#434 Sam Walton

David Senra (0:00)

For his first 50 years, Sam Walton was not at all a national figure.

He remained in the shadows, off the beaten track. It was only in the early 1980s that a startled public discovered that the richest man in America was not a Rockefeller, a DuPont, a Trump, a Kennedy, a Getty, or a Perot, but an unglamorous guy from Arkansas named Sam Walton.

Reporters discovered that he was ordinary, that he grew up in Missouri in the Depression, worked his way through college, lived a clean Christian life, served stateside in World War II, married an Oklahoma banker's daughter, opened up his first five-in-dime store in Backwater, North Central Arkansas, and raised four healthy kids. Pretty darned ordinary, but only on the surface. Sam Walton, underneath, was no ordinary man. It's one of my favorite paragraphs in the book that I'm going to talk to you about today, which is Sam Walton, the inside story of America's richest man, and it was written by Vance Trimble. So this book is almost 40 years old. It was actually written before Sam's famous autobiography was made in America. And what I want to do, this is like a third or four time that I read the book. So I just want to run through a bunch of ideas that are mainly focused less on like his early life in the biography, but more about how he essentially worked and how he thought about building his business. And I want to jump into the fact that this is one of the most important paragraphs, I think, of the book, because it's an illustration of Charlie Munger's great idea, which is like, you should find a simple idea and take it very seriously. So it says, to him, making money was only a game, a test of his imagination and expertise to see how far he could drive a business concept. Wall Street had a hard time getting the drift of that. Sam's idea, he admitted, was absurdly simple. Buy cheap, sell low every day, and while doing it with a smile. Then it goes into the fact that he, just like Henry Singleton, you and I talked about Henry Singleton a few weeks ago, Singleton was criticized because, by a lot of people who said, oh, you don't have a five-year, a 10-year, a 15-year business plan. Michael Bloomberg, last week, was the exact same way. Sam Walton was also the same way. He just wanted to wake up every day, work on Walmart, and then he was fine with changing his mind. Over and over again in the book, he'll be presented with new information. He'll be like, okay, I was going left, new information, I'm going to go right. So he was a genius in business with an iron mind, unwilling to compromise any of his carefully thought out principles. But Sam Walton is flexible. If he adopts a business course that doesn't work out, he's neither too vain nor too blind to see his mistake. To say so and to change his heading 180 degrees.

Another principle that reoccurs throughout the book is the fact that he did not like attention. He'd rather just wake up, work on his business. He was greatly disturbed. It says when Ford magazine set him at the top of their list of America's 400 richest Americans, this disturbed him greatly. He granted very few interviews. He turned his back on most TV cameras. He shuddered each time another magazine piece appeared. One of the most interesting things about Sam Walton is that he had insanely high energy levels. In fact, a friend of mine just sent some of this great post on Napoleon. I want to read this to you real quick, and I think it applies to Sam Walton as well.

The post says, it will never not be funny to me that when Napoleon got stripped of his empire and exiled, he responded by paving the roads, draining marshes, rebuilding the iron mines and ordered every house to install a toilet in just two months. Energy is a choice, he said. This is Sam Walton in high school. He was going out for football and basketball, learning to play tennis, making A's and making friends, grinding away on the merit badges in hopes of becoming an Eagle Scout, regularly attending Sunday school and scrambling after every odd job that would put money in his pocket.

This is what his dad said about how he raised his sons. The secret is work, work, work. I taught the boys how to do it. Sam's father was a bear for work and he would not tolerate sons who were not likewise industrious, ambitious and decent. This continues, Sam was the quarterback of the football team, also played on the basketball team, was the president of the student body, and he was in just about every club and organization. He was active. Sam was a hard worker. He was optimistic all the time. He had a great smile on his face and felt like everybody was his friend and that the world was something that he could conquer. He just didn't waste time. He was always busy doing something. One of the most interesting parts of the book is the fact that Sam, it's not like he set out for a career in retail. In fact, after he graduated school, he had no idea what he wanted to be. At one point, he's like, oh, maybe I'll be the president of the United States. But he decides he needs to make money, so he interviews for a job at the retail store, JC. Penney. And this is really important because there's a lot of ideas he learned at JC. Penney that he's going to use for the next 50 years of his own career.