Sam Walton, every mention

Walmart · Acquired Jul 19, 2022 · 100 mentions

• ▶ 25:46 David Rosenthal And that partnership that Helen and Sam set up
• ▶ 26:35 Ben Gilbert And of course, Sam's the guy, but there was a lot of family meetings to make decisions for the business.
• ▶ 26:58 David Rosenthal Sam talks about this.
• ▶ 27:37 David Rosenthal So Sam and Helen get married and Sam gets posted in a bunch of places all around the country doing kind of internal intelligence work for the army.
• ▶ 28:13 David Rosenthal LS initially wants them to move back to Claremore, but Helen and Sam kind of decide together.
• ▶ 28:26 David Rosenthal So Sam, he's got big ambitions.
• ▶ 28:52 David Rosenthal We would not be talking about Walmart if Sam had moved the family to St.
• ▶ 29:05 David Rosenthal Uh, Sam says her family had seen some partnerships go sour and she was dead set on the notion that the only way to go was to work for yourself and for your family.
• ▶ 29:35 Ben Gilbert And she looked at Sam and said, you were raised the same way, small town.
• ▶ 32:46 David Rosenthal The other big, big difference between how these stores operated in modern retail today, which Sam really invented was they weren't self-service.
• ▶ 33:51 David Rosenthal I don't know exactly how the department store model worked, like, you know, JCPenney's or Sears, where Sam had worked, but I think it was also not really what we're familiar with.
• ▶ 34:02 David Rosenthal I think when Sam was working as a salesman in Des Moines at Penny's,
• ▶ 34:22 David Rosenthal So, the Betley brothers, Sam's having this conversation with them,
• ▶ 34:53 David Rosenthal And Sam's like, great, I'll take it.
• ▶ 35:36 David Rosenthal So the question that Sam didn't ask himself and should have was why does this guy want to sell?
• ▶ 36:34 David Rosenthal And, uh, Sam, you know, he says, this isn't what I dreamt, but, uh, you know, I'm still gonna set big goals.
• ▶ 36:51 Ben Gilbert It's quite the turnaround and is also the first indication of Sam setting these big, hairy, audacious goals.
• ▶ 38:08 David Rosenthal So what does Sam do?
• ▶ 38:20 Ben Gilbert And this is a thing that speaking of the first time Sam does something that he then does forever, he becomes notorious for going into competitor stores, bringing in a little notebook, later bringing in a little tape recorder.
• ▶ 39:31 Ben Gilbert Year this was, but I remember some quote from Walton where he's talking about when we reached five percent the scale of Kmart and it's like, whoa, that, that really puts it into perspective how big a lead they had.
• ▶ 39:44 David Rosenthal It's actually a yellow legal pad that Sam uses.
• ▶ 40:39 David Rosenthal You know, Sam as the merchant is just getting whatever they send to him at whatever cost they prescribe and Butler brothers, they're doing great.
• ▶ 41:03 David Rosenthal So what does Sam do?
• ▶ 41:48 Ben Gilbert You'd have to really be paying attention to figure out, oh, maybe Sam's not ordering quite as much of this stuff from us as he should be.
• ▶ 41:59 David Rosenthal It's just Sam and, you know, Helen running the place.
• ▶ 42:29 Ben Gilbert Like, this is a brand new concept that we kind of take for granted now, but is totally a Sam Walton invention to meet his own needs, which is create something that is astonishingly low price to get people in the store.
• ▶ 46:20 David Rosenthal So all this sounds like Sam says there, it sounds simple, right?
• ▶ 47:47 Ben Gilbert Even though it's good for Sam, it's also good for them because volume and customers.
• ▶ 48:03 David Rosenthal Butler Brothers wasn't the only related party to Sam who figured out what was going on here.
• ▶ 48:09 David Rosenthal His landlord that had pulled one over on the previous owner and had the super onerous rent terms also figures out, of course, how great Sam is doing despite, you know, having the deck stacked against him.
• ▶ 48:26 David Rosenthal So he goes to Sam and your five is when the lease expired and there wasn't an option in the contract to renew the lease.
• ▶ 48:34 David Rosenthal So the landlord goes to Sam is like, you know what, son, you've done a great job.
• ▶ 49:15 David Rosenthal I say this is a saving grace, although the reality is Helen's father would have financed Sam's next venture no matter what, but sort of the saving grace for Sam's pride at least was that the landlord did buy out the value of the Ben…
• ▶ 49:35 David Rosenthal So he pays Sam and Helen, 50,000 dollars to take over the store.
• ▶ 49:54 David Rosenthal So this is now 1950 and Sam and Helen hit the road again, looking for a new town to bring their, uh, traveling circus to.
• ▶ 50:23 David Rosenthal And two, like I said, Sam keeps it real.
• ▶ 51:00 Ben Gilbert Sam, I need to be able to hunt quail in the maximum amount of time that I possibly can.
• ▶ 51:31 David Rosenthal As Sam says, he loves competition.
• ▶ 51:39 David Rosenthal Sam probably almost assuredly is rolling over in his grave right now.
• ▶ 51:51 Ben Gilbert If you thought Warren was, you know, a penny-pinching, very plain, no frills, no fancy things entrepreneur, Sam Walton, hard to argue who's sort of more frugal and less showy.
• ▶ 52:05 Ben Gilbert I mean, Sam eventually got into airplanes for very, you know, practical use, but Sam is not a showy guy.
• ▶ 53:10 David Rosenthal And, uh, Sam decides he's like, alright, well, this is a small market.
• ▶ 55:53 Ben Gilbert And what Sam is saying is, eh, I feel pretty good about building my own brand.
• ▶ 56:03 David Rosenthal It really was rational because even though Sam on the margins is doing his own direct deals with manufacturers at this point, it's a ludicrous concept that somebody in a little store in Arkansas could source all of their inventory and do…
• ▶ 57:45 Ben Gilbert I think it was the first time that Sam realized that shock value would bring customers.
• ▶ 58:13 David Rosenthal And if you think about it, right, like put yourself in the shoes of customers back then, and Sam talks about this a lot in the book, you know, for so long, and we'll get into the competition with Kmart, everybody thought Walmart, Sam, all…
• ▶ 58:52 David Rosenthal So Sam realizes that he might have a tiger by the tail here.
• ▶ 59:36 David Rosenthal And you learn about Walmart and Sam Walton, you realize that they were originally Walton isms, Sam isms, but the whole Amazon, like we're customer focused.
• ▶ 59:46 David Rosenthal Sam would have said absolutely not.
• ▶ 59:56 Ben Gilbert So eventually a Walmart does go in back in Newport and there is a little store that is run by a family member of the landlord that screwed over Sam that
• ▶ 1:00:08 Ben Gilbert And Sam makes the point, you can't say we ran that guy, the landlord's son, out of business.
• ▶ 1:00:24 Ben Gilbert You have to win in a market by counter-positioning in some way, and Walton did it by discounting, but that obviously has an impact on your competitors, and you need to be able to counter-position against
• ▶ 1:00:50 Ben Gilbert Sam is willing to blame the customer for putting the competitor out of business.
• ▶ 1:01:00 David Rosenthal Sam opens up a second store in nearby Fayetteville, Arkansas.
• ▶ 1:01:05 David Rosenthal Because again, like, it's just Sam and, you know, Helen when she can, you know, helping out with the bookkeeping, managing the first store.
• ▶ 1:01:12 David Rosenthal Sam needs to hire somebody to go manage Fayetteville because he's working in, in Bentonville.
• ▶ 1:02:15 David Rosenthal So all the pool of existing store managers, whenever they open up another store, Sam and Helen give them the opportunity to invest dollars in the new stores and the new partnerships.
• ▶ 1:03:00 David Rosenthal What Sam was doing.
• ▶ 1:05:04 David Rosenthal On the employee front, after Walmart went public, Sam instituted both profit sharing at the store level with the associates, with the hourly employees, but then also an employee stock purchase program.
• ▶ 1:06:11 David Rosenthal And totally inspired by Sam and Walmart and everything.
• ▶ 1:06:19 David Rosenthal Remember we talked all the way back in the beginning of the episode about Sam's brother, Bud.
• ▶ 1:06:32 David Rosenthal And one day Sam is visiting Kansas city and he hears about a new suburb development going in just Southeast of the city called Rushkin Heights.
• ▶ 1:06:57 David Rosenthal So Sam calls up Bud
• ▶ 1:07:17 David Rosenthal Sam says, when I saw that shopping center catch on the way it did, I thought, man, this is the forerunner of many, many things to come.
• ▶ 1:07:42 David Rosenthal Sam is convinced though that it's the future.
• ▶ 1:09:46 Ben Gilbert And so at this point, they're really starting to treat Butler Brothers as more of a component of the Walton business, rather than Walton being a franchisee of Butler Brothers.
• ▶ 1:10:01 David Rosenthal Quote, unquote, family centers that Sam and Bud were building.
• ▶ 1:10:27 David Rosenthal Sam and Bud were limited on how much discounting they could really do.
• ▶ 1:12:24 David Rosenthal It is this model that Sam is about to perfect here.
• ▶ 1:12:44 David Rosenthal You could argue they were first, but Sam was really the first to bring it
• ▶ 1:14:42 David Rosenthal Well, and there's another component, what you're saying, which is Sam's original lesson of you actually make more profit dollars selling items at the dollar than you do at one 20 because you sell three times as many.
• ▶ 1:15:16 David Rosenthal Just like Sam was starting to do in this, but on the margins, we're just going to completely not be a franchise operation.
• ▶ 1:15:32 Ben Gilbert And it's when Sam Walton is sort of informing the Walmart
• ▶ 1:16:34 David Rosenthal You need to operate the entire backend of retail yourself, Sam and bud and Walmart.
• ▶ 1:17:18 David Rosenthal So in this moment, Sam of course goes out, he goes and shops, he travels to the Northeast, he shops in Annanhope, he goes out, he meets Sol Price, who he already knew.
• ▶ 1:17:52 David Rosenthal The idea that Sam could copy this and go do it back in Arkansas.
• ▶ 1:19:22 David Rosenthal Done what Sam is proposing and essentially taken out their markup on goods that they would provide to Sam's stores.
• ▶ 1:19:58 David Rosenthal And the thing that Sam knew the minute he saw discounting was all of those stores are dead anyway.
• ▶ 1:20:33 unnamed speaker So, 1962, Sam and Bud secure a site in Rogers, Arkansas, which is pretty close to Bentonville,
• ▶ 1:20:52 unnamed speaker And Sam's got a bunch of candidate names for what to call this new retail concept.
• ▶ 1:21:31 unnamed speaker Sam's basically not mad about this.
• ▶ 1:21:53 unnamed speaker Which we should say, at this point, Sam is in his mid-forties.
• ▶ 1:22:00 unnamed speaker Yeah, it's worth pointing out, people often say, like, Sam Walton didn't start Walmart until he was 44.
• ▶ 1:22:06 unnamed speaker But as you can tell, because we are very deep in the story and in this episode here, and we are just now at the formal founding of Walmart, everything that Sam had done in his whole career was leading up to this moment, and it's a gradient.
• ▶ 1:22:27 unnamed speaker You know, Sam's education.
• ▶ 1:24:07 unnamed speaker And he says from day one at Walmart, Mr.
• ▶ 1:25:12 unnamed speaker And that pretty much immediately becomes the highest sales store in the whole Walton empire.
• ▶ 1:25:24 unnamed speaker And, um, as Sam puts it, they were basically trying to answer two questions with each of these, like one would people in a small town defect and start shopping in this new, crazy, chaotic environment just because of price.
• ▶ 1:25:59 unnamed speaker And I think Sam even gives an interview where he talks about that
• ▶ 1:26:57 unnamed speaker It was like hourly employees in the stores, store manager, Sam and bud.
• ▶ 1:27:16 unnamed speaker And then now it's optional again, Sam would be rolling over in his grave.
• ▶ 1:27:43 unnamed speaker And Sam, despite objections from a lot of people, including his wife, didn't feel bad about it.
• ▶ 1:32:28 David Rosenthal Sam has this amazing quote.
• ▶ 1:33:57 Ben Gilbert And part of this was Sam's Spidey sense from
• ▶ 1:34:13 Ben Gilbert So Bud was a pilot in the war and pretty early in the book, Sam talks about that he and Bud owned like 20 planes over the course of Walmart's life, but only one was a jet or sort of later they became jets because early on.
• ▶ 1:42:25 Ben Gilbert Most of it seems to be written from Sam himself.
• ▶ 1:44:00 David Rosenthal Sam Walton, who at this point is what, 1966, he's just about 50, he's like 48 years old, I think.
• ▶ 1:44:09 David Rosenthal He starts hearing about computers, because he's always got his ear to the ground, he's talking to everybody, he's always looking for new ideas.
• ▶ 1:44:16 Ben Gilbert He's cheap, so he doesn't want to spend money on computers, but he's starting to get the sense that in the same way that discounting disrupted everyone that came before in the variety store era, computer back-end retailers were probably…
• ▶ 1:44:32 David Rosenthal So he goes up to Poughkeepsie, New York and enrolls himself as chairman, CEO of Walmart in a seminar at IBM on how to use computing technology in business.