The $150B dollar business hiding in plain sight

0:00When I Googled this family, the words came up were silent dominance. Middlemen at planetary scale. I feel like I can rule the world. I know I can be what I want to. I put my all in it like no days off. On the road, let's travel, never look back. All right, Sam, I have a Billy of the Week for you, an MFM classic. This is not just any Billy of the Week. This is one of the biggest Billies in America, one that I wasn't really that aware of.

0:30I think you will know more than me about this, but I would say most people don't. Wait, can I guess? Let me tell you three things about it, then you can take a guess. Okay. All right, it is the largest private company in America for the last 40 years. It is owned 88% by the family and has produced more billionaires in one family than any other company ever. They do more revenue than Goldman Sachs, Nike, and Starbucks combined. Ooh, is it Mars or Coke?

1:02You're in the right neighborhood. Estee Lauder? Okay, you left the neighborhood briefly. Come back to the other neighborhood of like sort of rich redneck families of America. It is Cargill. Oh, yes. So the Cargill family. So I didn't really know anything about this family. Can I just tell you a little bit about their story and what they do? Because this is a dominant business story of all time. Wait, first, tell me, why did this interest you? Why did this catch your attention? Remember when I was at your house and you were like,

1:34there's this closet here, by the way, that we found. There's this extra storage room that we didn't even know until we lived here for two months. That's how I felt finding out that one of the most wealthy families in America, and I don't know their story. That's how I felt. As the host of My First Million, I just felt like I needed to right a wrong. Okay, I understand. And by the way, how did I find it? There was a Reddit thread that was, tell me about billion-dollar industries that I probably don't know about. And it was like, the first one was sand, and the second one was this, and the third one is this.

2:05Reinsurance. It's like, well, there's insurance companies, and then they buy insurance. That's called reinsurance. And then the reinsurance, guess what? They have reinsurance companies behind them. It's just insurance all the way down, baby. And so I was reading through this thread, and then one was Cargill, and I was like, oh, Cargill. So what they did is, so the story is, back in the day, as America was sort of getting its feet and railroads had started to get built, farmers needed to offload their crops, their grain, and they needed to sell them. So they could either sell it individually, so the farm could try to sell individually to a buyer

2:36and figure out how to transport it there, or they could work with a middleman. And so Cargill became the biggest middleman on the planet for basically just initially storing grain. So they would go right next to where the railroad is. They would build what's called a grain elevator, which is basically a giant storage facility for grain so that it wouldn't spoil very quickly. And the farmers could come drop it off. They would get, like, coat check. They'd get an IOU that says, I will pay you when your grain sells. Or they would just buy it at a flat rate, like wholesale, and be able to flip it. So you could choose, as the farmer, which one you wanted to do.

3:07This is what my father does for a living, by the way. Oh, so maybe you should have known. He does it with onions, onions. But yes, my father's a broker. That's what he does. Does he store, or he just calls one side and say, hey, I got 75 bushels of kilograms? This, well, it's fresh produce. So the storage is, like, a day. But yes, there's a, yeah, there is a place where they sit for, like, 24 hours before a truck comes and gets it. Yeah, but yes. And what's interesting is probably this for me from a business perspective, is you always hear this idea of, like,

3:37you don't want to be the middleman. Oh, you can always cut out the middleman. And in this case, the middleman became worth more than everybody else. And actually, if you look at many businesses, you know, there's many businesses where the middleman becomes quite a valuable business. And so there's an interesting question of why. And in this case, it's because the middleman was physically in the middle. They literally built the grain elevators that would store the shit right next to the railroad. And so you needed to transport it. You needed to get to the railroad. Who else had it? Like, nobody else was going to build that.

4:07So anyways, they start doing that. They then go, you know, further and further and further. So, you know, at one point, they're like, hey, these shipping barges are so inefficient where we're shipping the grain when it's not traveling by rail. So we'll build our own shipyard, our own ships. They end up producing ships for the U.S. Navy. They bought the biggest, like, meat, like, poultry company. And now they control, like, a huge percentage of the meat industry, of the grain industry. And so they've built this, like, empire. And nobody really knows them. And basically, it's just a family that owns this thing. 88% owned by the family.

4:39There's, like, 20 or something billionaires in the family now. They have this rule called the 80-20 rule. So 80% of all profits will get reinvested back in the business. 20 goes out as dividends to the family. And they hire, for the last, you know, 20 years or so, they've had professional CEOs running the company. It's not, like, family run anymore. And the profit per year, according to Wikipedia, I think it's, like, $5 or $6 billion. Yeah, that was, like, during, like, the kind of peak COVID stuff when, you know, when Ukraine was getting attacked. And, you know, Ukraine produces a lot of grain. And so their prices spiked.

5:09I think it's, like, $3 billion in a normal year right now. Okay. So, okay, so, you know, close to $1 billion a year of profit that goes just straight to the family. And it's been doing that for, like, whatever, 50-plus years. And so I want to tell you a little bit of something interesting. So first I was like, I was like, what do they actually do? Because now, you know when these corporations get so big, so large, they just have their hand in everything. And you would see these comments, like, you know, they're just, everything on your plate. Anything you eat in a package, Cargill had a hand in it.

5:39They're controlling the food supply. The people think of, like, Monsanto-style, like, evil companies. And so just, I want to read you this paragraph. So, imagine you eat a hamburger. Cargill probably sold the farmer the seed and the fertilizer to grow the grain. They bought the grain from the farmer and stored it at their grain elevator. They shipped it on their barge that they built in their ships that they built to a processing plant where it's processed into animal feed. And then they feed that to cattle who they then slaughter. They then store the meat at their meatpacking plants,

6:11sell the beef to the restaurant. By the way, the restaurant has to buy their salt. They sell, like, all of the salt to all of the fast food chains in the country. And then the corn syrup that they processed out of the corn gets put into the ketchup, the soybean oil that's used for the fries, the starch that's used in the milkshake, that's all Cargill. And isn't it crazy how, like, one company can have a hand in so much of your day-to-day life? And when you think you're eating at some farm-to-table restaurant, you're really not escaping them because they control the underlying ingredients

6:41that are used, the fertilizer, the seeds, the grains, like, all of it that gets fed to the cows. It's like, it all comes, it all goes back to the source. And isn't that kind of incredible? And the family is so big and so profitable, they also own a thing called Garta Capital Partners, which is a $10 billion plus size hedge fund. Correct. Because they have to hedge commodities, you know, on behalf of the farmers and for themselves as well at this point. So they own, like, a little bit of everything, including mines,

7:11because they need to get their own chemicals and minerals to make all of these things. This is incredible. No famous founder. You know, their office was famously this, like, chateau-looking thing on a lake in the middle of nowhere. And, like, that was their, it was called the lake office, if you Google it. And it's just quiet. You know, like, how they say, like, money talks, but wealth whispers? This is wealth whispers shit. You know what I mean? Like, who's the founder? What does he look like? Who's the CEO? What do they talk about? How come they're not on CNBC? Do they do podcasts?

7:42No, they don't do podcasts. You know what I mean? Like, it is true, like, quiet dominance. And actually, it was part of their strategy for a long time was to be quiet about it, just to not attract competition and to build this monopoly position in the logistics industry. Dude, this is cool. I've known, I've seen their logo. And whenever I look at, like, the largest privately owned companies in America, it's always been there. I never understood what entirely they did because it's one of those things where you say what they do. And it sort of makes sense,

8:13but it's like a B2B thing. So, like, you don't entirely understand exactly what it does. And they say, like, they sell chemicals. And I'm like, I don't know what that means. You know, that's so vague. But when you look at the numbers, they do $150 billion a year in revenue. That's just so massive. And I bet you that they, like, own so many more things that you wouldn't even realize. Like, for example, like, the Walmart family owns, like, have you heard of Rafa? It's like a cool bike D2C company. They own that?

8:43They own that. Like, they just, like, they're just rich people. They're just, like, deal men. They just own shit. They just go to the website to buy one and then they just keep pushing plus on quantity until they own all of them. Like, we now have the shop. That seems like something that this family would do is, like, you don't realize it. And then if you wanted to get, like, conspiratorial, which I have not done any research on it, I'm sure that there's, like, 10 or 20 really interesting conspiracies about how that either, they're pulling the strings behind, you know, it's like the, there's something going on with this family,

9:15which I'm just making it up. I have no idea. A journalist once described the family as secretive, inbred, and suspicious. I'm in.

9:25Hey, I want to tell you about something pretty cool. We have a database of all of the business ideas that have been discussed on this podcast. So hundreds of episodes the team at HubSpot went through. They pulled out all the simple, relatable, interesting, profitable ideas that we have brainstormed, and they're all available for download for free. Just click the link in the description below. Thank you to our friends at HubSpot. for sponsoring this podcast and putting together this free resource for you guys. Back to the show. In 1980, they did a survey, and by then it was already a dominant company, and they did a survey.

9:5594% of farmers had heard of Cargill, but only half of them knew what the company actually did. And then amongst politicians, lawyers, and journalists, who they call opinion leaders, 50% have heard of them, but only 10% understood what the business was. Because they have this sort of sprawling empire like you described, people don't really fully understand what they even do. You just sort of know that they're important. I had a friend who, I think it was Cargill that she went and worked at because they obviously make so much profit that they were trying to invest

10:26in like new seed-related, agriculture-related, D2C. Like I think they invested, like we had talked about that one, D2C Milk Company. Like they would look at things like that, like anything like interesting. And she said it was awesome working for them. She said it was a great company. Well, definitely. There's a section called the dark side in my notes here. So let me just tell you some things from the dark side just to be fair here. When you have like global crop production, you're going to have this, which is like accusations of child labor like in Brazil or in, you know, Ivory Coast and things like that.

10:57They're said to have better intelligence than the CIA. So basically they have a spy network around crops. So like they know more about the state of crops in real time than the U.S. government does around the world because it's like life or death for their business. You know, they've had like different like E. coli breakouts and stuff like that. Again, if you're touching most of the food supply, then like anything bad that can happen in food is going to happen to you. People just generally feel like they're monopolistic. So, you know, do they care about worker safety, number one? Probably not. Probably not in the top three,

11:28top three things that they care about. But they're Midwesterners. They're probably really sweet. But it's crazy to go from like a single grain shed to now controlling 25% of the entire U.S. export market for grains. And it's like pretty crazy. So it started 160 years ago. You and I did a talk recently and you were like, we were explaining like some of our preferences. You were like, I like projects. I like starting something and then potentially selling it.

11:58But like, I love the starting phase. I love handing it off to someone. And then I love it potentially ending and starting something new. And I was saying how I love things that could potentially go for 50 to 100 years. Not that I've actually done that. I've actually done the same thing as you. Projects starting and selling. And I'm so fascinated by companies that can last this long. And this one in particular is one that seems like they've kept it together pretty amazingly for 160 years. That's crazy. So they started before the Civil War. And it's still around.

12:28Isn't that incredible? And I just find that so fascinating. And like, part of me is like, well, when I die, like, why do I care about legacy? Like, we talk about legacy a lot. And I was reading something the other day and like, why the, or someone said to them, like, why do you care about your legacy? Like, who gives a shit? You're dead. And I was like, okay, yeah, I understand that perspective. Like, we can have the dichotomy of caring about that. And then also like, how cool would it be that the thing that you can create can employ 160,000 people 150 years after you're gone? Like, I don't know.

12:58I think that's awesome. I think it's kind of romantic and exciting. It's kind of like, two people can love running and one person's trying to run the 100 meter dash and the other person's running, you know, one of these like ultra marathon 100 mile races. And they're both like, yeah, I love running. But, and that's what I do. And that's kind of like, in the business sense, there's, there's different ways to approach it. There's the, what I call the projects approach, which is you kind of go in knowing like, hey, I'm going to have like five great at bats in my career. And I hope each one is a really fun chapter

13:29and I'm going to seek variety in those. It's sort of like being an author. You're like, all right, I got five years of research and writing and then a break and then I do it again. Exactly. And then there's other people that are brick by brick laying a foundation for an empire. And, you know, I respect both, but I know which one I want to do. And I think you know which one you want to do too. I think you want the, you want the like empire. Yeah, I don't know if I'm going to have the grit to pull it off, but I for sure love the idea of the result. Do you think the people who do this, is it a temperament difference?

14:00Like they're wired differently, therefore, you know, fast twitch, slow twitch muscle type shit where it's more of inherently who you are or do you feel like you might have the base wiring to do it, but you then need to adopt the systems, right? Like, for example, it's not like one guy ran this for a hundred years. No, he passed it to his son. His son kind of screws it up. Then the next son sort of saves it out of bankruptcy. And then by now, professional CEOs run it, but they've instilled values and systems and like ownership controls.

14:30But, you know, now the heirs are marine biologists and they're doing other things. They're not running this company, but the company, the entity lasts. So which one, where do you think you might fail? Is it the wiring or the systems? I think the wiring, you start off a certain way, but not always. For example, I think there's a lot of them that would have sold if they could have, but the opportunity just didn't present itself and they just said, screw it, I'll just keep going. And then I think what happens a lot of times is a few things. Like if you had to build a business and you never thought about selling, there's a world where you would do

15:01some wacky stuff that would make the business incredibly profitable, but incredibly not sellable. Like you would acquire assets or businesses that don't entirely make sense to one particular buyer. And then you get big enough to the point where you're like, S, this is a hodgepodge of stuff and it works for us, but no one buyer would ever actually take this. So like, but then I also think that it comes down a lot to the family and I think that there's something special around family meetings. We've had Rob Dierdrich on here. He talked about that. I actually follow some people on Instagram and they talk about like family meetings. Explain what you mean. What's a family meeting?

15:32So the way that I grew up is probably very similar to the way potentially you grew up, but the way a lot of Americans grew up, which is your parents never talked to you about money. If you asked them like how much do you make, they would say like that's none of your business. And there was very little transparency and there was probably very little culture creation in terms of like here's explicitly my expectations of you. Here's our family's culture. Here's our values. And what I've been learning about and frankly what I like is this idea of a family meeting where you get the children

16:03and everyone in the same room monthly, quarterly, annually, something like that. And in the same way you run a board meeting, you run a family meeting where you say like here's the values that we stand for. Here's how we did last quarter, last month, according to what we said we wanted to achieve. And what about the future? What would you guys like to do? Let's talk about this and here's the money that we have to spend on whatever dreams and ideas that you have and let's discuss if it fits within our family credo and mission. And there's actually like a way to do that and I aspire to do that with my family. My family is like

16:34taking minutes, taking meeting minutes. A board observer. I just think there's something special about being explicit about stuff. I think that a lot of times when you're growing up there's these things that you say, well, we never really talked about blank but my feeling was this. But what I would like to experience is like saying like we are actually going to speak what we intend to do and how we will do it and what resources we have to get it done and we'll have a conversation. And I think there's something very special about the families who pull that off. Yeah, I totally agree. I think it's explicit

17:05versus implicit. So it's not even like don't talk about that. It's more just it didn't get said, right? And it doesn't get said not for malicious or secretive reasons. It's just we were busy. I don't know myself what, you know, it's like I'm not sure I really know the answer to all these things and it's easier to just not even think about it, right? It's like if you ask somebody, well, what do you really want? Watch people just immediately just start to flounder and it's such a simple question. Don't you think you should know what you really want? When I'm meeting new people and I want to make them feel

17:35like I care about them it sounds like I'm being nefarious but I mean like I'm trying to like get to know someone I'm like, hey in the next six months anything interesting you want to get done in life or career or family wise and they'll be and half the time people are like I don't know and it's like the conversation is them discovering it and it's kind of exciting. Yeah, exactly. So I think being explicit I'm like you I'm an over communicator. I'll take the negatives that come with that because I think the positives are so overwhelming but how do you do it in a family is kind of interesting. I was at a friend's house and he has this like crest on the wall

18:06and he's like oh, that's our like family crest and I was like oh, like my family we didn't have one like I guess my ancestors dropped the ball. He's like no, like we made this I painted that like, you know five years ago and we just decided what are we all about? There's four quadrants on the crest and we said it's this, this, this and this and this is our sigil that's our animal. I love that. And I was like you could just do that? You could just be a university? Like I could be Hogwarts right now? What the hell? And I came home and I was like shit, I'm gonna start doing stuff like this

18:37and so I actually haven't made the crest but I have done a few other things like I gave for each of my kids they have like a way like it'd be like Sam's way so for example one of my kids it's like one of them says try, try and figure it out oh, that's the Sam way and I've said that so many times that now the great father moment is when he'll just be like well, I just did it I just did it the Sam way and he's using it as shorthand for like I didn't give up I try, try it until I figured it out and my daughter has a different one that's really beautiful and then we have one that's like for like

19:07the idea of gifts so I told him I was like I was like yeah, like everybody has like some gifts that you were given and my son loves like Pokemon and things like that so he kind of understands the idea that like super you have a superpower and like every every character he watches in a show has like a special power I'm like yeah, like well, you have one too he's like really, what's mine? and I'm like well, yours is that you're this and I just get to declare I give them a reputation to live up to you know, one that they're today quite inconsistent in but there's moments and all I do is I just highlight those moments I pretend the inconsistencies don't exist

19:38and I just keep reinforcing that until it's their identity and I do that for each of them individually and then one of the downsides is like I make one sound so good I'm like Dwight, can I just say that the other one has the same because then it feels less special I have to give the other one equally those but you can also do you know, it's a little tricky it's not perfect but man, this shit works it is really powerful and so there's a a version of that that's completely non-business related but in creating this like family dynasty idea of how do you instill a culture

20:08first in the home before you ever try to go do it you know, in the office and I think the likelihood that anyone's children will ever want to work in their business is very low and so like if that even happens I think and they get along that's like a miracle and so what I've noticed that is important also creating long-term trust so I talked about this a little bit with the Hearst organization Hearst company which owns like GQ it's like a famous magazine they own but they also own like a hundred businesses that you've never even heard of and they including like they own half of ESPN

20:39or whatever and one of William Randolph Hearst one of his great inventions was he created this trust within the family that was pretty ironclad and it was very long-term thinking trust like an actual legal trust or you mean trust like the feeling legal trust so for example for him it was like you cannot dispute this trust and if you do dispute it you're out of the will and like the trust basically just says that like Hearst I don't forget the exact number but Hearst hypothetically will have eight board seats family members are always two I think it was like

21:09you cannot argue with how much money you receive money is given out equally if you want more profits you cannot argue about it if you do argue about it you're out like things like that like he did these things that were quite good in terms of like making it last for a long time same with John Rockefeller he did that the same way one of the great things about reading about John Rockefeller he was this madman businessman think of Jeff Bezos a polite guy but like a ruthless businessman his son John also John he was a great dad they were both great he was a great dad and a great son and they loved each other

21:39very much and they showed a lot of mutual respect and so what I'm noticing about a lot of this stuff it's built on mutual respect it's built about empowering and having these very explicit conversations and that was a big takeaway from reading about them yeah it's interesting you gotta find like these blueprints it's kind of what I went back to when I was asking you about like the long term thing like you have to get to know your wiring to know where you're gonna you're gonna naturally have things come easier to you that are difficult for others and other areas that are gonna be difficult for you and you better figure out

22:09how you're gonna work around it either by patching up those weaknesses or getting people around you who compliment those and then you gotta learn the systems you know on top of it like what are the habits what are the actual systems on top of that to get the results I want but then there's like a wild card like for example I have a billionaire friend whose son is a homeless drug addict like they've tried numerous times to get this kid on the right path to the point where they're like we're either we just gotta let you figure it out and unfortunately that might mean death but like it's a very challenging tragic situation

22:40the family crest didn't help yeah like it's pretty crazy you can have I think what's the phrase you're the happiest of your saddest kid yeah you're only as happy as your saddest child yeah hey let's take a quick break you know that feeling when strategy is done the brief is written everyone's aligned and you realize someone still has to sit down and actually create all the content that someone is usually you and it's due tomorrow well the breeze assistant from HubSpot can help it works right inside HubSpot you can draft campaign copy blog posts emails all in your brand voice all using your actual customer data

23:11so you don't create just content you create content that converts check out HubSpot.com the agentic customer platform for growing businesses I went on this rant about like phrases and why they're really important the phrases we tell ourselves so for example like using the phrase like I might as well where it's like well I've already eaten bad today I might as well eat it's like no you that's just a convenient phrase you should not might as well do that or it is what it is is my is my favorite one it is what it is is the

23:41the complete surrender of of power of agency of anything it is what it is just replace it with just say it is what I make of this so then you say all right well what am I going to make of this you know like it is what it is is crazy can I tell you about a phrase that you're unfortunately need to know about and you're going to see everywhere online I also want to rebrand it so this thing it's called the Jevons paradox have you heard of the Jevons paradox it's not even a paradox a paradox means like an example of a paradox is like can God heat a burrito so hot that even he can't eat it

24:12like this is this is more like like what's that paradox called the retard's paradox that's a paradox this isn't even a paradox it's just like like a like an economic like principle okay okay let me read let me read the actual definition an economic principle stating that as technology makes use of a resource more efficiently the total consumption of that resource actually increases rather than decreases okay so as something becomes more efficient you would think you're using less of it because you're being more efficient but in total you use way more of it

24:43because the demand explodes okay go ahead and I'll give you I'll give you a ton of examples I want to rebrand it to Jevon's paradox because give it a little flavor yeah well because it was created by this guy named James Jevin who was a British guy and I think that'd be cool to have a wonderful economic principle be created by an American brother so I want it to be one of ours not one of theirs so right around the mid 1800s James Watt creates this new thing it's a new variation of the steam engine which is basically the steam engine that like everyone came to love and know James Jevin

25:14was basically this guy in the 1800s