Built From Scratch (2001) chronicles the story of Bernie Marcus and Arthur Blank, and how they went from being fired to founding the multi-billion home improvement chain Home Depot when Marcus was 50 years old.
Exec Summary
- Keep your successful business secret, or you will attract competitors
- Learn to read people
- Get equity if you plan to work hard and bring lots of money
- Write a biographical book for PR, but spin it like you’re sharing your business secrets
Video Review
FULL SUMMARY
About the Author:
Bernie Marcus and Arthur Blank are the two main founders of Home Depot, and they take turns writing chapters.
Learn how to sell a vision
Especially in the beginning, you don’t have much to show.
So you must be good at selling a vision:
You must stick to a vision and turn people into believers.
We had to be psychologists, lovers, romancers, and con artists to get them aboard.
Notice the “con artist” in that list.
Be calculative in everything you do
If it serves your goals, be offensive to jolt someone and get their attention.
Says the author:
To his face, I called him “the biggest schmuck I ever met in my life.”
That was a calculated gamble.
I read his personality. I knew what was going to get to him. Of course he wasn’t a schmuck, but nothing short of calling him one would have gotten his attention riveted on me.
(…) what would have happened if I had said, “Mr. Hubschman, I could do a better job.” Nothing would have happened. Instead, I very deliberately applied blunt trauma to his ego.
Learn political skills, & how to read people
I picked up this book mostly for the human side.
The relationships.
Their previous boss sounds like a dark triad.
Describing his former boss, they say:
He called himself “Ming the Merciless.”
It wasn’t a nickname used behind the boss’s back (…) how proud Sanford C. “Sandy” Sigoloff was to be known as “Ming. (…) the villain in the old Flash Gordon movie serials of the 1930s.
Now look how this guy thinks:
He was a nice looking, sharp-dressed man, very smooth, slick, and articulate, a chief executive who couldn’t just fire an underling (…) he once told me in a coffee shop, it was very important that he affect them economically, emotionally, and physically, so that people think twice before they ever turn on him.
This is important because the authors failed to realize they needed better precautions with a snake like this.
Also see:
Langone saw Sigoloff’s red flags
Notice Langone’s reaction on his first meeting with dark triad-ish Sigoloff:
It was all handshakes and politeness on the surface, but (…) Neither liked the other and they never would.
(…)
“This is a real bad guy,” Langone said after his first encounter with Sigoloff. “This is a guy that you can’t trust and that would kill you in a second.”
Langone was much better at handling that guy once they partner up 🔜
We have some articles to develop these skills:
Never give up your leverage against aholes
The authors were friends with Langone.
And because Langone had controlling shares, the terrible boss was kept in check.
However, this is when the authors make the mistake:
“Do me a favor,” I said. “Get Sigoloff off my back. Sell him the stock.”
“Bernie, trust me,” Langone said. “You don’t really want me to sell him this stock, because if I do, I am signing your death warrant. You are a dead man.” <— Bernie knew the character
“You don’t know what you are talking about,” I responded. “Sigoloff doesn’t know this business. I know this business. He needs me to run it.” <— The author naively expected Sigoloff to put the best of the company above his power
And now look how Langone predicted the future based on a correct reading of narcissism:
As long as you are there, he is never going to be able to take credit for its success, or for the recovery of Daylin.”
(…)
I am telling you, I can read this guy like a book. He can’t stand to see you succeed. The more you succeed, the more pain he feels.” <— this is narcissistic envy, what the author missed
With his leverage gone, the authors get fired
This is when the author realizes the power dynamics:
(…) board member said, “I don’t know why there is any question about succession here, since you have your obvious successor right in this room, Bernie Marcus.”
A quick glance at Sigoloff’s ashen face told me that that was never going to happen (…) the board supporting the idea made me a genuine threat to Sigoloff. The situation between us just went from really bad to dire.
And this is how it happened:
I was in one room, Arthur in another. It was a planned effort to divide and conquer us.
(…)
Sigoloff was well organized. He released a statement to the press by deadline on Friday afternoon, so that all the Los Angeles papers carried the story of our firing on Saturday morning.
(….)
The labor decertification proceedings were used as a tool to eliminate me and those closest to me.
In brief, Sigoloff looked hard at some fault he could find about the authors’ behavior, and he himself pressed charges against them.
Sigoloff also wiped out the author’s contraction options, telling him:
Sigoloff also voided my contract, daring me to sue. “The only problem for you,” Sigoloff taunted me, “is that I am going to fight you with the company’s money, and you are going to have to fight me with your own money, which you don’t have.”
You can’t say this guy didn’t talk straight :).
Let toxicity be the catalyst for honorable man behavior
Luckily, the authors took some good lessons from this, and decided instead to spread the opposite vibes into the world:
Traumatic as our experiences at Handy Dan were, they played an important part in developing Home Depot’s values.
For example, Sandy Sigoloff rewarded people who were his loyal followers with an inordinate amount of money. There are people who are for rent, and he bought their souls. We learned that love and compassion do a hell of a lot more than just buying people.
Also read:
MORE WISDOM
Dark triad technique: bamboozle everyone
This is what “the merciless” boss did:
As contemptuous as he was of bankers, Sigoloff still needed their money to run his businesses. His oft-stated philosophy was “keep banks in the dark and feed them crap, like mushrooms.” His MO was burying them in paper. And it wasn’t just banks, it was anybody. In fact, he put people on his payroll whose primary job seemed to be generating those kinds of documents.
Sigoloff’s approach was to hit the banks with so many facts, so many charts, that no human being could ever go through it all. And before that, confuse them. Then when you confuse them, he’d say, you’ll end up with somebody who you can do anything you want with.
After years of great work, the author realizes after being fired:
And we were hardly well paid. Ron, for example, was only paid in the mid-$30,000 range.
None of us owned stock in Handy Dan; all of our hard work and innovation seemed to have enriched everyone from Ken Langone to Sandy Sigoloff, but not us.
(…) When we left Sandy Sigoloff and Handy Dan, we had made a ton of money for them but walked away with nothing.
Keep your success secret
The authors didn’t want others to know they were doing good:
Between 1980 and ’81, sales did begin moving upward, but we kept it a deep, dark secret. If we didn’t, we might have encouraged competitors.
Criticism
A lot to say:
Grandiose, narcissistic-like storytelling
Let’s start with a mild example from the opening:
This book is the story of that virtually unparalleled growth and the values and culture that nourished it.
I’m pretty sure many businesses grew faster and/or more.
Next, the author first brags of his fast career progress at their previous employer, and then says:
I ascended the ladder of success at Two Guys by learning how important the folks are with whom you surround yourself. I loved teaching people the business. Why have I been successful my whole life? Because I’ve always surrounded myself with people who are better than I am.
How about you let others judge whether you were successful or not?
Also because in this same book, they later complain that they were just getting by as employees without equity.
There are many more examples of how awesome he was. And he carefully lists one of his records as “unlikely to be broken” -he says, and I didn’t buy it-.
And now listen to this dick move:
One day, Glass and I were walking through one of his superstores in Georgia. I said, “You think this superstore of yours is a great invention, right?”
“Oh, yes,” he said proudly, having played a part in Wal-Mart’s birth.
“Well, we did this at Two Guys back in the early fifties,” I said.
He doesn’t even realize what a dumb move that was, and how dumber it is to even brag about it.
First, he lays the (5-year old level) trap with the question. Then, he let the Sam Walton feel proud of his invention. And finally, he proceeded with the right hook. Nope, Sam didn’t invent squat because HE was the real inventor of it 🤦🏼♂️.
With this behavior, I don’t even think he was any good friend of Walton, as he tells us.
Sometimes you can see it in the small details.
For example:
Diller was right. I could trust Langone. But I knew that for myself. <— This is what we call here social scalping. He removes any credit from Diller.
Notice he could have said the same with a more power-protecting win-win.
For example: “Diller was right. I had the same feeling”.
But nope, he had to fully invalidate Diller’s advice.
There is more, but you get the gist.
Read more in:
Red flags of aggression, violence, & bias 🚩
The author seems very quick to getting aggressive.
Of course, in the book, he always had a good reason to get angry.
But once you discount the bias, I see these as potential red flags.
Let’s see some:
- Childhood gangbanger bragging
Starting from his childhood bragging of joining a gang of black kids as the only white:
Finally, the leader of one gang was so impressed with my ability to take what he was dishing out that he wanted me as part of the gang.
At 11 years old, I not only ran with this gang of thirty black kids but I became its second in command.
- Threatening customers
Then working in a store as a young man:
So I walked up to him, and said, “Pick a window.”
This big cigar dangling in his mouth, he looked at me, confused. “What do you mean, pick a window?”
“Pick a window, because you are going through one of them. I want you to have a choice in which one.” And believe me, he knew I wasn’t kidding.
- Challenging the boss publicly and cursing him
And when he “nearly came to blows” with Sigoloff “The Merciless”:
(…) Sigoloff and I nearly came to blows during a board of directors meeting. When we went into another room to hash out our disagreement privately, Sigoloff told me that he was the boss. He controlled my career, and I needed to understand that. Then he demanded that I literally repeat that back to him.
(…) I nonetheless told him to go —— himself.
Why would Sigoloff demand he calls him “boss”?
Most bosses don’t ask that without reason. Usually, it happens when someone disempowers the boss.
Then, it would be more understandable for Sigoloff to demand what he demanded.
But that would change the whole dynamics: the author may have been a disempowering, insubordinate, or outright dic*head.
- Kicking an investor out of the car
He tells a possible investor:
“Get out of the car,” I said. “Get out of the G-damn car!”
The man just looked at me. He thought I was crazy. We were in the middle of nowhere; cars and trucks were zipping by.
“I said, get out of the car! You are a stupid son of a bitch! Do you think I would get in bed with an imbecile like you? Get out of the f-ing car. You can walk to the airport for all I care.”
The authors made the investor sound like a grinch, of course.
And, in part, they succeeded.
IF what they wrote is true, I may agree with them.
But you can STILL spot red flags.
For example, the investor had demanded a salary cut and that they don’t drive Cadillacs -a cars luxury brand-.
While I got the point of the salary cut, I agreed with the investor on the Cadillacs. It was his money, it was not only fair of him, but ethical, to demand they’d drive less expensive cars.
But the authors makes himself sound like tough-talking straight man, and the investor like a sneaky f*ck.
- Threatening employee with murder
Yeah, literally, he says:
We told everyone, if anyone ever did that again, we would kill them. We wouldn’t fire them, because firing was not bad enough of a punishment; it had to be killing.
There are more examples.
And albeit on this one I am biased, I personally saw it as another red flag Bernard Marcus was one of Trump’s largest donors in 2016. And still backed him again in 2024.
Runs like an ad
Many autobiographies do.
And this is no exception.
If anything, Built From Scratch stood out for running like an ad, even among other autobiographies.
I also read several reviews online, and many mention that the customer service, at least today, is not nearly as good as the authors make it out to be.
REVIEW
Built from Scratch is a great book if you can read between the lines.
If you can’t, you can still find some valuable insights on entrepreneurship, career planning, and common political mistakes.
Some of the company values may also be good. There is little denying the author built a huge chain, so they did something right.
However, I wouldn’t bank on that being either 100% true, or a true differentiator for success.
Which brings me to the next point:
The most valuable insights for me were one-liners, or hidden.
If you can get to those, there is much to learn about (entrepreneurs’) psychology, toxic personalities, and red flags.
For the latter you must read twice between the lines because… It may include the authors :).
Check the best books to read or get this book on Amazon.
