Red Bull's Billionaire Maniac Founder

**David Senra** (0:00)
Dietrich Mateschitz is one of the most successful entrepreneurs of our age. A man who single handedly changed the landscape of the beverage industry by creating not just a new brand, but a whole new category, the energy drink. He is the visionary who brought the world Red Bull. In return for his innovation, the world has made him very, very rich. Over the last few years, he was taking anywhere from $500 million to $800 million a year in annual dividends, and he had a net worth somewhere between $20 and $30 billion. Mateschitz also runs an efficient enterprise. In 2010, Red Bull employed just 7,758 people, which works out to more than 667,000 in revenue per person. This success is the realization of a business plan that eschews conventional advertising in favor of marketing through its own events, shows, sports teams, and publications. Red Bull has produced its own TV programs, films, magazines, websites, and a steady diet of videos online featuring snowboarders, rally cars, surfers, cliff divers, and concerts, and a guy jumping from space. Mateschitz calls the multimedia salt one of the most important line extensions so far. As a major content provider, it is our goal to communicate and distribute the world of Red Bull in all major media segments, from TV to print to new media. Red Bull also owns four soccer teams. They have a NASCAR team and two Formula One racing teams. He finances the annual $200 million cost of his F1 teams out of the company's healthy operating income. And this is what he said about that. In literal financial terms, our sports teams are not yet profitable. But in value terms, they are. The total editorial media value plus the media assets created around the teams. That's such a good insight. Plus, the media assets created around the teams are superior to pure advertising expenditures. He then launches into his field that he's been delivering for the past 25 years. He explains that Red Bull is not just a drink. Instead, it's a philosophy, one seemingly derived from his own outlook on life and a functional product used to improve strength and performance and to revitalize the body and mind. Those are his words. He is also quite serious, prone to beginning sentences with the phrase, it is a must, as in it is a must to believe in one's product. If this was just a marketing gimmick, it would never work. And it is something that he believed on because he worked on Red Bull for over the last 40 years of his life. He just recently passed away. That's why I want to do this episode now. This is a little bit about the beginnings of how he discovered this idea. He was on a chance trip to Thailand in 1982, which would prove to be a turning point in his life. He was curious to know what attracted the locals there to an uncarbonated tonic, which they called a word in Thai. I'm not even going to try to pronounce, which literally translates to Red Bull. He tried some of this himself and found that it instantly cured his jet lag. Not long after that, he was sitting at the bar at the Mandarin Oriental Hotel in Hong Kong, and he was reading a magazine in the magazine and mentioned that the top corporate taxpayer in Japan that year was the maker of such tonics. Suddenly the idea hit him. He would sell that stuff in the West. He then approached a Thai business man who was selling the tonic in Southeast Asia and suggested that the two introduce the drink to the rest of the world. With one crucial change, it would be carbonated. This is going to be his partner's. His last name, I'm going to guess, is Yuvedaha. And he liked the idea, and so the two agreed to invest $500,000 a piece to establish a 49-49 partnership with the remaining 2% going to Yuvedaha's son.
So, when I said earlier that he was paying dividends, you know, somewhere between $500,000 and $800,000 to himself a year, and his net worth was somewhere between $20 and $30 billion, that is from this 49% that he owned of Red Bull. In addition to adding carbonation, he also positioned it differently. This would allow for his product positioning masterstroke. He would sell Red Bull as an ultra-premium drink in a category all of its own. At $2 a can, it was far and away the most expensive carbonated drink on the shelves. This is what he said about that. If we only had a 15% price premium, we'd merely be a premium brand among soft drinks and not a different category altogether. At this point, most histories of Red Bull tend to depart from Mateschitz and focus on Red Bull itself, which is exactly how he wants it. A curious hybrid of a mogul, Mateschitz has a zest for life that rivals Richard Branson's, but his obsession with controlling information puts him closer to Steve Jobs. Like the Apple founder, Mateschitz pulls the strings behind a consumer cult, and cults rely on message control, and cults rely on message control. Mateschitz is notoriously secretive. He is close to some of Austria's most prominent people. This part made me laugh. He is close to some of Austria's most prominent people, though Mateschitz says he doesn't place a premium on collecting friends or socializing. I don't believe in 50 friends. I believe in a smaller number. Nor do I care about society events. It is the most useless use of time.