Ben Gilbert: evaluation

Transcript context

…Okay, so 1916, everybody’s doing great. Nobody’s doing better than the Coca-Cola company. Asa Candler is a big man about town in Atlanta, probably the most important person in town. So much so that a group of other Atlanta citizens convince him to run for Mayor, which he does. He wins and becomes the mayor of Atlanta in 1916. He retires from Coca-Cola and gives his Coke shares to all of his children. Then a couple of years later in 1919, a local banker named Ernest Woodruff puts together an investor syndicate, basically stages a takeover of the company, and buys out the family members for $25 million. This also effectively serves as the IPO of the company because it’s a syndicate of investors, shares start trading hands, and the company becomes publicly traded. Certainly they didn’t need to raise capital by going public. And it was a complicated little period because some of the kids did want to have this happen. Other ones didn’t want to have it happen. There’s family infighting. But ultimately after a few years, Ernest Woodruff and his syndicate of investors do own and control the company. In fact, there was some clever financial engineering that had to happen to buy this company. $25 million in 1919 is a huge amount of money. As a result, this is actually the first time the secret formula for Coca-Cola gets written down. It had been this cool secret before, but as collateral for the loan that Woodruff took out to complete this transaction, they wrote down the formula and placed it in a vault at the Guarantee Bank of New York. Because that’s where they got the capital from, so they get to hold the formula as collateral. Prior to this, it had always been verbal. The system Asa Candler set up was insane. This is from the book, Secret Formula about Asa and his son Howard Candler. “Asa made his son memorize the contents of the various containers that were stored carefully in a locked room with their labels peeled or scratched off, for days with his father standing watch over his shoulder. Howard practiced making the ultra secret flavoring compound, merchandise number 7x, learning to recognize the pungent fruit and vegetable oils by sight, smell, and remembering each was put on the shelf when it came in from the supplier, until he knew by heart the proper amounts and the exact order in which to mix them.” This is crazy. The way in which this giant mass produced thing is created, it’s only stored (I believe) in two people’s head at any given time. They deliberately kept this a trade secret and didn’t patent it, because if you patent something, eventually it does become the property of the public and anyone can use it to further innovate. But Coca-Cola has kept this secret all these years. And it’s still part of the lore at the company to this day that oh, there are two people that know the formula, and they can’t travel together. Well the formula is out there. You can find it on the Internet.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.