#61 Malcom McLean: The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger

**David Senra** (0:00)
I want to tell you about a one-time only limited event that I don't think you're going to want to miss. I am doing a live show with Patrick O'Shaughnessy from the Invest Like the Best podcast in New York City on October 19th. Patrick has interviewed over 300 of the world's best investors and founders for his podcast. I've read over 300 biographies of history's greatest entrepreneurs for my podcast. We'll be talking about what we learned from seven years of podcasting, sharing our favorite ideas and stories and doing a live Q&A. There will also be special event-only swag. If you live in New York City, I think it's a no-brainer. But if not, I think it's a great excuse to fly in. I've already heard from a bunch of people that bought tickets, they're flying in from other cities. Some people are flying in from other countries. That's setting the bar really high. So I will have at least four shots of espresso or four energy drinks before or during the show so we can make it a night that you'll never forget. If you're interested in attending this unique live event, I will leave a link down below. I highly recommend you get your tickets today and I hope I get to see you in New York on October 19th. On April 26th, 1956, a crane lifted 58 aluminum truck bodies aboard an aging tanker ship moored in Newark, New Jersey. Five days later, the ideal X sailed into Houston where 58 trucks waited to take on the metal boxes and haul them to their destinations. Such was the beginning of a revolution. Decades later, when enormous trailer trucks ruled the highways and trains hauling nothing but stacks of boxes rumble through the night, it is hard to fathom just how much the container has changed the world.
In 1956, China was not the world's workshop. It was not routine for shoppers to find Brazilian shoes and Mexican vacuum cleaners in stores in the middle of Kansas. Japanese families did not eat beef from cattle raised in Wyoming. And French clothing designers did not have their exclusive apparel cut and sewn in Turkey or Vietnam. Before the container, transporting goods was expensive. So expensive that it did not pay to ship many things halfway across the country, much less halfway across the world. What is it about the container that is so important? Surely not the thing itself, a soulless aluminum or steel box held together with welds and rivets, with a wooden floor and two enormous doors at one end. The standard container has all the romance of a tin can. The value of this utilitarian object lies not in what it is, but in how it is used. The container is, at the core, of a highly automated system for moving goods from anywhere to anywhere, with a minimum of cost and complication on the way. Okay, that is from the introduction of the book that I want to talk to you about today, which is The Box. How the shipping container made the world smaller and the world economy bigger. If this is your first time listening to founders, let me welcome you. My name is David. The premise of this podcast is really straightforward. Every week, I read a biography, an autobiography, a book about the life story of an entrepreneur, and I try to pull out ideas all of us can use in our lives. So let me tell you how I found this book. A few weeks ago, I was listening to a fascinating podcast with the founder of Shopify. His name is Toby Lukey, I think is how you pronounce his last name. And I've heard him on a few podcasts, and I've just been fascinated with the way he thinks, like the way his mind works. And he said something that was really interesting.
He was asking if he had read any good books lately, and he recommended this book, the book that I have in my hand. And he said, the book is about the inventor of the shipping container, an amazing entrepreneur named Malcom McLean, who is the subject of today's podcast. And he went on to talk a little bit about McLean, but he said, McLean was the only person who cared about moving things. Everyone else was focused on a particular transportation method, be it trains or ships. But by focusing on the actual problem, which is what is the best way to move things around the world, he came up with a better solution. We need more of that in the world. And Toby talked about how that even influences how he thinks about Shopify, where most people think of Shopify, what do they do? They make it really easy to have an online store to sell something, but that's not really what his customers care about. He says, frankly, my customers don't care about an online store, they care about the independence of entrepreneurship. So when he, when him and his company build products, they don't think how can we make the best online store? They try to solve the underlying problem, which is how do we make more people reach the goal, their ultimate goal, which is that of independence, self-employment. And that's a really interesting distinction, and something that he was referencing that a lot of people miss. You might have heard this concept before, talking about, there's multiple examples how people don't want drills, they want holes. And so I've talked in the past that I keep a lot of quotes and things that are important to me that I need to reread on my phone in a special folder. And one of them is this idea that people don't want drills, they want holes, and this one entrepreneur realizing that. So let me just read this real quick. He says, I remember him saying, I teach my people on day one, people don't want drills, they want holes, meaning the people that go to the store and ask for a drill. So like, oh, I need to make the best drill possible. It's like, no, you need to look at underneath what your actual customer is trying to solve. And he said, after a week of reflection, I collapsed the firm from inside and rebuilt it from the ground up to never make this mistake again, meaning he was optimizing for the wrong thing. I rebuilt all my processes and everything was geared toward the fact that people don't want the technology, they want the solution it provides. We have to stand behind the core problem we are solving for our customers and we have to operate the whole way through to the point that they are raving fans. I hope this helps my fellow entrepreneurs. So that's exactly what Malcom McLean does. And as we're gonna learn today on the podcast, and I really appreciate Toby picking up on that. First of all, reading the book. And then also sharing, hey, like this guy, you can actually learn a lot from him because as I'll share with you in a little bit, like this problem was rather obvious and people had guesses on how to solve it. But McLean was the first one to realize that the fundamental problem was just what's the best way to move things around the world? That's what our customers care about. That's why they're paying us. They're not paying us for our ships. They're not paying us for our trains, for our trucks. They don't care about any of that. They'll send their goods all over the world in the most efficient manner. So why don't we focus on that? So before I jump into the book, I just want to read some of the... Well, first how the book part describes itself. So on the back cover it says, The Box tells the dramatic story of how the drive and imagination of an iconoclastic entrepreneur turned containerization from an impractical idea into a phenomenon that transformed economic geography slash transportation costs and made the boom in global trade possible. And then just one of the blurbs, which I thought was good, I didn't read this till after I finished reading the book, but it says, a perfect illustration of how an idiosyncratic entrepreneur brings something new into the world and a wonderful example of how business history can be made to sing, which I particularly appreciate because this entire podcast is around business history. So all right, so let's jump into the book. I'm just gonna move through like I normally do, just some highlights and ideas that particularly stuck out to me. So this book, as you can probably tell from the title, it's not a biography of Malcom McLean. It's a biography of the shipping container. He just happened to be the one credited with making, he didn't invent the container, but he invented the processes behind making it as broad and accessible as it is today. But embedded in this book is the life story of Malcom McLean, including how he started, how he thinks about business, things that are important to us. So that's what we're gonna be focusing on today.