Founders
Episode 110 #110 Henry Singleton (Teledyne)
Founders

Episode 110: #110 Henry Singleton (Teledyne)

Founders

Episode 110

#110 Henry Singleton (Teledyne)

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading Distant Force: A Memoir of the Teledyne Corporation and the Man Who Created It by Dr. George Roberts.

What I learned from reading Distant Force: A Memoir of the Teledyne Corporation and the Man Who Created It by Dr. George Roberts. 

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Henry was much more than a salesman, mathematician, engineer, inventor, and chess champion. He was a student. An observer of the history of manufacturing, of the progress and growth of corporations from the days of Henry Ford, the growth of General Motors, the manner of successful corporations in growing by acquisition. [0:01]

Henry reminds me of de Gaulle. He has a singleness of purpose, a tenacity that is just overpowering. He gives you absolute confidence in his ability to accomplish whatever he says he is going to do. [2:00]

Henry spent time doing exactly what we are doing — learned from entrepreneurs and great people of the past. [3:45]

According to Buffett, if one took the top 100 business school graduates and made a composite of their triumphs, their record would not be as good as that of Singleton, who incidentally was trained as a scientist, not an MBA. / Here is a direct quote from Buffett: The failure of business schools to study men like Singleton is a crime. / "Henry Singleton of Teledyne has the best operating and capital deployment record in American business.” —Warren Buffett [8:30]

Genius is an oft-misused word, but it cannot be denied that Henry Singleton brought exceptional brilliance to the creation and development of the enterprise he undertook. . .Many of these strategies, new at the time, have now become commonplace in the business world. [12:57]

My only plan is to keep coming to work each day. I like to steer the boat each day rather than plan ahead way into the future. —Henry Singleton [14:36]

Within eight years of founding Teledyne had bootstrapped their startup investment of $450,000 into a company with annual sales of over $450 million. [17:24]

Henry’s early faith that semiconductors would become the dominant factor in future electronics, even while this was still being debated by others in the industry. [31:15]

Henry’s three great ideas

Recognizing the future importance of digital semiconductors when this technology was in its infancy.

Acquiring and organizing a selection of financial companies to provide a strong financial base [The idea Henry learned by reading Alfred Sloan’s of GM’s book]

His innovative strategy for stock buybacks [40:30]

Henry knew where he could create the most value and focused on that. Are you doing the same? [50:16]

There is no speed limit: In the company’s first six years net income rose from $58,000 to $12,035,000 [52:20]

There are ideas worth billions in a $30 history book. [56:10]

Henry Singleton the teacher / Claude Shannon on being smart and quiet [1:06:45]

By 1977 Teledyne was the largest shareholder in nine Fortune 500 companies. But Henry didn’t want control. He didn’t even want a board seat. [1:13:40]

There are companies that will sell one division and buy another because today this divisions generally sports a low multiple and the one they’re buying has a high multiple. That absolutely turns me off. The whole concept is repulsive. We don’t do things like that. We look at the economic long term possibilities. —Henry Singleton [1:17:05]

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#110 Henry Singleton (Teledyne)

Introduction

In 1960, Henry Singleton formed a company named Teledyne to capitalize on the coming revolution in which digital technology would replace analog devices and systems in everything we could touch and imagine. They would apply semiconductors and digital technology to many fields of commerce. That company grew from $10 million in sales in 1962 to $3.5 billion in 1984. Henry was much more than a salesman, mathematician, engineer, inventor and chess champion. He was a student, an observer of the history of manufacturing of the progress and growth of corporations from the days of Henry Ford, the growth of General Motors, the manner of successful corporations and growing by acquisition.

In the 1940s and early '50s, he had spent days in the offices of brokerage houses in New York and elsewhere watching the ticker, thinking how to more efficiently get capital rolling, how shares are valued and traded, how companies with a steady growth rate are rewarded with an ever-increasing price-to-earnings multiple. On the way, Henry retold me of the GM story reported by none other than Alfred Sloan in a 1964 book. GM had no financial connections in 1919 and suffered a failure. Bailed out by the Duponts, it was near disaster. Get a strong national reputation with some financial institutional ownership, Sloan advised, and Henry did. Henry made me preach and teach ethical behavior in every way in every day, in every meeting that we held. Arthur Rock who assisted in the early financing of Teledyne had this to say, Henry reminds me of the goal, he had a singleness of purpose, a tenacity that is just overpowering. He gives you absolute confidence in his ability to accomplish whatever he says he's going to do.

Yes, he is rather aloof operating more or less by himself and dreaming up ideas in his corner office. Let me tell you this, that corner office produced a cornucopia of ideas. The man we memorialized today was born in Hassler, Texas in 1916 on a ranch where his father raised cotton and cattle. The 49 years together, we spent as friends and associates have not removed this great man from his love of ranching, cattle, and the great West. As the third largest landowner in the United States, he still had an occasional brush and contact with a cow. You know the saying, you could take the boy out of Texas, but you never take Texas out of the boy. We have lost a genius. Heaven has just gone digital, and I know it's full of apples named McIntosh.

All right. So that is actually the eulogy that the author of today's book, George Roberts, gave for his friend and longtime associate, Henry Singleton. So there's a bunch of things that were happening in that excerpt that I want to just point out. Let me just go back a couple of pages. First, it talks about his insane financial performance from $10 million in sales 1962 to $3.5 billion in 1984.

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