This morning I noticed two ways of saying the same thing, showing opposite ways of looking at the world and looking at business.
First, Conde’s book on Hudson tells the story of the company’s founding in great detail. I summarized it before. The group who founded Hudson started out working at Olds, then split in disgust and formed an unusual collaboration with Chalmers while running a partly independent company. Soon they separated amicably from Chalmers. Just before the latter split, Chalmers sent Roy Chapin on the obligatory Europe tour. All US engineers and educators and architects looked to Europe, especially Germany, for inspiration and guidance. Chapin toured the auto shows and the factories, and sent back a telegram saying:
I find that a reputation for quality of product is the only thing that can continuously pay dividends.
The new Hudson company continued to follow this motto, seeking quality above all. Their first advertisement promised Solid, speedy and stylish. Over the years Hudsons were speedy or stylish in various proportions, but always solid.
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Al Lewis of Business Blunders ran a Crooks Hall of Fame column today. Naturally the list included Sammy Bankman. Lewis quotes Sammy in a Forbes interview after the failure:
Lack of trust is an enormous transaction cost.
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Same statement from opposite perspectives. Chapin saw it from the honest side. If you want profit and stability, seek quality. Sammy saw it from the cold hard professional criminal side. Fraud is an added business cost like taxes. You can afford a higher overhead if you’re raking in more money, so you should do whatever’s needed to rake in more money from suckers.
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Sidenote.
Solid, speedy, stylish was a chord with three notes, each resonating with one type of auto prospect. Solid for the Conservative Prospect, Speedy for the Step-up Prospect, Stylish for the Luxury Prospect.
In the first decade of motoring most buyers were Early Adopters, which means Young Men. Dealers knew their customers and quickly appreciated the Speedy part of Hudson’s slogan. In the company’s first year, dealers begged the factory to rig up some special racers and enter some races. The factory obliged. “Win On Sunday, Sell On Monday” was a basic rule from the start! In 1952 Hudson played this note to the max, coming in first in 85% of all authorized NASCAR races. The officials tried hard to detect cheating but couldn’t. Hudsons were FAST, and they had excellent drivers.
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