Bill Bain

"Like Bruce Henderson when he had discovered the Experience Curve, like Jeff Bezos when he and David Shaw worked out the blueprint for Amazon (and before Bezos left Shaw to start the new venture), like Bill Bain before he deserted Bruce Henderson to found Bain & Company, Einstein had been transformed. Like them all, he knew that he was privy to insights nobody else had, and that he would change the world. Similar transforming certainty affected three other people we have already met in these pages – Steve Jobs, Paul of Tarsus, and Viktor Frankl."

"Transformations that occur in an unusual firm, before you start a new venture There was Jeff Bezos, working out the plan for Amazon while still working in that most remarkable of firms, D. E. Shaw & Co, one of the very few that knew how much the internet was going to change the world. Before Amazon was even born, Bezos was transformed, equipped, almost Messianic. There was Bill Bain, still within BCG, already transformed, already happily piloting the approach he would perfect in his own domain. This first model is the best – you can acquire ideas and authority, and start to experiment, while still employed by someone else. You become transformed on their dime. The firm you found is not really a start-up, more a continuation and personalisation – your personalisation – of a validated prototype. The new venture can be relatively low-risk, yet still high-return, both financially and, more important, psychically. Work for a strange, singular, surprising – and surprisingly successful – company. Look for one that is growing fast; that does things differently from its larger rivals; that focuses on a special subset of customers and that knows something the rivals do not know. Attain rare knowledge and confidence from what the firm knows. Next, work out how to use that special knowledge in a different way, just as Bezos did."

"Bain’s iconoclasm had six interlocking planks: •  An extremely close relationship with the client organisation, and particularly its head. •  Equality of status between the client organisation and the consulting firm (Bain & Company), and between the client’s CEO and the lead partner from Bain handling the client. •  A long-term and continuous relationship, completely at odds with the consulting industry norm of specific and intermittent projects. •  Exclusivity between the client organisation and Bain & Company both ways – as Bain told prospective clients, ‘We won’t work with your competitors, and you won’t work with ours.’ •  Focus on increasing the value of the company organisation – strategy was the means to the end, not the end in itself; conversely, to Bain, ‘strategy’ meant ‘anything that we can help with which will increase the value of the client firm’. •  Bill Bain believed in a top-down, quasi-military chain of command, both within his own firm, and in the client. What the lead Bain partner and the client CEO agreed should be done, would be done, by fiat, through the client organisation and in parallel with the Bain & Company organisation."

"Jeff Bezos needs the leverage of his Amazon army to an even greater extent than Bill Bain did. Bezos too places enormous importance on the quality and ambition of those he recruits. To get big fast required him to build an enormous organisation. Collaboration was similarly vital. Because Bezos knew nothing about functions such as warehousing and logistics, when Amazon had to start investing very heavily in these Jeff hired the very best people he could find, backed them totally unless they failed, and fired them if they did. Credibility was also vital. It came by becoming the largest online retailer by far – later the largest retailer period – of books, and then of other products. And as we saw earlier, Jeff’s relentless focus on exceptional customer service and unbeatable prices underpinned Amazon’s rapid expansion. Again, the business formula was also the vehicle."

"Here are examples of pool vehicles the players used. For Bill Bain, it was the theories of business strategy that had been originated by the Boston Consulting Group. BCG put its ideas such as the Boston Box out into the public domain to build reputation and sell business. When Bill Bain started Bain & Company, he was able to use all BCG’s concepts. They were high-octane stuff, fuelling a whole new industry. Jeff Bezos also used the BCG ideas to develop his philosophy for Amazon, especially dominant market share, and lowest costs and prices. Bezos also benefitted from two other pool vehicles – internet retailing and ‘Californian Venture Capital Syndrome’, which values growth above short-term profits, supporting Amazon’s losses for long years, allowing a focus on customer experience and low prices. Otto von Bismarck rode the rise of nationalism in the nineteenth century. This was his pool vehicle to turn Germany from a fragmented cluster of dozens of independent states into a unified superpower dominating central Europe. The popularity he gained by his unification of Germany pleased the liberal politicians and William, the Prussian King, and kept Bismarck in power for a generation. Winston Churchill’s pool vehicle was the rise of German National Socialism, Hitler’s murderous anti-Semitism, and his own opposition to them. An environmental factor does not have to be appeased or promoted; it can also be a pool vehicle when it is opposed first or most vigorously. Marie Curie’s pool vehicle was the new field of x-rays and radiation. The two pool vehicles which Walt Disney exploited so well were the rise of animated cartoons and, later, the rise of amusement parks. Disneyland was in many ways the opposite of traditional amusement parks, which Walt disdained as ‘nasty, dirty places run by hard-faced men’. Without their existence he would probably not have had the idea for a pristine and uplifting park idealising the best of American small-town values. Leonardo da Vinci would not have been Leonardo if he had not been born where and when he was. Renaissance Florence was his pool vehicle. Bob Dylan’s pool vehicle was the early 1960s folk movement in New York City, with its liberal-protest values, and self-importance, epitomised by his relationship with Joan Baez. He rode them until he became famous, then dumped them sharpish. Albert Einstein benefited from the…"

"Consider, for example, the following types of potentially transforming experiences: •  Educational – go to the best college(s) for what you want to learn and do. •  Self-defined unique expertise – become the expert in a narrow subject which you define. •  Live in a different country and culture. •  Work as an apprentice for an expert in your target field. •  Finagle a job in an exceptional, innovative company, which: ■  knows something unique – such as BCG for Bill Bain, BCG and Bain & Company for me, or DESCO for Bezos ■  operates in a different market from any other firm, defined by customers, products, price, or technology (or permutations of these differences) ■  is growing very fast – 30 per cent at least, ideally doubling or better each year ■  comprises ‘A’ people – curious, demanding, and innovating. •  Start a company, club or network like this."