On Trust

This week, instead of highlighting a single article, we decided to switch things up and highlight a particular theme running through several pieces. That theme is Trust.

We've included several pieces below where trust is a central theme including the series on Apple's secretive top-down culture, the summary of Berkshire Hathaway's decentralized culture of trust, and finally the fraudulent organic farming operation. Each one illustrates various operating standards (or lack thereof) within different companies. But while each company may have a distinct culture, a different decision-making process, and varying degrees of autonomy for members, every company ultimately runs on trust.

Trust matters for many reasons, but we think there are three big reasons that can't be overstated:

1.  Losing trust means losing time and money. When you lose a trusted vendor, customer, or employee, filling those holes in your business requires reallocation of productive man-hours from building your business to fixing your business. Invest the time and effort up front to hire right and diligence prospective customers and suppliers.

2.  Trust is tested in the tough times. You never want to doubt the man that packed your parachute. The same holds true in business - your operation is only as good as the trust binding the internal and external relationships together, especially in turbulent times. 

3.  If you want to go fast, go alone. If you want to go far, start building trust (and go together).  Long-termism is a concept bandied about in business circles enough that it has begun to lose its meaning, but it hasn't lost its purpose. Most folks know how to recognize when someone is legitimately oriented towards long-term mutually beneficial relationships, and when they are full of shit. Any one can start a business and hire employees, but if you want to build an enduring organization, you need partners you can trust. Start by empowering your employees and partners with incrementally more responsibility, allowing them to earn your trust over time, and earning theirs in return. It is the best investment you can possibly make in your business.

Apple's original iPod timeline (Patrick Collison)

+ If you enjoyed Patrick Collison's original Fast post, you'll marvel at the fact that it took Apple less than one year to approve, design, and sell the original iPod.

Welcome to Apple, a one-party state (Tortoise Media)

+ This is an in-depth series on Apple's culture, decision-making processes, and products."The tech giants have as much money and influence as nations. So what if we reported on them like countries? What would Apple be? A liberal China…"

Berkshire Hathaway's culture of trust (Rational Walk)

+ All companies are comprised of networks of trust between employees and employers. The employees trust that their employer will compensate them for work performed, and employers trust that their employees will put the company's priorities first and perform necessary tasks. Berkshire Hathaway takes this culture of trust to the extreme with all operating decisions relegated to managers and capital allocation decisions centralized in Omaha.  

Family business succession planning opportunities (CPA Journal)

+ This piece by the CPA Journal serves as a resource for small business owners looking at various options for tax-efficient ownership transfers.

Family-owned businesses urged to sell before the party ends (Accounting Today)

+ "Not only is it a great time to put a private company up for sale while the economy is strong and many deep-pocketed buyers are circling, wealth advisers are also reminding clients of looming political uncertainty toward the end of 2020."

Afternoon of the pawnbrokers (The Baffler)

+ If you've never learned the industry basics of pawnshops, you're in luck.

Meet the billionaire family behind the hottest stock in the past 30 years (Forbes)

+ Boring is beautiful, and this family-owned aircraft parts manufacture has proven that maxim for 3 decades.

Just about every store in the mall is struggling - except Bath & Body Works (Washington Post)

+ For some it may be non-obvious, but at the end of the day... you can't smell candles for sale online.

The outlandish story of Ollie’s: a $5 billion retail empire that sells nothing online - and is beating Amazon (Forbes)

+ "Most other retailers seem headed in the other direction. The internet now accounts for 10% of American shopping—up from below 4% less than a decade ago—and e-commerce topped $130 billion in the fourth quarter of 2018, a 12% increase from a year ago. Meanwhile, companies announced 3,400 store closures last year, with plans to shutter a record 155 million square feet of shops. Those numbers will skyrocket in 2019: Retailers announced 4,300 store closures in just the first nine weeks of the year."

The new American Dream (David Perell)

+ The American Dream isn't what it used to be - one job, one house, one city for life.  However, it is still as attainable as ever if you know how to use the tools of modern technology.

The 30 best pieces of advice for entrepreneurs in 2019 (First Round Review)

+ "Whether it’s tips for dealing with the emotional monsters that accompany startup life or perspectives on dealing with outright founder failure, the advice operators shared on the Review this past year underscores a simple theme: The true account of entrepreneurship isn’t the success story — it’s the work-in-progress."

Finding time to invest in yourself (Naval Ravikant)

+ "The mafia figured out this apprenticeship model a long time ago. The best way to end up running one of the families was to become the driver for the Don."

Missouri charmer led double life and masterminded one of the biggest frauds in farm history (Kansas Star)

+ "A clever and unethical seller can successfully pass off cheaper conventionally grown grain for the more expensive organic kind and make a huge profit, if they sell a lot of it. The agents suspected Randy Constant of doing just that."

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