#361 Estée Lauder

**David Senra** (0:00)
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 Buffett, where he says that a good manager must be a demon on cost. Buffett knows what most of history's greatest founders knew, that watching your cost was the foundation on which other competitive advantages can be built. Listen to what Jeff Bezos wrote 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 cost 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 spend and 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 trade 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. If you read that a company is instigating a cost-cutting program, then you know that management has been slacking in keeping costs low from the start. Ramp keeps you from slacking on watching your costs. And if you have been slacking, ramp helps you get back on track because ramp has built the world's best tool that gives you everything you need to control your spend, watch your costs, and optimize all of your financial operations on a single platform. I have now read 361 biographies and autobiographies for entrepreneurs for this podcast. A fundamental law of company building is watch your costs. It is in the Estée Lauder autobiography, which you're about to hear. It's in the book. I don't think I talked about it in the podcast, though. But when Estée brings her husband in to partner on the company that they're building together, she focuses on sales and product and he focuses on their finances. His job was to watch their costs. Ramp helps you do the same. Ramp helps you watch your costs. History's greatest founders knew that watching your costs was the foundation on which other competitive advantages are built. Ramp has built the world's best tool. Ramp gives you everything you need to control your spend, watch your costs, and optimize your financial operations on a single platform. Go to ramp.com and start building your competitive advantage today. That is ramp.com, ramp.com. I hope you enjoy this episode on Estée Lauder. She's one of my favorite entrepreneurs. This is 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 fling. 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? 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 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, money or contacts? What then is the mystical ingredient? It's persistent. 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 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 great make you feel that you too can become great. Our first year sales amounted to about $50,000. Expenses ate up just about every dime.