When Brands Drift: Why Alignment Starts (and Ends) with You

Cole Abbott

[0:00:00]

Brand Drift.

Mark Abbott

[0:00:11]

Brand drift.

Cole Abbott

[0:00:13]

This can happen for different reasons.

Mark Abbott

[0:00:15]

Yep.

Cole Abbott

[0:00:16]

Lately, seen a lot of takeovers and failed. Failed's probably not. Probably a strong word.

Mark Abbott

[0:00:26]

Yeah. Yeah.

Cole Abbott

[0:00:27]

But not six unsuccessful leadership transitions.

Mark Abbott

[0:00:31]

Yes.

Mark Abbott

[0:00:31]

That's a good way of putting it.

Cole Abbott

[0:00:33]

Less than successful, less than 6. Less than optimal.

Mark Abbott

[0:00:36]

Less than optimal.

Cole Abbott

[0:00:37]

And there's a lot of reasons for this. Sometimes it's not understanding the soul of the thing that you're taking the reins for. It's a different. And it's probably the same thing, but a difference in values and goals. What are you trying to do? Are you trying to just maximize revenues?

Mark Abbott

[0:00:54]

Right.

Cole Abbott

[0:00:54]

Are you trying to capture the market?

Mark Abbott

[0:00:57]

Yeah.

Cole Abbott

[0:00:57]

Steve Jobs had an interesting response when it came to market penetration. Everyone's like, we only have 15% of the market. That's awful.

Mark Abbott

[0:01:05]

Yeah.

Cole Abbott

[0:01:05]

He's like, well, Mercedes has whatever and they're doing fine.

Mark Abbott

[0:01:08]

Yeah.

Cole Abbott

[0:01:08]

It's like, oh, yeah. If you think about it like that.

Mark Abbott

[0:01:10]

Yeah.

Cole Abbott

[0:01:11]

Why you don't. It doesn't matter.

Mark Abbott

[0:01:13]

Yeah.

Cole Abbott

[0:01:13]

Right. But if you bring in somebody who's like, no, we just want to dominate and whatever. It's like, what do you got different goals you're going to not do? It made you work in the first place and. And so on. And sometimes you need someone fresh to come in and steer things back in the right direction. Yes. Which is fairly rare these days.

Mark Abbott

[0:01:31]

Yeah.

Cole Abbott

[0:01:32]

That, that goes well. But there's some examples of that. I mean, I think you could. Starbucks is an interesting case of how's that going to turn out right now.

Mark Abbott

[0:01:39]

Right.

Cole Abbott

[0:01:40]

I think it's going in the right direction. But I also think that part of Starbucks issue was a lack of strength in leadership.

Mark Abbott

[0:01:48]

Yep.

Cole Abbott

[0:01:48]

Like Schultz. Love Schultz.

Mark Abbott

[0:01:50]

Yeah.

Cole Abbott

[0:01:50]

And every time he left, the company just faltered.

Mark Abbott

[0:01:53]

Right.

Mark Abbott

[0:01:54]

Which he has to take some responsibility for.

Cole Abbott

[0:01:57]

But going back to his memo, which I like about the soul of a brand, he's like, well, you can't really put it into words. And I'm like, well, I think that's kind of a lazy response.

Mark Abbott

[0:02:08]

Yeah.

Cole Abbott

[0:02:09]

And you can do better than that. Right. You're just kind of avoiding the problem. You're like, well, you know, what are you gonna do? Right. But then he attributes it to some things and it's a symptom of those certain or those things are symptoms of the core issue, like prioritizing mobile over the in store experience. Cause it's like we're just doing mobile pickup. We're just a coffee shop. There's no competitive advantage there. Anyone can just stand up, order on an app, and you get coffee and it's not the experience. That's not the whole thing it was built around.

Mark Abbott

[0:02:36]

Right.

Cole Abbott

[0:02:36]

So he says that's sort where the issue started. And I don't think that he's dug into that deeply enough.

Mark Abbott

[0:02:44]

I agree with you.

Cole Abbott

[0:02:46]

But he has acknowledged the issue. And every time he comes back or, you know, because he'd leave and didn't come back, it sort of course. Correct.

Mark Abbott

[0:02:53]

Yes.

Cole Abbott

[0:02:53]

But that's an example of. Of the founder. He's not really the founder, but he.

Mark Abbott

[0:02:59]

Well, he really is.

Cole Abbott

[0:03:00]

He's the founder of the company as it is. He's not the founder.

Mark Abbott

[0:03:03]

Founder of Starbucks that we know.

Mark Abbott

[0:03:05]

Yes, Right.

Mark Abbott

[0:03:05]

He took over a brand that was a good little brand.

Cole Abbott

[0:03:09]

Coffee shop.

Mark Abbott

[0:03:09]

Took over a coffee shop.

Cole Abbott

[0:03:10]

Three coffee shops.

Mark Abbott

[0:03:11]

Right.

Cole Abbott

[0:03:11]

With. Maybe with.

Mark Abbott

[0:03:12]

With. With some roaster facilities. Who knows? It doesn't really matter. Right. But you know, it's just like, is Ray Croc the founder of McDonald's? No, but yes, the movie about that.

Cole Abbott

[0:03:24]

Is called the Founder. So it's like they're making a point, but they're like, no, he's the founder of the company.

Mark Abbott

[0:03:28]

He's the founder.

Mark Abbott

[0:03:29]

Right.

Mark Abbott

[0:03:29]

And, and, and Schultz is the founder of Starbucks.

Mark Abbott

[0:03:31]

Yeah. Right.

Mark Abbott

[0:03:32]

This topic, I don't know why this topic is something that I'm deeply passionate about, but I am. Right. And I think that whether you're the found the Day One founder or you're basically the founder of the company that became well known.

Cole Abbott

[0:03:58]

Well, it's like if you're the actual biological father or your stepfather. Stepfather. But you've been there since they were two. Yeah, it's like your dad. Your dad.

Mark Abbott

[0:04:08]

Right. Yeah.

Mark Abbott

[0:04:09]

And I think that. And we should do some research on that. How many times have I said that in this podcast? But we should do some research on this. I believe there's a soul of a company and that soul of the company, whether you're the founder or the Day One founder or the founder, for all practical purposes, you put that in place. And I believe that the vast, vast majority of great companies have founders who created great companies because they got the power of creating a company with a soul. Right. And so. And the term I started using within the last 24 hours that I shared with you this morning is you have effectives and you have efficiency.

Mark Abbott

[0:05:08]

Right.

Mark Abbott

[0:05:09]

And the effectives are the ones who see the bigger picture and understand sort of the softer side and understand the art of what is being sold, of what is being presented, the storytelling, the why this matters and the essence of the soul. And then the efficients are the numbers people, right? And what I believe happens and you know what caused us to want to have this podcast today, this topic, brand drift, was that literally within the last week there were two articles, one on Southwest and one on Versace. And in both situations, we have an efficient.

Mark Abbott

[0:05:54]

Right.

Mark Abbott

[0:05:56]

Changing things that were at the core of the soul of these companies. And the companies are now struggling.

Mark Abbott

[0:06:03]

Right.

Mark Abbott

[0:06:04]

And you know, Southwest used to be all about the common man, right. And Southwest was, you know, it was bags for free and it was low fares and no first class.

Cole Abbott

[0:06:17]

You know, everybody got going, sit down.

Mark Abbott

[0:06:20]

Go and sit down. There's no assigned seats. Right. It was just like this democratization of the airline experience. Because if you go back prior to that, right. We, you know, people used to wear suits and ties and dresses to go on the planes. It was a, you know, it was a luxury thing. And so that was what they stood for. And now all of a sudden, within the last week, right. They're going and they're not, they're contemplating doing first class or charging for baggage sign seating. I mean, it's just really, really sounding differently. And when you read why, it's, there's an efficient, efficient oriented CEO who's trying to drive growth. But the problem is, is that when you, when you veer away from the soul of the company, all of a sudden we've talked about on numerous occasions, all those ideal stakeholders who are attracted and those include your customers are like, this isn't, you know, this isn't what I signed up for. And Versace, if you study that story, I mean, it went from bold, amazing colors to literally black and brown.

Cole Abbott

[0:07:36]

I think that's emblematic of society as a whole right now. But which is, it's a side thing. Go to fling it safe. Right. But, but in both. Because I think effectiveness is the goal and efficiency can serve effectiveness.

Mark Abbott

[0:07:50]

Yes.

Cole Abbott

[0:07:50]

And if efficiency does not serve effectiveness, then don't do that.

Mark Abbott

[0:07:54]

Right.

Cole Abbott

[0:07:54]

There's like, oh, it's one or the other. It's like, no, you have one matters and then one serves the other thing.

Mark Abbott

[0:07:59]

Yes.

Cole Abbott

[0:08:00]

And you can use the efficiency, increase efficiency to better be effective. Southwest did that, right? They had like, we're only flying one plane.

Mark Abbott

[0:08:06]

Yes.

Cole Abbott

[0:08:07]

And because that makes everything very efficient, we don't need to worry about that. And then that didn't work when that plane turned out to not be a great plane. And that had issues. And they're like, well, we over indexed on one specific model. That was a thing.

Mark Abbott

[0:08:17]

But they went decades though, with that one plane.

Cole Abbott

[0:08:20]

Overall, you could say it was probably a good decision.

Mark Abbott

[0:08:22]

It was brilliant.

Mark Abbott

[0:08:22]

Yeah.

Cole Abbott

[0:08:23]

And then now you, oh, you have two planes or you better source the thing and then. Or you just don't use Boeing because Boeing's. And that's a whole other issue. Uhhuh. We don't need to get into that. And the same thing with Versace, Donatello was like, oh, well, we can bring these people in Capri in and they'll help us be. Become more effective through efficiency.

Mark Abbott

[0:08:43]

Right.

Cole Abbott

[0:08:43]

Like, they'll help with the logistics and everything and they'll do all the things that we're not good at. And that was never Idol's intention with going to Versace. He's like, well, I just want this. I want it to be mine. And I want to go Michael Kors with it, which is you could just make that stuff. Anyone can make that thing. Right. Anyone can do efficiency. Right. It's really hard to do effectiveness because efficiency is. Well, you just, especially with AI now is like, well, you just have it run an analysis and tell you what you could do.

Mark Abbott

[0:09:08]

Yeah.

Cole Abbott

[0:09:08]

It's like just free consulting in that way.

Mark Abbott

[0:09:10]

Yeah.

Cole Abbott

[0:09:10]

But it's really hard to figure out the vision side of things. And we've been facing this issue a lot over the years.

Mark Abbott

[0:09:19]

Right.

Cole Abbott

[0:09:19]

Where we had look at marketing five years ago and it was all about an efficiency play. It's like, well, no, that doesn't work.

Mark Abbott

[0:09:26]

No.

Cole Abbott

[0:09:26]

And that's the only reason I'm. I think that's the reason I'm here today working in 90s, because that really bothered me.

Mark Abbott

[0:09:32]

Yeah.

Cole Abbott

[0:09:33]

And it's like, why does that bother me? And it took me years to figure out why that bothered me and work through that and understand why that was a thing. But it is interesting how the efficiency. Because the effective people want efficiencies because then that makes them more effective. Right. But sometimes you lose yourself in that. And then for our EOS audience, there's a visionary integrator issue there.

Mark Abbott

[0:09:56]

Yeah.

Cole Abbott

[0:09:57]

And some integrators are very good at balancing those things. Like, I think Tim Cook is an integrator who can balance the effective and efficient side of things. Lean's a little bit more efficient than I think is ideal.

Mark Abbott

[0:10:08]

Yeah.

Mark Abbott

[0:10:09]

I'm on the same page.

Cole Abbott

[0:10:10]

But yeah.

Mark Abbott

[0:10:11]

And, and then. So, you know, and, and what, what my perspective is is that these have the efficient over index on efficiency to the. And, and, and starts to drift. And then the ideal stakeholders start to drift away. Right. And, and you know, a thing that I observed for decades as someone who's studied not just Businesses. But sort of the, the game of business is you have a lot of times where you'll have a visionary CEO who does a good job of following the founder. And then, you know, we all kind of appreciate the yin to our yangs. And for me, Jack Welch going to wow, horrible that I forget his name. But his successor, right. He went from visionary to efficiency, way over indexed. And GE became, you know, shadow of itself. And so you have these yin yang things that go on. Schultz is probably showing that exact thing. Right. Where you go from an effectiveness person who appreciates efficiency people, you end up handing the reins to an efficiency CEO because yeah, you weren't as effective efficient as you could be. And you know that.

Mark Abbott

[0:11:43]

Right.

Mark Abbott

[0:11:44]

It's a thing that you want to see improve. But then all of a sudden the efficiency people start to lose the soul and they start pushing stuff and they start being short term oriented. Right. And one of the areas where you and I were talking about a fascinating area where we see this is in automo, in the automotive industry, in the car industry.

Mark Abbott

[0:12:05]

Right.

Cole Abbott

[0:12:06]

Yeah. Auto industry is what's. I've been weirdly fascinated with it since I was like five.

Mark Abbott

[0:12:14]

Yeah.

Cole Abbott

[0:12:14]

So thinking about the stuff at that point with especially Ferrari, I loved Ferrari. And it's been. That leadership journey has been very interesting over the last 20 years.

Mark Abbott

[0:12:26]

Yeah.

Cole Abbott

[0:12:27]

And I remember back when they said we will never make more than 7,000 cars, we will never make an SUV. We don't care about the stuff. That's not who we are. Yeah. And everything was very cohesive on, on their path and what they stood for and what they valued and what they wanted to do. And now they've. Well, wait, what? So right. With Montemalo, then we had Sergio, Michonne, and then I don't know who's. Then they took it from Fiat and spun it off. And Sergio was more of an efficiency person than he was.

Mark Abbott

[0:13:06]

But he respected the soul.

Cole Abbott

[0:13:07]

He respected. But he respected the soul and he's. And he stood by those things. But very much is just these are hard boundaries.

Mark Abbott

[0:13:13]

Yeah.

Cole Abbott

[0:13:13]

Not like. Well, you didn't. I don't think understood and made the why behind the things is explicit because you listen to Enzo Ferrari talk about all this stuff and he's just, hey, if as David Senro from the founders podcast would say, he speaks about his company and his products like you would a lover, he describes him as beautiful and he hates to see them go racing because he just sees his car out there dying and. Right. That's the passion of the founder.

Mark Abbott

[0:13:40]

Right.

Cole Abbott

[0:13:41]

And it's like nobody. No one in leadership. Ferrari thinks that way anymore.

Mark Abbott

[0:13:45]

Yeah.

Cole Abbott

[0:13:45]

It's like, how. How can we make more? And I think we looked it up and they're making around 14,000 cars now.

Mark Abbott

[0:13:51]

Yeah.

Cole Abbott

[0:13:51]

So double what they said they were never going to make more than.

Mark Abbott

[0:13:54]

Yeah.

Cole Abbott

[0:13:54]

And there's a lot of things that are downstream from that. Like, they have their loyalty VIP system where you get allocations for cars and. And that's not as strong as it used to be. And you're. It took a. To took five years for that to see an effect. But they're creating cars. The allocations aren't being like, they have to get stricter because they have a lot of money coming in for people that want these things. But it's not the same culture behind it. Right. A lot of people from the Middle east going in and buying these things and filling out their garages with it so that they can. I mean, they're treating like a rewards program for a credit card.

Mark Abbott

[0:14:31]

Right.

Cole Abbott

[0:14:31]

Rather than, like, well, they love the car and they want to go race, and it's an obligation, not a passion anymore.

Mark Abbott

[0:14:37]

Yeah.

Cole Abbott

[0:14:38]

And, well, when you treat it like that, it's like, that's what you're gonna get.

Mark Abbott

[0:14:41]

Yeah.

Cole Abbott

[0:14:41]

That's just not who they are.

Mark Abbott

[0:14:42]

Right.

Cole Abbott

[0:14:42]

Lamborghini can do that. Because Lamborghini is just like, screw it. Let's have fun, see what happens. Right. That's their brand.

Mark Abbott

[0:14:47]

Right.

Cole Abbott

[0:14:47]

They don't care.

Mark Abbott

[0:14:48]

Right.

Cole Abbott

[0:14:49]

About that stuff, and it's fine. And. And they do. And so when they do swing wacky, like they put out an suv, it's like, all right. Doesn't mean anything. It's Lamborghini. Yeah. Yeah. So Ferrari and Inverse vs Porsche has done a fantastic job of sticking to the thing. And part of that's just because of the 911. They didn't have the 911. They'd be like, ah, it's a trickier issue because they're going electric a lot of things, and they're. They like to push the boundaries and they're very German and sort of like the electric is more efficient. It is faster, and that's all they care about.

Mark Abbott

[0:15:24]

Yeah.

Cole Abbott

[0:15:25]

And so. But that's them.

Mark Abbott

[0:15:26]

Yeah.

Cole Abbott

[0:15:27]

And so they can do that. But then they also respect the 911 and. Right. That's just been such a slow, iterative development over time.

Mark Abbott

[0:15:34]

Incredible.

Cole Abbott

[0:15:35]

Which is beautiful. And then there's a whole culture around that. Yeah. But then they can make an suv and it makes sense. But they never claimed they weren't going to make an SUV.

Mark Abbott

[0:15:42]

Yeah.

Cole Abbott

[0:15:43]

Right. The 911 is just. Basically goes back to the Ferdinand Porsche days of, well, let's make a super Beetle. And then there's some darker stuff in that, but that's fine.

Mark Abbott

[0:15:54]

Yeah.

Cole Abbott

[0:15:55]

It shows, like, how you can. Everyone wants to cancel brands and stuff these days. And it's like, well, you know, he was. He was like in the ss, he was a Nazi, but Hitler loved him. He loved Hitler.

Mark Abbott

[0:16:05]

But.

Mark Abbott

[0:16:06]

Right, right.

Cole Abbott

[0:16:07]

It's like, well, that's really fine now. No one really seems to care about that.

Mark Abbott

[0:16:10]

Right.

Cole Abbott

[0:16:11]

Not saying he's cancel, cancel Porsche, just. Right. An interesting fact of history. And then. All right, so we got two more on the car end, one being Aston Martin.

Mark Abbott

[0:16:24]

Yeah.

Cole Abbott

[0:16:25]

Who's always been a strong brand, but it's very British and like, oh, the interiors kind of sucked. Not very reliable, but it's James Bond.

Mark Abbott

[0:16:34]

Right.

Cole Abbott

[0:16:35]

And so we'll see with all of these things that having a great brand, as Roy Sutherland would say, having a great brand allows you to play the game of capitalism on easy mode.

Mark Abbott

[0:16:43]

Yeah.

Cole Abbott

[0:16:44]

And so if you're like, oh, this is easy, and then you play efficiencies, like, you'll see a huge spike right away and then that will taper off and you're like, what's happening? We didn't do anything different. It's like, well, you got rid of the. You're changing the mode of the game you're playing. Right. So if you lose the brand, it's like, well, you're not going to have anything special. And then, well, now you're just another retailer or just another manufacturer.

Mark Abbott

[0:17:03]

Yeah.

Cole Abbott

[0:17:03]

So coming to Aston Martin, having that great brand hasn't really suffered anything. They just kind of lagged behind.

Mark Abbott

[0:17:11]

Right.

Cole Abbott

[0:17:11]

And got lazy. And then Lawrence Stroll came in and he's just like, we're raising standards. It's like, I don't care. Just pump money into it, make it great. And so now their interiors, which is crazy, that over, like, three years, just all the car's interiors are now very nice. They're probably not. They're not as grand and everything as Bentley, but they've caught up. It's not an issue with car anymore. And they're like, we're going to make V12s until we're not allowed to make V12s anymore.

Mark Abbott

[0:17:37]

Yeah.

Cole Abbott

[0:17:37]

And so they understand the brand, they understand what they're doing, they're pushing it, but they're doing a good job at riding that line.

Mark Abbott

[0:17:43]

Yeah.

Cole Abbott

[0:17:43]

And I think he respects the soul and he raised the standards and.

Mark Abbott

[0:17:47]

Right.

Cole Abbott

[0:17:47]

That's an efficiency for effectiveness play.

Mark Abbott

[0:17:50]

Yeah.

Cole Abbott

[0:17:50]

And then you look at Jaguar, which is. They lost the brand because the brand is. There's a. I don't know if we can do this. There's a video Top Gear clip from years ago. Jeremy Clarkson on the E type. Specifically the Eagle E type. But for all intents purposes, the E type and why it's so iconic. It's just a British car. It is beautifully done. And so if you want to understand the soul of Jaguar, just watch that video. Just like a Top Gear, Jeremy Clarkson Eagle E type. And they just lost that. And then they're like, well, let's make an SUV and then make it a smaller SUV and then make an electric suv. And then they kind of had the F type, which is close. And then like, well, let's just let that do whatever. And then we killed that.

Mark Abbott

[0:18:39]

Right.

Cole Abbott

[0:18:39]

And then so it's like. Then their sales suffer because if you don't have the Halo car that represents the soul.

Mark Abbott

[0:18:48]

Right.

Cole Abbott

[0:18:48]

What are you. It's like if Porsche gets rid of the 911.

Mark Abbott

[0:18:51]

Yeah.

Cole Abbott

[0:18:52]

Well, you know, they'll be able to ride that out for 10 years. And then what happens if Jeep gets rid of the Wrangler?

Mark Abbott

[0:18:56]

Right.

Cole Abbott

[0:18:57]

What are they going to do?

Mark Abbott

[0:18:58]

Yeah.

Cole Abbott

[0:18:58]

And then that's an even bigger issue because Jeep and all of the Fiat stuff kind of rides on the Wrangler.

Mark Abbott

[0:19:04]

Yeah.

Cole Abbott

[0:19:06]

Because that's their strongest brand. And they're. I. I don't think Stellantis is well run, but then they have. Well, that I. Well run because I don't even think they have a. Any leadership right now. Cause they all just turned over because they were bad. But Jaguar's thing was. Well, nothing's working. Let's just blow it up and see what happens. Let's write a. A Seth Godin thing of burning down a house is a lousy way to renovate. But it's a great way to draw a crowd. I think I got that backwards, but. Right. I think it's. It's a. Yeah, yeah, that's pretty good. Draws a crowd. This allows me to renovate. Yeah, but.

Mark Abbott

[0:19:39]

Right.

Cole Abbott

[0:19:40]

That's. That's kind of what they're doing.

Mark Abbott

[0:19:41]

Yeah.

Cole Abbott

[0:19:41]

And I screw it and I. And I understand where they're trying to go. Because if you go up market, everyone's got market when the economy is favorable.

Mark Abbott

[0:19:48]

Yeah.

Cole Abbott

[0:19:49]

Some things are more sensitive than others to market fluctuations. Elasticity. Elasticity is right. Where.

Mark Abbott

[0:19:56]

Yeah.

Cole Abbott

[0:19:56]

So. Right. Like McDonald's is a. Inferior good is the right word. Yeah, Inferior good. But then they're trying to go up markets and if it's the Internet crashes and well, they lost that. Yeah, right. But when the market's good, right, you want to go up market. And so Jaguar's like, well, let's make $300,000. Cars are like Rolls Royce, but for younger people because Rolls is kind of dated and it's like, well, they're doing fine. I don't think their design language is good right now, but that's another story.

Mark Abbott

[0:20:21]

Right.

Cole Abbott

[0:20:22]

The Cullinan. But they're like, well, let's just do that because there's a lot of money there. And so they did that and then they marketed it towards people that would, I guess, appreciate it and be like, that's cool. But they don't have the means to buy it and they don't really understand why it would be good. And so you could do a. I heard was hearing somebody talk about like a very smart person. Well, read on all things businesses, brands and founders. And you say, well, I don't really care for art. It doesn't, doesn't matter. And so I was like, well, that's an interesting thing to think about from a lovinger's perspective. Right, right. And I think the appreciation for art is also the same appreciation for the soul of a brand.

Mark Abbott

[0:21:04]

Yeah, right.

Cole Abbott

[0:21:04]

You just push, push, push, push, push. And if you're super dogmatic and intelligent, you can squeeze efficiency out of anything. Right, right. That's not hard to do.

Mark Abbott

[0:21:13]

No, but it's very short term oriented.

Cole Abbott

[0:21:15]

It's very short term oriented. And it is hard in terms of it takes a lot of effort and everything. And you got to work really hard and have experience doing that. But it's not as rare of an ability as building a vision or continuing that because you really got to understand and unpack the soul and then respect it and honor and push it forward in the future and interpret it and extrapolate it. But it says right. In the earlier stages, you, your interest in art, it's like, well, you have immediate gratification, concrete thinking, well, art doesn't help me because this make me money.

Mark Abbott

[0:21:50]

Right.

Cole Abbott

[0:21:50]

Or then you move up and it's like, well, it doesn't. There's not, there's no transactional benefit to it. Or you just like art because your group does.

Mark Abbott

[0:21:58]

Right.

Cole Abbott

[0:21:59]

You're a conformist. Right?

Mark Abbott

[0:22:00]

Yeah.

Cole Abbott

[0:22:00]

Review. And then. Or if a group doesn't like arts and I'm like, well, I don't like art either.

Mark Abbott

[0:22:03]

Right.

Cole Abbott

[0:22:04]

And then, then you don't understand. Like you get it and you Go like, oh, yeah, I get it. You know, But I don't personally find any value in it. I guess some people like it, but I don't find meaning in it. And then that's what, like, 5,6ish? Self. Aware.

Mark Abbott

[0:22:19]

Yeah.

Cole Abbott

[0:22:19]

And then as you go up, you can see, recognize a deeper significance, even if you don't personally connect with it. But then you're also able to see. Right. Eventually, then you're like, well, you see art as a profound expression of the human experience. And if we don't have that, then all the rest of the stuff doesn't really matter. And so it does. Even though it seems superfluous and what it's like, no, you need that.

Mark Abbott

[0:22:42]

Right.

Cole Abbott

[0:22:43]

And we're getting. And it goes back to your Versace thing of trading color and expressive detail in the craftsmanship for something that's safe and muted and dull. And it's just. That's not the point. Right, right. Fashion in that way is supposed to be provocative. It's supposed to be exploratory. It's supposed to take something to. Well, we like this. And what if we push this further? Doesn't mean that whatever was on the Runway you should go by.

Mark Abbott

[0:23:11]

Right.

Cole Abbott

[0:23:11]

It's not the point of it.

Mark Abbott

[0:23:12]

Right.

Cole Abbott

[0:23:14]

So there's a very long winded way of going through the car industry and then back into the.

Mark Abbott

[0:23:20]

Well, into fashion and then. And then back into the soul. And we were talking earlier about, before we started this about Hermes.

Cole Abbott

[0:23:32]

If you look at Capri versus lvmh. All right. Lvmh, they were playing very different games. Capri's like, let's maximize revenues. Let's make this work. Right. We're going to turn this around. We could sell it. It'd be great. Because I, I do think.

Mark Abbott

[0:23:47]

Right.

Cole Abbott

[0:23:47]

I, I would like to know more about their strategy, but it does seem like they have an exit plan there.

Mark Abbott

[0:23:52]

There certainly seem like they're playing for an exit plan. Exit as opposed to long term game of creating value, unfortunately.

Mark Abbott

[0:24:00]

Right.

Mark Abbott

[0:24:00]

The value of Capri right now is basically equal to what they paid for Versace. So. So the entire organization. Wait, so everybody, Everything else in Capri.

Cole Abbott

[0:24:13]

Yeah.

Mark Abbott

[0:24:14]

Either Versace is worth half or probably. It's probably worth half of what it was, maybe even worse. And other parts of it, now that it's all, basically all the value that they had is gone. If you say that Versace is still worth what it was, but the reality is Versace is probably worth half and the other part's probably worth half of what it was. When they did the Versace acquisition, well.

Cole Abbott

[0:24:36]

Now it's just gonna go down because Donatella's gone. It's like, you still add something. Right now she's out, like, oh, anyone that actually really cares about Versace? Because if you just want designer stuff later, there's a bunch of brands.

Mark Abbott

[0:24:48]

Yeah.

Cole Abbott

[0:24:49]

There's not a lot of brands where the. The name, the designer is still in house. And it's very much an American thing of like, well, let's just take it and squeeze it and then go on.

Mark Abbott

[0:25:00]

Right.

Cole Abbott

[0:25:01]

Reverses. L.V.M.H. of which is. You could argue against them, but it's much more territorial. I think that'd be the shadow side of things, where it's like, we love that. We want to respect that, but we want it to be ours. And they're like, we never intend on selling it ever.

Mark Abbott

[0:25:16]

And they respect the brand.

Cole Abbott

[0:25:17]

And they do respect the brand.

Mark Abbott

[0:25:19]

All of their brands. And how many brands do they have?

Cole Abbott

[0:25:22]

A lot.

Mark Abbott

[0:25:22]

I mean, it's 30, 40, 50. It's a big number. It's more than that, probably.

Mark Abbott

[0:25:26]

Yeah. Yeah.

Cole Abbott

[0:25:27]

Big company. But do you hear the way. Going back to the Enzo Ferrari thing, the way that Bernard and the children talk about the brands? Like, they're very, very specific on how they think of them. So if you say something is a luxury brand, they're like, no, it's. It's ultra premium or it's premium. It's not a luxury thing. Right. Because they don't. And it's. And you say, well, technically, it is luxury. It's like, well, no, but it matters the way that they interpret it, because what is the meaning behind luxury? What is the meaning behind premium? And they think, to them, it's. They won't buy a brand that doesn't align with their core values.

Mark Abbott

[0:26:01]

Right.

Cole Abbott

[0:26:02]

They don't care how much money it'll make.

Mark Abbott

[0:26:04]

Yeah.

Cole Abbott

[0:26:04]

It's not the point. And then they want to basically smooth out the efficiency side of things while keeping the effectiveness.

Mark Abbott

[0:26:11]

Preserving the core.

Cole Abbott

[0:26:12]

They want to preserve the core but make it easier for the brands to do what they do. Yeah. And I. If they're in an interview and somebody's like, will you do this? Like, no, we don't. Very adamant about that.

Mark Abbott

[0:26:25]

Yeah.

Cole Abbott

[0:26:25]

And I think there's an element of the. The disagreeable that we've been talking about earlier.

Mark Abbott

[0:26:29]

Yeah.

Cole Abbott

[0:26:30]

And a lot of these brands are built with such a strong soul because the founders just disagreed. It was like, I'm doing it this way. I don't care. Right, right. And there's. There's that fire, that passion. And it's like, well, if you're playing an efficiency game, well, a bunch of other people can help you play the efficiency game, and you should let them. Yeah, but you're playing effectiveness game and somebody wants to stomp out that soul.

Mark Abbott

[0:26:49]

Yeah.

Cole Abbott

[0:26:49]

You're not gonna let them do that. And so you need the right people or you need to be the right kind of person to play that game, the LVMH there. And Bernard's tried very hard to take over a certain brand that would be the. The crown jewel in the thing, and that is Hermes. And Hermes is very much like, we're doing this. They value craftsmanship over anything. And so everything's handmade, but they're not stubborn on that. It's like, well, a machine can make it better than a person, then we'll switch. But. Right. That's valuing the product over the perception.

Mark Abbott

[0:27:23]

Right.

Cole Abbott

[0:27:23]

Which I think you should do in business. That's why we're here.

Mark Abbott

[0:27:27]

Yeah.

Cole Abbott

[0:27:28]

And you do that well, and you're a good person, sociable person. It's like, well, then that the perception thing will take care of itself. Hermes's strategy of doing that, sticking to that thing. And they can't scale infinitely, obviously, because, well, it's. They have to be made a certain way. And.

Mark Abbott

[0:27:43]

Right.

Cole Abbott

[0:27:44]

There's savoir faire. And everyone has to go to school.

Mark Abbott

[0:27:47]

Right.

Cole Abbott

[0:27:48]

Then learn apprentice to be in that. And. Well, it takes two years to do that. I don't know how many years it actually takes, but say two years to do that, then five years you can work on something else. And then like 10 years so that you can do, you know, move up to like a Birkin bag. And though that intention and attention to detail is what makes them so strong.

Mark Abbott

[0:28:11]

Yeah.

Cole Abbott

[0:28:11]

And so Bernard's just like, that's the most beautiful thing in the world to him. But then if you look at their numbers, they have a 71% gross margin and reported revenues of 15 million. 15 billion with a market cap of 260 billion. So that's pretty crazy.

Mark Abbott

[0:28:30]

It's unbelievable.

Mark Abbott

[0:28:32]

Right?

Cole Abbott

[0:28:32]

And they are, They're. You could say they're playing capitalism on easy mode.

Mark Abbott

[0:28:36]

Yeah.

Cole Abbott

[0:28:36]

But it's just that they're so restrained and that's what keeps them doing. And they're just going to keep moving up.

Mark Abbott

[0:28:42]

Yeah.

Mark Abbott

[0:28:42]

And they're.

Cole Abbott

[0:28:43]

They're less susceptible to the market because, well, if everyone else goes, people are still going to go to Hermes because that's what has the most value. And so everyone else. Right. Because when things are. When the demand so exceeds supply, it's like, well, they have a lot of buffer because they're not even trying to maximize revenues.

Mark Abbott

[0:29:00]

Right.

Cole Abbott

[0:29:00]

Their stuff secondhand goes for way more than it does from them.

Mark Abbott

[0:29:04]

And how old is that company now?

Cole Abbott

[0:29:07]

Let's see.

Mark Abbott

[0:29:07]

I say a hundred plus years old. Right.

Cole Abbott

[0:29:10]

1837.

Mark Abbott

[0:29:11]

So they started off as so 100, 180.

Cole Abbott

[0:29:16]

They're coming up on 200 years.

Mark Abbott

[0:29:18]

Coming up on 200 years.

Cole Abbott

[0:29:19]

They started off leather.

Mark Abbott

[0:29:21]

Yeah.

Cole Abbott

[0:29:22]

For I think saddles.

Mark Abbott

[0:29:25]

I think, I think it was saddles. And then. And then they went to trunks, I mean to luggage for the back of horse drawn carriages.

Mark Abbott

[0:29:33]

Well.

Cole Abbott

[0:29:33]

And that's why the logo's a carriage.

Mark Abbott

[0:29:35]

Yeah.

Cole Abbott

[0:29:36]

Coach ripped off, but whatever. Yeah, but. Right. And that's a. Well, we make stuff like this. We have these standards and we serve this clientele and so we make leather. We could have leather. We do saddles now. We do luggage. And then we could do bags and we could do all these things. And they're very customer focused.

Mark Abbott

[0:29:54]

Right.

Cole Abbott

[0:29:54]

Like the, they're two big things like the, the Birkin bag and the. Are both like, well, someone was on a plane with. I don't know if for one of those bags was like someone's on a plane sitting next to one and like. Well, I would like a bag. You know, I think it was, I think it was Jane Birkin. But if it's Kelly, I'm sorry. Brought a bat, brought a basket onto a plane.

Mark Abbott

[0:30:14]

Yeah, yeah.

Cole Abbott

[0:30:14]

Because she wanted to put all her stuff in and she couldn't get a good bat. A good looking bag that handled everything.

Mark Abbott

[0:30:18]

Yeah.

Cole Abbott

[0:30:18]

And she like stupid. And he's like, well, let me just make you a better bag. And then that's how that was born.

Mark Abbott

[0:30:24]

Yeah.

Cole Abbott

[0:30:24]

And then. So she'd use that from now on.

Mark Abbott

[0:30:26]

Yeah.

Cole Abbott

[0:30:26]

And because it handled everything. It looked good, it was well made.

Mark Abbott

[0:30:29]

Yeah. Right.

Cole Abbott

[0:30:29]

And this stuff lasts forever. And that's another thing with LVMH is they want things that are built to last. It's a lifetime warranties. All those things are very important to them.

Mark Abbott

[0:30:37]

Right.

Cole Abbott

[0:30:37]

So when they acquired Ramoa, they put that in place. It's like if you buy a Remoa After 2022, it's a lifetime warranty on the thing. But.

Mark Abbott

[0:30:45]

Right.

Cole Abbott

[0:30:45]

That goes to represent the values of the company.

Mark Abbott

[0:30:48]

What's interesting is once again, this would be cool to research. And this was. Is not a hard one to research. We could chatgpt this one. Right. Or Grocket or whatever your deep research preferences are Would it be a stretch to say that when we look at all the great brands, they all really leaned into being customer centric? They knew who their customer was or is, and they built a very high trust relationship with the customer. Would that be safe to say?

Cole Abbott

[0:31:28]

Well, for the most part, so I'd say yes. But that's. I think that's because most of these great brands were somebody that either was very close with and respected the customer or they were the customer.

Mark Abbott

[0:31:41]

Right.

Cole Abbott

[0:31:42]

Steve Jobs, like, he's the customer.

Mark Abbott

[0:31:43]

Yeah.

Cole Abbott

[0:31:44]

Right. I don't think it might as well fall into that category. I don't think a lot of the luxury, I think a lot of the other designers, they just designed for themselves. Right. That was a creative expression and they did what they loved, but they did it with a singleness of purpose and they were extremely talented. Right. So Disney would fall into that category.

Mark Abbott

[0:32:04]

Right.

Cole Abbott

[0:32:05]

Balenciaga and I could go to all the rest of the fashion houses that are great. Like, they did that and they loved that. And they did it. They wouldn't. Even if they didn't make money doing it, like, they're still going to do it. If they've been a Van Gogh, they'd still do the painting. Right.

Mark Abbott

[0:32:23]

That's what I. As you know, I shared with you. I was at a conference this a360. Well done, Peter D. Mondis this last week. And the last speaker was Lucky Palmer from Andrew. And he was talking about how when he got funding for his first company, Oculus, Right. He was like, I told them all, I don't know whether. I mean, I can't promise you you're gonna make money. And. And then he's like, you know, what they basically did was they. They funded him to do his hobby 12 hours a day. You know, he's like, this is the.

Cole Abbott

[0:33:10]

Greatest thing in the world.

Mark Abbott

[0:33:10]

Right.

Cole Abbott

[0:33:11]

I would do this without getting paid.

Mark Abbott

[0:33:13]

Now I've got all this backing and I have this potential to create a great company and I'm doing what I would have done anyway. It's like, you know, you're paying people to go to. I forget what, what he said exactly.

Cole Abbott

[0:33:25]

He said, I'm. I'm conning people into. Into paying me billions to do what I love. It's basically what he said.

Mark Abbott

[0:33:32]

Yeah.

Cole Abbott

[0:33:33]

And that's true.

Mark Abbott

[0:33:35]

Yeah.

Cole Abbott

[0:33:35]

Or is it Ionic Han?

Mark Abbott

[0:33:37]

Right.

Cole Abbott

[0:33:37]

But the. That mindset of I just want to do this thing.

Mark Abbott

[0:33:40]

Yeah.

Cole Abbott

[0:33:41]

Allows you to be so simple in your mission and not. Right. Steve Jobs would say that you're a complicated man and that was an insult. From him.

Mark Abbott

[0:33:51]

Yeah.

Cole Abbott

[0:33:51]

Because you want a thing to be simple. Yeah. When you, when you're simple, that breeds focus and then that focus creates a simple product.

Mark Abbott

[0:33:58]

Yeah.

Cole Abbott

[0:33:58]

And everyone wants a simple product. Right. We're in. It's human nature to complicate things. But we love simplicity, which is a fascinating little dichotomy. But being so passionate about it to the point where you're just blind and oblivious to everything else that's going on is we usually create something pretty interesting if you have the right traits and the right people around you. But usually that those are all symptomatic of the traits.

Mark Abbott

[0:34:26]

Yeah.

Cole Abbott

[0:34:28]

In, in doing that you're, you are serving people. Because if you're like, if you go about creating a company or entrepreneurship as well, there's a hole here. I'm going to go fill that hole.

Mark Abbott

[0:34:39]

Right.

Mark Abbott

[0:34:40]

Without any interest in the hole. It's just. Because it's a hole.

Mark Abbott

[0:34:43]

Yeah, yeah.

Cole Abbott

[0:34:44]

There's a lot of people that. Well, it's like where, where can I go do that? It's like you're thinking about it wrong.

Mark Abbott

[0:34:48]

Yeah. Right.

Cole Abbott

[0:34:48]

You got to find the intersection of, of passion, purpose and potential and then find that. And then pursue that single mindedly.

Mark Abbott

[0:34:57]

Yeah.

Mark Abbott

[0:34:59]

Passion, purpose, potential and something that you're willing to persist at for 10, 20 years.

Mark Abbott

[0:35:09]

Right?

Cole Abbott

[0:35:10]

Yeah. I would say if it's the right passion.

Mark Abbott

[0:35:12]

Yeah.

Cole Abbott

[0:35:13]

And it's the right purpose, you should do it. You should keep doing that.

Mark Abbott

[0:35:17]

Yeah.

Cole Abbott

[0:35:17]

But people and are appreciate novelties. Right. More than they should.

Mark Abbott

[0:35:25]

Yeah, but, but, and, and the potent potential. Passion, purpose and potential. We've never really had this conversation, but.

Cole Abbott

[0:35:32]

I just, I just made that up. I like it. Yeah, yeah, yeah.

Mark Abbott

[0:35:35]

But the potential is tam, right?

Cole Abbott

[0:35:38]

Well, it's tam. There's, there's two sides of that. There's TAM and there's. Are you the right person for this?

Mark Abbott

[0:35:44]

Right.

Cole Abbott

[0:35:45]

Are you, are you ambitious enough? Are you intelligent enough? Are you. Depending on the industry. Right. We could go into the other traits.

Mark Abbott

[0:35:52]

Right, right.

Cole Abbott

[0:35:52]

Are you mature enough?

Mark Abbott

[0:35:53]

Right, Right.

Cole Abbott

[0:35:54]

Or some of it's objective.

Mark Abbott

[0:35:57]

Right.

Cole Abbott

[0:35:58]

Or inherent. And some of it's depending on where you are in your life.

Mark Abbott

[0:36:01]

Yeah. Right.

Cole Abbott

[0:36:02]

So if you could say, well, potentially in 30 years you could do this hasn't really worked.

Mark Abbott

[0:36:09]

Right, Right.

Cole Abbott

[0:36:09]

Uh, if it's a journey stage thing, like a journey based thing like lovingers stage or the company stage or you know, but certain. If you're a isfp, Right. And you're trying to, I don't know you pick any of those things. Right. But you're trying to Go into a certain industry, it's like, well, you're probably not going to be really cut out for that. You're going to cut against the grain, even though you're passionate about this thing.

Mark Abbott

[0:36:33]

Right.

Cole Abbott

[0:36:33]

So. Well, you're, you're not going to be passionate about the thing that you have to do long term. I have, like, you're a very data oriented person and you're going to a creative industry and like, well, I like this because I can go make, it's very inefficient. I can make it efficient. Right. It's like, okay, now you go down that hole and then what? Yeah, the potential is not there.

Mark Abbott

[0:36:48]

Right.

Cole Abbott

[0:36:49]

So I, I. Potential's a nuanced one. Yeah, we, we know that most of, I mean, we've done the research on the Myers Briggs stuff and. Yeah, but how much of it's nt. It's like 90% plus on visionary founders. Yeah, visionary founders.

Mark Abbott

[0:37:05]

And then you go to, then you go to legacy founders, which is interesting. It's, it's a broader spectrum of personality types, specifically temperaments. Right. Because they're going into an industry that's already been created. They've, they have a vision for a better company, a better competitor. Sam Walton, you know, a good example. And, and so they, they see the efficiency, opportunity and in retail, that's pretty, that's, that's not atypical.

Mark Abbott

[0:37:40]

Right.

Mark Abbott

[0:37:40]

They're going into a known industry, specifically like mass retail, like Walmart, and they're, they're going into a known industry and they're just going to play the game smarter. They see how to play the game smarter. They're, they're fascinated by the game. I mean, Sam was like, he'd stop at, you know, every store, every competitor just loves of studying the game of retail.

Mark Abbott

[0:38:06]

Right.

Cole Abbott

[0:38:07]

And this all built off like Costco is another example of that. We're like, oh, let's just do this and let's do it better. And they kind of fell into that. But it's the same thing.

Mark Abbott

[0:38:14]

Right.

Cole Abbott

[0:38:14]

I'm solid price. Right. And just, let's just play the game better.

Mark Abbott

[0:38:18]

Yeah.

Mark Abbott

[0:38:19]

There's, there's a broader array of personalities, I think in the, in the leg with legacy entrepreneurs versus visionary entreprene. But.

Cole Abbott

[0:38:29]

Well, to create something out of nothing is.

Mark Abbott

[0:38:30]

Yeah. Harsh.

Cole Abbott

[0:38:31]

More difficult.

Mark Abbott

[0:38:32]

Yeah.

Cole Abbott

[0:38:32]

You're gonna have a much, a narrower scope as to who is best suitable to do that exceedingly and uncommonly well.

Mark Abbott

[0:38:40]

Right.

Mark Abbott

[0:38:41]

And then back to sort of the beginning of all this in brand drift. Right. Then it's like, okay, so specifically, you know, if, you know, and fashion's a really interesting category, as obviously we talked about cars earlier. But even though there's lots of different car companies and lots of different fashion companies, the companies that were started, they had a strong point of view about what specifically they were going to build and what that market looked like and what that. Those. Their ICP looked like.

Cole Abbott

[0:39:18]

A very, very clear.

Mark Abbott

[0:39:20]

Very clear.

Mark Abbott

[0:39:21]

Right.

Cole Abbott

[0:39:22]

Yeah. Balenciaga is very. I mean, he's just creative. He was very, very clear in terms of who he was serving.

Mark Abbott

[0:39:28]

Yeah.

Cole Abbott

[0:39:28]

And what they wanted and how he wanted that experience to be for them and how he wanted to change that. And then the wording was very like, you don't just wear the dress, you present the dress, you bequeath it to your daughter or whatever. Like all these things he was very adamant about because he's understood it so well. He's like, well, just make it for the best of the best. And like, because he wants to make the best thing and who can pay for the best thing, he's like, well, the people with the most money.

Mark Abbott

[0:39:51]

Right.

Cole Abbott

[0:39:52]

And that's a lot of that stuff starts and then some of them fall off and then it takes. Right. Then that's an LVMH thing. Like, oh, well, this is a great brand that is not being well run right now. So let's just go run it well and respect what made it great in the first place.

Mark Abbott

[0:40:04]

Yeah.

Mark Abbott

[0:40:05]

Go back to the foundation.

Cole Abbott

[0:40:06]

Yeah. And. And then you'll see some people can take brands and revive them, but then they leave and it's starts to falter again. Like Gucci and Tom Ford. Tom Ford came in, brought it back, made it great. And then he leaves and it's like. And I think someone came in, have a new person now running it who seems to be doing a better job. But I don't know that. What's the. It's.

Mark Abbott

[0:40:30]

It's the tapestry.

Mark Abbott

[0:40:32]

No.

Cole Abbott

[0:40:33]

All right, let me look at it.

Mark Abbott

[0:40:33]

It's not Capri, it's not Tapestry.

Cole Abbott

[0:40:35]

If you said the name, I'd know it.

Mark Abbott

[0:40:36]

It.

Mark Abbott

[0:40:36]

It. But it is one. It is a multi.

Cole Abbott

[0:40:40]

Caring. I should have known that. Caring is like the next biggest one.

Mark Abbott

[0:40:46]

Okay.

Cole Abbott

[0:40:47]

They on Gucci, Balenciaga, Usain Lauren and other things.

Mark Abbott

[0:40:51]

Yeah.

Mark Abbott

[0:40:52]

Brand drift.

Mark Abbott

[0:40:53]

Right.

Mark Abbott

[0:40:53]

I mean, it's, it's like, it's just back to the whole Founders Mode series. It's. You have a strong point of view on just a limited number of things. Your culture, your icp, your unique value proposition. Obviously there's, there's either A purpose of passion or a cause. We don't talk about purpose. Passion. Cause as much as we talk about passion. Purpose. Right.

Cole Abbott

[0:41:22]

But I think purpose causes in purpose.

Mark Abbott

[0:41:26]

Yeah.

Cole Abbott

[0:41:27]

Like there's a purpose behind the thing that's bigger than yourself.

Mark Abbott

[0:41:29]

Yeah. Right.

Cole Abbott

[0:41:30]

And that's a. Then you go, so basically it gets.

Mark Abbott

[0:41:32]

Down to either passion or purpose.

Mark Abbott

[0:41:35]

Yeah. Yeah.

Mark Abbott

[0:41:36]

I mean, Lucky was about passion and he laughs about. No, I didn't have this big grandiose.

Mark Abbott

[0:41:42]

Right.

Cole Abbott

[0:41:43]

And most people don't. I think you sort of passion is. You need passion and then you kind of can fall into purpose.

Mark Abbott

[0:41:49]

Yeah.

Cole Abbott

[0:41:49]

Because purpose is the intersection of, well, what. What am I passionate about? And then also what matters. You look at that from an easy guy perspective.

Mark Abbott

[0:41:56]

Yeah.

Cole Abbott

[0:41:57]

Which is another useful framework. It's probably just a different version of purpose, passion, potential.

Mark Abbott

[0:42:01]

Yeah.

Cole Abbott

[0:42:02]

Which is probably just a better version because I didn't make it up right now. But you. You sort of fall into. Into purpose.

Mark Abbott

[0:42:13]

Right.

Cole Abbott

[0:42:13]

Because I don't. I don't think that before 90, I thought I was going to really find purpose in. In B2B's ass. You know? Yeah. I really don't care. But I also think coming from a place outside of that is helpful. Yeah. Right. From being. Because it's. I was gonna go biblical reference there, but. And I was like, we go a whole archetypal thing here. But like the. The king has to come from outside the kingdom in order to revive the kingdom kind of a thing.

Mark Abbott

[0:42:42]

Yeah.

Cole Abbott

[0:42:42]

Which is a. You'd say it's like a nickel.

Mark Abbott

[0:42:45]

Right.

Cole Abbott

[0:42:46]

Because if the kingdom is bad, you're probably not going to find someone within that that's going to resurrect it.

Mark Abbott

[0:42:50]

Right.

Cole Abbott

[0:42:51]

Like, I don't think Starbucks should have promoted somebody to run it rather than going hiring Brian Nickel. That probably wouldn't work. Same with Aston Martin. Even though they weren't really bad. Right, Right. That's Lawrence buying. That isn't. Because he had a. He just wanted to help his son's racing career, which is so stupid. But now it's. It's turned out well.

Mark Abbott

[0:43:12]

Yeah.

Cole Abbott

[0:43:12]

For everything. Even though you could argue whether or not they should do a driver swap. But you. You fall into those things. And I think that would be the same for Schultz. I don't think he was like, oh, I'm gonna go create a great coffee brand, global coffee brand. I don't think that's what he was doing. But it kind of in line and you fall into it and then you're like, oh, this matters.

Mark Abbott

[0:43:34]

Right.

Cole Abbott

[0:43:34]

And there's something beyond just me.

Mark Abbott

[0:43:36]

Right.

Cole Abbott

[0:43:36]

I'm just a. I'm just the steward of this vehicle at this moment in time, this flash.

Mark Abbott

[0:43:43]

Right.

Cole Abbott

[0:43:44]

History.

Mark Abbott

[0:43:44]

Yeah.

Cole Abbott

[0:43:44]

And I have a responsibility to carry it and to do well with all the ideal stakeholders.

Mark Abbott

[0:43:50]

You can see the potential.

Cole Abbott

[0:43:52]

There's potential. All these little overlap things. I'm thinking about how you outline that model. Yeah. Things start to drift when you lose sight.

Mark Abbott

[0:44:00]

Yeah.

Cole Abbott

[0:44:01]

If you don't. If you don't. If you're in a boat and you don't have your North Star and you Just a cloudy day and you. You start to drift away.

Mark Abbott

[0:44:07]

Yeah.

Cole Abbott

[0:44:07]

Because there's currents, there's things you don't understand, there's things you don't see, and you'd be sailing really fast in the wrong direction.

Mark Abbott

[0:44:14]

Yeah, that's exactly right. You know, and all of a sudden it's like.

Mark Abbott

[0:44:16]

Yeah.

Mark Abbott

[0:44:17]

If you don't know where you're going and you're like, let's go faster. That may not work out so well.

Cole Abbott

[0:44:25]

And there are times where that works accidentally.

Mark Abbott

[0:44:30]

Yeah.

Cole Abbott

[0:44:31]

And Parasite, the movie. I love Parasite, but at the time I thought it was accidentally great. Because there's a lot of things where I'm like, wow, that's brilliant. And then you look at how the director thought of it, like, huh, that's not why I thought that was so smart. And then you're like, okay, well, I don't think you're thinking about things as well as you could from a storytelling and archetypal perspective. You're trying to focus on current events and issues and whatever. And then he just came out with another movie called Mickey 17. I've heard not good reviews about it. And now I want to see it because there's. For three movies from him that are well known. Be Snowpiercer, which is fine. Parasite was amazing. And then Mickey 17. And so I think that Parasite was an accidental success.

Mark Abbott

[0:45:20]

Right.

Cole Abbott

[0:45:21]

For example, the flood scene is. Is biblical. That's archetypal. Right. There's all these things that are happening and they're. They're moving themselves deeper and deeper and deeper, and they're not thinking ahead. So when that flood comes, it ruins them.

Mark Abbott

[0:45:34]

Like the.

Cole Abbott

[0:45:35]

The protagonist family and everything just lines up so beautifully in that. And according to the director is like, well, no, that's just about climate change. And you're like, oh, like you. You could do both, right?

Mark Abbott

[0:45:49]

Yeah.

Cole Abbott

[0:45:49]

You can have it for the right reason, but also accomplish your other goal.

Mark Abbott

[0:45:52]

Yeah.

Cole Abbott

[0:45:52]

And I don't think you thought through it all. And sometimes that works well, and sometimes that doesn't work. So you look at movies that are in consciously influenced by archetypes like Lion King, which is brilliant, but it's unconsciously, unconsciously informed. A bunch of things were like, they have like a marching scene. You're like, well, that's, That's World War II. That's Nazi stuff.

Mark Abbott

[0:46:15]

Right.

Cole Abbott

[0:46:15]

Like, okay. And then there's some things where it's like, there's a fruit and I don't think there's like, the fruit's like the sun and it's, you know, ripe and rebirth and all that sort of thing. Then you'll get Pinocchio. And none of that's conscious. All that's just like, well, that felt, you know, Disney's like, that seems right. And you just have a bunch of really creative and intelligent people in a room and they're throwing things out. Like, that doesn't work. This doesn't work. But then everyone's like, oh, that works. That makes sense. And getting stuck in the belly of a whale rationally makes zero sense. But if you break it down psychologically and from a union perspective, it's like, oh, that's crazy. They just did that in the 40s or whatever.

Mark Abbott

[0:46:49]

Right.

Cole Abbott

[0:46:50]

And so sometimes it works, sometimes it doesn't work. But it takes the right person to consistently do it right. Without knowing why. And eventually they'll learn why or not. If they. For those who do it right, I don't think there's a case where like someone had a streak of doing this really well for 10 years.

Mark Abbott

[0:47:08]

Right.

Cole Abbott

[0:47:09]

Or indefinitely.

Mark Abbott

[0:47:10]

Yeah.

Cole Abbott

[0:47:10]

And didn't figure it out.

Mark Abbott

[0:47:11]

Yeah.

Mark Abbott

[0:47:11]

I think, you know, the, the metaphor that works really, really well here is, you know, when you play a single game, luck matters a lot. You play a hundred games and it's all about skill and understanding.

Mark Abbott

[0:47:26]

Right.

Cole Abbott

[0:47:27]

There's a lot of one hit wonders out there.

Mark Abbott

[0:47:28]

Yeah.

Cole Abbott

[0:47:29]

It's like some stuff sticks.

Mark Abbott

[0:47:30]

But if you want to, if you want to, if you, you know, if you get lucky and that's awesome. Right. But if you want to play the long game, you need to know where you're going and you need to take advantage of the compounding of all the knowledge that comes through the game you're playing. And if you, if you have a decent tam, which we're putting underneath potential. Right. And the purpose is one that will go almost forever. Right. And you're passionate about that game so that you come back every day and suffer the slings and arrows, and you're.

Cole Abbott

[0:48:12]

Passionate about playing again, playing it the way that you want to. Play it.

Mark Abbott

[0:48:16]

Right.

Cole Abbott

[0:48:16]

And so you put your principles. Because I think all of these companies, all these founders have their either intuitive or explicit set of principles. That would be our fourth P. I would, I would. I think you put that in there because you're passionate about the principles, but you could, you could say it's another P. Yeah.

Mark Abbott

[0:48:31]

Because you can be really passionate and be completely unprincipled. Yes. And that's just another version of not having a. Nor not having. Maybe it's different between the North Star and having. Having instruments that help you even in the fog.

Cole Abbott

[0:48:48]

Having a compass.

Mark Abbott

[0:48:49]

Yep.

Mark Abbott

[0:48:49]

Having a compass.

Cole Abbott

[0:48:50]

The compass is your principles.

Mark Abbott

[0:48:52]

And that's. Right.

Cole Abbott

[0:48:53]

And how you use the compass is the direction.

Mark Abbott

[0:48:55]

And then, and then the great founders, I believe, have done enough of this thinking. Sometimes maybe it's more intuitive. Maybe that's a Schultz thing, but I.

Cole Abbott

[0:49:06]

I think a Schultz or Jobs. It's very intuitive.

Mark Abbott

[0:49:09]

Yeah.

Cole Abbott

[0:49:10]

But Jobs is so amazing. Clearly communicating those things.

Mark Abbott

[0:49:14]

Yes.

Cole Abbott

[0:49:14]

That when he would say them, whoever he said it to and whoever was in the room really internalized it.

Mark Abbott

[0:49:19]

Yeah.

Cole Abbott

[0:49:20]

And you look at Brian Chesky and he's like, we don't do core values. We just have principles.

Mark Abbott

[0:49:23]

Yeah.

Cole Abbott

[0:49:23]

He's like, it's stupid. Here's like 20 things. Don't. Like, this is what we do.

Mark Abbott

[0:49:26]

Right.

Cole Abbott

[0:49:26]

You look at a lot of the, a lot of service oriented companies or hotels, they have their list of principles.

Mark Abbott

[0:49:32]

Yeah. And.

Cole Abbott

[0:49:33]

And values. And it's like they have separated.

Mark Abbott

[0:49:35]

Right, right.

Cole Abbott

[0:49:36]

Ritz Carlton has a very fascinating page on that. Yeah. It's like this is what you do and you don't, you don't veer from this.

Mark Abbott

[0:49:43]

Right, right.

Cole Abbott

[0:49:44]

And. And that's a Red Bull. Dietrich Matosich had a very defined list of things, and some of them are obvious and some of them are not. Like, one of them is you don't get drunk in public.

Mark Abbott

[0:49:55]

Right.

Cole Abbott

[0:49:55]

And that's just an extension of him. But he's like, you don't do that.

Mark Abbott

[0:49:58]

Yeah.

Cole Abbott

[0:49:59]

And there's a bunch of other things. And like, he didn't do pr. Anti. PR kind of a thing. And.

Mark Abbott

[0:50:03]

Yeah. Yeah.

Cole Abbott

[0:50:04]

It's a. But all of those things are coming from the same source, and so they tell the same story. And that's what creates a strong signal for the brand.

Mark Abbott

[0:50:11]

And eventually it becomes very ingrained.

Cole Abbott

[0:50:16]

Within.

Mark Abbott

[0:50:17]

The company so that the company does not end up experiencing brand drift. And even if it does, going back to Warren Buffett's, one of his things that he, that he said, you know, you, you want to buy a Company that is so strong that it could survive the leadership of a fool. Because it's inevitable that one day there will be a fool who runs the company. Right. And so now I think maybe this is part of the LVMH story. Right? It's. It's.

Cole Abbott

[0:50:52]

That's exactly the LVMH story.

Mark Abbott

[0:50:54]

Yeah. Right.

Mark Abbott

[0:50:55]

It's like. It's like, no, the founder built something special. It's even proven by the fact that a fool took it over and went off. You know, sort of went off the rails in terms of the brand. But the brand still is powerful. And so we can take it over and bring it back and set it on the proper course, set it straight again.

Cole Abbott

[0:51:25]

With a good crew.

Mark Abbott

[0:51:26]

With a good crew, yeah.

Cole Abbott

[0:51:27]

You see a lot of the crew. It's like someone comes in and it's like, well, now I'm here and sees clean house. And then you put better leadership in. And a lot of times that works.

Mark Abbott

[0:51:36]

Yeah.

Cole Abbott

[0:51:37]

Because. Well, you know, do you think that. Why do you think the company's not doing well if it's a strong brand? It's like, well, it's probably bad leadership.

Mark Abbott

[0:51:43]

Yeah. Yeah.

Cole Abbott

[0:51:45]

You know, by definition, and even if you have good people in there, it's like, ah, well, you just kind of gotta start fresh a little bit. Cause of the habits. And that's an agreeable, disagreeable thing.

Mark Abbott

[0:51:55]

Right.

Cole Abbott

[0:51:55]

You could be just like, screw it. I mean, you. Or you could try spending six months, just sort through that mess.

Mark Abbott

[0:51:59]

Yeah.

Cole Abbott

[0:52:00]

But these people tend to be impatient.

Mark Abbott

[0:52:02]

Yep.

Mark Abbott

[0:52:04]

So don't know. Don't know where that characteristic comes from.

Cole Abbott

[0:52:07]

It takes a lot to ruin a great brand. Yeah, I. I don't. You know, I was on the acquired podcast. I think it was on the LVMH one. They're arguing like, well, what it would take to just ruin a brand. It's like, we do this, this, this, this, and, like. But even if you did that and you wait 10 years, you could. You could probably bring it back pretty well.

Mark Abbott

[0:52:25]

Yeah.

Cole Abbott

[0:52:26]

Right. Going back to the Porsche point, it's like, well, if your product's great and you stand by and you have. And you have the values.

Mark Abbott

[0:52:33]

Right.

Cole Abbott

[0:52:33]

You can survive beyond whatever that issue was.

Mark Abbott

[0:52:38]

Right.

Cole Abbott

[0:52:39]

And probably other examples of that hit the interest.

Mark Abbott

[0:52:44]

Another interesting conversation. Not today, because we're probably running close to time Here is. Okay, so we talked about brand drift and that with great brands, you can bring them back on course. Now, the. Now, the other question before that one is, what's it take to build a great brand?

Mark Abbott

[0:53:06]

Right.

Mark Abbott

[0:53:07]

Because you can have, you can, you can be a great founder. Right. And have your vision, but that doesn't mean you're going to create a great brand because there's a lot of stuff that needs to take place.

Mark Abbott

[0:53:20]

Right.

Mark Abbott

[0:53:21]

So that you can get the. What is it, three, four, five, ten? How many years.

Mark Abbott

[0:53:26]

Right.

Mark Abbott

[0:53:27]

Does it take for you to be able to consistently be doing those things and adhering to those principles and pursuing that passion and that purpose and, and pursuing the potential and pursuing. That was the other P we came up with. Right.

Cole Abbott

[0:53:40]

Was the purpose, passion, potential, principles and the principles.

Mark Abbott

[0:53:45]

Right. How long does it take now to really build a great brand?

Cole Abbott

[0:53:50]

That depends on a lot of things. I don't, I don't think that that's right. Because I, you could say Lucky Palmer. Lucky. It's like. Well, he, he builds up pretty quickly.

Mark Abbott

[0:53:58]

Yeah.

Cole Abbott

[0:53:59]

Right. And some people, it takes a lot of time because you do something really small and it grows and it grows.

Mark Abbott

[0:54:05]

Right.

Cole Abbott

[0:54:06]

It doesn't, you know, but it's just in the, it doesn't do anything catastrophic along that way.

Mark Abbott

[0:54:12]

Right.

Cole Abbott

[0:54:13]

We reach a point where it's sort of an exit velocity if you keep pushing. But also, most of the founders don't really run into that issue because of the principles dimension.

Mark Abbott

[0:54:21]

Yeah.

Cole Abbott

[0:54:23]

So if, if the founder's there and, and they have that issue, it's like. Well, that's, that's emblematic of deeper foundational immaturities, developmental inconsistencies or discordant qualities. So if you run it, that's a separate thing. But then when it comes to the survivorship or this, the legacy of the brand, it's like, that's a different story.

Mark Abbott

[0:54:49]

Yeah.

Cole Abbott

[0:54:49]

Because you, you can screw up, you could pull a Bud Light.

Mark Abbott

[0:54:53]

Right.

Cole Abbott

[0:54:53]

And like now they're fine.

Mark Abbott

[0:54:54]

Yeah.

Cole Abbott

[0:54:55]

They're very self aware about it.

Mark Abbott

[0:54:56]

They've.

Cole Abbott

[0:54:57]

Everything they've put out in the last year has been, you know, pretty much.

Mark Abbott

[0:55:02]

That core Bud Light on brand.

Mark Abbott

[0:55:04]

Yeah.

Cole Abbott

[0:55:04]

Yeah. And so it's just. And I, I think, you know, they screwed up. They didn't handle it well. I was a leadership issue. And then they've course corrected.

Mark Abbott

[0:55:12]

Right.

Cole Abbott

[0:55:12]

They're fine.

Mark Abbott

[0:55:13]

Yeah.

Cole Abbott

[0:55:14]

Right. Jaguar could just go dead for a year and then come back with a new E type. They literally just built E type again.

Mark Abbott

[0:55:22]

Yeah.

Cole Abbott

[0:55:23]

Exactly the same. And then make it electric or something.

Mark Abbott

[0:55:25]

Right.

Cole Abbott

[0:55:26]

Or not. Right. But even if they did make it electric, it'd be fine.

Mark Abbott

[0:55:30]

Right.

Mark Abbott

[0:55:30]

Well, it's interesting too. You look at International Harvester and the Scout.

Mark Abbott

[0:55:33]

Yeah.

Cole Abbott

[0:55:34]

I came back and I go, great. Even though you could rationally argue. Oh, it's just not a Rivian. It is kind of like a Rivian.

Mark Abbott

[0:55:39]

Right.

Cole Abbott

[0:55:39]

A more off roady Rivian.

Mark Abbott

[0:55:41]

Right.

Cole Abbott

[0:55:42]

But it looks like it's gonna do really well. Myers makes the dune buggy thing.

Mark Abbott

[0:55:45]

Right.

Cole Abbott

[0:55:45]

They're gonna come up with an electric version of that. It looks pretty cool.

Mark Abbott

[0:55:48]

Yeah.

Cole Abbott

[0:55:48]

And it's like, well, let's just take the thing nobody really liked. The fact that it was motorized is just like. Just make electric. No one's driving a long distance range. Doesn't matter.

Mark Abbott

[0:55:57]

Right.

Cole Abbott

[0:55:58]

They get clean and easy and fun like all right, let's do that. And it's like, that's pretty cool.

Mark Abbott

[0:56:02]

Yeah. Right.

Cole Abbott

[0:56:03]

VW lost side of that. They killed off the bug in the bus like, well, now you make assats. I don't know. And they didn't really understand the Subaru. Same thing.

Mark Abbott

[0:56:14]

Right.

Cole Abbott

[0:56:14]

A lot of cars where that's an issue. But you know, Jeep, Porsche, two of the strongest brands because of one car. Like when it doesn't ride well or it's rear engine.

Mark Abbott

[0:56:25]

Right.

Cole Abbott

[0:56:25]

They have something stupid. But they keep that thing because it matters.

Mark Abbott

[0:56:28]

Yeah.

Cole Abbott

[0:56:28]

And they honor that and I respect it. And they know that people in the future will as well.

Mark Abbott

[0:56:33]

Yeah.

Cole Abbott

[0:56:34]

And that is the artistic expression that makes life fascinating.