Burn-the-Boat Commitment and Pricing Choices

I'm reposting one of my favorite founder stories. If you listened to this first time I recommend listening again. If you missed this before, you're about to hear one of the wildest founder stories of all time.

A few surprising things I learned from reading about Dietrich Mateschitz, founder of Red Bull: 1. He started the company when he was 41 years old. 2. He was making $500 to $800 million a year and his 49% stake is worth $20 to $30 billion. 3. He still prioritized fitness deep into his 70s and liked driving fast, piloting his planes, and competing in off-road motorcycle races. 4. The company was started with just $500,000 from Mateschitz and $500,000 from his partner. Outside of a small loan from a local bank all other expansion was funded by profits. 5. The company reached profitability in its 3rd year and has been profitable every year since. (33 years and counting) 6. He took no dividends for the first 13 years and reinvested all profits into growth instead 7. He viewed Red Bull as a “marketing conglomerate” and tried to outsource everything else 8. He was intensely private. When an author tried to interview his elderly mother for an unauthorized biography. Mateschitz threatened to have his knee caps broken. He said it would only cost $500 to hire a Russian to do the job. 9. There are no biographies written in English about Mateschitz. 10. He believed a handshake agreement among gentlemen was sufficient and regularly did business with trusted partners with no written contract. 11. He bought a popular Austrian magazine just so he wouldn’t appear in it. 12. He was universally described by former employees as a gentleman, charismatic, and fiercely loyal. 13. He didn’t like spending time socializing. He said: “I don't believe in 50 friends. I believe in a smaller number. Nor do I care about society events. It's the most senseless use of time. When I do go out, from time to time, it's just to convince myself again that I'm not missing a lot." 14. He owned a private island in Fiji and said he was attracted to having his own independent state. His state would have the shortest set of laws in the world: “The rules are simple: Nobody tells you what you have to do — only what you don’t have to do.” 15. When he was asked if he was going to retire he said “I’m having more fun than ever.” 16. He refused to sell Red Bull or take it public and worked on it until he died. Episode sponsors: ⁠ Ramp⁠⁠⁠⁠⁠⁠⁠ gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud ⁠⁠⁠by going to Ramp and learning how they can help your business control your costs and save time and money.⁠⁠⁠ ⁠⁠⁠⁠https://ramp.com⁠⁠⁠⁠ Automate compliance, security, and trust with Vanta.⁠ ⁠⁠⁠Vanta helps you win trust, close deals, and stay secure—faster and with less effort⁠⁠⁠⁠. ⁠⁠⁠Find out how increased security leads to more customers by going to Vanta⁠⁠⁠. Tell them David from Founders sent you and you'll get $1000 off. ⁠⁠⁠https://www.vanta.com/founders⁠⁠ ⁠⁠⁠ Collateral⁠⁠ transforms your complex ideas into compelling narratives. Collateral crafts institutional grade marketing collateral for private equity, private credit, real estate, venture capital, family offices, hedge funds, oil & gas companies, and all kinds of corporations. Storytelling is one of the highest forms of leverage and you should invest heavily in it. You can do that by going to ⁠⁠https://collateral.com