#333 Red Bulls Billionaire Maniac Founder Dietrich Mateschitz

In this episode, the host delves into the remarkable life and business philosophy of Red Bull founder Dietrich Mateschitz, who revolutionized the beverage industry by creating the energy drink category. Mateschitz, a marketing savant, eschewed traditional advertising, instead promoting Red Bull through unique events, sports sponsorships, and multimedia content, achieving massive success and amassing a fortune. He maintained a private life, focusing on Red Bull's image rather than personal fame, and fostered rumors about the drink's ingredients to garner free publicity. Mateschitz's business approach was characterized by his desire for freedom, independence, and fun, which he prioritized over profit maximization, leading to a hands-on, perfectionist, and expansion-focused strategy that fueled Red Bull's growth without incurring debt. The episode also touches on Mateschitz's personal values, including physical fitness, never marrying, and his decision to keep Red Bull private and self-funded.

• The episode begins with a promise of two special announcements to be made at the end.
• One announcement pertains to the first in-person Founders conference happening in 60 days.
• The speaker urges listeners to stay until the end of the podcast for details on the conference and the story of Dietrich Mateschitz, the Red Bull founder.

"Okay, so I want to jump right into this episode, but I have two very special announcements to make. I'll do so at the end."

The quote indicates that the speaker has important information to share later, creating anticipation for the listener to stay engaged with the episode until the end.

• Dietrich Mateschitz is recognized as a highly successful entrepreneur who revolutionized the beverage industry with Red Bull.
• Mateschitz's innovation led to the creation of the energy drink category and amassed him a significant fortune.
• His efficient enterprise had impressive revenue per employee figures in 2010.
• The business model emphasized marketing through owned media and events over traditional advertising.

"Dietrich Mateschitz is one of the most successful entrepreneurs of our age. A man who single-handedly changed the landscape of the beverage industry by creating not just a new brand, but a whole new category, the energy drink."

This quote summarizes Mateschitz's impact on the beverage industry and his role in creating a new product category, which is central to understanding his entrepreneurial achievement.

• Red Bull's marketing strategy involved creating content and distributing it across various media platforms.
• Mateschitz viewed the company as a major content provider, aiming to spread the Red Bull brand through TV, print, and new media.
• The company's sports team investments were not immediately profitable but added value through media exposure and brand association.

"As a major content provider, it is our goal to communicate and distribute the world of Red Bull in all major media segments, from tv to print to new media."

This quote explains Red Bull's strategy to become a content provider, which is a key aspect of its marketing philosophy and brand expansion.

• Mateschitz saw Red Bull as a philosophy and functional product, not just a beverage.
• He emphasized the importance of believing in one's product and the functionality of Red Bull in improving various aspects of performance.
• His commitment to the product was lifelong, working on Red Bull for over 40 years until his passing.

"It is a must to believe in one's product. If this was just a marketing gimmick, it would never work."

The quote highlights Mateschitz's belief in the authenticity and functional benefits of Red Bull, which is crucial to understanding the product's philosophy and his approach to business.

• Mateschitz's trip to Thailand in 1982 led to the discovery of a local tonic that inspired Red Bull.
• He partnered with a Thai businessman, Chaleo Yoovidhya, to introduce the drink to the Western market with modifications, such as carbonation.
• The unique product positioning as an ultra-premium drink established Red Bull as a distinct category.

"He would sell that stuff in the west."

This quote captures the moment of inspiration that led to the western adaptation of the Thai tonic and the genesis of Red Bull's global journey.

• Mateschitz is described as a private individual with a zest for life but a controlled approach to information.
• He preferred a small circle of genuine relationships and had little interest in society events.
• His disregard for the taste of Red Bull, focusing on its functionality, was a surprising revelation.

"It is the most useless use of time."

This quote reflects Mateschitz's personal philosophy on socializing and time management, providing insight into his character and priorities.

• Mateschitz demonstrated marketing acumen by leveraging rumors about Red Bull's content for brand interest.
• He understood the importance of public interest over indifference, even if it involved controversial rumors.
• The strategy included anticipation of regulatory challenges and creating a demand that made the brand sought after.

"The most dangerous thing for a branded product is low interest."

The quote underscores the significance of public interest in marketing and Mateschitz's strategic approach to brand engagement.

• Red Bull adopted a Gatorade-like strategy of targeting athletes but focused on the extreme sports niche.
• The company sponsored a vast number of athletes across various sports, creating a strong association with athletic performance.
• Sponsorship negotiations and relationships with athletes were conducted in unconventional and personal ways.

"Today, Red Bull underwrites more than 500 athletes in 97 sports."

This quote quantifies Red Bull's extensive involvement in athlete sponsorships, which is a key component of its marketing and brand identity.

• Mateschitz blurred the lines between Red Bull's products, athletes, and events to create a cohesive image campaign.
• The company's global events are seen as more engaging and effective than traditional advertising methods like Super Bowl commercials.
• Mateschitz's lifestyle and personal interests align with the brand's adventurous and energetic image.

"To Mateschitz, it's just one big image campaign with many manifestations."

The quote encapsulates the integrated approach to Red Bull's brand image, where different facets of the company contribute to a unified marketing message.

• Mateschitz maintained a private life with luxury properties and a desire for independence, akin to owning a personal state.
• He had no plans to sell or take Red Bull public, valuing the enjoyment of his work over financial gain.
• His approach to life and business was driven by fun and a commitment to the Red Bull brand.

"It's not a question of money, he said. It's a question of fun."

This quote reveals Mateschitz's personal motivation and philosophy, which prioritized the enjoyment of his work over financial considerations.

• Mateschitz was highly private, focusing on promoting Red Bull rather than himself.
• The Red Bull headquarters operated a "press prevention office" to maintain secrecy and control over information.
• The founder's reluctance to engage with the media and his emphasis on privacy were part of his strategy for brand promotion.

"Since it's not me on the shelf for sale, but Red Bull, it's perfectly logical that Red Bull is at the center of our marketing activities and not the person."

The quote illustrates Mateschitz's reasoning for keeping a low personal profile and focusing the spotlight on the Red Bull brand instead.

• The subject is extremely private and takes extraordinary measures to control his public image.
• He purchased a society magazine in Austria to prevent his appearance in it, confirming his actions by stating ownership is the best way to avoid unwanted publicity.
• His desire for control extends to his business and personal projects, reflecting a perfectionist nature.
• Extreme success is often linked to extreme personality traits.

"He buys this magazine just so he will not appear in it. And he was actually asked about this, and he actually confirmed. He's like, well, the best way to prevent me from appearing in it is to own it."

This quote illustrates the lengths to which the subject will go to manage his image and the importance he places on controlling the narrative around him.

• The subject was a self-described lazy student who took an extended time to graduate from university.
• Despite his parents being schoolteachers, he did not come from a wealthy background.
• He worked various jobs through college, including at a steelworks company, as a ski instructor, and as a tour guide.
• Post-graduation, he worked his way up to marketing director at Unilever subsidiary Blendex.

"He called himself a lazy student because he took 20 semesters to graduate."

This quote provides insight into the subject's self-perception during his academic years and highlights his unconventional path to success.

• The subject's frequent travel for Unilever led to fatigue and a desire for a different lifestyle.
• His discovery of an uncarbonated Thai version of Red Bull sparked his interest in energy drinks.
• He sought financial and time independence, which motivated him to study the nascent energy drink market.
• He organized "energy drink parties" to taste-test various products and understand their effects.

"He desperately, desperately wanted independence."

The desire for independence is a driving force behind the subject's decision to leave his job and start his own business, reflecting a strong sense of self-belief and ambition.

• The subject had profound self-belief, evident in his decision to invest all his money into starting Red Bull at 41.
• He aimed to create a new market for Red Bull, understanding the need to educate customers and navigate regulations.
• The subject faced bureaucratic challenges in Germany, leading him to launch Red Bull in Austria first.
• Early marketing strategies included giving away the product for free to build demand.

"There is no market for Red Bull. We will create one."

This quote captures the subject's visionary approach to business, demonstrating his confidence in creating a completely new market for his product.

• The subject's perfectionism influenced his marketing and advertising approach, leading to a long search for the right campaign.
• He collaborated with a former college friend, Kastner, to develop the iconic slogan "Red Bull gives you wings."
• The advertising aimed to reflect the traits of being self-ironic, nonconformist, smart, and rebellious.
• Red Bull's initial success was amplified by its popularity in nightclubs and bars, where it was mixed with alcohol.

"Red Bull gives you wings."

This quote is the famous slogan that encapsulated the brand's message and became a cornerstone of Red Bull's marketing success.

• The subject capitalized on the formation of the European Union to expand Red Bull's market presence.
• EU laws allowed for easier approval across member states once a product was approved in one country.
• Red Bull's launch in Germany was accelerated by a black market demand, which created a cult-like following.

"The approval was only possible through a detour. Red Bull managed to get approved in Great Britain."

This quote highlights the strategic maneuvering required to navigate regulatory environments and successfully launch Red Bull in key markets.

• The subject understood the value of rumors and controversy as a form of free marketing.
• False rumors about Red Bull's ingredients added to its mystique and desirability.
• The ban of Red Bull in Germany prior to its official launch created a black market, increasing demand.

"The most dangerous thing for a branded product is low interest."

This quote emphasizes the subject's philosophy that controversy and interest, even if negative, can be more valuable than traditional advertising in building a brand's presence.

• Mattresses focuses on aggressive expansion, launching Red Bull in Germany with a substantial marketing budget.
• The marketing budget for Germany alone was set at €7.5 million, more than 10% of the company's total revenue at the time.
• Red Bull initially experimented with various products like coffee and cola, but eventually concentrated on the energy drink as its sole product.

"He sets the marketing budget for Germany at 10%, just that one market, more than 10% to €7.5 million for that year." The quote highlights the aggressive marketing strategy employed by Mattresses, dedicating a significant portion of revenue to marketing in a single market.

• Red Bull's early product diversification, including a lemonade drink called Red Rooster, failed to succeed.
• The company learned from these mistakes and focused solely on the energy drink, which had a "power law outcome."

"But in the early days, you could tell that he's learning from his mistakes and eventually goes and really puts all of his energy behind one arrow." This quote emphasizes the strategic shift to concentrate on the most successful product after learning from earlier failures.

• Red Bull expanded into new markets, including the United States, starting with a test launch in California.
• The company's growth was financed through profits, avoiding debt, and maintaining strict financial discipline.
• Employees were required to justify even small expenditures, despite the company's profitability.

"Most of the growth is just fueled from actual, the profits the company is making." This quote underscores the self-funded approach to growth, relying on profits rather than external financing.

• Mattresses instilled a culture of high expectations and performance pressure, balanced with above-average salaries and benefits such as company cars for all employees.
• Red Bull has a unique internal culture, including drinking "Luna Aqua," a special water served at company events.
• The company is described as having a cult-like following, both internally and externally.

"Every Red Bull employee from the secretary to the board has a company car." This quote illustrates the generous employee benefits that contribute to a loyal and motivated workforce.

• Red Bull outsourced production and distribution, focusing on sales and marketing as its core competencies.
• The company's main bottler relationship was based on a handshake agreement, emphasizing the importance of trust in business partnerships.
• Red Bull's marketing strategy included unique product design and ownership of sports teams for integrated branding.

"Basically, Red Bull is just a large marketing machine." This quote captures the essence of Red Bull as a company whose primary focus is marketing and brand promotion.

• Mattresses avoided bank debts, with the company only accepting minor bank financing in its second year.
• Red Bull reinvested all profits into expansion for the first 15 years, with no dividend payouts until 1999.
• The company's motto was "absolutely no debts to a bank," ensuring financial stability and survival.

"We at Red Bull spend the money that we've earned, not that we might earn someday." The quote reflects the conservative financial philosophy of investing only what has been earned, avoiding speculative debt.

• Red Bull's strategy involved constant expansion and the creation of unique events to gain media attention and free advertising.
• The company's sports sponsorship philosophy was to own and integrate into sports rather than just buying advertising space.
• Red Bull produced and distributed media content from their events to broadcasters for free, further amplifying their marketing reach.

"We're not holding a goddamn thing. We are advancing constantly." This quote, related to General George Patton's speech, parallels the aggressive and continual growth strategy of Red Bull.

• The founder's primary motivations were freedom, independence, and joy in work, not money.
• Emphasizes the importance of loving the work one does.
• The founder believes in the idea that the journey itself is the destination.
• The longevity of a business can be attributed to the founder's true enjoyment and commitment to their work.

"He has repeatedly said he never tires of emphasizing that money was never his main motivation for starting his own company. Rather, the driving forces were longing for freedom and independence, as well as finding joy in the work."

This quote highlights the founder's core values and motivations behind starting his own company, which were centered around personal fulfillment rather than financial gain.

"Our motto, going back to a quote from him, our motto is the journey is the destination."

The founder's motto encapsulates the philosophy that the process and experiences gained are more valuable than the end goal itself.

• The company relocated from a large city to a small village, significantly impacting the local economy.
• The move aimed to create a more pleasant working atmosphere.
• The founder's decision to move reflects a broader trend among certain entrepreneurs to create a unique work environment.

"Originally the company was headquarters in a bigger city called Salzburg. And he winds up moving the headquarters to this tiny village... and it only has 1500 inhabitants."

This quote details the strategic move of the company's headquarters from a large urban center to a small village, emphasizing the founder's unconventional approach to business location.

"The aim was to create a more pleasant working atmosphere."

The rationale for moving the company's headquarters was to improve the work environment, which aligns with the founder's values of joy and satisfaction in work.

• The founder maintains a fit and active lifestyle, engaging in extreme sports and other physical activities.
• He values physical fitness as it enhances his ability to enjoy his passions.
• The founder has never been married, has one son, and is described as being true to his authentic self.

"Everything that gives me pleasure in life is connected with a certain physical fitness and a physical well-being."

This quote illustrates the founder's belief in the importance of physical fitness to his overall enjoyment of life and its activities.

"He was true to his authentic self to the very, very end."

The founder's adherence to his personal values and lifestyle choices is highlighted as a key aspect of his character.

• The founder has ruled out selling his shares or listing the company on the stock market.
• He expresses no desire or need to exit the company and enjoys his work more than ever.
• Open to strategic minority stakes if beneficial.

"We could have done it a dozen times already. Our view on this has not changed. We neither have the desire to do so, nor is there a need."

The founder's commitment to his company is unwavering, as he has no interest in selling his shares or changing the ownership structure.

"A sale or an IPO is not even remotely tempting."

This quote reaffirms the founder's stance against taking the company public or selling it, emphasizing his contentment with the current state of affairs.

• Founders Notes is a comprehensive resource for founders, compiling years of notes and highlights.
• The Founders Only conference aims to build real relationships between founders.
• The event is exclusive, limited to 150 people, and requires a rigorous application process.
• The conference's mission is to foster a network of ambitious founders who can encourage and support each other.

"Founders notes, I really feel, is the world's most valuable notebook for founders."

This quote promotes Founders Notes as a valuable tool for entrepreneurs, offering access to extensive knowledge and insights.

"The mission statement, the North Star, is to help other founders build relationships with other founders."

The goal of the Founders Only conference is clearly stated as a networking opportunity designed to connect like-minded entrepreneurs and facilitate the growth of their relationships.