Warren Buffett and Charlie Munger said it was a crime that more business schools didn't study Henry Singleton. I think it's a crime that more entrepreneurs don't study Estée Lauder. She is one of the best founders to ever do it. This is the story of how she went from a childhood obsession, to a single counter in a beauty salon, to a multibillion dollar empire. This is my third time reading this book. It gets better every time I read it. This episode is what I learned from rereading Estée: A Success Story by Estée Lauder.
I'm reading this book called money Masters of our time, written by John Train, and there is a chapter on Warren Buffett in here.
And in the chapter on Warren Buffett, there's an incredible quote from Warren Buffet where he says that a good manager must be a demon on costs.
Buffett knows what most of history's greatest founders knew, that watching your costs was the foundation on which other competitive advantages can be built.
Listen to what Jeff Bezos wrote a about this in his shareholder letters.
Jeff wrote, focus on cost improvement makes it possible for us to afford lower prices, which drives growth.
Growth spreads fixed costs across more sales, reducing costs per unit, which makes possible more price reductions.
Customers like this, and it's good for shareholders.
Please expect us to repeat this loop.
Bezos brings up the importance of controlling your spending.
Watching your costs again in another shareholder letter, he says, we will work hard to spend wisely and maintain our lean culture.
We understand the importance of continually reinforcing a cost conscious culture.
What other trait do history's greatest founders have in common?
They all studied the great founders that came before them.
Jeff Bezos is on record over and over again talking about the influence that Sam Walton had on the way he built Amazon.
Sam Walton said in his autobiography, you can make a lot of different mistakes and still recover if you run an efficient operation.
Or you can be brilliant and still go out of business if you're too inefficient.
The way to think about this is that most success comes to efficiency and most failures are due to waste.
Here we go back to Buffett.
The really good manager doesn't wake up in the morning and say, this is the day that I'm going to cut costs any more than he wakes up and decides to practice breathing.
You keep costs low from the start.