Warren Buffett Leaves The Audience SPEECHLESS

These people had one thing in common you know they knew they had it in themselves they knew they could be something beyond where they were they were willing to put their time their energies to better themselves what you really could do with more skills it's just remarkable so I would like to just tell you a couple of short stories and we'll draw maybe a couple of lessons from them.

I would like to tell you of two women that each sold the business to Berkshire Hathaway to me actually for many, many, many millions of dollars both of them started with twenty five hundred dollars by a coincidence with the exact same amount it was everything they had in the world and one of them was a woman who landed in Seattle. In 1917 couldn't speak a word of English had a tag around her neck the tag’s said “Fort Dodge, Iowa” the red cross got her to fort dodge where she was reunited with her husband who had come to the country a couple of years earlier and she lived in fort dodge for two years and as she put it she felt like a dummy she couldn't pick up the language she couldn't learn a word and so she decided she and her husband decided to move to Omaha so they came to Omaha in 1919 and there she found a small colony of Russian jews so she started feeling more at home and then as her oldest daughter went to school she would come home this daughter Francis and she would teach her mother the words she learned in school that day and this woman rose bumpkin spent 20 years saving money bringing first her siblings over her mother and father fifty dollars at a time she sold used clothing to do it she had four children during this period and by 1937 after 20 years she'd save $2,500. she went to Chicago and she bought what she could have furniture her dream had always been to open a furniture store and this woman without who had never gone to school one day in her life with $2,500 but with the same spirit that the people in this room had about having a dream and working to accomplish that dream she built a business which she sold to me in 1983 for $60 million dollars approximately in which did a billion and a half dollars worth of business last year the fourth generation is working in that business this woman Rose Blumkin she worked for me until she was 103. and then I'm not saying then she retired and she died the next year which is a lesson to all of Berkshire's managers that premature retirement you know nothing you can't tell what's going to happen but Mrs B(Rose Blumkin) with her $2, 500 one further fact about her she could not read or write and she went into a furniture business and she didn't bring anything in unique in furniture but she brought a determination to succeed she knew she could outwork anyone else she knew she cared about her customers she worked at very low gross margins but she built this incredible business and i saw one other woman who did a similar thing with twenty five hundred dollars i paid her hundreds of millions of dollars for her business so I decided to go to the source and get these people before you know why I don't want you guys coming around to me asking me hundreds of millions of dollars I'd like to join in with you much earlier so I followed this group and today I'd like to tell you about one other small business person this person i went to buy his business from him and he turned me down which was very wise but this was a fellow who was born about eight years before i was he was born in 1922. we'll call him jack lived in the Midwest he was a pretty good athlete didn't like school much and i'm going to tell you one thing early in the story maybe you can figure out who the guy was the company he built hires more college graduates each year than any other company in the united states and this fellow who was destined for this but did not know it jack went to college for a year and then dropped out he really wasn't that interested in school and the year he dropped out was 1941 and when the country became the united states became under attack he went down to the army air force recruiting station volunteered and they turned him down because he had hay fever so he went over to the navy and again volunteered and they took him they put him on an aircraft carrier he flew small flight airplanes during world war 2 got two distinguished flying crosses from the navy and then he came back to the Midwest so now we've got a young guy probably by this time he would be 23 or 24 years old and the interesting thing is he got back to the Midwest and he actually kind of went from one job to another for a short period or not such a short period of time and he finally became a used car salesman at a Cadillac dealership In St louis, Missouri and at age 35 having moved up in the organization the sales organization he said to his uh boss could i go in the car leasing business with you the boss said well if you'll cut your salary in half and you'll come up with it was $25,000 which he borrowed we can become partners in a car leasing company so my friend jack started at age 35 in the car leasing business and he had seven cars it was pretty slow in fact one of the things he did was whenever the phone rang he let it ring three or four times so people would think that he was very busy answering other phones and of course the only call he was going to get all day so his first venture was okay but it wasn't really going to go anyplace and there's a lesson in this for all of us at age 40 he decided with 17 vehicles 17 cars he was going to go into competition in the rental car business so now he's taking on Hertz and Avis and national and people like that who have hundreds and hundreds of thousands of cars and he's got 17 cars and his cars aren't any different than theirs i mean he's buying them from general motors or Ford or Chrysler and he can't get the airport locations those companies have them all sold up but he was determined that he would basically offer the customer get all from a different car but he can offer him friendlier service than they've ever seen and so he started the company he named it after the battleship that he'd flown from in the pacific which was the USS enterprise(CVN-65) and he died about a year ,year and a half ago but when he died his rent-a-car company starting with those 17 cars was worth more than Hertz and Avis and all the rest of the rental cars put together the man's name was Jack Taylor and his son Andy Taylor is a good friend of mine runs the business now a grandchild is in the business they'll probably be a fourth generation alumni so this this man in the united states he didn't invent artificial intelligence you know he didn't do anything that just like Mrs b selling furniture i mean that any one of us could have entered those businesses but he lived by the by the creed basically of delighting his customers and working with people and establishing the relationship with them so that they in turn would wanted to like the customers he couldn't go out there and take care of every rental car possibility but he learned how to project himself and his attitude toward his fellow man and his desire you know to make a friend out of every customer he managed to take very ordinary cars and turn them into this extraordinary business from virtually nothing and it illustrates several points one is you don't necessarily get it right the first exactly right the first time i mean the car leasing business you know basically you were competing on the cost of money to finance cars and it's very hard to delight a customer when you just give them the car and tell them to send you a monthly check for five years and you'll be back at that time so his talents were being wasted basically in that business but at the age of 40 with all of that experience behind him he found the golden key he took a very ordinary business and turned it into an absolutely extraordinary operation just like Mrs B (rose bumkin) did with furniture and he didn't worry about whether the federal reserve was going to tighten or ease he didn't worry about whether the stock market was up or down yesterday he didn't worry about the things he couldn't change but he did worry he did focus on the one thing he couldn't change and that was the customer's experience and i have seen the one i didn't the one that got away enterprise i went down to Florida and tried to talk him into selling the Berkshire and he was smart enough not to do it probably the value of the company is quadrupled since i made that visit uh but he was smart enough to see that he would find that business henry ford as you may know failed twice before he started the ford motor company in 1903 i mean the test isn't whether you get the greatest business idea in the world the first time out the test is whether you keep learning as you go along what your strengths are and what you can do for your customers what you can bring especially to the party and to do that you need the education that i know you've received through ten thousand small businesses but you need a genuine desire day in day out to delight the customer I've never seen a business and I've seen a lot of businesses but I've never seen one that delights the customer that doesn't succeed i mean what you want is that customer the next day when they think do i want to rent a car or do i want to buy some furniture what goes through their mind you know it's the place where they've had a great experience i don't know what i paid for this type actually probably if somebody gave it to me but for the purposes of the speech i will say i have no idea but what i or the shirt I'm wearing others but i do know i will remember how i was treated when i bought it i mean you long forget about the price but you never forget whether you had a good experience or a poor experience with the purchase experience and you'll have a hard time finding a person has had a wonderful experience a delighted experience in purchasing anything that isn't going to come back and similarly if the memory is of rudeness indifference and whatever it may be they're never going to come back and as a small business owner and as you grow you have to not only be able to project that interest in people's well-being and delighting them yourself but you have to do it through other people and you won't be able to do it through people who themselves do not feel they're being fairly treated that their views aren't appropriately considered so you really do have to learn to multiply yourself through other people and i advise the young people to come to Omaha we have a lot of a number of classes the key is to certainly in terms of your personal life the most important decision you may make you'll make is the spouse that most of you will likely have and it's very important to surround your people yourself with people who are the better than you are you are going to move in the direction of the people you associate with so if you constantly I've been enormously lucky in that respect i mean i've just had teachers and friends and a spouse that really was a better person i was and i had enough sense to learn from these people that that life went better if you behaved better yourself it took a while so i advise you to seek out as your partner in business your partner in life whatever it may be look for the people that actually are examples to you rather than somebody that you need you think you need to straighten out yourself and simple rules like that delighting customers working through other people associating with people that will cause you to move in a better path than you might otherwise have they will take you so far in life that uh it's hard to believe i mean they took rose bumkin without being able to speak a word of English couldn't read or write and they took her to what is now a billion and a half dollar business and incidentally there's been no money put in it since the $2,500 that's been the total capital paid into the Nebraska furniture market and i think if you looked at enterprise i don't know their books the same way but my guess is that very little equity capital has been added to enterprise over the years the business built on itself so i want to tell you i admire this group enormously when i met Dr. Mello's class on september 22nd eight years ago i was thrilled and I admire people that are doing what you have done you've you know working hard at your job at the same time you took on an added really a lot of hard work to further your skills 99% graduate i mean it's a mind-blowing statistic and I'm looking at people here who i admire I'm cheering for you and i can tell you the best is yet to come.

Thank you