The oldest trick in the book to make your first million
Executive Summary
My First Million episode 844, where Sam Parr and Shaan Puri discuss how one of America's richest families makes its money, the Cargill family, then Jevons paradox, the Luddites, and where the opportunity lies. Shaan says Cargill is the largest private company in America for 40 years, owned 88 percent by the family, with more revenue than Goldman Sachs, Nike and Starbucks combined. He explains how it began as a grain middleman storing farmers' crops at railroad grain elevators, and the hosts discuss the middleman lesson and Jevons paradox, where efficiency gains increase total use. Sponsor: the description links a HubSpot unsexy business ideas database and promotes Hampton and Somewhere. PARTIAL COVERAGE: this note is based on the Cargill opening, a section on Jevons paradox, the closing and the description, and does not cover the family meetings, Luddites or ice king segments in the roughly 51 minute episode. All claims and figures are the speakers' own and are not independently checked.
Key Takeaways
Three clues
Shaan says the company is the largest private company in America for 40 years, 88 percent family owned, with more revenue than Goldman Sachs, Nike and Starbucks combined.
Why he looked
He says he found it in a Reddit thread of billion-dollar industries people do not know, and felt he needed to right a wrong as host.
Middlemen at planetary scale
He says Google described the family as silent dominance, middlemen at planetary scale.
Grain elevators
He says Cargill built grain elevators by railroads so farmers could store grain, then either hold an IOU or sell at a flat rate.
The middleman lesson
He says people say cut out the middleman, but here the middleman became worth far more than the producers.
Jevons paradox
He says Jevons predicted in 1865 that more efficient steam engines would raise coal use rather than reduce it.
The cotton gin example
He says the cotton gin made cotton cheaper and raised demand, a sign of how efficiency can expand use.
The Conversation Breakdown
Three clues
⏱ Untimed topicShaan says the company is the largest private company in America for 40 years, 88 percent family owned, with more revenue than Goldman Sachs, Nike and Starbucks combined.
Why he looked
⏱ Untimed topicHe says he found it in a Reddit thread of billion-dollar industries people do not know, and felt he needed to right a wrong as host.
Middlemen at planetary scale
⏱ Untimed topicHe says Google described the family as silent dominance, middlemen at planetary scale.
Grain elevators
⏱ Untimed topicHe says Cargill built grain elevators by railroads so farmers could store grain, then either hold an IOU or sell at a flat rate.
The middleman lesson
⏱ Untimed topicHe says people say cut out the middleman, but here the middleman became worth far more than the producers.
Jevons paradox
⏱ Untimed topicHe says Jevons predicted in 1865 that more efficient steam engines would raise coal use rather than reduce it.
The cotton gin example
⏱ Untimed topicHe says the cotton gin made cotton cheaper and raised demand, a sign of how efficiency can expand use.
Core Frameworks & Ideas
Be the middleman - the Cargill model
Own the storage, transport or exchange between producers and buyers.
Jevons paradox - the 1865 idea
Efficiency gains can increase total consumption instead of reducing it.
Insurance all the way down - Shaan's example
Industries often have layers behind them, such as reinsurance behind insurance.
Actionable Next Steps
- ✓Name one middleman role in an industry you know and what it stores or moves.
- ✓Think of an efficiency gain in your field and ask whether demand might grow because of it.
- ✓Browse a thread of hidden billion-dollar industries and pick one to research.
- ✓Treat the figures and history as the hosts' own claims and verify them before repeating them.
Notable Quotes
“middlemen at planetary scale”
“It is the largest private company in America for the last 40 years.”
“It's just insurance all the way down baby.”
The One Thing to Remember
Shaan Puri says Cargill became a dominant company by being the middleman for grain, and the hosts use Jevons paradox to argue that efficiency can increase demand.