In this Rule Breaker Investing podcast, David Gardner interviews a longtime friend, Roy Spence, the head of marketing communications and advertising firm GSD&M, which has created a host of memorable brand-defining campaigns you're sure to recognize. (We could tease you with names of some of the Fortune 500 companies and well-known business leaders he's worked with, but why spoil the surprise?)
He's also the founder of The Purpose Institute, and the author of several books, including The 10 Essential Hugs of Life, The Amazing Faith of Texas, and It's Not What You Sell, It's What You Stand For.
A full transcript follows the video.
This video was recorded on Nov. 1, 2017.
David Gardner: Welcome back to Rule Breaker Investing. I'm David Gardner. Happy November!
So, one of the things that I've enjoyed doing in our first two years of Rule Breaker Investing, the podcast, is occasionally, maybe every nine or 10 shows having somebody on the show to talk with. People that interest me.
It's a motley array of people. I was just looking back over our last four guests. You have Nick Epley, who's the author of the book Mindwise: How We Understand What Others Think, Believe, Feel, and Want. I hope you enjoyed Nick.
Then we talked to Zack Kanter, futurist. Future thinker. Entrepreneur. Talking about how Amazon's eating the world, and the implications, and a lot more besides that.
Then we went to McKenna Haase, who is the only female professional race car driver who's also a college student and who's also president of her college investment club that I know of. Maybe you, too. And I know you enjoyed McKenna.
And then finally Anders Ericsson. His book, Peak. I've gotten some great Mailbag feedback from people who said, "Yeah, I used Audible. I just bought the book right after that interview and have learned a lot." How wonderful is Anders and how wonderful that conversation was.
Well, now for something completely different. Well, not that different in that I'm always having people who interest me. Generally, people that I like. Sometimes like a lot and suspect that you might like them a lot, too. So that persists.
That's definitely true of Roy Spence. But, Roy is also very different from my last few guests. Roy is a working entrepreneur, himself. He is a marketing genius. He is the branding mind behind some of the most recognizable and successful advertising campaigns of the last few decades. He has met with and worked with some of the best-known people of our time.
And yes, he's even willing, occasionally, to stoop down and talk on a podcast to some younger guy, some fool, because Roy likes to talk to the common man. He likes to walk in our shoes and share some of his perspective with all of us. And that's what I have for you this week.
I know this is going to be a treat because I've gotten to know Roy over the years. I hope if you've never heard of Roy Spence before that you'll not only enjoy this, but you might even love Roy Spence a little bit, which we certainly do, here, at The Motley Fool. It's my pleasure, now, to start the conversation this week that you'll get to hear with Roy Spence.
Roy Spence is chairman and CEO of GSD&M, a marketing communications and advertising company. He's also the founder of The Purpose Institute, a consulting firm that helps people and organizations discover and live their purpose. And he's the author of several books, including The 10 Essential Hugs of Life, The Amazing Faith of Texas, and It's Not What You Sell, It's What You Stand For. Roy, a delight to have you on Rule Breaker Investing!
Roy Spence: Hey, Dave, my man! My friend. I appreciate it. You've got a marvelous company and, you know, you're not bad yourself. But it's been a great tribute to me to be a friend of yours, and your brother, and the company, so I'm honored to be here.
Gardner: And I'm delighted to have you on this podcast. We are not worthy, but you're going to spend some time with us and a lot of people are going to get to know you better, and that's what I'm excited about. Roy, for the benefit of people who may not know GSD&M or may not even know who Roy Spence is, can you just briefly explain what GSD&M does and when someone might call Roy Spence?
Spence: Well, thank you, David. Our story is an interesting one. I won't go long with it. I grew up in a tiny, little town. A small town called Brownwood, Texas. Loved every second, by the way. It's about 140 miles from Austin, Texas.
I decided to take the big leap -- I know your son just started freshman year in Vanderbilt -- to go to the University of Texas. So, I drove with a friend of mine to Austin [I'd never been before] and I moved into a dorm that had more people than my town. So here was a kid from Brownwood, Texas [now it's four times as big], walking around this big, huge campus.
Long story short, I met three or four people my sophomore year and we decided to start doing these multimedia shows. Back then it was just crazy film and music. And we had thousands of kids at college lining up, paying us fifty cents to get in. And our brownie. We can talk about it. It's America. You know, it's free enterprise.
And we looked at each other and we said, "Maybe we can make a living and a life doing what we love to do." So, we started the company kind of in college and we started GSD&M [Gurasich, Spence, Darilek, McClure]. I went down to the bank with a brand new tie-dyed t-shirt and a ponytail looking awesome. I asked for $5,000 to start my business and the loan officer says, "Well, what's your business plan?"
And I was like frozen. I went, "Uh, what?" He said, "What's your business plan?" I said, "Well, we want to stay together, we want to stay in Austin, we want to make a difference, and get rich." And he loaned me the money.
Forty-six years later, the four same partners are still together. We're not active in the agency, now, but we still office in the same building, we're still in Austin, we're still trying to make a difference, and we're working on the rich piece. But GSD&M is a marketing company. Our first big break was Southwest Airlines (NYSE:LUV) and we've done them now for 35 years.
Gardner: And we're definitely going to talk about that in a little bit. So Roy, now everyone knows you're the "S" of GSD&M. GD&M, who's the most valuable player among G, D, & M?
Spence: Well, originally no one could remember initials, which is true, so we stood for greed, sex, drugs, and money... but my mother said, "Roy, you can't keep talking about that." So, it's Gurasich, Spence, Darilek, and McClure. And I would say what we found out [and it's kind of what you all are doing with your company] early in our lives is everybody wants to be a partner. They don't want to deal with the ship. And we're still in the ship together for 46 years.
And we instinctively realized something that Galloway, Gallup, and StrengthsFinder knows. We all, each, play to our strengths. We didn't instinctively know any of this, but we never tried to make one of us become average at what we're bad at. We all kind of played like, "Let's become great at what we're good at." And so we had each other's back.
And by the way, the whole company, now, has taken Gallup StrengthsFinder. I don't know if you all know about it, but it really talks about your top five strengths. So, we kind of built the company based on purpose, and strengths, and being at other's back. And we didn't know anything about advertising. I think that was the best thing that ever happened. We did not know what we were not supposed to do [that rule breaker thing]. We didn't know what the rules were, so we broke them anyway.
Gardner: That's awesome. Roy, what is your superhero power?
Spence: What do you mean?
Gardner: Well, you're a superhero.
Gardner: And I've seen a lot of these movies. One of my better stock picks is Marvel, which got bought out by Disney, as you know. And so, you're a superhero and that means you've got a power. You might have more than one. And there might even be an origin story tied to how you discovered you had that power. This is hard for you, I know. I'm going to ask you briefly to be immodest.
Spence: [Laughs] Well, yeah, that's hard for me. But I will tell you basically, what happened. I got lucky, David. And I got lucky because I got on the road to purpose early in my life. I didn't know what it was. I didn't know what it meant. But since the beginning of time... Your human race search for meaning.
And a quick story I don't tell very well. I'll share it. I had a sister born with spina bifida. She was older than me. And back in those days, the early fifties, no one lived with spina bifida. It's a birth defect that all the nerves that are supposed to go into your leg ball up in an open wound on your back. And she was supposed to live to be four days and four months. She ended living to be 49 years old because of my mother.
And I pushed her to school every day and so did my sister. But I pushed her to school for five, seven, 10 years. I couldn't even see over the wheelchair. She graduated from high school. She came to Austin. And I hope your fans don't get mad, but every Sunday I pushed her, and we listened to the Dallas Cowboys, and ate Whataburgers.
And when she passed away at 49 years old, I was in her bed. And she always used to tell me, "Roy, you don't have to have legs to fly." And this big epiphany happened, David, when she passed away. I realized all these years I'd been pushing her she actually had been pushing me.
So I'd had this experience of walking in other people's shoes and I got to understand my dad's philosophy that you've got to be kind to everybody you meet, because everyone's fighting some kind of battle. And so I guess kind of my superhero power, or whatever, is I really do understand the idea that no one's too good and everybody's good enough. The King's Speech is one of my favorite movies. King's stutter, too.
So when you're looking at marketing... My No. 1 strength, by the way, with Gallup is strategic, and that basically, in Royisms [and you know this], is I see dead people. And that's not really the Gallup definition. They would hate me even for saying that, but... God gave the ability to see what will be. And by the way it's not easy, because people [ask] me, "How do you come up with the big idea?" And I used to say drinking, but anyway... I found through life [that] big ideas come from paying the price of knowing what you really want to accomplish. It comes from the idea God. If you don't pay the price, he'll give you a half-assed [excuse me] idea. It won't work. But if you pay the price of figuring out what is the problem we're really trying to solve, what is the opportunity we're really trying to create, and does it have a purpose; that's the side part besides just making money. I guess that I got lucky that my purpose is to help others fulfill theirs and maybe that's my God-given strength.
Gardner: And that is so well put. And Roy, let's talk a little bit about purpose. One of your books is subtitled, Why [Every] Extraordinary Business is Driven by Purpose. Now you know this. We're a show about investing.
Gardner: Why should investors care about a company's purpose?
Spence: Great question, and I would say 20 years ago they shouldn't have. Jim Collins and I [you know, Good to Great, Built to Last [and] a great friend], we were on the purpose journey. Didn't know each other. And when he came out with Built to Last, he had this great line: that the visionary companies, the ones that are built to last, will always have a purpose beyond making money.
And I'd been on this [my company and me] on this wilderness. We learned about purpose, David, in two ways and then I'm going to get to your specific question. One, we did a campaign called "Don't Mess with Texas." People don't know what that is, but back then it was an anti-litter campaign.
Gardner: It's a bumper sticker. We see it here in Washington, D.C. And it hurts after the Cowboys beat the Redskins!
Spence: It was an anti-litter campaign. And so they hired us. You know, "Keep America Beautiful." Didn't really like it because they liked the crying Indians and "Don't Pollute. Give a Hoot." And we said those campaigns really are effective with the Sierra Club, but the Sierra Club does not litter. Billy Bob Beautre from Tyler, Texas litters.
So we came up with "Don't Mess With Texas," and litter went down 77%, literally, with no fines, no penalties, no regulations. We changed people's behavior. They stopped littering. Our first spot, God bless him, was Stevie Ray Vaughan. And then we had Willie, and Weyland, and George. It was crazy. My point is we finally realized the reason it was working. We got out of the litter business and got into the pride business. We did not know that.
Southwest Airlines comes along. Their whole premise -- and I'll get to your investment point -- was to give people the freedom to fly, which was our line. I looked at Herb one day and I said, "You're not in the airline business. You're in the freedom business," and he said, "I sure am."
And you look at the great books by Raj and Conscious Capitalism. Our book. We started finding out 15 years ago what is true. If a company and an organization has a culture of making a difference in people's lives and not just making money -- I'm not talking about kumbaya stuff -- but actually what they do every day is improve people's lives, then their bottom line is more improved.
Now to answer your question specifically, when Al Gore and I invented the internet... we had no idea that everyone would know everything about yourself or your company, for good or bad. And this younger generation -- Millennials and Gen Zs -- there's a lot buzz about why they're not this and that. Well, I will tell you the one truth. They are the most purpose-seeking generation ever recorded in history. A lot of them are lost, but they want to be found.
They're going to work for organizations and companies that have a purpose beyond making money. They're going to buy products and services from companies that treat their employees right. That treat the community right. That treat their country right. That treat the environment right. They're going to be looking for purpose-inspired organizations.
So investors, before you put a dime in somebody's company, I would go ask the CEO, "What is the purpose of your company?" And if they start rattling around their business card and they have to pull it out and on the back of the business card it says, "Blah, blah, blah, blah..." They ought to be able to say right off, "Our purpose is to help people love where they live." By the way, that's Lowe's. We help people love where they live. So that would be the No. 1 question for my investment in the future. Maybe not now, but the future talent and the future customers will be asking the same questions. I'm not going to buy from you and I'm not going to work with you unless I understand the core values and core purpose of your company.
Gardner: Amen, brother. And just so you know -- I think you do know this -- you're already preaching to the choir, because that's how...
Spence: I know.
Gardner: ... we think. But I wanted to still hear it from the mountaintop from the man, himself, because you put it so well and that's so inspiring. And Roy, you mentioned Herb Kelleher. I would love for you to just tell us [about] the vaunted [and rightly so] former CEO of Southwest Airlines. Still living. Still adding a lot of purpose to the world. A lot of humor because that's a big part of Herb, as you well know. You know him much better than I.
I'm curious. What was the first time that you met Herb and what have you learned from Herb over the years?
Spence: Great question. Quick story. When we first started our business, we did a lot of political advertising because they had to pay in advance. [Laughs] That was a good thing.
And we learned a lot in politics, by the way. Most of all we learned the sense of urgency, because there's not a regrand opening after election day. So we ran a guy for Congress and we beat this guy that was supposed to win. Herb Kelleher was one of his key supporters. I didn't even know who he was. I was 26 years old, or something. 28.
So I get a call from Herb Kelleher's office and his assistant calling, Verity [ended up being president of Southwest Airlines], who I adore, said, "Herb wants to meet you." I didn't know who he was. So I found out who he was and I drove to the meeting and we sat down for two hours. I was 28. He had 28 airplanes or something like that. And he looked at me and he said [after two hours], "Do you drink?" And I went, "Yeah, a lot!" So he pulled out a jar of Mezcal that someone had given him from Mexico. We drank the whole thing. Shared the worm. He hired me. And we first started doing a lot of just project work and we ended up getting all of his entire business. And let me tell you why he was the best CEO I ever worked with, and I worked with Sam and all these amazing ones.
Three things. One, he was a genius but didn't walk around with it. Two, he was a competitor, but he said, "Take the competition seriously but not yourself, Roy." And he'd preach that everywhere. "This is only business." And third, most importantly around my neck is a symbol of every religion in the world, because when I did The Amazing Faith of Texas book I realized there's only one thing that all the religions have, and that's the Golden Rule.
Herb Kelleher practiced the Golden Rule with everyone. The Golden Rule is hard, because you have to walk in somebody else's shoes. If you're going to treat someone like you want to be treated, you've got to understand that God made us all different. To this day he probably knows the names of 20,000 of his employees -- I'm not kidding you -- because he walked in their shoes.
He was there way before Undercover Boss. He was into mechanics. He was serving peanuts. He was in the pipes. So those three things...
Gardner: That's great.
Spence: ... smart as hell but don't show it, kill the competition but don't take yourself seriously, and practice the Golden Rule.
Gardner: All right. So Roy, it's time for us to take a little bit of a dark turn for our time together, because I know you're a Star Wars fan and you know that there's The Empire Strikes Back. It comes in the middle...
Gardner: ... and that's where we are right now. And it doesn't need to be that dark, but one thing I don't talk about much on this podcast is politics, so let's talk politics just a little bit now. I am very apolitical. We live in interesting times, as you know. You know how effective political advertising can be. You just mentioned it was even more effective if you're the business doing it because they pay up front, which I love learning from you...
Spence: Yeah. [Laughs]
Gardner: But let's talk about public opinion of Congress. You know it's at an all-time low. We hear left and right sharply divided. There seems to be more energy spent on finger-pointing, sometimes, then solving problems. Do you think it's possible as a common interest, for all involved, for Congress to rediscover its nonpartisan PURPOSE...
Gardner: ... and repair its brand?
Spence: Well, thank you for asking. One of the things [is] my mom was a civics teacher in my little hometown. And, by the way, schools don't teach civics. They think history is civics. It's not. History is what happened, civics was why it happened, and I'm on a little path of we've got to bring civics back to civilization in our schools. If you don't know why people do things... But, anyway.
My mom used to always tell me, "Roy, no matter what happens, always remember here in America politics is the business of freedom," and it stuck with me all my life because as bad as it is here, or was, we have the freedom to debate, and yell, scream, and all that kind of stuff.
What has happened, and I'm not going to go there, but there was a book [and I know the authors are Strauss and Howe] who wrote a book about 10 or 15 years ago about the "fourth turning." But basically they studied history, David, and the fourth turning basically makes the case that in America [and actually around the world] every generation has a spring, a summer, a fall, and a winter. Turn, turn, turn.
The last winter in America was World War II. The winter before that was the Civil War. The winter before that was the American Revolution. They predicted that our winter of my generation would hit in 2008 and they predicted it 10 years before 2008 hit. That's when the massive meltdown happened, and by the way, winters last a long time.
Trump's advisors studied the fourth turning and the bottom line is you ask what's going to happen. I'm not for or against anything. I've decided I'm going to spend the rest of my life on a project called The Promised Land Project. The Promised Land Project is not for the tired or the timid. The Promised Land Project is like Kennedy's call for a man on the moon. The Manhattan Project during World War II. Reagan's call to tear down the Berlin Wall. Clinton's call to join the 21st century.
The Promised Land Project is attacking the issue of our time: we're involved in another civil war. And if you think it from a brand perspective, both sides are to blame. Special interest PACs are to blame. And social media, now, just amplifies it. They are creating, by design, an "us vs. them" culture.
And by the way, people don't remember this. The first motto of the United States of America was "E pluribus unum." Now I know there's a lot of Latin majors out there...
Gardner: Out of many, one.
Spence: Out of many, one.
Gardner: That's about the only Latin I know.
Spence: So, The Promised Land Project has a centerpiece. We're going to spend the next nine years of our lives. America has a marketing problem. We're going to mobilize the best marketers in the entire planet. And our purpose, by the way, of The Promised Land Project is to start building a culture of "us," as in USA, so that America can start winning on purpose. We have to have purpose over politics in this country, and I'm getting the purpose gurus [from] all over this country to say, "Young people, get off your butt and get in the political arena."
Kennedy was 41. Our leaders are old as dirt. We've got to get young people getting in the arena, the business of freedom, and whether they're Democrat, or Republican, or Libertarian, or Independent; we've got them to understand what a purpose-inspired leader is versus a political.
Now, three or four things and I'll stop. This is not kumbaya. The purpose of The Promised Land Project has four or five centrums. No. 1, Americans need to respect the dignity of all work again. We've got to walk in each other's shoes. We've got to understand factory workers, and farmers, and subway riders. We have something in common. We're going to work every day.
Secondly, we've got to stop the myth that a four-year college is the only path to success in this country. It is wrong. It's immoral. We have hundreds of thousands of jobs out there and in the ninth grades and colleges they're picking winners and losers. Oh, if you go to college you're a winner. If you're not, you're a loser. The Promised Land Project's going to take that on straight up, because it's wrong and un-American. God made us all different, and we judge our kids on standardized tests. Let's see. God made us all different.
So we're going to be on The Promised Land Project. We're going to be championing the concepts of StrengthsFinders in public schools. By the way, they put it in the Atlanta public schools. So if you can't spell, or you can't add, or whatever the issues are, let's find out what you're really good at so you can become great at it.
We're going to champion the miracle of America which is entrepreneurship. America has to start a million new companies, and I'm not talking just the East and West Coasts and Silicon Valley. These are heartland jobs. Quit asking your kids, "What do you want to do?" Ask them what they love to do. And once you find out what they love to do, help them build a business. We've got to stand tall for small. Big is good. The small businesses create the real jobs.
And finally, the Beltway needs to know the solutions for America's future are not going to come from the Beltway. They're going to come from the cities. It's already happening. And the people who get elected to Congress and the White House need to realize their job isn't about inventing the future. Their job is discovering the solutions that are already on the ground and scaling them.
I know you might "think I'm a dreamer, but I'm not the only one." This is going to be a marketing campaign.
Gardner: [Laughs] I love it. I'm a believer and in fact I'll say a year ago on this podcast I was asking openly of anybody who wanted to listen that we should be talking... We do this at our company and I know you do this at yours; better at yours than almost anybody. What are your core values, we ask ourselves and our employees, for-profit and not-for-profit?
And what I was asking open question on this podcast -- and then we tried to answer it on one subsequent podcast -- was, "What are America's core values?" What are those three to five values? What's the process by which we articulate and then align around those? So I know I'm preaching back to the choir, here, but count me in on The Promised Land Project. I like it.
Spence: Thank you. What we're trying to do... I don't believe the politicians on either side. I don't believe a lot of the media. Just like Don't Mess With Texas, we've got to get the greatest marketers on the planet who believe in being a force for good. We've got to believe that they believe that we're better together. That it shouldn't be us vs. them. We'll always fight. America, again. Politics is the business of freedom, but we will lose our freedom if politics does not take the backseat to purpose.
Gardner: Love it! OK, Roy. I'm already feeling that we're coming out of The Empire Strikes Back. We've been to the dark side, and back, and now it's time for those little Ewoks, and it's all going to be good.
Spence: Make some hay.
Gardner: Let's see where it takes us here in our last 10 or 15 minutes together. Let's talk about business a little bit. You just told your first-time meeting with Herb Kelleher. Let's pick somebody else that everyone knows. I'm curious how you first met Sam Walton and what you learned from Sam Walton.
Spence: Well, it's an amazing story. A couple of years after we did Southwest -- I joke about it and you've heard me say this -- I get a collect call from Sam Walton. Young people don't know what means.
Gardner: I still remember those.
Spence: My assistant said, "There's a collect call from Sam Walton." I thought it was my dad, because he called me collect all the time. He's a cheap son of a bitch. And there was Sam. And he said, "Oh Roy, I like you, No. 1 because..." I'm now shaking. This is Sam Walton. And he hadn't gone into any urban areas yet. It was all rural. And he said, "I like you because my dog's named Ol' Roy." And he said, "I also like you because my dog food is named Ol' Roy." He said, "Ol Roy, can you come to Bentonville, Arkansas? I like what you're doing for Southwest. We need some help." I'm terrified. Borrow another $5,000. Get a flight. Go there. I have a big briefcase with nothing in it, just so I could look like I had something. And walk in and there's Sam and I don't know. David Glass. I don't know who all was there in Bentonville, and I'm literally terrified. Finally, Sam looks at me and he says, "Hello, Roy! Glad you're here, but where's the rest of your staff?" Well, I didn't have any other staff. It was me. And my briefcase was over my knees and I was shaking like a leaf. And then finally my Texas thing kind of kicked in. I looked at him and I said, "Well, Mr. Sam, there's an old saying in Texas: 'one riot, one ranger.' What kind of problem you got?" He falls out of his chair laughing. Hires me. 17 years I rode with Sam Walton. I would guess the No. 1 thing I learned from Sam Walton [and I learned so much]. His big thing, the No. 1 thing [was] curiosity does not kill the cat. Curiosity kills the competition. We had to go out in the marketplace and go to all the competitors -- good, bad, or indifferent -- and find out something they were doing better than we [were].
That whole notion back in business land now... And I don't think you get all your information off the internet. I think you've got to get out there and walk in other people's shoes and talk to people. As you know, I'm walking across America. But he was one.
Norm Brinker, who rolled out Chili's restaurants... One of the great purpose-inspired leaders, by the way. We got him when Chili's was tiny and then we had him for years and years and years. We haven't had him in a while. We did the baby back ribs spot which was amazing. But he taught me something else, too, David. He said, "You always have to have benchmarks. If you play hockey and you don't have benchmarks..." They were just going to continue to roll.
But I remember looking at him before he passed away. He said to me, "Now Roy, you know this. Life is a journey. Don't live your life with destinations, because the final destination will be here faster than you know it. Live your life as a journey." Do you know what I'm saying?
Gardner: Sure do.
Gardner: It's one thing to say it. It's another to live it. He obviously did.
Spence: He did.
Gardner: And I think I'm talking to somebody else who's on a journey. Are you really walking across...? Did you say you're walking across America?
Spence: Yes, I started about eight years ago. I was watching TV in New York. I thought I had a bad day. It was late at night. I don't have bad days after being in Haiti, by the way, after the earthquake at all. But I was watching Nancy Grace. She was yelling at me and I hadn't done anything. Every doctor is bad. Every dog is bad. Every priest is bad. I said, "That's not the America I know," so I decided to walk across America and take a picture of something good every mile. And I have a day job.
So it was about 10 years ago when I first did it. I haven't done it since. I went through eight or nine states, 20 miles a day, and every time my pedometer went off, I had to find something good to take a picture of.
Spence: And let me tell you what I learned in life. My mom used to read me, "Two roads diverged in a yellow wood. And sorry I could not travel both. And be one traveler." I had no idea what Robert Frost was meaning. I do now.
You become what you look for in life. If you're on the road to look for enemies, you'll find them. If you're looking for hate, it will live in your heart. If you're looking for gossip, it will consume you. If you're looking for fear it will follow you. But if you get on the road and you're looking for friends, you'll be befriended. If you're looking for love, you'll be loved. If you look for the truth, it will set you free. If you look for hope it will go to the mountaintop.
I now know in life, and all of you listeners and viewers out there, you actually become what you look for, so let's go look for goodness. Goodness is not simple, easy. Goodness is hard. But in the end game, when you look for the good things, and we're all looking instead of at the dark things, you'll find the good things. And if that sounds kumbaya, it's not.
Gardner: [Laughs] Completely agreed. And purpose is something that you saw early on as you've described. You just had that lens perched on the end of your nose and that's how you saw the world. And I'm curious, Roy. Looking at the world today... You don't have to cast any nasty aspersions, here, but is there a name that comes to mind when you think about a company that may have lost its purpose at some point? And/or maybe tried to redefine its purpose? And maybe even failed at that?
Spence: My instinct in life, and I know this sounds, again, a little bit naïve. And a really good friend of mine validated this the other day, and if I told you who it was you would go, "Wow!" He looked at me and he said, "Roy, you know what's interesting about you?" And I said, "Yeah, everything!" No, I didn't say that. He said, "You are a for person." I said, "I beg your pardon?" He said, "You're for things. You're not against things." And I am. And he said, "What's interesting about the observation," and again, you would know who he is, is he said, "People are born with it." Like I said, my sister helped me.
When you walk in other people's shoes and you realize that everybody's fighting battles, if you're for something vs. against something, I'd like to be for it. So I don't really want to talk about who had it and who lost it. I think that the key thing is when my preacher passed away about two years ago... By the way, he and I drank scotch together, so he was one of those, which I like.
I used to tell my preacher every Saturday night before... Gerald Mann. We'd sit out in my backyard and drink. And I'd say, "You know, Preacher, here's a little thought. If you don't know where you're going, you'll never be lost." And he let me go by with that stuff for about two years, because I talked about "if you don't know where you're going, you'll never be lost." And he said, "Well, that's wrong. If you don't know where you're going, you'll never be found."
So I think we've got to go find ourselves all the time. And part of it for America is what T.S. Eliot said. We will not cease to explore, but when the exploring is done we'll go back to where we started and know the place again for the first time.
Sometimes when companies lose their way, or people lose their way, you need to go back to where you started and understand why you took that first step on the road that's bad, or why you took that first step on the road to good. We need to go back and reexamine the miracle of this country. And basically I think it's the idea that if you can dream it, you can build it. Another one is no one's too good and everybody's good enough.
Gardner: So, Roy, from there I'm almost embarrassed to ask my next question, but I'm still going to ask it. That was so eloquent and also high-minded. But I also know there's a grounded Roy Spence, there. There's a guy who's going to get down in not the muck, here, but the cheese with me with this next question. So, Roy, let's talk about a topic near and dear to... is it fair any Texan's heart... and that's queso, so this is a Chipotle (NYSE:CMG) question. Chipotle -- I bet you know this, Roy -- recently introduced queso. It's all natural. All natural ingredients. Now I think it's fair to say that the reception [and I'm also a for person], so... let's just say the reception has been, we'll say pretty lukewarm. And there's been some backlash on social media. Roy, not only are you a Texan, but you also have your own hot sauce...
Spence: Yes, I do.
Gardner: And I've enjoyed it, too. It's Royitos. So, here's my question. If Chipotle enlisted you for a queso consult, what would your advice be?
Spence: I would say keep working on it. [Laughs] And I love Chipotle. I love their intent. I love their purpose. I know they've had some issues. But in the end game, as a Texan... You know, when I started my hot sauce company, my daddy taught me three things. His name was Roy, by the way, and he grew up speaking Spanish before English. He's in Eagle Pass, Texas. So his name was Roy. I was named Roy, so he called me Royito all my life, little Roy. And I was known by that in Brownwood, Texas. I wasn't Roy, I was Royito.
So, he taught me three things. Be kind to everybody you meet, simplify your life [which I didn't do], and then he'd always say, "Now Royito, remember. Don't do mild in food or life."
Don't do mild. So, my Royitos Hot Sauce company was based from my dad, and the purpose on the back of the jar, which is sold in Whole Foods here in Texas, [and] Central Market says, "My purpose with Royitos is to inspire people to don't do mild in life. Follow your passion and your purpose." So, I would say to whoever is in the queso business, don't do mild.
Gardner: Really good advice. I have to admit that question, as well as a few others, were written for me in consultation. Somebody who knows you as well or better than I do, even if you don't recognize Mac Greer, our longtime producer here.
Spence: Hell, yeah, Mac! How you doing, brother?
Gardner: [Laughs] He's right on the other side of the glass. He's a Texan, as well.
Spence: Oh, God! I miss you, man!
Gardner: And here's Mac's take and let me know what you think of this. So he's a queso-loving native Texan. He wanted me to bounce this off you. He basically says that Chipotle is maybe trying to solve a problem that doesn't exist, because people may not want all-natural queso. People do want queso that tastes great. Queso might be a guilty pleasure. It doesn't need integrity.
Spence: Mac, you're so bad! But anyway, here's my answer to that. My theory, whether it's Chipotle or Southwest, who are driven by values and purpose... not holier than thou... but driven by purpose and values [is] you've got to stay with what you believe in. I've always told people that the worst thing you can do [and this is a heavy answer to a light question]... but the worst thing you can do is to try to be like them, because in the end, the best you'll ever be is a worse them. So, why don't you be a better you? I would encourage Chipotle to stay on their course of values and purpose, continue to improve, and if they make one move to be a worse somebody, what's the call on making the second move? And I know the question was light, but to me it's kind of a heavy question.
It's like when, Mac, we were at Southwest, all the consultants said, "You've got to charge for bags. There's $350 million a year you could throw to your bottom line." And the visionaries at Southwest said, "No. No." They said, "No, sir, everybody's doing it and you're struggling with blah, blah, blah, and you could throw $350 million to the bottom line. You have to charge for bags."
And the visionaries [Gary Kelly and everybody] said, "No. Our purpose is to give people the freedom to fly. A bag costs the same amount as a Disney World ticket. We're not charging for bags." And the market went, "Are you kidding me?" Well, what happened was [because of brilliant advertising, I might add]... as reported in The Wall Street Journal, in 12 months Southwest drove $1 billion of new revenue charging for free. You know why? We didn't violate the purpose of the company. So that's a heavy answer to a light question, but actually the question... I would encourage Chipotle to keep making it better and better, but do not violate the purpose and the values of the company. You do it once. What's to say you're going to not do it again?
Gardner: Really well put from a man who doesn't do...
Spence: Do mild.
Gardner: ... mild. And I get it. So this is the only way I can think to close this delightful conversation which will be enjoyed by tens of thousands of Rule Breaker Investing listeners. Thank you so much, Roy!
Spence: You're welcome!
Gardner: [This is] the only way that I can think to end this one. One of the things that I do though this show is that I get to meet great people, and you're a great person. And I, in some way, get to share a part of that great person's perspective with anybody who's foolish enough to listen.
And so I think -- well, I know -- that a lot of our listeners are, themselves, entrepreneurs. Small businesspeople. Big businesspeople. We've got a lot of people. And my take here, Roy, is that one of the most valuable things I could do for them at close is to channel, for free, because I don't think you're charging me for this wonderful hour...
Spence: No, man. No, sir.
Gardner: ... or so. I think this is for free. Some free advice to all those Fools out there who were Foolish enough to start something for-profit. Not-for-profit. Can you just give maybe one, two, or three points of classic Roy Spence advice to anybody walking in their shoes who's trying to do a better job marketing their business?
Spence: It's a great question, and it's a great way to close. I think that the lessons I've learned, and didn't know what they were... I think No. 1 is you've got to really believe in what you're making and producing. If you're trying, again, to do it to get rich, that's all good. But if you're starting a business, it's got to be started first with passion.
Secondly, I always tell people who say, "I want to start up my own business on my own," is, "Come here, son or daughter. Sit down with me. You can't do it on your own. You're going to do it with partners." My mom used to tell me there are two kinds of people in the world. There are vinegar people and honey people. And I say the vinegar people are takers and the honey people are givers. Hang out with the honey people. Find partners that are givers, No. 2.
No. 3. When you market, do it simple and make it where the "Don't Mess With Texas" or "Freedom to Move about the Country," or whatever the lines are, start figuring out what your slogan is first. I hate to use that word, but that's what it is. What is that handle? The Fool. Start with that. And if you don't find that you can do it in three or four words, or some power like don't mess with whatever it is, you've got to keep working on that. Because the world doesn't wake up and say, "God, I'd like to have a new company start!" I sure hope I have some more soaps to choose from. God, I hope there's some more soft drinks out there than there are beers. And the final thing from a marketing perspective, and you all know this, is that one of the greatest books on marketing ever written was Strauss and Howe. It was called Positioning.
They say everybody runs around in their head with these ladders. Like if I sat on the cola ladder back 20 years ago, it'd be Coke and Pepsi. Yes, RC and Dr. Pepper. And there was a company on the cola ladder who was getting crushed. Because people walk around with ladders on every category and they rank them one, two, three, to four. They have more than that now. 7-Up was getting crushed. They said, "We can't play on the ladder," so they built a new ladder called The Uncola.
If you're starting a business, don't think you can be better to start with. You've got to start by thinking, "We've got to be different." If you're not different, they won't ever get to better, because they won't try you. Be different first.
Gardner: Bam! That is a great way to end this. Roy Spence, let me just say, quickly, that one of my favorite investing books... This might catch you from the side, here. This is a surprise moment, maybe, Roy. But one of my favorite investing books is your book, It's Not What You Sell, It's What You Stand For. And it's not because you wrote that book for investors. I don't think you did. I've read it, so I know you didn't. You wrote it to help people think through the purpose of their organizations.
But I, because I like to read widely and pull stuff from different fields, I have used that as an investment book. It's enabled me to look into...
Spence: Wow! Thank you!
Gardner: ... the heart of companies and say, "I'm going to pick this one, not that one." And more often than not, it works. And when it does work, sometimes it works like magic.
Spence: Well, thank you!
Gardner: So Roy, I want to thank you and I highly recommend that book and all of your work, of course. Maybe there will be some new GSD&M clients as a consequence of this conversation. That wasn't the purpose of it, but sometimes when you have good purpose, you make money, too, which I think you've demonstrated, as well.
Spence: Hell, yeah. In fact, if you don't... I always say, if you want to be in the non-profit business, remember you're not going to make any money. [Laughs]
And I love non-profits, but I'm in a for-profit business. It makes a difference. David and Tom, Mac and everybody, it's always the Fools. They're amazing. Motley Fool's a purpose-inspired organization. You dog it every day. I've seen it. I've been in your offices. I've been around you guys at Conscious Capitalism. And one of the great things that happens in America is when good people do good things. I'm just going to tell you, a lot of times good things happen. A lot of times it doesn't, but when you have good people doing good things, good things happen. I'm honored to be on the show!
Gardner: Thank you, Roy! I really appreciate it. I do need to mention to my listeners [that] he's as handsome in person as he is eloquent on the phone. So that's just a side note.
Spence: [Laughs] No, he's not. And when I leave you, David, I still get to be with me.
Gardner: [Laughs] Oh, thank you so much, Roy!
Spence: I don't know why I said that.
Gardner: I love it!
Spence: OK. Bye, guys!
Gardner: Well, I think it's fair to say, after that, not much more than 'nuff said. Or sometimes I think of the word that ends some of the more hoity-toity movies out there. It's French. It's three letters. I know you know it. Fin. Let's just go with that. See you next week. Fin!
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