Organizations succeed to the extent that all of their members pursue a common goal.
Everything in this book goes back to that idea.
It goes back to the idea of keeping the main thing, the main thing and how this is a very simple and powerful idea that's excessively hard to practice over a long time because it goes against human nature.
It's in our nature to drift and complicate things.
And the founder of Fastenal, Bob Kierland, built his entire company building thesis around that idea.
Keep everybody in your organization pursuing a common goal.
And then Bob uses this book to defend his ideas.
But it's laughable that his ideas even need to be defended.
His numbers speak for themselves.
How the hell does a company selling a commodity product?
He says in the book he had no advantage on products, yet that same company was able to compound all the way to a $38 billion market captain and is one of the best performing stocks over the last quarter century.
I'm friends with the co founder and CEO of Ramp, Eric, and I was texting him about this book and this incredible company while I was reading and researching this episode because Eric is keeping everyone in his company pursuing a common goal that would make history's greatest founders proud.
Ramp is building the world's best tool that gives you everything you need to control your spend, watch your costs, and optimize your financial operations on a single platform.
So this is what I texted to Eric.
It describes why this obsession with cost control that fastenal has turned into a massive advantage that fuels other things.
So it says, anyone who claims that expense management frugality is not a competitive advantage should pull up a long term chart of fastenal stock price and see how a company that sells nuts and bolts and keeps costs low somehow has been able to eat their competitors lunch for decades.
This is this very virtuous flywheel that begins with keeping operating cost and watching costs very low.
By keeping operating costs very low, fastenal is able to pay their employees incrementally higher wages and thus more effectively develop and retain talented salespeople.
The quality of service and depth of knowledge that the employees have eventually brings in more revenue, which grows the business and allows it to further lower operating expenses as a percentage of revenue, thus allowing for more hiring of top quality employees, which brings in more revenue.
This creates a virtuous circle of sorts.