What I learned from reading In-N-Out Burger: A Behind-the-Counter Look at the Fast-Food Chain That Breaks All the Rules by Stacy Perman.

Almost immediately, a boisterous crowd appeared, requiring the presence of police to direct traffic and help with crowd control.

There were businessmen in suits, women in heels, truckers in jeans, college students in t-shirts, construction workers in heavy boots, and moms with babies on their hips.

They all braved the long lines, enduring waits of more than 2 and 3 hours.

Remarkably, the official kickoff was marked with little fanfare.

2 workers carried a simple white sign with the familiar In-N-Out logo and the words we are open.

There weren't any prizes offered, furry mascots, or any other marketing gimmicks.

There was no promotional advertising either, just a small sign that stood on the lot for some time, coming soon In-N-Out Burger.

The carnival atmosphere was created entirely by In-N-Out's rabid fans.

The chain didn't need to advertise its opening.

For weeks, its devotees had been broadcasting the news to 1 another.

For 2 years, ever since word had spread that an In-N-Out was coming to their city, the residents had been waiting anxiously.

The day before, some sleeping in their cars overnight.

In-N-Out's Vice President of Planning and Development, Carl Van Fleet, assessed the scene with the chain's typical understatement.

This is not something that happened overnight.

That is an excerpt from the book that I'm gonna talk to you about today, which is In-N-Out Burger, a behind-the-counter look at the fast food chain that breaks all the rules, and it was written by Stacey Perlman.

This book was recommended to me by a listener, and it came at the absolute perfect time.

Some of the best businesses in history could be described as cheerful cults.

So reading this book, I wanted to read this book to better understand a phenomenon that I've noticed over and over again as I studied the history of entrepreneurship.

In fact, on the very front cover of the book, there's a blurb and it says, this is an absorbing case study on how a family business came to be at the center of its own cheerful cult.

And so it's important to keep in mind as you and I talk today, we're not talking about cults in like the negative connotation, the most famous examples, people like Jim Jones or like Charles Manson.

What I'm trying to figure out as I read this book is like how do you develop a positive, cheerful cult?

How can you bring joy to somebody else's life through a product or service?

You bring so much joy to somebody's life that they tell others about it compulsively.

So that is the definition that we're working with.

But this is 1 of the best posts that I've ever come across.

It's called Aliens, Jedi, and cults, a mental model for potential.

And it was written by this guy named Richard Burton, who was a early employee at Stripe.

Stripe, in case you don't know, is probably, I think it's the most valued, valuable private business in the world.

It's gonna wind up going public, I think, relatively soon.

And his experience as an early employee Allowed him to discover a mental model for potential that he has then applied to other things like Bitcoin Ethereum SpaceX he's got a bunch of other projects and businesses.

I'm just going to read from the very beginning though.

of the experiences that I've had that very few people can relate to.

I have been lucky enough to stumble across a few rocket ships before anyone else cared.

This has helped me build a mental model for things that have potential.

He says, in 2010, I started a little company selling custom apparel on the internet.

I integrated Wufoo, Google Checkout, and PayPal to sell around 100, 000 sweatshirts to students.

So he's talking about the problem that you had, you know, 10, 15 years ago, trying to sell things online.

You had to patch together a bunch of different products or services.

That's the first solution, the first problem that Stripe solved.

So it says, in 2012, 2 years later, I read a blog post about a little company called Stripe.

I instantly understood the value of what they were doing and decided to apply for a job there.

I researched every single person in the company.

I was completely focused on getting a job there.

When I met John Collison, this is 1 of the co-founders of Stripe, he's going to be referred to as 1 of the Jedi, and I'll get there in a minute.

When I met John Collison and we started whiteboarding together, I knew 2 things.

This guy is going to be a billionaire, and I'm definitely going to get this job.

I spent at Stripe had a profound impact on me.

It showed me what was possible when a few brilliant people get together and make something people want.

Stripe gave me a mental model for potential, and this is the single most important sentence in

the entire post and it's something the reason I I'm reading this use because this this completely resonates with me as I read this post I immediately started filtering it through all the information I've consumed you know between 200 somewhere about 250 biographies of entrepreneurs and this is just fundamentally, it feels fundamentally correct to me.

And he says, Stripe gave me a mental model for potential.

An alien founder assembles a group of Jedi to start a cult and go on a mission together.

Patrick, he's telling us how this applies to Stripe.

then you list about 4 or 5 really important either co-founders or very early employees, so John and a list of other people, were some of the Jedi.

The developers raving about Stripe formed the cult.

Their mission was to grow the gross domestic product of the internet.

And the most obvious example from the history of entrepreneurship that jumps out that fits that mental model, an alien founder assembles a group of Jedi to start a cult and go on a mission together is Steve Jobs.

The Jedi are people like Steve Wozniak, the early employees that were on the Macintosh team.

The initially small group of Apple devotees formed the cult and they went on a mission together going back to this post I'm only gonna read 1 more example because it's probably the most famous example.

That's in the entire In the entire post again.

I'll link it below So make sure you read the whole thing or you could just Google aliens Jedis and cults and it says he talks about discovering Bitcoin back in either 2011 2013 and says I started reading more about the project and began to appreciate its potential.

The founder Satoshi was clearly an alien.

The people working on the protocol were Jedi.

The project had assembled a cult-like following online.

And then at the very end of the post he makes it easy for us to take this idea and carry it with us.

If you're searching for a project with potential, watch out for the alien founder, Jedi team, and a cult following of people on a messianic mission.

How does that relate to the book that we're gonna talk about today?

Well, if you've ever met anybody that likes In-N-Out, you'll know that they like In-N-Out because they will tell you.

All of my friends that live in California won't shut up about it.

I sent this post to my friend Sam who listens to the podcast and he made a great observation.

He says, if you think about it, the richest man in the world is a leader of a cult.

He was obviously talking about Elon Musk.

Both Tesla and SpaceX are forms of cults.

These are positive cults for the world, right?

So as I'm spending the last week doing all this research, and I'm going to pull out a couple more examples too, I saw a clip from this investor, Josh Wolf, who I stole 1 of his great ideas.

He says, chips on shoulders puts chips in pockets.

So somebody grows up feeling that they're in a bad spot, usually has a lot of drive to fix that as they get older.

And so Josh Wolf was famously known for shorting Tesla for several years.

And he talked about why that was a mistake.

Even though he considers that, he says, you know, there's some shenanigans going on inside the company where the case is, he realizes like, oh wait, this isn't a company anymore.

And so he says, a few years ago, This is a sign of a cult.

A few years ago, I started noticing that people were getting Tesla tattoos.

It's very hard to short something when people are tattooing the brand on their body.

Think about it, The biggest podcast in the world is an example of this.

If you Google Joe Rogan experience podcast tattoos, you will see hundreds, if not thousands, of people that literally tattooed Joe's face on their body.

I've read the word cult in many of these books.

Let me give you a perfect example where they explicitly talk about Trader Joe, who wrote the book when he was like 90 years old.

Then he book was published and he died like the following week, right?

If you haven't listened to it, The book is called Becoming Trader Joe.

And he says, this is what he says in the book.

Because think about like Joe Rogan's never run an ad.

Obviously, there's, there's content marketing and stuff behind it.

Most of their growth came from word of mouth.

And then the fearless flyer is like a form of content marketing.

A lot of that which Trader Joe says he just copied straight from David Ogilvy.

That's why I've done like what 4 or 5 podcasts and David Ogilvy legitimately thinks that guy's a genius.

But this is what Trader Joe says about this.

Word of mouth is the most effective advertising of all.

I have been, In-N-Out has that, Tesla has that, Stripe has that, Bitcoin has that, Trader Joe's has it, Apple has it, the list just goes on and on, right?

Word of mouth is the most effective advertising at all.

I have been known to say that there's no better business to run than a cult.

Trader Joe's became a cult of the over-educated and underpaid partly because we deliberately tried to make it a cult once we got a handle on what we were actually doing And partly because we kept the implicit promises to with our clientele.

That is a huge I need you to remember that as we go through the book today.

We kept the implicit promises with our clientele.

Trader Joshi managers in and out did that over and over again.

We kept the promises for the most important people.

And this is what Trader Joe's warns us though.

It's fantastic to have a cult-like following.

It's the most powerful form of advertising.

It's the 1 every single business in the world is trying to go after.

He says, beware of ever betraying the true believers.

So once you identify who your true believers are, You cannot disappoint them or they will turn on you.

Another example for you, all the way back in Founders Number 31, I did a podcast on Peter Thiel, read 2 books on him.

1 of those books happened to be 0 to 1, and he says explicitly, he talks about cults in that book.

He says, the best startups might be considered slightly less extreme kinds of cults.

The biggest difference is that cults tend, he's talking about the negative connotation of cults, the biggest difference is that cults tend to be fanatically wrong about something important.

People at a successful startup are fanatically right about something those outside of it have missed.

And In-N-Out, as we go through this book today, we realize that you have this giant explosion.

In-N-Out started in 1948, and so most of what I'm going to talk to you about today is just the founder, Harry Snyder, right?

The next 3 decades, there's this gigantic explosion in fast food in America.

It becomes a multiple hundred billion dollar, if not trillion dollar industry.

And yet none of In-N-Out's quote unquote competitors have this cult-like following that In-N-Out does.

And that's what that sentence right there people at a successful startup so In-N-Out was fanatically right about something like McDonald's, Wendy's, those outside of it have missed.

Okay so let's jump into the book I'm going to start

with the single most important sentence in the entire book It's something that's repeated probably 15 times, something that Harry Snyder, co-founder of In-N-Out Burger, he founded it with his wife Esther, repeats for 3 decades.

And so his simplicity starts with what is he going to offer.

In-N-Out's famously limited menu of 3 burgers, french fries, soft drinks, and milkshakes has barely changed since Harry Truman was president.

There's no Mediterranean wraps, no chicken Caesar salad wraps or children's menus.

is, I'm still in the introduction of the book, what the author is doing is comparing and contrasting

the way In-N-Out runs their business with the way everybody, they're all their competitors do.

There's no heat lamps, no freezers or microwaves.

There's no bags of flash frozen fries on site either.

Rather, in a procedure that has gone unchanged since the chain first opened in 1948, a cheery associate hand peels, cuts, and fries the raw potatoes that are grown especially for the chain.

At In-N-Out, the lettuce is still leafed by hand.

The family-owned, fiercely independent chain has remained virtually unchanged since its inception in 1948." So that sentence, just like, keep it real simple, do 1 thing and

do it really well repeated over and over again 15 20 30 times throughout the book.

That's also something that's extremely different than a lot of the competitors it is a to this day so this book was published in

Fast forward over a decade later, the chain is still family-owned, there's no franchises, and it is still private.

It has long been adored by its legions of fans whose main complaint seems to be there just aren't enough of the restaurants around.

In-N-Out is frequently the subject of rumor and speculation.

The private company has always shunned the kind of publicity that its competitors routinely courted.

It has rarely bothered to counter or clarify the murmurings.

book is written is when the co-founder dies.

She outlives her husband by about 30 years.

So in 2006, In-N-Out Burger issued a statement announcing that Esther Snyder, who along with her husband Harry, had founded the chain, had died.

Esther's death left her 24-year-old granddaughter, Lindsay, the sole heir to the In-N-Out Burger fortune.

A petite, unassuming woman, Esther had spent most of her life determinately maintaining In-N-Out as a private family-owned business, keeping it virtually unchanged as the decades rolled by.

She did so despite countless offers from investment bankers, venture capitalists, private individuals, and large corporations, all of whom were hell-bent on buying into the hugely profitable chain's unparalleled popularity.

Esther Snyder preserved her family's privacy even as In-N-Out transformed from a single burger stand to a cult

And then 1 last sentence from the introduction the counterintuitive chain had stridently bucked every industry trend.

Later on in the book like another 250 pages into the future, I double underline a sentence that I think I want to put at the very beginning to help you understand the In-N-Out philosophy.

It is known as the anti-chain with the cult-like mystique.

The anti-chain is the perfect way to describe In-N-Out's approach to building their business.

So in 1948 Harry and Esther they're already married at this point they settle they settle in this little suburb of Los Angeles called Baldwin Park and so that is where the very first the very first in-and-outs gonna happen built in 1948 this is the frontier of the American dream this is where newly married couples like Harry and Esther could purchase land, buy a small house, and build an even smaller burger joint, and then dream big dreams.

Baldwin Park is where the Snyders developed their basic philosophy serve the freshest highest quality burgers and fries Treat your employees well and your customers even better all while providing friendly service in a sparkling clean environment and above all remain family-owned and independent Something they repeat over and over again even as In-N-Out's competitors raced around the globe franchising, In-N-Out never wavered from their simple philosophy.

Harry Snyder was an uncomplicated man with sharp instincts.

And I think a lot of that has to do with his upbringing.

His father was, well, I mean, I'll just let you, he's gonna describe his

Sounds like he thought his father was a bit of a loser.

He didn't believe anybody, this is Harry talking, he didn't believe anybody should be wealthy.

He figured that if you made so much money, the rest of it should go back to the government and then they could give it to poor people.

For a little bit, Harry was actually identified as a communist.

And then Harry realized, well, that doesn't actually work out.

He builds a business, but he also takes care of his employees.

He thought it was just the right thing to do to share.

Even if you're not sharing profits, like they don't own a percentage of the business, they still make a lot more money his employees made a lot more money than other people working in similar restaurants Hendrick was careless to the point of recklessness the old man always ran out of money was how Harry described his father's financial acumen or lack thereof and then imagine how much how much you have to mess up your life for 1 day for your kids to describe you like this.

And so he says, when he left Seattle, my dad owed everybody and their brother money.

So not only was he not good with money, he didn't really work as he didn't work that much, but then he would also essentially borrow money and just leave town.

So he's doing it in Seattle, then they go to Los Angeles and it's the same situation.

The family moved from 1 rental house to the next after owing rent to look to the landlords they had left behind when Harry was 13 his father landed in jail after he beat up a landlord who came by and demanded money his father was also extremely entitled extremely lazy These are things that Harry is not.

So he would make money as a house painter.

And he says the work paid a tidy sum of 20.

So this is they're going to have to struggle through the depression.

gets this fierce work ethic that never leaves him.

The work paid a tidy sum of $25 per week.

But when Hendrick was refused a vacation, he simply put down his paintbrush and walked away, leaving his wife to support the family with her housekeeping jobs.

Really great, really great role model, Hendrick.

Hendrick never held another proper job again.

So it fell on Harry to pick up the slack of his father.

So if you could think of Hendrik has loser mentality.

During Harry's teenage years, he's a teenager.

He's still supposed to be in school, and his dad is so lazy and apathetic that Harry's forced to pick up the slack.

During Harry's teenage years, he took every job he could.

He managed to maintain a fierce sense of responsibility.

Although he was just a young man and the Depression had flattened prospects for most, Harry always found a way to make a dollar.

And he always supported his family, giving them money every week from whatever money he had earned.

Selling sandwiches is the job that he's going to have right before

he founds In-N-Out and realizes, hey, I can do this.

He delivered hot dog and hamburger buns for a bakery.

He picked up rental umbrellas on the beach.

And again, he's doing anything he can, gives his parents money.

As you can imagine, he's working so much, he's not that great

He was never more than a middling student.

Rather, Harry excelled in the areas of common sense and resourcefulness.

That is a fantastic way to describe my interpretation of his business philosophy.

It's a combination of common sense and resourcefulness and then you layer in an intense work ethic.

Following high school, he enrolled at Santa Monica Junior College but quit after 1 semester.

Harry's drive and tenacity were propelled by the uncertainty of watching his parents labor to provide for his family.

Harry grew into a disciplined fellow with a strong sense of responsibility.

He also did a really important thing as he builds his business.

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#244 In-N-Out Burger: A Behind-the-Counter Look at the Fast-Food Chain That Breaks All the Rules