#303 Rose Blumkin (Warren Buffett's Favorite Founder)

0:00 The Tale of Rose Blumkin is a quintessential immigrant success story. She was born in a village. Near Minsk, Russia. She and her seven siblings were Lived in a two room log cabin.

0:11 And had to sleep on straw mats. Her father was a rabbi and spent his days in religious study. Her mother ran a small general store. My father was so religious, he said.

0:22 That my mother had to support us. He only prayed. Rose never attended school. А тіс.

0:32 She once woke up in the middle of the night and saw her mother washing clothes and baking bread for the next day. Rose said, When I grow up, you're not gonna work so hard. I can't stand it. The way you have to work. Day and night.

0:44 When Rose was thirteen, she left home. Walking barefoot for eighteen miles to get to a train. She stowed away on the train and got off three hundred miles away at a small town near the Ukrainian border. She went from shop to shop looking for a job and a place to stay. You're just a kid.

1:02 One store owner said. I'm not a beggar. Rose shot back. With only four cents in her pocket. She has to sleep in the house that night.

1:10 Tomorrow I go to work, she said. The owner relented, and Rose got up before dawn. The next morning And cleaned the store. She stayed, becoming the manager of that store by the age of sixteen.

1:22 Then she went to a larger town, got another job in a men's clothing store as a salesman, And met Isidore. Plumpkin. They were married in nineteen fourteen. And Mrs B later remembered her wedding day.

1:34 Saying. My mother brought me two pounds of rice and two pounds of cookies. That was the wedding feast. World War One erupted that same year and many inhabitants of Russia Had to flee.

1:43 Isidore was able to emigrate. To the United States. We didn't have the money for two passages, Rose said, and so my husband had to go alone. For the next three years Rose worked in a dry goods store. Squeezed every penny.

1:56 And finally in nineteen seventeen took a train to the Chinese Siberian border. I had no passport. At the China Russia frontier a soldier was standing guard with a rifle. I said to him. I'm on my way to buy leather for the army. When I come back, I'll bring you a big bottle of vodka. I suppose he's still there waiting for his vodka, she said, laughing.

2:14 She made her way from China to Japan. And then book passage On a Japanese peanut boat. After six miserable weeks, the ship finally docked in Seattle. When she got to America, she had sixty six dollars in her purse.

2:28 The Red Cross. Helped Rose. Find her husband who was living in Iowa. They lived in Iowa for two years, during which their first daughter was born. But Rose was unable to communicate with any of the locals, so they moved to Omaha.

2:40 Where there was a large community of people who spoke both Russian and Yiddish. I couldn't learn to talk English, Rose said. I didn't know nothing. So I made up my mind that I was going to a bigger city. That was an excerpt from the short biography of Rose Bumpkin that I found In the book that I'm gonna talk to you about today, which is The Women of Berkshire Hathaway, Lessons for Warren Buffett's female CEOs and Directors, and is written by Karen Linder.

3:01 So I've made a lot of podcasts on Warren Buffin and Charlie Munger. And in almost every book, including the the Berkshire shareholder letters? They'll mention their admiration. for Rose Blumkin, who's known as Mrs. B, who's the founder of Nebraska Furniture Mart. And I mentioned on past podcasts that

3:16 I can't find a biography on her. I wish I could do an episode on her. And a few listeners actually told me about the book that I'm holding in my hand. And this book does an excellent job of giving an overview. of Rose Bunk's life and career. And so let's jump right into it. It says Rose Bumpkin became the first ever female Berkshire Hathaway manager.

3:32 When Nebraska Furniture Mart was acquired. By Warren Buffett in nineteen eighty three. Rose was just shy of ninety years old at the time. You would assume that this change in ownership would signal retirement for Rose. But she still worked for more than a decade longer, twelve to fourteen hours a day, seven days a week.

3:48 Until she reached the age of a hundred and three. So after I read the book I went and searched all the highlights that I have. uh about Rose Blumken. And back on episode one eighty two, I read a biography of Warren Buffett that came out in nineteen ninety five. It's called Buffett, The Making of American

4:03 capitalists and there's this great uh excerpt in that book that describes this purchase that this book is describing. And it's the It's the negotiation, or if you can call it that. Between uh Buffett

4:16 And Mrs. B, and this is the I think the second or third time he had tried to buy I think i he I know he tried to buy it at least one other time, maybe like twenty years earlier. And so it says, uh how much? Buffett asked. Sixty million Mrs. B spat out. They shook hands and Buffett drew up a one page agreement, Buffett's biggest acquisition by far.

4:34 Uh, misses B, who could not write in English and barely could read it, made a mark at the bottom. A few days later, Buffett presented her with a check. For ninety percent. Uh, she f this is my favorite part. She folded it without a glance, and by way of concluding matters declared.

4:48 Mr Buffett. We're gonna put our competitors through a meat grinder. She was eighty nine. When she said that. About forty six years after she started the company.

4:57 It says Rose founded the furniture store in Omaha in nineteen thirty seven. at the age of forty three and grew it into a business with annual profits. of over fifteen million dollars. By this time she had trouble walking, but that wouldn't stop her. She'd actually drive around the furniture store. And she would stop to speak with customers and her thick

5:14 Russian Yiddish accent, encouraging them to make a decision and assuring them that they wouldn't get a better deal anywhere. She had a harsh management style and she was very tough. The way she speaks about Some of her former employees in this book. Uh, it's just it's funny'cause it's coming from a Like a hundred year old lady.

5:31 This is the end result. Most furniture stores have found it futile. uh to attempt to compete in Omaha with Nebraska furniture mart, in fact. I can't remember if it's in

5:40 the book uh Buffett Making an American capitalist. No, you know what? It's in Buffett's shareholder letters where he says that he would rather wrestle Grizzlies Than compete with Mrs. B. And so I wanna expand on that idea that most furniture stores have found it futile to even try to compete with her. This is one of my favorite parts of this entire like mini biography of Rose.

5:59 Look what they hang on the walls. In the office of Nebraska furniture market. There are several going out of business advertisements from competitor stores. Framed. And hanging on the wall.

6:11 Displayed so that the company will never forget About those other stores who put themselves out of business. How it can happen to anyone. And that it must be avoided. And so yeah, that's a good idea as a reminder, hey, how bad things can get, you know, uh Buffett has

6:24 Like a newspaper clips from from the depression to remind him for the same thing. But after getting to know Mrs. B, I just can't help but thinking that She also put it up there to be like, Look what happens when you try to go against me. Uh I I unapologetically uh adore and love her approach. And how serious she took her work.

6:41 And just if you think about the opening where you just think about how difficult her early life was. She was never able to go to school ever. Not elementary school, not college, not high school, nothing. You know, having to start work at six years old, live on a straw mat. And then have the opportunity to come to America and build A business that made her and her unborn grandchildren rich. I could see why why she take we take it so seriously.

7:02 So let's go back to the very humble beginnings of this business that's unbelievably valuable. I think in later shareholder letters Uh, they were doing more, they were doing what, hundred and twenty million a year just out of the one Nebraska store, I think was more than all the other furniture stores in Omaha combined. And it started out because she needed to help her husband. Her husband opens a secondhand clothing store. Now, sometimes it's referred to as a clothing store, sometimes it's referred to as a pawn shop. But her husband's the one working originally.

7:25 And she's at home with the kids. Remember at the very beginning. She calls herself dumb or she says I she says I was dumb because I couldn't learn to talk English. The way she speaks learns to speak English though is actually from her old I'm thinking I'm pretty sure this is her oldest daughter. who was going to school in Omaha.

7:41 Uh her oldest daughter's name is Frances. Frances taught her mother how to speak English after she came home from school each day. Rose tells the story of how she began to be involved in Isidore, her husband's store. The depression came and my husband came home and said we'll starve to death. Nobody walks in, what will we do? I already had my four children by nineteen thirty.

7:58 So she's gonna go to work. And help her husband. She says uh he would sell clothing at the same price that he had paid for it. He didn't understand how to make a profit. Remember, she's at this point. She's what, almost forty three? She'd been working in stores since she was six, working full time when she was thirteen. You know, managing stores when she was sixteen, she knew how to sell.

8:16 And so she told this is she told her husband this is what we're gonna do. And this is really the basis. for her entire uh Warren's gonna talk about the advantage that he has and why he's Uh that she had over her other competitors.

8:29 And in many cases, I think it's in this book. And if it's not, I'll find the quote for us. About the fact that she hit on the idea for what makes Places like Costco and Walmart so special. before there was a Costco in Walmart.

8:41 And so she says Let's sell 10% over cost and I'll come to your store and show you how to and show you and help you because I did build a big business in Russia for my boss and I knew business. Th these are direct quotes from her. So this is how she speaks. She obviously speaks You know, she's missing some words there. Uh, Rose began retailing right out of the Blumpkin home.

8:59 This is hilarious. with home furnishings and accessories. This practice continued even after she was successful. Check out her dedication to sale. Uh this practice continued. Throughout her lifetime.

9:11 Visitors to the Blumpkins house would admire the furniture That had attached price time. I'm sorry. But just this idea where you're like One of the most successful financially successful entrepreneurs in Omaha.

9:25 And you come to her house And And her furniture has price tags on it. And like Oh, I like your couch. And she tries to sell it to you. I love this lady. This practice continued throughout her lifetime. Visitors to the Blumken House would admire the furniture with attached price tags and lampsheets.

9:41 Still covered in plastic wrap. If a guest expressed interest in a piece, it was available for sale. Long before that though, she had to find a way to make money. At one point she printed ten thousand flyers. Offering to dress a man. from head to toe for five dollars. So this is back in I think like the nineteen thirties, somewhere around nineteen thirty seven.

9:59 This one promotion made the Blumkin family eight hundred dollars. And so she's selling stuff out of her house. There's like this basement. She's selling stuff out of this store. And she realizes like people keep coming to her'cause they get such great prices. Can you get me this? Can you get me that? People used to ask me, Can you get me this? Can you get me that? I used to take them to the wholesale house and sell it and sell them uh at ten percent above cost. I never lied. So her main

10:22 Let me go to uh another quote real quick. I think I brought this up in the latest episode I did on Charlie Munger. Just episode two ninety five. And he says uh Well, there's actually two ideas here. Let me let me bring this up to you first before we go back into Rose's story'cause I think this is fascinating.

10:36 How they make an exception to their rules. How mu how b Rose is so special that Munger and Buffy make except exceptions for her. As a general rule, this is Charlie Moyers saying. As a general rule, you should bet on the quality of the business, not the quality of the management. Unless, of course, you've got a Mrs. B in your hand. If that's the case, you need to go all in. I remember Nebraska Furniture Marts founder, Mrs. B.

10:55 Who in response to a question about having a business plan replied. Yeah. Sell cheap. And tell the truth. She was a business genius. So that's the end of the quote from Munger.

11:05 How many And again, this is what I always pay attention to. With people like Muffet uh Muff Muffett. With Buffett and Munger. How many different managers, founders businesses have these guys analyzed over their entire life. Like it's incredible. And they're saying, Hey, nope, pay attention to this person. This is why I went really deep on Henry Singleton.

11:24 And why I've been collecting a bunch of like hard to find singleton information'cause I'm gonna do another episode on him. Like she was a business genius. The reason that uh that came to mind just now is'cause where we're in this book, they're like, Listen, I'm just gonna tell the truth. And at this point in the story, she's telling the customer, Hey, I'm gonna get you a good deal and I'm just gonna sell it to you above ten percent cost. And because the markup's so low.

11:41 This is the lowest price you're gonna get and therefore it builds trust. and a a a relationship with these customers and they're gonna come back forever, they're gonna tell their friends. Their kids are gonna go there, their grandkids are gonna go there. Assuming you're in a like uh if you're in a game that you're gonna play for a long time, this is like the the version of a

11:56 This idea of infinite return on investment. I never lied, I showed them the bill and then and they all respect me. You should see what kind of customers I have the best in the world. They build me one of the finest businesses in the country. I always believed in honesty.

12:09 Anything is wrong, I try to make it right, meaning obviously If the problem has a if the customer has a problem, I'll make it right. Mrs. B opened a furniture store in nineteen thirty seven with a five hundred dollar loan from one of her brothers. It was a thirty by one hundred foot basement room. She called it the Nebraska furniture mart. This is hilarious.

12:26 The day the same day I opened, another furniture store was opening. They had an orchestra, orchestra music, and Hollywood stars, and I only had a three and I only had three line one ads. Because I was poor. I did that day a big business. I couldn't get over it. Rose was forty three years old at the time, and her four children were between the ages of ten and nineteen. And then this story is also mentioned in in Buffett's shareholder letters, which was fantastic. The fact that

12:50 She gets sued by her competitors over charging customers too little. misses B would encounter a fair number of obstacles in growing her business throughout the years. She would choose to make a small profit of ten percent. bend over backwards for customers and grow the company by selling in large volumes. It also made her competitors very angry. Uh, at one point Mrs. B was able to convince Marshall Sfields

13:10 to sell her carpet wholesale at three dollars per yard. She then resold it for three ninety five per yard. The competition was selling the very same carpet for seven ninety five per yard. Her competition called her a bootlegger. Her reply was, You betcha, I'm the best bootlegger in town.

13:26 So then she tells the story of what happened. Uh these three lawyers uh taking from this one company take me to court, suing me for unfair trade practices. Three lawyers and me with my English. I can't afford a lawyer, so I just go to the judge and I say, Judge. I sell everything ten percent above cost. What's wrong? Can I give my customers a good deal?

13:43 I don't rob my customers. The judge agreed, threw out the case, and bought fourteen hundred dollars worth of carpeting from misses B the next day. The publicity from this uh trial was worth far more then Mrs B could have afforded to afforded to purchase an advertising.

14:00 It's hard to think of better advertising than that. It's in the new you read imagine reading the newspaper it's like This this lady gets sued because her prices are too little. You know where you're going the next day. Um oh this is fantastic. So uh this investor named Josh Wolf has this great um

14:15 Has this great maximum. That I I see in these books all the time. He says, Uh chips on shoulders puts chips in pockets. I think Rose Blumpkin is a perfect example of that. Rose attempted to buy furniture wholesale in Chicago. The merchants were very rotten to me. When I walked in

14:29 to the merchandise mart to buy furniture, they used to kick me out and say, Don't bother us, we're not gonna sell you nothing. I used to Uh almost start to cry. My face would get red and I'd say, Some day you'll come to my store to try to sell to me And I'll kick you out the same way you did to me. And then her punchline here is hilarious. This is why I think

14:46 He's framed going out of bed. She definitely has a chip on her shoulder and it takes great pride in in in competition. And I just I could picture her looking at these framed, uh, going out of business uh sale like advertisements of her competitors with glee. Because the way she ends this story, the punchline is I outlive them all. But of course with any business there's ups and downs. Here's one of the downs in nineteen fifty

15:09 business slowed down, this is after the Korean War. Business slowed down and Mrs. B found herself unable to pay her bills. She was worrying night and day. A local ba banker came into the store to buy a cabinet and asked why she was so upset. After listening, he gave her fifty thousand dollars. of his personal money as a ninety day loan. She then had to think of a way to earn the money to pay back the loan.

15:27 This is really smart. So she rented the Omaha City Auditonium. for two hundred dollars per day and held a three day sale. She took in two hundred and fifty thousand dollars from the sale. Paid off all of her loans and never borrowed money again.

15:41 Unfortunately, this is the same time that her f her husband dies. Isidor had a heart attack and died. They were married for thirty six years. and Rose would be a widow for forty eight years. Mrs. B once asked if she believed That she had a tougher time succeeding because she was a woman.

15:55 She said, Me? No, sir, she answered. When it comes to business, I could beat any man and any college graduate. She was relentless. Another example of that in nineteen sixty one, half of Nebraska furniture mart was destroyed. By a fire. The resulting fire sale generated a line two blocks long to buy hugely discounted items.

16:13 That had been exposed. to the smoke, one of my favourite maxims from The history of entrepreneurship is Uh problems are just opportunities and work clothes. She's like, Okay, can't pay my bills, gets this loan. Does a three day limited sale.

16:25 makes five times the amount of money. Right. Then Firecoms, okay. Well what can I do? Now I have a bunch of uh inventory I need to get rid of.

16:33 Hugely discounted just'cause it has a little bit of smoke damage. People love saving money. couple years later, actually about fifteen years later, nineteen seventy five. A tornado took out the entire Nebraska furniture mart building. The tornado also destroys a post office next to the mart, so what does she do?

16:48 She buys the ground and built on it to expand the business. We have turned every tragedy into a positive. That's another way of saying problems are just opportunities and work close. Then it goes into a description of her uh insane work hours and her dedication the fact that work was a hobby for her with her children grown and out of the house. She devoted her entire existence to growing Nebraska French mart.

17:08 She loved the game of selling. She didn't care a bit about the money. It was all about making a sale, she said. Uh, Louis, her son, came back after World War Two. in nineteen forty five and joined the business showing the same intelligence and business acumen. as his mother and I think long after she passed away.

17:23 He was still I just saw him in the I was reading through all my highlights in Berkshire uh in Warren's shareholder letters and as of like ninety two. When Louis's like ninety two, he's still working in the business too. Uh his calm management style balanced out his mother's quick temper. And he would often hire back employees who had been fresh fired by Rose.

17:40 She could have quit working at any time, but the simple action of going to work and being productive kept her interested in life. And energized. David Ogie has a great quote on this. He says retirement is fatal. When I was poor, I was ambitious, she said. I always wanted my kids I always wanted that my kids should have what I didn't have. I wanted to show poor people that there's a future in life.

17:58 If you try, you can have it. Mrs. B took time off of work. To take classes to become a US citizen. A fellow member of Mrs. B's class recalls asking her You were here for thirties This is hilarious.

18:10 You were here for thirty seven years before becoming a citizen. How come you waited so long? I was busy, Mrs. B said. And Mrs. B has some good maxims. This is one of them. Business is like raising a child. You want a good one. A child needs a mother and a business needs a boss. My hobby is figuring out how to advertise, how to undersell, how much hell to give my competitors. I'll never forget how they treated us when we were poor.

18:30 This is I think this is my favorite part of the entire book. Uh a nineteen seventy seven local newspaper article sums up Mrs. B ten Mrs. B's temperament. On work ethic. What's your favorite thing to do on a Sunday afternoon?

18:42 Visit my customers and my store. What is your favorite thing to do on a nice evening? Drive around to check the competition and plan my next attack. Favorite movie in the last year. Too busy.

18:55 Favorite book in the last year. Don't have time. Favorite cocktail? None. Drinkers go broke. If you want to be in business, be sober.

19:04 Favorite place. My store. And finally, last question. What's one thing that needs that most needs to be done. uh in our state or in our nation.

19:12 Clean out all the lazy ones. This just made me think of something. There is something That I think uh adds a little flavor to life. I was rereading past highlights. And there's something about um David Ogee.

19:25 That was in this biography of David written by somebody who worked with him. Um'cause all I think all the books I've done on David Ogreby He wrote himself, he's the best writer. I I've ever come across for for the podcast.

19:38 Let me read this because I just realized like the stories I'm about to tell you, we're gonna add to our Rose file. And this will make sense. This comes from the King of Madison Avenue. David Og V in the Making of Modern Advertising? Which I covered all the way back on episode one sixty nine in case you missed it. I'd also read the book, it's excellent. But uh this is I think pretty sure this is like one of the very beginning parts of the book.

19:57 And so the author who used to work with or work for Og V said He was fifty two and famous. I was thirty three and a junior account executive. Early on he wrote a letter to one of my clients. After listing.

20:08 eight reasons why some ads prepared by the company's design department would not be effective. He delivered his ultimate argument. The only thing that could be said in favor of the layouts is that they are quote unquote different. You can make a cow look different by removing the udder. But that cow would not produce results.

20:23 So began my David file. Almost everyone who worked at the agency kept one. And this is something that was repeated in another context. For people that knew Ogre and they said almost everyone who brushed up against a man has a David story. And so this is I think like

20:38 Well all the stuff that's happening on the next few pages, like oh this is we're gonna add to our rows How special and unique this individual was. And I just think these people add like so much spice and flavor to life. In nineteen ninety, misses B drove her cart into a metal post and broke her ankle. She didn't go to the hospital until the next day. She was back at work the next day. The next year she took a corner with too much speed and turned the car completely over, gashing her head on a grandfather clock.

21:01 The wound required stitches, yet she was back in the store two hours later. She is ninety seven. This is insane. Uh, there was a luncheon where Mrs. B was being honored. The luncheon was dragging on, and at about one fifteen, Mrs. B stood up and hollered, What is wrong with you people? Don't you have jobs? I'm going back to work and she left. Here's another addition to the Rose file.

21:22 Warren Buffett said during the opening remarks at the nineteen ninety three Berkshire Hathaway annual meeting. I'd like to introduce Berkshire's managers, except Mrs. B, who couldn't take time off of work for such foolishness. Like a shareholder meeting. And this is what I was mentioning earlier. Mrs. B developed successful merchandising practices.

21:39 long before they were adopted by mainstream retailers. She had established the idea of a discount store making small profits on large volumes. Sam Walton didn't open his first discount store. leading to the Walmart Empire until nineteen sixty two. The company still follows these principles. It is run very fiscally conservative.

21:58 Conservatively. Mrs. B always felt that the days of the depression could return at any time. We still run the company like the depression is coming back. We have no debt. Though she never spent a single day in a classroom, she had a savant's capacity for arithmetic. So

22:14 This is the idea. of she she gets interviewed on ABC's uh like nationally televised show twenty twenty and people can imagine can't believe how fast she is with numbers. But it's another example of this maximum that you and I talk about all the time.

22:28 that the public praises people for what they practice in private. How she's been working in the carpet department For half a century. How many times do you think she had to multiply how much per yard Or per square feet. By the the the size of the customer's space.

22:42 And so it says uh Like rolling through the store on her cart. And the she's being interviewed. And he would just throw out random numbers. It's like, Okay, let's say carpet's twelve dollars and ninety five cents a yard, I want thirty yards. How much is that? In less than a sec second.

22:58 Mrs. B would reply. And if my room is twelve fourteen feet, how many And then she'd cut him off nineteen yards. She'd reply before he'd even finished his sentence. She was the most brilliant salesperson I've ever met, but she's a lousy manager. She is terribly abusive. Who is saying this? Oh, this is uh one of her for her former employees.

23:17 She's terribly abusive to her employees. She charms her customers, though. She's a workaholic, she operates on almost zero margin. And she is one tough, feisty woman. And so that's a that's another uh actually good idea for you and I. Where it's like, you know, she's the most brilliant salesperson ever.

23:31 She is gifted at what she's doing, but she brought in her son to kinda balance out. She's really great with customers, but maybe not gr good with employees. Okay, so bring in somebody that that's way more calm, that's better. Yeah, dealing with employees and like they said. She may fire an employee but then her son who's more calm might hire that person back after the fact. And then here's the story I referenced earlier where Warren tried had previously tried to buy

23:51 Uh this business. Warren Buffett had known of the business and was aware of its success from living in Omaha. He admired Uh, the Blumkins business savvy. In the late nineteen sixties, he had offered seven million dollars for Nebraska furniture mark. An amount this is hilarious.

24:04 An amount that Mrs. B turned down while calling him cheap. Two decades later, Warren came into the uh Mart again for the purpose of making Mrs. B another offer, this time it's sixty million dollars for ninety percent of the company. Mrs. B and uh Buffett shook hands on the deal. No lawyers were involved. And there was no audit and no inventory was taken of the merchandise. Buffett said if she ran a popcorn stand.

24:24 I'd want to be in business with her. She's just plain smart. She's a fierce competitor and she's a tireless worker. And this is one of my favorite things that he said, and I think is a good idea for for Also think

24:35 Of Are we the answer to Buffett's question. Uh uh that'll make more sense in one second. One question I always ask myself in appraising a business is how I would like, assuming I had ample capital and skilled personnel. To compete with it.

24:49 I would rather wrestle Gri Grizzlies than compete with Mrs. B. They buy brilliantly. They operate at expense ratios competitors don't even dream about. And they and then They pass on to their customers much of the savings. It's the ideal business.

25:04 One built Upon exceptional value to the customer. that in turn translates into exceptional economics for its owners. That is a great I need to read that line again. It's the ideal business.

25:16 One built upon exceptional value to the customer, then in turn translates into exceptional economics. for its owners and I couldn't find it in my highlights. And in net and it's not in any of my notes. And it's not in this book. But I swear I remember s um this idea of like they buy brilliantly.

25:32 There's a beautiful simplicity to Rose's a approach to her business, right? And I'm pretty sure I had heard somewhere or read somewhere. that they buy all their inventory. From one manufacturer.

25:44 But this idea, when I read that, I was like, Okay, I wanna make sure that My approach to my own work is like okay. I want people to describe me that way. It's like I'd rather wrestle Grizzlies than compete with him and what he's doing. And I think that's just a good like maxim for us to keep in our back of our minds. Like is that

25:58 applicable to me and if it's not, what can I do to make it true? Uh in turn, Mrs. B also admired Buffett. Mrs. B said. Uh, my hero is the middle class, the immigrants, and Warren Buffett. He's a genius. I respect him a lot. He is very honest, very plain, and his word

26:14 Is as good as gold. Another addition to our Rose file. Rose is the only founder. That Buffett had to buy out twice. So The the good thing about about the business is a family business.

26:26 This is after Buffett already owns it. She's still working. They bring in like multiple generations of Blumpkins. And so she loved working with her son and she hated working with her grandkids and so this is what's gonna cause her to leave. Uh nobody wanted her to leave, said uh said Louis. That's her son. Mrs. B said she was not upset with Louis. He is one in a million, she said.

26:45 However, she said Mm. However, she had used the name Hitler. To refer to her grands Ronald and Irvin. They have a fight over pricing and control of the carpet department, which she considered was her domain.

27:00 And of course Rose like all of history's greatest entrepreneurs. Or obsessed with control. And so she quits and she starts another business. It'd probably be the first for a ninety six year old woman to start a business, but I feel capable of doing it. And one approved of Buffett and my grandson's she was upset at Buffett'cause she felt that

27:15 He had sided with her grandsons over this. They they wind up patching things up. uh one approved a buffet in my grandson said I can do it. I I could outsmart any twenty five year old. So that's how old her grandkids are. Mrs B quickly became bored after leaving the store. She hired a chauffeur, this is hilarious. I keep saying that, but it is. It it I I laugh so many times reading her story. I absolutely love her.

27:33 She hired a chauffeur who drove her around Haw Omaha each day. And took her to other stores. She looked in the windows and checked to see how many cars there were in the parking lot. She's ninety six. It didn't take long for her to plan her revenge. I wanna be my own boss. Nobody's gonna tell me what to do. I had enough. I'm going to let them have it. Thank God I've still got my brains.

27:52 I've got health, money and strength and common sense. I know how to beat everybody. The new store was directly adjacent to the Nebraska furniture mark. This is adjacent. I heard it was across the street, but it's

28:03 They can see it one way or another. And so she's asked, would you like to see Nebraska furniture market go out of business? She says uh it should go out, it should go up in smoke. I like that they should go They should go to hell, she replied.

28:17 The reason she able to move so fast is'cause there's really no uh it's everything's black and white. There's really no like shades of grey with her. And so at this point she felt, you know, they took away her carpet apartment or try to override her decision. So that's it, you're gonna go to hell. And Buffett picks up on that. So everything with Mrs. B uh knew how to do, she would do fast. She did not hesitate and there was no second guessing. She'd buy five thousand tables or sign a thirty year lease or buy real estate or hire people.

28:41 There was no looking back. She just swung. The rules of running her business were very simple. Sell cheap, tell the truth. Fortunately, Mrs. B lived long enough to reconcile with her family. Uh, the first relationship to be patched up with was Warren Buffett. Rose was angry with him because she felt that he had sided with her grandsons.

28:57 Two days before her ninety eighth birthday. Buffett once again. bought uh her roses and chocolates and brought it to her job. He's a real gentleman, she said. After accepting Buffett's peace offering.

29:08 She settled her differences with her grandsons and sold Mrs. B's warehouse the new st the new company. Two Nebraska furniture Mart. For five millim dollar. with the provision that she could keep control of the carpet department this time Buffett made sure to have Mrs. B at age ninety nine.

29:24 Sign a non compete agreement. And then Mrs. B looks back at this time, and really she's just saying, you know, controls obviously priority number one. Maybe I was wrong, maybe I was too hard, and then Mrs. B sat on the field with her grandsons. I'm very independent. If things aren't run the way I want it, I don't like it. And I get very mad.

29:41 And it's an excellent way to end. Rose's story, the woman who never attended school and couldn't read or write was the recipient Rose's long life allowed her to accumulate numerous experiences in the community and in business. She was forever grateful that she was able to come to the United States. In fact at every family gathering, she would insist that they they sing God bless America. It was her favorite song.

30:03 The people who were born in this country don't appreciate All these wonderful things. Like those who've who've come from out of darkness. So when I had lunch with Sam Zell That was episode two ninety eight. This is one of the things that we talked about in detail because

30:16 His experience as a kid was similar to uh what his dad would tell him was similar to what my dad told me. His father escapes Poland. uh you know the pro persecution of the Jewish people of the Nazis. And he tells Sam over and over again, You have no idea how lucky you are that you were born in this country. My father was born in Cuba, fled.

30:33 Uh Castro. And he would tell me that over and over again. So it says the people who were born in this country don't appreciate all the wonderful things like those who came out of the darkness. I love the United States since the day I came here. On her hundredth birthday she said, All my wishes have come true. American people were wonderful to me. And I made a success. I never expected that much.

30:49 And I did a pretty good job. That's a hell of an understatement, Mrs. B. You did a fantastic job. Uh, she officially retired in October nineteen ninety seven and she died at the age of one hundred and four. The next year. Upon hearing of her death, Warren Buffett said We were partners.

31:03 And in most ways, she's the senior partner. She's forgotten more. Then I'll ever know. Aspiring business managers should look hard at the plain but rare attributes That produced Mrs. B's incredible success. Students from forty universities visit me every year.

31:18 And I have them start the day with a visit to the Nebraska furniture mart. If they absorb Mrs. B's lessons, they need none from me. And that is where I'll leave it for the full story. of Mrs B. There's a bunch of other remarkable manager's profile in this book as well. But I think the book is worth buying just for the Rose Blunk chapter.

31:38 uh alone, even if you only read that chapter, chapter one. I will leave a link if you buy the book using that link. Uh, you'll be supporting the podcast at the same time. Another way to support the podcast is to sign up for Founders Premium. I've been making a lot of AMA Ask Me Anything episodes and so subscribers to Founders Premium. Can

31:54 Listen to those. I think there's like twenty one or twenty two available and I'll be updating that feed every week. That link is obviously down below and available at Founders Podcast dot com. And My I have a free email newsletter if you want to receive an email from me.

32:08 A friend of mine will actually chastise me because he's like It's I was so inconsistent, so I'm gonna update it every every time I read a book. And he's right. He was completely right about that. So what I do is I just uh Usually e every book. I think the last one uh the last email I just sent out was on the the Mine and Napoleon book.

32:23 I think I have like seventy six or maybe eighty six, something like that. Um different highlights from that book. And so it takes me forever, but I think it's really valuable. Where I try to say, Okay. What are the top ten things I wanna remember most? And I try to get'em into like sentences, almost like maxims.

32:38 Um so anyways. If you're interested in getting an email from me. Uh, with the top ten highlights of all the books that I read for the podcast. That link is also down below and available at founderspodcast dot com. That is three hundred and three books down. One thousand ago.

32:52 And I'll talk to you again.

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