotic. So this is the theology of chaotic organizations. "The theology of chaotic organizations writ simple: Heaven is purpose, principle, and people. Purgatory is paper and procedure. Hell is rule and regulations." So I'm going to skip over a large part because we obviously know that he's successful in convincing these people.

• 1:03:41David Senra?

  To take a chance on a

• 1:03:44David Senra?

  an intentionally decentralized comp organization. It's not even, it's not even really a company yet. But while he's doing this, he's got to convince almost one by one hundreds of banks and then thousands of banks and it continues on and on. As he's doing this, I came across this great quote on sales and persuasion. I had held fast to the notion that until someone has repeatedly said no and adamantly refuses another word on the subject, they're in the process of saying yes and don't know it. So he definitely used that, um, because most people turn him down, but he was persistent.

• 1:04:25David Senra?

  Okay, so now I'm skipping way ahead and this is what becomes his biggest regret.

• 1:04:32David Senra?

  And it's his fight against monopoly and it's, you can clearly see that profit wasn't his main motive because he's arguing against letting the system that he's running, which is NBI Visa and its main competitors, Master Charge, which eventually comes Mastercard. And he's arguing that

• 1:04:56David Senra?

  he's arguing against something called duality, which means basically the, they're structured as owners slash members. So the people that were members of the network were also owners. And he succinctly realizes that if they become member owners of both the two largest payment processors, Master Charge and Bank and NBI, that eventually they'll merge into one monopoly because they have the same owners and he has a fundamental understanding of human nature. And so he winds up fighting against this, uh, which again clearly would damage his profit over the long term because he thinks it's the right thing to do. And he actually gets death threats from this. So it says,

• 1:05:35David Senra?

  "Having come from a relatively poor family, I knew that the economic power of ordinary people arises from freedom of choice and sufficient resources to pursue them. It led me to a strong belief that would, that they would be best served if there were many competing card systems and many competing card issuers within each system." I was deeply convinced that there could and should be many card systems within the consumer banking industry. Remember, that's what he's doing. He wants more competition. He wants less profit. And that because he thinks it's the right thing to do. And that there were ample opportunity for others to emerge in the retail, travel, and communications industries. I was equally convinced that the that complete freedom of banks to become owner slash members

• 1:06:19David Senra?

  of both the Master Charge and Bank of America card systems would foreclose the emergence of new systems and severely limit consumer choice. I was equally convinced that interlocking ownership of Master Charge and Bank of America card would inevitably result in disminishment of competitive vigor between the two, eventual dominance of one or the other, and merger of the two in substance, if not form.

• 1:06:52David Senra?

  So before I tell you the result, because remember, he fails at this. We know that now because we're living with the results in modern day. But during this time, he's getting death threats, unbelievably stressed, because he feels he's doing this because he feels it's right. But if you're an owner member, and like you want monopoly profits, right? If you all you care about is making money. So this is how he dealt with stress before I wrap up on how he winds up failing at the rejection of duality. And it has to do with like a fight with the Justice Department of Justice. So it says, "During dark times, long walks in the woods have always sustained me. This time, I broke the law to do it. The closest open space was the San Francisco watershed. Miles of forested hills bordered

• 1:07:36David Senra?

  Crystal Springs reservoir near where we lived. It was posted everywhere with no trespassing signs. I would walk along the bordering road until there was no sign visible in either direction, pretend they did not exist, excuse myself on the basis of dire need, slip through the fence, and lose myself deep in the woods. There, I would climb for hours, licking my wounds in the hope a solution would appear."

• 1:08:03David Senra?

  A sense that in the great picture of things, my trials and tribulations were of no consequence, would slowly seep into my bones and allow me to face the next week. I've used this as, uh, this tool myself, myself, to try to deal with stress and anxiety in my own life. Where it says, "A sense that in the great picture of things, my trials and tribulations were of no consequence, would slowly seep into my bones and allow me to face the next week." So something I've talked about is a few years ago, my mom was diagnosed with metastatic breast cancer. By the time she got it checked out, it was already, uh, it was already too late. It was stage four and, um, so, and she died young.

• 1:08:53David Senra?

  So obviously, it's gonna be a difficult thing to deal with.

• 1:09:04David Senra?

  And one way I dealt with it was by just realizing that, you know, the loss of a parent is, in the grand scheme of things, like it's the way of the world. I obviously didn't want her to pass away younger, but...

• 1:09:25David Senra?

  But stepping outside of myself and realizing that, you know, people throughout history have to go through these things. And that, um, it's outside of our control. So this whole idea of that, "A sense of the grand picture of things, my trials and tribulations were of no consequence." I wouldn't use the word "no consequence," but it's just, it's realizing that

• 1:09:47David Senra?

  you're not the only one going through these things, I think is the way I would put it, so. So Dee, um, so now we're gonna get to, so Dee understands that, you know, if you're an owner member of MBI and Master Charge, and these are the two largest...

• 1:10:04David Senra?

  And these are two largest payment systems, then like he just said, eventually it's going to monopolize into one. So he has a, in the licensing agreement, he says, hey, you can't, you have to pick one or the other. And so he went to getting sued by some of the members, member owners, and the Department of Justice comes down against that, saying, hey, it's on, you're, it's on, you're trying to limit competition unfairly. And that's, he was trying to do the exact opposite. So we're going to see the battle, the fight that he loses with them. And again, keep in mind, this is his biggest regret.

• 1:10:38David Senra?

  The senior investigator informed us that the vast preponderance of banks had assured them that we, that would, they would never go dual. So this is the senior investigator of Department of Justice, saying, hey, we've talked to the banks that you're worried about, that they're not going to go dual. He reminded, which we obviously knows, that's, that goes against human nature, of course they will. He reminded us that Master Charge, our principal competitor, then larger than NBI, had publicly announced that they did not share our views and had no intention of adopting a similar prohibition. What proof did we have for our conclusions? And this is detalking. Look, I argued, there is never a way to prove a prospective situation. It's not a matter of evidence. It's a matter of judgment. I spent the last seven years intensely involved in the business, working at the heart of how

• 1:11:23David Senra?

  banks act and react. If we withdraw or fail to enforce a prohibition against duality, within two years, you will find it difficult to discover, you will find it difficult to discover a half dozen banks that are not dual owners slash members of both systems. They will be aggressively issuing both cards and within a year or two, within a year or two, questioning why they should support two systems and urging management of both to coordinate their activities.

• 1:11:53David Senra?

  We have a decent chance to roll back duality. If we're successful, we'll see the emerge, this is still detalking, we'll see the emergence of a third and fourth, perhaps fifth and sixth bank card system. For no bank in a given market will then want to issue the same products as a direct competitor, because they, they would just be a commodity at that point. There will be real economic benefit for each bank in a given market to, to belong to and help develop a separate system. So again, he's fighting against his own.

• 1:12:21David Senra?

  If he was just after profit, he's fighting against his own needs. But he clearly thinks that more competition in the system is going to be better for the customer. If we do not prevent duality now, there will never be more than two bank card systems. Pressure to diminish their competitive vigor, perhaps even to merger the two will never end. The precedent will roll over into debit cards and other payment systems. It's not a matter of proof, it's a matter of common sense. That's the end of his quote. So it says, "The labyrinth Department of Justice, like all mechanistic Newtonian industrial age organizations, was fat on data and information and starved for understanding and wisdom. The letter was denied.

• 1:13:03David Senra?

  If we attempted to enforce the bylaw, we could expect to be sued. Strong convictions notwithstanding, subjecting the new organization and its members to antitrust penalties in the face of such a divided industry and in defiance of the Department of Justice seemed impossible. I gave up. After four years of extraordinary expense, effort, and trauma, I recommended to the board that we accept our destiny, withdraw our prohibition on duality, and turn our attention to everything we could to enhance bank-to-bank competition and minimize erosion of competition between the systems. What I told the hanging jury at the Department of Justice proved wrong.

• 1:13:46David Senra?

  The banks didn't take two years to go dual. They did it in six months. Today, there is no third, fourth, or fifth bank card system. Visa and Mastercard are swiftly emerging as dominant debit card systems. To this day, I often have regret I did not screw my courage to the sticking point and fight on. Go down then and there, unbowed and unrepentant. To this day, I wonder if the implied death threats affected my courage and judgment. Whether removing the prohibition of duality was a prudent act or a failure of courage and judgment, I shall never know." And I include that in there because, again, I think if you, from the outside, it's like,

• 1:14:31David Senra?

  "Oh, this guy spent his life, he created this huge successful company, he must be so happy." And you realize that a lot of the book is about struggles and discontent and regret and depression, and something he had to learn the hard way that...

• 1:14:50David Senra?

  Even when we, in his case, I don't even know if he really wanted it, but even when we get what we think we want, it may not actually, like, we're very bad at predicting what's gonna make us happy.

• 1:15:03David Senra?

  And to continue this trend, I want to read to you his surprising conclusion about his work. And now, this is right before, this is after, um, this is after, this is towards the end of the book, and after he retired from Visa, and this is more of that. Because I think his ideas are very valuable to us, we should, we should, uh, we should remember them, we should use them as we see fit in our own world, our own lives and own world. But I don't like this false myth of entrepreneurship that everything is always great. Starting a company, building a product, this is usually very hard work that takes a long time.

• 1:15:43David Senra?

  And as such, you're gonna be exposed to all of the different variations of the human experience, joy, happiness, sorrow, depression, anxiety. You can't have one without the other. So, it's important for us to internalize that, that not only, like, do you feel that way, and I get a lot of emails from you guys saying that, you know, hearing these stories are inspiring, I'm happy to hear that, because they inspire me. And the idea is if they inspire me, most likely, if I take these ideas and talk into a microphone and spread them through the internet, they'll probably inspire you.

• 1:16:17David Senra?

  But, you know, I hope that, as you listen to this podcast, and as we continued, as, like, this project continues to go on, that it's not, it's not all rainbows and flowers. Like, it's, I want it to be, as much as we can, by looking at, like, the entire life experience of a founder, to realize that, you know... You can't have the positives out the negatives and it takes a lot to go through this. So with that in mind, this is his surprising conclusion about his work. Judged by orthodox methods of objective measurement, growth, size, profit, market share and volume,

• 1:16:59David Senra?

  FISA has been a phenomenal success. It would be a lie to deny a strong sense of privilege and substantial pride in presiding at its birth and guiding it to maturity. So he's saying, there's the positive, right? The positive side, it's like, I'm really proud, it was really hard and I'm really glad I did it. But, but other methods of evaluation transcend measurement and objectivity. By the standards of what FISA ought to be, there's that guiding principle of his again, it would be a lie to deny a sense of failure. In spite of my pride and all that FISA demonstrated about the power of the chaotic concept of organization and all the things that it accomplished, I do not believe that FISA is a model to emulate.

• 1:17:43David Senra?

  This is such an important conclusion. It is no more than an archetype to study, learn from, and approve upon. That right there. I love that that is why the ideas in these books are so important. It's not, listen, yeah, take the ideas, but don't just copy, don't emulate, like, study it, so saying it's an archetype to study, learn from, and then improve upon. That's the entire point of collecting ideas. And finally, I just want to read one more part from the book. Comes at the very end and it's a question and I think, um, let's end on and I'll carry with us. Are you going to copy the mechanistic command and control organizations of the past or

• 1:18:28David Senra?

  are you going to innovate and create something new? The more one explores both the bright and dark side of the emergent phenomenon, the more the questions we must answer become apparent. Are we to cling to the archaic, increasingly irrelevant industrial age internal models of reality and the organizations and leadership they have spawned? Or can we consciously understand the chaotic organizational patterns that have existed throughout nature since the beginning of time and are struggling to emerge in societal systems?

• 1:19:00David Senra?

  If you are unwilling to examine your present consciousness, your internal model of reality, your perception of how you were, how you are, how you might become, and how you ought to be, you are making a grave mistake. No one is without influence. Everyone has choices to make about where they will lead and where they will be led. No one is without power to choose wisely and well. After all, if you think you can't, why think?

• 1:19:41David Senra?

  So we'll leave that there.

• 1:19:44David Senra?

  I'm just gonna repeat what I said earlier. I don't think I did a good job. There are so many ideas and so like, I don't even know what to say about this book. Other than like to fully understand it, if you want the full story, you're gonna have to read it and probably reread it over and over again. And that's not to say I don't think the ideas I share with you just now are not valuable. I think they are. It's just, I've never come across this deep level of thinking that is contained in this book when it comes to organization and information and just,

• 1:20:14David Senra?

  it's just amazing to me. And I can see why. Like there's so much if you read the back of the book. It's like the most original and apt approach to organizing we have been offered so far. It clearly fits the must-read, must-absorb category for leaders in every sector. You've got all kinds of people talking like, the praise of this book is insane because it's so different.

• 1:20:36David Senra?

  I'm still left scratching my, even after reading, I've read two of his books this week and I'm still, like it's like I'm on the tiniest tip of a giant mountain of knowledge that this guy has. So if you want the full story, I left a link in the show notes. You can buy the book and support the podcast at the same time.

• 1:20:55David Senra?

  And if you want to see all the books that I've read for the podcast so far and you want to support the podcast, and you can also see next week's book, excuse me, go to founderspodcast.com forward slash books and you can get all the books there. I just presented this entire podcast. Remember founders podcast is ad free and independent. So if you, if you're learning, if you like the ideas, if you want this project to continue, if you explicitly want to say, hey, I want to see more things in the world like this, go to founderspodcast.com forward slash support. There's be links in your podcast player too. You can click directly from there. You can sign up to be a member. It's really, really fast. You sign up once you, and then you get

• 1:21:39David Senra?

  access. Not only do you make sure that this podcast stays independent and exists, but I do extra bonus members, members only podcasts every week. So right now, if you sign up today, you would automatically unlock six of them that I've done in the past, and I add to that every week. And like I said at the beginning of the podcast, now that it has its own podcast feed. So you sign up and every Monday, you'll see not only the main founders feed updated, but the founders, members only feed updated automatically. So then you can listen to it just like you would any other one. Such a better experience. I've been testing it out myself. And again, appreciate the people that gave me that feedback on that. And then something else that is really important, if you want, if you want to do a max level supporter of the

• 1:22:24David Senra?

  podcast, say you say, David, I really like these ideas. I like what you're doing here. Sign up to become a founders member and then sign up to become a fade paid, paid member, excuse me, of founders notes. Go to foundersnotes.co. There's also a link in your show, show notes, you can, you can tap on in your podcast player. But just like I think there's valuable information in the history of entrepreneurship, which is comes from these books. I think there's a lot of valuable information currently happening right now. And the way to, so founders podcast is going to cover all the historical knowledge of founders. Well, what about the present day

• 1:23:02David Senra?

  There's tons and tons of podcasts out there about entrepreneurship. Most of them take the form of interviews. There's so many that it's impossible for you to listen to them all. So what I do is I listen to a lot of these. I pull out the key ideas and I email them into tweet-sized bits of knowledge that you can read rather quickly. And what I'm doing now is, for the past few weeks, I've done about five to six, I think, on each email, maybe five every time, different podcasts. I'm expanding that out because I want to make founders' notes as comprehensive as possible. I want it, it comes in your email every Sunday.

• 1:23:41David Senra?

  And, you know, it's, I want it to be a way to understand and have a pulse on what are the thoughts of entrepreneurs that are still operating right now, today. And I find these ideas valuable. You probably do too, because you're listening to this podcast right now. So if you don't have the time to listen to all of them and take notes, you might as well sign up and let me do it for you. So far, the open rates, people are not only reading it, but they're going back and opening it over and over again. The feedback I've been getting is really fantastic. I want to invest more time and energy. Eventually, I want this to become a small company where other people can help me do this.

• 1:24:21David Senra?

  Because I think this knowledge that's buried in all these dozens or so podcasts are valuable. And I think getting the key ideas to you in a way in which it's convenient and easy to read is valuable. And I think the ideas that are contained inside that email every week is well worth what it actually costs. So it'd mean a lot to me if you would go to sign up. And if you want to test it out first, you can go to foundersnotes.co and sign up and you'll see the free version, which is going to be basically maybe 10 to 20% of what the full version entails. I don't know the exact percentage yet, but let's say 10 to 30%, something like that.

• 1:25:06David Senra?

  So it gives you a good idea of what to expect. And inevitably, I think you'll find value in there. And when you do, please upgrade and subscribe. It's a great way to support this podcast. And other than that, I'm going to give my voice a rest so I can be back next Monday with another podcast. Thank you very much for the support. Thank you very much for listening. Oh, another thing before I go. If you want, uh, so I have a, I do podcasts, as you probably know, for people that leave reviews, right? So before I said, hey, if you listen on a podcast app like Apple Podcasts where you can leave a review, screenshot that and then email it to foundersreviews@gmail and I would reply back with, uh, these, these podcasts I make that are available nowhere else. So far I've done one on

• 1:25:47David Senra?

  Steve Jobs that has stories I've never heard anywhere else. Another one on Max Levchin, the, uh, the, he talks about the founding of, Max has an interesting perspective. Imagine working with Peter Thiel and Elon Musk before they were Peter Thiel and Elon Musk. Well, that one, before I would just email you the links. Uh, not only do you get the two I've already done, but as I do more in the future, if you just leave, if you send the review to [email protected], uh, for a minute of your time, you get hours of work from me in perpetuity. Well, now, instead of the email, now I also have a dedicated, uh, podcast feed for that. So they'll automatically update. So if you, everybody that's left a review, I've emailed them personally and they, they have this feed now.

• 1:26:30David Senra?

  But if you're, you haven't yet, um, take a review, or leave a review, take a screenshot, send it. If you, if you use an app like Overcast or Breaker, these other apps that don't have reviews, but have a way to recommend, like they have, some have likes, some have stars. Well, if you do that, star or like any episode, show, uh, take a screenshot real quick, email to foundersreviews.com. I will, email foundersreviews.com, email to, to [email protected]. Ugh, I gotta be able to talk today. And I will reply back and give you access to that RSS feed. You'll immediately unlock the two podcasts I've done and automatically update on your podcast player, uh, the ones I do in the future. And again, I appreciate, it's very helpful for other

• 1:27:14David Senra?

  people to see those reviews, to see if founders is worth their time or not. All right. I gotta rest my voice. I will be back next week. Thank you for all the support and, uh, hopefully I didn't mess this podcast up too much.