Ep 109: Anson Frericks on the Rise & Fall of Budweiser; Milton Friedman vs Klaus Schwab; and How to Save Corporate America

20:32Were you lying to me then when you were all in on DEI a couple of years ago? or you line me 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. 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.

21:01What 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 as it was. 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 to white males where it had been like 50, 60 % before.

21:33It was actually crazy. People became afraid to hire white men. I mean, 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 got 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.

21:59I 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?

22:28Like, the mission of Black Rifle Coffee Company is sort of like coffee and culture to firefighters, police officers, people who love America. But they were saying, well, no, because of 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 6th were wearing Black Rifle Coffee Company hats. I'm like, come on, guys. Like, you got to be kidding me. If someone says this to me, my first thought 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?

22:59You 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. It's their own fault. It's not worth the fight. And so, Caitlin, that's why I left to start Strive with the A, because we said, really, you need to drive a cultural revolution across corporate America.

23:25We 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. But don't necessarily have a new agenda forced on you by outside activists, the BlackRock Statesview vanguards. McKinsey was all in on this diversity matters study that was completely debunked. And so we just decided to go do something entrepreneurial instead. No, well, and I love it. And I became a small investor and strive through Vivek right away when you guys started it. Then for people today, would you encourage people to fight back more if they're seeing this nonsense though in their companies?

23:59Or 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 or three years ago, to your point, I mean, you would be called racist, bigoted if you push back on any DEI agenda, whether it was quota system, whether it was 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.

24:31And 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, and$40 billion has been erased since this happened. Thousands of people have lost their jobs. They work with tons of independent distributors, family-owned distributors across the country.

25:02they've laid off tons of people uh suppliers have closed shop i mean it really shows the problems what happens when you lose focus on your customer and the bigger issue is there's been zero accountability i mean 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.

25:30So the 3G guys we spoke about, 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 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 it's really disgusting and i know they're like going all their circles dating in New York and London and celebrating all this nonsense.

26:29And it's like, these guys never could have created wealth with these ideas. And it's kind of disgusting to me. I don't know. It just horrifies me to see second, third generation wealth doing these things. It's really sad because you do get a lot of it. No, I mean, it is. It is really sad because the people that actually get hurt, I mean, it's not you if you're in your whatever billionaire circles and on boards and running around New York and London. It's everyday folks. It's the beer wholesaler ships in St. Louis, Missouri and in Austin, Texas and all over. And now that they've lost 30 % of their revenue.

26:57They 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 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.

27:26You 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 over this. 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 that they came out against. If you recall, Major League Baseball canceled the All-Star Game in Atlanta, Georgia that year. Crazy. Because of this law, which is insane.

27:53And what's funny is they moved it to Denver, Colorado. I've also lived in Denver, Colorado. There are, I mean, you know, Denver, Colorado is about the whitest town I've ever lived in. There's no like black people. No, exactly. They moved out of the blackest town to the whiter town for DEI purposes. Like this is ridiculous. I mean, it's, it's totally comical. So it was funny is that I saw a lot of people that were throwing out Coca-Cola, canceling major league baseball tickets. And, um, frankly, just didn't want this, this nonsense happening. And Vivek had recently left his company Roy vent because, um, he had wrote some op-eds about more free speech needed on the internet.

28:25And his company wanted him to take a lot of positions on DEI matters. He 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 want business focused on business. And 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. I love it. Just like you. I don't care if somebody's transgender. Like if they can fly a plane, they're in the top 5%.

28:53Sure. I'll hire them. I don't want those to force 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. 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.

29:23Before Elon bought Twitter, we thought about creating a Twitter that was free speech, but ended up creating Strive because we thought that we could change culture across corporate America if we created a new asset manager where we would create just low-fee passive index funds, 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.

29:59They were doing this by 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 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.

30:31Before that, these ESGDI proposals, less than 2 % of 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 &P 500. And they have an outsized influence 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.

31:02We thought there's got to be a better way. Should we be punishing these places? I mean, I think Texas pulled$8 billion out of BlackRock. 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 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 some of them come over to you guys? Like, what's changed here so far? Are we winning at all or where is it going? Yeah, I mean, I think there's two ways that you can go about kind of like dismantling this big three.

31:32Again, BlackRock, State Street Vanguard, Cartel. One way there are probably fiduciary breaches, and there's a lot of legal complaints that are coming against. There was actually one in Texas where American airline pilots were successfully saying that, hey, you guys took my 401k. You, BlackRock, invested into ESG promoting funds, and you advocated 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 way is just to compete. And frankly, if you have your own money, you can invest it however you want to.

32:03And 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 at Strive said, we're just not going to do that. We're going to invest in the businesses where we want companies to focus on their mission, be excellent at doing that, hire an American way, be unapologetic about whatever your mission is. If you're an oil company, be a great oil company. if you're a social media company be about free speech and try to have many phone as possible and if you like that mission you think that's going to make you more money and create a better societal outcome then you have strive i love it and and tell us a little bit about working with vivek you've known him since high school you guys you guys were mock trial partners in high school um 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 huh what ended up happening with that it was uh yeah it was kind of funny because when I left Anderson Bush to start Strive, we had a whole conversation on, hey man, you're doing this for at least the next five plus years, right?

33:06You're not running for Senate. You're not doing anything else in politics because he was thinking about some other things. He said, no, no, no, we're all in on Strive. I said, okay, great. 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 a half 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.

33:35I 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 got so much momentum. Like, what are you talking about? He said, well, that's part of the, I mean, that's 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 at Strive to a broader audience. And so I think he next called Peter Teal because I said, man, you got to call Peter because he's one of our big backers.

34:07And 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 then said, you know what? I think it's a great idea. You should go and do it. And after that, 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. I mean, 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.

34:37And 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.

35:09He 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 using a first principles approach to figuring out what is actually true, whether that's in business or in politics.

35:43I 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, helped form the zeitgeist and then support President Trump and 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? Like, what are the next steps for all of us? Yeah, I think that the next steps for all of us, I'm incredibly optimistic.

36:12I 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 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.

36:49And 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 leading 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.

37:30And 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 if 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 is like i think there's things like this we need to be doing they are are there 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 And I think, Joe, that's a real simple one that you just spoke about.

38:08And 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, you know, fear is contagious, but courage is contagious, too. And there's been this whole just preference falsification over the last five years.

38:37People 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 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 that. 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.

39:06Yeah, they think it's ridiculous. One of the most, I think, courageous people right now, he's actually someone 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, head 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.

39:41This 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 believe. 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.

40:04We need more moderate Democrats like that who actually say with a common sense and not be afraid of the radical left. And, you know, 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. Right. There's both of those. You know, 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 woke-topia. They thought they were going to get stolen from. They thought they were going to be discriminated against for having been too successful.

40:31Like, why do I want to deal with this? I'm just going to leave. And, you know, 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.

40:57You 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 was the Supreme Court case that overturned affirmative action.

41:25And 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 just like a big movement towards black, Hispanic, females all move more in the Trump direction because people are rejecting the identity politics.

41:58People 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 just 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.

42:31And 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 the last five years. And even if, you know, 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 back to business. I'm very, very optimistic. I love it. Well, you know, affirmative action was originally called positive discrimination and they rebranded it affirmative action.

42:58It's much more clear when you see it as positive discrimination. Actually, we shouldn't have any discrimination. And we're definitely all embracing it again. And this is a great note to end it on. Thanks so much for joining us. Thanks, Joe. Thanks for having me. Really appreciate it.