Walmart, every mention

Walmart · Acquired Jul 19, 2022 · 100 mentions

• ▶ 2:39 David Rosenthal It is not technically true because there is a Walmart across the river in New Jersey that is less than 10 miles away, but in spirit, that is true.
• ▶ 2:55 David Rosenthal It's the biggest company in the world.
• ▶ 2:57 David Rosenthal It services all of America except where we live.
• ▶ 8:12 David Rosenthal Totally bootstrapped Walmart.
• ▶ 8:56 David Rosenthal Sam and the Walmart story is like the bridge between the business America that was John Rockefeller and Standard Oil and Amazon and Jeff Bezos.
• ▶ 9:25 David Rosenthal Reading the story is how much Walmart embraced technology and Sam embraced technology, and I think they were arguably the first corporation in America to embrace computing as a business paradigm.
• ▶ 9:37 Ben Gilbert Certainly to embrace their own private satellite network, but yes, I'll save the spoilers.
• ▶ 10:01 David Rosenthal Today, it is much larger, bustling metropolis of 5000 people, but of course those 5000 people have just about every retail need of theirs serviced in a first class way by the local Walmart Supercenter that is located just south of town.
• ▶ 10:20 Ben Gilbert Walmart grew at a much faster rate than the, uh, two X that Kingfisher grew in a century.
• ▶ 12:18 David Rosenthal Unfortunately though for Sam and Bud, maybe fortunately for Walmart,
• ▶ 14:30 Ben Gilbert All of Sam's future generations are worth a few hundred billion dollars, depending on the day that you look at Walmart's market cap, since it's nearly all invested in Walmart, but it's a multi-hundred billion dollar family.
• ▶ 18:31 David Rosenthal All of that goes right into Walmart.
• ▶ 18:34 Ben Gilbert So much of Walmart is trying something, doing an experiment, watching it fail on some small scale, choosing not to roll it out, or watching it succeed, and then choosing to rapidly roll it out across as many stores as possible.
• ▶ 18:57 David Rosenthal That was actually Walmart number two.
• ▶ 24:38 Ben Gilbert There's a parallel here between Walmart's success and the fact that most people haven't heard of most of any reference that we've made so far.
• ▶ 25:50 David Rosenthal Is today Walton Enterprises, which owns 36% of Walmart, and then individual family members and trusts, I think mostly Bud's family, own the other 11, 12%.
• ▶ 26:03 Ben Gilbert Yeah, this is the interesting seed plant of Walmart being a family business from the very get-go.
• ▶ 26:21 Ben Gilbert At a really high level, Walmart always was a family partnership.
• ▶ 26:50 David Rosenthal The partnership, the family as a whole had to decide to sell, and that allowed them to keep majority control of Walmart all through the history.
• ▶ 28:52 David Rosenthal We would not be talking about Walmart if Sam had moved the family to St.
• ▶ 34:48 David Rosenthal Now, if you know where Bentonville, Arkansas and Walmart is today, it's not in eastern Arkansas.
• ▶ 39:08 Ben Gilbert When I was growing up, I was like, Walmart, Kmart.
• ▶ 39:10 Ben Gilbert I think Kmart's kind of like Walmart, about the same scale, same size, kind of a little lower end.
• ▶ 39:18 Ben Gilbert I didn't realize that Kmart for a very long time was much, much larger than Walmart.
• ▶ 39:24 Ben Gilbert They were kind of Walmart's big brother incumbent.
• ▶ 42:50 Ben Gilbert And this would become a cornerstone of Walmart forever after this, and for every other retailer.
• ▶ 45:36 David Rosenthal At a higher price and always low prices, always Walmart.
• ▶ 45:43 David Rosenthal We're not quite at Walmart yet though.
• ▶ 45:59 David Rosenthal Once they got to a certain scale at Walmart and it was bigger, I think the original company-wide slogan was
• ▶ 47:56 David Rosenthal Unfortunately, though, like I said, there's a reason that Walmart is not headquartered in Newport, Arkansas.
• ▶ 51:42 Ben Gilbert The new Walmart campus.
• ▶ 51:44 David Rosenthal The new Walmart campus that they're building.
• ▶ 54:50 David Rosenthal There's a great quote about this when Walmart actually gets started later that I'm going to tease it for now.
• ▶ 58:05 Ben Gilbert Maybe there's, like, reasons why people should be coming to Walmarts, even if they aren't necessarily looking to buy something.
• ▶ 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…
• ▶ 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.
• ▶ 59:56 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
• ▶ 1:00:05 Ben Gilbert Does get put out of business by that Walmart going in.
• ▶ 1:00:36 Ben Gilbert So when the big realization is, oh, customers always want lower prices, and satisfaction guaranteed, and all the other Walmart-isms, that will have impacts on your competitors, and you have to pay attention to those competitors, but…
• ▶ 1:01:48 David Rosenthal This is something I didn't understand until reading the book becomes a huge part of the playbook for Walmart for decades, which was every store manager in a new store opening was given at first equity and individual partnerships, and then…
• ▶ 1:03:57 David Rosenthal So during this period and in the early Walmart corporation period,
• ▶ 1:04:43 Ben Gilbert Those folks were kind of discriminated against in the Walmart culture, especially in the early days of like, you think you're better than us, college boy?
• ▶ 1:04:59 Ben Gilbert We're talking Walmart.
• ▶ 1:05:00 Ben Gilbert So like, take us to Walmart.
• ▶ 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.
• ▶ 1:05:22 David Rosenthal Home Depot modeled their employee stock program purchase program after Walmart's, and it's brilliant.
• ▶ 1:05:48 Ben Gilbert Microsoft only let us have a 10% discount, so very kind of Walmart to give a 15% discount for market price.
• ▶ 1:06:11 David Rosenthal And totally inspired by Sam and Walmart and everything.
• ▶ 1:09:26 David Rosenthal That was the big step of Walmart.
• ▶ 1:11:53 Ben Gilbert Walmart probably has a gross margin between 20 and 24% at any given time, and every store had like a 33% gross margin.
• ▶ 1:15:30 Ben Gilbert This is again, later in Walmart's development.
• ▶ 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.
• ▶ 1:19:06 Ben Gilbert That is this moment for Walmart.
• ▶ 1:21:18 unnamed speaker What if you just take part of the Walton name, keep that and make it a place to shop and call it Walmart seven letters.
• ▶ 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.
• ▶ 1:22:22 unnamed speaker Walmart in some ways started 20 years before.
• ▶ 1:22:39 unnamed speaker But anyway, July second, 1962, the very first Walmart opens in Rogers, Arkansas.
• ▶ 1:23:30 unnamed speaker So I think you think about running to a Walmart today as kind of a chore.
• ▶ 1:24:02 unnamed speaker From Charlie Kate, who was the store manager of that first Walmart in Rogers.
• ▶ 1:24:07 unnamed speaker And he says from day one at Walmart, Mr.
• ▶ 1:24:50 unnamed speaker So that store does a million dollars in the first year, which was great, but now remember, some of the Family Center stores were doing two million dollars, so it was very promising, but Rogers was still a pretty small town, so either later…
• ▶ 1:25:18 unnamed speaker And then a third Walmart, the second one, technically in Harrison, which we've been talking about, and that was also a smaller town.
• ▶ 1:27:04 unnamed speaker And this is how the sort of legendary, anybody who knows about Walmart corporate culture knows about the Saturday morning meeting, which they actually made monthly, I think in like the mid 2000.
• ▶ 1:28:35 David Rosenthal Also in 1962, the same year as the first Walmart,
• ▶ 1:28:57 Ben Gilbert Which doesn't Target feel like a newer company than Walmart?
• ▶ 1:29:36 Ben Gilbert Walmart.
• ▶ 1:29:38 Ben Gilbert You probably wouldn't have bet on Walmart to be the dominant one that wins in the discount wave, but they steamrolled the other three.
• ▶ 1:30:11 David Rosenthal The way Walmart won, and that is just this amazing story we're going to tell now,
• ▶ 1:30:44 David Rosenthal And the new Walmart concept, Walmart revenue was still only around ten million dollars at that point in time, so they are like a gnat five years later, and Kmart is like darling of Wall Street.
• ▶ 1:31:47 David Rosenthal So as Walmart starts to build out on their own, going from chaos to building out their own distribution network, they're always a hundred percent laser focused on lowest cost possible, most efficient possible, as much cash flow, as much…
• ▶ 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.
• ▶ 1:35:37 David Rosenthal I was thinking also about this whole incredibly important piece of the Walmart story where they literally build their own infrastructure for everything from scratch.
• ▶ 1:40:00 Ben Gilbert They grew the number of discounting stores pretty dramatically up through their 1970 IPO, and people still weren't really paying attention, because they were this company in the southern Midwest, they seemed regional, but let's just take…
• ▶ 1:40:16 Ben Gilbert By 1968, they had 24 stores.
• ▶ 1:40:21 Ben Gilbert They filed to go public in 1970 with 32 stores and around a thousand employees, and
• ▶ 1:40:53 Ben Gilbert But in October first of 1970, it went public.
• ▶ 1:41:01 Ben Gilbert They sold 300,000 shares at 15 dollars, so that's sort of the actual IPO the night before, and some quick math shows they raised four and a half million dollars in that IPO.
• ▶ 1:41:12 Ben Gilbert It started trading for around 1560, so they had a modest little pop the next day, but they really were not having meaningful research coverage.
• ▶ 1:41:22 Ben Gilbert A lot of the research coverage they were getting
• ▶ 1:41:33 Ben Gilbert The next year, in 1971, they did grow top-line revenue 77%, so despite the Walmart that we know of today, where they're a very slow-growth company, and I say that not to criticize them, but because we're often talking about pretty new tech…
• ▶ 1:41:52 Ben Gilbert The annual growth rate for Walmart is in the, like, two to three percent range, so not a fast-growing company by top-line revenue by any standards now, but shortly after IPO, despite not attracting a lot of attention, that was not the case.
• ▶ 1:42:28 Ben Gilbert They grew 77% their first year after IPO.
• ▶ 1:42:41 David Rosenthal In, in 1977, they did half a billion dollars in sales growing at that rate.
• ▶ 1:42:49 David Rosenthal So Walmart's compound annual revenue growth rate for the whole decade of the 19 seventies was 40.1%, four 0.1% for the whole decade.
• ▶ 1:43:12 Ben Gilbert Those two decades propelled them to be and somehow still hold the crown for the highest revenue company in the world.
• ▶ 1:43:21 Ben Gilbert You look at Amazon and some people that you think might be approaching them.
• ▶ 1:43:25 Ben Gilbert Approaching, but still not better.
• ▶ 1:43:29 David Rosenthal Still, Walmart is king.
• ▶ 1:43:40 David Rosenthal One kind of during this period, actually starting like right after those first early years of the first Walmarts and that is computers.
• ▶ 1:43:54 David Rosenthal So just four years after the first Walmart goes in.
• ▶ 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.
• ▶ 1:45:21 Ben Gilbert This was the start of Walmart becoming a technology company.
• ▶ 1:45:24 Ben Gilbert They were always interested in experimenting with the most cutting-edge stuff, but Sam didn't understand technology well, but he understood the benefits of technology.
• ▶ 1:45:34 Ben Gilbert And so the way that he made sure Walmart could sort of benefit from this is he always left the door open for smart, tech-savvy, younger people to come and have big jobs at Walmart.
• ▶ 1:46:17 Ben Gilbert Later on, there was a proposal made for a 24 million dollar satellite network, private satellite network, specifically for Walmart.
• ▶ 1:46:45 Ben Gilbert So, they invested twenty-four million dollars to link all stores with a two-way voice and data transmission and a one-way video communication from Bentonville.
• ▶ 1:47:19 Ben Gilbert They ended up okaying a twenty-four million dollar proprietary satellite network.
• ▶ 1:47:44 Ben Gilbert And they eventually instituted this for the Saturday morning meeting, too, where he would broadcast over their proprietary satellite network in 1987.