# #377 Expanding A Family Dynasty: Marcus Wallenberg Jr.  ## Episode metadata - Episode title: #377 Expanding A Family Dynasty: Marcus Wallenberg Jr. - Show: Founders - Owner / Host: David Senra - Episode publish date: 2025-01-27 - Episode AI description: Marcus Wallenberg Jr. reshaped Swedish industry, leading a family dynasty that once employed 40% of the nation’s workforce. The Wallenberg family's strategic investment practices reveal how they've thrived for 170 years, emphasizing values of innovation and teamwork. Insights into the family dynamics highlight contrasting management styles between the brothers and the heavy burden of legacy. A tragic incident showcases the personal stakes involved in maintaining such a powerful lineage, illuminating the delicate balance of personal and professional responsibilities. - Mentioned books: [The Match King](https://share.snipd.com/book/0e0b88bd-c9f0-4a31-977c-f3db184d32b7) by [Frank Partnoy](https://share.snipd.com/person/02fcdc2c-b9d2-4254-9ea5-252071d20a3d), [Furthering a fortune](https://share.snipd.com/book/a7a09eab-5040-428f-8acd-0ab391894857) by [Ulf Olsson](https://share.snipd.com/person/c6698b37-0203-4592-9cbd-ffae1463c530) - Duration: 01:03:42 - Episode URL: [Open in Snipd](https://share.snipd.com/episode/a3df954d-c0b7-4ab9-8f04-7d78a72aaff9) - Show URL: [Open in Snipd](https://share.snipd.com/show/f6fac7e0-d3c5-43df-bb99-1e202e327d1f) - Export date: 2026-02-11T20:06:35 ## Snips ### [Prioritize Top Talent](https://share.snipd.com/snip/c87aeebc-6429-42aa-8c78-845c76f0e701) 🎧 00:22 - 02:07 (01:45) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/e1166e8b-c5ab-4735-b1e6-86ca6f1e5319" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Prioritize hiring the best people. - A small team of A+ players outperforms a large team of B and C players. #### 💬 Quote > Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon's success. > — Jeff Bezos Jeff Bezos on the importance of hiring #### 📚 Transcript **David Senra:** to that list as well. And it starts with Jeff Bezos' very first share where Jeff Bezos emphasizes the importance of having the very best team. He wrote, setting the bar high in our approach to hiring has been and will continue to be the single most important element of Amazon's success. You will hear Marcus Wallenberg Jr. say something very similar to that. Jeff's focus on talent is very similar to this quote that I actually found that Steve Jobs gave in an interview that very same year in 1997. This is what Steve said. He says, I think I've consistently figured out who the really smart people are to hang around with. You must find extraordinary people. The key observation is that in most things in life, the dynamic range between the average quality and the best quality is at most two to one. But in the field that I was interested in, I noticed the dynamic range between what the average person could accomplish and what the best person could accomplish was 50 or 100 to one, given that you are well advised to go after the cream of the cream. You want to build a team that pursues the A plus players. That is exactly what Ramp did. Ramp has the most talented technical team in their industry. Becoming an engineer at Ramp is nearly impossible. In the last 12 months, they hired only 0.23% of the people that applied. When you use Ramp, it means you have the top tier technical talent and some of the best AI engineers working on your behalf 24-7 to automate and improve all of your business's financial operations. And they do this all on a single platform. That means the longer that you use RAMP, the more efficient your company becomes. In the end of that interview, Steve Jobs added one thing. He said a small team of A-plus players can run circles around a giant team of B and C players. From a customer's --- ### [Financial Prudence and Independence](https://share.snipd.com/snip/27a6fef8-665e-4d24-a3d9-4240d28eaac0) 🎧 04:29 - 07:02 (02:33) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/bea963c5-5565-4c99-9909-5d639cdccbe6" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - The Wallenberg family prioritized financial prudence and independence. - They maintained high liquidity and avoided relying on outside help, which helped them survive Ivar Kreuger's financial scandal. #### 💬 Quote > Long experience in this bank has taught us that we must almost exclusively put our trust in ourselves. > — Marcus Wallenberg Jr.'s uncle On the Wallenberg family's banking philosophy #### 📚 Transcript **David Senra:** And since I was going to go to Sweden, I figured I'd want to read and learn more about the most powerful family in Sweden. It's the Wallenberg family. It's actually a 170-year family dynasty. So the book that I want to talk to you about today is called Furthering a Fortune, Marcus Wallenberg, Swedish banker and industrialist, and it was written by Ulf Ossin. So Marcus Wallenberg Jr. was known as M.W. So that's I'm going to refer to him throughout the entire that you and I are going to have. I do want to jump right into his life. I do think there's a few things I should like some background I should give you about the Wallenberg family because he's the third generation. And there's just a couple of ideas that I think were laid like the foundation laid very early in the very early days of the family dynasty that Mark is definitely built upon. Although, as you see, he was fine with the responsibility of continuing the tradition and expanding the dynasty. But he was much more of an like an innovator than an administrator. As somebody born wealthy, you might suspect that, okay, we're already rich. We're kind of just going to maintain it. He was not interested in that. He was interested in technology, innovation, and drastically expanding the family fortune. Now, there is a couple of ideas that he never deviated from. So there's a line at the very beginning of the book where his actual uncle says, long experience in this bank has taught us that we must almost exclusively put our trust in ourselves. So the Wallenbergs, and this is mentioned multiple times throughout the book, they always had more liquidity than other banks. And they never wanted to put themselves or find themselves in a position where they had to rely on the kindness of outsiders. I don't think you survive and thrive really for 170 years without being relatively conservative and having like this financial fortress. Remember this for later on, because when MW is a young man, his job, one of the jobs in the bank and the family bank is the fact that he was handling all loans for Ivar Kruger, which I covered all the back on episode 348, which was the biggest, one of the biggest, maybe the biggest financial scandal and financial collapse, definitely in Sweden's history, but in economic history in general. And it is due to the conservative and prudent nature of the Wallenbergs and what they taught the third generation that they wind up, I'll tell you about this but it's pretty crazy. They actually held more collateral from Kruger than liabilities, where a lot of other banks and the main competitor for the Wallenberg family was actually, his life and work was destroyed by his association with Ivar Kruger. So --- ### [Long-Term View and Rescuing Companies](https://share.snipd.com/snip/8eaec09c-57db-4500-872e-43ea2768d517) 🎧 07:02 - 08:26 (01:24) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/c9350157-566f-4d08-9a37-3d1c039c55dc" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - The Wallenberg family rarely sold assets, even problematic ones. - They held onto companies for decades, sometimes over a century, often rescuing them and recovering losses. #### 💬 Quote > The bank did not content itself with writing off the lending losses, but continued to maintain its interest in its debtor companies in an attempt to rescue them and at some future date, recover as much of the bad debts as possible. > — Ulf Olsson On the Wallenberg family's approach to investments #### 📚 Transcript **David Senra:** this idea, it's like, hey, you want to a ton of liquidity, more liquidity than the other banks, and you don't want to put yourself in a position where you have to rely on the kindness of outsiders. Another thing that is in the book, and I also got to meet while I was in Sweden, some people that had worked with the Wallenbergs for many, many years. And this came up over and over again, the fact that the family rarely, if ever, sold. In many cases, there's a bunch of problems in the businesses that they own or they invest in, and they wind up owning these for decades, in some cases over a century. And what they found is in time, a lot of these problems can be solved or work themselves out. So it says the bank did not content itself. And when you hear the bank, you really have to think of the family, which again, there was no difference between the way Marcus thought about it, the way his father, the rest of the thought about it. There's no difference between the bank and the family, the business and the family. The family is a business. The business is a family. The bank did not content itself with writing off the lending losses, but continued to maintain its interest in its debtor companies in an attempt to rescue them and at some future date, recover as much of the bad debts as possible. So again, I wanted to bring that up right up because they did this before M.W. was born, and you'll see M.W. does this, and he actually carries on the tradition and really rescues, restructures, combines a bunch of companies that the family owned for an extremely long period of time. --- ### [Early Signs of MW's Character](https://share.snipd.com/snip/225ce033-a9fa-468e-8aa4-f025f4fb3e1a) 🎧 09:09 - 11:10 (02:01) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/1e7d623b-2ddd-4c42-a06b-d3668458163d" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Marcus Wallenberg Jr. (MW) displayed self-confidence, a strong will, and a need for control from a young age. - He pursued business with the same intensity as his love for tennis, becoming a Swedish doubles champion. #### 💬 Quote > He showed signs of being argumentative and strong willed from a very early age. He had a great need for independence and control. > — Ulf Olsson On MW's childhood traits #### 📚 Transcript **David Senra:** And you're going to see traits that he had when he was a kid that he continued his entire life. They call there's a there's a funny line in the book where they said that M.W. was a self-confident five-year He showed signs of being argumentative and strong willed from a very early age. He had a great need for independence and control. Remember, he's a kid. He's like this his whole life. And he was way more defiant than his siblings. They also said that he often got his own way thanks to his charm powers of persuasion. So the family has essentially set up a track for all the kids very early on, which for the most part, MW agrees to. He's like, yeah, okay, my fate, my destiny is to work in the family business and to perpetuate this dynasty. But he's also going to have input and really push back on his father, even though he had a great relationship with his father. But I want to give you an idea of the kind of family we're dealing with, where there was no ceiling on their ambition or what they thought they could do. So they actually, the school, after he does some brief military training, M.W. is going to go to the school. The school is the Stockholm School of Economics, and it's created by his family. And the way I was thinking about this is when you when I went back and I reread my highlights over and over again before I sit down and talk to you. And the second or third or fourth time I read this section, I like, oh, you know what? What's really happening, the way I think about what's happening is the Wallenberg family is starting this business school as a way to grow the entire pie and then take a percentage of that growing pie. So what do I by that? Growing the pie, they're interested in making more business people, so they make more businesses. If there's more businesses, then they're going to own equity in some of those businesses and then have a relationship. The family bank is going to have a relationship with those businesses. And MW's uncle was the one that started it. And he says, it is for knowledge and training that will raise the members of the commercial sector from the level of shopkeepers and merchants and allow them to attain the position and respect that they occupy in other countries, trying to build a more sophisticated financial and business base inside Sweden. --- ### [Focus on Forward Momentum](https://share.snipd.com/snip/1dc58b01-74bc-403a-ab33-c2c1aa58081e) 🎧 13:00 - 14:38 (01:38) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/101fe535-27e5-4525-a215-503911d3c743" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Focus on continuous progress and knowledge acquisition in your career. - Introspection can hinder action, so prioritize moving forward. #### 💬 Quote > There is but one possibility to make progress, to gain knowledge. In other words, to go forward. > — Marcus Wallenberg Jr. MW on career progression #### 📚 Transcript **David Senra:** And so one of my favorite parts about the book is the fact that there's all these letters in the book back and forth between M.W. and his father. And you see the advice that his father has, how M.W. kind of pushes back. But one thing that he doesn't push back, and I think this is actually good if you're born into a situation like he is, he writes to his father. At the time, M.W. is about 21 years old, and he knew that he was going to go into the family bank. Right now, he's going to expand it way past finance and go. He really thought of himself much more as like an industrialist. He was much more interested in industry than he was finance. But he writes to his father something that's very interesting. And I think there's a side idea here that you and I can benefit from. He says, I do grant you, father, that you are right about my career being determined. There but one possibility to make progress, to gain knowledge. In other words, to go forward. So at the very end of the book, there's a line in the book that says M.W. was not given to introspection. This is one of, surprisingly, one of the most controversial observations that I have just about reading all these books. Many of the great founders, once that they know what they want to do, I would argue that they actually have very low levels of introspection to almost no introspection. And the reason that is important is because low introspection equals more action. And you see the importance of action and moving forward with the way he ends that letter. These are very, you know, Swedish people are very typically very reserved. I was shocked at how many of the letters that MW is writing, and he just used exclamation points way more than I expected. And he ends that letter to his father forward exclamation --- ### [Learning from the Ground Up](https://share.snipd.com/snip/e68fa4e5-5f9a-4008-85e4-7e1a3be3afa6) 🎧 14:38 - 16:32 (01:54) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/d857973c-7e9e-4461-89a4-6b4555fb785b" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - MW's father emphasized learning from the ground up. - MW started in the mailroom and trained at various international banks like Pictet, Lazard, Brown Brothers, and Credit Lyonnais. #### 💬 Quote > His father had already started to plan the next step in his son’s carefully mapped out career: periods of training with foreign banks. > — Ulf Olsson Describing MW's career path #### 📚 Transcript **David Senra:** point. And one thing that MW did not have to think about was that the family was something that his father taught him and that his father's father taught him was that the family and the bank were one in the same thing. And definitely how MW thought about it. Now, once you're done with your military training, now you've finished with the Stockholm School of Economics. This was very fascinating. He's like, okay, I'm going to map out. You can't just come into the bank. We're not just going to make, give you a position of authority or, you know, put you right in the top. The way the family trained the next generation, I absolutely loved. And I've seen this a few times too. They insisted that they have to learn from the ground up. When I want to read to you, if you listened to a few weeks ago, when I covered the two biographies of Hedy Green, who was the single largest individual financier in the world of time, the way that she wanted to train her son, the next generation, you know, because Hedy Green was fifth generation. Her family was rich for five generations before her. She said, OK, I want you to learn the railroads and you're going to learn it. You know, even though I own the railroad, could make you CEO anytime I wanted or president anytime I want. No, you're not going to do that. You're going to walk the goddamn tracks. You are going to literally going to pull weeds and clean up. You're going to do every single job. You're going to learn from the ground up. So what MW's father does is, first of all, they have a phenomenal network. Just wait till I read the banks that he's going to become a trainee at. But he literally starts in the mailroom. He starts doing the lowest level possible. So it says his father had already started to plan the next step in his son's carefully mapped out career, period, periods of training with foreign banks. The work was monotonous with all the manual duties that formed part of everyday banking at the time, such as sorting, checking, counting, and writing everything by hand. It provided, but this is why he's doing this for his son. It provided a basic insight to the workings of the financial system. So MW's father is sending him all over the world, training in all these other banks, see how they --- ### [Building Lasting Relationships](https://share.snipd.com/snip/c5521b14-c402-4b27-9489-fad745a6d5fa) 🎧 16:32 - 17:28 (00:56) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/e42cf567-bad0-409f-9c5a-7129d5f093f0" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Cultivate lasting relationships by showing gratitude and attention to those who help you. - Personal contacts are crucial for career success. #### 💬 Quote > The most lasting relationships are created through paying attention and showing gratitude. > — Marcus Wallenberg Sr. Advising his son on relationship building #### 📚 Transcript **David Senra:** do it, right? He's doing it so he learns from the ground up, but he's also, this is something that is repeated over and over again. It's this maxim that I've said to you before, relationships run the world. His father talks about the fact that personal contacts were actually even more important, an even more important reason for training abroad. And I think Marcus Wallenberg Sr. would agree with that over and over again. He's talking about you need to prioritize the personal contacts. I'm going to read this great advice that he gives to his son, again, appearing in one of these letters that go back and forth between father and son throughout the book. It is necessary to behave in a way befitting a well-mannered member of an established family. When M.W. was about to leave London, his father stressed how important it was to clear out in a decent way. You should pay visits or write to all of those who have shown you some kindness. The most lasting relationships are created through paying attention and showing gratitude. You should take a couple of extra days doing that. So --- ### [The Wallenberg Sphere](https://share.snipd.com/snip/d86c88e1-a824-4024-a4ee-5f2a505f0485) 🎧 21:24 - 24:03 (02:39) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/a25f9270-8af1-4e80-81aa-011e0d20d5ee" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - The Wallenberg "sphere" comprised the bank (SEB), the holding company (Investor AB), and a complex family office. - These entities, though technically separate, worked together to manage and grow the family's wealth. #### 💬 Quote > It is important to remember that the banking business was only one of the fields of activity in which the Wallenberg group was engaged. > — Ulf Olsson Describing the Wallenberg business structure #### 📚 Transcript **David Senra:** all, should not M.W. ultimately take the decision on his own future? So the book talks a lot about what they call the Wallenberg family sphere, which I absolutely love that description. And in the most simple terms, it is the bank, the holding company, which is called Investor AB, which was founded in 1916, is public and still exists to this day. In fact, it is the second largest company in Sweden behind Spotify. And then what I would call the family office, which is really a complex web of companies and holding companies that manage the family fortune. You can actually see some of this structure on the family's website. It's Wallenberg.com. But it's important for me to point out that this is a very like oversimplified way to think about it because they have just this huge network of companies. And you'll see this as we continue to go through the book, just how complicated it can get. But I want to read this section to you because this was what was taking place when M.W. starts his career in the family business. It is important to remember that the banking business was only one of the fields of activity in which the Wallenberg Group was engaged. There were at least two other principal activities which came under the family umbrella. The family was directly involved in industrial ownership, first through the rehabilitation of weaker companies in order to recover loan losses from their bank. Secondly, in the development of new companies that had the potential of becoming valuable customers of the bank in the future. Much of their industrial activity was carried out through the holding company AB Investor, again, the one that still exists to this day, and its subsidiaries, backed by SEB, which is the family's bank, backed by SEB's capital resources. this is a key point here. Although dominated by the Wallenberg family, the investor group of companies was formerly kept separate from the bank. So their bank and their main holding company is technically separate, but they still control both. A third line of business, alongside the banking and industrial operations, was the management of the family's assets. Considerable growth was also achieved by the use of finance and holding companies that could carry on financial activities on a larger scale using techniques not normally found in banking. That's why they have all these holding companies. These companies were known as quote unquote associated companies, which meant that they were formerly independent of the bank, but were still closely linked to it. Many of them were foreign companies enjoying tax and foreign exchange advantages. And the reason I think it's so important to try to simplify the family sphere, you have the initial source of the family's wealth being the bank, the way they grow the wealth being the holding company, and then you have all the private, the family office per se, of the actual management of the family's assets. --- ### [Complex Holdings](https://share.snipd.com/snip/87a65769-a6dc-4d34-9454-829b4276005d) 🎧 24:03 - 25:03 (01:00) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/4a404642-ae31-4608-b971-99a865271901" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - The Wallenbergs owned an Ecuadorian plantation run by a German company. - This demonstrates the complexity and global reach of their holdings. #### 💬 Quote > So an Ecuadorian plantation run by Germans owned by Swedes. > — David Senra Illustrating the complexity of Wallenberg holdings #### 📚 Transcript **David Senra:** And I think those are the three primary uh like components of the sphere now there's probably an unlimited amount of companies within them like let me give you a perfect example of why i think it would be so difficult to actually put it put a actual price on like how much wealth does this family have any and this goes for you know anything that's been compounding for a long period of time so later on the book they're like fighting with the eventual Nazi government in Germany over one of their assets. And to me, this is like the perfect example of just how complicated and how widespread their family sphere went. So the Wallenberg family owns a plantation in Ecuador. That plantation in Ecuador is run by a German limited liability company. But the main, the principal owner and the main shareholders is the Wallenberg family in Sweden. So an Ecuadorian plantation run by Germans owned by Swedes. And so 300 pages into this book, when you're reading about all these different companies, I mean, MW is going to sit, he's on 80 different boards. He's like the --- ### [Atlas Case Study](https://share.snipd.com/snip/0701fce9-4b38-4cf2-a31d-88bc600a8bc6) 🎧 26:45 - 31:00 (04:15) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/3d825e0b-c90b-4c3e-a5ea-8bec613f6f9d" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - The Wallenbergs' long-term approach allowed them to turn around failing companies. - Atlas, founded in 1873, shifted from railway equipment to pneumatic technology after multiple restructurings. #### 💬 Quote > Within the family, this case has traditionally been regarded as a model of how industrial problems should be handled. > — Ulf Olsson On the Atlas company as a case study #### 📚 Transcript **David Senra:** view. And a lot of the problems that they have inside companies, because they never sell, they're able to work through given enough time. And so this is really a family case study for how problems should be handled inside of their companies. And one of the most surprising things that I learned from this book is they really try to avoid letting bad investments die. There's a, you know, some people believe that, you know, spend all your time on the big winners, kind of cut your losses. There's really, you know, no wrong way for this. just depends on what you want to do. But they, the Wallenberg family, they spent a ton of time not letting their bad investments die. And because they have such a long-term horizon, they're able to wait out for better times and opportunities. So there's this company called Atlas, and it says it's perhaps the best example of the perseverance of the Wallenbergs with regard to its industrial investments. Within the family, this case has traditionally been regarded as a model of how industrial problems should be handled. This is where M.W. rapidly learned practical crisis management under the supervision of his father. Atlas was a company that had been founded in 1873 by the Patriarch of the Family. This is founded by A.O. Wallenberg in 1873. The reason he started the company is because in 1873, the main technology of his day was the railroads, right? So they start Atlas for the purpose of producing equipment for a network of railways. I'm going to pause there. There's another maxim that jumps out when you study this family, and that's don't let the money escape. So if you're going to start, if A.O. Wallenberg, any Wallenberg started a company, who do you think is going to be that company's bank? SEB was Atlas's bank. Atlas became the largest mechanical engineering company in Sweden, taking up a lot of the bank's management's time and energy, as well as a disproportionate share of its loan portfolio. The company's first crisis occurred after the 1870s with the decline of the railway industry. So what did they do? During the 1880s and 1890s, Atlas was restructured two separate times. So this idea of restructuring, consolidating, and combining is something that the Wallenbergs do over and over again. Remember, they're not going to sell. So they wind up changing from producing equipment for railroads into the manufacturing of air-operated tools and compressors. So around the time that Atlas switches from railroad equipment to pneumatic air compressor tools, Marcus Wallenberg Sr., MW's dad, the Wallenbergs found companies too. They make investments, they buy companies, they start companies. He founded a company called AB Diesels. The idea was, hey, we're going to manufacture engines based on Rudolf Diesel's patent. What they do is like, hey, we're going to actually consolidate Atlas into AB Diesel. So we're going to combine the companies. That combined company does well for a few years in large part because this is during World War I and there's a huge demand for their products. After the war ends, there's a depression in Sweden that hits both companies very hard. So keep in mind, this is 50 years after the founding of Atlas. They're still in control of the company. They were thinking, okay, maybe we need to close down the business completely. They decide not to do that. They decide restructure it and then they have to lay off a bunch of workers. So they go down from about 900 employees down to 300. They restructure the company. They write down the shares. They still have full ownership and control. So it says the family was again prepared to wait for better times. That is a very important line because they have control and because they have financial resources and the long-term, they have a long-term perspective and they always had, they can wait for better times. Now what they realize is, hey, our compressor and air compressed tools division shows the greatest potential for growth. And it's being pulled down by this diesel engine division. And so another thing that you'll see the Wallenbergs do over and over again is that's fine. We're not going to sell the company. We're just going to drop that bad business line. And then we're going to find a market that provides tailwinds. And this is what happens. The profits came instead from air operated tools and compressors, a market sector that appeared to be expanding. Before the decade had ended, diesel engine manufacturing had been closed down, and the march a position for the company as a world leader in the area of pneumatic technology had been initiated. --- ### [Choosing the Right Partners](https://share.snipd.com/snip/f239aa50-2d7b-4bc5-b0a9-30dd795bf9da) 🎧 31:00 - 33:15 (02:15) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/6d5802e8-e3f1-4d93-8f4f-765430e0229e" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Carefully choose your business partners, as bad associations can be detrimental. - Unlike Oscar Ryback, whose career was ruined by Ivar Kreuger, the Wallenbergs thrived after Kreuger's collapse. #### 💬 Quote > Ivar Kreuger became very closely associated with Oscar Ryback [...], who was the only person who could really compete with Marcus Wallenberg Sr. for the title of Sweden’s leading banker during the 1920s. > — Ulf Olsson On the impact of Ivar Kreuger #### 📚 Transcript **David Senra:** By investing in the cutting edge of technology and the international marketplace, NW chose a direction that would, in future, central to his industrial philosophy. Okay, moving on to another idea that the Wallenberg family repeats over and over again, the importance of picking who you associate with carefully. I'm going to start with an example of somebody that did not do this, and it winds up destroying this guy's life and work. This is the section on Ivar Kruger. It says Ivar Kruger became very closely associated with Oscar Ryback, who had headed this other bank, I'm not even going to try to pronounce, since 1917, and who was the only person who could really compete with Marcus Wallenberg Sr. for the title of Sweden's leading banker during the 1920s. Again, the reason this speaks to the importance of picking who you're with carefully, Ivar Kruger is going to destroy this guy's life and work. The exact opposite is going to happen to the Wallenberg family. I mentioned earlier that MW managed the Ivar, Ivar Kruger financial disaster extremely well. The family bank had refused to loan Kruger more money before his empire collapsed. And when it did collapse, bank actually had more collateral than liabilities. I do think Ivar Kruger is very important to study, but I already did an episode on him. If you're interested in learning more, listen to episode 348, which is about this book called The Match King Ivar Kruger, The Financial Genius Behind a Century of Wall Street Scandals. And I think in more ways than one, the Ivar Kruger collapse actually demonstrates the shrewdness of the way the Wallenbergs operated their business. So not only were they not taken down or destroyed by them, they actually, as a result of the collapse of the Kruger empire, the Wallenberg group was drastically expanded. And I'll just give you one example of this. At the time where Kruger dies, some people think it was a suicide, some people think he was murdered, but Erickson was a very, very precarious situation because Kruger was a majority shareholder in Erickson. And this, again, with another idea that the Wallenberg has is this extreme long-term outlook and the way the Wallenberg family operates in this really long-term way. They actually still control this company, Erickson, 100 years later. Ericsson is jointly controlled by the Wallenbergs and this bank called Handelsbacon. And they both acquired their voting strong A shares and thus control of Ericsson after the fall of Kruger. --- ### [Don't Let the Money Escape](https://share.snipd.com/snip/15da4891-d603-4062-b915-7a24c9c2a2ae) 🎧 34:52 - 35:51 (00:59) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/3dfd319e-dec2-451c-9a14-ad7aadd29018" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Keep money within your business network whenever possible. - The Wallenbergs preferred doing business with companies within their sphere of influence. #### 💬 Quote > Don’t let the money escape. > — David Senra Summarizing the Wallenberg family's business strategy #### 📚 Transcript **David Senra:** Now, I wanted to read that to you because I think this idea, and again, I took this idea from the book and just compressed it down to a maximum for you and I, don't let the money escape is one way they do this. So your preferred partner, right? You have this network of companies who knows the count, even if they're separate legal structures, they're heavily controlled by one family and people that they trust. It's your preferred partner for every single thing should be inside the Wallenberg sphere. So they take control of Ericsson. They wind up going to the government of Finland. And the family bank, SCB, says, hey, we are going to loan you, government of Finland, $4 million from our bank. So you can then spend that money that came from our bank and give it to Ericsson so they can expand your network, your telecommunications network. And then Ericsson, you're going to have an agreement with SCB that we get at least 37.5% of all of your banking business. --- ### [Wallenberg Family Motto](https://share.snipd.com/snip/187e8215-9191-4f70-a6c3-5b0ac187e158) 🎧 35:51 - 38:45 (02:54) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/e3995040-7daa-4647-b0a7-e4ccc72e0f10" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - The Wallenberg family motto, "Esse Non Videri" ("To be, not to seem"), emphasizes sincerity and authenticity. - MW inherited and applied this principle throughout his career. #### 💬 Quote > It is to be, not to seem. > — David Senra Explaining the Wallenberg family motto #### 📚 Transcript **David Senra:** Don't let the money escape. Their associated companies almost always had to use the family bank. Now, without a doubt, since this is the biography of Marcus Wallenberg Jr. of MW, right? He's been the main character, the supporting character, the most other important character in this book is without a doubt his father. And his father's life motto actually becomes the family's motto and is still to this day. It's on their website over and over again. It's also in this book. It translates from Latin. It is to be, not to seem. And one way he described it to his sons, because he's about to pass away and then we're going to get into really how his sons are now writing back to each other, to their friends and to their associates about the impact that their father had in their lives. But the way he described it to his sons was it was the importance of being sincere and true to oneself. So this part is absolutely incredible. I want to read the whole thing. I'm going to give you my outline, my notes before I read it to you. Number one, admiration for his father. Number two, the importance of innovating and creating something new. Number three, his idea that we need to be epoch makers. Number four, the traits that M.W. most admired from his father. And number five, the importance of, again, this is repeated. They just have a handful of ideas that they repeat over and over again, like everybody else. Surround yourself with great people. This is something the Wallenbergs repeat. So now M.W. is writing right after the death his father. He said, you probably know better than most people what a wonderful father, friend, comrade, and mentor he was, and the strength of the ties with which we had developed with him. He has left a great void, but his spirit is so strong that it will live on forever among many of us. What M.W. inherited from his father and turned to his own advantage was the ability to create something new. This is now how M.W. thought about this. For the sake of civilization, I sincerely hope that the epoch of bold and constructive innovation has not come to an end with the passing away of my father. Innovation goes on constantly and is stronger than any regulation. The fact that he was often seen as the soul of an epoch, or regarded as an epoch maker, was probably due to his unusual qualities. Should other men of the same emerge, I believe they will also be seen as epoch makers. M.W. continues to describe his father. He was extremely versatile. He had a phenomenal memory and was very knowledgeable in all kinds of sciences and literature. He enjoyed music and knew about different technologies, and he mastered languages as well. And there's all these exclamation points again. I'm really surprised by these very reserved Swedes, how often MW used exclamation points. I do the same, so I love it. He was very interested in history and would tell stories his various companies and about the difficulties he had encountered. He was talented, first of all, in terms of wisdom and intelligence, but he also had great judgment, industriousness, energy, and he also enjoyed good health and had a sense of responsibility. Really, the reason I'm reading this to you, because he's describing his father, but now that I know the full arc of M.W.'s life, you could use the same description of him as --- ### [Rescuing Ailing Companies](https://share.snipd.com/snip/6717510d-2172-4ece-9db4-0406b25f33bb) 🎧 38:45 - 40:53 (02:08) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/c4b3a55f-dd52-4c6b-a0f9-e86bfaadb095" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - MW focused on rescuing companies by realistically assessing their position and giving them a fresh start. - He often consolidated, shed underperforming units, and recapitalized companies. #### 💬 Quote > First, the bank’s management examines the company’s position, and they identify where the true losses lay. Then with the help of a very realistic approach, a judgement has to be made as to whether the company could be able to succeed if it was given a fresh start. > — Ulf Olsson Describing how MW handled struggling businesses #### 📚 Transcript **David Senra:** well. He often used to say, I find it difficult not to intervene when I see things going wrong. And one thing that I think is very important is that he was very good at picking good collaborators. And so with the passing of his father, this is not going to surprise you based on the personality and everything you and I have discussed up to this point. He's going to become M.W.'s going to become the most prominent and powerful person inside the family, even though he's the second son. That is why the book is called Furthering a Fortune. And the way he furthers the Wallenberg family fortune is because he had this obsession, not with finance, but with industry. And I'm shocked at how much of the book is covering the restructuring, reviving, and combining of all of the different companies that they quote unquote invest in. But really, they're like, I don't think of them as investors. They are very much like operators, almost like co-founders. And a lot of these cases are on the board. They wield a hell of a lot of influence and control. And so MW is talking about the fact that, you know, if you own something for a long period of time, it's given it's going to have ups and downs. And he talks about their approach to fixing these ailing companies. So he says, first, the bank's management examines the company's position, and they identify where the true losses lay. Then with the help of a very realistic approach, a judgment has to be made as to whether the company could be able to succeed if it was given a fresh start. So sometimes that is combining the company. Sometimes that's shedding business units that were not performing as well. Sometimes it means writing it down and recapitalizing it. But then he says, then the company's bank, right? This is what I mean about they don't let the money escape. The company's bank must often become involved on a long-term basis. And in the interaction between the family bank and the company's management, this is what MW says over and over again. The personal element of the relationships was the greatest importance. He goes back on to why relationships are so important. Let's say we have an ailing company. We've recapitalized it. We've combined. We've got new management. We've done whatever we can. Now, what do we do next? To make it grow. The management of the bank, which you can think of as the family, right? Often committed itself to trying to secure markets, meaning customers, further resurgent company through judicious use of our contacts. --- ### [Active Ownership](https://share.snipd.com/snip/beab7fb0-69e2-427b-80f3-c8cfc596f8c1) 🎧 40:53 - 41:27 (00:34) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/097c7120-e75e-4c57-b44e-4a52c968b557" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - MW practiced active ownership by gathering information and building a strong team. - He recruited economists, technicians, and lawyers, keeping files on potential managers. #### 💬 Quote > - He established a system of active ownership. What does that mean? This is what he did. He hired a staff function for the gathering of information. > — Ulf Olsson Describing MW's management style #### 📚 Transcript **David Senra:** And so here's a description of some of the ways that MW implements and exerts his influence. Again, they believe, Wallenbergs believe, and MW believe, in long-term and active investment. When he became the managing director of the bank, he was able to mobilize all of its resources. He established a system of active ownership. What does that mean? This is what he did. He hired a staff function for the gathering of information. Economists and technicians were recruited. A legal department employing professional lawyers was set up and files on potential managers were kept and so on. So he's essentially helping them recruit --- ### [Morning Prayers](https://share.snipd.com/snip/ea9c24ce-1c10-44d9-838a-8cb24a3463ad) 🎧 47:48 - 49:25 (01:37) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/70ba1616-a7cf-4e42-a35d-c01421075c63" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - MW instituted "morning prayers," gathering top staff to report on their areas and share information. - This provided him with a direct, unimpeded flow of information, similar to Jensen Huang's T5T emails. #### 💬 Quote > Each of them would give an account of their respective areas of responsibility, report major individual transactions and exchange general information. In this way, MW could keep abreast of developments within the bank and be at the centre of the flow of information. > — Ulf Olsson Describing MW's information gathering system #### 📚 Transcript **David Senra:** I want to go over the very unique way because granted, he really has no regard for convention or just continuing down a path just because somebody else in his family beforehand continued on that path. In everything he does, he injects some kind of new idea. So takes over the management of the family bank and he institutes this thing called, he calls morning prayers. So he gathers his top people and each of them would give an account of their respective areas of responsibility, report major individual transactions and exchange general information. In this way, MW could keep abreast of developments within the bank and be at the center of the flow of information. So it's kind of like an analog, low-tech way. If you listen to the Jensen Wong episode I did last week, where both MW and Jensen and a lot of history-based entrepreneurs, they want unimpeded information and a lot of it. And so Jensen has this idea where he's like, hey, every single person in the company, you're going to write, I think once a week, this top five things, this T5T email, right? Top five things. You're going to put in bullet points. I'm going to read hundreds of them every week. And I'm going to have this unimpeded flow of information. MW's analog version of that is I'm going to gather all my people together. And real quick, in many cases, they mention the fact that these meetings go really fast, like 15 minutes. I'm going to get this unimpeded information on a daily basis from the people in my company. Another thing that was very unusual, given the industry that they're in and how reserved the family was, M.W. is the first person that he actually starts advertising the bank's services publicly because he wants --- ### [Investing in Technology](https://share.snipd.com/snip/e5d65cdf-0fb0-491a-b6f4-d7259fcb2148) 🎧 49:25 - 50:26 (01:01) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/c3cf096a-2905-4941-9e6a-2de99cd02093" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - MW embraced technology to increase efficiency. - By implementing punch card machines, he doubled productivity while only slightly increasing workforce size. #### 💬 Quote > - So as this result, all accounting transactions were transferred to punch cards, which led to a dramatic increase in efficiency. Productivity doubled. > — David Senra On MW's use of technology #### 📚 Transcript **David Senra:** to grow. And so it says in the early 1950s, the bank, which normally took a low profile with the media, advertised that it was at the service of private enterprise. He starts making the bank invest heavily in technology. And in technology of their day, they have these punch card machines. So he buys a bunch of punch card machines then all and make sure that all accounting transactions inside of the bank have to be no longer done by hand. They have to be done on the technology of their day, which is the punch card machines, right? So as this result, all accounting transactions were transferred to punch cards, which led to a dramatic increase in efficiency. Productivity doubled. Twice as many transactions were carried out by a workforce that only had increase from 425 employees to 550. So they add 125 employees, but they do double amount of work because of MW's insistence that you need to invest in technology because we want to push these massive increases in productivity that technology enables. And --- ### [Public Criticism and Information Flow](https://share.snipd.com/snip/b456dd55-1805-4aec-aadb-11983c37d252) 🎧 50:26 - 52:52 (02:26) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/82bcaea8-1bb7-4263-8bd2-a3be07b8526e" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Criticize publicly, as it's a learning opportunity for the whole company. - Ensure everyone keeps you informed, even on seemingly trivial matters, to draw your own conclusions. #### 💬 Quote > - MW would express his dissatisfaction with somebody in front of other people. [...] He considered it useful for others to understand what it meant to work for him. > — Ulf Olsson On MW's management style #### 📚 Transcript **David Senra:** so remember, he wrestled control of the family bank from his older brother, and we're going to get a lot more details on how he decided to run his business. There's obviously a lot of differences between his brother Jacob and him, but there's also going to be a lot of parallels. When I got to this section, I thought a lot about Steve Jobs and Jensen Wong. So it says MW was a highly visible driving force in the bank. Jacob had adopted a low profile. The employees did not see much of him. MW had a different way of communicating with the staff. He got to know everybody. So I would say MW is a big proponent of management by walking around. He liked to walk around the office asking what the different employees were doing. The pace of the work in the bank increased. MW would express his dissatisfaction with somebody in front of other people. So remember, just like Jensen was a big proponent of public criticism, talked about the fact that you should criticize publicly because it should be a learning experience for the entire company. If you criticize privately, only you and that individual employee actually learned the lesson. And Jensen was optimizing, just like MW is optimizing for the overall learning of the entire company. MW would become irritated and lose his temper, but there was often a sound intention behind his outburst. He considered it useful for others to understand what it meant to work for him. That reminds me of Jensen as well. Not keeping him informed of what was going on was a mortal sin. That reminds me of Jensen as well. It was not up to the subordinate to judge what needed to be reported. Jensen almost says that exact same thing. It's spooky how similar this is. M.W. himself wanted detailed information even on apparently trivial matters. He wanted to draw the conclusions himself. Reports containing the writer's own reflections he would call half-chewed food. Now, I had a weird thought that came to mind when I got to this section. Because this is reminding me of Steve Jobs would insist on improving every single ad that Apple did before it went out. And so the people that made the ads in the meetings with Jobs, they would put the ad in front of them and they'd try to tell them a story. And Jobs would tell them to shut up. It's like, are you going to be there when I see this billboard or when I'm having coffee on a Sunday morning and seeing this Apple ad in a newspaper? And they're like, no, exactly. So be quiet. I want to be able to judge, like draw the conclusions myself. Another side of MW's leadership style was that once he had told someone off, he would quickly let the matter pass. --- ### [Active Ownership and Leadership](https://share.snipd.com/snip/7d560ab7-c1f6-4b9c-89dd-302be5d60527) 🎧 52:52 - 55:02 (02:10) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/411702df-fd44-4022-99fd-2aede6fceaa0" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Be a chairman of many companies, not a CEO of one. - Active involvement is key: "Ownership without presence rots." #### 💬 Quote > - Ownership without presence rots. > — Marcus Wallenberg Jr. MW's philosophy on ownership #### 📚 Transcript **David Senra:** It not linger. the whole time. Jensen focused on running NVIDIA the whole time. MW was the chairman of the board for 33 separate companies and on the board of another 80 companies. His style, I would say, is much more in line with what Sam Zell said, where he set up all of his companies and everything he was in. Sam said, I am the chairman of everything and the CEO of nothing. There's a couple other things, and I just made a list because, you know, they reappear over and over again. And so I just made a list of how I think about MW's entrepreneurial philosophy. Okay. Number one, he wants to invest in technology. Number two, he wants decisive influence over the company he is working on or investing in. Number three, he's going to impatiently push things forward constantly, which leads to number four, which seems paradoxical. And the paradox is MW's short-term impatience combined with the long-term perseverance of the Wallenberg family in their industrial matters. The list continues. Number five, the quality of the people is most important. In fact, let me interrupt the list. I'm going to read this section to you and I'll get back to my list. When judging companies, MW considered that the capacity of its top people was generally the most important ingredient. He therefore chose executive managers with great care. He kept himself well informed about new names, drove his managers extremely hard, and moved others aside if they were not up to the task. Those of his own generation who had allied themselves closely with him earlier were gradually moved to one side in favor of new blood. He demanded unlimited work and loyalty from his managing directors and all of his industrial companies. Number five, the quality of the people is most important. Number six, he believed in driving people hard. Number seven, he wanted new blood. And number eight, he had tons of expansive energy for new initiatives. And number nine is one of his favorite sayings that he would repeat. He said, ownership without presence rots. Ownership without presence rots. What does he mean? 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