Transcript

#308 The Founder of Glock

0:00 Gaston Glock arrived in Luxembourg in july nineteen ninety nine for an urgent talk. With the shell company artist Charles Ewart. E were picked up Glock. Personally at the airport. Before proceeding to their meeting, he suggested that Glock take a look at

0:15 At the new sports car that he had just acquired. It was parked in a garage. When they got to the garage, I were guided Glock down. to the third underground level. Where they found themselves alone.

0:25 Ewar pointed out the sports car and Glock approached on foot to take a closer look. Suddenly A tall man stepped out of the shadows, lunging a Glock. Glock raised his arms defensively, and the attacker swung a large rubber mallet. And struck Glock on the top and the side of the head.

0:42 Rather than intervene to help Glock. Ewart turned and ran. I'm a coward, he would explain later. Glock, meanwhile, was fighting for his life. The gunmaker who usually carried a pistol

0:53 Lacked one on this day. With no other option, Glock fought with his hands. He swung his large fists at Into the attacker's eyes and mouths. Though he was seventy years old.

1:04 Glock put up a stout defense. He drew blood and knocked out several of his attacker's teeth. Despite the hammer blows to his head. He gained the advantage. When the police arrived, they found a bizarre scene.

1:17 The bloody attacker Lay collapsed on top of Glock. With his arms outstretched like Jesus. Glock was pinned to the ground, but not mortally wounded. His attacker was unconscious.

1:28 Glock had suffered several hammer blows the head and lost a liter of blood. At the hospital, though, he was strikingly composed. Before doctors finish patching him up, He summoned his personal bankers. Those two bankers held seventy million dollars of his cash in accounts.

1:45 to which E word had access. Within three hours of the attack Glock had moved forty million. to a secret Swiss account. E War was busy too.

1:54 He blocked the other thirty million from being transferred. E Worth. Glock's supposed financial advisor had been stealing from him. That was an excerpt from the book I'm gonna talk to you about today, which is Glock, The Rise of America's Gun.

2:07 And is written by Paul Barrett. I was not expecting To do this book this week. This book wasn't even on my radar until like a week or two ago. I saw somebody

2:17 uh speaking about reading the book online and what they said made me interested in ordering the book. And he says, uh what struck me is how his inexperience was a great advantage. He didn't assume anything About how to design a handgun because he never designed one before. Consequently,

2:32 He of course designed the best one ever. He didn't know what was out of bounds. And so that idea of not knowing what's out of bounds Not knowing what you don't know. It sounds like to a normal person, like a liability, but in as we've seen many of these uh the books that you and I go over.

2:46 Together. uh for entrepreneurs especially going attacking a an industry they never worked in before, it winds up becoming an advantage. And that'll make a lot more sense as we go through the book. So that intro Occur fiftin years.

2:59 After Glock. invents and starts selling his handgun. This story is wild because not only does he have people stealing from him His financial advisor actually hired the guy to kill Glock. But what's crazy is over the course of the story.

3:11 Glock has so many of his top Lieutenants and top executives steal from him. Which I'll get to in a bit. I wanna start at the beginning because It doesn't make any sense. This guy was fifty years old. He was managing a car radiator.

3:25 Factory outside of Vienna. He had a small manufacturing business on the side. He had never made a gun. I don't even think he owned a gun. And yet within a decade he goes from zero to billionaire. So let's jump to that right now. After thirty years of manufacturing

3:38 Glock had yielded a respectable social station and a comfortable life. Still he dreamed big. He was the son of an Austrian railroad worker. He was managing a car radiator factory outside of Vienna. And he operated a side business with his wife using a second hand metal press. They produced a modest volume of brass fittings.

3:57 For doors and windows. He also made a bunch of shower curtain. Rods. Over time the side business slowly expands, and this is one of the most important um ideas in the book. And that is to always do the best with the job in front of you'cause you can never predict

4:12 What future opportunity that unlocks. He gets really good at manufacturing things with polymer and plastic. One of those things he actually is gonna make for the Austria's ministry of defense he starts making knives. For the ministry of defense. That is how he learns about the opportunity to make handguns. So says the garage metal shop expanded over time to make steel blades, which so impressed

4:32 Austria's ministry of defense that Glock obtained a contract. To supply field knives and bayonets to the Austrian army. And this is where he's gonna find any opportunity. Watch w watch how fast he moves once he realizes There's a huge opportunity here. One day in nineteen eighty he overheard a hallway conversation between two colonels that jolted his imagination.

4:50 The army needed a new pistol. to replace the antiquated ones from World War Two. Glock interrupted the conversation and asked if it was possible if his company could bid on the pistol contract. He's asking to bid on a pistol contract. He's never made a pistol. Designing firearms was something far beyond his experience. He asked the Colonels to describe the army's requirements for a new handgun.

5:09 And I just love his mindset here. He's like, Well, this shouldn't be too difficult to make'cause he just describes it. To him the handgun was simply another accoutrement. That attached to a soldier's belt. Similar to a knife that he already produced. As Gaston Glock himself

5:22 Put in an interview. That I knew nothing was my advantage, that I knew nothing. was my advantage. He gets to start with a blank sheet of paper. All of his competitors have decades and some kind in some cases centuries of built up procedures and processes and the way they do things. So let's skip ahead and go into his initial research process, because I think there's a lot of good ideas in here for you and I.

5:44 Uh Glock didn't own any guns. After the conversation at the defense ministry in early nineteen eighty, he bought a Baretta, a SIG. and a modern version of the German P thirty eight pistol. He began disassembling the guns, putting them back together, and noted the contrasting methods used to make them. I started intensive studies in such a manner that I visited the Austrian patent offices for weeks.

6:04 Examining generations of handgun innovation. So what's he doing there? He's doing exactly what you and I are doing. He understood that learning from history is a form of leverage. Listen to what he just said. I started intensive studies in such a manner that I visited the Austrian patent office for weeks, examining generations of handgun innovation, what took people generations to learn, because he's going back and doing all this reading, he learns in a few weeks. I bought and tested all modern pistols available to time. And I tried to involve into conversation the best experts I knew. So he contacts a bunch of experts.

6:33 in the firearm industry, he invites them. He has a meeting with them. There's two guys. Uh two main guys here and I just wanna go over this really quick. Uh, he invited several firearms specialists to join him. Among those who attended were this Colonel Uh a champ who was a champion shoot shooter who also oversaw

6:47 Weapons procurement. For the Austrian army that becomes extremely important. He also invited an author of technical books. Such as silencers. For hand firearms.

6:58 And then you just asked them flat out, gentlemen. What do you want to see in a pistol of the future? And the beautiful thing is his initial customer is going to give them the outline of exactly what he needs. Remember, he's gonna have to bid. against a it's not like they're just gonna give him a contract. All right, he's got a bid against other gun manufacturers. So it says uh they desired a high capacity pistol that held more than eight rounds. It should weigh no more than twenty eight ounces.

7:21 It should have a light trigger pull for fast, accurate firing. And it should be streamlined and easy to holster. Crucially the gun. should have no more than forty parts. This is so important. One of my favorite ideas about this entire book is the way this guy designs his company.

7:34 And I'm gonna repeat a lot of the things that he does. He designed a product and a company based on limiting the amount of moving parts. This is gonna be very reminiscent of like the early days of uh Henry f when Henry Ford was building his car. Of Herb Keller of South West Airlines. The limited moving parts, the sim simple product, the simple business processes, they

7:52 All created, allow them to stack advantages at one after another. Wait till you see the profit margins. That this guy d this is incredible. All right, let me I'm getting ahead of myself. So it says the Colonel also told Glock that the pistol should be able to withstand extended contract with snow, ice, and mud. It should fire ten it should be able to fire ten thousand rounds with no more than one failure per thousand. The ideal pistol

8:14 should have a long service life. Of forty thousand rounds. This professional research that Glock is engaged in is so important, and he knew. He knew it was important then at the evening's end. Glock had his guest sign and date one of the sheets of paper that m memoralized

8:29 Their thoughts he treated the occasion. As if it would be remembered. By history. Another main theme that appears over and over again in the book. You don't need much to start out. He began working on a prototype. He tested crude early versions.

8:41 In a basement firing range that he built. specially for this purpose. He shot alone using o this is hilarious. He shot alone using only his left hand. If the gun blew up on him, he would still have his good right hand. This guy moves fast too. More professional research. Glock attended police academy classes.

8:59 and took private shooting lessons. Remember he didn't own a gun, he knew nothing about it. My intention was to learn as much as possible as fast as possible. This process lasted one year. He filed for an Austrian patent On april thirtieth, nineteen eighty one, it was his seventeenth invention.

9:15 So he called the gun. He called his gun the Glock seventeen. So from zero to patent that's one year, then from finally actually submitting the actual prototype two, which is gonna be his first custom, that's another year, so two years in total. After another year of testing and improvement, Glock submitted four samples of the pistol to the Austrian army.

9:33 I worked for two years day and night to bring The sample to the army on time, move fast. And then as we'll see a few times today, Glock has a lot in common with James Dyson. Difference for the sake of it. and retention of total control to this day the Glock family owns.

9:47 The company. Glock is obsessed with control just like Dyson James Dyson was. You don't know what I'm talking about. Uh listen to episode three hundred. Uh, that's the third or fourth time I've read Dyson's autobiography.

9:57 Two our overarching concepts would set the Glock seventeen apart. Remember, he's bidding against other existing pistol manufacturers, okay? First it was to be made largely out of light resilient injection molded plastic. And second, it was designed without a pre existing factory. I need to go ahead a few pages before I come back to this.

10:16 Because this comes up over and over again. It's black. Plastic and metal construction. Set it apart. From everything else on the market.

10:24 Suggesting modernism and efficiency difference for the sake of it. Something that James Dyson talked about and that benefited that his product, his first vacuum cleaner. benefited in the early days. They give him an edge. over all of his competitors is it looked different. You would go into a store, you'd see seven, eight vacuum cleaners all look the same. Then you get to the end, you're like, What the hell is this thing?

10:44 It immediately snaps the consumer. It's like oh I need to pay attention. This is different. He also has a great line. James Dyson has a great line. On the value that that A strange looking product will actually get you more media attention. He says it is one of the virtues of having such a strange looking product that journalists are more likely to take an interest in it.

11:02 That's something that he learned when he w designed a uh a wheelbarrow. with instead of a wheel had a ball. And he got so much more attention than other people trying to build wheelbarrow that all looked the same. That he applied that idea about ten or fifteen years later when he was designing the vacuum cleaner. We see that same exact idea benefiting Glock right here.

11:21 And so not only did Glock's gun look different, but it also had a a huge benefit. Remember, has to survive in rain, snow, and mud. This was is initially designed for the military. So The he's using industrial plastic, which they said is often called polymer. Was actually remarkably strong and resistant to corrosion, a major problem with traditional steel guns.

11:40 And then because he started from a blank page, he's like, Well, I don't have to just manufacture guns in a factory that's been manufacturing guns for fifty years. W what would a factory look like if I designed it now? From scratch this also gives him This also makes him Uh produce

11:54 Uh his gun a lot. uh a lot more efficiently and cheaply and that increases his margins. Uh, the important thing that gave him the b his big price advantage was that he designed the pistol for complete production. On computer controlled tools. And I probably have seventy five highlights in this book, but really this is a summary of why

12:12 Like studying the way he He's a very flawed person, that's we'll get to later on. But his approach to company building and and creating a new product is very fascinating to me. I says uh this is just a note I'm writing to myself. The book is all simplicity, focus, and differentiation. That is the best way to get my attention. Uh simplicity turns me on. I love it. I am drawn to it.

12:29 Clock produced the simplest handgun. With only thirty four components. Again, simplicity lets you stack advantages one on top of another. I also wrote down Uh one of Steve Jobs favor quotes, one of my favorite quotes.

12:42 This is plastic all over uh Apple in the early days. Simplicity is the ultimate sophistication. That of course is Leonardo da Vinci. Because of the unfussy way, the simple way, Gasting Glock Fabricated his slide, his pistol required fewer steps to manufacture. Saves money. And there were fewer opportunities for error, adds durability. The Glock seventeen was put through a pr preliminary firing run of ten thousand rounds. The glock malfunctioned.

13:05 Just once. And then again, the benefit of starting from a blank sheet of paper and a brand new company. None of his competitors could say the same. He got it right because he hadn't done it before. One of the largest problems in getting a new design accepted by an established manufacturer is not just a quote unquote not invented here syndrome.

13:21 But also the we don't have that tooling syndrome. Why would we invent something new when you can simply modify what we already have? Glock started with a blank sheet of paper. А за результат оригінал. And he was at the right place at the right time. The book starts out.

13:37 With this. This crazy shootout that's happening in Miami in the nineteen eighties. between the FBI police officers and I guess these drug dealers are bank robbers. A lot of these cops and FBI agents get killed. They're all at that time.

13:49 They're like running around with like these Smith and Weston revolvers that hold like six Shots. And if anybody's seen the document that's on Netflix called Cocaine Cowboys. the flood of drug violence in Miami in the eighties and it was spreading all over the country actually. These guys have Uzies, they have high powered rifles. And so you have

14:05 Military and law enforcement officials all over the country and all over the world trying to get better guns that could hold more rounds and were more reliable. And so even though he starts out in Austria, he's going to wind up dominating The most valuable market for his product in the world. It's also interesting'cause he I think I'm pretty sure he's he's pretty

14:23 He's he's very anti American. He does not like Americans. He says they're stupid, but that's where I think almost all of his wealth came from. Uh, within just a few years another market far larger and richer than the Austrian defense sec sector Would be keen for a pistol of the future. American police officials wanted a new handgun and Glock was there to offer a powerful alternative to the revolver. And then the author talks about the dynamics of this market, that the fact that the American civilian gun buying population tends to gravitate towards what the professionals carry.

14:48 And as a result for Glock, this will trans this translated into a bonanza. And then finally one more thing from this section before I move on. Something we say over and over again. First They ignore you, then they laugh at you, and then they copy you. Smith and Wesson. who could who dominated the American law enforcement market before Glock created something uh new and better.

15:07 Smith and Weston ignored Glock. At first, then they scoffed at him and eventually became they began imitating him. He actually sues them later on and wins like a a patent infringement case against them. Okay, so in addition to simplicity, differentiation and and uh retention of total control The other main theme of the book

15:25 that stuck out to me that I've been thinking about a lot, like how can I use this in my own business. is he's got all these very unique and unusual forms of distribution. And so my answer to this question How did a pistol produced by an obscure engineer in Vienna

15:40 A man who barely spoken and had no familiarity with America. become in the space of a few years an American icon. The answer to that question is distribution. And a lot of this is gonna be media driven, and media begets more media. So first of all There's people in America that are really they're gun salesmen

15:57 They stand the industry. They see this headline. And they're like, Wait a minute, what's going on? So this guy named Carl Walter is gonna play A very important role in the first few years of Glock Glock. I don't think Really maintain some

16:08 very many professional resources uh relationships for a very long time. This guy like builds up his entire American distribution salesforce and then winds up firing him later on. But Carl is just his gun salesman. And then he sees a headline. He's like An unknown gun manufacturer won a large contract to supply pistols to the Austrian defense

16:25 Ministry of Defence he was intrigued. So let's go back to This very important theme that we see over and over again. Do the absolute best job on the opportunity that's right in front of you'cause you have no idea. what opportunity that will unlock in the future. Glock starts making knives for the Austrian government.

16:40 He's reliable, does the best job possible. So then they allow him to bid on The pistol contract. He does an incredible job there. That headline then gets the attention of this guy who's going to build out his entire American

16:53 Distribution and Salesforce. And so Carl is sitting in America reading A German's weapon magazine, and that's where he hears about the Glock seventeen. And so he says I was extremely curious why the Austrian army bought it. So he goes and meets Glock. And there's two things that are happening here. One

17:09 He's like, Well, here's this gap in this extremely valuable Market. How many guns Does the American Police and military buy. And so he's like, Well, there's actually some really there's a lot of money to be made.

17:23 If we could convert US police departments from revolvers to pistols. And there's all these news stories about the cops in in in the nineteen eighties being outgunned by other people, not, you know, having six shots, their their guns jamming, all this other stuff. And it's like okay, well

17:37 Why would you carry a Smith and Weston revolver that carries six shots and can jam? Why don't you carry this weird looking pistol? It's made mostly of plastic by this Austrian engineer that carries seventeen. And so it goes back to the Dyson thing about having the benefit of having just a strange looking product. assuming that the product is good. Obviously we we're operating on the assumption that the product you're making is world class or really great.

17:59 He's like, Wow, that's really ugly. But that initial reaction by Carl is like Oh, that's really ugly. But yeah, at least that you have his attention. And then this is another example of Glocks. Like fetish for simplicity. working in his advantage because Carl at the time when he's going to meet

18:13 uh Glock. He actually works. He's a He works for this company. I don't know how to pronounce this maker. It says uh he represented Steer. S T E Y R But Steer made really complicated pistols. So it says this is what Carl said. The handgun that they made was far more complicated, and it was a pain in the ass to service.

18:31 So Carl goes and meets Glock, he says, Hey, listen, I represent this handgun manufacturer in United States. Perhaps I could do the same for you. I could represent Glock in the United States. The biggest sales opportunity of Glock's entire career. Was somebody else's idea.

18:46 Енсо, Карл осокс. In the the American gun media industry. This is again this is s this cannot be overlooked it was extremely important. So he's having this conversation with Glock. He says, Listen, the pistol will sell, but it must be sold.

19:00 He meant that he could explain to the American law enforcement market why a gun that looked so strange deserved a chance. And so he brings with him this guy that runs this magazine, this really influential magazine at the time called Soldier of Fortune. And so he says, Listen, this is my suggestion. You should give the the scoop on publicizing the Glock seventeen United States. Word of mouth will then spread in gun circles. By the time that you have expanded your manufacturing capacity, America would be hungry for your new pistol. So what Carl understood is that media begets more media.

19:29 And this is gonna supercharge Glock's distribution. And so this article is gonna come out. The guy writing the article says Uh he argued that the Glock's design set it apart from everything else on the market. Back to the importance of differentiation. Now the one with the one exception. Glock studied and copied the greats. Remember he was going back and reading

19:47 generations of patent filings. In a few weeks. And so for this is from the article. The only uh conventional thing uh about the Glock was the method of operation he adopted for his handgun. Glock borrowed his basic mechanics from John Moses Browning, the greatest gun designer. of the late nineteenth century.

20:04 Okay, so let's go back into more unusual distribution. This is fascinating. So the secretary of state in nineteen eighty five, the US Secretary of State goes and meets the foreign minister. Uh Vienna. And so the US secret service agents and their VNing Vienen

20:18 uh counterparts actually start talking. And the Austrian counterparts give the US Secret Service a gift. They give them a bunch of glocks. The US secret service. Uh agents returned with unusual gifts from their Austrian counterparts.

20:31 Three high capacity black polymer pistols. It was Glock's first official foray. Westward. So that's the first way the pistols get from Austria to America, once they're there, the secret service then passes.

20:43 Some of the pistols along to the US Department of Defense. Those two organizations are both going to be future customers of Glock. So then what happens next? American defense procurement officials invite Glock to compete in trials in nineteen eighty four. To select a new sidearm for US soldiers.

21:01 Now I mentioned earlier that this guy's obsessed with control. You see this example. He i he objected to the Pentagon, so he's going to compete and then win at this. He objected to the to Pentagon's insistence. that the rights to manufacturing the winning gun design would be open to competitive bidding.

21:15 Glock intended to collect all profit from the production of his gun Himself Really smart. Again goes back to the advice from James Dyson. Retention of total control.

21:25 And so then this goes back to How if you go back in in Glock's life, even before he had a lot of financial success. He was obsessed with quality. In fact, there's a great line that comes somewhere later in the book where it says quality will always bring you More money. Glock demanded high quality. He the motto of the company is perfection.

21:43 Glock perfection to this day. It's like all on the walls and everything. But this was very interesting. It this is the s three star general in the Austrian army, and he's describing Glock at the early days of building his company. So Glock is still alive today, he's like ninety three. Thing is like fifty two where we are in the book. He says there's this interesting guy. He never in his life designed a field knife and he delivered the best quality samples.

22:04 among all the in industry participating. And all those guys have been in the knife for hundreds of years. Then this interesting guy came back and sold. A newly designed handgun. to the ministry of defence quality

22:17 Will always bring you more money. Now what happens if you're able to make high quality In the simplest way. you have a company that's going to essentially uh he just created a money print machine. And this paragraph is really the benefit of

22:31 A product with fewer moving parts and a company with fewer moving parts. They settled on a commercial wholesale price. of three hundred and sixty dollars. and a recommended retail price of five hundred and sixty dollars.

22:44 These levels undercut comparable American European brands. Yeah. They generated generous profits. Glock's gross margins exceeded sixty five percent. By comparison, Smith and Wesson and Beretta ranged five to twenty percent of profit.

23:03 The Glock's simpler design and the computerized manufacturing methods allowed for larger profits. Another benefit of a low cost structure. Клак said in their first year. If they they could break even, all they had to do was sell eighty five hundred guns for the year.

23:18 Right. So they have a very low cost structure. We saw eighty five hundred guns will at least survive. They unveil the Glock at a trade show in America. They sell twenty thousand units on the first day. And then you go into why so many people want to buy it. One

23:32 It looks weird. It's getting covered in the media as a result of the fact that it looks weird. But then both professional and recreational gun owners want something that's simple. Less things can break in a life and death situation. This is winds up being huge advantage for Glock. Again. Make a product in a business with few moving parts.

23:48 The pistol's design and its relatively few components was the most important thing. Because of these components, less parts can break. And therefore the weapon will last longer. Let's go back to a recurring theme in the book, the fact that he's getting a ton of free media attention because his product looks so differently. somebody writes they're mistaken. They thought they somebody wrote an article, I think it was like the Washington Post or something. They're like, Oh my God This this gun is all plastic, like you can sneak it through. It's like they call it like the hijacker special or something like that.

24:15 There's there's metal in it, you can't sneak it through, but the result was a huge surge in demand. For this pistol. The intense public attention devoted to the Glock did have an impact on the gun and its manufacturer. Questions about the pistol's unusual design and materials became a major selling point. Civilian orders continued to pour in.

24:32 as thousands of gun buyers decided to see what was all what all the commotion was about. I'm gonna pause right here. uh when I did the the book on Robert Caro, it's episode three oh five. I don't know if I mentioned this in uh in the actual podcast. But there was something fascinating where

24:48 One of the very first what we I guess would call lobbyists today is this guy named Tommy the Cork. Tommy the Cork was really close with like FDR. And Linda Johnson. And he winds up surviving and living longer than both LB J and F T R. And he agrees to be interviewed by Caro.

25:02 And Robert Carrow at the time is a very young man. Tommy the Cork's older. Robert is in Washington, D C You know, he's spending a few days with Tommy the Cork. Interviewing him.

25:11 Wakes up. reads like the front page of the Washington Whatever Times or whatever. It's like, Oh my God, Tommy the Cork has been caught in like this huge scandal, such as like bribing politicians. And so Robert goes to meet him and thinking, Oh my God, Tommy's gonna be distraught. Maybe he won't meet with me, goes to Tommy the Cork's office. And the guy's like smiling, he's like gassed up, completely energetic.

25:31 And Robert's like, What's going on? Like, didn't you see the newspapers? Like, Yeah, that's why I'm happy He goes Uh it's just free advertising, kid. And so this idea it's just free advertising kid, I think is a main theme in this book. There's a lot of uh attention and controversy. Surrounding blocks.

25:46 Product? And in every case, even his his attackers just make his company stronger, like we're seeing here. Uh, so it says civilian orders uh orders continued to pour in, thousands of gun buyers decided to see what all the commotion was about. More than one thousand requests. For free samples from law enforc enforcement agencies poured in in nineteen eighty six alone, so you're not selling one or two. Uh guns, right? Um, it's a good thing.

26:10 His distribution strategy. Is you could sell to consumers. But they might buy one or two or whatever the case is. These agencies are gonna buy a thousand at a time. uh some of the contracts in this book like a hundred and fifty million a year

26:21 to this army, hundred and uh, you know, seventy five million to this other division in the US government or all these other governments. And a lot of them found out because of all the controversy in the media. More than one thousand requests for free samples of law enforcement agencies in nineteen eighty-six alone. Glock would send the guns for free, said Hey if you want to keep'em, just send us a check and the check the price would be heavily discounted because Glock knew that The US uh gun buying population is just going to copy what the law enforcement and the army has

26:47 Nine out of ten of the recipients. eventually sent a check saying that they would like to keep the guns. And so from just this one article alone. This is the what they said internally. at Glock. You just got five million dollars worth of advertising for free.

27:04 Okay, so let's stay focused on more of their ideas for distribution. They actually I mean I guess this is kind of a a It's kind of a A version of influencer marketing. combined with an idea that David Ogie learned. So

27:17 David Ogy before he started his advertising agency, he was actually one of his jobs, he had multiple jobs, one of his jobs was selling Stoves. Door to door. And so something that he learned was If you go up to knock on the door and somebody answers like, Hey, you wanna buy my stove, talk about it

27:32 That would have one conversion rate. And then if you say, Hey, if uh here's a stove, this is all it does, but by the way, if you buy, you get six free cooking lessons with purchase. He said the word free is magical. Just that extra sentence or that extra offer wind up Dramatically increasing the percentage

27:49 of customers who actually purchased. And so we see Glock having this like combination of influencer marketing. Plus free teaching and free lessons. He becomes very powerful. uh distribution component for them in mid nineteen eighty six

28:03 Carl Walter began putting some of the country's most admired shooting instructors on contract. That's the influencer marking part of it. To spread the word about the Austrian pistol. This melding of training and marketing Became a glock hallmark. If a department would buy some Glocks, this is what they do. They would then dispatch another trainer

28:22 As part of the procurement deal. A freebie for the new customer. That is the combination of the Og V Selling stoves and giving away lessons. Idea. And then this was also differentiated against their competitors because Their trainers would come to you.

28:36 the other existing gun manufacturers to make you come to them. They took the training program on the road. You had to go to Smith and Weston Academy in Massachusetts if you were gonna use this if you were gonna use the Smith and Weston. If your agency was going to adopt the Glock, we would send training your way. Again, this goes back to this more unusual forms of distribution. Why? Many times instructors from neighboring agencies attended these sessions out of curiosity. Glock would then sponsor an open house seminar for all federal, state, and municipal trainers in a given region. This was just a brilliant way.

29:07 To sell this gun. And then what happens next could have been predicted by Andrew Carnegie when he says cut the prices, scoop the market. Watch the cost. And the prophets will take care of themselves. The deals worked financially because of the company's startlingly low manufacturing costs.

29:22 which Glock was able to push down even further. to less than hundred dollars a unit. as its production volume grew. Targeting the lucrative professional law enforcement market. was a great idea, but it was not a new idea. All the way back on episode one forty seven, you and I have seen this idea before.

29:39 Glock is literally Running Sam Colts. Exact playbook. He was just doing it a hundred years earlier. Glock was not the first firearm designer. To promote a handgun to the Americans in uniform as a means of developing a lucrative market. The first was Sam Colt.

29:55 The strategy that the Glock team pursued a hundred and forty years later. resembled that of Sam Colt. What allowed Sam Colt to get his business off the ground was the fact that he was winning endorsements from prominent lawmen and military officers of his day. This is more on what Colt and Glock had in common. Colt relentlessly pursued public contracts. This is exactly what I've been describing to you so far in the book. Regardless of the profit margin, government patronage, Sam Colt once said.

30:21 Is an advertisement if nothing else. Gaston Glock became the Sam Colentieth Century. Back to more unusual distribution, they get the gun in the hands of prop makers for movies. So they they give uh pistols to the prop men. And then they also give them huge discounts.

30:40 And they would let them cut the line in in front of other customers. Glock gets one of the most valuable product placements ever. In uh this movie called Die Hard Two with Bruce Willis. And this is what Bruce Willis' character said in the movie, that punk pulled a Glock seven on me. You know what that is? It's a porcelain gun made in Germany.

30:57 It doesn't show up. in airport x ray machines. And it costs more than you make in a month. And the crazy thing is all of that was made up and it did not matter. It didn't matter that every single trait that Bruce Willis said Uh Rattled off on the pistol was incorrect.

31:12 There was never a model called the Glock Seven. The gun was made in Austria, not in Germany. It did show up on airport X ray machines, and the Glock did not cost more than what a police captain made in a month. Despite all of the errors as a result of that line in Die Hard Two, the Glock became an instant favorite. of American gun enthusiasts. Another advantage that Glock had over their competitors was the fact that they were able to focus. They put all their effort and resources behind a single product. American handgun makers offered many diverse models in the fashion of the Detroit car companies.

31:42 Glock saw that as competing with himself and resisted the temptation. So this is what I mentioned earlier, how he goes essentially from zero to a billion uh within ten years Uh, here's some sales numbers ten years in. The company sells more than twenty thousand guns a month at an average cost of six hundred dollars a piece. They've sold over five hundred thousand Glocks in North America alone.

32:03 Four out of five glocks produced in nineteen ninety five were purchased by civilians. Who paid much higher prices. Than police departments. And this is the crazy part is that Demand is far outstripping supply of the Glock factory at this point in time.

32:17 He had taken a hiatus from buying advertising. The factory in Austria could not make pistols fast enough to meet the demand. And this is more about Glock the man and then how he ran the company. Lot of weird stuff in here. Uh corporation does not have a soul. Its character reflects that of the people in charge.

32:33 My favorite statement on that is that the founder is the guardian of the company's soul. Uh Gl Gaston Glock was very much in charge of his company. And he was a man with a complicated soul. Even those people who came to have grievances against him did not dispute his drive and tenacity. Well into middle age. He discovered a reservoir of ambition.

32:51 That fed the design of a truly innovative handgun. He was a late blooming tinkerer whose breakthrough came at exactly the right moment. He had enough sense to hire an inspired marketer who In Carl Walter. This is the guy I was telling you about earlier that Really built. the American marketing and sales organization in America, which is by far

33:10 uh the most valuable part of Glock's business. At the beginning Glock had no feel for the United States at all. and much of anything or or much of anything outside of Austria. He evolved from a provincial manager of a radiator factory. To a world traveling industrialist that is

33:27 One of the craziest sentences in the entire book because it is true. He evolved from a provincial manager of a radiator factory. To a world traveling industrialist, he's owns all of the company. This company's worth billions of dollars. Glock built a cash machine with margins in the neighborhood of seventy percent. The slogan Glock Perfection was not puffery to Gaston Glock. He believed it. His organization projected coolness and

33:52 Certainty and arrogance. The founder was capable of charm, and at other times he struck people as distant and condescending. He expressed disdain. This is so this is a weird thing. He expressed disdain for Glock's American employees based on nothing more than their nationality. He hires a bunch of people to also speak German.

34:12 And that happened to work in America. And they just they they like to talk in German and they talk about how uh stupid Americans are. This is What a bizarre guy. Uh he had an unforgiving management style. When one day which one day he summarized

34:23 Every morning you have to slap everyone on the head just in case they did something wrong. Then he does just some unwise things. He goes around like uh there Their American headquarters is right outside of Atlanta and so he would like meet women Uh he he's married the whole time. Uh He winds up divorcing his wife who he starts the company with.

34:41 And now he is ninety three, and his new wife is forty two. He winds up meeting a bunch of women in uh all around Atlanta, then hires them. And so in one case this one lady's getting hired and she's telling her she's like a young woman. She's selling her mom And and her mom gives her the right advice. She's like, You gotta be really weird. Like you have to assume that he has lecherous intentions. That's the word she used. Lecherous intentions.

35:04 And he does. He's like kinda hires her as like this quasi personal assistant, so she's gotta do a bunch of stuff in the office. But then he's like, Oh do a bunch of stuff in my house. Including make my bed and then put candy on my pillow and then she'd knock on the door and he would answer it in his underwear. And so there's just a bunch of highlights. It just sounds like he w spent a lot of his time seducing Several younger women.

35:25 Uh, he traveled in luxury. He has houses all over the world at this point. His female friends had carte blanche at Atlanta's most expensive stores. But at the same time he would explode in rage when his employees bought what he considered unnecessary office supplies. And so you have the weird thing is as the this crazy amount of demand for the product

35:43 The the product is really good and then the company that's built on top of this like fast growing rocket ship. Especially in the early days, it may be different now where it's like more mature. It just didn't have a lot of We just wasn't handling the demand really well. The company was patch together on the fly, the company evolved.

35:58 into a money maker powered by excellent product design. And a fearful desire not to displease Mr Glock. Uh, the the way I would describe it is like he he was feared by his employees. And so he evolves into what you would describe as a tyrant. And there's a great line in here that really summarizes what's happening because everywhere he goes

36:15 His company's printing money. He's winning awards. And he's just like oh I'm um Amazing. Says he began believing his own news clippings.

36:24 And so in a strange turn of events, he winds up firing Carl Walter. This is the guy that built But There would have been no Glock without Carl Walter, but the problem was Carl tried to take some of the shine away from the founder. When the Austrian company received industry awards at at any war shows, it was Walter who went up on stage to accept them. Glock has this big ego. This is not good.

36:45 Rule number one, this other guy working there says rule number one Is that you let the guy who pays the bill Take all the credit. At this point, Carl Walter's conversation was like a percentage of sales. And he was just getting too rich and Glock didn't like that.

36:56 Uh, in nineteen ninety two, Glock proposed changing his contract to cut drastically his percentage commission. The owner had no intention of making uh him a multi millionaire. Taken aback. He refused.

37:07 He had lived and breathed Glock for seven years. Was this to be the reward for all of the sacrifice to be cheated by the man that he had made rich? Glock remained unmoved. He gave me an ultimatum, Carl said. Accept it or And I took the oar.

37:21 Without hesitation, Glock fired him, the man widely created with establishing the company in America. Over the next eleven years, Glock would run through seven US sales managers. And this is a terrible line. to have your company described as and yet it didn't even affect the crazy thing, it didn't the product and the demand was so high it didn't even affect their their financial performance.

37:45 Distinguishing oneself within the company became a career killer. Later on in the book it talks about the fact that a bunch of his employees were embezzling Uh money from him. And they didn't feel bad about it'cause they thought he was such like an ass. And they're like, he's this guy's making two hundred thousand dollars a day personally. He doesn't need the money.

38:01 And a bunch of them actually go to jail for this, but that just gives you an indication of like what's happening. And Gloacos Wild. You know, he's got all these mistresses, the money's going everywhere. Uh they they have like this company wide outing every Thursday at this giant strip club.

38:14 In Atlanta. And so it says Gaston Glock was the king of the world. The girls, the guns, the money and the liquor, and at the center of it all was this Austrian engineer that none of us knew very well. And then he doesn't stop there. This guy decides to have his own theme music. So he splits his time between Austria and I guess Atlanta.

38:30 And he would go to this casino and this restaurant so much. And he would insist that when he shows up with his entourage that the band stops playing. Literally the the the the house band has to stop playing whatever they're playing. They would pause for a moment. And then the band would swing into a rendition.

38:47 Of Frank Sinatra's My Way. That was Glock's theme. I did it my way. And yet, even through all these shenanigans, the fact that his top financial lieutenant tried to have him killed. The fact that his senior executive and longtime lawyer were both found guilty of embezzling money from the company.

39:03 It did not affect this incredible financial performance by this company that he built. By the late nineteen nineties, the gun business had made Gaston Glock a billionaire. Estimating the size of his fortune was and is difficult. Because most of it remains tied up in his privately held corporation. It is impossible. To say how much cash that he has stashed away. That the pistols still managed to flow from the factory and sell throughout the world despite the executive chaos.

39:27 was one of the greatest tributes to the intrinsic quality of Gaston Glock's creation. And that is where I'll leave it. For the full story, I recommend buying the book. If you buy the book using the link down below, you'll be supporting the podcast at the same time. Another way to support the podcast. And if you haven't done so already, make sure you for sign up for the founders AMA feed. That link is down below. You can ask me questions directly in the welcome email after you sign up.

39:50 There'll be a private email address where you can email me directly. And then I answer the questions that you send over email in short AMA episodes. I'm doing a few of those AMA episodes a week. So if that sounds interesting to you. That link is down below. That is three hundred and eight books down. One thousand ago. And I'll talk to you again soon.