#260 One from Many: VISA and the Rise of Chaordic Organization

Transcript from https://podmenti.com/t/522be4b6e413a95d

It is nineteen ninety three.
Nine years since I abruptly severed all connection with the business world.
For life on the land.
It is still hard to believe.
Turning my back on Visa in nineteen eighty four and walking away at the pinnacle of success.
Was the hardest thing
I have ever done.
The reason is still difficult to explain.
But it's not complicated.
That inner voice
That will not be denied.
Once we learn to listen to it.
Had whispered since the beginning.
Business.
Power and money.
are not where your life is about.
Founding Visa and being its chief executive officer
is something you needed to do.
But it's only preparatory.
Each time.
I resisted.
You're crazy.
Preparatory for what?
And why?
There was no answer.
Only silence.
In time.
The voice became incessantly.
And demanding.
Peace is not an end.
Give it up.
In the business world as well.
Completely.
Now
In time.
You will understand.
It was frightening.
It was maddening.
I felt a damned fool.
To even think about it.
A rational
Conservative
Fifty five year old businessman who had never smoked a joint
Or dropped a drug.
Listening to inner voices?
Absurd.
Throw away a lifetime of work?
Success
Money?
Power.
Prestige.
А зои но валю і на веге хоп.
That life had more meaning?
Madness.
But the voice would not be silent.
This was not my lifelong friend and companion.
The rational old monkey mind.
The certified expert of logic talking.
This was another voice entirely.
And I knew it was right.
I abruptly left Visa.
And severed all connections with the business world.
Offering the only possible explanation.
I feel compelled
To open my life.
To new possibilities.
No one believed it.
Why should they?
I could scarcely believe it.
Myself.
I hadn't a clue what those possibilities might be.
But I intended to be open to them.
The nine years since I left Visa
And opened my life to new possibilities.
Have been good years.
Filled with things.
I deeply love.
Family.
Nature.
Books.
Isolation.
Privacy.

Of imagination.
More than enough.

A fine
Life.
Life is not about control.
It's not about getting.
It's not about having.
It's not about knowing.
It's not even
About being
It is a magnificent
Mysterious Odyssey.
To be experienced.
That is an excerpt from the book that I reread and the one I'm going to talk to you about today, which is One for Many. Visa and the Rise of the Chaotic Organization, and it was written by D. Hawk.
I originally read the book for the first time about four years ago.
It was episode forty two of Founders.
D recently passed away.
And it hit me kinda hard because after I read the book for the first time
I thought the way he thought was so interesting.
I went and found other books written by him, and so he has two books
of maxims. They're called autobiography.
Of a restless mind, volume one and volume two.
And for the last several years, volume one has been on my nightstand next to my bed.
I pick it up.
If not every week, a few times a month I just pick it up, turn to a random page.
And just read a few of his thoughts.
And to me that experience was like having a wise old man, like a wise old grandfather figure.
Pull you aside for a few minutes.
And just teach you little bits of knowledge that he's learned not only from his very unique life of founding and starting Visa.
But also reading.
Thousands and thousands of books.
And so when I heard he died, I was like, okay, the only the only like the small way in which I can honor somebody who I've spent a lot of time learning from
is I'm going to re read the three books.
That I have of D.
And I'm going to do podcasts. So I was originally gonna put it all in one podcast, but the autobiography of Restless Mind.
Volume one and two. Each one is about two hundred pages, has about uh about twelve hundred, thirteen hundred.
uh different maxims in each book. So it's four hundred pages.
you know, t maybe twenty five hundred maximum, something like that.
So I'm gonna do
this episode today just on one for many, and then another episode I'll release very soon, as soon as I make it.
On
Autobiography of a restless mind.
Volume one and volume two.
And so before I jump into the book, I wanna give you this overview. This is I'm pretty sure how I found out that he died.
Uh I've said over and over again that um you know, most of the founders that I pay attention to are all like throughout history, don't really try not to pay too much attention to what's going on today. I use time as a filter. It's the only way I can tell if like the ideas are good or not.
But one of the most impressive to me
founders in present day is Patrick Carlson of Stripe, and he was the one that tweeted out
And this is what he said, and I wanna read this to you because I think it's a good overview of why D Hawk is so important to study.
And so Patrick says D Hawk, the creator of Visa, died this week in ninety three.
He was a very underrated innovator and someone who inspired me.
And my brother who's also Patrick's co founder.
David Sterns is the author of the definitive book about Visa.
who now works at Stripe, so David now works for Patrick.
And he shared this below.
And then Patrick linked to three paragraphs.
That David Stearns wrote.
about overview of why Dhawk is so important.
And having read all of these books multiple times, I think this is a really fantastic overview.
Of why he's so important and why I think people formidable entrepreneurs like Patrick.
spent time studying and learning from him.
So I'm gonna read that to you right now. Deehawk realized something in the late nineteen sixties that few others really understood.
Computers and telecommunications would soon make it possible to build a global electronic
value exchange system that would enable consumers to pay for goods and services
Anywhere you want to be.
But his true brilliance was realising that such a system.
Would require a fundamentally different sort of organization than the traditional franchise model that the Bank Americard had been using.
Don't worry about these terms. I'll get into them later, but that's the precursor almost like two thing two steps before.
Visa.
And it was called Bank Americard because it was created originally by Bank of America.
So he goes into what is gonna be required. A truly global payment system required something akin to a financial
Unit United Nations.
A social structure in which multiple competing institutions could cooperate just enough to build something far bigger than any one of them could build alone. I'm gonna pause right there, think about the term.
Or the title of the book that we're gonna go over.
One from many.
Just said a truly global payment system would require something akin to a financial United Nations.
uh social structure
In which multiple competing institutions could cooperate just enough to build something far bigger than any one of them.
Could build alone.
That is what makes Visa special.
Why did he see what others failed to see? And this is why
When I read this paragraph that describes really not only what he did, but the person behind him
considering that every single person that we study is a misfit, a rebel, some kind of outsider, you'll clearly see why I was like, Oh, okay, this guy has a lot to teach me. Let me go and buy every single book that he has and not just read them once and read them casually, but read them over and over again.
Uh so it says what why did he see what others failed to see? Or what made him successful where others had previously failed?
Part of the reason was that he was an outsider.
He was not your typical banker.
He grew up poor in rural Utah.
He didn't go to the right schools, nor did he have a prestigious internship at a large financial institution. He thought
From first principles.
And questioned everything.
Even down to the nature of money itself. Now that one sentence is going to appear. Remember that for later later.
Because that appears over and over and over again.
You won't even believe how this guy thinks.
He thought from first principles and questioned everything, even down to the nature of money himself. He uses that that
tactic over and over again. He was disappointed in most social institutions, but he saw the potential for thriving chaotic systems.
Like those he observed in nature.
another main theme of the book that we'll get into. He saw a better way of doing things and he didn't listen to folks who said it couldn't be done. So
That one sentence real quick.
Had he D has in common with almost every single we're we're up to what, two hundred and sixty
Something like that. Two hundred sixty biographies of history grace entrepreneurs.
They all
Or could it be described that way? He saw a better way of doing things and didn't listen to the folks who said it couldn't be done.
And most importantly, he hired and inspired a group of people who shared his vision and were truly excited about it.
The passion that he has.
For doing this.
Is
And it's it's there's a line in the book that I'll share later on where I wrote a note to myself. It's like it's impossible.
to read this section of the book and not be fired up.
From our current perspective, it's difficult to appreciate what Hawk and Visa had accomplished and why is that the case, because we're living in the future that he foresaw many decades before today, right?
Today I can hop on a plane for um to almost anywhere in the world and use my Visa card to purchase goods and services, regardless of the language spoken by the merchant, the currency of the merchant's bank account, or the time zone difference between the merchant's shop and my issuing bank. In the early 1960s, this was simply
On
Thinkable.
Today's magic.
was yesterday's dream. That's a great line, by the way. Today's magic
Was yesterday's dream and Hawk.
was one of the biggest streamers.
Of them all.
Rest in peace, D
You will be missed.
So with that, I want to jump into the introduction of the book. This is where Dee himself tells us, hey, this is what the book is about. In nineteen sixty nine, Visa was little more than a set of unorthodox convictions about organization.
Slowly growing in the mind.
of a young corporate rebel.
But this book is much more than the story of the barely believable events that brought Visa into being.
It is also the story of an introverted small town child who
Passionate to read.
Dream and wander the woods.
The youngest of six born to parents with but an eighth grade education.
It is a story of crushing confinement.

Along with sharp.
With the sharp rising awareness.
Of the chasm between how institutions profess to function
And how they actually do. So this book is almost twenty years old.
This idea where he has
He's dedicated if you go to his personal website, it's DW Hawk.com. He starts with this idea. There's three questions that he has been his life has been obsessed with, and he's writing the words on his website.
When he was ninety.
And so his whole career in kind of intellectual odyssey is the way he would put it.
Is
Trying to answer these three questions. Number one, why are institutions everywhere increasingly unable to manage their affairs?
Number two.
Why are individuals everywhere increasingly in conflict with and alienated
from the institutions of which they are a part.
Number three, why are society in the biosphere increasingly in disarray?
So those are the three questions he's gonna repeat over and over again.
It is a story of lifelong search for the answer to those questions, which had everything to do with the formation of Visa.
It is a story of harboring four beasts.
that inevitably devour their keeper.
Ego.
Envy
Greed.
And ambition.
And it is a story of a great bargain.
Trading ego for humility.
Envy for equanimity.
Greed for time.
an ambition for liberty. So what he's talking about there is the fact that he
founded and ran Visa as its CO for sixteen years and then that voice, which I started the podcast with.
just made him give it all up. And so that's when he goes
On his website he's got a fantastic
uh like outline, very simple outline of his entire life.
And that time period it's from nineteen eighty four to nineteen ninety two. This is how he describes himself.
And he's he's very gifted with language.
And he gets right to the point.
Ranch owner.
Recluse.
Student
and philosopher. And so when I do that other podcast
on the autobiography of Restless Mind volume one and volume two.
he goes into detail what his daily schedule is like'cause it's extremely fascinating. So that's coming after this, okay?
Uh so it says it's a story of events impossible to foresee that sent a man of seventy.
on a journey more improbable than Visa and infinitely more important.
Beyond all else.
It is a story of the future.
Of something trying to happen.
Of a four hundred year old age.
Rattling in its deathbed.
As another struggles to be born.
It is not just my story.
Although I am in it.
It is not just your story.
Although you're in it.
It's a story.
Of us all.
And so before I go into his early life and a little bit about how he came to think the way he does
one thing I had to feel like we have to define a term here because it's in the subtitle.
He what he's talking about there is like there's a four hundred old age rattling its deathbed. He's talking about c what he'll use he describes that as command and control. So think in like our modern world, how every single institution, whether it's the government, the school, the how most companies are operated, and his main point
is that that is not gonna work in in the information age. You need to devi devise new ways of organizing people to work together.
And so he uses the word chaotic, and he says I borrow the first syllables from chaos.
In order.
And I combine them.
and chaotic emerges. And so then he'll define it for us, something that appears over and over again in the book. So it's important to know this.
The behavior of any self organizing
and self governing organism.
Organization.
Or system.
That harmoniously blends characteristics of chaos and order.
The second definition and where he got
Like his uh the inspiration for this and the way he thinks about a all things comes from nature.
Number two characteristic of the fundamental organizing principle.
Of nature.
And so D's love of nature is fundamental in understanding why he thinks the way he does. He grew up next to the Rocky Mountains.
In essentially something between shelter and a house. So we'll get that
We'll go into that right now. I trod happily.
Behind a tall
God like father.
A quarter mile.
Through the trees.
To the neighbor's well.
The five gallon can is solely filled by my father, as he proudly explains that
That will there'll be no stale
Piped water in our house.
We'll have water from this well.
Nothing finer, he says.
So that's D's way of explaining, hey, there's no indoor plumbing in my house.
Outside, icicles hang from trees.
I weigh an extended bladder and cramping bowel.
against a fifty yard dash between three foot snowbanks
To the icy outhouse.
That is his way of saying he doesn't have a toilet inside.
Nothing finer. So this idea.
You're gonna hear me repeat that a few times'cause his family, his dad and his mother
Would be that's how they describe.
to their children that you actually don't need that much in life. So nothing finders always put in quotation marks.
It's to indicate to the reader that it's coming from his father or his mother.
So when
He's explaining to his mom, Oh, I gotta run outside to the outhouse, it's snowy outside.
She says nothing finer. You don't need anything more than out out house, and according to my mother.
This teaches one to attend to business and not Donald.
Earlier this evening, my mother produced her special treat, which she called Rich Man's Soup. So now he talks about what were they feeding him?
They're very poor. They don't have a lot of money. They're not they have n he just f uh introduced the book saying
Not only you know they lacked education.
We didn't have a lot of money, we kinda had to live off the land and we spent a lot of time in nature.
Nothing finer.
describing her rich man soup. These were the ingredients. Hot water
Bread.
So
Pepper and butter.
It is years before realization dawns that there may have been no other food in the house.
A hint that we are not the most fortunate of people.
and a hundred homilies lurking in the parental mind leap out to assault my ears.
So then he just lists off all these like maxims.
that his parents would repeat over and over again to him and his other siblings.
Riches are not in the number of possessions.
But the fewness of wants.
Wish not.
Whatnot?
The road to hell is paved
With good intentions.
And this is the
reason I'm reading this too.
Very much against my will.
The intuitive wisdom of centuries.
was being handed down.
That is exactly what his books
of maxims do as well.
It was there in that tiny college in the small farming community at the edge of the Rocky Mountains
That the three great loves of my life arose.
Literature.
Nature.
And a lovely girl with beautiful brown eyes, so he's gonna meet his wife.
In this area.
When they're fourteen.
They wind up getting married at twenty.
They would have everything to do with the unorthodox ideas that led to the creation of Visa.
Although I could not know so at that time.
When and how I learn to read is lost to memory.
Ours was not a bookish family.
My parents considered themselves lucky to have graduated eighth grade before pride and necessity drove them to earn their own living.
Where the books came from, I have no idea.
Probably from people who knew
That hawk boy's a little strange.
He'll read anything. And so there's a lot of this section.
That is double underlined from my own personal
reasons because I this seems very similar to
How I was when I was a kid.
One of the most powerful memories of those early years is the countless hours curled up on my side in my favorite place.
The floor in the corner.
Next to the warm wood stove.
Face propped up on my left hand, my right hand turning the pages of a book.
I had gone to another place.
And I hear
Nothing.
Night after night my mother pulls me from the pages of a book
Opens the oven door.
Removes a round
Fifteen pound rock.
Wraps it in flannel.
Carries it to my bed.
And slips it between the sheets.
Nothing finer, she says.
And what she's describing is nothing finer. This is what D
Describes.
It's an icy room and cold feet.
On a hot rock.
For a kid
Anxious.

In the pages of his book.
And all that I'm reading to you just appears over a few pages and he just does a great job because at the end of this, you you have an idea of exactly who he is.
And these traits
Just burn in him.
Forever.
It is easy to know where the second grand passion
Love of nature came from.
The Rocky Mountains.
Fast hours and days in the midst of such magnificence often wander often wandering alone are impossible to describe.
Nor can words convey the abiding love of nature and deep intuitive sense of connection to the earth. So we're gonna see multiple times throughout his career.
Where he is beaten up.
Bloodied.
Depressed.
Wants to quit.
As you can imagine, building something like Visa in the nineteen sixties and seventies could not have been easy.
And every time.
It's like his walks in the woods and spending time in nature is his therapy.
And he has beautiful language to describe
why that was important and what it gave him later on.
Uh, so it says it gave you uh deep intuitive sense of connection to the earth. Love me as they will, there's a growing feeling of estrangement from my family.
A feeling of not belonging.
No one shares my passion for reading or wandering alone.
No one directs them either.
I live large in a private world.
Of nature, ideas, and imagination.
And so that's a description of his first six years of life.
He loved the fact that he could read whenever he wanted to, go spend time in nature.
Then they're like, Okay, now you have to start going to school and church.
And this is where he gets introduced to
institutions for the first time and he does not like them.
Nothing in my first six years prepared me for the shock of institutions.
В скунч кем кружку конф'енет и бордом.
It is though everyone began to shed their humanity.
At the door of institutions.
It's as if adults suddenly turned into a mob to confront one child.
All right, kid.
You've had the joy of life for six years.
That's enough. Grow up.
Lear what life is all about.
Failure to conform.
Right.
Discipline.
So he starts getting into trouble.
For failing to conform when he's six.
That happens for throughout his entire career.
He's constantly getting in in many cases fired because he refuses to conform.
And so he's spending time in nature
When he's not
in school or church and he can't reconcile in his little young brain.
Like why are they so different?
And so he's like if I have to choose one, I'm gonna use choose the natural world.
As my blueprint.
Nothing in nature feels like church school.
There's no principle pecking away at the rest of the flock.
There's no super frog telling the others how to croak.
There's no teacher tree lining up the saplings and telling them how to grow.
Something's crazy.
Is it me?
I can't begin to think about it in a coherent way.
Let alone understand the resentment
confusion and doubt.
But the sense that something has gone awry.
It's powerful.
And so he does the only thing that comes natural to him and that's rebelling.
I rebelled it was persistent, stubborn, and at times stupid refusal to accept orthodox ideas.
to be persuaded by authoritarian means.
Or to seek acceptance by conformity. So that's the kind of mind if you go back to
that post I read, the three paragraph post I read from David Stearns, w the author of the definitive book on Visa. It's like well
Why is he why was D able to succeed?
Like what did he see?
And why was he able to succeed where others
had failed.
And part of that was obviously that he was an outsider.
The idea that he had spent the previous ten or twelve years of his life
working at different banks and financial s institutions is almost unbelievable.
And in fact, right before he starts Visa, he decides okay, I give up.
Uh, I've been beaten, brutaled. I'm just gonna he calls it retirement on the job.
Where he keeps the job, he's like let me just find
I need to pay bills to support my family.
I want a job that
I could do in my sleep.
pays me enough and then leaves me more time.
to read and to spend time in nature.
And then
He that's what he thought his life was gonna be. He tried to predict the path of his life.
And then the unexpected opportunity to do visa where essentially he has almost no free time at all.
uh is actually what actually occurs. So the years passed alternating between the magnificent mysteries of nature, the imaginative joy of books, and the dull reality of institutions and work, work, work. And so this is where he gets into his first jobs.
family doesn't have a lot of money, so this idea is like I'm gonna have to start working
All of my spare hours from the age of ten.
And so he lists all the things he was doing at age ten, I was hand harvesting fruit and vegetables at a penny.
the for the pound.
At twelve I was thinning sugar beets at twenty dollars the acre.
It's all manual labor, as you can imagine.
What a young
per young educat uneducated person would be
Like what kind of jobs they would be able to get. That was followed by the first salary job at a farm
As farm labor for twenty cents on the hour. At fourteen, I I got a job dumping slop in a canning factory.
summer and after school jobs came one after the other
I was a mucker at a dairy.
I was a hot chain dipper.
Under a hundred degree sun.
I was a spray truck operator in an orchid.
I was a laborer in a slaughterhouse.
None of it seemed demeaning.
It was life.
It was making a living.
It was what proud men did.
Without whining.
And so I'm gonna fast forward a little bit. He was not supposed to go to college, he didn't have the money to
He was a
really good at debate, won a bunch of debate competitions, and part of doing uh winning debate competitions gave him a scholarship to like what we would consider kind of like a community college.
And it's
During his two years of college
where he really starts honing on this idea where it's like institutions
This is what they claim to do, this is what they actually do. Why is no one doing anything about this? At college, the dean put me in way of the classics and some understanding of both the powers and limitations of the human mind. At the same time, increasing conflict with the college and other organizations inflamed a growing preoccupation with the paradoxes inherent in institutions.
and the people who hold power in them. So all he's describing is the pa the
The problems h saw.
That he struggled with.
For the next fiftin to six stін years.
laid the foundation for the ideas of visa. That is why he's telling you and I this story.
The seeds of many of the perceptions that shape my life.
Some now grown into convictions.
Were planted then.
In college.
And then once he graduates college, we have seventy six year old D Hawk.
Describing
The twenty year old version of D Hawk.
Thus at twenty
Newly married.
Unemployed.
Eager to learn.
But a verse to being taught.
Emerged an absurdly naive
idealistic young man.
An innocent lambda
Hunting the lion of life.
The hungry lion.
Was swift.
To pounce.
And so right away at his first job, this is where he learns. So he calls them mechanistic industrial age organizations.
And this is where he's learning how they really function, and he hates it.
So it says I fell into a job at a small floundering branch office of a consumer finance company.
Within months the manager left and his lot fell to me.
Protected by remoteness, anonymity, and insignificance
four lambs, so he's all constantly refu referring to his young self. He's like an I unrealistically
uh naive
uh version of himself as a lamb.
And so it says four lambs, whose average age of twenty, trashed the company manual, ignored the commandments, and did things as common sense.
conditions and ingenuity combined to suggest. So that's this idea. It's like I'm eager to learn.
But I'm averse to being taught.
Did not just want to say, Hey, do
A through Z.
I want to come, I want to think about what we're actually trying to do. Like what is the purpose of the company? What are we trying to do for our customers, and think if there's a better way to do it. So that's something he does his entire life. Within two years, business tripled and the office was leading the company in growth, profit, and quality of business. Anonymity was gone, and the blind fists of corporate power and orthodoxy began pounding for conformity.
And then he does a great job of with one sentence. It gives you an idea of exactly what he what is going on and what he doesn't like.
Confrontation with superiors grew frequent and intense.
So now the company transfers him to Los Angeles, and this is where he meets this guy named Dick Simmons, who teaches him, hey, you don't actually understand the company.
And uh the company you're working for and how institutions actually work in the real world.
And you're not gonna like it the more you know about it.
And so D says, I was taken into by a charming man, Dick Simmons. He was extremely literate.
Exceptional intelligence and perception lay behind the literacy and more than a little and a little cynicism. He detested his job.
And we swiftly became friends.
And then this is where D and Dick get into detail about how
you know, large companies with little ownership and accountability.
Function.
And so D's boss, this guy named Brown, says hey
We have a problem to fix and he says
Visitors, he told me, were occasionally confused about the location of the senior executive offices.
I was to attend to the matter and keep him informed.
And so D's like, Oh, this is simple, just order some signs, we'll put'em up, people won't be confused anymore.
And this is where he gets his education.
into how mechanistic
industrial age organizations really function.
How do you tend to handle it?
Dick assed.
I'll call a sign company, see what's available, and then have it installed, I replied.
His hands went up in mock horror.
That will never do.
You've been assigned a project.
And important projects
Always take time.
Yeah, sure, Dick, funny, funny, I replied.
And дик респонд
Am I not responsible for your indoctrination?
Trust me.
This will be fun.
And you're gonna learn something as well.
He explained.
What you don't understand is that in companies like this.
Procedure
Is more important.
So remember that idea.
D talks about the important like a lot of businesses flip th flip that, right? So he's always like you find out you you you discover like you ask questions, so you discover what is the purpose of what you're trying to do.
In our case, like what is the purpose of the business? What is it actually doing?
And this is really important because his line of thinking breaks down like what is it what is money? What is information?
What like what are we actually doing?
And so D makes the point that you start with purpose and then you can come with procedure and then most large companies and these what he calls like these seventeenth century relics actually get this reversed. And this is one of his first introductions to this. He's like, But you're not understanding is that procedure
is more important than purpose here.
And method is more important than results.
During the weeks to follow
I received a fascinating education about both human nature.
And the nature of organizations.
bored to death and disillusioned with the company.
One the most intelligent people I had ever met.
casually extracted opinions about the quote unquote
Sign problem.
From various officers.
Each of their opinions.
Being different.
So something that could be solved.
With a phone call.
is now going to be dragged out.
And suck the resources, time, energy, and money.
From the company.
It says he obtained
Diverse sketches, samples, and prices from suppliers.
and then would expose them to officers and idle moments to elicit conflicting opinion
And avoid decision.
Fascinated, I watched as Simmons manipulated situation after situation.
Not once was a lie told or a person misled.
He had more integrity and skill than that. This is the main point punchline of this whole section.
He simply left
Murky minds
Unclarified.
And petty minds.
Free to fuss.
I have never forgotten Simmons. Countless times over the years I've asked diverse groups of people to reflect very carefully on their work.
And to make a simple balance sheet. How much time, energy, and ingenuity did you spend obeying senseless rules and procedures that had little to do with the results they were expected to achieve, which is a way of thinking about the story he just told us, right? I could have solved this with a phone call.
Instead, we created a bunch of fake work and tied everybody else in knots and no one realized'cause there's no accountability, no one realized the actual work wasn't getting done.
And so when he asked these questions, he says it's rare it is a rare person who works in like a large institution who arrives at a sum of less than fifty percent of their time and eighty percent of their time
is not uncommon. So it's a tragic waste of human energy and will to D.
Well, I guess all of us we'd probably agree with that, right?
But he also noticed the second thing he also noticed is that this is only happening to subordinates.
What he realized is like people with power to write and enforce rules
Rarely spend much time.
Following them.
And so that's something D observes over and over again, rules for thee, not for me. And it strikes him as just inherently unfair.
And so in many of these examples of these books that you and I have studied
large organizations, maybe mature companies, they see bureaucracy as like that's just the way things are. Founders see it as a thing that needs to be constantly eliminated, checked and then eliminated. I just re uh recently I just re read Sam Walton's fantastic autobiography.
It's episode two thirty four Founders, if you haven't
Uh listen to that yet.
But he mentions this a bunch in
Uh his book.
And I'm just gonna pull out one quote from that book'cause I thought it was uh it relates to exactly where
You and I are in D Hawk's book.
And Sam said, if you don't zero in on your bureaucracy every so often.
You will naturally build in layers.
You never set out to add bureaucracy.
You just get it.
Period.
Without even knowing it.
So you always have to be looking
To eliminate it.
And I think that last line is fantastic advice. You always have to be looking to eliminate it. It's not something just oh this is how things are. We should just accept it. It's like no, it has grown. We need to beat it back over the line.
So Simmons eventually leaves the company, D is going to get fired.
But what I really liked is how he ended this section, he kind of tied everything together for you and I.
And he's like, Listen, I know this now as a seventy six year old man and having all the life experience and knowledge I had.
At twenty five?
I wasn't ready for this lesson.
I didn't truly understand.
what it was that I was seeing and what it was that I was learning.
Um I was not the first person this also happened to.
And I'm not going to be the last. And so he t tells us about this time. What Simmons was trying to teach.
I was not then ready to learn. It took him decades to syntezize.
The lesson meaning himself.
In industrial age organizations, purpose slowly erodes into process. So that's why he brings up the word purpose over and over again. And to think about
Like what is the purpose? What am I doing? Start with there. Then you figure out how to do it.
But you don't do it, you don't reverse those. Procedure takes precedence over product.
The doing of the doing is why nothing gets done.
Simmons had elevated the doing of the doing to an art form until virtually nothing got done.
At twenty five
For all his rebellious
Unorthodox ways.
The lamb
Was too naif.
To see the realities.
So remember the Lamb is just a metaphor for him. He's describing himself. He wanted to believe
in the company.
He wanted it to be different.
He wanted it to make it better. So he's saying he, he's talking about himself because he's describing the land. That's a little it makes sense if you're reading it, but now reading it out loud. I can realize that that could be a little bit uh confusing.
It is an old
Old story.
The lamb was determined to change the company.
The company.
was determined to corral.
The lamb.
It was no contest.
Within the year
A badly mauled lamb
was out the door.
Much wiser in the ways of hierarchical
command and control organizations.
And the people who hold power within them. I don't have the Kindle version of this book.
but would have to guess that the word hierarchy or hierarchical and command and control
His car used twenty times.
Throughout these chapters.
Now this book may be the most detailed in terms of like the creation of a new company, new organization that I've ever read.
What I find most interesting though
Is the multiple times of struggle and depression that he has to persist through.
So he's twenty five years old, he just lost his job.
This is one of my favorite parts of the book. Loss of the job was a crushing experience.
We had money for a month's groceries.
No savings.
Considerable debt.
Two toddlers.
And another baby
About to be born.
One event is seared in memory.
The feeling returns and
As sharp.
As a throbbing
Tooth.
We were desperate to know what to do.
We had no idea.
When I might find a job or receive another paycheck.
We agreed.
I must apply for unemployment.
The next morning
Deeply
Depressed.
And again, that's another word if I could use like if I had the Kindle version to search, I would imagine depressed or depression.
Sadness.
those it's gonna be repeated over and over again. That is one of the the reasons to read this book because of
I go back to that one of my favorite maxims in the history of entrepreneurship that excellence is the capacity to take pain. It is unbelievable.
How much pain.
D had to endure.
To create Visa.
The next morning, deeply depressed, I drove to the nearest unemployment office.
A line of people extended out the door.
And down the sidewalk.
Sitting in the car across the street, looking carefully at the faces of the people
I could not make myself.
Open the door.
One moment.
I imagined myself in the line.
The next
Explaining to a concerned wife
Why I had not done so.
Ай того майсе
That refusal to get
Out of the car.
was ridiculous.
Just false pride.
The feeling would probably vanish as soon as the application was filled out.
And I realize how silly such feelings were.
But I could
Not
Get.
Out.

Something deep inside said.
No.
Take me there,
And I die.
Sick
At heart.
I drove slow home to explain to a bewildered
pregnant young mother of two
That entering that line was something I could not do.
I did not know why then
And I still
Don't
The next morning I began a frantic search for work.
Any kind.
Anywhere.
Doing anything.
Within the month.
A miserable job at pitiful pay appeared.
I grabbed it, giving us momentarily momentary breathing room.
We were determined never again to be in such a vulnerable position.
We swore
That with the possible exception of a home mortgage, we would never again have more debt than cash in the bank.
Within a month.
I took two
More miserable jobs.
With Herculean effort.
We paid our debts in a year and a half and put a small sum in the bank.
I banded two jobs to concentrate on the best of the three.
Which is a tiny investment company in serious trouble.
Due to corrupt.
Management.
The sole owner
was a wealthy dower man
He refused much in the way of salary, but gave solemn assurance of freedom to use unorthodox methods and a substantial share of the profits if success followed.
He kept
The first promise.
Five years later.
The lamb sat down with the owner to divide a handsome profit.
From the sale of a successful company.
Only to come.
Face to face
With naked greed.
Although worth millions.
He claimed that the profit he had promised to share
Must include years of losses that preceded my arrival.
Therefore.
There was no profit to share.
Even though the company fetched a huge premium when it was sold.
He was adamant.
If I didn't like it.
I could sue.
It was no longer a lamb that looked deeply into those dead expressionless eyes.
Drew a deep breath.
And with a tinge of pity.
And a mountain of contempt.
Softly said.
Keep the money.
You apparently need it more than I do.
His dead eyes did not blink.
The lips never moved.
The expressionless face was frozen.
The beast.
Greed.
had devoured him completely.
The sheep turned
And walked out the door.
They never saw or heard from one another.
Again.
So this is interesting because now again, this is the second time I've read this book.
And so not only do I have like the new notes
what comes to mind when I'm reading it now, but I also get to see what I thought four years ago.
And

So it says my original note on this page was
Observing human nature.

And now this is
me now thinking about w the version of me that wrote it four years ago.
And I wrote, Listen, that seems a bit cynical, but I probably still believe it's accurate.
And then the note that did pop to mind on the second reading this time.
Is now it makes sense why Warren Buffett spent so much time.
on ethics in his shareholder letters.
And on only working he's like him and Charlie Munger say over and over again, you can't make a good deal with a bad person.
Which is exactly what D try to do here.
He didn't know any better, like he's younger, didn't have the experience.
But you know, they talk over and over again, only work with people that you like, admire and trust.
It's not worth it chasing trying to

У часто crappy person.
I think um
Munger used the term like hey, most you know, there's there's a ton of people that are just straight rat poison.
Just avoid them. Don't try to make money with them, just just keep it moving.
And so when I really read this part and this goes on for, you know, page or two.
Of this guy.
That completely screwed over D.
I for no reason.
Really.
It's like okay.
It's really but there's a lot of wisdom in what Buffin and Mung are advising us. So you can really think about the ethics of the people that you're working with.
And so back to the book, D talks about
the aftermath of this. I was ju just another hunk
of unemployed mutton.
Bruised and bleeding on the sidewalk.
Автор Сіксініс.
Of unorthodox management.
And unblemished results.
The ship.
By the standards of industrial age command and control organization.
Was a failure.
the words that they use to inflict so many wounds, meaning describing him, right?
We're not without some justification.
Stubborn.
Opinionated.
Unorthodox.
Rebellion.
Really when I th thought about this I was like, Man, you're reading this
And obviously I know how his life turns out, but I'm like, dude, you should just be an entrepreneur. Like, what are you doing here? You're fighting here, that you're stubborn, opinionated, unorthodox, rebellious. You cannot work in these giant companies. It's just not gonna work for you, man.
And so this is when he's gonna come to the conclusion. He's like, I give up, I'm not just trying to try to excel.
It's just like retirement on the job thing.
Time has elapsed, but I wanna bring up
Or he w I wanna tell you what he brings up of like
He's not only working the last sixteen years, this dude is
Obsessed.
with learning.
It says throughout the sixteen years of successful business failure, the sheep continued to read.
Poetry, philosophy, biography, history, biology.
Economics, mythology.
Anything and everything that satisfied his curiosity.
about connectedness and relationships. He mastered nothing, nor did he wish to.
But new ways of seeing old things began to emerge and new patterns slowly revealed themselves.
The vagape of some answers had begun to form
But the sheep had no idea what to do with them.
Sheard.
Bloodied.
And once again unemployed.
He lost heart.
And wandered into
A slow of despond.
So he's dejected, he's lost his confidence.
Now he's gotta start all over again.
And so eleven years has passed.
since he sat in there and he's like, I lost my job under twenty five.
I just can't. I I'm not gonna go
And
Get on unemployment. I'm gonna work three jobs, but he's super depressed.
Eleven years later.
Still depressed.
With three young children, a heavily mortgaged house.
No job and little money in reserve.
It was impossible.
To stay out.
of the dismal swamp of depression.
Day after day I walked the woods and
In the misting northwest rain.
My constant companion
was an overwhelming feel feeling of failure.
What?
Was wrong with me.
Now this is insane because
No
Axiom like
Darkness it's darkest before the dawn.
This is he's about to get the job at the National Bank of Commerce. This is going to be where he gets the opportunity to do Visa because National Bank of Commerce
It's one of the first fran few franchisees of the Bank America card.
Because the two founders. So the founder of
Bank of America and the founder of the bank uh National Bank of Commerce were actually friends. So that's
that leads him to the opportunity that eventually is gonna turn into Visa.
She's like, Listen, I'm yeah I I feel like a failure.
I got three kids.
I've worked in this industry for sixteen years. I had great results, no money, and I keep getting fired.
And so he's like, What is wrong with me?
It seemed impossible to act consistent with my beliefs and succeed in the corporate world. So he's like, Okay, well, I'll just give up.
Yet there seemed no way to escape from the corporate world without putting the welfare of my family at risk.
That I could not do.
So this is the conclusion he arrives at.
I would make make no more effort to climb the corporate ladder.
There would be no more intense commitment to work.
My victim
would be one of the local banks where a modest living
could be had at the cost of a pleasant demeanor.
Conformity.
and fractional ability or effort.
Henceforth
My life would be family.
Books.
Painting.
Garning.
And nature.
And so there's one line on that page that I had to double out online and I had to really sit and think about'cause he says
There will be no more intense commitment to work.
I don't think
D.
And probably people like you and I actually have a choice in that matter.
'Cause there's gonna be no more intense commitment to work.
Right before he does
The hardest
And most committed work.
He does in his entire life.
So he wasn't able to
adhere to that plan.
But then you think of like wait till y I get to the next podcast on the autobiography of Restless Mind volume one and two.
And I describe his daily schedule.
Uh it may be things that he loves and he's obsessed with, like reading and working in the land.
But he's got an intense commitment to work. He's got an intense commitment to life.
Is the way to think about that.
I mean he's got an intense
commitment to organizing information.
I know a bunch of founders that have read this book, like it is insane.
How much information is in here.
It's like it's it's the it's a weird collection of two things at once, where it's like extremely detailed about the creation of a new organization and Visa and everything else, but also written with like
beautiful language and and completely imbibed with his philosophy on life and living.
It could not have been an easy
book to create by any means.
So
At this point in the story, he's going through and he's like
applying it all these different j j uh banks and jobs and he's like that
These all suck.
And then he comes across one where he's like oh the people in here might be like me. They might
They're like different. So he says the National Bank of Commerce were different.
And so he's having these job interviews. He's like, These aren't job interviews. Like these are like
conversations about like what we're reading and philosophy and he's like
I'm connecting with these
Them as people as opposed to like employee employer.
And so they're like, listen, we like you, we don't really have a job for you.
But let's just get you in here. We can't pay you a lot.
And then hopefully something will
Up here.
Like that that can match like your talent and your expertise.
And so he says at thirty six I would be a trainee.
A nobody.
We couldn't live on the salary.
If a significant job and a ba better salary did not come within a year.
Our savings would be gone.
But I really liked these decent people.
And so then he talks about like what does it take
To make a decision.
That feels right with your heart.
but it's in conflict with your head. When he is older, I think he's
I think he's in his seventies. I think it's this comes from volume two.
He says like the this is the advice I give my grandchildren.
To use your brain.
But follow your heart.
And then he says that's also good advice for adults. And so this is where
I think in it uh from my reading of a all the stuff I've read that he's written.
This is where where I think he's taking his own advice. Like this doesn't make sense mentally.
I'm jumping.
For the first time I abandoned logic, tossed reason in the trash, and made a career decision on intuitive feeling and faith.
And so they move him from department to department, just trying to figure out okay what he can do.
They're mostly like jobs well beneath
his like his experience and his talent level. My days were filled with menial work that I could have done in my sleep.
But it was not without compensation.
It brought me time to read, reflect on the past sixteen years, and dive even deeper into the obsess with organizations and the people who hold power within them.
And so all the experience he's having is preparatory for visa. He just didn't know it at the time.
And part of this is he's having to okay, you gotta f you've you're fighting with the outside world.
Right you have to fight with
what the government w wants of you, what your job wants of you, what maybe society wants of you.
But he's talking about like before I'm learning how to manage
Myself.
with the external world I've gotta figure out how to m I've gotta focus first on managing yourself.
And so he spends quite a bit of time about like okay, well if you're gonna lead others, first you lead yourself, then you lead your superiors, then you lead your peers, and then if then from there you just employ good people and you free them to do the same.
And all else is trivia. That's something he repeats in the book.
But before he does that, he's like okay, I gotta figure out who I am and I gotta confront and get used to myself.
And the reason this is necessary to do is'cause you can't run away from yourself.
And so he says years before words by Emerson had leaked from the page and stuck in my mind.
Everywhere you go.
You take your giant
With you.
That's what Emerson wrote.
He was writing.
About the insatiable desire to escape the present.
And sick paradise.
In the new and different.
New places, new stations in life, new possessions.
A futile quest.
to escape
Self.
And so then D reveals
part of his inner monologue, which I don't think most people would do so. They're not gonna tell you what they how they actually view themselves, right? No matter how hard I tried to escape my giant, he always returned.
The country kid.
So now he's describing like things that
You know, maybe the way he looks at himself, but also
How's his appearances to the outside world, the country kid.
The two room house.
Manual labor.
No university degree.
Estrangement.
A raging sense of inferiority.
All this negative self talk.
That is not helpful. It's not like this is constructive criticism, like self uh constructive criticism. It's like, oh I do that, maybe I should change that. This is just like this constant negativity going through his brain.
And he's like, This is it. Like we're not doing this. It was then that I had the guts to turn, look my giant in the eye, and say,
You're an ugly cuss and you scare the hell out of me.
But if we're gonna be forever linked
We might as well get to know one another.
And live civilly.
Together.
And so when all this is happening
This is when he gets the opportunity.
to work on what eventually will become Visa, but he has no idea that it's gonna happen yet.
And so there's a guy
Uh his his boss, this guy named Mr Carlson, who he absolutely loves.
He thinks Mr Carlson was just a great man.
And so Mr Carlson asked, say, Hey, will you come uh
I I need to have a meeting with you, I gotta discuss this opportunity with you.
And this is what Mr Carlson is saying Bank of America has decided to franchise Bank Americard.
And we have agreed to take a license.
We would like to be in business within ninety days.
Bob Cummings is to head the program.
However, he has no experience with credit cards and I think he could use your help. What do you think?
Mr Carlson, there are a couple of things you should know about me.
I've been managing businesses since I was twenty and would be a terrible assistant anything.
And I have absolutely no use for credit cards.
Well, young man.
If that won't bother you too much, I expect it won't bother me either.
Why don't you have lunch with Mr. Cummings?
And see if the two of you can work it out.
And so originally Bob is supposed to be running the program
D's gonna be his number two.
They do this thing where the beginning of credit card industry is
Barely exists at this point.
And it's not like it is today.
was deemed illegal now.
Where it's like you don't have to apply for a credit card.
They would just send every single one of their customers.
Uh a credit card.
Through the mail.
So they wind up what Bob and Dee are working on.
Is he wind up signing like a hundred and twenty thousand customers up in ninety days. He's gonna work day and night.
I'm gonna skip ahead because
Just like
He needed the help of others around him, so he saw Mr. Carlson. He's like Mr Carlson, I I like and respect him.
He gave me this opportunity. He works with Bob and Bob realizes, Oh no.
D should be the leader here.
And this is just incredible that this happened. So it says I expected to work until the program was well established and then I would get back to my retirement on the job.
Shortly after the first anniversary of the launch.
The senior vice president in charge of personnel.
Asked if I could come by to speak with him.
To my surprise, he told me that he needed to borrow Bob for another assignment.
Which Bob was eager to accept.
That would not be possible unless I was opening to become head of the credit card department.
at a significant raise in pay. Remember he said
something doesn't pop off soon, I'm gonna go through all my savings, I'm gonna have to get another job.
So now Bob's like
uh or excuse me, the the senior vice president in charge of personnel is like, Hey, we gotta take Bob, but that's okay, you'll have Bob's job and you'll make more money.
It was fifteen this is the incredible part.
It was fifteen years later.
At Bob's retirement party.
When Ron, who was the guy he was just talking to
Finally told me the truth.
Bob had walked into his office and abruptly announced.
Ron.
Get me out of this job.
D needs and deserves it.
I'm just in his way.
If Bob Cummings had not made such a magnificent gift of the job he loved
The extraordinary events of the next chapter.
Would never have come.
To be.
And so I D is in charge of a massive program that is growing exponentially.
And is full of fraud and hundreds of millions of dollars.
of losses so you can really think about this is a problem that D and Visa needed to solve.
But eventually it's gonna turn into Visa. Bank of America let it be known that it would license its Bank of America card program to other banks. Stories of the banking madness of the time are legendary.
In the beginning.
There was no magnet magnetic strip on the card and no electronic card readers at the point of sale.
This system for clearing sales drafts between banks was primitive.
Cumbersome.
And impossible to fully describe.
Basically say hey
What if you were accepting payments everywhere?
Do paper.
It's ridiculous. Backrooms filled with unprocessed transactions. It became an accounting nightmare.
And
A criminal bonanza.
Counterfeit cards.
uh were stolen on their way to postal departments and they were stolen from mailboxes by thieves and snatched up by pickpockets.
There was no electronic system.
For authorizing transactions.
There was no internet.
There was no electronic entry of data at all.
The massive outpouring of credit cards to gain considerable consumer and merchant acceptance.
Uh, there was a massive outpouring of credit cards to gain considerable consumer and merchant acceptance, and as acceptance skyrocketed, the number of transactions flowing between banks exploded.
The clearing system swiftly disintegrated under its own volume.
And this is the environment from which Visa emerged. By nineteen sixty eight, the fledgling industry was out of control. No one knew the extent of the losses, but they were thought to be in the tens of millions of dollars.
they're gonna wind up actually being in the hundreds of millions of dollars, a huge sum for the time and for the size of the system.
And so D is the one that has to solve this problem. This goes on for a very, very long time.
I I after reading probably I don't know, maybe a dozen pages of this, I just wrote a quick summary for myself.
This is uh the previous few pages.
Meeting after meeting, hundreds of groups, all one all with different ideas.
on how to do things no one with authority to do anything without approval.
This is my version of hell.
And so that that line, This is my version of hell.
One of my favorite things I've ever read in any book.
was from the founder of Patagonia.
uh Ivan Chenard and he wrote this fantastic book called Let My People Go Surfing, The Education of a Reluctant Businessman.
And I thought he said something in the book which was fascinating. He's like
What is like a way to find what you truly want to do is like what if you were to describe
like the worst version of the job that you have. And then you ch in in the building your company you design the opposite of that.
And so he's also really funny and very opinionated.
Um
And so what he said
Is when I die and go to hell.
The devil is gonna make me the marketing director for a cola company.
All be in charge of trying to sell a product that no one needs.
Is identical to its competition.
And can't be sold on its merits.
I'd be competing head on in the cola wars.
On price.
Distribution.
advertising and promotion.
Which would indeed
Be hell for me. And so if you read that book, or if you listen to the podcast I did on it a long time ago, I think it's episode eighteen.
Uh you would know
That
His Ivan's counterpoint to that is like I want to build
products that are so great they have no competition.
And that book describes, you know, all these ideas he has, like quality as a d as a distribution method.
uh making sure that you're not doing you're not just copying what other people are doing, that you're you're actually making a differentiated product.
But I think even uh apart from his description of what version of
uh what hell would be for him. I think that idea of like, hey, what is your version of hell?
And then creating the opposite of that is a really smart
And so what D is having to do to try to get arrive at eventually the organizational structure that he does
would be my version of how it's just it's constant meetings.
No one can make a decision. The end of the meeting is let's do another committee and then that committee produces more committees.
And all the time that this is happening where it's like m they're really not focused on purpose, they're focused on procedure.
Things are getting worse to the w point where they have a complete
system failure.
A complete system collapse.
And that is the one that creates D's opportunity.
And from this
Might be
My favorite idea of D's.
And this is something I wrote uh in an old note to myself the first time I read the book.
And now I yanked the the post in there and I put it on the wall.
Uh, and it says focus on how your product or company ought to be.
And nothing else. That may be he's got a gr lot of good ideas. That may be
my favorite one of his, but we'll get there in a minute.
Uh the problems were enormously greater than anyone imagined, far beyond any possibility of correction by the existing committees or the licensing structure.
And growing at an astonishing rate.
Losses were not in the tens of millions as everyone had thought.
Remember there how would you even know what losses are. Everything
Oh the these transactions are are being
Like compiled and just
And and and paper just being stacked in back offices. You have no idea what's happening.
Uh so it says it was growing at an astonishing rate. Losses were not in the tens of millions, as everyone had thought, but in the hundreds of millions and accelerating. That is in the nineteen.
Sixties.
That has got to be terrifying.
And so this is
These thoughts at this time. Suddenly like a diamond in the dirt, there it lay.
The need for a new concept of organization and a precarious toll hold from which to make the attempt.
And I think what he means by that is like listen, clearly your way's not working. We're we're gonna be rocking up hundreds of millions of dollars in losses.
We let me try something new.
While he's then he goes back. This this this chapter is called Peeling the Onion.
And you'll see why.
I'm about to say or in a few minutes like why I

I could see a lot of people that want to build uh encrypt in crypto.
Uh reading peeling the onion.
And getting a lot of ideas.
And I did not know that D was a fan of
Crypto either.
I was actually listening to an episode of Business Breakdowns on V how Visa makes money today.
Uh I'll link it uh in the show notes below.
And he actually D joined uh I think he was like ninety years old. He actually joined a board.
uh of a a crypto company because there's a lot of when you think about the fact that he didn't want anybody to have control.
He didn't want like a top down hierarchical
He didn't want that's not what he wanted Visa to be.
There is a lot of overlap in this
You'll see when I get there.
There's some kind of weird echo, I guess, is what I'm trying to say between how D thinks about organizational structures structures
What people are trying to do in like cryptocurrency.
And I would say
How
Remember that book on episode one seventy six, uh, just for fun, which is the autobiography of Linus Torvalds?
of like open source software collaboration.
There is like a these ideas are very much related and
He discusses them in detail.
in the the chapter peeling the onion. So if you happen to be working in that industry or that interests you
I pick up the book just to read the peeling the onion chapter. So before I get there
This is where he has this propensity to like break everything down from first principles and be like, Okay
I needed to understand at a fundamental level.
the problem I'm dealing with. And so he's thinking it's like okay, how do I influence the future? Influencing the future requires mastering four ways of looking at things.
As they are.
Right, and his situation's terrible.
As they uh excuse me, as they were.
As they are.
As they might become
And as they ought to be. And so that is I think the first time he mentions this he mentions as they ought to be.
This is something he
Describes.
And repeats over and over again.
It'll at the very end of the book.
He is rather disappointed in his career.
Because
He used as things ought to be as his north star and he thinks he didn't get even halfway there.
And so that's why I said it th this idea.
That jumps out of the book.
uh jumps at at you from reading the book that you should focus on how your product or company ought to be and nothing else.
is actually really profound.
And so let's go into his like first principle way of thinking.
Um and it kinda makes sense.
what what I was trying to get at. Like there's just this weird overlap between like what D was doing
how nature's organized, how open sour sources are or organized.
In fact, the reason I brought that up is'cause I think in that podcast uh episode of on Visa, they said that if Visa was founded in today instead of the nineteen sixties, the organizational structure he would have used was like
Would have been based on
crypto today. So so let me read my note real quick before I read what he sa what he's about to tell us. Everyone else was focused on the form, defocused on function.
He broke it down and identified the essential function
and then try to build from that foundation.
The nature of a bank
is its a central function.
Was the custody exchange and loan of money.
But what was money?
Money was not coin.
Currency or credit card.
That was formed.
Not function.
Money was anything.
customarily used as a measure of equivalent value and medium of exchange, which is exactly what
V's gonna enable four
It's customers, right?
Going back to the beginning of the podcast where it's like, Okay, I can hop on a plane anywhere
Uh I can use my Visa card to purchase goods and services regardless of the language spoken by the merchant, the currency of the merchant's bank account.
Or the time zone difference between the merchant shop
And my issuing bank, it is just
A way a medium of exchange.
And so then D goes into this. He's like, Okay
If money's not a coin, it's not a currency, it's a credit card.
Like it can't be a coin because coins have long been
Been debased.
It's not based on gold or anything else like that.
He says certainly the paper on which currency and checks are printed have no significant value.
Nor does the ink.
And he goes away, think about this is like a barrel of ink and a pulped tree.

Costing a few dollars.
And that would you'd be able to print billions of dollars worth of currency on that.
And so he says realization slowly dawned that money had become alpha numeric symbols recorded and transported.

Metal and paper.
But that still left a gap in my understanding.
And then this is where he gets to his main point.
About why you could build
Or why it was possible to build.
a global electronic value exchange system.
Money had become guaranteed.
Alpha numeric data.
Thus.
A bank would become
No more than an institution.
For the custody
Loan.
An exchange of guaranteed
Alpha numeric data.
And so you can think of this chapter as D's fundamental understanding of the problem he was trying to solve.
allowed him to see the future. You and I live in that future. Money would become nothing.
But alphanumeric data in the form of arranged energy impulses. It would move around the world at the speed of light, at minuscule cost.
By infinitely diverse paths.
Any institution that could move
manipulate and guarantee alphabetic data in a manner that individuals customarily use and relied upon
As a medium of exchange.
Was a bank.
It went even beyond that.
Inherent in all this
Might be the genesis.
Of a new form
of global currency.
And that realization leads to his oh shit moment.
We were not in the credit card business. The card was no more than a device bearing symbols for the exchange of monetary value.
that it took the form of a piece of plastic was nothing but an accident of time
And circumstance.
We were really
In the business of the exchange of monetary value. So that is what the
business ought to be.
That isn't a business that we are in. Why don't we build from that purpose?
And create an organization that enables us to be in the business of the exchange of monetary value. And for us to do that, we have to be able to coordinate.
With
Thousands of banks all over the uh over the world and millions of customers.
And we cannot do that.
With
The mechanistic command and control organizations of the present day.
And so he lists people uh lists organizations like IBM and General Motors and things like that.
And once he realizes the business that he's in
He's like, oh my God, think about the opportunity that's in front that's in front of us. Exhilarating realizations followed one after another. Any organization that could guarantee
Transport
And settle transactions in the form of arranged electronic particles twenty-four hours a day, seven days a week around the globe.
would have a market.
That market would be every exchange of value in the world.
That was un
Believable.
Did I think it could be done?
No.
It was impossible.
Дидай да Банк в Америка во гів.
No.
Did I think that banks worldwide could be brought together in such an effort?
No.
Did I think that laws would allow it?
No.
Did I think anyone would seriously listen to such notions or allow them the light of day to
Even if they did.
No.
But did I believe.
It was what ought to be.
Ah.
That was another question indeed.
And that was powerful enough.

So there's a lot of detail in the book about what's taking place
I think he summarizes it amazingly on his website. So I'm gonna read a paragraph from his website first.
And then there's just
You get fired up.
Like th this is the section I was referencing earlier.
Well, it's like it's just impossible to uh to read
this section and not be fired up. Before I get there, this is from his website. It soon became apparent that the problems were much worse than anyone imagined. Convinced that the only solution was reconception of the entire system
Hawk challenged three others to join him,
In a week long effort to conceive an ideal organization, an ought to be organization.
to create the world's premier system for the value for the exchange of value.
In nineteen seventy, after an intense year and a half long effort.
The first part of an organization unlike any that had ever before existed.
Came into being.
National Bank Americard Incorporated in the book. It's referenced as by its initials MBI.
With Hawk as president and s'o.
This is what's going to turn into Visa. Within two years, operating problems and losses were under control, and the business was high profitable.
Growing at the rate of fifty percent compounded annually.
Within five years the worldwide system
was unified under the name Visa.
And was
By a considerable margin.
The largest system
For the exchange of value in the world.
So that was the result. D is about to describe in the book.
to me is the reason behind like why would you even try to pursue something like this.
Традиционне проблем were close to us.
Бо винамор в емерцепс.
For there seemed no better alternative.
I was more than enamored.
As one of the participants put twelve years later.
In a Harvard case study.
Quote.
It's a guy describing D.
He had a passionate commitment.
To the ideas
That bordered on zealotry.
In the beginning, few paid our effort much attention.
As it advanced and gained attention,
It was subjected to much ridicule.
As it approached success,
Bitter opposition emerged from many sources.
There were dozens of times.
When I longed to quit.
What prevented me is not entirely clear.
All that is clear.
Воз стабер конвікн.
That the ideas that had been forming over the years
We're sound.
And then this is a great
sentence here.
The possibility of that which has never occurred.
cannot be determined by opinion.
Only by attempt
Attempting the impossible is not rational.
It is beyond reason.
І із матер оп.
Faith.
And determination.
Each time I fell into despair and wanted to give up.
And that happened often.
Something softly whispered.
Not now.
Not while you still believe.
Go on.
Go.
On.
What kept me going remains a mystery.
It doesn't really matter.
For there was an inexpressible sense that in some profound non physical way
Existence would lose meaning.
If I did not persist.
I'm gonna actually get to
the fact that he was a reluctant leader, which I found very surprising and interesting.
But the reason I'm telling you all this is because

I think it's because he's had to convince and s essentially sell so many people
He's just got a really interesting way to think about sales.
And it was very helpful at this point in his career, so I just want to read it to you. I held fast to the notion that until someone had repeatedly said no.
and adamantly refuses another word on the subject.
They are in the process of saying є.
And don't know it.
And so once he gets all the different banks and the members to agree, he thinks, Okay, great, this is my job is done.
I can go back to my retirement and the job.
And they're like no, this is only we're only gonna agree if you run
This new organization.
I don't think you understand.
We want a commitment that you're prepared to move to San Francisco.
and head NBI.
You've led the effort since the beginning and brought it this far.
We don't want to risk a change of leadership.
During the remainder of the process.
Or for several years thereafter.
If you make that commitment
You will have our commitment.
So they come in at every single member bank, okay?
Had I any intention of accepting if asked?
None.
I was exhausted.
The work had taken every moment of my waking hours for a year and a half.
Both of my sons were about to graduate high school in four months.
Our daughter was a freshman in high school.
I love the mountains.
The forest and the lakes of the Pacific Northwest.
What I desperately wanted
Was my life back?
I wanted to bring this dream into being.
Return to the Northwest.
And perfect my retirement on the job.
I explain my position and desires.
And it made no difference.
They said
No commitment from you.
No commitment.
From us.
And so as is customary, any time he has to make a large decision
In his life he goes to
Nature. He goes for a walk in the woods.
This is really interesting because we have
His journal entry.
From this period of his life.
I slipped away for a long walk in the woods.
A few pages of notes survive from that day.
They were in a old file.
Where they had remained unseen and forgotten these past thirty five years.
The flood of feeling

Is impossible to describe.
And I like that he wrote that line because in when I read the autobiography of Bob Dylan
I was telling you on that podcast the last episode of Founders.
that I don't think there is another
Like a more powerful medium to evoke emotion.
than really great writing.
And so he's having that experience thirty five years later, reading his own writing.
And it this is an inflection point in his life.
He doesn't know it yet, but this is how he's gonna spend the next sixteen years of his life. I walked to the hill and sat on a fallen tree.
I leisurely whittled a maple walking stick.
it came to me that forming and building NBI
Or anything of worth.
Is much the same.
It requires sound material.
A good tool.
A capable hand.
And most important
A vision of things to come.
It requires patience and persistence to pursue the vision
Chip.
By chip.
By chip.
And a willingness to change the vision.
as the nature of the material is revealed.
What foolish logic
would rationalize becoming president of NBI.
It means giving up grass.
Rain.
Trees.
Birds.
Insects.
All the natural living things.
It means dirty air.
City jungles.
Confinement in steel and concrete boxes.
conniving people
And fussing.
Futile work.
It means living where I do not want to live.
Liking what I do not like.
And working how I work not.
Perhaps I can hang on to reality.
If I remember the things I love best,
And simply write off the next three years.
for education of the children and my desire to provide my wife
With freedom and some of the finer things that she so richly deserves.
Will I come to prefer the corporation
to whittling a cane.
Somehow.
I doubt it.
So we obviously know he takes the job. The newly elected board met.
And appointing me president and chief executive officer.
Thus began what I expected would be a three year commitment
before I could regain a measure of freedom and return to a more private w life in the North West.
Had I an inkling.
That those three years would become fourteen.
Or of the trials and trauma that lay ahead.
I would have walked away on the spot.
And so what's amazing is you think the book would be like look, it's a celebration, look what we built. Visa's amazing.
Енецьна, хірі фокус з ало.
on the failures and the shortcomings of not what visa is.
But what it ought to be.
And so I I'll get there in one second.
There's all these competing financial interests. Some of them don't agree with some decisions that D has the power to make.
And unbelievably enough, they they
resort to death threats. So they light him they say, Hey, we're gonna kill you. They send him letters in the mail. Somebody breaks into his office office and like carves up his chair.
And so this is how he dealt with that stress.
It says twenty years making and collecting loans had taught me that anger, blame, and condemnation
And other negative emotions are fueled by like response.
They are least able to be sustained when met with calm indifference.
It has always been my inclination to quietly suffer through adversity.
While tempting to find a solution.
During dark times
Long walks in the woods have always sustained me.
This time I broke the law to do it.
The closest open space was miles of forested hills with
near where we lived.
Posted everywhere.
Were no trespassing signs.
I would pretend they did not exist.
Excuse myself on the basis of dire need.
Slip through the fence.
And lose myself deep in the woods.
There I would climb for hours.
Licking my wounds in the hope that a solution would appear.
А сенс це і не грит пікче в т.
Май три'з і трибліш в носиє.
Would слоy siep into my bones.
And allow me to face the next week.
It was many months.
Before the depression.
Gradually faded.
And years.
Before the memory.
Became less painful.
And so then we get to the part where I was mentioning earlier. It's like it's not like look how gr look how great I am, look how great it is what I built.
It's like look how
h how short I fell.
And failed to live up to my own ideal. So he calls it the successful.
Biznis
Failure.
It is painful to think about weakness and failure.
It is even more painful to write about it.
But it's an essential part of the story.
And so he's about to make the point for all my, you know, unorthodox behavior.
My uh inability to conform.
my desire to do things differently or think of a new way to do things.
In many cases I reverted to what most human do ho most humans do and that's just I copied what others were doing.
He says one of the first of my failures came early when we were establishing permanent
N BI.
Headquarters.
Something about confinement in private quarters had always annoyed me.
So he's talking about private offices. Yet in the world of institutions, physical separation from others had become a hallmark of success, power, and prestige.
It was the heyday of gigantic corporate headquarters with palacial executive offices.

For lesser folks.
Something about such corporate show and tell quarters offended me.
Probably because I was normally excluded from them.
And when I was not
I often had poor experiences in them.
Неверс, I convinced myself
That others.
Like banks.
Government officials.
Regulators and prospective employees would never accept NBI as a substantive organization.
If it were located in inexpensive
Modest
Quarters.
Вот із науклі.
is that I lacked ability and courage to lead.
In the direction of my natural inclination.
rather than copying acquired behavior.
And so originally it was an open floor plan, then he has so many meetings that he winds up having a private office.
And then when he leaves they take the entire
uh open floor plan.
And just
Separate it into closed offices, cubicles for everybody else.
And really nice.
areas for the executives exactly what he did not want to happen.
Another failure.
I enabled more debt.
to accumulate.
From the beginning I believed in and worked for a transition from the concept of credit card
To the concept of a transaction device.
For the exchange of value.
A debit card.
To use the jargon of the day.
It was my hope that issuers would evolve from m making the card primarily
as an instrument for debt.
to making it as an instrument for the exchange of value.
It was my hope that revenues of issuers would evolve from reliance on interest.
on cardholder debt.
to reliance on transaction pricing for services provided.
It was my hope.
That this would equitably distribute costs between the most affluent
And least affluent customers.
Twenty eight years later, he's really pointing out the fact that the exact opposite happened.
Twenty years later,
That has not happened.
An interest on debt
Of those who need to pay monthly.
supports free service.
to the more affluent.
And then his final mistake and maybe his largest one.
І за хікун стоп.
Reverting to a command and control structure.
he in a way think about what he's about to tell us is like I couldn't even live up to my own ideals.
Perhaps the greatest failure of all
Was to completely underestimate the degree of individual cultured change.
such an organization required.
The organization was so new, success so immediate, and growth so explosive.
That it was necessary to hire
Management from the outside.
Each of these people came full.
Of the techniques, cultures, and habits of the mechanistic industrial age organizations from which they emerged.
Many took the openness and liberty of visa to
As applicable to them.
But not in relation to those
over whom they had authority.
Time after time I would discover departments within the company where people were subjected to ridiculous rules and regulations.
noticed time and time as he built Walmart, right?
When I f when I would forbid it.
Managers quite rightly saw my efforts to restrain their conduct
as command and control.
And so it was.
I used
command and control techniques.
To prevent
command and control.
Plain.
Stupid.
All too often.
I was simply unable to be the change.
That I wanted
To see.
And then this is where we get to his surprising conclusion about his work.
And then he does end on a positive note, though. Judged by orthodox methods of objective measurement,
Growth, size, profit, market share and volume.
Visa has been a phenomenal success.
It would be a lie to deny a strong sense of privilege and substantial pride in presiding at its birth, and
And guiding it to its maturity.
By the standards of what visa ought to be.
It would be a lie.
To deny a sense of failure.
In spite of my pride and all that Visa
demonstrated about the power of the chaotic concept of organizations and all things that it it has accomplished.
А Дуна Блів.
That visa is a model to emulate.
And so at this point
His next sentence to me.
Is his
message to future generations of founders.
It is no more
than an archetype to study
Learn from and improve upon.
And then he leaves on a positive note here, though.
But that's quite all right.
Failure is not to be feared.
It is from failure.
That most growth comes.
Provided that one can recognize it.
Admit it.
Learn from it.
Rise above.
And try again.
And then he leaves the business.
Early in nineteen eighty four, the curtain came down on my performance as CEO of Visa.
The business costume went into the closet.
And I went directly from the commercial theater.
To life on two hundred acres.
Of remote
Ravaged land.
It was shockingly difficult.
An aching void emptied of things once craved.
Money.
Power, prestige, position.
All achieved.
And now abandoned.
The lifelong dream of pioneering a new concept of organization.
had been realized.
There was pride and gratification.
In knowing what it had been.
What it now was and what it might become.
There was also a sense of failure.
About what it ought to be.
The world was marveling at Visa's success.
To me
It's flaws.
We're all too apparent.
Well
So be it.
Life.
Flows on.
One by one I picked up the frayed ends.

Nature.
Literature.
Grandchildren.
Art.
Contemplation.
Humility.
and slowly wove them deeply into the fabric of being.
Gradually the void filled,
Pain eased.
And ten.
Drastically different.
But wonderful years.
Emerge.
And that leads us into the next two decades where he writes autobiography of a restless mind, volume one and volume two. That podcast will be coming very shortly.
This is where I will leave it. If you want the full story, highly recommend reading the book.
If you buy the book using the link that's in the show notes in your podcast player, you'll be supporting the podcast at the same time.
That is two hundred and sixty books down.
One thousand ago.
And I'll talk to you again soon.