Red Queen Podcast

Why are we doing an episode about ASML, a business that the BBC referred to in 2020 as "a relatively obscure Dutch company,"?  It started with host, Eeke's, curiosity about an iconic company from her homeland of the Netherlands. But the deeper we descended into the ASML world of semiconductors, chips, and lithography, the more we all realized that we had something pretty special on our hands.  ASML owns 100 percent of the extreme ultraviolet lithography (EUV) market. These are the machines that the biggest chip producers like TSMC, Intel, and Samsung rely on to power the world's most innovative chips. Their monopoly was a hard won. When they started investing in EUV in the 1980s, neither ASML nor anyone else in the industry knew whether this technology was possible. It was truly science fiction. Then over the span of 40 years, ASML was a part of the most mind breaking technological advancements, beating out competitors in the United States and Japan to ultimately dominate the lithography market. And, enable us to keep up with Moore's Law (which perhaps would be more aptly called 'Moore's Challenge.')  ASML is Europe's second largest company, all run from a field in Veldhoven, the Netherlands, and in this process, they have built one of the biggest technical moats in the industry. Our research for this episode relied heavily on the following 3 books: ASML's architects by René Raaijmakers, Chip War by Chris Miller, and Focus: The ASML way by Marc Hijink.

Today we are going deep on Trader Joe's and I'll kick things off with a quote from their employee handbook.  "Why do customers shop at Trader Joe's? Our people are warm and friendly. It's fun and an adventure. They find unexpected products. They'll experience cheap thrills. Our people are helpful and knowledgeable.They know that we have tested each product to ensure quality and satisfaction. They trust us. You're going to have to be a special person to make sure that when every customer leaves the store, they think to themselves, that was fun. And I got a good deal. When that happens. No one can touch us." Perhaps not the description you would expect about a gross free train. That is exactly the magic of Trader Joe's. It's just...different. The three of us love Trader Joe's product, but we love founder Joe Coulombe even more. He's a true polymath, always finding inspiration and insight from unlikely sources. And Wrote one of our very favorite corporate histories, becoming Trader Joe's.

We are back for part two of the GE story. In the first episode, we covered GE as a company that effectively embraced research and invention within a broader organization.  In this episode, we're going to talk about everyone's favorite or least favorite topic: Capital M Management.  How did GE develop a practice of management that was copied by every CEO at the time? Why did companies like Honeywell, Boeing, 3M, ABB, Medtronic, Home Depot, Twilio, and almost Uber, come to GE for their CEOs? And what was GE doing to provide endless fodder for 30 Rock jokes?  How did Jack Welch grow GE into a ~$450B company? And how–and why–did GE become one of the worst-performing stocks on the Dow Jones under Jeff Immelt? Have we already witnessed the beginning of the end for GE? Or are we about to witness a corporate phoenix rise again? We’ll take you through 50 years of modern GE history and share our takeaways from studying GE’s most iconic leaders and their biggest strategic bets.  (2:18) Jack Welch: The Management Era (33:19) GE Capital (43:35) Jeff Immelt: Bad or Unlucky? (1:06:45) Larry Culp: GE’s first outsider CEO (1:12:46) Operator Playbook: what tactics will we borrow from GE? (1:17:21) The Future of GE?

It’s easy to think about GE as a company in decline–after all, it’s about to be broken up officially into tiny pieces. But there are two big themes that make the story of GE relevant for today’s companies–and what got us excited to dig in. First, GE is a company founded on invention. GE is a research lab plus company that managed to commercialize its research. We have so many AI research lab style companies today, but it’s worth remembering that GE was the most successful in this model. It was Apple, Google, MSFT, and Lockheed rolled into one. In its heyday, it helped win WW2, it owned everything from NBC to being America’s 4th largest lender, and of course, electrified America. Your electricity, Neil Armstrong’s boots, home appliances, your TV shows, the planes in the sky above you—all GE. Second, GE believes in people and process, not just invention. They think that management is a practice that can be taught, that is distinct from the domain of the business. They prioritized generalists, and pioneered most management practices. We were blown away by how many management practices we still use today were started at GE. Does this philosophy work?  In this first of two episodes, we’ll cover GE’s founding era as a successful research lab (and lessons learned about running one), the conditions that set the stage for GE’s focus on management practices, and an intro to one of the the most iconic CEOs of all time–Jack Welch.  (1:00) A quick note from your hosts (thanks for your feedback!) (3:90) The Myth of Thomas Edison and Managers vs Inventors (12:30) Research and Invention (26:43) Corporation as Civilization’s Infrastructure  (33:24) GE Management as a Practice (1:01:24) Meet Jack Welch (1:14:24) Operator Playbook: what tactics will we borrow from GE?