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What you're actually looking for the whole time is the unfair advantage.
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No one understood this better than a former Royal Air Force pilot whose first love was airplanes.
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His name was Colin Chapman.
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And over more than 20 years, he did more to influence F1 design than any other person in history.
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This was the man who turned Formula 1 from a playground for gentleman mechanics into rocket science.
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All of it stemmed from his singular purpose in life, which was to extract every ounce of performance from whichever engine he happened to be dealt.
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What Chapman realized first and far more dramatically than any of his contemporaries was that there was more to this racing business than pure horsepower.
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Engine capacity didn't matter if he couldn't first solve the paradox of making his cars as light as possible while also engineering them to stick to the racetrack. His mantra was simple.
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Adding power makes you fast on the straits.
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He said, "Subtracting weight makes you faster everywhere."
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So, he's got several quotes around this mantra of his that adding power makes you faster on the straits.
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Subtracting weight makes you faster everywhere.
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He would say, "Simplify than add lightness."
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He also said, "Any car which holds together for a whole race is too heavy."
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So, he designed his his cars were much more like aircraft built with just enough material to do the job and not an ounce more.
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They were rarely the most powerful, but they'd be nimble and efficient and built above all to outrun the competition through superior design.
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That's just one of many reasons why I think there's so many great parallels for entrepreneurs and and company builders in a book about Formula 1.
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So, Chapman's laboratory where we can experiment with all his eccentric ideas, was the Lotus Racing Team, which he founded in 1952 with 25 he borrowed from his girlfriend.
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He established himself in the north London neighborhood of Horny.
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This is an area where his father ran a pub next to a railway station.
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It had sustained heavy bombing by the Nazis during World War II and did not seem a likely place to produce an engineering maverick.
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So, the only spot Chapman could find for his first garage was a block of stables full of empty beer crates behind his dad's pup.
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But, as it turned out, a unique set of circumstances were was brewing all over Britain at the time that would turn the country into a cradle for highlevel motorsport.
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As the dust settled after World War II, Britain remained in a state of deep deprivation and under a national rationing program.
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But what it did have in ample numbers was dozens of unused RAF airfields and a supply of war veterans who knew their way around an engine.
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It was no coincidence that by 1952, when the UK had three permanent racetracks, two of them had been wartime airfields.
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Chapman grew his engineering ranks by recruiting from the aircraft companies.
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He had a really interesting insight.
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What was a race car anyway if not an upside down airplane wing?
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Air flow and weight were everything.
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This was an era before easy access to wind tunnels.
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So, the Lotus boys had to come up with creative solutions to measure how their in inventions minimized drag.
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For one test, they fitted fins all over a car to see how they flexed at high speeds.
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And the only way to get a close look at them in real time, one engineer decided, was to strap himself to the hood for a lap and pray he didn't end up as roadkill.
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Chapman's gang would stop at nothing to be just a little bit quicker.
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And soon everyone knew it.
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At least one rival referred to them as that mad lot.
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A slight that the intensely proud, easily offended Chapman would not have taken well.
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a short man with a big chip on his shoulder.
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He devoted much of his life at Lotus to proving people wrong.
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And so he's going to come up with a series of innovations.
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They call him the mad scientist of F1.
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And so here's one example.
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Team Lotus came around to what was known as the midenine design, which really meant moving the engine behind the driver from its regular position in front of him.
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This might not seem so unusual until you remember that the natural order of ground locomotion until that point had always been a horse or a locomotive pulling the rest of the show, not pushing it.
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Chapman let his imagination run wild.
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Ideas poured out of him so fast that as soon as they were shuffled into development, Chapman was already on to the next thing.
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In fact, I read something was hilarious.
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His colleagues would nickname him the white tornado because he was so high energy.
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Turns out, it says that he had manic energy, but he was also, it says his manic energy was boosted by a regime of uppers.
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So, he was on some kind of stimulants.
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Uh, they could make him impossible to work for.
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I know you believe that what you think I said is what I want read a sign that he kept on his desk, but are you sure that what you heard is really what I meant.
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However chaotic the process, Chapman spent the 1960s producing a string of masterpieces.
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each with its own gamechanging innovation.
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Again, I just love the idea that his nickname was the mad scientist of F1.
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When most cars still used frames where the structure sat on a skeleton of steel tubes, Chapman produced the Lotus 25.
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It was a single hole and was inspired, like everything else he did, by airplane design.
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The central frame of the car was one piece of molded aluminum.
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In Chapman's internal quest to cut weight from his cars, this was the equivalent of a 3-w weekek juice cleanse.
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There was one thing that Chapman was prepared to add to his car before anyone else, and it came from his lifelong struggle to round up enough money to go racing.
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In this case, it was a sponsored paint job.
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I can't believe this guy also invented the sponsored paint job in F1 for nearly two decades.
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So they had been racing F1 for two decades up until this point.
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And before Chapman had the idea to sell to to sell that paint job to sell space on his cars to sponsors, F1 cars were simply painted according to the nationality of the racing team.
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It may seem trivial to you and I today, but at the time this was a shocking break from tradition, which is obviously one of the main points of what I want to talk to you about today and every single person I'm going to profile is the fact that they just came in.
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They studied how everybody else was doing things.
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Said, "Hey, you know what?
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I have other I have different ideas.
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I'm going to pursue a different way of doing things.
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They're all very entrepreneurial."
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And so when he talked about inventing the sponsored paint job, he just thought it was very pragmatic.
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He's like, I'm going to go race on Sunday and then I'm going to go sell on Monday.
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And all the money coming into the team then he could then use for more inventions.
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So it says not only did the deal fill the team's coffers, it also kicked off a 40-year spell of unbroken association between F1 and the tobacco industry.
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Now, here's the crazy thing.
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He sold the first sponsored paint job was to I think Golden Leaf Tobacco.
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It was $85,000 or $85,000 for a year.
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Over the next few decades, the tobacco industry alone is going to pour 4. 5 billion into F1.
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All that started because Chapman was just looking for a way to pay the bills for his racing team so he could just invent more.
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The new source of income was enough to keep the lights on a little longer in the Lotus garage, where Chapman continued to live up to his reputation as F1's resident mad scientist.
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Like all mad scientists, he insisted he wasn't mad, simply misunderstood, in particular by the everexpanding Formula 1 rule book.
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In his mind, the whole set of regulations should have been able to fit on the back of an envelope.
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This is what his proposal was.
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Pick the maximum capacity of the engines, choose the type of fuel, and specify that the resulting car has to fit in a box so long, so wide, and so high.
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Then we can really get down to making a car.
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Not that the regulations slowed him down much.
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Chapman was so relentless in his pursuit of an edge that his own drivers began to wonder if the part of the car that he cared least about was the one strapped into the cockpit.
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Tragedy was such a regular occurrence in Formula 1 at the time that two dozen drivers were killed in the first 15 years of the series alone.
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Three had been at the wheel of one of Chapman's cars.
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So in his private memos, he actually grappled with this ethical line between pushing boundaries and protecting lives.
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And he was writing notes to himself.
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Says, "A racing car has only one objective to win motor races.
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If it does not, it is nothing but a waste of time and money.
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It does not matter how safe it is if it doesn't consistently win. It is nothing."
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Brutally frank, these words lay bare Chapman's competitive creed.
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He compared a Formula 1 driver to a mountaineer.
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Each knew the risks of the climb.
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the danger was part of the pursuit and one of his drivers had an accident before he winds up having a fatal accident and he writes Chapman a letter.
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This guy named Yokin Rent and part of the thing he says, "Honestly, your cars are so quick that we could still be competitive with a few extra pounds used to make the weakest parts stronger.
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Please give my suggestions some thought.
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I can only drive a car in which I have some confidence and I feel the point of no confidence is quite near."
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16 months later, Rent was dead.
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A brake shaft in his car failed at the Italian Grand Prix.
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He hurdled through a poorly installed crash barrier where the impact caused his own seat belt to slit his throat.
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The Italian authorities charged Chapman with manslaughter since he was the man responsible for the car.
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He was acquitted 6 years later.
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One of Chapman's rivals said that man should have his own private graveyard.
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In 1977, Chapman was reinvigorated by an eruption of fresh ideas.
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And if he got this idea right, the car would feel like it was cornering on rails.
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Chapman laid out all of his thinking in a rambling 27page memo to the Lotus R&D department.
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The crux of it was an insight that no one else had fully considered yet.
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And the idea they refer to as ground effects is generating downforce but from underneath the car.
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Chapman wondered what if he could add to that effect from underneath the car.
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The concept worked so dramatically that when Mario Andredy asked if he could try it out at a Grand Prix in late 1976, so they had started building the prototype in 75.
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It was going to be ready for 77 halfway through the 76 season. Chapman had it ready.
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So his driver is like, "Hey, let's use it right now."
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Chapman responded with a firm no because he didn't want the other team seeing what fresh hell he was about to unleash on them.
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Once Andreddrey finally got behind the wheel, he said that the Lotus 78 might have well might as well have been painted to the road.
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That season, Chapman's latest creation was by far the quickest, most advanced car on the grid.
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The next year's car was even better.
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Mario Andredy said the Lotus 79 was the closest thing that he'd ever driven to perfect. He won the championship.
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The celebration was muted.
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Andreddy's Lotus teammate Ronnie Peterson had been involved in a fiery crash at the start of the race and died that night.
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It was the fifth fatality of a Lotus driver.
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That tragic championship would be Chapman's last, but his worst decisions still lay ahead.
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This is the part of the story where John Delorean makes an appearance.
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Delorean was a smoothtalking former General Motors executive.
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Delorean approached Chapman with a couple of proposals in the late 1970s.
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He had a scheme to build Delorean cars in Northern Ireland by using grants from the British government.
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With the UK facing mass unemployment, the government signed up to the tune of tens of millions of pounds, completely unaware that Delorean's company was a financial house of cards.
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Lotus would help design the chassis for a fee of $17 million.
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Only none of that money ever found its way to Lotus for developing the car.
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So British prosecutors had been tipped off to this whole arrangement.
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They alleged that Delorean had pocketed 8.
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5 million of the government fee while Chapman had taken 8 million for himself.
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In the fall of 1982, Delorean was arrested in a sting operation while attempting to buy 220 kg of cocaine with the attempt to distribute.
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In England, Chapman could feel the walls closing in.
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Weeks later, robbed by stress, he died of a heart attack.
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Chapman potentially facing a decade in prison was only 54 years old.
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One story that circulated at the time that he actually faked his own death even with six drivers titles, seven constructor championships, and a half a dozen revolutionary designs, a staged heart attack, and subsequent disappearance was one bit of engineering beyond the talents of Colin Chapman.
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His legacy was generations of engineers who made it their life's purpose to bend every rule in Formula 1 in the name of going faster.
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Their diligence, sharpened by relentless competition, would put the sport on the cutting edge of automotive creativity.
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Prototypes went from their sleepdeprived brains straight onto the tarmac in a matter of weeks.
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If they could imagine it and it wasn't expressly forbidden, then they raced it for as long as they could until it was legislated out of existence.
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To anyone who had ever raced, the men responsible for pushing the boundaries of Formula 1 were certifiable geniuses.
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That was an excerpt from the book that I want to talk about today, which is The Formula: How Rogues, Geniuses, and Speed Freaks Re-engineered F1 into the world's fastest growing sport and is written by Joshua Robinson and Jonathan Kle.
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So, I was not expecting at all to do this episode this week.
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In fact, I'm working on two other uh founders founder episodes uh at the same time.
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But I was talking to Peter.
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So, Peter uh is a doctor, he's a podcaster now.
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He's a best-selling author, but he's also completely obsessed with Formula 1 and has been for a long time.
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So, I told him I just got into the sport.
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And so, he gave me this book recommendation.
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Then, he gave me another documentary that I that I watched twice. the documentary.
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I'll link both uh down below.
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The documentary, you can actually watch it for free on YouTube. It's called one.
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But once I started this book and I started listening to the audiobook first, I listened to the audiobook twice actually before I read the book.
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The reason I knew I had to do an episode is because I was completely compelled.
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I could not put this book down.
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And so instead of focusing on just a single individual like I normally do, there's I picked out three people.
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There's, you know, probably eight, 10 different interesting people that I could do episodes on alone.
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But I picked out three people I just want to give you like short profiles on and pull out some of the most unique ideas they have.
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And what I said earlier is is why these people are so fascinating to me.
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It's like they came into something that had already existed.
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They looked at what everybody else was doing, their you know, modus operande their way of doing things.
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Like, well, I have my own ideas and I'm going to spend a lot of my life energy and my time and my money and my resources to seeing these ideas come to fruition.
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So Colin Chapman was the mad scientist where he's focused on actually building the car.
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The next person I want to talk to you about, his nickname is F1 Supreo.
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This is Bernie Ecklestone.
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Bernie made more money off of F1 than anybody else.
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And so his innovation is actually in the business.
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The pro how do you promote this very unique sport and then how do you make it into a business?
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Because when he comes into it, most of the people are losing money racing.
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There is no sustainable business model.
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It was very fractured and I think he's just got a a ton of really interesting ideas on how to actually build the how he built the business of F1.
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So it says Bernie Ecklestone had a lot of reasons to admire Enzo Ferrari.
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When he first entered the sport in 1970 as a sharp used car dealer who turned himself into a driver agent, Eckleston knew that Enzo had been a force to be reckoned with for nearly 20 years.
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Not only did Enzo wield tremendous influence over the direction of Formula 1, but Enzo learned that there was more to this whole racing game than winning races.
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Ferrari understood that image mattered, that a veneer of class mattered, and more than anything, getting your way mattered.
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The sport is on the table, Enzo once told Bernie, "And the business is underneath it."
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These were values that Ecklestone had understood instinctively since the school playground when he sold cookies and buns at a markup, having just bought them from the local bakery with the money from his newspaper route.
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As a kid, he knew he had to scrap for every penny.
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It's not as if his parents would ever be in a position to help. His dad was a fisherman.
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His mom was a stay-at-home mom.
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Their first house didn't even have indoor plumbing.
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This guy is going to make himself billions of dollars.
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and he grew up in a house without indoor plumbing and where he grew up was really important just like with Colin Chapman.
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Ecklestone is also growing up in London in the Kent neighborhood says as Kent was being built back from the damage inflicted by German bombers, Ecklestone became keenly aware of the growing demand for car and motorcycle parts.
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So he's actually trading parts as one of his first businesses.
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It didn't take long for him to start dealing in whole cars and motorcycles.
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And then he honed his skills among the sharks.
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He's dealing with rough people in a rough neighborhood.
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Remember, fundamentally his story, this story that I want to tell you is like, how did a used car dealer turn himself into a Formula 1 billionaire?
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In that world of thugs and East End gangsters, the 5'2 Ecklestone had somehow carved out a spot for himself.
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He's making enough money.
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So then he establishes, he goes, he wants to sell more luxury cars.
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He establishes a sparkling all-white showroom in the outer reaches of Southeast London. business was booming.
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The fisherman's son now carried wads of bills in his bespoke suits and insisted that his place of business be as immaculate as his appearance.
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He's obsessed with cleanliness.
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He starts selling a bunch of luxury cars.
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Before long, Ecklesen wasn't just selling cars to chic Londoners.
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He was loaning those customers the money to buy them as well.
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As he rad in cash selling cars and collecting interest, his passion for racing never left him.
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Eckles had scared the living daylights out of himself in at least one serious crash.
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The death of his close friend, the driver Stewart Lewis Evans from burns sustained at the 1958 Moroccan Grand Prix had convinced Eckleston to give up racing forever.
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But he wasn't ready to quit the game.
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In addition to being his friend, Eckleston had also been Lewis Evans manager.
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By the mid 1960s, Eckleston was hanging out in Formula 1 circles and developing a deep bond with the driver Yoken Rent, who I Yaken Rent, I think is how you pronounce it.
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the one I just told you about that died that wrote the letter to Chapman and then wind up dying 16 months later.
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The friendship morphed eventually into a business partnership.
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This one too ended in tragedy.
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Eccleston says to this day that he never recovered from his friend's death at the wheel of the Lotus 72 car.
18:22
Strangely though, Bernie only increased his commitment to the sport after the accident.
18:27
Eccleston bought a team for £100,000, which would be the equivalent for about a little less than $2 million today.
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Being a team owner came with a serious perk.
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This is again how he's going to maneuver himself into position of power.
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It gave him entry to the periodic meetings of the British constructors.
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So they the racing car team owners.
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They would get together to discuss all the pressing issues in the sport.
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It was around this time that Ecklestone also met the most famous car builder in the world, Enzo Ferrari.
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Ecklestone and Ferrari grasped early on what racing fans were coming to see.
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So the Ferraris were the stars.
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Whether supporters cheered for them or against them, the Ferraris were by far the most important team.
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And as it turned out, no one would get richer off of the Ferrari mystique than Bernie.
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In order to make his fortune, which would swell into the billions, Eckles admits that there was never a plan, nor did anyone know exactly how rich he was.
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That was one of the two things he wouldn't talk about.
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You'll never get me to discuss last night, he once said, or money.
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Bernie wasn't like a driver who knew every bump and curve of the of a racetrack's corners.
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Nor was he like the engineers who could predict how a complex puzzle of air flow, horsepower, and rubber might behave.
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Yet, he understood how to succeed in F1 as well as anyone.
19:37
I read each chapter multiple times before I sat down and talked to you.
19:43
And when I reread this highlight, I thought of a line from one of my favorite books, which is by Will and Ariel Durant.
19:48
It's called The Lessons of History.
19:50
And it says, "History reports that the men who can manage men manage the men who can manage only things.
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And the man who can manage money manages all.
20:01
Ecklestone managed F1's money.
20:01
And he did that for nearly four decades.
20:04
More on how Bernie worked.
20:07
The recipe was to exploit loopholes, uncertainty, and anything that wasn't spelled out in binding legal ease.
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And once you've done that, guard those secrets like a Soviet spy.
20:16
Share only what you're you are compelled to share, and never let anyone peek inside the garage.
20:21
It is no coincidence that the motor home that followed him around to all the races from the early 1990s became known as the Kremlin.
20:29
"Your problem is you always want things absolutely clear," Bernie once told a close associate.
20:34
"And sometimes it's better if things are not clear.
20:39
When you live into your '9s as a billionaire architect of a massively popular sport, marry three times, and watch your daughters grow into full-time famous people, the public tends to get curious.
20:50
But everything you need to know how Bernard Ecklestone built the foundations of modern Formula 1 and ran his three- ring circus for more than 40 years can be boiled down to one fundamental skill.
21:03
He was wired to make deals.
21:06
Eccleston used that six sense for dealmaking to revolutionize Formula 1 in three critical areas.
21:12
The first was taking control of the team's relationship with the racetracks.
21:15
The second was harnessing television, the single force on which every modern sports empire is built.
21:22
And the third was seizing on the importance of sponsorship.
21:26
Eccleston's purpose in life became to grow Formula 1.
21:29
From his very first meetings with F1's other team owners, Eckleston sniffed opportunity.
21:36
This part was fascinating.
21:36
Some of the people around the table had been hugely successful in the auto industry, and others were brilliant designers or racers.
21:42
But if he was being honest, Enzo Ferrari aside, these weren't sharks.
21:48
They weren't as crafty as the gamblers he met on his regular trips to the casino.
21:52
Nor were they as cutthroat as the gang of used car dealers he knew back in London.
21:57
Worst of all, none of them had any real money for all of their technical acumen.
22:01
Eckles couldn't believe how frequently and bitterly the teams complained about being on the verge of bankruptcy.
22:07
So I got to this section made me think of one of my favorite things that Buffett ever said, Warren Buffett ever said.
22:12
He said, "The important thing is to keep playing, to play against weak opponents, and to play for big stakes.
22:17
That is exactly what Bernie's going to do."
22:20
The reason soon became clear to him.
22:22
The constructors, without a lick of commercial sense between them, couldn't agree on anything.
22:27
All of it stemmed, Bernie thought, from their failure to realize a fundamental reality of Formula 1.
22:30
The teams were only really rivals for a couple of hours a dozen times a year on the track.
22:37
They needed to understand that the rest of the time they were business partners.
22:42
Instead, every outfit from Colin Chapman's Lotus' to Enzo Ferrari's Ferrari was out there acting alone for their own smalltime interests.
22:52
Teams negotiated appearance fees individually with each circuit.
22:55
They didn't discuss their finances with each other.
22:59
If they thought they would make up their shortfall in prize money, they were sadly mistaken.
23:03
The races in those days offered purses of barely $10,000.
23:10
So Bernie, another thing that was genius about this is he is early. He is very, very early.
23:15
I think I just read that the annual prize money now for Formula 1 is over 2 billion a year.
23:20
Bernie is coming up with these ideas when they're offering $10,000 to win a race.
23:25
No one was quite sure who was running the show either.
23:29
The F1 calendar was an everchanging mishmash of races controlled by local automobile clubs.
23:36
The schedule was so chaotic that promoters couldn't even guarantee that every team would show up to every race.
23:41
And so they use the example of the 1970 season.
23:43
In the 1970 season, only seven of the 12 teams competed in every single race.
23:47
To Eccleston, the whole ad hoc money losing setup was nothing short of outrageous.
23:51
What was the point of fairing cars, drivers, and mechanics as far away as Canada and South Africa if the team was only going to come home several thousand pounds lighter?
23:58
What the teams needed was to work together, controlling the terms and negotiating as one.
24:05
They could be a cartel if they wanted.
24:08
They just didn't know it yet.
24:10
And so, I was reading another profile of Bernie and I came across this great description of what he changed.
24:14
He says promoters were used to haggling with shoestring privateeer teams suddenly found themselves facing a united front led by a ruthlessly effective negotiator.
24:26
So this is his proposed solution.
24:29
Eckleston proposed that the British outfits form a company that would optimize the logistics of racing in Formula 1 and make sure everyone got paid fairly on time and in full.
24:36
The other owners shouted Bernie down at first.
24:41
They had no interest in adding more negotiations and more administrative nonsense to their workloads.
24:45
Well, I'll do it, Eckleston said. But I want a fee. Remember this moment.
24:50
Eckleston was offering to take on all the responsibility and 100% of the risk to guarantee proper appearance money for the teams wherever they raced.
24:58
It's the precise instant when the sands of the entire sport began to shift.
25:04
Eccleston would make the deals with the circuits and he would make sure the whole show turned up.
25:08
All Bernie wanted in return was 8% of whatever the promoter shelled out to the group of teams that would eventually form the Formula 1 Constructor Association, which is this organization that Bernie is founding.
25:23
It was more than acceptable price for the luxury of never worrying about this stuff again.
25:27
And then we'll see that Bernie has a little bit of like Michael Oitz in him.
25:31
At the end of 1972 season, his first season in the game, Bernie went to all the European promoters demanding that they increase the prize fund to £43,000.
25:42
And he does this over and over again. So that was in 1972.
25:43
By 1976, the demands were up to £150,000 a race.
25:46
Then the next year, £165,000 a race, then £190,000 a race.
25:52
If circuits weren't prepared to pay, then the teams just wouldn't go.
25:57
Eckleston had no problem making himself an annoyance because he knew everything always came down to money, even when they acted like it didn't.
26:03
Enzo Ferrari had taught him that much is the advice that Enzo Ferrari gave Bernie Ecklestone.
26:09
You should never let people know you're running a brothel.
26:11
You have to pretend it's a hotel and keep the brothel in the basement.
26:14
Bernie's role at FOCA, this organization he just founded, would see him spend a decade wrangling the strange, confusing world of motorsport politics.
26:24
His great ally in this Oh, this is so such a such a wild story.
26:29
His great ally in this was an upper crust British lawyer named Max Mosley who refined whose refined upbringing and polished education was everything Bernie's background was not.
26:41
Mosley had a family tree studied with baronss and dames.
26:43
He had been raised in France, Germany, and educated a British boarding school.
26:48
This is how Bernie describes their partnership.
26:49
I was the used car dealer. He was the barristister.
26:53
But there's also some dark stuff going on in Max's family.
26:55
His father, Oswald Mosley, was the leader of the British Union of Fascists.
27:00
And in 2008, so many decades into the future, there's actually the News of the World tabloid obtained footage of Mosley engaged in what they called a sick Nazi orgy with five hookers.
27:13
Mosley successfully sued the paper for a breach of privacy, admitting to the extracurricular activities, but denying that there were any Nazi themes.
27:21
So, I actually looked up to see if there was any interviews if he was still alive and found out that Max Mosley was actually diagnosed with terminal cancer in at the age of 81.
27:32
And instead of letting the cancer took his take his life, he actually shot himself in the head.
27:36
But long before Mosley was doing all this these exotic parties and doing all this crazy stuff he was doing, he was actually the perfect partner for Ecklestone.
27:44
Bernie drove the hard bargain.
27:46
Mosley considered the long game, but Mosley admired his new partner.
27:51
Bernie's lawyer said something funny about him that I want to tell you.
27:54
He uh his Bernie's own lawyer said that uh he had a great talent for getting himself out of trouble that he got himself into the first place.
27:59
Mosley was perfectly dialed into Bernie's negotiating tactics which were primarily cooked up to drive people nuts.
28:05
The routine was essentially good cop bad cop.
28:09
While the urbane consily Mosley engaged with whoever's across the table, Eckleston delighted in showing how quickly he could lose interest.
28:15
In fact, Bernie would say so.
28:17
or he would just stand up while people were talking to adjust picture frames on the wall.
28:20
Or he would schedule flights really close to meetings in order to squeeze negotiations shut.
28:25
The battle for control of the sport dragged on for nearly a decade between Eccleston's FOCA and the confusing collection of acronyms that made up motorsports world governing body.
28:38
So there's this huge fight for like a decade between Bernie's FOCA and this other organization called FISA.
28:42
The president of FISA they describe in the book as a French blowhard whom Ecklestone came to despise.
28:49
So his name was Jean Marie Ballistre and so this disagreement between FISA and Folk was described as a war.
28:56
The war that erupted between Foka and FISA wasn't about any one specific thing other than control of the sport.
29:01
Though the two sides opened up plenty of fronts.
29:04
They argued about technical regulations, about circuits, and above all they argued about cash.
29:10
Races were run under the constant threat of teams pulling out at the last minute, drivers going on strike, or FISA yanking away World Championship points, which was no way to run a league.
29:19
This is how they described the analogy using two other sports.
29:23
The NFL didn't schedule games wondering who might turn up, and Wimbledon didn't threaten to lock players out of center court.
29:29
The uncertainty was exactly what anyone hoping to appeal to sponsors didn't need.
29:35
And so, they finally hammer out a deal.
29:37
And this is another turning point in Bernie's life and career.
29:38
In early 1981, after talks in Italy and Paris, they reached a compromise.
29:42
FISA would control all technical and sporting matters and FOA with all of its financial power was left in charge of promoting Formula 1, which is all Bernie really wanted anyway.
29:51
And so they signed this agreement which they call the Concord Agreement.
29:55
Let me read this description of what the Concord Agreement meant.
29:58
This confidential pact whose names evoked diplomacy and whose terms read like a complex treaty granted Folk and Ecklestone the rights to negotiate television deals and manage the sports commercial aspects.
30:08
The governing body in turn kept its prestige with a share of revenues besided day-to-day promotional control.
30:14
It was in effect a transfer of power from gentleman amateurs to hard-nose businessmen.
30:21
As part of the deal, Eckleston would take the lion share of the growing TV and sponsorship money.
30:26
a cut that would make him fabulously wealthy in the decades to come.
30:31
Now, there's another crazy thing that was mentioned in the documentary that I watched that I mentioned earlier.
30:36
Bernie actually offers the other teams to buy into this.
30:40
So, he goes in the documentary says that Bernie said that he paid a million dollars to get the TV rights for F1. There's 10 teams.
30:46
I will sell each of you 10% for $100,000.
30:48
And one of the team owners is actually interviewed in the documentary and he says, "Us nine idiots all said no."
30:54
And so Bernie actually takes on the risks alone and maintains the ownership.
30:59
This is what is going to build, you know, his great fortune. And again, he is early.
31:04
Among the various concessions he secured for himself, Bernie had made sure that the deal placed the sports broadcast lights rights under his control.
31:10
Considering what the British and European TV landscape for sports look like in those days, no one realized that they had surrendered a potential cash cow.
31:19
There's actually a lesson from the history of entrepreneurship I think is really important about this.
31:21
Don't give up future rights.
31:23
Walt Disney, one of his heroes was Charlie Chapman.
31:25
Charlie Chapman was one of the founders of United Artists.
31:28
Disney had to deal with United Artists.
31:30
Then when they went to resign, Disney refused to give United Artist the TV rights for Disney's IP at a time when there was only like a few thousand TVs in existence.
31:42
And Disney was adamant about not giving up control.
31:47
So much so that that caused him to have to break away from one of his heroes companies because he was just completely refused to give up future rights. We see this.
31:56
We see that FISA and then their leader, which we'll talk about, it's even crazier because at this time I think they they still have like 30% of the TV rates and they sell it for like $9 million few years from now. It's just nuts. Just this idea.
32:07
It's like you see it over and over again.
32:09
You just handed away something. You had no idea. This is, you know, 1981.
32:12
You have no idea how valuable these rights are going to be in the in the years to come.
32:17
And so they're talking about at the time he's making the deal, few broadcasters carried any live any races live yet.
32:22
What little footage appeared was shot during short sections of the race, then flown back to Europe and cut into highlight packages for news programs.
32:32
And because F1 had to take whatever sponsors it could get at the time, remember, they don't have a lot of money.
32:38
This actually caused conflict with some of the broadcasters.
32:41
So, the BBC the BBC had refused to show F1 for much of the season because it objected to one of the teams sponsorship deals, which was this company, which I'd never heard of before, called the London Rubber Company.
32:53
I was like, "Well, what's the problem with the London London Rubber Company?"
32:56
The problem is the London Rubber Company's most popular product was Durex condoms.
33:01
And so they were driving cars around advertising condoms.
33:07
And so they're like, "We're not putting this on error, are you crazy?"
33:11
And so the advantage here again when you just look at what's happening and I highly will recommend reading this book and then just spending a lot of time in each chapter he just to Bernie this is like the system is so backwards and if you it was just very chaotic and one of the things that he just does over and over again he just adds order to where there is chaos
33:31
and he's he's got a lot of ideas so like think about this and I would say many of these ideas they're kind of like opportunities hiding in plain sight again going back with what I think is the main theme of what I'm trying to to to talk to you about is just like seeing what everybody else's does and just like what can I do that's different. I don't
33:45
I don't want to just cop like I can keep like he is innovating in an existing sport.
33:49
The sport has been going on for decades at this point, you know.
33:52
So this idea is like I don't know like TV seems to be really valuable.
33:56
Then he also does smart things which I'll talk to you about in a minute where he's like well look what the NFL is doing with TV in America.
34:02
Like why can't we just take that idea and apply it to our sport in Europe?
34:06
Another idea he had because he was always trying to go like high-end.
34:08
And I'll talk more about this later, but he's like, "Okay, well, the paddic, right, where all the teams are during the races, they they used to be like closed off.
34:16
They were like obsessed with secrecy.
34:18
You just have the engineers and the mechanics there."
34:19
And he's like, "Yeah, but this is like a very high-end exclusive area.
34:24
You know how concerts have like they can sell a lot for like backstage passes?
34:28
Well, what's the backstage pass for F1?"
34:30
It's access to the paddic and we could sell that to sponsors to bring their customers.
34:34
We can have celebrities back there, power brokers, and uh I've been invited to multiple F1 races and I I've had to say no uh both times because of working on the podcast and uh one of them was in Miami and I didn't know in the book it says like the these tickets are if you can even buy them in many cases you'd have to be a sponsor.
34:51
They were run to the tens of thousands.
34:53
Now again that's like half a century from when Bernie's thinking about it.
34:57
It's just like this idea is hiding in plain sight.
34:58
Like we have assets that we're not using. It's just right there.
35:02
you just have to think differently to carve them out to create them.
35:06
So it says EES knew that television remained the future.
35:08
He'd spent time in the United States where where the NFL was turning TV into its purpose for existing.
35:13
Bernie had also come across a young American agent who spent the 1960s and 1970s revolutionizing golf and tennis by building his clients into household television names starting with Arnold Palmer.
35:26
Again, his idea is like we could just do the same with F1 drivers and look at today.
35:31
Go look at the top F1 drivers and then look at how many people follow and engage on social media.
35:37
They're some of the most famous people on the planet because there's only 20 of them.
35:40
Eccles had the potential to do the same for Formula 1.
35:42
The most significant deal came almost immediately.
35:43
So he he does a deal with this cumbersome bureaucratic bureaucratic beast called the European Broadcasting Union, the EBU.
35:53
So this is an umbrella group that represents 92 public broadcasters across the European continent and Echostone convinced them that F1 racing was a product that they desperately needed. He's a great salesman.
36:05
There were just a few conditions.
36:07
No longer could they cherrypick the best races and ignore the rest.
36:12
It was too easy for them to show like the Monaco Grand Prix and then ditch the one the race that's in like Sweden.
36:17
If they wanted Formula 1, they'd have to commit to it by airing every single Grand Prix in its entirety.
36:23
Again, think about what he's doing.
36:25
He's taking something that'sa chaotic and organizing and and just applying order to it.
36:29
How the hell are you going to grow your sport?
36:32
How you going to your your customers, your fans, your your viewers if they don't know?
36:35
It's like, okay, the Monaco's on and then what about next week's race? I turn on the TV. There's nothing there. No explanation. Where is this thing? It has to be organized.
36:42
And then he does something really smart at the very beginning.
36:46
He's like, listen, I'm not even going to charge you that much.
36:48
the money the the estimate on this deal was like low seven figures.
36:50
But he's he Eckleston's point like I don't care about the cash.
36:54
What I care about is the visibility because the real cash is from the sponsors by securing large chunks of airtime for races on television stations across Europe.
37:01
He had manufactured hundreds of hours of new exposure for F1 sponsors.
37:05
Everything from the logos on the cars to the boards by the side of the track were now guaranteed eyeballs.
37:13
and he lets that deal build up his own sport, you know, for almost a decade.
37:18
And he's like, "Oh, wait.
37:20
I actually have a better idea here now."
37:22
So, he had been working his used car dealer magic on TV executives all over the continent and figured that the once critical EBU agreement could now be dispensed like an old tire.
37:30
If he could sell the TV rates separately in each country, there was a fortune to be made.
37:37
Who needed one bulk deal when he could make dozens of smaller ones?
37:39
By 1990, F1 claimed a global audience for the season north of 1. 2 billion viewers.
37:46
In order to keep growing that number, Ecklestone pursued his efforts to professionalize the series.
37:53
He moved the start of every Grand Prix to 2:00 p. m.
37:55
Europe time so that people knew where and when to find the races.
38:00
Again, imposing order where there was chaos.
38:03
He also convinced broadcasters to build programming around the start and finish of the events to generate more screen time for the cars and circuits.
38:12
All of which pushed the value of F1's TV rights for a 5year cycle to $120 million.
38:16
The most remarkable thing about the price which dwarfed anything happening in other European and any other Europeanbased sport wasn't just the size of it.
38:25
It was exactly how much of that money found its way directly back to Ecklestone.
38:30
So, I'm going to get we're going to get into how much money this guy he's the highest paid executive in Britain, okay?
38:35
How much money this guy was paying himself.
38:38
But I need to point out make this point that's so important.
38:40
We're talking every like wow look how much money they're making in 1990.
38:44
He got involved in the sport in 1960, 1961, 1962.
38:46
This guy did not interrupt the compounding.
38:51
Now, the rights and F1 itself has been, you know, sold over and over again since then. But he built his career. I think he was 45.
39:00
I think he's 44, something like that.
39:00
By the time he starts doing this, and I think when he finally stops, he's like like in his mid 80s. So, back to this.
39:06
It was exactly how much of that money found its way directly back to Eccleston.
39:09
So, they they do another Concord agreement.
39:11
Under that agreement, 30% of the broadcast revenue goes to that governing body while the rest went to Ecklestone and the teams.
39:17
But after the end of the EBU agreement, which was the the bulk deal he did with the 92 90 something broadcasters, right, the this is so crazy to me.
39:27
The FAA got spooked about the future of television, which suited Bernie perfectly.
39:33
They traded away its 30% stake of the TV rights for $9 million.
39:39
I don't know if this true, but there is a rumor, keep in mind, there's a rumor that Liberty Media Media, who owns the rights today, turned down a $20 billion offer from Saudi Arabia for those rights.
39:53
30 some odd years earlier, the FIA sells their rights, 30% of these rights for $9 million by taking the guaranteed cash.
40:04
Now, Bernie's nemesis, the one he hates, had no clue how much he was leaving on the table in the future in a lifetime of questionable decisions.
40:11
This was surely the most expensive.
40:13
Bernie had beaten him once and for all.
40:15
And here's another way that Bernie built the business and made more money.
40:20
Bernie's strategy was to tell every race organizer that they weren't important.
40:23
He told them that he didn't really want more Grand Prix.
40:25
The teams didn't want more races and they were the ones getting cut.
40:29
And so these hosting fees, I actually looked this up.
40:33
Now countries pay a ton of money to Formula 1 to host a race in their country.
40:38
The numbers I found, they said it ranges anywhere from 20 million a year to all the way up to 57 million a year.
40:44
By the 1990s, it had become a legitimate question around the sport. Who owned Formula 1?
40:48
Bernie Eckles insisted there was only ever one answer.
40:52
He controlled the television rights and was well onto way his way of controlling the commercial rights too.
40:55
He was also in charge of negotiating with the circuits and local promoters.
40:58
As far as Eccleston was concerned, all of that amounted to controlling Formula 1.
41:05
Nobody was there trying to stop me from doing something that I thought was good.
41:09
He says what all of his opponents had found was that the appearance of chaos around Eckleston was in fact his greatest weapon.
41:16
No one was ever quite sure where they stood.
41:18
No one could sense when things were about to change.
41:22
No one could even look up anything.
41:22
The only complete and accurate accounting of F1's operations existed not in the regulatory finding filings or tax returns, but inside Eckleston's head.
41:30
I carry out my business in a very unusual way.
41:35
He said, "I don't like contracts.
41:35
I like to be able to look someone in the eye and then shake them by the hand rather than do it the American way with 92page contracts that no one reads or understands.
41:44
If I say I'll do something, then I'll do it.
41:46
If I say I won't, then I won't.
41:49
Surprisingly, people seem to like that.
41:51
All major decisions about where F1 raced and how it looked now went through Bernie, and so did most of the profits in 1989, as some driver salaries reached the unprecedented heights of 6 million a year.
42:03
Eccleston was pocketing a million a race.
42:05
And so, this is the funny part, too, that you always notice if if things are working, the numbers always get bigger than you could possibly expect.
42:12
So, I have on my desk uh printed out uh the the highest salary for an NBA player.
42:16
I think it starts with like, you know, it goes back 60 years or something.
42:20
Starts like 8,000 a year, you know, all the way up, I think now it's like 75 million a year or something like that.
42:25
So, in 1989, they're like, "Oh my god, these driver salaries are so high. It's unprecedented.
42:30
They're making 6 million a year.
42:32
The top drivers now get paid just for their salary like 65 million a year."
42:36
And you just see that happen over and over again.
42:38
Things grow way bigger than people anticipate.
42:40
I'll take as much money as I can get and I don't get as much as I should.
42:43
Bernie said he was the highest paid executive in Britain.
42:47
In 1993, his combined salary from the two companies he used for selling television and sponsorship rights amounted to $44 million.
42:52
The people responsible for actually racing Formula 1 cars could hardly wrap their heads around what was happening to their sport.
43:01
This is maybe the most important part.
43:04
Eccleston had been one of them, just another constructor, just another team owner hoping to build a quick car and find a halfdecent driver to sit in it.
43:13
Now he was profiting from their work on a scale that no one had seen who had seen F1 in the ragtaged 1960s and 1970s had ever imagined.
43:23
They put limits on their work.
43:27
They put limits on their opportunity.
43:29
Bernie did not one of my favorite Bruce Lee quotes is like if you always put limits on what you can do physical or other otherwise it'll spread into the rest of your life.
43:36
It'll spread into your work. There are no limits. There are only plateaus.
43:40
But you must not stay there. You must go beyond them.
43:44
That's exactly what Bernie did. They stayed there. He went beyond them.
43:48
You've stolen F1 from the teams.
43:48
Another constructor shouted at Bernie. Bernie disagreed.
43:52
Eckleston felt that the only reason they could still afford to put fuel in their cars and tires on their wheels was him.
43:57
What wasn't up for debate was that by the early 1990s, Eckleston had made Formula 1 more popular than it had ever been.
44:04
F1 was now broadcast in more than 100 countries.
44:08
It boasted ratings of 200 million viewers per race.
44:10
20 years after he entered the sport as an outsider, that's another super important point about being an outsider.
44:19
Bernie was now pulling all of the strings.
44:21
Even if no one was quite sure who owned Formula 1, there was no longer any doubt that the man known around the paddock as the supreo was in charge.
44:30
One of my favorite maxims from Game of Thrones is those on the margin often come to control the center.
44:37
It's exactly what happened with Bernie.
44:38
It's what happened with Chapman.
44:40
It's what happened with where I'm going to talk about Dedricch Masist, founder of Red Bull.
44:43
You see it over and over again in these books.
44:45
So, I got one more person I want to talk about.
44:46
One of my favorite founders.
44:48
I think one of the best one of the best episodes I've ever done, one of the ones I'm most proud of. It's episode 333.
44:52
If you have not uh listened to it yet, or if you've listened to it when it came out, you know, a year or two ago, you should listen to it again.
44:57
I think the title's uh Red Bull's Bill Maniac billionaire founder, there were no biographies of English in English on Dietrich Mastis, the founder of Red Bull.
45:07
And so we translated one from from German to make that episode.
45:12
It's it's one he's one of my favorite founders.
45:14
The way he thinks he's just a complete like outsider and and a little bit of crazy as we'll see.
45:20
So, he's the last person I want to profile here.
45:22
Dietrich Masters never intended to build a Formula 1 world champion, but then he never intended to build a global energy drink empire either.
45:28
How he managed to pull off two such unlikely feats despite harboring no lifelong ambition to accomplish either one can be traced back to the same basic impulse. Mashes was bored.
45:36
He gets bored very very easily.
45:39
As a marketing executive in his native Austria, Mashes traveled the world hawking toothpaste, detergent, and women's cosmetics.
45:45
He was stuck in a rut, fast approaching 40, and tired of life on the corporate treadmill.
45:52
This is what he said about that time of his life, right before he starts Red Bull.
45:55
All I could see was the same gray airplanes, the same gray suits, the same gray faces.
45:59
All the hotel bars look the same, and so did the women in them.
46:04
Mashes was desperate for a way out of this monochrome nightmare.
46:09
He found it on a business trip to Thailand in 1982.
46:10
Searching for something to take the edge off his jet lag, Maschus was offered a local pickme up that was a favorite among longhaul truck drivers, a syrupy yellowish concoction cooked up by a Thai pharmacist as a cure for hangovers.
46:23
It hit Mashes like a triple a special shot to the eyeball.
46:28
Within months, he had quit his job and set up a company to start selling this miraculous stuff in the West.
46:32
Before it reached the shelves, Mashus made a few tweaks to the recipe. Okay.
46:38
So again, I think that's a great tweaking the recipe in everything that he does is Mash's MMO and I think the main point in of this chapter.
46:45
Mash just wanted a carbonated less concentrated version of the original.
46:50
So he stripped the ingredients down to the essentials.
46:53
Then he redesigned the traditional soda can into an 8 oz bullet shape and price it at $2 a pop to signal that this wasn't just another cola.
46:59
By 1998, Red Bull had single-handedly created a whole new category of beverage called energy drinks.
47:05
was selling 300 million cans worldwide.
47:08
I think they sell like four billion cans.
47:10
I forgot the number I just read.
47:12
It was like four billion cans a year. It's nuts.
47:13
Was selling 300 million cans worldwide and had made matchets a billionaire.
47:17
The secret to Red Bull success wasn't the flavor or its health benefits, but the ingenious way it was marketed.
47:22
And so this is one of the main points I hope you go back and listen to episode 333 because the way he matches this viewed Red Bull, he called it a marketing conglomerate.
47:29
His very unique idea was outsource everything else but the marketing.
47:33
He plastered the Red Bull logo on skateboarders, base jumpers, cliff divers, ice climbers, ultramarathoners, waterfall kayakers, and all over any oddball event in which thrill-seeking lunatics launched homemade flying machines off the end of a pier.
47:48
All of which helped to finance Mash's taste for acquiring his own aircraft.
47:52
You can actually go he has he has his own hanger that well he had he passed away a few years ago.
47:57
So, and he had his his own hanger, but he really had like his own private air force.
48:03
remember the idea that he has his own private air force.
48:04
This will come in later when he's recruiting for his Formula 1 team.
48:07
Uh and so he Red Bull is now financing his taste for acquiring his own aircraft and his personal desire to own a private island in Fiji.
48:16
Doesn't everybody want to own their own South Pacific island, he said.
48:20
Yet none of those endeavors embodied Red Bull's quintessential ingredients of speed, endurance, and the imminent threat of mortal danger quite like Formula 1.
48:28
Mattresses looked at F1 drivers and recognized them for what they really were.
48:32
Overcaffeinated adrenaline junkies with scant regard for their personal safety. So this is pretty crazy.
48:37
He Red Bull sponsors I don't even know how many athletes today.
48:41
The first person the first time they sponsor a professional athlete is an F1 driver.
48:46
They're doing this all the way back in 1989.
48:47
It is the Austrian driver Gard Burger.
48:50
So that's his first place.
48:53
Okay, well we're going to sponsor individual drivers.
48:55
Few years later, he's like, "Well, actually, why don't we uh sponsor entire teams?"
48:59
So, to become a title sponsor, so kind of like the presenting sponsor, right?
49:04
The title sponsor of a Swiss F1 team.
49:06
Then a few years later, they're like, "Hey, we're going to establish our own driver development program so we can identify young prospects that have F1 potential."
49:16
And they just keep finding more and more ways to ingratiate themselves and invest in F1.
49:20
says even other billionaires with a gift for marketing and a thirst for speed were surprised by how quickly Mashes ramped up his investment in the sport.
49:29
So then there's a quote from Bernie Eckles about Dietrich Mashes.
49:33
Like this guy is very very good at building a brand.
49:36
That brand was now linked to the world's premier motor racing series.
49:41
Yet Masist wasn't entirely satisfied.
49:43
So the problem was he's the presenting sponsor right of a team that is losing all the time.
49:48
He's like, "This is not good."
49:50
So he says, "If an insurance company sponsors a team and that team loses, people don't change their insurance company, but when the Red Bulls lose, people will get a new drink."
50:00
And so they had the idea, they're like, "Well, we don't actually just don't just only sponsor other uh events and other athletes.
50:06
We actually create our own events and like we dream up these like spectacles and we actually own them.
50:12
So why don't we do the same thing for Formula 1?"
50:14
So he buys the Ford Jaguar F1 team, which I guess was in bad straits because he gets it for one pound sterling, renames it Red Bull Racing.
50:23
Once again, what is his first instinct? To tweak the recipe.
50:25
He wants Red Bull to be the loudest team.
50:29
And they're going to come into every single thing.
50:32
Again, I think this is one of the most important parts of the chapter, the most important ideas.
50:36
What's going to happen here?
50:37
We always thought that if the old teams did something one way, is that necessarily the way Red Bull would do it?
50:43
And if it's not the way we would do it, then why don't we change it?
50:45
The first thing they do is there's these motor homes that every team comes to the track.
50:53
Every team parks these motor homes in the paddic.
50:55
At the time, the express purpose is for to talk to your sponsors and to hold technical meetings.
51:02
Well, Red Bull had something a little different in mind.
51:04
So, they build this giant thing they call the energy station.
51:07
It is a gleaming three-story glass and steel edifice with a hydraulic roof that lit up at night to reveal a nightclub on the upper deck.
51:14
They said it looked much more like a spaceship that a spaceship had landed in the paddic.
51:20
The most radical part of the energy station wasn't even the design. It was the door policy.
51:24
At the time, the team motor home was supposed to be one of the most sacred and private enclaves in the paddic.
51:30
A place where deals were made and race strategies were devised.
51:33
But Red Bull threw its doors wide open and welcomed everyone.
51:36
Mechanics, drivers, engineers, and team principles.
51:40
It didn't matter who you were or which team you worked for.
51:41
Anyone with a paddic pass around their neck was welcome to to come to the parties on the energy station roof where guests could listen to electronic dance music while knocking back a couple of beers or vodka. Red Bulls.
51:53
Red Bull soon established itself as the sport's foremost disruptor, seemingly determined to challenge every unwritten rule and standard way of operating.
52:02
So, they love the energy station idea, but the most famous F1 race takes place in Monaco.
52:09
The energy station's not going to fit there. So, like, oh, okay.
52:11
So, we'll build one that's just for Monaco, and we're going to make sure it floats so we can put it in the Mediterranean Sea.
52:18
says the team commissioned a ginormous floating pontoon which was assembled and stored in the Alps until the week before the Grand Prix when it was hauled to northern Italy.
52:27
There was some 70 engineers who spent 21 days make constructing this.
52:32
So it fits on top of the pontoon.
52:34
This one was equipped with a DJ booth and a swimming pool and a further six and they took six hours of sailing this entire monolith 40 miles down the coast where then they docked it in the Monaco Harbor right next to these giant super yachts.
52:47
Dietrich was having so much fun that he do I love this guy.
52:53
He was having so much fun that he soon decided that owning one F1 team wasn't enough.
52:56
Less than a year after establishing Red Bull Racing, Mashis acquires a second team.
53:00
This was clearly a company planning for the long term.
53:06
There was a lot of people in the sport that would, you know, come in, they would be all excited.
53:08
They could even burn hundreds of millions of dollars and then they disappear.
53:12
But Dietrich wasn't like this.
53:13
As Mashes and his Red Bull empire weren't going anywhere.
53:15
So now they start to focus like what is the the best possible marketing we could do for F1 team?
53:22
Uh winning is is the is the best possible marketing we could do.
53:25
To achieve that goal of transforming his brash outsider into a genuine contender capable of toppling F1 bluebloods like Ferrari and McLaren, Massachusetts had made what may have been the most audacious gamble of his career.
53:39
Remember that the idea that energy drink red bull companies coming into F1 where Ferrari has been racing for I don't know what 30 40 years at this time.
53:48
Those on the margins often come to control the center.
53:52
It's exactly what's about to hire happen here.
53:54
So they call what he does next his most audacious gamble of his career inside of F1.
53:58
He hired the youngest team principal in F1 history.
54:03
Handed him the keys to the entire operation and got out of the way.
54:04
This is going to be Christian her.
54:07
This is over 20 years ago.
54:09
So it says at the time Christian her is this 31-year-old had never who had never driven an F1 car, never worked for an F1 team, possessed no college degree or expertise in engineering, design or aerodynamics.
54:21
But something about his keen understanding of how to marshall the resources of a racing outfit in the lower categories of motorsport had impressed Mashes.
54:28
I've got big ambitions with this team.
54:31
Dietrich told her, "I want it to be different.
54:33
I wanted to have different energy.
54:35
We are not going to be corporate.
54:37
We're going to do things the Red Bull way.
54:38
The Red Bull way meant being unafraid of failure.
54:41
It meant trusting your gut.
54:43
It meant giving youth an opportunity and occasionally rolling the dice.
54:47
And I'm prepared to take a chance now.
54:49
I'm willing to take a risk on you.
54:52
And so their very first thing that they do is they need to find greater technical leadership and direction.
54:59
So Christian her sets his sight sights on recruiting what is the most highly regarded aerodynamics export in the sport.
55:07
This guy named Adrien Newi actually ordered several months ago when I started getting into F1.
55:11
I ordered uh Adrien Nuie wrote a book called How to Make a Car or How to Build a Car.
55:16
I think eventually going to read it and turn into an episode.
55:19
But Adrian Newui has designed championship winning cars in three different decades.
55:23
I'm just going to pull out some other quotes uh just to give you some background real quick background on how important this is.
55:29
Newi says that aerodynamics which is the study of how air flows around a solid object is the single biggest performance differentiator in F1 and he is the expert in that domain.
55:38
He understood that way before his peers way before his peers that the single biggest competitor wasn't the other cars. it was win resistance.
55:46
And so he thought if he could defeat wind resistance better than the other teams, he would automatically win more races.
55:51
And he has spent 40 years thinking about every nick, groove, or cranny on the surface of a race car.
55:59
And so what Christian her would do is he essentially just started stalking Newi.
56:03
New is working for another team at the time.
56:04
And so he would just like randomly bump into just, oh, I didn't know you were going to be here.
56:09
He knew he was going to be here.
56:10
Knew he uh we talked about this.
56:12
his tactic was to build a relationship with me was by accidentally bumping into me all throughout the paddic.
56:17
And this happens over and over again.
56:18
They start talking and what her realiz is like, "Oh, newie's like he would at least entertain the thought of leaving one of the sports most storied teams for the F1 equivalent of a startup, which is what Red Bull is at this point.
56:30
The only question they hadn't discussed at that stage was money.
56:34
And that discussion would have to take place with Dietrich Mashes."
56:35
So her and newie fly to Salsburg.
56:39
Then they take a helicopter into the Alps to have lunch with Dietrich.
56:44
And then this part was hilarious.
56:46
We showed him something of what Red Bull is like.
56:48
Among other things, we stuck him in one of our alpha jet fighters and went inverted over a mountain at 500 ft. No thank you.
56:54
You can count me out on ever doing that.
56:59
That that sounds terrifying. Uh so what happens?
57:02
They wind up having a great lunch.
57:03
And then Newbie tells Dietrich his number.
57:06
And Dietrich does something that's really smart here.
57:08
So it says, uh, when Dietrich discovered how much the world's highest paid racing designer was expecting to take home, he was unsure if Newi was worth that that price tag.
57:18
So Mashis made a call to Ghard Burger, Red Bull's original Formula 1 driver and now had become one of his closest confidants.
57:25
Gard, we have Adrien Newi here in Salsburg, but he is very, very expensive. What should we do? Well, it depends.
57:31
Ber replied, "On what value do you put on a second a lap?"
57:34
In other words, do you want to win or not?
57:37
Cuz if you want to win, pay the man.
57:40
Adrien Nui was formerly introduced as Red Bull's chief technical officer in November 2005 with the stated aim of building the team into a championship contender.
57:50
There was an energy about us.
57:53
We were like a young band on our way up.
57:54
Again, it's just like a startup.
57:56
The band's first hit came in 2009.
57:58
The FIA had introduced sweeping new regulations designed to encourage more overtaking during races.
58:05
The changes covered everything from the bodywork to the tires.
58:08
The rule changes amounted to a blank sheet of paper for designers.
58:13
And the parallel that just jumps off the pages here, it's like so inside of F1 when they change the rules, right?
58:18
The rule change changes amount to a blank sheet of paper for designers.
58:21
You can think of if you think about all the different people that we we cover and we study together on this podcast.
58:26
New technological waves are like that for business.
58:28
It allows you to think up something completely different, something you couldn't have done before without the invention of that technology and now build a company to take advantage of that new technology.
58:38
In the same way, they're building a car that could take advantage of these new regulations.
58:44
And no designer was more comfortable staring at a blank piece of paper than Adrien Newi.
58:48
I do enjoy regulation changes, says Newi.
58:50
Perhaps the part of my job I enjoy the most is figuring out what those regulations mean, what is their intention, and if a subtle different difference allows us to explore new horizons.
59:02
The result of those explorations was a Red Bull car unlike anything the team had produced before.
59:09
This is exactly why you overpay talent because it's nearly impossible to overpay for talent.
59:14
Newi had digested the rules, changes, and produced a bold and revolutionary design that went like a rocket ship.
59:20
That was the car they called RB5.
59:22
He improved it even more for the RB6 the next year.
59:25
The result, the next year's result was the RB6.
59:28
Newi estimates it generated more downforce than any car in Formula 1 history.
59:32
That meant the RB6 could take some of the highest speed corners in the sport flat out.
59:40
It was as if the car was pasted to the track.
59:43
Red Bull took pole position in 15 of the 19 races that year and clinched its first world title.
59:47
Thanks to Mash's investment, Horner's leadership, and Newi's genius, Red Bull had cracked the code.
59:53
The team stomped its way to four consecutive titles.
59:59
Mash's team was now so powerful, so successful, and so integral to the future of Formula 1 that it was no longer an outsider.
1:00:05
Red Bull was a fullyfledged, paid up member of the establishment.
1:00:10
The team that set out to upset the aristocrats now occupied the same rarified air as those automotive giants.
1:00:18
Those on the margins often come to control the center.
1:00:22
That maximum ties together all three of these remarkable people.
1:00:25
Colin Chapman, Bernie Ecklestone, Dietrich Mattresses, all outsiders, all people who took risks, all people who insisted on doing things their own way.
1:00:33
The book is full of people and ideas like this.
1:00:36
I highly, highly recommend that you read it.
1:00:38
If you buy the book using the link that's listed down below, you'll be supporting the podcast at the same time.
1:00:43
I also think the new audiobook feature on Spotify is excellent.
1:00:47
That's the fir that's where I've been listening to the audiobook.
1:00:50
If you're a Spotify premium member, you literally it's remarkable what what what they've done.
1:00:53
You literally just search for the the audiobook title and then press play and it immediately starts playing.
1:00:58
So, in case you didn't know about that, I would also do that.
1:01:00
I've been listening to a lot of audio books on Spotify.
1:01:01
If you're not on my personal email newsletter, for every book that I read, every episode that I make, I send you a list of the top 10 highlights.
1:01:09
It's free to join and you can do that by going to davidsonra. com. That is 395.
1:01:14
I don't even know what episode number this is. I think it's 395.
1:01:17
I've been so obsessed with this book and trying to figure out what I want to talk to you about this week.
1:01:21
I just spent so much time.
1:01:22
So, I think it's hopefully it's 395.
1:01:23
So, that's 394 five books down, 10,00 go.
1:01:25
and I'll talk to you again soon.