Venture Voice – interviews with entrepreneurs

Entertaining Entrepreneurship

VV Show #28 – John Bogle of The Vanguard Group

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If you’re making lots of money in a fat industry for doing relatively little, then the last thing you want is a competitor like John C. Bogle. He founded The Vanguard Group in 1975 and revolutionized the mutual fund industry by slashing management fees. By creating the world’s first index fund, John showed investors they could invest in the market without giving a large portion of their earnings to fund managers. While it sounds easy in hindsight, it was a difficult path. John was fired along the way and made many enemies in the industry. But John, like any good entrepreneur, is a fighter. And at age 75, he’s still ready for a challenge.

Show notes:

3:30 College years at Princeton

  • “I’ve always been a terrible idealist – or a wonderful idealist.”
  • The mutual fund industry was described as “Tiny but contentious.”
  • “I’m even more idealistic now than I was then.”

13:15 Executing on a senior thesis by starting a career in mutual funds

  • Became head of Wellington Management Company by age 36.
  • “I fell for it hook line and sinker.”
  • “My merger partners… banded together and fired me.”
  • “It was awful, I cried. And why wouldn’t you? But I know I’d made a terrible mistake and ended up paying a terrible price.”

18:00 Started the world’s first index fund

  • A thousand times growth since start.
  • “Fired with enthusiasm.”
  • “I can assure you I am no saint. If you don’t believe that ask my wife.”
  • “The more the managers take, the less the shareholders make.”

23:40 Idealism and execution

  • “The Lord has created few people with a greater feeling of determination than I have.”

28:00 Keeping costs low

  • “I’d be embarrassed to walk into an executive dining room.”

32:15 Values in a company

  • “For God’s sake let’s always keep Vanguard a place where judgment has at least a fighting chance to triumph over process.”

38:45 Managers have usurped power from owners

49:15 Fighting corruption through the market

  • “Mutual fund directors are pretty useless appendages.”
  • “If I were persuaded it would never happen, would I start doing things differently? Not at all. I’d do them even stronger.”

55:20 Going against the grain

  • “Nobody in this business had more fun than I had. Nobody.”
  • “Entrepreneurship is about the joy of creating.”

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