Aryaansh Rathore

In 1984, Nike did something crazy.

They paid a $410,000 fine just to let Michael Jordan wear black sneakers on court.

Back then, the NBA had a strict rule saying that if a player wears a pair of basketball shoes, “they MUST be 51% white.“

If this rule was broken, you'd have to pay a $5,000 fine per game.

Over a 82-game season, this adds up to $410,000 in penalties.

But Nike being Nike, they sent Jordan onto court wearing a pair of black and red sneakers - which INSTANTLY stood out, since everyone else's feet were white.

These shoes were the first edition of what we know today as the Air Jordan 1s.

So when people started talking about how “the NBA fined a guy for wearing some insanely good-looking shoes,“ Nike knew that their marketing masterclass was paying off.

All this drama and controversy made Jordans the talk of the town for a week or so, and it catapulted Nike's sales to crazy heights.

By the end of the season, Mike Jordan became the NBA Rookie of the year.

And Nike sold over $126 MILLION of Jordan 1s.

Cut to today, and Jordan 1s are still the first shoe you think of when you hear the word “Nike.“

Last year, the entire Jordan brand did over $6.6 billion of sales, and that handsome growth has earned MJ over $1.5 billion in lifetime royalties.

Insane.

This guy runs an $8.5 billion company. But he DOESN’T have a mobile phone, drives a beat-up Hyundai, and was forced to build a house by his wife.

His company’s stock price also beat the market by 58,500%.

These are a few cool things I just learnt about R Thyagarajan - founder of Shriram Finance (a microfinance bank). 👇

🛡️ 1/ 𝗟𝗲𝗻𝗱𝗶𝗻𝗴 𝘁𝗼 𝘁𝗵𝗲 𝗽𝗼𝗼𝗿 > 𝗹𝗲𝗻𝗱𝗶𝗻𝗴 𝘁𝗼 𝘁𝗵𝗲 𝗿𝗶𝗰𝗵.

Shriram ONLY lends to the poor.

98% of their loans are repaid on time.

Another 1% are paid late.

And only 1% of loans end up defaulted.

Big traditional banks are jealous of repayment rates that high.

Media brainwashes us all to believe that the poor are not credit-worthy.

The facts?

Shriram actually made $200mn in pure profit this year.

Those at the bottom of the pyramid will always find a way to pay you back.

But a rich man?

He’ll just file bankruptcy and move on. (ahem ahem)

📈 2/ 𝗨𝗽𝗹𝗶𝗳𝘁𝗶𝗻𝗴 𝘁𝗵𝗼𝘀𝗲 𝗶𝗻 𝗽𝗼𝘃𝗲𝗿𝘁𝘆 𝗶𝘀 𝘁𝗵𝗲 𝗢𝗡𝗟𝗬 𝘄𝗮𝘆 𝘁𝗼 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗹𝗲 𝗴𝗿𝗼𝘄.

India’s economic engine is the most impressive thing our world has seen.

But it is uneven as hell.

The top 1% own 40% of the wealth.

Most new wealth creation flows directly to the top.

The ONLY (and I mean ONLY) way to build a sustainable society which doesn’t turn into a scary utopia of upper and lower classes is to push the lowest rungs of the ladder up further.

Bottom-up.

🔗 3/ 𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝗽𝗿𝗼𝘁𝗲𝗰𝘁𝗶𝗼𝗻 𝗶𝘀 𝘄𝗲𝗮𝗸 𝗮𝘁 𝘁𝗵𝗲 𝗯𝗼𝘁𝘁𝗼𝗺.

Poor people are given exorbitant rates on their loans.

- Truck drivers have to cough up 80% interest
- Grocers and kirana owners have pay 50% interest
- Education loans go for 35-40% interest

Most poor people just accept this, because there was no other alternative.

Shriram saw the opportunity here and gave them below-market rates.

The result?

Tons of trust built and billions in profit.

💥 𝗕𝗼𝗻𝘂𝘀/ 𝗚𝗶𝘃𝗶𝗻𝗴 𝟭𝗫 = 𝗴𝗲𝘁𝘁𝗶𝗻𝗴 𝟭𝟬𝗫.

Thyagarajan gave away $750 million of shares to his employees.

Just like that.

But he also pays mid-level employees 30% BELOW market, and senior executives almost 50% BELOW.

Despite him underpaying employees, most of them reject higher-paying job offers from other banks.

The work is simply that good.

He could have a mansion, but he lives in a 1500 sqft house that his wife forced him to build.

He could drive a different color Rolls Royce for each week of the day, but he goes to work in a Hyundai i10.

He could deck an iPhone 14 in diamonds, but he has no phone and enjoys reading newspapers + birdwatching.

Insane...