#33 Levi Strauss The Man Who Gave Blue Jeans to the World

In the late 19th century, Levi Strauss, a Jewish immigrant with a deep knowledge of the clothing business, partnered with tailor Jacob Davis to patent a new kind of work pants reinforced with metal rivets, known today as blue jeans. Their invention, born from the practical need for durable laborer's clothing and a fortuitous encounter with a customer's request, leveraged Strauss's extensive commercial network and led to the explosive success of Levi Strauss & Co. The company's innovative branding, which included a trademark two-horse design, helped non-English speaking customers identify the product, while the patented design cornered the market, yielding substantial profits. Strauss's life, marked by his contributions to California's development and his support for trade expansion, reflects the entrepreneurial spirit of the American West and the transformative impact of the Gold Rush era.

• Levi Strauss is recognized for his impact on fashion history, specifically for elevating blue jeans to an iconic status.
• He possessed a business sense and vision that saw potential in metal rivets for pants, contributing significantly to the garment's success.
• Strauss also contributed to social welfare by supporting orphanages, kindergartens, and universities.
• His influence extended to politics and commerce, where his advice and financial support were sought after.
• Levi Strauss was instrumental in establishing San Francisco's commercial core, which later facilitated cultural revolutions and technological advancements.

"That's what Levi was. He didn't invent blue jeans, but without him, the most iconic garment in fashion history might never have been more than just duck cloth pants on the rear ends of Nevada's minors and teamsters."

This quote emphasizes Levi Strauss's role in transforming what could have remained a simple garment into a fashion staple. His business acumen and innovation with metal rivets were critical to the success of blue jeans.

• Reviews and ratings on platforms like Apple Podcasts are crucial for podcast visibility and success.
• The hosts discuss the value of incentivizing listeners to leave reviews to benefit both the podcast and its audience.
• A reward system is proposed where listeners who leave reviews receive exclusive content.

"So I think the best way than just asking you is to offer you something of tangible value."

The quote reflects the strategy of providing tangible rewards to listeners for their engagement, acknowledging that incentives can motivate audience participation and support for the podcast.

• Levi Strauss, originally named Loeb, was born into a Jewish family in 19th century Bavaria.
• His family faced significant discrimination under the "Jew Law," which restricted Jewish professions and personal freedoms.
• Despite hardships, Strauss and his family were determined to emigrate to America for religious and social tolerance, as well as economic opportunities.
• The journey to America was perilous, but the promise of a better life motivated many immigrants, including Strauss's family.

"The favorable news that I've received from my stepbrothers in America has convinced me to follow them, even though I do not have at this time, a specific occupation."

This quote from Levi Strauss highlights his determination to join his family in America, despite the uncertainties and challenges he faced. It underscores the hope and opportunity that America represented for immigrants.

• Upon arriving in America, Levi Strauss and his family were involved in the dry goods business.
• The gold rush era provided a backdrop for Strauss's business ventures and the broader entrepreneurial spirit of the time.
• Merchants, including Strauss, capitalized on the gold rush by providing goods and services to miners, rather than mining for gold themselves.
• The narrative illustrates the various levels of business success achievable, from peddling to managing large enterprises.

"If they did experience hardship, they knew it wasn't forever. It was just something that had to be endured on the way to the ultimate goal, self-employment."

This quote captures the immigrant entrepreneurial mindset of the time, where short-term hardships were endured for the long-term goal of achieving self-employment and success in America.

• The California gold rush was a significant event that led to mass migrations and economic opportunities.
• The gold rush is likened to the technological revolution, providing a metaphor for seizing opportunities during times of change.
• Levi Strauss's business strategy during the gold rush was to supply miners with necessary goods, a concept known as "pickaxe retailing."

"The best way to make money in mining was not to squat in a snow fed river, but to have dry clothes ready for those who did."

This quote encapsulates the business strategy of providing essential goods to those at the forefront of the gold rush, illustrating how Strauss and other merchants profited from the needs of miners.

• The Gold Rush created a demand for ready-to-wear clothing among the middle class.
• The Strauss brothers capitalized on this demand by supplying California retailers from New York.
• San Francisco became a central hub for goods and people due to its proximity to the goldfields.
• Ready-to-wear clothing was one of the biggest industries in the country by 1853, with New York as its center.

"Some stayed in New York and supplied California retailers exclusively." This quote highlights the strategic business decision of some New Yorkers, like the Strauss brothers, to supply goods to the booming California market without relocating there.

• The clothing business had a tiered system of production and distribution.
• Workers produced goods for jobbers, who would then sell to wholesalers and distributors.
• Retail customers were the final link, getting items to the consumer.
• This interconnected system was crucial for the ready-to-wear clothing business.

"The clothing business relied on tiers of producers and manufacturers." This quote describes the layered structure of the clothing industry, where goods passed through several hands before reaching the consumer.

• The Strauss family was already in the dry goods business before the Gold Rush.
• They were well-positioned to take advantage of the economic opportunities presented by the Gold Rush.
• Levi Strauss was 20 years into a successful career in dry goods when he found an opportunity to create blue jeans.

"Levi is actually already, I think he's like 20 years into a successful career as a wholesaler and manufacturer of dry goods." This quote indicates that Levi Strauss was not a newcomer to the dry goods industry when he began producing blue jeans, but rather had substantial experience.

• The Gold Rush was recognized as a sustainable economic boom, not just a temporary event.
• Merchants helped grow small towns into major cities by providing necessary goods.
• The Gold Rush symbolized wealth and, more importantly, freedom and economic autonomy.

"Gold meant wealth. But wealth was relative." This quote reflects the broader implications of the Gold Rush, suggesting that wealth was not just about material possessions but also about achieving personal goals and freedom.

• Thomas Edison's goal was to enjoy the autonomy of an entrepreneur.
• Edison's need for autonomy was a driving force throughout his career.
• The pursuit of autonomy is a timeless human desire, as seen in both Edison's and Levi Strauss's stories.

"Edison's need for autonomy was primal and unvarying." This quote underscores the importance of independence in Edison's life, drawing a parallel to the entrepreneurial spirit of the Strauss family during the Gold Rush.

• Getting to California during the Gold Rush involved choosing between several perilous routes.
• Levi Strauss undertook a dangerous journey to California, reflecting the hardships faced by entrepreneurs of the time.
• The Panama route became more popular due to the completion of the Panama Railroad, which facilitated faster travel.

"The Panama Railroad was partially completed across the Isthmus by this time." This quote highlights the significance of infrastructure development in improving access to economic opportunities like those in California during the Gold Rush.

• Levi Strauss started his business in San Francisco by establishing relationships with local retailers.
• He had to begin his business without any contacts and waited for shipments from his brothers in New York.
• Strauss was able to successfully navigate the financial panic of 1855 and continue to grow his business.

"He hit the pavement. To find his first customers." This quote illustrates Levi Strauss's proactive approach to building his business from the ground up, despite the challenges he faced.

• Economic cycles of booms and busts are a part of human history.
• Understanding economic history can help prepare for inevitable financial crises.
• The book "This Time Is Different: Eight Centuries of Financial Folly" is recommended for its insights into economic patterns.
• Historical summaries of banking crises provide valuable context for understanding the nature of economic instability.

"The reason I included that part is because one of the overarching themes of this podcast is something that is really important for all of us to internalize, is that because human nature remains relatively constant throughout history, we should understand that economic booms and busts are inevitable." "It's not just relegated to United States, it's everywhere, constantly."

These quotes emphasize the recurring nature of economic cycles and the value of learning from history to better navigate future financial challenges.

• The gold rush led to a local economic panic in San Francisco in 1855.
• Levi Strauss capitalized on the gold rush by sending significant amounts of gold to New York.
• The term "treasure" was used to describe the substantial sums of gold sent, highlighting the wealth generated during this period.

"A run on San Francisco banks caused nearly 200 bankruptcies." "Despite the panic, Levi sent five more boatloads of gold to New York between August and December, making a grand total of the year over 80,000, or $2 million in today's currency."

These quotes describe the financial turmoil caused by the gold rush and Levi Strauss's successful gold shipments, which amounted to a "treasure" in contemporary terms.

• The gold rush era saw unique payment methods, including the use of gold dust.
• The concept of currency and means of exchange is fluid and has changed throughout history.
• Historical context can help understand modern phenomena like cryptocurrency.

"But did you know during the gold rush, people paid in gold dust?" "What we use for currency changes constantly throughout time."

These quotes draw parallels between the historical use of gold dust as currency during the gold rush and the contemporary debate over the legitimacy of cryptocurrency.

• San Francisco's cost of living remained high even after the initial gold rush years.
• Running a business involved numerous expenses, including insurance, freight rates, and various fees.
• Levi Strauss's business thrived despite these costs, demonstrating his commercial success.

"Running a business could be just as expensive. There was so much to pay for." "But that wasn't the end of it. After the steamer arrived in port, merchants had to pay fees to pilots, the harbor master and the wharf owners."

These quotes outline the extensive costs associated with running a business during the gold rush era, highlighting the challenges faced by merchants like Levi Strauss.

• Financial panics were a recurring issue in Levi Strauss's life.
• The sinking of the Central America led to significant financial losses and contributed to an economic panic.
• Prejudice in issuing credit to Jewish people was a significant obstacle that Levi Strauss had to overcome.

"The loss of the Central America meant that over a million dollars in gold was now at the bottom of the Atlantic and not in New York bank vaults." "Wholesalers who lost money could not buy more goods if their credit was not top notch."

These quotes highlight the impact of maritime disasters on the economy and the difficulties faced by businesses in securing credit during financial panics, especially for Jewish merchants like Levi Strauss.

• Levi Strauss expanded his investments and engaged in philanthropy and politics.
• His reputation as a "solid merchant" brought him an unusual business opportunity that would lead to a significant leap in profits.
• The invention of blue jeans by Jacob Davis, using fabric from Levi Strauss and company, was a pivotal moment in Strauss's business.

"Levi ended the decade of the 1850s with a preview of his own future." "And Levi's good name would soon bring him an unusual business opportunity, a giant leap in profits, and the need to create an entirely new department for his headquarters."

These quotes summarize Levi Strauss's business acumen and foreshadow the transformative opportunity that would come from his association with Jacob Davis and the creation of blue jeans.

• Jacob Davis, a tailor and inventor, created durable pants with rivets, leading to the invention of jeans.
• Due to financial constraints, Davis sought a partnership with Levi Strauss to patent and produce the riveted pants.
• The successful patent and partnership with Strauss led to the widespread popularity of what we now know as jeans.

"So he makes these pants. People see her husband, who now has pants and can go out in public, walking around, and they eventually want these new riveted pants, which we are going to come to know as jeans." "Based on his past experience, Jacob thought he might be able to patent his new style of pants."

These quotes describe the accidental invention of jeans by Jacob Davis and his subsequent partnership with Levi Strauss, which would revolutionize the clothing industry.

• Jacob feared his idea might be stolen and decided against patenting his process.
• Instead, he sought a partnership with Levi Strauss, whom he had a prior business relationship with.
• Jacob proposed a deal to Levi: 50% ownership in exchange for funding the patent and related costs.

He was afraid someone else might steal his idea, which he was sure was a moneymaker. So he decided to take a different route. This time, he would get a partner. He writes a letter to Levi Strauss.

The quote explains Jacob's concern about protecting his idea and his strategic move to partner with Levi Strauss to secure it.

• The late 19th century was a time of rapid innovation and patenting.
• In 1871 alone, 19,000 patent applications were submitted, and 11,000 were granted.
• Notable inventions from this era included the safety pin, elevator, typewriter, and dynamite.

It says, in 1871 alone, 19,000 applications were submitted for new utilities or inventions to the patent office. 11,000 of these were granted, this was the era that saw the invention of the safety pin, the elevator, the typewriter, and the dynamite.

The quote provides context for the innovative spirit of the time, highlighting the number of patents and significant inventions.

• The Internet revolution is compared to the Gold Rush in terms of creating high demand for services.
• Programmers and engineers are today's equivalent of the highly sought-after laborers during the Gold Rush.
• Reed Hastings of Netflix expressed a desire to pay top engineers significantly high salaries.

When there's a revolution, there's a high demand for services, right?

The quote draws a parallel between historical events and current technological revolutions, emphasizing the increased demand for specialized labor.

• Despite the expansion of garment production, there was skepticism about its profitability.
• Skilled labor in garment production, such as cutting and sewing, commanded high wages due to a shortage.
• Women often worked from home and were able to demand top dollar for their skills.

Wages for the men and women who could cut and sew clothing were among the highest in the country due to a shortage of skilled labor.

This quote highlights the high demand and wages for skilled labor in the garment industry during the late 1860s.

• Levi Strauss had a deep understanding of the clothing business.
• His actions suggest he was not a risk-seeker but recognized and seized opportunities.
• His extensive knowledge of customer needs and the industry prepared him to capitalize on Jacob's riveted pants invention.

When Levi's deep knowledge of his customers needs met Jacob's riveted pants, it's no wonder Levi jumped at the opportunity and made his decision so quickly.

The quote underscores how Levi Strauss's comprehensive industry knowledge enabled him to recognize and act swiftly on a promising business opportunity.

• Levi and Jacob chose to use the term "overalls" for their patented riveted pants to better resonate with customers.
• They understood the importance of introducing a product that was both familiar and innovative.
• The rivets were a new feature, but the pants were not so different as to deter customers from trying them.

They understand that the product they put on the market was both familiar and new.

This quote illustrates the strategic thinking behind Levi and Jacob's branding and marketing approach, focusing on balancing innovation with familiarity.

• The patented riveted pants allowed Levi Strauss and Company to command high wholesale prices and enjoy significant profit margins.
• The exclusivity of the patent meant they were the sole producers for 17 years.
• The introduction of riveted clothing significantly boosted the company's sales.

The wholesale price was $19.50 per dozen, with Levi Strauss and company seeing between 33 and 40% in profit.

The quote reveals the lucrative nature of the patented riveted pants and the substantial profits it brought to Levi Strauss and Company.

• Levi and Jacob's products were marketed using symbols to cater to a diverse customer base, including non-English speakers and the illiterate.
• The two-horse trademark became an iconic symbol of the company's durable overalls.
• Symbols like the two-horse design played a crucial role in brand recognition and customer loyalty.

A specific design that could be associated with the company's riveted overalls five years ahead of the event could go a long way toward keeping customer loyalty when competitors products hit store shelves.

This quote emphasizes the foresight and cultural understanding Levi and Jacob had in using a distinctive trademark to maintain customer loyalty amidst future competition.

• The podcast revolution is likened to the Gutenberg revolution in its impact on spreading information.
• Podcasts make information accessible to those who may struggle with reading or prefer audio content.
• The speaker advocates for the conversion of written content to audio to reach a wider audience.

There is a technological revolution. It is a deep one. The technological revolution is an online video and audio immediately accessible to everyone all over the world.

The quote draws a comparison between the historical impact of the printing press and the modern influence of podcasts on information dissemination.

• Levi Strauss was remembered as a quiet, affable, and well-dressed individual.
• He imparted wisdom to his employees, as illustrated by an anecdote shared by an early employee.
• Levi's passing was noted as peaceful, and his familial and business practices were reflective of a bygone era.

Mr. Strauss was very quiet, affable, always immaculately dressed. Joe was really an admirer of him.

This quote provides a glimpse into Levi Strauss's character and the respect he garnered from those who knew him personally.