#303 Rose Blumkin Warren Buffetts Favorite Founder

In a compelling exploration of entrepreneurial spirit and tenacity, this episode delves into the inspiring life of Rose Blumkin, affectionately known as Mrs. B, the founder of Nebraska Furniture Mart. Mrs. B's journey from a childhood in Russia, helping her mother's store at six, to becoming an iconic figure in American business, is a testament to her relentless work ethic, honesty, and competitive drive. Despite never attending school, her savvy for business led to a thriving enterprise that caught the attention of Warren Buffett, leading to her becoming the first female manager under Berkshire Hathaway. The episode also highlights the innovative services of Meter, which provides hassle-free Internet and Wi-Fi solutions for businesses, echoing Mrs. B's dedication to customer service. Additionally, the episode touches on the importance of enjoying one's work, as exemplified by Andrew Wilkinson of Tiny, and the fun side projects that keep the spirit of entrepreneurship alive.

• Mrs. B's dedication and customer service are likened to the founders of Meter.
• Meter founders' commitment involved moving into the factory to perfect their service.
• Meter provides fast, secure Internet and Wi-Fi for various commercial spaces.

Mrs. B had this relentless dedication to her work and a willingness to do whatever it took to serve her customers.

This quote highlights Mrs. B's unwavering commitment and willingness to go above and beyond for her customers, setting a standard for dedication in business.

• Meter offers easy-to-use Internet and networking for businesses.
• The company is named for its utility-like simplicity and necessity.
• Meter supports business expansion without significant upfront costs.
• Meter provides design, installation, hardware, software, and expert support.

Meter gives you fast and secure Internet and Wi Fi for your business. It works in any commercial space.

This quote emphasizes Meter's provision of essential services for businesses, highlighting the versatility and security of their Internet and Wi-Fi solutions.

• Mrs. B expanded her business after a tornado, buying adjacent property.
• In a modern context, Mrs. B would likely choose Meter for her expansion needs.
• Meter's service allows businesses to focus on growth and competition.

So then she buys the lot next door as well, and then she expands.

The quote illustrates Mrs. B's proactive approach to business growth, which mirrors Meter's ability to support such expansions in a modern setting.

• Importance of enjoying work, as demonstrated by Warren Buffett and Charlie Munger.
• Andrew Wilkinson from Tiny shares this philosophy.
• Bronze busts of Munger and Buffett serve as reminders of their business principles.

It's very obvious that Warren and Charlie are gifted at what they did, literally the best in the world at what they did. But they also had fun.

This quote conveys the idea that exceptional skill and enjoyment in one's work are not mutually exclusive, as exemplified by Buffett and Munger.

• Rose Blumpkin's early life in Russia involved hardship and a strong work ethic.
• She emigrated to the U.S. after a challenging journey and reunited with her husband.
• Rose's determination and resourcefulness were evident from a young age.

She was born in a village near Minsk, Russia. She and her seven siblings lived in a two room log cabin and had to sleep on straw mats.

The quote provides a glimpse into Rose Blumpkin's humble beginnings and the challenging conditions that shaped her resilience and drive.

• Rose Blumpkin was the first female manager at a Berkshire Hathaway company.
• She worked tirelessly, even into her old age, demonstrating exceptional dedication.
• Rose's negotiation with Warren Buffett for the sale of Nebraska Furniture Mart was straightforward and reflected her bold character.

Rose Blumpkin became the first ever female Berkshire Hathaway manager when Nebraska furniture Mart was acquired by Warren Buffett in 1983.

This quote highlights Rose Blumpkin's pioneering role as a female manager within Berkshire Hathaway and her continued dedication well past the typical retirement age.

• Rose Blumpkin's management style was tough but effective.
• Nebraska Furniture Mart became an unrivaled competitor in Omaha.
• The company's success is symbolized by the "going out of business" ads of competitors on the office walls.

Most furniture stores have found it futile to attempt to compete in Omaha with Nebraska Furniture Mart.

The quote underscores the dominance of Nebraska Furniture Mart under Rose Blumpkin's leadership, effectively deterring competition in the local market.

• Mrs. B started working at six years old and lived on a straw mat.
• She had no formal education, not even elementary school.
• She moved to America, built a successful business, and secured wealth for her family.
• Mrs. B's challenging early life fueled her serious approach to business.

"She was never able to go to school, ever. Not elementary school, not college, not high. You know, having to start work at six years old, live on a straw mat, and then have the opportunity to come to America and build a business that made her and her unborn grandchildren rich."

This quote highlights the difficult beginnings of Mrs. B and the contrast between her early struggles and later success, emphasizing her determination and resilience.

• Mrs. B's business acumen was evident from an early age, managing stores by 16.
• She began helping her husband's struggling business during the Depression.
• Mrs. B proposed a new business strategy: selling goods at a small markup over cost.
• The strategy was innovative, pre-dating similar approaches by Costco and Walmart.

"Let's sell 10% over cost, and I'll come to your store and show you and help you, because I did build a big business in Russia for my boss, and I knew business."

This quote reflects Mrs. B's confidence in her business knowledge and her introduction of a low markup strategy that would later become a cornerstone of retail giants.

• Mrs. B's dedication to her business was such that she sold items directly from her home.
• She gained customers' trust by being transparent about pricing and honest in dealings.
• Mrs. B's approach to business was characterized by honesty and customer service.

"I never lied. I showed them the bill and they all respect me. You should see what kind of customers I have, the best in the world."

This quote encapsulates Mrs. B's commitment to honesty and transparency, which earned her customer loyalty and respect.

• Warren Buffett and Charlie Munger acknowledged Mrs. B's exceptional talent and made an exception to their rule of betting on business quality over management.
• They considered Mrs. B a business genius, an accolade given to very few.

"As a general rule, you should bet on the quality of the business, not the quality of the management. Unless, of course, you've got a Mrs. B in your hand."

The quote from Charlie Munger underscores the exceptional nature of Mrs. B's business acumen and the high regard in which she was held by two of the most successful investors.

• Mrs. B faced legal challenges from competitors for her low pricing strategy.
• She was accused of unfair trade practices but defended her approach in court without a lawyer.
• The publicity from the trial brought her more business than she could have bought in advertising.

"I sell everything 10% above cost. What's wrong? Can't I give my customers a good deal? I don't rob my customers."

This quote shows Mrs. B's simple yet effective defense in court, highlighting her commitment to fair pricing for customers.

• Mrs. B was initially mistreated by furniture wholesalers in Chicago.
• She vowed to succeed and one day turn away those who had dismissed her.

"Someday you'll come to my store to try to sell to me, and I'll kick you out the same way you did to me."

This quote demonstrates Mrs. B's resilience and determination to overcome rejection and disrespect from suppliers, foreshadowing her eventual success and influence in the industry.

• Mrs. B experienced a significant downturn in business post-Korean War, in 1950.
• She was unable to pay her bills and was visibly distressed about her financial situation.
• A local banker offered her a personal loan of $50,000 with a 90-day term to help her recover.
• Mrs. B ingeniously organized a three-day sale at the Omaha City auditorium to repay the loan.
• The sale was a massive success, bringing in $250,000, allowing her to pay off her debts and avoid future borrowing.
• This period also marked the passing of her husband Isidor, with whom she had been married for 36 years.

"In 1950, business slowed down... Mrs. B. Found herself unable to pay her bills... A local banker... gave her $50,000 of his personal money as a 90 day loan... She rented the Omaha City auditorium for $200 per day and held a three day sale. She took in $250,000 from the sale, paid off all of her loans, and never borrowed money again."

The quote highlights Mrs. B's financial struggles and her creative and successful strategy to overcome them by organizing a large sale, demonstrating her resilience and business acumen.

• Mrs. B did not believe her gender hindered her success in business.
• She was confident in her ability to outperform any man or college graduate in the business realm.
• Her relentless nature was a key factor in her success.

"Mrs. B. Once asked if she believed that she had a tougher time succeeding because she was a woman. She said, me? No, sir, she answered, when it comes to business, I could beat any man in any college graduate."

This quote illustrates Mrs. B's strong belief in her capabilities and her disregard for gender as a barrier to her success in the competitive world of business.

• Mrs. B faced several major setbacks, including a fire in 1961 and a tornado in 1975, both of which caused significant damage to Nebraska Furniture Mart.
• Instead of seeing these events as disasters, she viewed them as opportunities to rebuild and grow.
• The fire led to a successful fire sale, and the tornado allowed her to expand the business by acquiring adjacent land.

"Then fire comes... Hugely discounted just because it has a little bit of smoke damage... A tornado took out the entire Nebraska Furniture Mart building... She buys the ground and built on it to expand the business."

The quote conveys Mrs. B's optimistic approach to seemingly catastrophic events, using them as catalysts for further business development and innovation.

• Mrs. B's work was her hobby, and she dedicated her life to Nebraska Furniture Mart after her children were grown.
• Her son Louie joined the business in 1945 and brought a complementary management style.
• Mrs. B's work ethic was so strong that she continued working despite injuries and never considered retirement.
• She believed in providing opportunities and demonstrating through her own success that a better future was possible with effort.

"With her children grown and out of the house, she devoted her entire existence to growing Nebraska furniture art... Louie, her son, came back after World War II in 1945 and joined the business... She could have quit working at any time, but the simple action of going to work and being productive kept her interested in life and energized."

This quote demonstrates Mrs. B's unwavering commitment to her business and the joy she derived from work, as well as the dynamic between her and her son in managing the business.

• Mrs. B took time off work to attend classes and become a U.S. citizen after living in the country for 37 years.
• She equated running a business to raising a child, emphasizing the need for a strong leader.
• Her competitive spirit was fueled by past hardships, and she had a clear disdain for laziness.

"Mrs. B took time off of work to take classes to become a us citizen... Business is like raising a child. You want a good one. A child needs a mother, and a business needs a boss."

This quote reflects Mrs. B's values regarding the importance of leadership in business and her personal dedication to her work and country, even after many years of residence.

• Mrs. B was ahead of her time with her discount store concept, which predated the Walmart empire.
• Her business practices were conservative, operating with the mentality of preparing for hard times.
• Despite having no formal education, Mrs. B possessed extraordinary arithmetic skills, which contributed to her success.

"Mrs. B developed successful merchandising practices long before they were adopted by mainstream retailers... She had established the idea of a discount store making small profits on large volumes... We still run the company like the depression is coming back. We have no debt."

The quote underscores Mrs. B's innovative approach to retail, her financial prudence, and her natural talent for numbers, which were key factors in her success and the enduring legacy of her business practices.

• Warren Buffett was impressed by the Blumkin family's business acumen and offered to buy Nebraska Furniture Mart in the late 1960s for $7 million, which was declined by Mrs. B.
• Two decades later, Buffett successfully offered $60 million for 90% of the company, with a handshake deal and no formal due diligence.
• Buffett admired Mrs. B's intelligence, competitiveness, and work ethic, stating he would rather compete with grizzlies than with Mrs. B and her business.

Buffett said, "if she ran a popcorn stand, I'd want to be in business with her. She's just plain smart. She's a fierce competitor, and she's a tireless worker."

This quote highlights Buffett's high regard for Mrs. B's business skills and his desire to partner with her regardless of the business type.

"One question I always ask myself in appraising a business is how I would like, assuming I had ample capital and skilled personnel, to compete with it. I would rather wrestle grizzlies than compete with Mrs. B."

Buffett's quote emphasizes the competitive strength of Mrs. B's business and his reluctance to compete against it due to its exceptional operational efficiency and value to customers.

"They buy brilliantly. They operate at expense ratios competitors don't even dream about, and then they pass on to their customers much of the savings."

This quote explains the business strategy that made Nebraska Furniture Mart successful: smart purchasing, low operating costs, and savings passed on to customers, resulting in a strong competitive advantage.

• Mrs. B admired Warren Buffett and held the middle class and immigrants in high regard.
• After a family dispute, Mrs. B left Nebraska Furniture Mart and started her own store at age 96, proving her capability and independence.
• Mrs. B's business rules were simple: sell cheap and tell the truth.
• Despite initial conflicts, Mrs. B reconciled with her family and Warren Buffett, selling her new company back to Nebraska Furniture Mart with control over the carpet department.
• Mrs. B's story is a testament to her success as an entrepreneur who never attended school and couldn't read or write but received honorary degrees.

"My hero is the middle class, the immigrants, and Warren Buffett. He's a genius. I respect him a lot. He is very honest, very plain, and his word is as good as gold."

Mrs. B expresses her admiration for Buffett, highlighting his intelligence, honesty, and reliability, which she values highly.

"I want to be my own boss. Nobody's going to tell me what to do. I had enough. I'm going to let them have it."

This quote captures Mrs. B's determination and self-reliance as she decides to start her own business after leaving Nebraska Furniture Mart.

"Sell cheap, tell the truth."

Mrs. B's straightforward business philosophy focused on providing value and honesty to her customers, contributing to her success.

"I'm very independent. If things aren't run the way I want it, I don't like it, and I get very mad."

Mrs. B's quote reflects her strong sense of independence and control over her business operations, which was a key factor in her success and conflicts.

• Rose Blumpkin, known as Mrs. B, was deeply grateful for the opportunities she found in the United States.
• Her immigrant experience shaped her appreciation for the country, a sentiment shared by other immigrants who escaped persecution.
• Mrs. B insisted on singing "God Bless America" at family gatherings, symbolizing her love for the country that allowed her to achieve success.

"The people who were born in this country don't appreciate all these wonderful things, like those who've, who've come from out of darkness."

This quote conveys Mrs. B's belief that immigrants who have faced hardships have a deeper appreciation for the opportunities and freedoms in the United States.

"I loved the United States. Since the day I came here on her 100th birthday, she said, all my wishes have come true."

Mrs. B's quote expresses her profound love and gratitude for the United States, crediting her success and fulfilled dreams to the opportunities the country provided.

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