“All families in my upper middle–class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth.”
—Warren Buffett, 2015 Letter to Berkshire Hathaway Stockholders
In the last chapter, we covered the Dow Jones Industrial Average and other companies you should know a little something about in order to be considered financially literate. Otherwise, businesspeople might view you like someone who recently arrived from Mars—that is, a person pretty clueless about business and the financial markets. This chapter focuses on some important business leaders (past and present) that you should know. Knowing who these men and women are will provide you with a greater understanding of how our present-day economy came to be and where it might be going. George Santayana, a famous philosopher of the 19th and 20th centuries, said, “Those who cannot remember the past are condemned to repeat it,” so that's another reason not to zone out on this chapter.
We'll organize the chapter into two big segments, past business leaders and present business leaders, similar to a business “Hall of Fame.” How does this all tie in with Buffett? Well, Buffett knows or has commented on many of the business leaders we'll discuss. Many of the living businesspeople that we'll discuss have also signed the Giving Pledge. There are a handful of nuggets in this chapter that we'll turn into Buffett Tips. Let's get started.
Alexander Graham Bell is generally credited as the inventor of the first telephone, although there is some controversy surrounding this claim. Bell founded the Bell Telephone Company, which eventually morphed into AT&T. AT&T dominated the telecommunications industry in the US until the government ordered its breakup in 1982. Martin Cooper of Motorola is credited with inventing the cell phone, in case you were wondering.
We've mentioned Rose Blumkin (Mrs. B) a few times in this book. She built Nebraska Furniture Mart (NFM) into the largest furniture store in the country and ultimately sold her business to Berkshire. She worked until she was 103 years old and was one of NFM's best salespeople, in addition to running the business. Buffett regards her as one of the most talented business executives of all time. Buffett met with hundreds of college students each year for decades—John went several times—and included a visit to the NFM as a key part of the itinerary. In his 2013 Letter to Shareholders, Buffett wrote, “Aspiring business managers should look hard at the plain, but rare, attributes that produced Mrs. B's incredible success… . If they absorb Mrs. B's lessons, they need none from me.” That's a pretty powerful endorsement. Let's use one of Mrs. B's most famous quotes: “Sell cheap and tell the truth” as our next Tip. We know Buffett would approve.
Andrew Carnegie was known as a steel baron and philanthropist. His steel holdings, with the help of financier J.P. Morgan (discussed below), were eventually consolidated into US Steel, the first billion-dollar corporation in the US. His charitable efforts resulted in the creation of thousands of libraries around the world, as well as the highly ranked Carnegie Mellon University (then called Carnegie Tech) in Pittsburgh, Pennsylvania.
Walt Disney began his entertainment career as a cartoonist, with Mickey Mouse being his most famous creation. He not only developed a very successful movie business but also expanded into the theme park business in a big way. Disneyland opened in California in 1955 and since then, several more enormous Disney theme parks and resorts have opened around the world. Disney is probably the person most associated with family entertainment, that is, forms of entertainment rated G or PG that delight kids and adults alike. As we mentioned in the last chapter, Disney is a member of the Dow.
Thomas Edison is known as perhaps the greatest inventor who ever lived, obtaining patents on the light bulb, phonograph (record player), motion picture camera, and more than a thousand other items. He founded the company, with the help of financier J.P. Morgan, that evolved into General Electric (GE), which was one of the 30 stocks in the Dow Jones Industrial Average for more than 100 years, until its removal in 2018. Another GE executive, Jack Welch, who died in 2020, was regarded as one of the most successful corporate executives of all time, helping turn GE into one of the most valuable stocks in the world at the time of his retirement in 2000.
Henry Ford didn't invent the automobile (that distinction generally goes to Karl Benz of Daimler/Mercedes Benz), but he helped mass produce the car using assembly-line techniques. That is, each worker was responsible for adding a single or small number of parts to the car, such as a tire. Ford, with his Model-T car, made the automobile affordable to the masses, forever changing the world of transportation. Ford is probably most responsible for putting the “buggy whip” (i.e., a horse-drawn carriage) largely out of business, to the benefit of horses everywhere.
Katharine Graham was the first female CEO of a Fortune 500 company, The Washington Post. During her tenure leading The Washington Post from 1971 to 1991, its stock returned 3,315% vs. a gain of only 227% for the Dow. Graham played an important role in helping Buffett improve his social skills and provided him with an introduction to a “Who's Who” of business and government leaders around the world. Buffett strongly recommends reading Graham's book Personal History. It details her personal story of being thrust into running The Washington Post after her husband's suicide, her doubts as an executive, and her ultimate triumph. Sounds like a great Lifetime movie, except it's all true.
William Randolph Hearst, for a time, ran the largest newspaper and magazine business in the world. He was active in business from the late 1800s to early 1950s. At one point during the 1920s, one in four Americans read a paper owned by Hearst. His organization also published magazines that are still popular today, including Cosmopolitan, Harper's Bazaar, and Good Housekeeping. The articles in his papers weren't always of the highest standards and were often called “yellow journalism” by critics, a reporting technique based on speculation and half-truths. One of his famous and most criticized quotes was “You furnish the pictures and I'll furnish the war.” Many of the articles in his papers were like a combination of the National Enquirer or TMZ plus The Washington Post. But his newspapers also conducted some serious journalism, such as uncovering corruption in many instances. The classic movie, Citizen Kane, is loosely based on the rise and fall of Hearst.
Steve Jobs was co-founder (with Steve Wozniak) of Apple, which played a major role in ushering in the personal computer age. Before Apple, most computers were used for business purposes and were large enough to fill up a room. Apple also played an important role in popularizing the graphical user interface (GUI) used in most computers today. The GUI relies on icons or pictures, rather than memorizing and typing commands. We'll make a long story short. Jobs was fired from Apple (by its board of directors) in 1985, but he returned to lead the company in 1997. There's a pretty good Ashton Kutcher movie (Jobs, 2013) on the subject if you're dying to know the full story. Another movie (Steve Jobs, 2015) isn't quite as good, at least according to the Jobs family. Jobs led the development of a slew of revolutionary products including the Mac, iPod, iPad, and iPhone and helped turn Apple into, at one point, the most valuable company in the world. If that's not enough of an accomplishment, he also founded and led Pixar, an animated film studio, that he sold to Disney for $7.4 billion in 2006.
Ingvar Kamprad was the Swedish founder of IKEA, a large, high-quality discount furniture store. Like Buffett, Kamprad favored frugality, simplicity, and enthusiasm. As an example, much of IKEA's furniture is shipped unassembled. This not only results in lower prices but also allows the boxes that contain the furniture to be relatively flat. Shipping costs are lower, and IKEA's stores are able to hold a large amount of inventory. Customers can leave with their furniture loaded in their car, SUV, or pickup truck and not wait weeks for delivery. IKEA aims to make the assembly of their furniture relatively easy, having less customers dread the phrase “Some assembly required.” Like Buffett, Kamprad was often ranked among the richest people in the world and lived a fairly plain existence. For example, despite his multi-billionaire status, Kamprad drove a 1993 Volvo for two decades, shopped at flea markets, and flew coach when traveling. Even Buffett will skip on that last item!
Ray Kroc didn't found McDonald's. That distinction belongs to the McDonald brothers, Maurice and Richard. Kroc eventually bought them out, with some controversy, as depicted in the movie The Founder. However, Kroc helped popularize the fast food industry and turned McDonald's into the biggest restaurant chain in the world. Most McDonald's restaurants are franchised, rather than company owned. Franchised means an independent owner follows the business approach set up by the company (McDonald's in this case) and pays the company (McDonald's again in this case) a percentage of its sales. McDonald's also makes a good chunk of its money from real estate, since the franchisee usually pays rent to McDonald's for its store. This aspect of McDonald's goes to a main point on financial literacy: understanding the business model of a firm, which is how it makes money. Like Disney, McDonald's is a Dow 30 stock.
If you've ever walked by a cosmetics or fragrance counter in a department store, you've must have seen some of Estee Lauder's products. Estee Lauder co-founded the cosmetics and fragrance firm that bears her name. She was the only woman on Time magazine's 1998 list of the 20 most influential business geniuses of the 20th century. For a time, she was the richest self-made woman in the world. She was especially known for her marketing skills and popularized the now common practice of giving a free gift with the purchase of a cosmetic or fragrance product.
We mentioned J.P. Morgan earlier in the book as the founder of what today is known as JPMorgan Chase & Co. He also beared a strong resemblance to the banker in the game Monopoly. The central bank in the US, the Federal Reserve, was created in 1913. Before that time, if there was a recession, then often known as a panic, the government relied on powerful bankers, such as Morgan, to bail the country out. For example, Morgan was widely credited with ending the Panic of 1907. He also played a key role in creating some of the largest companies in the world at the time through mergers and raising capital. Morgan had a big hand in the creation of three firms we previously mentioned, AT&T, General Electric, and U.S. Steel. The Rothschild banking dynasty in Europe is probably the only other family that rivals the power that J.P. Morgan had at his peak.
We came across John D. Rockefeller, perhaps the richest person in modern history, in Chapter 5 in the context of his quote on his love of receiving dividends. Rockefeller created the largest corporation in the world at the time, then known as Standard Oil. The firm controlled much of the oil industry in the US, especially on the refining side, until it was forced to break up into 34 separate companies. The main Standard Oil component that remains today is known as Exxon. Other Standard Oil “siblings” include Mobil (which has since merged back with Exxon), Chevron, and Amoco.
Buffett had a profound thought on John D. Rockefeller and the standard of living that most Americans enjoy today. He said due to the advances in technology, health care, farming, and so forth, even middle-class Americans live better in many respects than the perhaps the richest person ever. We have better health care, cars, phones, food, airplanes, computers, televisions, and thousands of other items that either didn't exist in Rockefeller's time or were of poorer quality.
In his 2015 Letter to Shareholders, Buffett wrote:
All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth. His unparalleled fortune couldn't buy what we now take for granted, whether the field is—to name just a few—transportation, entertainment, communication, or medical services. Rockefeller certainly had power and fame; he could not, however, live as well as my neighbors now do.
According to Buffett, it's the American system of commerce and innovation that provides real gains to its citizens over time, and it explains why most of us are fortunate to live better than the world's first billionaire. He also wrote in the same 2015 Letter, “For 240 years it's been a terrible mistake to bet against America, and now is no time to start. America's golden goose of commerce and innovation will continue to lay more and larger eggs.” Let's summarize Buffett's powerful thoughts on Rockefeller and the American economic system with a Tip.
Cornelius Vanderbilt, who had the nickname Commodore, made a fortune in the shipping and railroad industries during the 1800s. By some estimates, he'd have a net worth of more than $200 billion today—more than Buffett, Gates, and Bezos, after adjustments to present-day dollars. Before there were automobiles and paved highways, railroads were the dominant form of transportation that helped power the economy, and Vanderbilt was the biggest railroad baron of his time.
Sam Walton was the founder of Walmart, the largest retailer in the world. Fortune magazine ranks the top 500 firms in the US by revenues in an annual list known as the Fortune 500. Walmart has topped the list for the past several years, even though Microsoft, Amazon.com, Apple, and other firms have a bigger market cap. Not too long ago, Walmart was a small-fry company run out of Bentonville, Arkansas. The name of the firm comes from part of Walton's last name as well as Walmart's larger competitor at the time the firm was founded, Kmart. Sears was also a much larger firm and a Dow 30 stock when Walmart was founded back in 1962. Walmart helped pioneer the “superstore” concept and provided its customers with low prices on a wide range of goods. It too, of course, is a Dow 30 stock today.
Thomas Watson Jr. helped turn IBM into the most powerful computer company in the world from the 1950s through the 1970s. It had great success selling computers to businesses and governments, as well as to individuals, after the personal computer revolution was ignited by Apple. IBM still has a large business presence today but has since been eclipsed by Microsoft, Facebook, and Alphabet (Google) in the technology world. It still remains a Dow 30 stock. Watson had some struggles as a student but was admitted to Brown University as a favor to his father, Thomas Watson Sr. Buffett is fond of quoting Watson, who said, “I'm no genius, but I'm smart in spots, and I stay around those spots.” It's a slight twist on Buffett's circle of competence belief and one that we think is worthy of a Tip for all of us non-geniuses.
Companies that completely dominate their industries aren't easy to come by. They arrive perhaps a few times in a generation. Companies that would fall, or fell, into this category include IBM in the 1950s–1970s, Microsoft in the 1980s–present, Intel from the 1980s through the early 2000s (until the smartphone began its rise), Google 2006–present, and Facebook 2012–present. Alibaba and Tencent also have very powerful positions within their industries in China today.
Bernard Arnault is the chairman and CEO of LVMH Moët Hennessy—Louis Vuitton SE (LVHM). If you want to flex your wealth, sporting some Louis Vuitton is one way to do it, since they are perhaps the most premier luxury goods firm in the world. Their popular brands, besides Louis Vuitton, include Christian Dior, Fendi, and Dom Pérignon. LVMH is in a battle over acquiring Tiffany, one of the preeminent jewelry firms in the world. Arnault is currently worth over $80 billion, making him one of the richest people in the world.
Mary Barra is CEO of General Motors (GM), one of the oldest and largest car companies in the world. GM's brands include Cadillac, Chevy, Buick, and GMC Trucks. Mary Barra is revered for her approach to dealing with a crisis. She was dealt a bad hand when she took over as CEO of GM. The company admitted to sweeping under the rug a problem with faulty ignition switches on hundreds of thousands of its cars. The faulty ignition switches could result in the car engine shutting off while driving, preventing the airbags from inflating in the event of an accident. At least 100 people died from this severe mechanical problem with GM cars. Barra publicly acknowledged the problem, apologized, and recalled a massive 30 million cars. GM was able to move on from the scandal and provided an example, albeit belated, on how to deal with product recalls.
In his 2005 Letter to Shareholders, Buffett dispensed some advice on how to deal with a problem. He wrote, “When a problem exists, whether in personnel or in business operations, the time to act is now.” Barra followed Buffett's advice as soon as she took over as GM's CEO, and this advice is certainly Tip worthy.
Better yet, try to prevent mistakes from happening. Hurricane Katrina devastated the New Orleans region of Louisiana in 2005. It was one of the worst hurricanes ever to hit the US, resulting in the loss of 1,800+ lives and an estimated $125 billion worth of storm damage. Places near or below sea level are often protected by a type of floodwall designed to withstand water surges called a levee. It obviously failed for New Orleans when Hurricane Katrina barreled into the city. In Buffett's 2005 Letter to Berkshire Shareholders, he wrote, “The time to have considered—and improved—the reliability of New Orleans's levees was before Katrina.”
Buffett suggests that you should be aware of your likelihood to make certain mistakes or to be exposed to certain risks and then you should think of a plan in advance to reduce the negative effect. For example, maybe you are prone to impulse buying on something you don't need, are tempted to put all your money in a single risky investment, or are in a situation that can lead to trouble. Follow your Inner Scorecard to try to resist mistakes that may arise from peer pressure. If you are prone to impulse buying, do your best to make sure it's on something that you can return quickly without penalty. In advance of any purchase, try to have a written plan for the type of investments that make sense and a risk management plan for reducing the losses.
We've discussed Amazon.com several times in this book. The founder of this incredible company is Jeff Bezos. Amazon started out a seller of books on the Internet and billed themselves as “The World's Largest Store.” Eventually they expanded the business to sell almost everything on their website. And with their purchase of the organic grocery store Whole Foods, Amazon has moved into the physical retail store business—known as a brick-and-mortar store in Wall Street speak—as well. They've also started to roll out their own branded Amazon stores. They are piloting cool technologies such as cashierless stores that allow you to avoid waiting in line, everyone's least favorite part of shopping. Amazon also powers many of the most widely visited websites in the world, such as Netflix, through their Amazon Web Services unit. And their home speaker Echo/Alexa is likely to morph within your lifetime into a true virtual assistant that can answer many of your questions.
Buffett regards Jeff Bezos as the best business executive of the current generation. He praised Bezos for building a business that delights the customer. In speaking to a group of small business owners, he said, “Bezos set out every day to delight his customer by fast delivery, by lower prices, whatever it took… . And today, he is thinking about how to delight his customer.” Let's turn this thought into a Tip.
Richard Branson is a billionaire businessman best known for two things—his Virgin brand of businesses and feats of adventure. Let's start with the adventure part first, since it's more exciting. In 1991, he set a record crossing the Pacific Ocean in a hot air balloon. He also crossed the Atlantic Ocean on a separate trip and set a record crossing the English Channel, the body of water that separates England from France, in an amphibious vehicle. That is, something that can both drive and float. He also currently owns Virgin Galactic, a firm with the goal of flying passengers in outer space. His firms include(d) Virgin Records, Virgin Mobile (a cell phone company), and Virgin Atlantic Airways (an airline). Branson battled dyslexia and poor grades as a young person before achieving his incredible business success. At last count, he had a net worth exceeding $4 billion.
Michael Bloomberg may be best known as the former mayor of New York City, which he led from 2002 to 2013. He also vied for the Democratic presidential nomination in 2020 but didn't make the cut. He made most of his $50+ billion fortune as the founder of Bloomberg L.P., a business information and media firm. A “Bloomberg machine” can be found on most Wall Street trading desks, and Bloomberg TV/radio are popular business channels/stations. A Bloomberg machine provides an efficient way to get data, analytics, news, and messaging on one platform. It also acts as a tool to do trading for many of its customers, especially in the bond market. If you work on Wall Street one day, we think it's a good bet that you'll have a Bloomberg machine on your desk or at least one shared machine in your department. Mike Bloomberg's story also provides a lesson in perseverance. He was laid off (i.e., asked to leave) due to a slowdown in business from his prior job at the Wall Street investment bank Salomon Brothers before starting his eponymous company.
Sergey Brin and Larry Page are the co-founders of Google, now known as Alphabet. There were lots of search engines before Google came on the scene. There was Yahoo! and MSN Search / Bing (Microsoft) as well as names that now are somewhat obscure, such as Alta Vista, Excite, Infoseek, and Ask Jeeves. Google won out because it had the best product. Brin and Page started the company while graduate students at Stanford University. The Internet revolution provides a great example of the fact that young people can literally change the world. Sundar Pichai is currently the CEO of Alphabet and also a person to watch in the decades ahead.
Another one of Buffett's biggest investment regrets is not buying Google's (now Alphabet's) stock, even though he was an avid user of the company's search engine. Although Buffett usually stays away from technology stocks, he understood that Google had elements of a natural monopoly. A natural monopoly means there is one seller of a product and the advantage happened naturally (i.e., through the quality of a company's product(s) and its business acumen), as opposed to government regulation. Of course, Google isn't the only search engine, but it has roughly 80% market share in the US, so it's close enough.
Buffett said during his 2017 shareholders meeting, “Just imagine having something every time to just hit a click, you know, a cash register rung somewhere out in California. So it was and is an extraordinary business and it has some aspects of a natural monopoly. I mean, it's very easy for me when I go to a computer.” Let's turn Buffett's investing mistake on Google into a Tip.
Shawn Carter, Beyoncé Knowles-Carter, Sean Combs, and Andre Young started out as musicians. You likely know them better by their “stage names” of Jay-Z, Beyoncé, P Diddy (or Diddy or Puff Daddy), and Dr. Dre, respectively. Beyoncé Knowles-Carter, who is married to Jay-Z, is so famous that she only needs to go by her first name, like Cher or Madonna. It may surprise you that these artists made most of their money in the business world and not by selling records. All are on the path to becoming billionaires and some, such as Jay-Z, already are.
Jay-Z's business empire include(d) a record company (Roc-A-Fella Records), clothing line (Rocawear), sports agency (Roc Nation Sports), alcoholic beverage firms (D'Ussé cognac and Ace of Spades Champagne), and a subscription-based music streaming service (Tidal). Jay-Z did meet with Buffett on at least one occasion to listen to the oracle's advice on building a successful business. Beyoncé is another hugely successful musician (Destiny's Child, Beyoncé), actress (with Austin Powers in Goldmember), and businessperson in her own right. She has an ownership stake in two clothing lines, House of Deréon and Ivy Park, as well as in Tidal. She also has a very successful fragrance line, Heat, and endorsements for Pepsi, American Express, Nintendo, L'Oréal, and many other firms.
Sean Combs earned his business stripes not only from a successful music career but more significantly through his business interests. Combs Enterprises is, or has been, owner of a clothing and fragrance line (Sean John), record company (Bad Boy Records), and spirits company (Cîroc Vodka). Dr. Dre scored his biggest business win when he sold Beats, a headphones company he co-founded, to Apple for $3 billion in 2014. His record company, currently known as Aftermath Entertainment, has played a large role in the success of other superstar musicians, such as Snoop Dogg, Eminem, and 50 Cent.
Tim Cook is the Chairman and CEO of Apple, which is among the most powerful companies on the planet. Under Tim Cook's watch, Apple at one point became the most valuable company in the world, valued at more than $2 trillion. Tim Cook used to run the operations part (i.e., day-to-day and nuts and bolts) of the business and was put in charge by Steve Jobs after he became terminally ill.
Jamie Dimon, chairman and CEO of JPMorgan Chase & Co, is probably the best-known financial services executive today, other than Buffett. Dimon steered his company through the Great Recession of 2008–2009, perhaps better than any other banking executive in the world. However, it hasn't always been smooth sailing for Dimon. In Chapter 15, we're going to talk about careers, networking, and mentoring. A mentor is someone who provides advice and is helpful to your career. Dimon had a great mentor in Sandy Weill for many years but ultimately got in a conflict with Weill and was fired by his mentor. However, Dimon eventually rebounded and led JPMorgan to new heights. Like Buffett, he writes a widely read, detailed letter for his shareholders each year.
Jack Dorsey may be the closest thing we have today to Steve Jobs, an executive running two very high-profile companies that he co-founded, Twitter and Square. Twitter, of course, is the wildly successful social media platform that has, in some respects, replaced the newspaper. President Trump is a big fan of the service and his tweets often roil the financial markets. Square produces a hardware/software product that allows small vendors to accept credit card payments. Dorsey also made headlines for donating $1 billion in 2020 to fight COVID-19 and to support a number of other worthwhile ventures.
Bill Gates is usually ranked among the richest people in the world—$110+ billion at last count, along with Buffett and another person on our list, Jeff Bezos of Amazon.com. Gates is the co-founder of Microsoft. The other co-founder was a lower profile billionaire by the name of Paul Allen, who left working at Microsoft on a day-to-day basis in 1982. If you're a sports fan, you may have known Paul Allen as the owner of the Seattle Seahawks in the NFL and Portland Trailblazers in the NBA. He passed away in 2018. Steve Ballmer was one of the early employees of Microsoft and was CEO for many years after Bill Gates stepped down from day-to-day management of the firm. He is currently owner of the Los Angeles Clippers NBA team.
Bill Gates is good friends with Warren Buffett, and Buffett has volunteered to donate most of his money to Bill Gates's charitable foundation. We'll discuss this enormous and generous gift further in our last chapter, on philanthropy and charity. They both co-founded the philanthropic organization that we mentioned in Chapter 1, the Giving Pledge.
Reed Hastings is co-founder of Netflix, the huge online video service. Many families have quit their cable providers (“cord cutters”) making Netflix a growing force in the entertainment industry. For many, Netflix, Google's YouTube, and Amazon's Prime Video are their TV. Netflix's original business model was renting DVDs through the mail, but now most of their customers stream content over the Internet. Legend has it that Hastings started Netflix since he was upset paying late fees for a movie rental (Apollo 13) that he didn't return promptly. The rest is history. Creating a better or more customer-friendly product is the recipe for many successful businesses. Netflix has branched out to creating original movies and TV shows making it a competitor of Disney, AT&T/Time Warner, and other media companies.
Kylie Jenner built a cosmetics empire using her and her family's social media presence as a key marketing engine. She became the youngest working billionaire in history after Coty, a large cosmetics firm, purchased a majority stake in Jenner's cosmetics business. You may know Robyn Fenty better by her middle and stage name, Rihanna. Like Jay-Z, Beyoncé, P. Diddy, and Dr. Dre, she used fame garnered from her musical talents to expand into the business world. Like Jenner, Rihanna has a thriving cosmetics and fashion business. She is reported to have a net worth of at least $600 million while still in her early 30s. That figure would be way ahead of where Buffett was at that age, even when adjusted for inflation.
Phil Knight is co-founder and former chairman and CEO of Nike, the largest athletic shoe (i.e., sneaker) and apparel company in the world. In case you are wondering where the name Nike came from, Nike was the ancient Greek goddess of victory. A cool name for an athletic company, in our view.
After you finish reading this book, we strongly recommend that you check out Phil Knight's fascinating autobiography, Shoe Dog: A Memoir by the Creator of Nike. It may surprise and inspire you to learn that the firm was far from an overnight success. Phil Knight started his business as an importer of Japanese sneakers that he sold out of the trunk of his car at track meets. Eventually, he turned this reseller of sneakers, then known as Blue Ribbon Sports, into Nike. Of course, we know how the story ended—a humongous success!
Jack Ma, Pony Ma (no relation), and Robin Li are co-founders of three of China's largest tech companies—Alibaba, Tencent, and Baidu—respectively. We briefly mentioned them in the last chapter on important companies in today's global economy. China is currently the second-largest economy in the world, as measured by GDP, behind only the US. Since China has a population of roughly 1.4 billion people and it is using the technology found in most developed markets, as well as educating its citizens, it is poised to surpass the US in total GDP terms within our lifetimes. And these three gentlemen, through their firms, are shaping the way China will look in the years ahead.
Rupert Murdoch is the Australian-born founder and co-chairman of News Corporation. He is one of the most successful news and media professionals with a net worth in excess of $15 billion. You may know News Corporation best for their Fox TV channels and 20th / 21st Century Fox film units. As we noted in the last chapter, the bulk of the entertainment part of the business was sold to Disney. In Europe and Asia, they were also well known for their cable TV company, Sky, which is now owned by Comcast. News Corp is also one of the largest newspaper publishers in the world. Their best-known paper is The Wall Street Journal, but they also publish a number of other popular papers including the New York Post and The Sun. Real estate fans may also know News Corporation as the owner of the popular website realtor.com.
Elon Musk first became widely known to the business world as one of the founders of PayPal, a firm we came across in our discussion of electronic payments in Chapter 3. Today Musk is better known as co-founder and CEO of Tesla, a pioneering electric car company. Musk is also the founder of SpaceX, a firm that blasts rockets and satellites into space for corporate and government customers. SpaceX has a much more ambitious goal—to colonize Mars! Don't laugh, it may happen in your lifetime. Musk and Bezos are probably the two most visionary business leaders in the world today, taking over the mantle from the late Steve Jobs, whom we discussed earlier in this chapter.
Amancio Ortega is the Spanish founder of Inditex, a multinational clothing company, and he's also one of the richest people in the world. He recently had a net worth of $65 billion, putting him in Buffett's, Gates's, and Bezos's territory. Zara is perhaps the best-known retail clothing chain in Ortega's empire. Ortega's contribution to the business world falls under the heading of “fast fashion.” No, it's not the clothing wear of former Olympic sprinter Usain Bol:-). It refers to getting clothing from the headlines (e.g., a star wearing a certain outfit) into the store very quickly. By quickly, we mean Zara can develop a new product and get it into a store in as little as one week, in contrast to the several months it takes most companies.
Howard Schultz is the founder and former chairman/CEO of Starbucks, the world's most popular coffeehouse chain. Schultz helped develop the “Starbucks experience”—a cool place to hang out, socialize, and do work. He came up with the concept after being inspired by Italian coffee shops during a trip to Milan. In contrast, at many restaurants most people just eat and leave. Most Starbucks location have Wi-Fi and swanky furniture, providing an inviting atmosphere. This cool vibe allows Starbucks to charge high prices for its coffee, while still getting repeat business.
Oprah Winfrey was once the most widely watched talk show host on the planet. Her show, The Oprah Winfrey Show, dominated its time slot—the main way people watched TV before the days of binge watching—for more than 20 years. However, she turned herself into a billionaire by becoming a media and sales mogul. She started out as an employee of the talk show company but became so successful and powerful that she eventually set up her own company, Harpo Productions (Harpo is Oprah spelled backward), that owned the talk show.
When she retired from the daily talk show business in 2011, she hosted a series of TV specials and focused on developing her media empire, including a magazine (O, The Oprah Magazine), website (Oprah.com), satellite radio station (Oprah radio), and cable network (Oxygen) and co-produced two other enormously popular talk shows that she helped launch (Dr. Phil and The Dr. Oz Show). If that's not enough, she was also a contributor to the highly regarded weekly news program 60 Minutes and is (a roughly 10%) owner of Weight Watchers International, a weight management services firm.
Mark Zuckerberg is co-founder, chairman, and CEO of Facebook, the largest social media firm in the world, with over 1.2 billion active daily users. He started the business out of his dorm room at Harvard and later dropped out of college as his business took off. Bill Gates did the same thing a generation or two before Zuckerberg. Normally, we wouldn't encourage you to drop out of school, but if you're on the path to becoming a billionaire, we'll give it a thumbs up:-). In the prior chapter, we also mentioned that Facebook also owns Instagram, Facebook Messenger, and WhatsApp.
Sheryl Sandberg is the chief operating officer of Facebook, running the firm on a day-to-day basis. Before she joined Facebook in 2008, she was an executive at Google. When Sandberg joined the firm, Facebook was losing tens of millions of dollars a year. Today it is making more than $15 billion a year. She is also author of the bestselling book Lean In: Women, Work, and the Will to Lead. It's a highly acclaimed book that gives advice, especially to women, about succeeding in business.
Of course, there are tons of other important business executives, past and present, but this list provides you with a good start. A fun exercise might be to peruse the lists of the Bloomberg's Billionaire's Index, the Forbes 400, and Nobel Prize winners. The stories of these men and women may inspire you. There are other people worth mentioning such as Satoshi Nakamoto, the pseudonym of the inventor(s) of Bitcoin, but his/her/their identity is currently unknown.