#365 Nick Sleep's Letters: The Full Collection of the Nomad Investment Partnership Letters to Partners

Founders

David Senra

Steve Jobs, Founders, James Dyson, Company Builders, Technology, Henry Ford, Elon Musk, Business Professional Biography, How I Built This, The History Of Entrepreneurship, Jim Clark, Entrepreneurship, Entrepreneurs, History, Founder, Business Autobiography, Jeff Bezos, Entrepreneur, Biography, Biographies Of Entrepreneurs, Biographies, Business, Business Biography

4.8 • 1.5K Ratings

🗓️ 16 September 2024

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

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Summary

The best investors are not investors at all. They are entrepreneurs who have never sold. — Nick Sleep Nick Sleep’s letters are a masterclass on the importance of understanding the underlying reality of a business — what he calls the engine of its success. I read all 110,000 words of Nick’s letters (twice!) to make this episode and what I found most important is Nick’s ability to develop a deep understanding of “honestly run compounding machines” (like Costco and Amazon) years before everyone else. Nick explains clearly how Jim Sinegal and Jeff Bezos set up their companies for long term success —from the very beginning — and gives us a few hints along the way on how we can do the same in our business. And the absolute entrepreneurial history nerd in me loved the references to Henry Ford, Sam Walton, Rockefeller and other greats from the past that are sprinkled throughout Nick’s letters. No surprise that someone who was able to make $2 billion for his clients has a deep understanding of the great work that came before him.

Transcript

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0:00.0	One of the most interesting things that Nick's Leib writes about is the importance of understanding the underlying reality of a company.
0:06.0	He calls this the engine of its success.
0:08.5	What I actually found most interesting in these letters is Nick's analysis of the engine of success of Costco, Amazon, and Walmart
0:17.3	and how those three founders, Jim Senegal, Jeff Bezos and Sam Walton,
0:20.4	design their business in a way that ensure that they would survive over the long term.
0:24.8	All three of them were what Nick Sleep calls honestly run compounding machines.
0:30.4	This emphasis that all three founders placed on the long-term success of their business
0:35.7	allowed them to never make the fatal mistake of interrupting the compounding.
0:40.1	And to do so, Bézos, Cinegal, and Walton all adopted a key trait.
0:45.0	They were in the words of Warren Buffett a demon on costs.
0:49.0	Having a lower cost structure than any of their competitors was a competitive advantage that compounded over the decades
0:54.1	and Nick is going to mention that several times including one time when he realizes back in 2006 that
1:00.3	Amazon's costs are so low and they're so efficient that the game was already over.
1:05.3	Everybody else just didn't know it yet.
1:07.2	This is something that I was talking about with my friend Eric who's the co-founder and CEO of
1:11.2	Ramp. Ramp is now a partner of this podcast. I've gotten to know all the
1:15.0	co-founders of Ramp and spent a bunch of time with them over the last year or two and
1:18.4	they all listen to the podcast so they've picked up on the fact that the main theme
1:22.2	from the podcast, one that recurs over and over again,
1:25.3	is the importance of watching your costs and controlling your spend.
1:28.8	The managers that are able to do so develop a massive competitive advantage and that is the reason that
1:34.6	RAMP exists. RAMP exists to give your business everything you need to control
	...

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