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i hope you enjoy this episode on Estee Lauder she's one of my favorite entrepreneurs it's the third time I've read her autobiography business is not something to be tried on it's not a distraction not an affair not a momentary flame
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business marries you you sleep with it eat with it think about it much of your time it is in a very real sense an act of love if it isn't an act of love it's merely work not business what makes a successful entrepreneur is it Talent
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well perhaps although I've known many enormously successful people who are not gifted in any outstanding way not blessed with particular Talent is it then intelligence certainly intelligence helps but it's not necessarily the
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education or the kind of intellectual reasoning needed to graduate from the Wharton School of Business that are essential how many of your grandfathers came here from the old country and made a mark in America without the language
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money or contexts what then is the mystical ingredient it's persistence it's that certain little spirit that compels you to stick it out just when you're at your most tired it's that quality that forces you to persevere find the route around the stone wall it's the immovable stubbornness that will not allow you to Cave in when everyone says give up just before we decided to commit ourselves to Cosmetics full-time our accountant and lawyer took
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us out to dinner they had something grave to tell us don't do it that was the advice the mortality rate in the Cosmetics industry is high and you'll rule the day that you invested your savings and your time into this impossible business we beg of you don't do it we did it we make the business decisions no one else we make them Mark Twain once said keep away from people who try to belittle your Ambitions small people always do that but the really
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great make you feel that you too can become great our first year sales amounted to about $50,000 expenses Aid up just about every dime no matter forward that is an excerpt from the book that I just finished reading for the
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third time one of my all-time favorite entrepreneur autobiographies definitely on myout Mount Rushmore book keeps getting better every time I read it and is the autobiography of Estee Lauder the book is called Estee a success story and
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it was published almost 40 years ago and keep in mind as we go through this today she was 77 when she is writing these words and still working every day still going strong the way I think about her is I really think she's just an American
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Badass I say this over and over again I really think a lot of today's entrepreneurs should try to emulate Estee and that if she was alive that she'd be kicking other entrepreneurs ass up and down the court Warren Buffett and
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Charlie Monger said it should be a crime that more business schools are not studying Henry Singleton that's the way I feel I think it's a crime that more entrepreneurs don't study at St Lauder so I'm going to jump right into it it
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starts with a very painful memory at the very beginning of her career okay so she just said the end of the first year of her company they did $50,000 of Revenue I think last year they did something like 16 billion the company's almost 80
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years old and what's remarkable is that her Empire starts as just a small concession stand at a single counter inside of a single beauty salon and when it starts she is the sole employee and so there something that happens at this
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beauty salon that stayed now she's talking about this you know 40 years after it happened maybe even longer and yet she can remember it like it was yesterday she says I remember the woman at the Florence Morris beauty salon
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where I had my first cosmetic concession she was Thoughtless and cruel and will always remain that way in my mind maybe she was a catalyst for good in the end maybe I wouldn't have become Estee Lauder if it hadn't been for her at the
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moment she was cast in my memory to last there forever I despised her simply thinking about that incident brings back pain she was having her hair combed and she was lovely I was very young and vulnerable and I loved Beauty I felt I
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wanted to make contact with her in some small way what a beautiful blouse you're wearing I said to her it's so elegant do you mind if I ask you where you bought it she smiled what difference could it possibly make you could never afford it
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I walked away heart pounding face burning and this is the punch line of this entire section this is why I'm reading this to you never never never never will anyone say that to me again I promise myself someday I will have
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whatever I want and then one of the most interesting things is she then starts her autobiography that that's the first story right but then she doesn't go into her early life she's not talking about herself she's talking about her Obsession her obsession with beauty and there's a multiple things that are going on on this on the next few pages I think are important I'll just tell you uh the a few of them number one beauty is an
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ancient industry which leads to number two which allows her to build a business around things that will never change and so Jeff Bezos famously said in the early days of Amazon he thought it was really important to build your business around
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things that won't change so at the very beginning he realized hey people are always going to want low prices they're going to want faster delivery and they're going to want wide selection they're going to want that today they're
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going to want that 10 years from now they're going to want that 20 years from now so that means he can invest heavily in those areas and reap the benefits for many decades to come which leads to the third thing that's obvious about Este Lauder she studied the history of her industry and then the fourth thing it's it's not even implied she says over and over again she's completely obsessed she loved Beauty this was not Beauty was a
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mission for her it was not just a product and so she says Beauty has always commanded attention beauty secrets have been passed on from mother to daughter Through the Ages so she talks about what primitive women were
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doing thousands of years ago she talks about what they were doing in Rome what Cleopatra was doing what they were doing in Egypt and she says women have always enhanced their god-given love looks it has always been so it will always be so
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and then she speaks to why this is her Mission and why she made this her life's work what it does for her customers beauty is the best incentive to self-respect you may have a great inner resource but they don't show up as
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confidence when you don't feel pretty people are more apt to believe you and like you when you look fine and when the world approves self-respect is just a little easier the pursuit of beauty is Honorable and then she continu talking
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about her Obsession but really this is a universal appeal of the product and the industry that she built her Empire in beauty transcends class intellects age profession geography virtually every culture and economic barrier there isn't
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a culture in the world that has empowdered perfumed and prettied its women love has been planted Wars won and Empires built on beauty I should know I'm an authority on all three love Wars and empires have been woven into my
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personal tapestry for decades I've been selling Beauty ever since I could recognize her and that last line is very important because that is one of the most important traits that she has she is a master worldclass salesperson she
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talks about it over and over again in fact she says I have never worked a day in my life without selling if I believe in something I sell it and I sell it hard and then the most important relationship that she's going to have
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outside of the one she obviously has with her immediate family with her husband and her kids is the one with her mother true interest tends to be revealed early and we definitely see that's the case with Estee Lauder and Beauty she says the first Beauty I ever recognized was my mother Estee would observe the way her mother emphasized her own Beauty routine my mother began brushing her golden hair in the morning even before she opened her eyes I
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remember her reaching out for that brush as soon as she began to stir I adored my mother's hairbrush her hand cream and the gloves when she passed away at 88 years old she was still beautiful and what I love that EST day's Mother did is
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she instilled self-confidence and self-belief into her daughter are really really early and it's obvious if you read este's autobiography she does not lack for confidence or self-belief you're as beautiful as you think you are
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she would tell me the secret is to imagine yourself the most important person in that room the person everyone else is waiting to see if you imagine it vividly enough you will become that person and if you could see the notes
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that I left myself throughout the book A lot of them are just I repeat over and over again the fact that she was born for this business that she was in that it's really important to pick a career that you have an immense passion about
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in fact I love what the advice that Charlie Munger gave where he said in my whole life I've never been good at something I wasn't very interested in it just doesn't work there's no substitute for strong interest he could be speaking about and describing Estee Lauder my very first memory is that of my mother's scent her Aura of freshness the perfume of her presence my first sensation of Joy was being allowed to reach up and
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touch her fragrant and satiny skin her hair didn't Escape my attention either as soon as I was old enough to hold a brush I'd give her no peace Estee you've already brushed my hair three times today I can still hear her complaining
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my older sister Renee submitted to getting her face patted with my mother's cream my sister-in-law was perpetually saint-like in her submission to my treatments all of this annoyed my father considerably stop fiddling with other
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people's faces he'd say but that is what I like to do listen to this paragraph it's insane but that is what I like to do touch other people's faces no matter who they were touch them and make them pretty before I'm finished all set I'm
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certain the world's record for face touching I could spin Magic on the faces of my family as soon as school was over I'd run home and start on faces and hair even at 8 years old even then I knew this continues this is what she says
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about her childhood Obsession a few years later I want to paint a picture of the young girl I was a girl caught up mesmerized by pretty things and pretty people thinking about my childhood now reveals such early patterns my drive and
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persistence were always there and those are qualities that are essential for building a successful business still I sometimes wonder if I had set my heart on selling anything else but Beauty would I have risen to the top of my
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profession somehow I doubt it I believed in my product I loved my product a person has to love her Harvest if she's to expect others to love it too and Beauty was such a Bountiful Harvest how could I have known this at 12 years old
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I don't understand it I just did and so Estee Lauder has a lot of the same traits that are covered in one of my favorite Talks on YouTube which is called Running Down a Dream how to succeed and thrive in a career You Love
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by Bill Gurley and there's a line in in that talk that also speaks to what the advice that Charlie Munger just gave us that you know there's really no substitute for having this deep ingrained like really strong interest in what you're doing and the line from running down a dream that I think applies T Lauder and a lot of the great entrepreneurs that you I speak about is that someone else has a deep passion for whatever career path you're on and
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they're going to smoke you if you don't have it yourself and I think that's tied to another one of my favorite maxims which comes from Ernest Shackleton by endurance we conquer we have in this book think about it she's 77 years old
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she's writing the book she's talking about an obsession that has taken hold of her almost 70 years ago and never let her go if you love it you're going to do it all the time if you do it all the time you're going to get really good at
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it and more importantly you won't quit by endurance we conquer all the success is so many decades into the future Estee Lauder the company is I think 78 years old as of today they did $50,000 of Revenue their first year they did 16
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billion last year and so keep that in mind as she's about to talk about one of the most important experiences that she has is she starts working at a very young age with her Uncle so she says when I dreamed in my private Universe I
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dreamed of being a skin specialist and making women beautiful since I had heard that many in my mother's family did just that my Shining Moment came in the form of a quiet man who also loved touching faces my uncle John my mother's brother came to visit us from Hungary he was a skin specialist what glories those words conjured up he captured my imagination and interest as no one else ever had I was smitten with Uncle John he
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understood me what's more he produced Miracles the first beauty products that Estee laud ever going to sell are the ones that her uncle John makes I recognized in my uncle John my true path he produced his glorious cream in our
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home working happily over a gas stove I watched I learned I was hypnotized my education was just starting I was devoted to it I loved his creams loved his potions loved my uncle John this is the story of bewitchment I was Bewitched
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by the power to create Beauty Uncle John had world to teach me we constructed a laboratory of sorts in the tiny stable behind the house do you know what it means for a young girl to suddenly have someone take her dreams quite seriously
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to teach her Secrets I could think of nothing else after school I'd run home to practice being a scientist I began to Value myself so much more to trust my instincts to trust my uniqueness trusting oneself does not always come
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naturally if learn when young the practice sticks today there there is no one who can intimidate me because of title or skill or fame I do what's right for me and this is a preview of what her business is going to be like because
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everywhere she goes she carries her products with her and she'll strike up conversation and she'll do like these mini makeovers and convert customers one at a time she was doing this back in high school I didn't have a single
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friend who wasn't slathered in our creams deep inside I knew I had found something that mattered much more than popularity My Moment had come and I was not about to miss seasoning it Uncle John loved me I loved him and my future
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was being written in a jar of cream okay so now here's something that's going to be surprising so she's you know 8 years old 12 years old 16 years old she's completely obsessed she's essentially going to do this business for free for
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fun for a few decades in the family that she was raised in at the time that she's living it is expected to go from her family's house to her husband's house she gets married young she's around 22 years old they have their first kid I
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think 2 3 years later so she's 24 25 years old she's a housewife and this entire time she doesn't found Estee Lauder Companies till she's 38 this is you know a decade and a half in the future and during this entire time she's
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still running a business it's just for fun and this is a great description of her Obsession we were struggling so hard to be independent and sometimes this was not easy times were lean we had a beautiful son and I spent my days mothering and all the time all the time I was mothering my Zeal for experimenting with my uncle's creams improving on them adding to them I was forever experimenting on myself and on anyone else who came within range good
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was not good enough I could always make it better I now know that obsession is the word for my Zeal it was never quiet in the house there was always a great audible sense of Industry especially in the kitchen where I cooked for my family
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and during every possible spare moment cooked up little pots of cream for faces I always felt most alive when I was dabbling in the practice cream I felt as though I was conducting a secret absorbing experiment a real
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adventure and I think the Zeal that she has for beauty for developing her own products for teaching Beauty a lot of what she does is teaching how to use the products what they can do for you she did this for fun and that is going to
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directly lead to this Foundation or excuse me the founding of this Empire which starts at with just a single counter inside of a beauty salon so she'd go to this beauty salon once a month to get her hair dyed and and done
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and she is an extrovert and a master saleswoman and so she's talking to every single person in the salon she become friends with them invite them over to her house and then give them like free makeovers so it says many of the young
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women who came to Florence Morris that's the name of the beauty slime to get their hair done would come to my home for a quick Beauty lesson I love sharing what I knew and creating excitement about skin one day Mrs Morris the the
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owner of the shop said to me what do you do to keep your skins looking so fresh and lovely it would turn out to be a question of great importance for me I didn't have to be asked twice the next time I come I said I'll bring you some
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of my products my heart was pounding Estee comes back a few weeks later for her normal appointment meets with Florence Morris again she says would you mind leaving them with me she asked as I offered my four products I'm
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so busy now I'll try them when I have time I knew better goes back to this master salesmanship this understanding of persuasion that Estee had she said I knew better just let me show you how they work Mrs Morris give me five minutes and you'll see the right way to use them nothing could have induced me to leave my bounty without a demonstration I have to pause there before I go on that is one of the most important insights into the history of a
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in so I've gone back and read you know countless biographies about many of the Great advertising agency Founders many of them were founding their companies in the 40s the ' 50s and 60s but they will all tell you a lot of their ideas came from the early 1900s and this one guy named Claude Hopkins Claude Hopkins may be the best copywriter of all time and the most influential thinker in the advertising industry he wrote this book called
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scientific ad advertising his boss Albert Lasker thought the book was so valuable that he locked it in a safe for 20 years because he didn't want his competitors to have access to the ideas eventually the book gets out of the safe
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gets printed and goes on to sell like eight or 9 million copies the reason I tell you all this is because there's a line in Claude Hopkins autobiography that is demonstrating exactly what Estee Lauder knew at this time in her life no
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argument in the world can ever compare with one dramatic demonstration s day knew that instinctively because she says nothing could have induced me to leave my bounty without a demonstration so she goes through this quick Beauty routine
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and it says I showed Mrs Morris a mirror she was raving Beauty she then said do you think you would be interested in running the beauty concession at my new salon I did not hesitate for a second up until that point I had been giving away
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my products this was my first chance at a real business I would have a small counter in her store I would pay her rent but whatever I sold would be mind to keep no Partners I never did have Partners I would risk the rent but if it worked I would start the business I always dreamed about risk-taking this is one of my favorite sentences in the entire book risk-taking is the Cornerstone of Empires no one ever became a success without Taking Chances
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and this is one of the most remarkable things about Estee Lauder and why I you know I'm trying to like shout from the rooftops please study her like read her biography listen to the the episodes I've done on her over and over again she
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understood this by Instinct this fundamental understanding of humans human nature and then combining that with building her business on a handful of simple principles one of the most important things she will ever do again
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if you're going to want to go from $50,000 of sales in your first year to you know multiple you know 16 billion 70 years later Customer Loyalty over everything else Customer Loyalty over everything else she just understood this
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and so she invents at least she claims to and I haven't found any examples of other people doing this she she claims to invent the sales technique of the century which is giving gifts with purchase and in sometimes giving gifts
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even without a purchase this is so powerful now the big secret I would give a woman a sample of whatever she did not buy as a gift it might be a few teaspoons of powder in a wax envelope perhaps I'd shave off a bit of lipstick
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and tell her to apply with her fingers perhaps in another envelope I would give her a bit of glow the point was this a woman would never leave empty-handed a woman would never leave empty handh handed I did not have an advertising
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Department I did not have a copywriter but I had intuition I just knew even though I had not yet named the technique that gift with a purchase was very appealing in those days I would even give a gift without a purchase the idea
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was to convince a woman to try a product having tried it at her leisure in her own home and seeing how fresh and lovely made her look she would be faithful forever we going to come back to this idea about customer loyalty and what and
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how Este Lauder cultivated this over and over again she would be faithful forever of that I not had not a single doubt again this is not justr I can come this idea of the importance of Customer Loyalty over everything I feel has been
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like on in a bunch of the books you know over the years but especially in the last few weeks to the last few months go back to Les Schwab one of Charlie monger's favorite Founders he had this idea he's like hey uh he ran these ads
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he's like uh we will change we will fill your tire and change your flat for free even if you don't buy anything and what he knew was that hey you come in we fix it for free we we did you a service we did you a favor when it's time to get new tires you're going to go back regardless of price or anything else you are going to go back to the store that did something for you last week we had an example of this with fenol they would
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custom order a part that they don't carry as a special request for their customer in that episode I referenced that Bugatti was doing this back in what the 1940s probably there's a L from Bugatti's biography he receives a letter
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30 years he had sold this customer a car 30 years earlier something broke on it they don't have that part anymore Bugatti offered to custom manufacture that part and give it to him at cost a few weeks before that we talked
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about Sam Walton in the early days of Walmart if somebody would return something Not only would he give them their money back he would instruct his salese the one doing that return to give them a gift for for free customer
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loyalty over everything a few pages later this should not be a surprise a devoted clientele was developing not to my surprise of course my products were the finest and the beauty salon atmosphere was perfect women were already in the self-improvement mood
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think about this go to where your customers are that is what she's doing the beauty salon atmosphere was perfect why should they go home with beautifully with beautiful hair and a tired lless face it made sense to sell a total Beauty package word spread business moved gradually but steadily I worked every day from 9: her son is in school at this point so this is what her schedule has to be uh word spread business moved gradually butly I I
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worked every day from 9:00 a.m when I arrived to polish my jars jars to 6:00 in the evening I never took lunch I felt I had to be there for every woman or I would surely lose her I cleansed creamed colored talked talked talked and talked it worked like a charm and the interest in my products grew there is a line that Warren Buffett has when he describes Rose blancan affectionately known as Mrs B and he says I would rather wrestle Grizzlies
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than compete with her this would be an example of why the same would apply to Estee Lauder she's on vacation she's at a beautiful hotel poolside what do you think she's doing she walks over to the women at the poolside and she starts
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giving them free makeovers the response was Electric in the next few years as had spent some weeks alone at this hotel or that hotel as what what might be called working vacations many women would gather around and ask me to teach
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them about skincare and cosmetics it was fun for them and profitable for me women wanted to learn One Summer after another I pushed myself lotting creams making up women selling Beauty in the winters I'd visit these eager ladies at their homes where with a bridge game as a backdrop I'd make up their friends and sell more creams the mood at these sessions was as exhilarating for me as for them I didn't need bread to eat but I worked as though
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I did for the pure love of the Venture for me teaching about beauty was and is an emotional experience I brought them Charisma and knowledge about their possibilities they gave me a sense of success I felt flushed with excitement
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after each session that is the positive side of OB session what is the negative side it's going to destroy her marriage now I should speak of a time of great pain and great confusion it's difficult for me to speak of it I'm
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always reluctant to divulge intimate family matters but I've determined to be candid in this book so I shall I am a visceral person by Nature I act on Instinct quickly without pondering possible disaster and without indulging in deep introspection this quality can work well in business where Instinct counts and where one must be able to risk and take immediate action but the same quality can be an irritant in personal relationships I was moving
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steadily forward and all the progress brought with it a great deal out of activity that neither interested nor in many ways included Joe Joe is her husband this is going to lead to divorce says when he wanted to talk I'd usually
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be off in another world thinking projecting planning my thoughts on a dozen projects my mind a whir a world I was busy building a business I was single-minded in the pursuit of my dream business itself was the purest romance
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for me so they're going to get divorced in 1939 she considers this her greatest mistake she winds up fixing her mistake they're going to get remarried and they're going to be married for over 50 years and there's an Insight that she
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has here that I think also Sam Walton realized as well that I want to tell you about one second but she says we were never to be separated for longer than a few days ever again we always till the day he died that day was the blackest
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saddest day of my life had each other to hold and to talk to so Joe and I were remarried this time forever but with a few changes now this idea in this point is really important she makes it a family business for these obsessed
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obsessive entrepreneur types like a Sam Walton like an Estee Lauder like my friend Justin who I was just talking to this about you want to spend so much of your time I'm the same way you want to spend so much of your time building your
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business one way to not have it absolutely destroy your personal life is to involve your family in that business and so EST Lauder convinces Joe to give up his business which what is doing as well and come help her with the Este
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Lauder business and so I was telling my friend Justin about this because he's doing the same thing his wife is going to come into his business so they can dedicate a lot of time to the success of the business but also spend time
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together and so when this book is published right this book is published in 1985 it is still considered a family business it doesn't go public I think for like another 10 years after the fact so Estee is obviously leading the
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company her husband helps her her son is involved Leonard the older son is involved at a very young age and then they have a second son like 10 years later and he works the family business as well now I do not want to give you
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the mistaken perception that her business is just growing by Leaps and Bounds it is a slow steady crawl she says nothing happened fast they talk about you know this this myth of the overnight success and since success she
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says it does not happen that way I cried more than I ate there was constant work constant attention to detail lost hours of sleep worries and heartaches friends and family didn't let a day go by without discouraging us despite all the
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naysayers there there was never a single moment when I considered giving up that was simply not a viable alternative I had a secret weapon this is very fascinating keep in mind we are in 19 think we might be 1940s at this point I had a secret weapon there were in those days before television and high gloss advertising only two key ways to communicate a message quickly the telephone and the telegraph I came up with a third and it was potent tell a
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woman women were telling women so word of mouth was her base that was her initial distribution women were telling women they were selling my cream before they even got to my salon tell a woman was the word of mouth campaign that
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launched Estee Lauder cosmetics and it's something she's going to use over and over again as we'll see and she makes another point in addition to this there's just no way she's going to quit but she says I knew there was a business
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and Beauty as long as there was a woman alive every day I touched 50 faces so I think by now you've heard her say a few times that she was obsessed with beauty and obsessed with details and this is a combination of the two when
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she's deciding what the packaging what the jars of her cream will look like and so this is how she makes the decision first of all I reasoned where would my jars sit in every woman's bathroom naturally second I knew that I wanted
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Every Woman To Remember whose cream it was that was making her look so fresh and lovely the name would have to be embedded right on the jar needless to say the jar had to be beautiful and this this is the hard part it couldn't clash
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with my customer's bathroom decor having obtained sample jars my research consisted of matching the few colors to which I had narrowed my choices to wallpapers in every guest bathroom I could manage to visit every time I went
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to a friend's house or an elegant restaurant I would excuse myself from the company visit the bathroom and match my jar colors against a vast array of wallpapers there were silver bathrooms purple bathrooms black and white bathrooms Brown brown bathrooms gold bathrooms pink bathrooms even red bathrooms which color would look wonderful in any bathroom I deliberated for weeks I spent an inordinate amount of time freshening up people must have
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been worried about my long absences and So eventually she has her eyes set on growing out of beauty salons and into saxs fth Avenue and she says she that she needed a larger Marketplace the great department stores because of
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the new phenomenon of charge account at the beauty salon her customers would have to pay for the merchandise uh with cash and some of the women that didn't have enough cash on them at the time would ask her well do you have a counter
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at saxs fth Avenue and I could just add it to my charge account and so what she's about to do here she's going to repeat a later stages as she's building her business but she wants to break into these stores through the ground up and
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you also see why earlier she thought that persistence was the most important trait for an entrepreneur to have says my name was not exactly unknown at sax fth Avenue the tell awoman campaign had already resulted in hundreds of phone
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calls from women asking for my products the store was beginning to wonder about me the enthusiastic phone calls from my own clients were having effect so she goes and talks to the Cosmetic buyer this guy named Mr Robert Fisk and he
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says no a bunch of times and he says he finally acceded to my millionth request he gave me a small order for approximately $800 worth of merchandise Hallelujah we decided to send my own customers and all the people with charge
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Accounts at Sachs a small elegant white printed card with gold lettering that read saak Fifth Avenue is proud to present the Estee Lauder line of Cosmetics now available at our cosmetic department and this is another example
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of that big things start small do we have a hundred wonderful products no we had four but she had a lot of confidence in those four products and you had to because this is where she goes and she's going to to invest all of her savings
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previously she'd been making all of her products at home and so they wind up getting their first like laboratory SL office it was a former restaurant and they had to pay 6 months rent in advance we swallowed hard and signed the lease on the restaurant's gas burners we cooked our creams we did everything ourselves every bit of work was done by hand forehand to be exact Joe's and mine we stayed up all night for nights on end
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snatching sleep in fits and starts and then she talks about the fact that breaking this Mammoth barrier into retail for the first time was one of the most exciting moments that she'd ever known and so by building up all this
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Goodwill over years and years and years of developing her customer base literally one at a time then also doing this direct Outreach campaign to her her customers but also Sax's customers that she just described here's the result all
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the people to whom I had given samples all the people who had been telling other people all those people appeared on opening day at saxs Fifth Avenue in 2 days we sold out the fun was about to start and with that came the endless
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work the endless traveling the endless streams Rivers Tides Torrens oceans of words I would utter In Praise of the products I knew were the cream of the crop I was a woman with a mission I had to show as many women as I could reach
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not only how to be beautiful but how to stay beautiful on the way I hoped in my secret heart to find Fame and Fortune it was 1946 that is the official founding of the Estee Lauder company she's around 38 years old at the time and now she's off and running because when she's in one Sach store she's going to expand to other Sach stores if she's in a bunch of Sach stores that makes it easier to to expand into other department stores and
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she just has a a lot of great I really feel like great advice and great lessons for future generations of entrepreneurs this one this one story is about the importance of never underestimating a customer's desire it was 101 in the
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shade in downtown San Antonio Texas and I was making my first personal appearance at the Estee Lauder counter in an elegant department store this is something she would do she would travel all over the country and launch she'd
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spend like a week or two there launch every single store personally to make sure that all the people were trained right and they were doing things to up to her expectations slowly a woman made her way towards us she was short sthy
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and definitely out of her element she had no shoes and two gold teeth she stopped directly in front of the counter then she pointed to one jar and looked up expectantly I was about to assist her when the salesperson tapped me on the
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shoulder not her Mrs Lauder don't waste your time she's not going to buy anything I know her typ I Whirled around since when do you know how much money she has in her pocketbook I asked I went to work first the cleansing oil which I
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patted on and immediately took off then the cream pack then the super rich all-purpose cream I worked all of it in and then removed the excess and then handed her a mirror she stared and stared and then smiled she couldn't
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speak English I couldn't speak Spanish still at that moment I felt such a bond with that woman and she and I both marveled at the miracle of makeup you know the ending to this story before I write it she bought two of everything I'd used on her face and the next day her relatives did the same I never forgot her she symbolized so much for me never be patronizing never underestimate any woman desire for beauty that proud woman embodies my entire
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philosophy how bad do you want it I would open each store myself I might have to travel by bus train or donkey but I'd be there for a week to train the salespeople to set out the merchandise and to create the aura and then that was
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another description of this free sales this free sample sales technique that she pioneered the free makeover she just gave that woman with no shoes and gold teeth the free gift she would give with purchased a free gift sometimes without
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purchase and what this this was the engine that drove her business the reason to appear at my counter was the gift to the customer the free something that would sell everything else it sounds so simple doesn't it I'd have to agree it was simple most good ideas start in simplicity so much so that everyone wonders why no one did it before the sample was the most honest way to do business you give people a product a try if they like it they buy
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it they haven't been lured by an advertisement but convinced by the product itself this is so smart what she did here and again this is Instinct she just knew this to be true we took the money we had planned to use on advertising and invested instead in enough material to give away large quantities of our products it was so simple that our competitors sneered when they heard what we were doing today even the banks are copying us and so it's
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obvious as you go through the her life story that especially at this point in her life she's acting with this insane sense of urgency and so she said that the that she started business when she was older she thought that was a
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distinct advantage and I love the way she describes this I started late I didn't have the time for waiting women of a certain age are seasoned enough to bypass certain Temptations they can focus on their interest more steadily
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than their youthful counterparts it takes a certain tunnel vision the ability to look directly ahead and older women are not quite as easily distracted they are usually more successful when they have an advantage of years and then saay Lauder is just relentlessly resourceful how many people are willing to put in this type of effort she's going to recruit customers one by one and I would make the argument after this that she's actually not
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recruiting customers one by one I I'll explain what I mean in the early days I spent an endless amount of time riding the rails so she's traveling all over the country on by train the sound of train Wheels became background music to
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my dreams as I traveled around the country to be present at each Estee Lauder counter opening I met the women who would one day be my customers at least I hope they would be to that end I never stopped talking to people not ever
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if she sees a woman sitting by herself she'd go up say had love to make up your face and show you a cream that would make you so lovely to touch she would give them a makeover for free then they she'd hand them a mirror she looked at
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herself she couldn't believe it I gave her a little everything to take home she still writes to me now keep in mind by the time she's writing the book okay she's had she's been running her business for 40 years to this day I
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still receive mail from women I met all over the world met touched and made up during spontaneous moments and so my point is like well first of how many people are willing to put in this type of effort recruiting customers one by
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one but think about that some of these people she might have met 20 years ago 30 years ago they're still writing to her they're still customers of hers how many other customers have they gone and evangelized and recruited for Estee
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Lauder it wasn't a one-on-one if you're in things for the long term it's not a one-on-one interaction it's one on 1,000 because it's that person and then whoever that person tells and then whoever that person that that person tells tells and that just compounds and grows throughout the decades and so the Relentless resourcefulness doesn't stop there so you're you know you're launching your Estee Lauder you're inside of a department store right
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you're at the Cosmetics counter do you think she stops at the Cosmetics calendar no she does not she goes to the when she's launching a store she'll go to every other department say they're selling dresses or hats whatever the
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case is she'll make friends with the people she'll give them free samples and say hey when you sell that hat mention a new shade of lipstick might look good with the hat I can make friends with sales women selling hats and she might
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suggest to her customer that a free makeup at the S Lauder counter would enhance the new hat immeasurably and the dress salesperson might mention to her customer that Este Lauder has the perfect shade of lipstick to wear with
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the new dress I would induce the whole store to speak for my products more Relentless resourcefulness from her the point was to keep thinking to keep placing the products in the public eye to keep devising new ways of capturing
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the consumer's attention during the week I usually spent at an opening promotion I made it my business never to leave town without seeing every Beauty editor of every magazine and newspaper I brought them samples made up their faces
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gave them Beauty advice I promoted Beauty and made friends there is no such thing as bad time she's doing this you know in a they were telling her during like economic downturns that she's going to be in trouble this is her response
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there's no such thing as bad times I kept telling myself there is no such thing as bad business business is there if you go after it a few pages later more Relentless resourceful Behavior give full effort always everywhere no
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Community was too small for my attention my absolutely full effort I had ridden for instance on a bus for 6 hours to open a small store in Corpus Christie Texas the store's clientele was modest in size and economics no matter never
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underestimate people who live in small towns are those with limited budgets people no matter where they live or on what their finances will spend if they're convinced of worth this idea she repeats constantly go out build relationships make friends keep these friends for your entire career this is what I told you Sam zel and Charlie Munger both said to me in different ways in person I used every second to make friends and to spread word about our
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products this is just fantastic advice she says never underestimate the value of an ally and so one of her early allies was this woman named Helen Blake and again never underestimate the value of an ally is a great line and she's on
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the phone with Helen Blake and this is what she says you know she would say to me quite casually during a phone call I think might want to give Miss Pope the merchandise manager from Woodward a call I was with her yesterday and she
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mentioned that I looked wonderful and I told her it was due to your cosmetics and well I just think she'd like to know more about you that instant I would call Miss Pope if you do not do important things when you think of them you probably never will and you will lose out today they call this networking this sharing between colleagues it is one of the most powerful Tools in business another great line about this imagine a
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business world where you are the seller and the buyers are are your allies then go make that happen another thing that Este La does is really smart is she she wants to answer this question how can I get more women to buy their own perfume and her
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answer to this question is genius is going to wind up launching this giant business line for them and so Estee Lauder had studied Coco Chanel she quotes Coco Chanel multiple times in this book at the point she's writing
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this book Coco Chanel's uh perfume Chanel Number Five is widely popular but as they realize like perfume is very high margin very expensive product but at this time women don't buy it for themselves it's like a man buys it for a
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woman to Mark a special occasion like a birthday an anniversary things like that and so she asked the question okay well how can I get American women to buy their own perfume how could I get the American women to buy her own perfume I
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would not call it perfume I would call it youth do a bath oil that doubles as a skin perfume that would be acceptable for them to buy because a woman would buy her own bath oil right they're all taking baths a woman could buy herself a
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bottle of bath oil the same way that she'd buy a lipstick without feeling guilty without waiting for her birthday or anniversary and the result is something she has was a mini Revolution this is why instead of using their
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French perfumes by the drop behind each ear women were using youth do by the bottle in their bath water it doesn't take a graduate school business to figure out that meant sales beautiful sales in 1953 youth did youth do did
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about $50,000 worth of business for us in 1984 that figured had jumped to over50 million one product in a family remember there's family-owned business in 1984 okay one product line from one question three that she asked herself
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three decades earlier is generating over 150 million in Revenue a year so I want to go back to her idea about the importance of making it a family business she was completely en raptured and obsessed and completely this idea taken hold of her of building this company but she says I refus to either choose business or family I wanted both and so this is a little bit about how they structured the business not only between themselves husband and
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wife but also more importantly I think uh their young kids and I think the the experience that they gave them you fast forward now both of her sons are still alive I think one is 91 and one is 80 and they're both multi-billionaires as a
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result of you know this this decision remember going back to the very beginning the accountant and the lawyer don't do this don't do this thank God Estee didn't listen to anybody but herself and you fast forward 80 years
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later and look at how she changed the trajectory of her entire family so as the business grew we cared very much about involving our sons Leonard worked at the office every day after school he delivered packages he was our first
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billing Clerk and he would type up every invoice this is when he's in high school by the way and then he'd work full-time for us or with us during every summer After High School he he went to the Wharton School of Finance at the
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University of Pennsylvania and then after that he went to Columbia Graduate School of Business all while in college we had been sending him copies this is such a great idea all while in college we had been sending him copies of all
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the correspondents at Estee Lauder so things like notes from Distributors deals lost or made letters from customers financial statements positive and negative were all forward to him at school and it was around this time where
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they get an acquisition offer and they're like well we received an offer to sell the business for a million dollars you know we're in 1950s and so they asked their son you know what should we do and I I think it's obvious as they didn't consider selling for one second but he said you know a million dollars doesn't sound like too much we should keep going and today the market Cap's somewhere around $30 billion and then when Estee wants to
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expand into Europe the way she does it I think is really smart so she says I'm going to start with the finest store in London which at the time was herods and she thought if I could get my products inside of her herods then all the other
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great stores in Europe would follow and so she goes and pitches the buyers at herod's the first meeting the buyer is simply not interested and so Estee does exactly what she does when she's in town to launch anything even though at this
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time she was unsuccessful getting into her products in there she goes and she says a little media attention was called for I visited the beauty editors of various magazines and she convinced the beauty editor at Harper's Bazaar to
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write a piece about her products and they agree but then they ask her okay well what store in London would are your products available and she says my products are not available in London and she replies okay that's fine I'll write
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a piece saying that Estee lauder's Cosmetics will be coming soon the article comes out it's well received Estee goes back to the buyer at herods again I went again the answer was no there was no space at this time there was no call for my products this wasn't the right time of year maybe another time I had to keep trying I stayed in England another month visiting every Beauty Editor to make my name known I was getting writeups but no order from
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heritz the next year I go back to London and I go back to herit she was not the buyer was not quite as hostile at this time she says let me tell you I have no room but as I told you before but perhaps I could take a tiny order and
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put it in with the general toiletries it won't be next to the good Cosmetics that you'll have to understand it was not a victory yet I visited every one of the beauty editors again to remind them of me another round of makeups another
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round of samples do you think you might write another piece I asked I asked them now they were in London at herods the Articles appeared customers also appeared women began asking for Estee Lauder the herod's buyer was reluctant
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to notice but she had no choice in the flush of a good week sales I summoned up courage to ask if she could give me a more important counter oh no she said other counter space is definitely not available that's fine 6 months later I
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made a third trip to London I met with the buyer again well we seem to have many London women asking for your products she grudgingly admitted I think I'll give you a small spot at a more prestigious counter and that is how Estee Lauder came to Europe This Relentless way that she follows up this Relentless way that she draws attention to her Brands and gets other other people other customers to ask you know through the media through her own
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clientele is something she does over and over again so she wants to expand into Canada the buyer at this department store is like no like the Cosmetic department is is spoken for we have all these exclusives and she's like okay
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well what not a cosmetic uh you need bath oil why don't you stock my youth do so she says you need a bath oil women would love to come into a department store instead of a drugstore to buy it look Buy It On consignment if you sell
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it fine if you don't you've lost nothing oh okay he said but send me just a few bottles and only the oil you know she's not going to do that so I was wrapping up the bath oil to send to Canada I decided to put a few creams in with a
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note take on consignment also you certainly wouldn't want to have to say no to any woman who asks if you have everything if you have anything else in this line right and his response was what about our exclusive with other
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companies what about my lack of space what about what about what about he sputtered when I spoke with him later on look you must go with the trend and with the world everyone is using the bath oil and these creams in America you don't
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have to pay me for them until you sell them oh okay fine he said in resignation when I came to make a personal appearance at the opening of este lauding in Canada my sales department had sent everything the bath oil the
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cologne the cream little boxes of powder I could give away as gifts we sold out of everything the buyer came down to see me after 3 or 4 days how did you do this he said you don't sell cosmetic he responded you sell yourself it all goes back to what she said I've never worked a day in my life without selling if I believe in something I sell it and I sell it hard she has an entire chapter on selling it is not enough to have the
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most wonderful product in the world you must be able to sell it one person with definitive ideas and pride in their product and a Hands-On approach can lay the foundation for a strong business creating a great product is an
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accomplishment making people aware of its existence let alone getting them to try it is sometimes harder to do than to create it in the first place combine this with her unique philosophy about building a business that's authentic to
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her goes back to what the gentleman in Canada was saying oh you don't sell your products you sell yourself this is what Estee said each business person must find a style that voice that grows clearer and louder with each success and
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failure observing your own successes and failures makes your inner business voice more sure and Vivid she continues and she states what she learned about building in Beauty works for all products during the acquisition binges
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of the 1970s we saw business firms becoming conglomerates there was pressure for us to do the same the Lauder inner voice said no stick to what you know best and don't change it today the same firms are spinning off all the subsidiaries because they weakened instead of strengthening their original product The Voice grows stronger with each success remember that companyb building philosophy voice is what she's referencing The Voice grows stronger
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with each success each observed failure all one has to do is listen business is a Magnificent Obsession I've never been bored a day in my life partly because as a true business addict it's never been enough to have steady work I had to love
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what I was doing love your career or else find another soup glue or beauty can all be packaged in jars tubes and bottles and all vended like any other commodity the big difference lies in the vendor the big difference lies in you
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not the items to be vended even excellent glues soups and beauty products can die in the marketplace if the vendor isn't passionate and clever develop your own style our Unique Style has come from years of trial and error
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and it's just two pieces of advice I think go well with each other visualize and then work like hell to make your Visions a reality visualize if in your mind's eye you see a successful Venture a deal made profit accomplished it has a
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superb chance of actually happening projecting your mind into a successful situation is the most powerful means to achieve goals if you spend time with pictures of failure in your mind you will orchestrate failure countless times
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before the event I have pictured a heroic sale to a large department store every step of the way and the picture in my mind became a reality I visualized success then created the reality from the image great athletes business people
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inventors and Achievers from all walks of life seem to know this secret sounds wiie Fufu I'm just telling you it's in a bunch of the books Bob noise founder of Intel Edwin Lan Steve Jobs Arnold Schwarzenegger Estee Lauder they all did
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this they all talked about doing this as well and then combine that with working like hell to make your dreams reality I tend to work non-stop during the day usually seven days a week and then at night she goes out at night about five
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times a week on average why it helps my business it keeps me in touch with the people who buy and sell my cosmetic Cosmetics it keeps my finger on the pulse of my customers who are also the kind of people I choose as friends it's
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very useful to stay in close social contact with business associates those who are connected with my business life store owners buyers media people movie stars young career women are all involved on another level in my social
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life and then finally she has some parting advice for you and I which is focus and don't quit first comes the wish then you must have the heart to have the dream then you work and work and work from where you sit you can
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probably reach out with comparative ease and touch a life of Serenity and peace you can wait for things to happen and not get too sad when they don't that's fine for some but not for me serenity is pleasant but it lacks the Ecstasy of
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achievement living the American dream has been intense difficult work but I couldn't have hoped for a more satisfying life I believe that potential is unlimited success depends on daring to act on dreams how far do you want to
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go go all the way within each person is the potential to build the Empire of your wishes and don't allow anyone to say that you can't have it all I've always believed that if you stick to a thought and carefully avoid distraction
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along the way you can fulfill a dream my whole life has been about FF filling dreams I keep my eye on the target whatever that Target was I've never allowed my eye to leave the particular Target of the moment whether your target
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is big or small Grand or simple ambitious or personal I've always believed that success comes from not letting your eyes stray from the target anyone who wants to achieve a dream must stay strong focused and steady you must
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expect and demand Perfection and never settle from me mediocrity if you push yourself beyond the furthest place you can go you'll be able to achieve your heart's dream and that is where I'll leave it for the full story highly recommend
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reading the book if you buy the book using the link in the show notes are available at Founders podcast.com you'll be supporting the podcast at the same time that is 361 books down 1,000 AO and I'll talk to you again soon