If you want to become a billionaire, the most probable way to get there is by starting a company. Over the years, there have been a couple of billionaires who were able to amass their wealth through diligent investing, making movies, and even writing books. But, despite the avenue, nearly all billionaires can attribute their wealth to some sort of individual venture whether that be starting a hedge fund or pursuing directing. There is, however, a select group of individuals who were able to hit the elusive 10-figure mark by working as employees their entire lives.
And the first person to achieve this remarkable feat was a Cuban refugee named Roberto Goizueta. So, here’s how a Cuban refugee became the world’s first 9 to 5 billionaire. Roberto Goizueta was born on November 18, 1931, in Havana, Cuba. When Roberto was a kid, the family was quite well off. His father was an architect and owned a successful construction/hardware business. Meanwhile, his mother was the heir to a large sugar plantation. Roberto grew up in a mansion that his grandfather built, so life was pretty good. He attended local private schools in Havana during his early days before attending a preparatory school called Cheshire Academy in New Haven, Connecticut. Roberto would end up doing well enough in school to get accepted into Yale University where he majored in Chemical Engineering. Roberto graduated from Yale in 1953, and right after graduation, Roberto would marry Olga Casteleiro and moved back to Havana. After graduation, his father wanted Roberto to join the family business, but Roberto had other plans.
Roberto wanted to make a name for himself instead of following in his father’s footsteps. So, he looked around the newspaper when he found an advertisement from an unidentified company that was looking for a bilingual chemical engineer. The company turned out to be Coca Cola and Roberto would get the job. However, his father only let Roberto take the job if he agreed to work at the family company every Saturday. Roberto agreed to his father’s condition and took the job on July 4, 1954. The job wasn’t particularly glamorous, but it did pay $500 per month which is the same as about $5000 today. His friends thought he was crazy for taking a job at Coca-Cola instead of his father’s company, but soon enough this would turn out to be the right decision.
Starting over again
Over the next five years, Roberto quickly worked up the corporate ladder becoming the chief technical director for all five of Coca-Cola’s bottling plants in Cuba. At this point, it seemed like nothing could go wrong. Roberto had a solid career going, and even if he lost his job, he had a great family to back him up. But this is when Cuba would experience an unprecedented turn of events. In January of 1959, communist leader Fidel Castro led a rebellion against the Cuban government, and he would successfully overthrow the government just a month later. Fidel Castro instantly named himself the premier of the country and made it clear that he was going to take over all private businesses. Roberto quickly sent his children to stay with relatives in the US, but Roberto and his parents would try to stick it out in Cuba for as long as possible. Eventually, in August of 1960, the family decided that it was time to get out, and they would use a family vacation to Miami as an excuse to flee the country. When they reached Miami, the family had successfully escaped communism, but they had lost everything in the process. The family was staying at a small motel room, and they only had $40 and 100 shares of Coca-Cola left. To make things worse, just two months later, the new Cuban government would seize all of Coca-Cola’s assets in Cuba as well as the family’s assets. So, there was officially no going back. The only silver lining of the situation was that Coca-Cola didn’t lay off or fire Roberto. But given that Coca-Cola had lost all of its assets in Cuba, Roberto had to start again from the bottom.
In 1961, Coca-Cola moved Roberto to the Bahamas where he worked as a chemist. Given Roberto’s previous experience at Coca-Cola though, it didn’t take him too long to work up the corporate ladder once again. By 1963, Roberto was promoted to staff assistant to the senior vice president for Latin America. And in 1964, Roberto was transferred to CocaCola’s headquarters in Atlanta, Georgia. Just two years after that, Roberto was promoted to vice president of technical research and development which made him the youngest person in history to reach that position. But this was just the beginning. While Roberto was working as vice president, the former chairman of Coca-Cola, Robert Woodruff would become quite impressed with Roberto’sperformance. Woodruff was 77 years old at the time and he had just retired from Coca-Cola a few years ago, but he still played a crucial role within the company. Soon enough, Woodruff and Roberto would become friends and often ate lunch together. It’s thought that Woodruff considered Robertoto to be his disciple. Several years later, in 1974, Roberto was promoted to senior vice president of the technical division, and just one year after that, he was promoted to executive vice president of the technical division. Roberto served as one of Coca-Cola’s executive vice presidents till 1979 when the president of Coca-Cola J Lucian Smith resigned. This allowed Roberto to move up to being a vice-chairman of the company. At the time, Coca-Cola had 6 vice-chairmen, and these guys were considered to be the next in line for becoming chairman and CEO. However, within a year, the system would be changed. 4 of the vice-chairmen would become executive vice presidents, and Roberto would take on three roles which were director, president, and Chief Operating Officer. As COO, Roberto eliminated natural sugar from coca Cola’s sodas. Instead, he opted for high-fructose corn syrup which was 40% cheaper. This clever business decision further impressed Woodruff. And, just a year later in 1981 when Paul Austin, the former CEO, retired, Roberto would be named the new CEO and chairman of Coca-Cola with a strong recommendation from Woodruff. And this is when Roberto would prove his ability. You see, Coca-Cola was doing just fine in terms of revenue and profits, but a storm was brewing in the background, and the media picked up on it. Coca-Cola’s sales had flat-lined for quite some time now, and this wasn’t because Coca-Cola had reached market saturation. The soft drink market was still growing and the reason Coca-Cola didn’t see any growth was that Pepsi was eating it all up thanks to the marketing genius of John Sculley. Coca-Cola was still outselling Pepsi at soda fountains, but Pepsi had actually overtaken Coca-Cola within the food store market since 1979 and they were quickly building up market share. So, Roberto arranged an executive meeting where he explained his plan for the 1980s. The key point he hammered with this meeting was the need for reinvestment. In his mind, the idea was super simple. Borrow money at low-interest rates, invest it in high-returning assets, and then pocket the difference. But, this was a completely foreign idea to Coca-Cola. Coca-Cola had never borrowed money in its entire history, and this made many executives skeptical about Roberto’s plan. They all knew that Coca-Cola needed major change to win back market share from Pepsi though, so they went along with it.
Roberto’s first major decision was the introduction of new drinks, the first of which was Diet Coke in 1982. Diet Coke was a massive success and Roberto would follow this up with Cherry Coke in 1985 which also became a major money-maker for Coca Cola. Roberto wasn’t free of mistakes though. In 1985, Roberto also oversaw the release of New Coke which changed the formula of classic Coke. Though Coca-Cola had gathered a significant amount of objective data that people liked the taste of the new Coke better than the original Coke, the market didn’t respond that well. There was something about the nostalgia and familiarity of the original Coke that even Coca-Cola themselves couldn’t beat. Roberto didn’t make a fuss over this weird reaction though. He quickly listened to the market and brought back the original Coke formula within just 79 days.
Aside from experimenting with new drinks, Roberto completely overhauled Coca-Cola’s marketing effort. Until then, Coca-Cola was extremely passive with its marketing. Roberto changed this by introducing slogans like Coke is It!, You Can’t Beat the Feeling, and Always Coca-Cola. This aggressive style carried into the company’s expansion efforts as well. For instance, after the Berlin Wall fell in 1989, Roberto instantly expanded the company in Eastern Europe despite the terrible economic condition of the area. While this was a questionable move at the time, Coke overtook Pepsi as the preferred soft drink in Europe just three years later. This aggressive marketing made Coca-Cola one of the most recognized brands in the world. It’s estimated that 94% of the entire world’s population recognizes Coke’s red and white logo.
Roberto also spent a lot of money on vertical integration. Throughout the 1980s, Roberto invested in a variety of different bottling companies which allowed Coca-Cola to significantly reduce their operating costs and increase their profits. For a bit of time, Roberto also experimented with investments outside of the beverage industry. For example, in 1982, Coca-Cola bought Columbia Pictures for $692 million. At first, the investment performed quite poorly, but after the release of Ghostbusters, Columbia Pictures exploded and Roberto was able to sell the company in 1989 for a $1.5 billion profit. Despite this success though, Roberto decided that it was best to focus on just one industry. Roberto strongly believed that the sole purpose of every company was to maximize shareholder returns, and as long as a leader accomplished this, good things would follow. In his opinion, the most effective way to accomplish this was by being focused and being aggressive. And that’s exactly what he did.
Unfortunately, though, Roberto’s career would abruptly come to an end during his peak. Roberto had been a lifelong cigarette smoker and in September of 1997, he would be diagnosed with Lung Cancer and he would die just one month later on October 19, 1997, at age 65. Despite Roberto’s untimely death, he had already done wonders for Coca-Cola. By 1996, Coca-Cola was outselling Pepsi internationally by a ratio of 3 to 1, and as you would guess profits and stock price had gone to the moon. When Roberto took over Coca-Cola in 1981, the company was worth a solid $2.8 billion. But shortly after his death, Coca-Cola was worth $184 billion. That’s equivalent to a 64x return within just 17 years. To put that into perspective, Coca-Cola stock has only grown 31% since Roberto’s death. No wonder Warren Buffet made so much off of Coca-Cola. This phenomenal performance has made RobertoGoizueta one of the most respected and highly regarded CEOs of all time. And many of his business philosophies are taught in the most prestigious business schools around the world today. Considering all of this, I don’t think you’d be surprised to hear that Roberto was worth $1.3 billion at the time of his death making him the world’s first employee billionaire.
What do you guys think about Roberto’s insane rise to the top? Comment that down below. Also, drop a like if you love Coke.