Ep 109: Anson Frericks on the Rise & Fall of Budweiser; Milton Friedman vs Klaus Schwab; and How to Save Corporate America
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You have these two schools of thought going back to the 1970s, but what's the purpose of a corporation? In the US, you had Milton Friedman that says, focus on shareholder, shareholder value. That's sort of your primary customer. And how do you focus on your shareholder? Just create great products and services. And over in Europe, you have the Klaus Schwab World Economic Forum, Davos crowd that said, no, no, no. The purpose of corporations is to serve all stakeholders equally. It's very challenging to do that because who do you put above the other one? It's almost trying to serve like multiple gods. Yeah, exactly. When you have multiple things, you actually have no thing at all. You just fake it. I think

The thing that drives me crazy is that the market is like this super efficient system. It's like an evolutionary system.

But the system can't actually work and evolve without really clear feedback mechanisms if it has all these fake things you're plugging into it. It just drives me crazy. Right. You're exactly right. And then even if you take a look at it, there's two economic models for the next 50 years. In the U.S., created much better investment returns for people in that stakeholder model in Europe. And the S&P 500 was up 10% on average a year over that timeframe. The European broad-based indices were up 7%.

which might not sound like a lot, but if you had $100,000 invested in the US in 1970, it'd be worth $4.5 million today, only $1.5 million in Europe.

Got a great chat with Anson Frerichs. Anson wrote Last Call for Bud Light. And after leaving AB InBev, he co-founded Strive Asset Management with Vivek Ramaswamy. You know, Anson is a really talented guy. He has a background working at all the top places. He was a superstar at AB InBev, which owns Budweiser. And he kind of saw how a company that got moved out of the Midwest, you know,

into New York, got caught up in the crazy woke waves going on, saw how all these asset managers were forcing big companies to go in this more woke direction to kind of blackmail them if they didn't do certain things with ESG, with DEI, and made them really want to fight back. Not only did he start Strive and Athletic Capital to support companies

and investing is more aligned with core American values. But he's speaking out and he really deeply understands what went wrong and how we could take back corporate America and bring back prosperity to our country. I'm Joe Lonsdale. Welcome to American Optimist. Today we have with us Anson Frerichs. Anson, you're the founder of Athletic Capital, co-founder of Strive Asset Management with Vivek Ramaswamy, who's an old friend of yours. And you were a former president in Anheuser-Busch. Thanks for joining.

Yeah. Thanks for having me, Joe. Really looking forward to the show tonight. You wrote a book that came out a little while ago called the last call for Bud Light, the fall and future of America's favorite beer. I guess you were, you were there during the heart of some of that, or you were there right before that nonsense happened, huh? Yeah. It was there right before the nonsense. I mean, frankly, I left the Anheuser-Busch cause I saw sort of this train wreck ahead of me. I saw the company that had went all in on sort of the ESG DEI agenda, uh, started inputting diversity dashboards, quota systems, uh,

the company didn't do a partnership with black rifle coffee company. Cause they thought that company was too controversial. And, uh, one of the reasons I left and started striving was funny. And a year later worlds collided as, uh, everything we did at strive, which makes sure companies were focused on the customer folks on shareholder value kind of collided with the Bud Light, Dylan Mulvaney partnership.

You kind of took the opposite direction. What you saw. Well, well tell us a bit about your background to start. I think you were Yale undergrad at Harvard business school and you were, you were at Citadel after that. What's your background with Yale for undergrad? Like you said, uh, with a private equity firm called summit partners after undergrad business school was working at Citadel. Um, I was actually in their long, short healthcare team. It was, uh, the worst job I probably ever had as a, I was literally forecasting how many people were going to need knee replacements and hip replacements based on weather patterns and how people were going to fall and break hips. Uh,

That wasn't going to be very exciting. At the time, I then ran into the folks from 3G Capital. And that was a group of sort of Brazilian guys that had rolled up kind of the beer industry in South America. They bought InBev over in Europe, which owned like Stella Artois and left. And they just bought Anheuser-Busch Capital.

South America, all the rich families, a lot of them are tied to these beer fortunes. I guess there's a lot of really impressive people all around for whatever reason, they made a lot of money in beer and these, these guys put it all together. And I, and I hear there's, they're really good at talent, right? So these, these were impressive people. Super impressive people. Uh,

George DiPaolo Lehmann, Marcel Telles. George DiPaolo Lehmann is a former Wimbledon tennis champion, created one of the largest investment banks in Brazil, was wildly successful. And these guys, they put together the world's largest beer company. They've also gone on to buy Kraft Heinz. They own Burger Kings. They own a bunch of different businesses. And their whole piece was originally was meritocracy. We want to hire the best, want to hire the brightest, and then have them come in, run companies more efficiently. And for a while, they were very successful doing

And this is maybe a metaphor for a lot of our things in our, in our country and in the world. So they were focused on the top talent. They're focused on meritocracy. We've all heard stories in the business world about the amazing things they built. So I can see why you'd want to go work for them. And it's, it's kind of weird to going from wall street to a beverage company, but you're working with these people, folks on meritocracy, biggest company in the world. And yet it's,

it feels like something happened inside of that company where some of these woke values took over, where meritocracy was pushed to the side. What happened and when did that happen? Were these guys still in charge when that happened? Yeah, I mean, they really weren't. I think that was part of the problem. And I think there was really two things that went wrong for this business. The first one is that sort of the...

uh, the InBev style, which was the 3G capital InBev zero based budgeting operating style. It only works when you have things to buy. To some degree, these guys got too successful. They bought everything. There was nothing left to buy. And all of a sudden they're forced to now build brands. These guys were never built brand builders, which we'll talk to. But I think the separate piece of this, Joe, is that, um,

It's almost a metaphor would have this company is even why some of the power I think went to so many people went for Trump first in 2016 and then afterwards. The company came in 3G Capital, they bought Anheuser-Busch headquartered in St. Louis, Missouri. And within five years, they said, we can't get good talent to St. Louis, Missouri. And we need to move the whole corporate headquarters essentially from St. Louis to New York. That's where they put sales. That's where they put marketing.

and i think this is a problem where you think about kind of like the hollowing out of the center of the country i mean anheuser-busch for 150 years had found tons of talent in st louis they built the world's biggest beer brands biggest beer company in the united states within five years they hollowed out a lot of infrastructure moved it to new york city put a lot of different people in that had never worked in the midwest never understood midwest values

worked with now different marketing agencies, different sports agencies. And then within seven years, you have sort of the Dylan Mulvaney partnership, especially after they adopted a lot of the ESG DEI philosophy to try and grow brands, which as we've seen, hasn't really worked. What's going on with these shifts here? This was a simple one where you had a lot of the senior managers at what was InBev, the company that bought Anheuser-Busch, were more Brazilian. They were Belgian. They're more European. They had been more used to living in more so-called cosmopolitan cities.

And then most of them, just frankly, them and their spouses just didn't like living in St. Louis. And so they really, the 2015-2016 timeframe, they used this excuse that St. Louis was behind. I think Uber wasn't in St. Louis at the time. That's the quote I remember to justify the move was, man, Uber is not even here. We're just behind trends. We're behind where things are. So that's why we want to move to New York City to be closer to urban centers, closer to where trends are happening, closer to innovation, which...

candidly it wasn't really the the call the quintessential american beer drinker if you take a look where st louis is they have 67 market share in new york they have 20 market share just very different i think uh ideals but it was i think it was worse it wasn't necessarily you'd find a lot of hard-working people in st louis you find a lot of young people want to move to st louis it was just more of a i think they just didn't like the middle of the country yeah they were rejecting the culture of their customers themselves in a way they they almost were too haughty

and too elitist that their culture of being there didn't it's not what they they wanted to do and then obviously they brought in a lot of this woke nonsense and i guess i guess just new york and san francisco in general were so immersed and so steeped in these broken cultures that once you're there they kind of took over the whole culture it feels like were there people pushing back like you were there internally as part of it like what was it like when you pushed back was it you know what was the story there

Yeah. So, you know, and the company really started changing when you had to move from St. Louis to New York City. And this is also an interesting timeframe. This is sort of the 2016, 2017 timeframe. We saw a lot of corporate America changing because at this time when Rick Trump came to power, he pulled out of a lot of these sort of national organizations, the World Health Organization,

Paris Climate Agreements. And this is when you had these large asset managers, BlackRock, State Street, Vanguard, that were now getting pressured from the state of California, whose pension fund dollars they manage. State of New York, whose pension fund dollars they manage. European sovereign wealth funds, others that are now pressuring business to so-called solve a lot of these existential crises that now no longer Trump and the government were going to do.

So at that time, you're having a lot of pressure from getting these asset managers that are coming in, forcing on companies an ESG DEI agenda. And I think Anheuser-Busch was very uniquely susceptible to it. They had just bought SAB Miller. They created the world's largest beer company, but there was nothing left to buy. And now they're being told by Wall Street, you have to grow organically. And the big push was, hey, if you just do ESG DEI, all of a sudden, you're going to have tons of people that are going to start buying your brands. And that just never really materialized. So

This was happening in the sort of 18, 19 and even the 2020 timeframe. And then as you recall, I think this whole ESG DEI movement, I mean, really got blown off track during COVID. The Black Rocks and others kind of like set the table by having the business round table in 2019 evolved the purpose of a corporation away from what Milton Friedman says was the focus on shareholders.

You know, at the time when they did that, there were only like four companies where they wouldn't sign their statement. And I bought all of those stocks and all four of those overall have outperformed massively, which I think is like a really good sign to like go with the contrarians, you know? No, 100%. I mean, because you have to look at the incentives. And now the incentives changed from, hey, your largest, your so-called shareholders, BlackRock, Stratford, Vanguard, instead of focusing on shareholder value, they said stakeholder value.

So do ESG, DEI, get involved in more politics. And this got really warped around the COVID timeframe because if you remember during COVID, all of a sudden this existential crisis of COVID hits and even Trump was very much pressured to sign what was called the Defense Production Act, where you could compel companies like General Motors to create ventilators. You could have Delta flying medical supplies,

And companies really got off track. And there was really huge pressure by the state of New York, people in New York who were dying early on in COVID. But that got companies off track. I mean, we didn't have a bush. We were making hand sanitizer. Walmart's doing COVID testing facilities in their parking lot. Google is talking about all the COVID. It was a huge distraction, obviously. And in some cases, you do want to be helping out with a crisis in the country. But it's obviously things are very distracted at that time.

Right. You know, and when there's a real crisis, like, great, you got to help. And at that time, a lot of people thought, okay, we got to help. The problem was, is that the COVID crisis, that existential crisis ended pretty quickly. I mean, no hospitals were overrun. You didn't have any of these big issues of, you know, mass people dying early on. But then the next sort of so-called existential crisis emerged within two months.

And that was when George Floyd died. And now all of a sudden, after George Floyd's death, all these companies had just gotten off their mission, were trying to appease all these stakeholders for COVID. And now the next big existential crisis they're being told to solve by BlackRock, State Street, Vanguard, others,

is this crisis of systemic racism is the fake engineered thing coming out of nowhere and then completely distracting you and and then getting you to try to give money to communist organizations right it was just a marxist organization it was totally insane i want to step back a little bit to this idea of stakeholder capitalism i think maybe the world economic forum and klaus schwab was behind pushing this along with these others and you know and milton friedman who i got to know when i was at stanford he was there at hoover a lot was more about shareholder primacy

like how did we shift from shareholder primacy and, and, and getting results for shareholders in the market, working to make things efficient versus the stakeholder capitalism thing where the market top down is, you know, is told about its other priorities. Was that world economic forum? Like you said, it was, it was some of the pensions, like, like,

why did they start doing that then not before like what happened in the last 10 years yeah i mean unfortunately just taking a step back i mean you have these two schools of thought going back to the 1970s but what's the purpose of a corporation yeah in the u.s you had no freedom that says focus on shareholders shareholder value that's sort of your primary customer and how do you focus on your shareholders just create great products and services and over in europe you have the claude schwab world economic forum you know davos crowd that said no no the purpose of corporations serve all stakeholders equally

It's very challenging to do that because who do you put above the other one? It's almost trying to serve like multiple gods. Yeah, exactly. When you have multiple things, you actually have no thing at all. You just fake it. And the thing that, the thing that drives me crazy is that the market is like this super efficient system. It's like an evolutionary system. Like it's a venture capital system.

you know, an entrepreneur person like my, and you too, our job is like help the system evolve, but the system can't actually work and evolve without really clear feedback mechanisms. If it has all these fake things you're plugging into it, it just drives me crazy. Right. You're, you're exactly right. And then even if you take a look at it, there's two economic models of the next 50 years in the U S created massive

much better investment returns for people in that stakeholder model in Europe. The S&P 500 was up 10% on average a year over that timeframe. The European broad-based indices were up 7%, which might not sound like a lot, but if you had $100,000 invested in the US in 1970, it'd be worth $4.5 million today, only $1.5 million in Europe. Then

And then also, if you take a look at any broad-based societal metric, GDP growth, per capita income, unemployment rates, inflation, the U.S. has trounced Europe on all of those over the last 50 years. Europe is actually quite poor compared to us now. People don't realize our poorest states are actually richer or wealthier on average, right, than Europe's wealthier countries, which is

It's kind of shocking, right? I think West Virginia and Louisiana are ahead of a lot of the UK and places like that. No, you're absolutely right. And so American free market capitalism has produced unbelievable economic prosperity and growth for us. But there's been some bumps along the way. I mean, one of the bumps that we had in the last, call it 15 years, was the Great Recession of 2008, 2009.

And then when you think about some of the change from this focus on American free market capitalism to this European model, a lot of it traces back to 2008, 2009, where a lot of people were losing houses and everyone saw the banks getting bailed out. And so there was this whole Occupy Wall Street movement that popped up, the 1% movement. And a lot of the banks to try and repair that image, you see that's when they started adopting this policy of ESG DEI, which were terms that had started actually in 2005.

The UN Human Rights Deal, they had a whole deal in 2005. Nobody used it. But all of a sudden, they started gaining popularity after the Great Recession as banks were trying to repair their image. And then, like anything, you start following the money. And the other thing they started realizing is that if I start asking companies to get involved in more environmental, social, governance issues, or DEI, diversity and inclusion issues, all of a sudden, I can start making indexes and I can start scoring companies.

And if I just take an oil and gas company out here, there's some alcohol company I don't like there, Tesla, they don't have unions, I don't like that. All of a sudden, I can start taking and picking and choosing companies, but putting them in an ESG index, charging people two to three X the amount of money that I was for a regular index...

And then all of a sudden you have a bad incentive system. And of course, no one's going to buy that stuff normally, especially once they see it's not performing. But of course, our pension funds actually aren't the money of the people themselves. There are money being managed by others to impose these politics on us. And I think it's maybe even darker than what you just said. I think when you have these top-down systems that people create, they get captured by

by power and to use for power. So I think the nature of humanity is that whenever something like this exists, people will start using it to express their views and to force people to do things and to push people to things. And it seems like a lot of the left captured these things and used them to attack and punish their enemies and force people to fund their stuff. I mean, isn't that how this iterated? I mean, 100%, Joe, you're absolutely right. The left started using sort of business to get done through the backdoor of business that couldn't be done through the front door of government. I mean, the state of California is a perfect example.

So state of California is the largest pension fund in the United States. It's $280 billion. And what's crazy right now is they're only being funded at about 80 cents on the dollar. So if you're in the state of California, you're on their pension system, you don't expect to get your full pension.

One of the reasons is that that pension system is essentially controlled by the government. I mean, the governor, Gavin Newsom, appoints a bunch of people there. And even the state of California, they've said that we're going to use our pension dollars to promote an ESG and DEI agenda. It's not about actually maximizing returns and making sure that the people of California can have a pension with dignity, but they're using that to force oil and gas companies to go out of business because they have a lot of money. They want to remove that.

And they're using it in a very weaponized and politicized way to get done again through the backdoor business where they can't get done through the front door. Well, they've raised the returns for a lot of my friends who invest in oil and gas out here in Texas because their money's not here. So it's harder for some people, but in some ways it makes us make more money. What inspired you to write the book after all this last call for Bud Light? Was there something in particular you were angry about you wanted to explain? What was the purpose for you of writing that? I think the purpose is, Joe, is when you take a look at the march of capitalism over the last, you know, 100,

couple hundred years, it's been positive. But again, there's some bumps along the way. And I think that we just went through a very bumpy time period, especially over the last 5 to 10 years, where you had a lot of businesses that got off track from their mission. I think that made those businesses less profitable. But then also, I think fractured society a lot more as not only Bud Light, but you had companies like Disney and Nike and the NFL and Starbucks and Target. I mean, you go down the list...

a lot of businesses really lost track of what their purpose was, what their mission was, who they were serving. And I don't think that there's really been a reflective novel yet that really looks into exactly what happened. Why did companies get involved in politics? Why was it bad for the business? And then ultimately what needs to be done moving forward? And I think there's no better story to tell than really the Bud Light story where Bud Light became essentially the one holding the pin that popped the ESG bubble where all of a sudden people said, wait a minute,

You know, okay, like I didn't really like when Disney got involved in the parental rights issues in Florida. I don't like the NFL getting involved with players kneeling. But man, like Bud Light, the ultimate sort of like Midwestern working class, everyday citizen beer. Now, all of a sudden, they're getting involved in controversial transgender politics. Like, how did this happen? And that's where you actually first saw that millions of consumers left a company.

Billions of dollars of shareholder value were just erased. And then the company is still sort of dealing with the aftermath and the consequences. And I think really the story about being unable to articulate what the purpose is of this campaign, who does it serve? It really showed what the problems were with ESG and DI. So that's the story to write. And hopefully we prevent this cycle from happening again at some point.

Well, it really is amazing what a little bit of courage does on these issues when people start speaking out. Cause I think everyone was already thinking some of this stuff was pretty crazy. Like I'm personally, I'm not like anti-trans or anything like that, but I, you know, I probably think that children probably should not be able to make that decision, but you

know but it's but it's amazing that like with the with the with like people who are having advantages being born male and women's sports i think it's an 80 20 issue in the u.s at least that they shouldn't have those advantages being in those sports and and yet you weren't allowed to say this like even even i was not really speaking out on this as much and i was probably more than almost any of my friends even i would try to avoid certain things just not to have like a thousand people scream at me online you know or something they really censored us it is interesting how finally it's kind of opened up and now does it feel like the corporations are realizing they have to

be more careful not to not to be extremists and activists? Are they just going to find new ways to be activists the next few years? Like, where are we with this? I mean, it seems like the camps are really splitting in two. I think that for the vast majority of companies, they're realizing that the ESG agenda, it didn't make them more profitable and it didn't help them actually create so-called better societal value, became more divisive more than anything.

So you're seeing a lot of companies that are walking back from these positions. I think Goldman Sachs this week no longer is going to force quota systems on board members. You're not going to be having Disney's drop some of the DI, but other companies are leaning in. Costco over the last week has really doubled down on their DEI initiatives. Continue to have supplier quotas in terms of how they're going to get products. I guess they're based in Washington or something. They're based in a very lefty area. Right there.

They're up in Seattle. They're up in Washington. I think JP Morgan is kind of doubling down as well, kind of more based in New York. And I think this is going to be problematic. Now, you mentioned you shorted a bunch of companies that were in the business roundtable. You went long on the ones that didn't. I think this is actually an interesting opportunity to see which companies are walking back from a lot of the ESG and DI commitments. I think those ones are going to massively outperform the ones that try and serve every

single. I'm surprised to hear that about JP Morgan because Jamie Dimon seems like he has a lot of common sense and that's too bad. He's not being able to push back on that internally. I guess this is very hard sometimes for a CEO, even if you believe something sometimes to confront his team on, huh? I think so. I think there's probably, and this is even with, with, with Jamie, he's probably made such a commitment to it over the last couple of years. It's hard for him to unwind that since he's still in the seat and people in his employees are going to ask me, I'm like, well, you know,

When were you lying to me? Were you lying to me then when you were all in on DEI a couple of years ago? Or are you lying to me now when you're now walking back from it? I just think as well, there's kind of two types of DEI. I think that there are companies that got into it authentically when they said, we just want DEI to be finding the best, the brightest, and the most...

This is what Mark Cuban claims DEI is. The good part. This is what Mark Cuban, and I think that Jamie Dimon falls into this, that they just believe that's what it is. Unfortunately, though, what they don't realize, it's become a pejorative term for the vast majority of Americans. What DEI actually became in corporate America was quota systems, and it became exclusionary. You couldn't even push back.

on DEI in corporate America. So it wasn't as inclusive. It became, if you complain about hiring a black person over a white person, because you're saying the white person is more competent, you are racist. That's what it became. It became, there's no white men that you should be putting in these jobs. It became, the percentages are crazy. I'm sure you've seen this. It was something like 6% or 7% of these promotions and hiring over a period in fortune 500 were,

word of white males where it had been like, you know, 50, 60% before it was just, it was actually crazy. People became afraid to hire white men. Right. I mean, that's what, that's what it ended up meaning in most of these places. Right. I mean, that's what it ended up being. And then there was even a cancel culture about certain brands and ideas. I mean, one of the other reasons that I left Anheuser-Busch, I was frustrated. The company moved away from being a meritocracy. They changed that principle. You'd be out more about gotten promoted based on the diversity, quality of your teams. But even I tried to do a partnership with black rifle coffee company.

when I was at Anheuser-Busch. This made all the sense in the world. I mean, the guy who's drinking a six pack of Budweiser at night is a lot of times drinking Black Rifle coffee in the morning. But in the 2021, 2022 time period, I had the whole business model, the whole case. Black Rifle had grown from 70 million to 300 some odd million of revenue. They needed a distribution partner to take their new 16 ounce can coffee into Walmart, Kroger, 7-Eleven. So we were going to make a bunch of money doing that. And then all of a sudden, our external affairs team based in New York City said, no, we can't do this partnership.

It's too controversial. Like, what are you guys talking about? Like the mission of black rifle coffee companies serve like coffee and culture to firefighters, police officers, people love America, but they were saying, well, no, because it's like, you know, the black rifle. And I don't know if it fits our DEI kind of agenda. It's some people in the January six, we're wearing black rifle coffee company hats. I'm like, come on guys. Like you gotta be kidding me. If someone says this to me, my first thought is,

Just is that, you know, I'm going to write to the founders and the owners and tell them their people internally are insane. Like, did you ever think to write to the 3G guys and be like, your people are internally have gone crazy or you just left? You know, I mean, I probably should have. But at the time, Joe, I candidly, I was the whole company and the culture was changing. Meritocracy was already gone, which I was shocked about considering 3G and who these guys were.

Now all of a sudden, because we moved to New York city, we looked at everything through this lens of fifth Avenue in New York. Basically it was already gone. Not worth the fight at that point is their, their own fault. And so can, and that's why I left to start strive with the day because we said really you need to drive a cultural revolution across corporate America. We need to get businesses back to being focused on the bottom line, back to business, serving their customers, whatever your unique company mission is, do that. So don't necessarily have it, uh,

um, have a new agenda forced on you by outside activists, the BlackRock States, your vanguards. I mean, McKinsey was all in on this diversity matters study that was completely debunked. And so we just decided to go and do something entrepreneurial instead. No. Well, and I, and I love it. And I, I would, I would be became a small investor and strive through Vivek right away when you guys, when you guys started it, then, uh,

for people today, would you encourage people to fight back more if they're seeing this nonsense though in their companies? Or is it the kind of thing that you just have to run away from still today? Or do you think there's room to kind of fight and push people and try to teach them to act better? No, but I think that now it's an amazing opportunity. I mean, the Overton window has opened in a massive way. Whereas two, three years ago, um,

To your point, I mean, you would be called racist and bigoted if you push back on any DEI agenda, whether it's quota system, whether it's giving hundreds of millions of dollars to BLM. I mean, heck, like every company for a while had to have the BLM square, even though BLM, they said on their website that we wanted to essentially destroy the nuclear family. And if you just disagreed with that, all of a sudden you're racist.

But I think as we've seen, and again, I mean, really it was what I think Bud Light opened this, where people saw the real problems that happen if you get involved in a lot of this social and political issues, especially if your brand has nothing to do with it. And then all of a sudden, it's actually sad because the company lost millions of customers, billions of dollars of shareholder value, $40 billion has been erased since this happened. Thousands of people have lost their jobs. They work with tons of independent entrepreneurs.

uh distributors family-owned distributors across the country they've laid off tons of people suppliers have closed shop i mean it really shows the problems what happens when you lose focus on your customer and the bigger issue has been zero accountability you still have a lot like the same ceo is there the same board of directors why haven't they fired the people who did this these people who did this should be fired by the owners i don't understand in corporate america

it's like it's like it's like there's so rarely accountability for these things it's very strange to me I mean I love to talk to the owners like maybe they're afraid of being called racist or something I don't know but this is part of the problem so the 3G guys we spoke about like they kind of stepped aside from the board five six years ago so now it's a lot of their kids that are running it it's these European families that are running it and those folks I think that they are just wholehearted believers in ESG and I think this is a broader conversation to have I mean maybe even as part of the America first agenda

for certain companies and brands like Anheuser-Busch. Maybe they should be sold back to American owners. And I think that would actually be better even for the shareholders, the European ones, because I don't think that here in the U.S. you can serve sort of the European folks that might have more of a pro-ESG DEI agenda and serve more consumers here in the U.S. that just want Bud and Bud Light to be Bud and Bud Light. No, I mean, it's absolutely ridiculous. You know, if my kids had taken over a family business or something I bought,

and they were running it and they did this nonsense and they let these commies run things, I'd take them out of that position and make them go work on a farm for a year. You know, this is ridiculous. These kids should be ashamed of themselves. It's really disgusting. And I know they're like going in all their circles, dating in New York and London and celebrating all this nonsense. And it's like, these guys never could have created wealth with these ideas. And it's kind of disgusting to me. I think I,

I don't know. It just, it just horrifies me to see second, third generation wealth doing these things. It's, it's, it's really sad because you do get a lot of it. No, I mean, it is, it is really sad because like the people that actually get hurt, I mean, it's not you if you're in your whatever billionaire circles and you know, on boards and running around New York and London, it's everyday folks. It's the beer wholesalerships in St. Louis, Missouri and in, and in Austin, Texas and all over. And now that they've lost, uh,

30% of their revenue. They have to fire half their staff. I hope the 3G guys, if they see this, I hope they think about how to go back and try to fix having raised their kids badly until all this is still be happening and how they're hurting as many people from that. So let's talk more about Strive. I want to hear what you guys build. You spun out Athletic Capital of that as well. What do you build at Strive Asset Management? What are you building now? Yeah, so Vivek and I, we decided we got the idea really for Strive in the summer of 2021. And both of us saw that corporate America was changing.

I was living in Atlanta, Georgia during this time period. You remember there was the Georgia Voting Rights Initiative happened in 2021. This is where Governor Kemp signed a law that says you need to have an ID to vote, but then also expanded polling access and others. And corporate America really lost their mind. BlackRock was the very first company that said, we're against this law. We're pushing back on it. Other people should as well. Coca-Cola and Delta, which had nothing to do with voting laws, they came out against this. If you recall, Major League Baseball canceled the All-Star game.

in Atlanta, Georgia that year. Crazy. Because of this law, which is insane. And what's funny is they moved it to Denver, Colorado. I've also lived in Denver, Colorado. Denver, Colorado is about the whitest town I've ever lived in. There's no black people in Colorado. No, exactly. They moved it out of the blacker town to the whiter town for DEI purposes. This is ridiculous. I mean, it's totally comical. And what's funny is that I saw a lot of people that were throwing out Coca-Cola, canceling Major League Baseball tickets,

And frankly, didn't want this nonsense happening. And Vivek had recently left his company, Royvent, because he had wrote some op-eds about more free speech needed on the internet. And his company wanted him to take a lot of positions on DEI matters. They didn't want to do it. So...

We were talking about these issues over the summer of 2021. We thought that we could better serve, I mean, 150 plus million Americans that just went business focused on business. And there were some of the first decks we actually thought about doing was putting together a portfolio of companies. We actually thought about creating an airline just called Merit Airlines. We're going to hire the top 5% of pilots, you know, just like you. I don't care if somebody's transgender, like if they can fly a plane, they're in the top 5%. Sure. I'll hire them. What I don't want though is the force of

somebody who's unqualified to be flying airplanes. So we just said, you know, maybe we'll do that and we'll charge people a hundred dollars more than Delta, but you'll be guaranteed to have sort of the top five. Did you see, did you see Kamala when she left the last flight for the vice presidency had the first like all female, like flight crew is like, she's still doing it even, even now. It's crazy. Crazy. Um,

So we thought about that. We thought about creating a company called Pop Without Politics to go after Coca-Cola because I was in the beverage world. Before Elon bought Twitter, we thought about creating a Twitter that was free speech, but ended up creating Strive because we thought we could change culture across corporate America if we created a new asset manager where we would create just low fee passive index fund.

like large cap value, large cap growth, S&P 500, we would invest into companies and we would be a better fiduciary for folks like yourself and others that were frustrated with BlackRock, who was taking everyday citizens' money via their 401ks or investments, investing into businesses, and then forcing them to get more involved in politics. They were doing this by talking to, writing annual letters to CEOs, telling them they need to earn their social license,

They were going on media talking about how they're going to force behaviors and change at companies if they weren't adopting ESG and DEI policies. And then they were really voting for shares at companies. If you're a publicly traded company, you have shareholders who can put up proposals every single year. And

there was a massive increase in the number of ESG proposals that activists and nonprofits were starting to put into companies after this business roundtable evolved the purpose of the corporation in 2019. Before that, these ESG DI proposals, less than 2% in the past,

But by 2021, everything from racial equity audits to defund the police initiatives, to overturning election integrity laws, to having oil and gas companies produce less oil and gas, all of a sudden 30 to 40% of these were passing in corporate America because BlackRock, State Street, Vanguard have $20 trillion of capital.

They are the single largest shareholder, 95% of the S and P 500. And they have an outsized influence, uh, with the 20 to 30% of the shares they can vote. So all of a sudden, all these businesses are getting involved in these issues. We thought there's gotta be a better way. Should we be punishing these places? I mean, I think Texas pulled $8 billion out of BlackRock, um,

You know, a lot of red states have still been really slow to react. I think BlackRock's trying to backpedal now and trying to pretend it's no longer did this horrible thing to our civilization along with State Street and others. Like, should red states be pulling money out of that or have something come over to you guys? Like, what's changed here so far? Are we winning at all or where's it going? Yeah, I mean, I think there's two ways that you can go about kind of like dismantling this big three. Again, BlackRock, State Street, Vanguard, cartel. One way there are probably fiduciary breaches and there's a lot of legal breaches

Complaints that are coming against was actually one in Texas where American Airline pilots were successfully saying that, hey, you guys took my 401k. You BlackRock invested in the ESG promoting funds and you advocate for ESG policies that hurt my returns. And so therefore, that's one way that I think these guys are being forced to take a look at their fiduciary responsibilities. But the other is just to compete. And frankly, like if you have your own money, you can invest it however you want to.

And if you want to take your money and you want to invest it into these ESG or DEI promoting asset managers, man, you can do it. But just know that your money is going to be pushing for quota systems and racial equity audits and all this other stuff. Whereas we had strived to say, we're just not going to do that.

Like we're going to invest in the businesses where we want companies to focus on their mission, be excellent at doing that, hire an Americanic way, be unapologetic about whatever your mission is, your oil company, be a great oil company. If you're a social media company, be about free speech and try and have as many folks on as possible. And if you like that mission and you think that's going to make you more money and create a better societal outcome, then you have strife. I love it. And tell us a little bit about working with Vivek. You've known him since high school. You guys were mock trial partners in high school.

He seems like obviously, you know, he's a friend of mine. He's a really smart guy. He also, he sounds like he got busy though and went and did some other stuff other than just running the business. What ended up happening with that? Yeah, it was kind of funny because when I left the Ann Arbor Bush to start Strive, we had a whole conversation on, hey man, like you're doing this for at least the next like five plus years, right? Like you're not running for Senate. You're not doing anything else in politics. He was thinking about some other things. I said, no, no, no. We're all in on Strive. I said, okay, great. So,

So we do it and we're very successful. Our first year, we launched the company with the most successful exchange traded fund launch of the year for a new issuer, raised hundreds of millions of dollars within a couple of weeks, ended the year at over half a billion dollars. And then he gives me a call around Christmas of 2022 and says, hey, man, I got to have a conversation with you. I said, yeah, what's up? He's like, I'm thinking about running for president. I said, come on, you got to be kidding me.

We had just done our Series A. It was led by some of the Texas family offices. And I said, man, we just did our Series A. We've got so much momentum. Like, what are you talking about? He said, well, that's part of the whole deal. We're having so much success. I think there's an opportunity to bring our message around free speech and meritocracy and American free market capitalism and that all these sort of ideals we were talking about strive to a broader audience.

And so I think he next called Peter Teo because I said, man, you got to call Peter because he's one of our big backers. And he calls Peter and I thought Peter would tell him it's a bad idea. But of course, Peter listened for a couple of minutes and it said, you know what? I think it's a great idea. You should go do it. After that, it's...

He left and started running for president. But as you know, I mean, in any startups, there's always some ups and downs along the way. Ended up, I think, being great for us because we were true to our mission. He stepped away from the company so he could go and do politics. Strive was focused on just unleashing American free market capitalism. He was going to be focused more on democracy. And he stepped away to do that. And now he's off and running and Strive's still thriving as well. What's Vivek best at when you work with him? What's he best at doing as a builder? You know, this is...

Something that I think shocks a lot of people when I say this, because a lot of very successful people, financially, et cetera, aren't great listeners or don't listen to feedback. He's actually a very good listener.

And when you're with him one-on-one, he will listen to you. He will hear you. He will respond to you. And I think he does a very good job about that. So I'd say listening. And the other piece is just honest feedback also. He does a really good job of being very clear with honest feedback, what you're doing well, what you're doing, what you're not doing well. But then also he's a very good partner.

Everything we did was very collaborative. I think this goes back to the listening piece. It goes back to the feedback piece. I think it goes back to just getting to what's ultimately true. And I think that became a big part of his campaign of the truths and the 10 truths that he has. He's very good about listening, listening to all sides, changing his opinion with the facts change, and then kind of using a first principles approach to figuring out what is actually true, whether that's in business or in politics.

I was really inspired by his campaign. I shared a bunch of those videos early on that he made. And it's awesome to see. I think he really helped form the zeitgeist and then support President Trump in taking that forward. You guys definitely played a role in that. Let's talk a little bit about optimism for the future. So what's the way forward for America on all these issues? How do we protect corporate America from this woke mind virus? How do we cure it? Are there policy changes? Are there things investors should be doing? What are the next steps for all of us?

Yeah, I think that the next steps for all of us, I'm incredibly optimistic. I mean, I love your podcast, American Optimist. I actually came to my bar and had my American flag behind me here because I actually think we're getting back to the principles of American free market capitalism that made this country wildly successful over the last 100 years, that created unprecedented wealth and prosperity. And we're doing that by dismantling a lot of these programs that frankly just didn't work. A

A lot of people think that Trump's responsible for the dismantling of DEI programs. I think Trump is really just given all these companies cover to roll back programs that they saw weren't adding to the bottom line, weren't helping them innovate, weren't helping them actually going out and creating workforces that were amongst the best and the brightest. And so now that they're pulling a lot of these back, I think we're about to enter into an era of

unprecedented economic prosperity, new job creation, new innovation, because businesses are getting back to what they do best at, and that's innovating, serving their customers, and leaving all this other social stuff to politicians. I'll tell you one way I push back, and I try to be really nice about it, but people will email me wanting help or want to work with me or want to do something in Texas, and they'll have pronouns on their bio. And to me, when you have the pronouns noted, unless you actually are trans or unless you're really close to trans people, most of the time, the pronouns are part

of like the woke industrial complex and you're signaling a B sense. You're signaling that you're obeying this kind of like woke way of doing things. And so I'll tell them really nicely, like, just so you know, when you have those pronouns, it means there's a good chance that you're signaling to everyone that you agree with some really radical left stuff that I personally don't agree with. And that's okay. We can still work together, but I want you to know that if I'm going to be introducing you to people who are helping you, they're going to be like, Joe, who's this crazy woke person? Why are you trying to get me to help someone who obviously doesn't have my values? And I just want you to understand that's how it's going to come across.

And a lot of them, when you say something like this, they're like, oh yeah, thanks. I never thought to take those off. Obviously I'm going to do that now. And I take them off. And I'm wondering, I think there's things like this we need to be doing. Are there other things that we can do to put pressure in the right ways or to help kind of move things back to normal?

Yeah, I mean, I think, Joe, that's a real simple one that you just spoke about. Because there was so much fear over the last couple of years. So I had this debate with people about the pronouns. Why do they have them? And a lot of people say it's like, well, I just kind of felt I had to because we got this chief diversity officer that came in. And the chief diversity officer talked about pronouns and how that's the nice thing to do. And so I just thought that I had to do it because other people were doing it. And we always talk about this a lot. I mean, fear is contagious, but courage is contagious too. And there's been this whole just –

preference falsification over the last five years. People didn't want to put pronouns in their emails. People didn't want to have to say that biological men can compete against biological women in sports. People didn't want to talk, have to be forced to accept that gender affirmation care for kids is okay. But they felt again, that they could be called a bigot if they didn't do it. Things are shifting big time now. And I think people need to just think for themselves, did I really believe these things or was I forced to do it?

I love that even Pete Buttigieg and AOC have taken their pronouns off now. So even they were bullied into doing it to have to be part of the cause, which even they think is ridiculous. You know, they think it's ridiculous. You know, one of my, one of the most, I think courageous people right now, he's actually somebody on the left. He's a good buddy of mine named Seth Moulton. And Seth Moulton is a Congressman from Massachusetts.

veteran. And he was one of the first people in the Democratic Party that says, listen, guys, I have two daughters. I do not want them playing against biological males in sports. And he was essentially canceled by a lot of people on the left for that. A lot of people said he should step down. He was bigoted. His campaign, ahead of his campaign, stepped down as well. A lot of people were protesting outside of his office. But I think that's the courage that you just need to step up and just say, hey, there's, you know, this isn't

some right wing conspiracy theory that's pushing back on this. This is not sort of the right wing that's trying to cancel people. This is just common sense. And I think we need to get back to common sense. And I think you're going to start seeing it more on the left. But hopefully I think with more people like yourself and others speaking up, it gives more people courage to speak up and actually say what they want.

I love it. I have a lot of respect for Seth Moulton too. I don't agree with him on certain things. Obviously he's a Democrat and I'm not, and there's things we're misaligned on, but he's a courageous American. He's on the house armed services committee. Like I mean, we need more modern Democrats like that who actually like say with a common sense and not be afraid of the radical left and,

And I think on the right, we have to stand up to our crazies too sometimes. It's going to take courage too if we have to admit it. There's both of those. We started American Optimist to push back on a lot of cynicism and pessimism in our country. And I had multiple friends who left our country after making a lot of money. They thought it was just going to be a woketopia. They thought they were going to get stolen from. They thought they were going to be discriminated against for having been too successful. Like, why do I want to deal with this? I'm just going to leave. And for me, America still stands for the shining city on the hill, even though it's not perfect, even though it's broken in certain ways.

I think for me, part of this MAGA movement is the fact that it can be great again and it's going to be great again. And so what's the best case scenario for us kind of recapturing all these institutions and taking back our country? Are you optimistic it gets done? Are we going to root all this stuff out? Are things going to be in a great place in five or 10 years? You know, I really am optimistic, Joe. You know, you think about this country, we never said it was perfect, but we said we were always in pursuit of a more perfect union.

And I think that this is a good step forward that we've been making towards getting back to the ideals of the Constitution and of the freedom and all folks are created equal. One of the things that actually made me most optimistic over the last couple of years, if you think about some of the recent Supreme Court decisions, there's been some big ones. The one that actually didn't cause almost any controversy was Students for Fair Admission versus Harvard.

And this is the Supreme Court case that overturned affirmative action. And it was a very different response. And the Democrats really didn't respond to it. People on the left didn't respond to it. Very different than when Roe v. Wade was overturned a year prior, where people almost lost their minds. Everyone in corporate America issued responses. A lot of CEOs got involved. And that's because I think we actually are heading more towards a meritocracy.

People, you know, if you're black, if you're gay, if you're female, you don't want an asterisk next to your name. Every time you get promoted, you want to know that you earned it. And I think that that's why you saw a big movement towards black, Hispanic females all move more in the Trump direction because people are rejecting the identity politics. People are rejecting the quota systems. People are rejecting that Joe Biden governs in the way by saying that I'm going to appoint a female vice president. I'm going to have a black female Supreme Court justice.

Why? You say you're going to hire the best and the brightest, then you remove any of the asterisks. And I think it's amazing, I think what Trump has done to create a very diverse cabinet, a very diverse group of folks that are around him, just by saying I want the best and the brightest. I'm very optimistic that that's going to trickle down. I think into corporate America, you're seeing, again, Goldman Sachs, Amazon, Facebook, Meta, all dropping a lot of their DEI and ESG policies.

And I think people are getting back to business. So I'm optimistic. I think even more so, I think people have now lived through this kind of crazy episode of the last five years. And even if five years from now, there's some blip and we have a fallback, I actually think folks like Mark Zuckerberg, he's not going to censor speech again.

I don't think you're going to have Goldman going back to some of the quota systems that they were implementing. I think people are going to get back to, uh, back to business. So I'm very, very optimistic. I love it. Well, you know, affirmative action was originally called positive discrimination and they rebranded it in affirmative action. It's much more clear when you see it as positive discrimination. And actually we shouldn't have any discrimination and we're definitely all embracing it again. And so this is a great note to end it on. Thanks so much for joining us. Thanks, Joe. Thanks for having me. Really appreciate it.