Founders - #111 David Geffen

Episode Date: February 16, 2020

What I learned from reading The Operator: David Geffen Builds, Buys, and Sells the New Hollywood by Tom King. ----Come see a live show with me and Patrick O'Shaughnessy from Invest Like The Best on October 19th in New York City. Get your tickets here! ----Subscribe to listen to Founders Premium — Subscribers can listen to Ask Me Anything (AMA) episodes and every bonus episode. ---He told me he had recently read Buffett: The Making of an American Capitalist, Buffett was Geffen's hero.Geffen—with searing focus, unyielding drive, and outlandish nerve—had devised and implemented strategies to propel himself to the top of the heap of Hollywood powerbrokers.I used to have phone conversations with David that would leave me sweaty.David might not have realized it, but he was being educated by a master entrepreneur. Batya succeeded in teaching him the value of hard work and the possibilities of life under even the most difficult circumstances. She was a brilliant businesswoman who could account for every penny that went into and out of the enterprise. She kept her overhead low by driving hard bargains with her suppliers and by closely monitoring her expenses.His mother determinedly drilled into him the same advice she often repeated to herself. "You may not be very tall, but you will stand head and shoulders above everyone," she declared. "You think of yourself as head and shoulders above everyone else, and you will be."Arriving in Hollywood for the first time, David thought he had found paradise. It was even more intoxicating than he had imagined. His life's ambition was soon established after he read a new biography of MGM studio boss Louis B. Mayer called Hollywood Rajah. "I want this job," he thought to himself.He simply did not have the attention span that college required. He was eager to get into the real world.She told Geffen that some of the brightest lights in the entertainment business had gotten their start in the mailrooms of the major talent agencies. Although it was not a glamorous job, it was a way to get a foot in the door. Having tossed aside all notions of right and wrong, David Geffen simply lived by different rules than did the rest of society around him. Unconstrained by traditional ideas of acceptable social behavior, he was free to use all of the resources at his fingertips to achieve his lofty goals.Geffen simply worked harder than anyone else.The music department, he said, was the place where a young agent could make a name for himself. Brandt's advice had a profound impact on Geffen. He at once rejiggered his career plans.It was not an undying passion for music that made him decide to try to make his fortune in the business; he did it because he might get rich quickly.Geffen recognized that publishing was one of the areas in the music business where the real money was being made. Long after an artist's star has faded, publishers benefit financially for years to come, pocketing royalties whenever a group records a song or sheet music is sold.Having studied Clive Davis, he decided that he, too, had the savvy to make it in the record industry. It was not much of a stretch for him to envision David Geffen, the music mogul.He remained unsettled and plagued by feelings of insecurity and dissatisfaction. He was driven by a devil that constantly told him he needed to be bigger, more, and something else. He simply was not the kind of man who was going to stand in one place for very long.While he saw himself most of the time as the smart, fast-rising star he had become, there seemed to be fleeting, dreadful moments when his confidence shattered and he was gripped with fear.The way Geffen saw it, there was a natural synergy in owning both a record company and a management company. They could use the management company to book and promote the acts it was recording on the label and vice versa. Controlling both sides of the business. But the real advantage, Geffen explained, was that they could use the record deal, which came complete with Atlantic financing, to cover the overhead at the management company.From the day he opened his new business, Geffen had his eye fixed on the bottom line. He had the foresight to avoid the pitfalls that had proved fatal to so many others who had launched record labels before him. He was overhead averse and did not feel the urge to redecorate or to hire a large staff.For all his money, David Geffen was turning out to be rather frugal. He well understood that the delicate balance between profit and loss can be upset if expenses are high.Playing fair, Geffen had learned, was difficult and time-consuming; lying, on the other hand, was easy and effective.Just thirty, he claimed that his net worth was about twelve million dollars.  But he was surprised to realize that the millions of dollars he had just banked and the trappings he had been able to acquire with it did not make him happy. It hit him when he was in London on a business trip, lying on a bed in a posh hotel, smoking a joint, and staring at the ceiling. All his life he had dreamed of being a multimillionaire, thinking that money would solve his problems. It had not, and he fell into a deep depression.Geffen saw immediately that Katzenberg had the hustler-like qualities that he himself had displayed at that age.Used to the relatively quick turnaround of record production, the slow-moving nature of the movie business made him agitated, nervous, and bored. Key to his recipe of success had been his ability to move quickly; but in the movie business, that same pacing proved to be a detriment, and it began to drive him crazy.It was to be the most important negotiation of Geffen's life, and he successfully extracted an extraordinary deal that within a few years helped make him one of the wealthiest men in the country. In pulling off the deal, he showed himself to be a shrewd, remarkably focused strategist. He had an uncanny ability to understand people, recognize their weaknesses, and capitalize on them. The negotiation also showed once again that Geffen had that rare ability to envision success: He clearly understood his power and knew how to get what he wanted.--There was one thing Calvin Klein did not tell Geffen: His privately held fashion empire was on the brink of bankruptcy.  Geffen surmised that the company should be transformed from a manufacturing firm to a design, marketing, and licensing company."You guys stink at manufacturing," he said. "You need to get out of that business."Instead, Geffen continued, the company needed to focus on what it really knew: how to design and market the Calvin Klein brand name."Calvin, you should only be focusing on the aesthetics," Geffen said. "You should just be designing the clothes and overseeing the marketing and advertising."Geffen reprimanded Klein and Schwartz for excesses they could not afford. Among other things, he told them to sell their company jet which cost them $2.5 million a year to maintain. He also told Klein to fire his chief financial officer and helped him hire Richard Martin, a top executive at Price Waterhouse, the accounting firm he himself used.Here was the "fixer" in action: David Geffen was now involved in the kind of problem solving that energized him more than anything else.--The idea of Geffen joining Katzenberg and Spielberg seemed a bit odd. For one thing, Geffen was Hollywood's greatest entrepreneur and nearly all of his successes were ones in which he alone had made the decisions."If I have to sit and convince somebody why I'm enthusiastic about something, I'm already depressed." The idea of himself as a partner was a strange one for David Geffen.I've been working on myself, and my demons and my nonsense and my fucked-up-ness for a long, long time. Which is not to say that I'm still not a little fucked up. I think you get better and better in tiny increments, and you die unhealed.----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

Complex, contentious, and blessed with the perfect pitch ability to find the next big talent, David Geffen has shaped American popular culture and transformed the way Hollywood does business. His dazzling career has included the roles of power agent, record industry mogul, Broadway producer, and billionaire Hollywood studio founder. But from the beginning, his accomplishments have been shadowed by the ruthlessness with which he has pursued fame, money, and power. With the operator, Tom King, who interviewed Geffen for the book and had an unimpeded access to his circle of

intimates, presented a mesmerizing chronicle of Geffen's meteoric rise from the mailroom at William Morris, as well as a captivating tour of 30 sizzling years of Hollywood history. Drawing on the recollections of celebrities such as Tom Cruise, Yoko Ono, Warren Beatty, Courtney Love, Paul Simon, and even Cher, whom Geffen nearly married, the Operator transports readers to a world that is as ruthless as it is dazzling, revealing a great American story about success and the bargains made for it. Okay, so that is on the back cover of the book that I'm going to talk to you about today, which is The Operator. David Geffen builds, buys, and sells the new Hollywood, and it was written by Tom King. And I chose that excerpt to start the

podcast with because I think it's a great one-paragraph overview of the life and career of David Geffen, where you have this singularly focused, intensely driven, really talented entrepreneur, manager, business person, and yet how in that short paragraph the author uses the word ruthless twice and that's in the other side to Geffen where you have one of the most ruthless people that I think I've ever, this is going to be an interesting podcast because he may, he definitely is david geffen is definitely one of the most ruthless um people that have ever covered on the podcast um and then i just want to finally point out that last sentence where he said it's a you know it's a uh transports readers to a world that is ruthless as it is dazzling revealing a great american story about

success and the bargains made for it. So just keep that in the back of your mind as we go through the book today about the bargains that David is making for the success that he achieved. So just two quick things before I jump into the rest of the book. One, I found out about this book through a listener. So if you do have interesting founders that you want me to cover or books you want me to analyze on the podcast, please continue to send them my way. And second, I just want to take a minute or two and talk about this idea that I feel you and I have been talking about frequently for a fairly long time. And that's this idea of soul in the

game. And there's a bunch of different founders that I've covered. This is not a comprehensive list by any means, but you definitely see that you can always tell somebody has soul in the game by the way they approach their work, right? And so I think of people like Walt Disney, who I covered on Founders number two and Founders number 39. Steve Jobs definitely had soul in the game. Founders number 5, 19, 76, and 77. I also have two bonus Steve Jobs episodes coming on the Misfit feed here in the next few weeks as well. James Dyson, founders number 25. Let me pull up this quote.

And this is how you kind of – one, if somebody has soul in the game, you'll notice it by the way they approach their work and the products they make, right? But also the way they talk. And so this is from James Dyson, his autobiography, which is one of my favorite books that I've ever read for the podcast. And this is what sold in the game sounds like when you're writing your autobiography. He says, this is not even a business book. It is anything or if anything, a book against business, against the principles that have filled the world with ugly, useless objects and unhappy people. So I love the fact that, one, he pokes fun.

He's a very cheeky writer if you've read his book. He's very witty, but he also likes to talk. He likes to point out the ways in which his products are better. He's extremely confident in that manner. But I think that also he hits on something else like, yeah, there's a lot of, just look at a lot of the products that you interact with. A lot of them are, you know, poorly made, ugly, maybe not, you know, poorly designed. That's why, you know, we try to celebrate excellence on this podcast. But he also hits on unhappy people. And this is my own belief that if every business was run by somebody with a soul in the game, it would make everybody else's life better because it's a

more pleasant experience, right? So James Dyson's one of them. Another example that comes to mind is Yvonne Chouinard, founder of Patagonia. I covered him on Founders 18 and number 60. Henry Royce of Rolls-Royce fame, of course, he had Soul in the Game. If you read that book or listened to Founders No. 81, it's very obvious. Enzo Ferrari, maybe Soul in the Game personified. The guy was one of the most obsessive people that I've ever covered. Founders No. 97, 98. And then most recently, I talked a lot about this with the founder of Adidas, who I didn't even know existed before I started reading that book about him.

And that's Adi Dasslerler, founders of number 109. And so I want to read this paragraph because I was going through a bunch of my notes and thinking about this this week. And I'm going to read this paragraph from this book called Skin in the Game, Hidden Asymmetries in Daily Life by Nassim Taleb. And he's got an entire, it's probably like seven to ten pages where he goes over his idea about what Soul in the Game is and how you can, where you see, like how it makes somebody with Soul in the Game, makes it obvious that they have that, right? And then I'm going to tie it back to podcasts and then I'm going to get into the book. I have a point here.

Just bear with me for a second. So first he says, this is Taleb writing, he says, anything you do to optimize your work, cut corners, or squeeze more efficiency out of it will eventually make you dislike it. And you know what, I need to communicate clearly here. David Geffen did not have soul in the game. And that's why I'm choosing to talk about this here before we get into the book, because you're going to see a great

source of unhappiness, even though this guy has made billions and billions and billions of dollars. So it So it says it would eventually make you dislike it. Artisans have soul in the game. So now he's going to list like some of the characteristics of people that have soul in the game. Number one, artisans do things for existential reasons first, financial and commercial ones later. Their decision-making is never fully financial, but it remains financial. Number two, they have some type of art in their profession. They stay away from most aspects of industrialization. They combine art and business.

Three, they put some soul in their work. They would not sell something defective or even compromise quality because it hurts their pride. Finally, the last one, they have sacred taboos, things they would not do even if it markedly increased profitability. Okay, so that's a good brief overview of what that means in case you haven't come across this term before. I personally prefer studying people that approach, like they, I mean, what is the point of this whole podcast? The whole, if you think about what we're doing here, like why are we trying to learn from people, not only learn the good ideas that they accumulate through the lifetime of their

careers, but also avoid their bad mistakes is, I think it was Tim Urban who introduced me to this idea, but I think it's like it has it's it's an old idea that 90% of your happiness or thereabouts it comes down to two things in life like who you surround yourself with so your spouse and your close friends and then what you do for a living and you're going to see here today David Geffen in large part made a lot of money but he was kind of tormented he not even kind of he was tormented in a lot of ways um and so when i when i bring up ideas about having stolen the game or studying people in the past is like if we can take these ideas half of the time they were awake assuming you work eight hours a day you're sleep rate you

you have 16 left or you're actually conscious so it means you're going to work half of those maybe a little less if you take the weekends off or whatever the case may be. So it's very important to find something that you like doing and to feel like you're progressing and you're getting better at your craft. So that's just this general idea because when I sat down, I was like, how am I going to talk about this book today? So I guess even before I jump into the book, let me just grab some notes of mine. And this may be a little different than I normally do because I'm pretty sure David Geffen's a sociopath. I'm almost positive he's a sociopath.

So if you see a profile of a sociopath, his glibness has superficial charm. He's manipulative and cunning. They never recognize the rights of others and see their self-serving behaviors as permissible. That's David Geffen. They have a grandiose sense of self. They pathologically lie. They have a lack of remorse, shallow emotions, an incapacity for love, and a need for stimulation. But here's the thing.

Like, it's not all – the lessons I learned from reading this book are not all negative. I think one of the biggest things that David understood and that I took away from his life is an idea that I was first introduced by Steve Jobs. And David Geffen, like Steve Jobs, and I think this is important for every single person living, is they both understood that life is malleable. So let me pull up this quote. Steve talked about this a lot over several different decades in different contexts. So I'm going to give you two quotes about the same idea. This is back, I think this is in the early 90s. And Steve Jobs talking. He says, the minute you understand that you can poke life and actually something will pop out of the other side,

that you can change it, that you can mold it. That's maybe the most important thing. It's to shake off this erroneous notion that life is there and you're just going to live it, or you're going to live in it, excuse me, versus embrace it, change it, improve it, and make your mark upon it. David Geffen definitely shaped his life. Steve Jobs continued later on. He says, when you grow up, you tend to get told that the world is the way it is and that your life is just to live your life inside the world, try not to bash into the walls too much, try to have a nice family, have fun, save a little money. But that's a very limited life. Life can be much broader once you discover one simple fact, and that is that everything around you that you call life was made up by people that were no smarter than you and you can change it you can influence it you can build your own things that other people can use once you learn that you'll never be the same again so not only does steve know that david geffen knew that i think almost every single person i've studied in the podcast

that's what i think reading biographies is so inspirational because they start out as poor broken people in many cases and they build themselves into what they become. They poke life. They change it. They understand it's malleable. So that's a positive that I learned from David, right? But the negative is he didn't work on something he loved. I'm going to go into more detail on that in a minute.

He was sociopathic. I already told you that. And he was always unhappy. He was obsessed with money, but then he was surprised it didn't make him happy. And then second, the note I left myself is he would abuse people, break his word, and then these same talented people would then sign back on him, whether they worked on him for one of his movies in the future, even though he abused them, or they re-sent to his record label after he lied to them. And the note I left myself is don't be like that.

When you identify people, I was sitting here thinking, what is the strategy here, David? If you were to run into a David Geffen kind of person in your life, what would I do? And I thought about that when I put the book down and finally finished it. And I came up with a short idea that's probably the correct route to go. Avoidance. You can't have people like this in your life.

All right. So let me jump into the book. Hopefully that preamble that made a bit of sense to you. Oh, man. This story is crazy. All right. You'll see when I get into it. So first I'm going to jump into the forward. And here we have the author, Tom King, talking about it took him a while to convince David to give him access to write a book about him. So he says, I told him that I wanted to write a book about him. Geffen was aggressively opposed to the idea and quickly ended the conversation. A week or so later, I called him again. He softened somewhat because

he told me that he'd recently read Buffett, The Making of an American Capitalist. Warren Buffett was Geffen's hero, and he applied that he would be pleased if his life merited a similar treatment. So one thing that you're going to realize about Geffen is he was heavily influenced by reading And he applied that he would be pleased if his life merited a similar treatment. So one thing that you're going to realize about Geffen is he was heavily influenced by reading biographies of people he admired. Warren Buffett is one of those people. The other person that he wanted to pattern his career after was one of the founders of MGM, Louis B. Mayer. I'll get there in a minute. So eventually Geffen gives in.

He's like, okay, yeah, you know what? This would be great. He's extremely confident, egotistical. And so he's like, this would be great if my life, if somebody wrote a book about me the way they wrote a book about Buffett. But the problem is Geffen's not Warren Buffett. He doesn't have the same temperament by any means. So I'm going to start still in the forward. I'm going to talk about some of his personalities and strengths. This is going to give you an insight into like what we can learn the good from him he says geffen had had come to be involved with nearly every medium in the entertainment world and he had been almost invariably successful he was extremely successful in multiple domains i'm not trying to downplay his talent whatsoever. I'm just saying that he was extremely ruthless.

You can't – I feel when analyzing the life of and learning from the life of David Geffen, you can't only focus on one aspect. He was driven, talented, and ruthless. And the reason I bring this up is because, you know, we don't want to be naive. We live in a very complex and chaotic world, and the people we study, they're imperfect human beings just like you, just like I am. We're all imperfect. Now, we don't ever want to go to the level of imperfection

that we're going to see here today with Geffen, but we have to realize that these people, if you're extremely ruthless and driven, you can also become extremely successful. Now, what we want to do is be extremely successful by being really good at what we do and not have that come at an expense to other people. You know, but there's a ton of people. There's a ton of people throughout human history. They're alive today.

They were alive 100 years ago. They'll be alive in the future. They're just like David Geffen. And we have to realize that these people exist. And again, my advice is avoid them. So he says he was successful in almost every medium, right? From humble beginnings in Brooklyn where he learned entrepreneurial skills from his mother, Geffen, with searing focus, that's a positive, unyielding drive, another positive,

and outlandish nerve, I would also say a positive, had devised and implemented strategies to propel himself to the top of the heap of Hollywood power brokers. And I think one of the mistakes he made was he was competing in what's largely a zero-sum game, where most of life and business can be positive sum. Now here's some personality, these short little sentences that are going to give you the idea of his negatives, extreme negatives. Former executive at Warner Communications told Tom, the author of the book, I used to have phone conversations with David that would leave me sweaty.

Stephen J. Ross, who is arguably the most important mentor Geffen ever had. Ross had done a great deal for Geffen, but Geffen did not see it that way. Geffen had repaid him by making insensitive comments to the press as Ross lay dying from cancer. A quote from Geffen's only sibling, his brother. Why would you want to write a book about him? Why don't you write a book about somebody who's done good for the world? So the foreword ends with David Geffen doing what he does throughout his whole life, screaming, he's on the phone, screaming at Tom.

He says, I changed my mind. I don't want you to write the book. And by that point, it was too late. And it was interesting. Tom's reaction was like, oh, good. I'm glad we're having this fight because now I see how David was with most people in his life So I can write a more authentic book about him. Okay. All right, so I want to start in the early days I think to understand David Geffen You kind of have to understand what I would describe as like the proto David Geffen, which was his mother

I think her name was spelled Batya or pronounced Batya so this is Batya Geffen, which again, I think is David Geffen before David Geffen. This is before David was born. Living at the poverty line and lacking even the money to buy milk for their baby, the Geffens went on a relief program. They immigrated. They're from Russia. At least she was from the Ukraine at the time. And they're living in New York City, don't have a lot of money okay so it says they're living at the property line lacking even the money to buy milk for the baby this is david's older brother the geffins went on a relief program but batya was a proud woman who felt a deep sense

of shame when welfare workers visited their apartment she also married somebody that was not like her so the description of his father of david's father there was one thing she now understood fully the man she married two years earlier he was simply not ambitious but it was extremely ambitious she was embarrassed that she couldn't make any money she was extremely hard working a very powerful personality so she starts her own business and they said there's a lot of like um they call them i think heavy well let me just read this part too you. She's going to create by hand and eventually manufacture her own line of bras. Okay. And it says, the bra she made was a good one.

And the word of her talent spread quickly. Her world in New York was populated with scores of heavyset immigrant women. And Batya sensed that there was a market for inexpensive custom-made brassieres facing the most desperate financial situation of her life she established a small home business and this business was relatively successful she kept it for i don't know 40 years a good amount of time now this is the person behind the business baye moved about the neighborhood with the force of a hurricane you could easily say that about david well. She was convinced she was put on the earth to tell people how things ought to be done, whether or not they asked for her instructions. You could say that about David as well.

She was incapable of seeing life through anyone else's eyes other than her own. Her son also possessed that quality. David was her mother's favorite. He was about 10 years younger than his older brother. And by that time, they were in a way better financial position. They were not rich by any means, but they weren't on welfare because of Baia's bra business, right? And so she really pumped him up. She gave him like a high – she told him to have a high, self-opinion of himself. It says, She also hid devastating things from them.

So this is also, you know, unfortunately we have to understand that I always say in, like, my own life, like, I never want to rely on the good graces of other people, right? I was listening to this podcast the other day, and I had to rewind it because I could not believe what the person was saying. Let me actually – hold on. Let me get his quote because I wrote – I put it in my notebook because my personal approach to life is the exact opposite of this person's. Okay, I found it. I I'm not gonna say who it is person is a fairly large audience I'm not here to obviously criticize that I just I want to contrast I have a different point of view than this and I

want to relate this to where we're at in David Geffen story so I round and and made sure I had this correct because I could not believe my eyes this person's talking says there's something very beautiful about feeling very small and very weak to feel you need other people. No, absolutely not. My entire existence is trying to learn and to make myself strong so I can support myself, my family, my loved ones, so I never have to rely on the good graces of human beings. Because when you're very small, history is, I mean, my family, my loved ones, so I never have to rely on the good graces of human beings. Because when you're very small, history is, I mean, this person, there's no way this person could have even a basic understanding of human history.

Because when you're very small and very weak, you get taken advantage of. So this podcast is not about making you smaller or weak. It's about making you smarter and stronger. I have a very distinct point of view. I find, we talked last week, I loved when Henry Singleton said that people that think for the short term repulse him. Well, this repulses me, the idea that we ever want to celebrate weakness. Absolutely not. So here we're going to see something that happened.

Unfortunately, David Geffen's relatives are Jewish. And Batya's entire family, she escaped, right? Her sister escaped. Everybody else was killed by the Nazis. And this is what happened. So she hadn't talked to, she's the only one that escapes the United States, right? She tries to locate her sister Dina. She finds Dina in, this is, they haven't spoken in about, I think, 20 years at this point, right? And so she's, Batya had not heard from her sister or any of her other family members, right? So Batya screamed, oh, my God, Dina, how are you? And she goes, I am fine, but I am the only one alive.

Everyone else is dead. And so Batya, you know, obviously she didn't know this happened to her family years before. She said, Dina said that most had perished in the September 1941 massacre at Bab Yar, a huge ravine outside of Kiev that served as a mass execution ground during the Nazi occupation. They were ordered to strip naked and were led in groups of 10 to the edge of the ravine where they were systematically machine gunned from the opposite side. Their half sisters, their father and mother, their husbands and children were shot on the other side and thrown down by the well and buried essentially in a mass grave. So this idea

that it's beautiful to feel very small and very weak and to feel that you need other people is a lie. Now this, what's interesting to this is she, as we expected, think about if like you hadn't talked to your family in two decades. This is before, you know, I guess the only modern technology would be like the telephone, for God's sake. So communication was extremely different than the world we live in now, right? You find this out, what do you expect? Even a strong woman like Batya, she winds up having a nervous breakdown. She has to go, she spends time in an asylum. It's just really heavy stuff in here. Okay, so let's skip ahead. Now, she is also extremely strong person. She recovers. She hides this. David and his brother don't find this out until after she dies. Now, we're talking maybe 30 or 40 years after the fact she held a secret for a very long time is what I'm telling

you okay but the one thing that David benefited of of having were one of the reasons David benefited having her as a mother she was in large parts a master entrepreneur you know not to the sense that she could build a she was always able capable of making enough money to support every member of her family. So it says, David might not have realized it, but he was being educated by a master entrepreneur. Baia succeeded in teaching him the value of hard work and the possibilities of life under the most difficult circumstances. She was a brilliant businesswoman who could account for every penny that went into and out of the enterprise. She kept her overhead low by driving hard bargains with her

suppliers and by closely monitoring her expenses. This is something David would do that was very different from other people in the record business. And it gave him a huge advantage, something that most of the entrepreneurs that we study say. It's like, what's your cost? What's your cost? What's your cost? It's just math at the end of the day. Now, here's an interesting part. David found something he loved at a very early age, and this is going to influence the career that he chooses. But we're going to see eventually he runs into a fork in the road, where it's like, okay, I can choose the world I love

or the one that's going to be money, lots of money, and faster. And so he chooses the second road. And I think that is a big takeaway here that if you're doing things for money money will solve money problems but david is extremely extremely unhappy it's not going to solve your unhappiness problems we see people that are rich and successful all the time and they kill themselves because they're they're they never figured out how to be content with life david david obviously never committed suicide, but he's largely discontent from the time we meet him as a young adolescent till the book ends. This book's 20 years old. So I think he's in his seventies now. I think the book ends when he's

like 57 or something like that. So it says, this is David finding something he loves, show business, Broadway movies. So it says, to David, Broadway was a magical wonderland that called to him, a world far away from the life he knew at home. He became obsessed with show business, so he'd take the train into, they were living in Brooklyn, so he'd go down to Times Square, and he'd catch all of these. At the time, you could pay like two bucks, and you'd see a bunch of shows.

He just spent all day there. David fantasized that one day the crowd would be cheering for him. We start to see his personality traits at a very young age. At just 13 years old, David displayed a blatant lust for money. He had a weird, this idea is like, all right, I'm going to get rich. So let me go look at the occupations that are rich. So he's like, oh, I'm going to be a dentist. He's a dentist. He figures we're rich. And that was his main goal in life. This is how his cousin described him. He's enterprising. He thinks of nothing but money. Now here, we're going to see another, we're going to see his mother, you know, constantly tell him, listen, you are a special child. You're gifted. You could do anything you want. Now I'm going to read this to you but this is very similar this is this

depending on who the person is giving this advice to them could make extremely positive impact in their life when i read this part i immediately thought of the the advice that nolan bushnell gave to a young steve jobs so i'll get there in a minute okay he says uh this is his mom you may not be very tall but you will stand head and shoulders above everyone. If you think of yourself as head and shoulders above everyone else, you will be. She did understand that there is a power in positive thinking. People think it's like willy-foo-foo stuff. I always say the combination of a positive mental attitude and perseverance like can overcome almost any obstacle that you have in your life.

So why I say this is similar to the advice Nolan Bushnell gave to young Steve Jobs is because, first of all, if you don't know who Nolan Bushnell is, go back and listen to Founders No. 36. This guy is one of the craziest careers I've ever heard of. He was the founder of Atari and Chuck E. Cheese. The book that he wrote, which is Finding the Next Steve Jobs, he wrote that book because he's one of the very few people that was ever a boss to Steve Jobs. He hired like an 18 or 19-year-old Steve Jobs to work at Atari. And that book, Finding the Next Steve Jobs, opens up with Nolan's balling out of control. Both Atari and Chuck E. Cheese at the time were doing more in revenue than Apple. And Apple, I think, was doing like $100 million a year or something at the time. You know, gigantic successful businesses.

So he buys this huge house in Paris, if I'm remembering correctly. I haven't read the book in a while. And he throws a party. And Steve Jobs shows up at this party. I think at the time Steve Jobs was like 25, 26 years old. And then they wind up spending the next day or two walking around Paris talking about creativity, building businesses. And that discussion they wind up spending the next day or two walking around Paris talking about creativity, building businesses.

And that discussion is the foundation for the book Nolan writes. And it contains tons of useful information. You can read it in like a week and I highly, highly recommend it. But the piece of advice that Nolan gave Steve that Steve's really ran with, if you've analyzed the career of Steve Jobs, right, is pretend to be completely in control,

and people will assume that you are. He told that to a young Steve Jobs. Steve Jobs took that advice and ran with it, just like Batya is telling a young David Geffen. Think that you're head and shoulders above everybody else, and everybody else will start believing that too. Okay, so let's get more insights into his personality. Essentially, David is a misfit that doesn't like himself, but with something to prove. And this

combination leads to, you know, extreme outlier success. He says there was already a lot that David did not find attractive about himself when he looked in the mirror. He was small framed and short, and he had a nose that he thought of as he had to be in his 40s by this time. harshly. So what they're talking about there is David was gay, but he would not, he didn't admit it till, I think he was, he had to be in his forties by this time. So here's something to understand about David. And this is where I think is bad. We do not want to follow this example here. He was like five foot seven, or he is five foot seven Jewish. He's got a big nose. He's like scrawny. He wanted to be, it says in the book, which is jaw-dropping to me, he had dark black hair.

He wanted to be 6'1", straight, married with kids, not a big nose and blue eyes, and a Gentile. He essentially wanted to be the opposite of what he was. I don't think, my opinion of this is like your uniqueness, everybody has some kind of like uniqueness about their personality. And yet over time, society kind of conditions you to like, to limit your uniqueness, to become conform more like everybody else. I think you should just lean into it.

Like you don't control your hair color, your eye color, your height, what your nose looks like any of this stuff. And so don't don't feel the need to change who you are. Use the things that make you different as your strength like in his case you know he he becomes fabasys financially successful he's got a lot of people that admire him he gets to date whoever he wants like they don't at the end of the day there's another I'm gonna reference wait but why again that blog by Tim Urban he's got this great post about um camera the name of it let me actually let me look for it real quick so I don't ruin this point.

Okay, I found the post. And it's a quick post. You can probably read it in, I don't know, 15 minutes maybe. It's called, I'll link it in the show notes too. It's called Taming the Mammoth, Why You Should Stop Caring What Other People Think. And Tim, you know, Tim's obviously a great communicator, a great writer. But the synopsis of the point he's making is what David Geffen know, Tim's obviously a great communicator, great writer, but the synopsis of the point he's making is what David Geffen here, he's like, oh, people aren't going to like me

because I'm tall, I'm short, I'm Jewish, and I'm gay. People don't think about other people. You cannot get caught up too much with what other people think about you because they're not thinking about you. Think about your very best friend in the world how often do you think about them on a daily basis what a couple minutes maybe 20 minutes a day who knows what the point is most of the time you're thinking about oh i'm hungry i'm tired i gotta work on this oh i gotta pick up my kid from school oh i gotta do this that's just how people are we think of ourselves and so when i read um Tim inspired me when I read this post, and maybe I had the inkling of that idea somewhere, but he communicates it better than I can, that wow, like, yeah, that's not an accurate representation of reality. Humans are obsessed

with themselves. And so in that sense, like, lean into what makes you unique. In my opinion, I'm talking to myself now, I need to lean in what makes me makes me unique. And I need to, to, to understand my own strengths. Yeah, there's a lot of things about myself that I want to change. But so you know, I don't have control over, like, if you ever saw me in person, like, I have a gigantic head. Like, seriously, I was teased ruthlessly, an older brother, and everybody, my friends would come over in elementary school, right? And my brother would call me basketball head because I look are lollipop because I was a skinny kid with this giant round head. And now like when I was a kid, it tormented me. But now I think it's funny because like maybe that's where I store all

the stuff I read or like, it just, it just doesn't matter. And obviously it grew into my head somewhat, but my point being is like when I was younger, I thought of it as a weakness. I wanted to change it. You know, you're so, you don't understand what you don't know when you're eight or 10 or 12 years old and you're being teased about this stuff. You know, cause I didn't finish a thought. My brother had said this in front of my friends and they took it back to school and then it just spread like wildfire. So then on I was basketball head. Now I think it's funny because I don't care. I didn't control this.

I didn't choose to have a giant head, but I do. So it is what it is. It's just silly to fret over things you can't control. And David, in large part, he also has a weird, unbelievable belief in his talent and ability and yet at the same time hated a lot of the stuff about himself. So this is why I'm so confused when I'm doing this podcast because this is a very confusing book and a very confusing person. So, all right, let's go back to more of his personality. This is his teacher describing him. He's rather talkative, self-centered, ignores teachers' orders and instructions, is fresh, and conceited.

The life story of one person can fundamentally change you forever. Forever. And that happens with David Geffen. It's happened with a bunch of people. So this is David Geffen finding the biography of Louis B. Mayer, and he holds onto this idea for his entire life. The ideas are such weird, special things that can have such a great impact. It says, so he moves to Hollywood. David thought he had found paradise. It was even more intoxicating than he had imagined. His life's ambition was soon

established after he read a new biography of MGM studio boss Louis B. Mayer. And this is the takeaway that David had. I want this job, he thought to himself. Something to know about David Geffen is he did terrible at school. He was not a fan of formal education. In fact, later on in his life, he took that as a source of pride, that he was able to succeed further with less education than the people that, you know, have a bunch of degrees. So it says, from the moment classes began, it was clear that college and David were not meant for each other. Plagued by the same issues that

had beset him in high school, he simply did not have the attention span that college required. He was eager to get into the real world and seemed incapable of spending long hours studying in the library. So at this time, he had moved to, I think, Texas to go to college. So he flew back to Los Angeles without completing his first term or taking any final exams. There was to be no further formal education for David Geffen. So he starts to meet people that knew other people that were successful in the business. Remember, he wants to do movies. He hasn't talked about music yet.

But he winds up meeting a—he's's the first music mogul they call him is this guy named phil spector um at the time they're writing this book phil is you know this crazy person we now know uh phil spector was convicted of homicide or manslaughter or something like that he's serving like a 20-year sentence and he's in like his 80s right now so this is uh specter is extremely violent he winds up pointing a gun at david too and other people he would just constantly point guns at people so we kind of see this but the note of myself on this page is we must learn not to emulate these behaviors so said specter was the first music mogul david saw in action and he studied his every move. Spector was only more than two years older than David, but he was already a millionaire and a star.

He was a renowned eccentric, and most people around him felt it was understatement to call his behavior unbalanced. He was an egomaniac, a control freak, and a screamer. You could also say that about David. He realized that Spector achieved his success without either movie star looks or a terrific singing voice. I could do this, David thought. and they set him on a path that he didn't intend for himself. And they said, hey, a lot of agents start out in the mailroom at William Morris or agencies like that, and so that's what he did.

He gets a job. Now here's the deal. He lied about graduating college, and he also lied about being Phil Spector's cousin to get the job. David lies, Geffen lies a ton, a ton in this book. But that's not really my main point here. The point was that if they found out that you lied on your application, you'd get fired from that. So David devises a plan to avoid that.

And then his plan winds up producing unintended positive byproducts. This is a very interesting part. Let me read this to you. He devised a plan. He came in an hour early every day for four months and rifled through every one of the bags of mail, hunting for a letter from UCLA that he was certain would arrive that would inform the Morris office that the university had no idea who David Geffen was. Now, here's the thing. The president of this company at the time attributed his early arrivals to ambition, but in truth, it was simply terror. So he winds up ingratiating himself

into the people that are running the business, and he does this his entire life. He uses mentors. He would flatter older people that're in positions of power and he'd leverage their relationship to get to to go where he wanted to go next and then what happens is he would burn the bridge talk crap about him you know to do things that you shouldn't do for people that are helping you it says in the sure sign yet that geffen's moral compass was off kilter, he did not believe that he had done anything wrong. So what happens is that the letter comes and he forges it.

He felt he had simply exercised his gift for resourcefulness. This was to become the most repeated tale of his career, and he proudly boasted about it throughout his life. So now we're talking about we're going to understand more of his personality through the view of the other people working in the mailroom with him. Demonstrating an arrogant disregard for the views and welfare of his fellow people, they compare him to this character called Sammy Glick, who was in this really popular novel in the 1940s. Demonstrating an arrogant disregard for the views and welfare of the fellow people, Sammy Glick was a backstabbing huckster who employed appalling tricks to run to the top in Hollywood, kicking others off the ladder as he rose higher and higher. Having tossed aside all notions of right and wrong, young David Geffen simply lived by different rules than did the rest of society around him. Unconstrained by traditional ideas of acceptable social behavior, he was free to use all the resources at his fingertips to achieve his lofty goals. So obviously I'm not advising, like when I read that, you know, I don't want to achieve success

through duplicitous means, you know? But we'd be very naive not to realize that there's a ton of people just like David Geffen out there that will do that. And if you happen to have to work with them or you get in their way, there could be disastrous consequences to your life. So, again, let's just practice avoidance. It said, continuing that paragraph, employing their strong work ethic he had learned from his mother, Geffen simply worked harder than anyone else. And that is true. He would essentially be working 24 seven nonstop.

And then this is in what I think we're in the, what was my guess here? Sixties, maybe this point in the book. And you know, the people that are running the company are going to realize, hey, this guy here that is working the mailroom, uh, does, first of all, he does any tasks that we assign him and he does it rapidly. Um, he goes above and beyond these are the good things about david he goes above him beyond his job um he'll spend more time doing it he has nothing going on he's not in school he has no family he's like there is a very special time in a person's life in my opinion of this like early like let's say after high school, college age, early 20s, where you have the only responsibility you really have at that point. And for most people, it's like themselves.

So anyways, my point being is like David, at this point in the story, David Geffen is, he's got nothing but time. He's got no money and a ton of drive and nothing but time. And when you combine no money with one of the most driven people I've ever come across and every minute of the day that he's not sleeping dedicated, then of course he's going to make progress. Of course he is.

So that's what we're seeing here. Okay, so this is, now he's also crazy, but he has a lot of smart ideas. And I think this is a smart idea to never settle where you are. So it says he's in the mailroom, he's using the the opportunity in the mail room he's like I'm not gonna stay here I'm using this as a launchpad and he always used every opportunity as another

like ring on the ladder to get to where he wanted to go right so he says uh his plan he was only in the mail room net for now but he wanted to make a name for himself signing actors he saw broadway plays a musical all the time he read scripts voraciously and he imagined which actors would break out in which parts one day he promised he would represent movie stars and directors so he starts building this huge it's i would call it almost like a database of all the actors there's no imdb back then right about the actors he liked okay reading all these scripts he had, going back to what David Ogilvie told us, the good ones just know more. David Geffen knew more. He was willing to do that. And when I read this section, it made me think of one of my favorite

quotes. It's from Bruce Lee. And it says, it's about not seeing limits, only plateaus, right? So he says, this is Bruce Lee, he says, if you always put limits on everything you do, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there. You must go beyond them. David definitely, he never,

even if he didn't know that Bruce Lee quote, he definitely personified that idea. One thing I took away from him was he did not believe there was a ceiling to what he could accomplish. And as a result, he goes from working in the mailroom

to eventually, you know, accumulating $8 billion or whatever it is. I mean, that's why they wrote the book on him. He's a very complex, conscientious, what's that word?

Contentious person. Okay. So this is how David builds a relationship with the president of William Morris. So it reminds me a lot. If you listen to my podcast, I did an Aristotle Onassis as founders number 84. Onassis did something like this too. Remember, he fled the Greco-Roman war. He winds up as a refugee in Brazil, like 17-year-old kid. He's got to build up from nothing. And he did a similar thing to break into, Onassis did a similar thing, what David's going to do here, to break into the tobacco business, reselling tobacco in Brazil, right? Okay. So it says, this is the guy he's trying to target is this guy named Lefkowitz. After hearing that Lefkowitz came to work on Saturdays, Geffen decided he would too. For weeks, Geffen stalked Lefkowitz.

This is exactly what Onassis did. He would follow the guy that made the decision about where to buy tobacco, and he just waited until he noticed him. So Geffen stalked Lefkowitz until one Saturday, the two stood together waiting for the elevator. Geffen introduced himself and struck up a conversation. Lefkowitz, impressed with his display of unbridled ambition, asked if he would join him for lunch. Lefkowitz liked Geffen and was impressed by both his doggedness and his appropriately reverential manner.

He would kiss his ass, essentially what he's saying there. The other young man in the mailroom was stunned to find that Geffen was not lying when he said he had formed a relationship with the president. Geffen has a talent that I definitely don't possess and a talent that took him very far in his career and that's his ability to forge what people think are authentic relationships with a large, large number of people. Unfortunately, the further you get in the book, you realize, oh, this is the opposite of authentic. It was very transactional, which I'm not a big fan of transactional relationships. Okay, so he's got this whole idea.

He's like, I want to be Louis B. Mayer. That's me. But he meets somebody, this guy named Brandt, and Brandt changes the path of David's life again. And because David, he informs David Geffen that, listen, Geffen, you're on the slow path here. So he gets advice how to speed things up. And he does. Remember, he's been lusting after money since he was 13. After listening to Brandt, Geffen explained that he planned to rocket to the agency's top echelon by signing movie stars and directors.

Brandt looked at the scrawny kid and laughed. Listen, jerk, you're 22 years old, Brandt told him. What do you think? A famous director is going to sign with you? The music department, he said, was the place where a young agent could make a name for himself. Brandt's advice had a profound impact on Geffen. He had once rejiggered his career plans. So Brandt would make a bunch of money in the music business.

And he's saying, listen, that's nice that you want to work in the movies, but young people don't, they're not, the agents are not going to sign with a 22 year old. Are you crazy? And so he's like, for you, music is going to be more lucrative. So David's takeaway was, it was not an undying passion for music that made him decide to try to make his fortune in the business. He did it because he might get rich quickly. And I think that is also the issue with David. Before I picked up the book, I knew the name David Geff, and I heard Geff on records. I didn't know any detail really beyond that. I didn't even know, oh, and I knew

that he founded DreamWorks with Spielberg and Katzenberg, right? Which I'll get to also in a little bit. But yeah, I was surprised when he had such an undying passion and focus on movies, because he never seemed to really do much of movies. It was all music. And so he winds up selling multiple record labels. The last one he sells for $550 million. It makes him fabulously wealthy, but he's spending time doing things he just doesn't like to do.

So take whatever lesson you think is there. One thing Geffen realized early, and I think a lot of artists are starting to understand this folly now, Geffen wanted to stay close to the money. So he's in the music business now, and he's like, how do these records make money? He says, early on, Geffen recognized that publishing was one of the areas in the music business where the real money was being made. So he's going to stay close to that money. We talked about this all the time. Long after an artist's star had faded, publishers benefit financially for years to come,

pocketing royalties whenever a group records a song or a sheet of music is sold. So I think there's a lot of parallels between modern-day entrepreneurship now and this phenomenon, this trend that you're seeing in the music industry where artists are realizing, hey, I'm the one making the goods. I'm the one making the music. I should own it. So a ton of people, David Geffen being one of them, in history got extremely rich essentially owning the work of other people. And now with technology's like well i'm gonna keep my they're called masters i'm gonna keep it's the publishing rights to your music that's where they make so much money so these musicians are smartly realizing hey i need to i don't really need i like to give away all my work to and make this you know old dude uh rich

uh they didn't necessarily know that back when when Geffen was getting started and I think that the parallel there is there's a lot of people realizing hey and your business equities your most valuable thing so be very careful about selling portions out of it especially if your business is growing the the analogy there is like equity is to ownership is to the entrepreneur what publishing rights is to the musician and I think if independent entrepreneurs should study what independent musicians are doing and they're making a lot of in some of these these people are young kids I've been listening to a lot of interviews and

stuff and extremely adept and understood the pitfalls of the previous generation and are avoiding that masterfully and as a result making the music they want to make and making all the money which and avoiding that masterfully. And as a result, making the music they want to make and making all the money, which again, that's just entrepreneurship. And I'm here for that. I love that. Okay. So what he does here, the reason I bring this up for Geffen is he starts, he's an agent, but then he never does just one thing. So he signs musicians. And one of the first artists he signs, she is a singer and songwriter. But that's not where David's going to make his money. So he goes to her.

He's like, listen, I'm going to. And usually at this time, agents would book tours. That's how they'd make money. And so he's like, why don't we do this? Why don't we start your own publishing company? They call it Tuna music i think um and when you she would her albums would do okay but she made more money by writing songs and then giving them to people like barbara streisand and all these other people and so when another singer used her song she would constantly make money

like on the back end like on a residual basis over and over again. And so that's actually how David becomes a millionaire. So I just want to set that up. I'm not there yet, but that's the first of many businesses that he's going to sell and the first one that makes him a millionaire. All right. So at this point, he is an agent, but he's also a manager. He's doing both. And he keeps jumping around from agency to agency because he's signing people, he's having success, and he gets recruited. And he's in his early 20s here. So he becomes successful rapidly. It was not long before Geffen grew bored, restless, and unhappy at the Ashley famous agency that Sony's at. Even though he was signing some of the biggest acts in the business, booking concerts was tedious and thankless work.

And there was almost so much money to be made. So the question was like, what are you going to do next? Soon, Geffen became obsessed with the brazen idea that he ought to quit the agency and form his own record label and personal management firm. This is exactly what he's going to do. Having studied Clive Davis, he decided that he too had the savvy to make it in the record industry. It was not much of a stretch for him to envision David Geffen, the music mogul. So that's a good idea. I think seeing somebody else do something gives you the confidence that

maybe you can do it as well. David Geffen sees Clive Davis. He's like, hey, I know Clive. I can do this as well. Now, he doesn't stop there, though. One word description of David Geffen has got to be bold. He's definitely bold. He boldly told Clive Davis that he ought to leave his job as president of Columbia Records and become his partner in a new label that they could run as co-CEOs.

That's definitely bold. And what's even crazier is Clive thought about it for a little bit. He didn't obviously wind up doing it, but that's wild. All right, so now we got to the part where David becomes a millionaire. Giffen went to Clive Davis with an offer to sell Tuna Fish Music to CBS. He was praying for a windfall and wanted to strike while the iron was hot. Tuna Fish Music had already earned over a half a million dollars, and Davis knew it would automatically continue to earn substantial income as an annuity for past copyrights.

That's what I mentioned earlier. Some people in the music business have become incredibly rich off that idea. They wound up making a deal worth more than $3 million. It was a staggering amount of money, the likes of which had rarely been applied to the value of any solo artist's catalog of songs. Now, the reason I bring that up is because it's really important. What seems, this happens a lot in life,

where we're like, oh my God, that company got bought for X amount. And sometimes that's the beginning of a trend where the valuation is just gonna keep increasing in the future. This is happening in the music business at this time. They're like, oh my God, I can't believe Clive spent $3 million

on a single solo artist's catalog, right catalog right well this trend continues into the future and it helps david sell his record label maybe i don't know 10 15 years in the future i'm not exactly sure of the the time frame uh for hundreds of millions of dollars winds up being 550 million uh the stock winds up going i think before he sells it to like $650 million. So an unbelievable amount, way more than $3 million. It says Geffen was riding high, yet he remained unsettled and plagued by feelings of insecurity and dissatisfaction. We see this over and over again. People are thinking that, hey, whatever's wrong with me can be solved by money. Money solves money problems. But if you're deeply unhappy, you have issues that you haven't rectified, if you're spending your time doing things you don't like to do, if you're deeply unhappy, you have issues that you haven't rectified,

if you're spending your time doing things you don't like to do, if you have bad relationships, like money's not going to solve that problem. I think of, you know, one of my favorite people I used to learn a lot from. I read his books. I watched his show, Anthony Bourdain. For many people traveling around the world, eating great food, filming a TV show about it it seems like uh you know the best job in the world I think Dave Chappelle opened his last special um was it called sticks and stones maybe with with this very same point like most people look at Anthony Bourdain he's the best job in the world and he killed himself and so Dave was using that point it's like hey you know my life's good but it's not great I think he uses the analogy it's like. It's like, hey, you know, my life's good, but it's not great. I think he used the analogy. It's like, my life's like an above-ground pool.

It's a pool. But he's basically saying, hey, I know it looks like I'm Dave Chappelle. I'm traveling around. I'm getting paid $20 million for every dinner special. But I also have problems too and problems that my money's not solving. So I think that's just important to know and understand that it's perfectly normal if you're having these feelings and just try to solve them. He was driven by the devil that constantly told him he needed to be bigger, more, and something else. He simply was not the kind of man who was going to stand in one place for very long.

He decided suddenly that now was the right moment to turn his attention to filling the fantasy he had since reading the biography of Louis B. Mayer. This book is mentioned like half a dozen, maybe a dozen times in this book. It's very important to him. He wanted to be a power broker in the movie business. He's like, all right, I got a little bit of money. Let me try to do that. Now, obviously, listen, this book is 600 pages long. It is gigantic. So this is not, as every podcast I make, this is not meant to be a summary. I'm just pulling out interesting ideas that I found for myself. And if you think the podcast is interesting, then obviously I always recommend buying the book. So I'm going to skip over a bunch of stuff, but I want to really hone

in on David the person. And this is about his imposter syndrome that comes up a lot in the book. Oh, and his nasty habit of screaming at people, which is a very unwise decision. He winds up getting into many, many physical altercations. This is just not a smart way to live your life. Geffen had realized that his most powerful weapon was his voice. He was a gifted screamer, and he learned quickly that he could scare people into giving him what he wanted. His rage was so formidable that it left some of his victims gasping for air. Is that really how you want to live your life? Screaming at people, having miserable relationships. This is not, this is not good. The irony that was that for Geffen was most likely more frightened than his victims.

While he saw himself most of the time as smart, fast rising star he'd become, there seemed to be fleeting dreadful moments when his confidence shattered and he was gripped with fear. In these moments, he saw himself as a shadow of his father, the failure who had never gained respect. Geffen built up an enormous wall around himself, most likely praying that others would not also see that shadow. Now, he still is not, at this point in the story, he's still not broken into the movie business. I'll get there in a minute. But this is a turning point in David's life, and I think it's very important. He has not started his own record label yet. Okay?

And he is visiting Clive Davis and he's trying to get Clive to sign this artist. I think his name is like Jackson Brown or something like that. And they're in a meeting and Davis has to interrupt the meeting because he's getting a phone call. And David Geffen thought Cl davis was being extremely rude so he's like let's we're getting out of here he says geffen on the other hand was incensed at what he thought was davis's rude behavior pack up your guitar we're leaving he told brown uh brown dutifully put his guitar and followed geffen out of the office and passed uh the where davis was talking on the phone wait david shouted or dav Davis shouted after them, but Geffen had already reached the elevator. Geffen's next stop changed the course of his life.

He turned to Ahmet Ertegun and asked him to sign Brown to a contract at Atlantic. Ahmet, look, I'm trying to do a favor by giving you Jackson Brown, Geffen said, delivering a passionate pitch. You'll make a lot of money. You know what, David? I have a lot of money, Ahmet replied. Why don't you start a record company and you'll have a lot of money too? It was exactly what Geffen wanted to hear. His eyes lit up as Ahmet further offered to be his partner. In exchange for a 50% ownership interest in the new label, Ahmet volunteered. He's running Atlantic Records at the time. Atlantic would cover all the expenses as well as handle the manufacture, distribution, and promotion of Geffen's records.

The costs would be charged equally against the joint venture, and any profits would be split equally between Atlantic and Geffen. It was an astonishing deal that would not cost Geffen a cent. He realized without hesitation that now was the moment to realize his dream. If no one else would sign Jackson Brown, he figured he would do it himself. Yes, he told Ahmet, count me in. Now this is David's strategy of running his company. The way Geffen saw it, this is another smart move. The way Geffen saw it, he's this another smart move. The way Geffen saw it, there was a natural synergy in owning both a record company and a management company. Remember, they made money two different ways.

Record company of publishing, management company of touring. They could use a management company to book and promote the acts it was recording on the label and vice versa, controlling both sides of the business. OK, that's a good that's a really smart move. But why? What's the real advantage? Geffen explained that they could use the record deal, which came complete with Atlantic Financing, to cover the overhead at the management company.

He understood that if you watch your costs, you make more money. That's why so many entrepreneurs give us that advice. So it says, the thing that Geffen liked most about the offices was the reasonable rent. From the day he opened his new business, Geffen had an eye fixed on the bottom line. He had the foresight to avoid the pitfalls that had proved fatal to so many others who had launched record labels before him. So he's also doing something smart, watching his costs and studying the people that did what he's trying to

do before him, realizing the good ideas they had and, oh, they all went broke. They all spent too much money. Let me avoid that. He calls it being fatal, that it was fatal, and indeed it was fatal. He was overhead averse and did not feel the urge to redecorate or to hire a large staff. For all of his money, David Geffen was turning out to be rather frugal. He well understood the delicate balance between profit and loss can be upset if expenses are high. Here's one sentence that describes David's, David Geffen's MO. Playing fair, Geffen had learned was difficult and time consuming. Lying on the other hand was easy and effective. You got to be very careful when you get around people like this. Okay. So this is, this is, this is the part where I realized, oh, I think this

guy's a sociopath. And the question I left myself is like, is this the way you want to live your life? Even the mere sight of him, meaning Geffen, sometimes prompted violent reactions. Remember, humans, the lowest common denominator in our conflict resolution, in our species that has been very well documented is not words. When words fail, we inevitably go to violence. And this is why you don't want to be a jerk. You don't want to be, I see people online. They just like send nasty messages to people they don't know. It's just the way they talk about people. It's very, very unwise, very unwise. You don't want to go around creating enemies. I don't understand why

you're doing that. And even that, if you have a disagreement, try to remain calm. David would throw things at people. He would curse at them, yell at them. The problem is people can hit back and they do. He had guns pointed at him. He gets hit with eggs. He gets punched multiple times. Is that really what you want your life to be? It's so silly. It doesn't have to be. Even the mere sight of him sometimes prompted violent reactions. Someone driving by pelted Geffen with eggs. Friends pulled, I apart just before it was likely to escalate into a fistfight. Jerry Heller got into a screaming match with Geffen. The two shouted obscenities at each other from their respective windows.

They had offices next to each other. There were countless murky situations in which Geffen himself was at least partly to blame for his contentious relations with other people. He got punched multiple times, and he punched people multiple times. Now, here's where you realize that sociopaths sleep well. They don't think anything is wrong with their behavior. My own personal view on this is the opposite. David would get into an... Let me read this to you, and then I'll tell you a book that heavily influenced my thinking on this. There are countless other murky situations with Geffen himself was at least partly to blame for his contentious relationship with people in the business. But Geffen's conscience always remained clear. Quote from him, I don't have the burden of

bullshit and lies and deceit and cheating. None of that plagues me because I don't do any of it. What? He does that almost every day. What is he talking about? I think I'm unique in this business. I can sleep at night. Oh, you got to run the other direction if you ever get around people like that. Literally, they sleep well because they don't think anything is wrong with their behavior. So anytime something would happen, David would blame other people. If a record didn't sell, if this deal didn't go through it was never ever his fault ever it was your fault you're an idiot I'm great I read this book a few years ago it's called extreme ownership it's the exact opposite of this it's saying hey no matter what

happens in your life assume that you're the one responsible and try to do everything you can to fix it like that's a brief explanation of the general idea. And so that example is like, okay, let's say you're running a company and your subordinate, one of your employees gives poor customer service or makes a mistake. Okay, yeah, most people are like, oh, you're an idiot. In some cases, you know, that is true and you have to fire the person where the case is. But in this book, it's like, okay, I am at fault here because I'm the leader. I'm the one in charge. I clearly did not communicate.

One, I mean, I was the one that made a mistake. Maybe, one, I'm the leader. I'm the one in charge. I clearly did not communicate. One, I mean, I would say maybe one, I hired the wrong person or two, maybe I didn't communicate the level of service that this company does. And that flips everything around completely because it goes from being helpless to realizing, hey, I have agency over a lot of situations in my life and the ones I don't have agency over, I'm not going to worry about because they're beyond my control. But everything else, I'm going to say, okay, I clearly made a mistake here. I'm going to learn from this. I'm going to fix it. And I think that's a much more powerful operating system for life than Geffen's, where it's like, oh, everything went good. That was me. There was a mistake. It must be you that you're an idiot. Okay. So the record label he starts is the first one. This is not Geffen Records.

This is not his big one that he sells for 550 million. This is called Asylum. After a year, he sells his business and agrees to an employment contract. And I put, he agrees to his employment contract, question mark. Like this does not seem, David didn't like having partners. He didn't like being told what to do. Why would you assign an employment contract? Well, he had to because he's going to get some money out of it. Although Geffen's goal from the beginning was to one day sell Asylum and reap cash windfall, he was taken off guard by Ross's offer. Geffen did not contemplate for one second declining Ross's offer because he had an insatiable

hunger for money. He was also motivated by the fear that Asylum's fast rise had been a fluke and it could fall apart at any moment. You can have it for $7 million, Geffen blurted out. Without blinking, Ross agreed to Geffen's price. But then he says you have to sign the disappointment contract. They wind up having a falling out. Eventually, he's going to start working into,

he's going to work in the movie business that, because Warner has not only music but in movies. And then he's gonna get fired after 11 months I'm gonna talk about that in a minute and then he spends years essentially doing nothing because he's got this employment contract where he's getting paid all this money to not go to work so I wonder being a mistake but now we find David Geffen at 30 years old rich and depressed just 30 he claimed that his net worth was about $12 million. But he was surprised to realize that the millions of dollars he had just banked and the trappings he had been able to acquire with it did not make him happy. It hit him when he was in London on a

business trip, lying in bed on a posh hotel, smoking a joint and staring at the ceiling. All of his life, he had dreamed of being a multimillionaire, thinking that money would solve his problems. It had not, and he fell into a deep depression. And I just want to draw your attention to a meeting. So David Geffen becomes friends with and makes a relationship with this guy named Barry Diller. At the time, Barry Diller is the head of Paramount, the movie studio. And so they're traveling, and this is where he's going to meet, David Geffen is going to meet Barry Diller's assistant, Jeffrey Katzenberg. I bring this up because Jeffrey Katzenberg winds up being, in the future, David's business partner.

It says that at the airport in New York, Geffen and Diller were met at customs by Jeffrey Katzenberg, a 24-year-old New Yorker who that year had been hired as Diller's assistant at Paramount. Among his jobs was expediting the chairman's customs check at airports. So he didn't want to wait long to get to customs, right? Geffen, who had wasted many hours in customs, was flabbergasted as Katzenberg's oiling of the custom workers enabled him and Diller to breeze through the process. Katzenberg was eight years his junior, but Geffen saw immediately that Katzenberg had hustler-like qualities that he himself had displayed at that

early age. So at this point in Geffen's life, he finally gets to do what he wants to do. He's kind of like being groomed to eventually take over Warner Brothers Studio. This is where he's learning the movie business and realizing him and the movie business are not compatible. So he winds up seeing a rough cut of this movie that Clint Eastwood is making. It's called The Outlaw Josie Wales. And so now he goes to have a conversation with Clint Eastwood, and it's going to be kind of a smack in the face. Clint, this is the best picture you've ever done, Geffen said. I only want to suggest one thing. I think it would be better if it was 20 minutes shorter. I'm glad you took the time to see the picture, and I appreciate your comments, Eastwood said calmly. Why don't you study the picture some

more and see if you have any more thoughts? When you do, give me a call over at Paramount. Remember, he's making movies at Warner Brothers. So he says uh why over at paramount geffen asked because that's what i'll be making my next movie eastwood threatened realizing that he put his foot in his mouth geffen quickly recanted clint uh this picture is perfect he said quickly i wouldn't change one thing frame thank you very much he dashed back out of his office the exchange was an ominous sign because it showed that geffen was not versed in the old studio games where producers and executives alike lie to one another about how much they love each other's movies while in another venue geffen's kurt style might have been refreshing in hollywood it played poorly so i think it's

important that you know your strengths and you're in an industry working in an environment, an industry, a company, where those strengths are actually assets. In the music business, you know, he could go around and say, you know, this is a terrible record. We're not going to put it out. They could be kind of brutally honest. The movie business was not like that at all. And it moved a lot slower. Geffen was was very you know hyper i don't know even what word to use there he's just he woke up and he went and then he

fell asleep and woke up and went he was very impatient um so he only lasts uh 11 months at warner brothers and the note of myself is be careful what you wish for. You might get it. Geffen, who had succeeded stellarly at everything he had taken on so far in his professional life, now finds himself failing for the first time. He was just beginning to realize that he had critically misjudged the cultural differences between the music industry and Hollywood, and that those differences were causing him to stumble badly. Now, this is also you kind of feel sorry for him Because he excelled in an industry he didn't care.

He didn't really have a love for music at all. He would listen to show tunes and stuff. And yet he was wildly successful in that domain. And yet the one he loved and was passionate about, he failed at. So you do feel for him there. Used to this relatively quick turnaround of record production. Some of the most famous records he ever put out for the Eagles, he signs John Lennon and Yoko Ono. I mean, he signed Aerosmith. He signs a bunch of big bands. They would have a classic album that would

be listened to decades later that they could make in like 10 days. It's not how the movies went. So he was used to relatively quick turnaround. The slow moving nature of the movie business made him agitated, nervous, and bored. Key to his recipe of success had been his ability to move quickly. But in the movie business, the same pacing proved to be a detriment, and it began to drive him crazy. So at this point, after he gets fired from Warner Brothers, he does this long sabbatical where they won't let him out of his contract, so he's still getting paid, but he doesn't have to do any work. Eventually he gets pulled like there's this huge,

let's say, economic growth in the record business. So there's a lot of people that want to partner with him because he had such success running independent labels. This is where he starts geffing. But he's only going to go this is he's David. He's a masterful dealmaker. This is not a skill I possess. So I do admire like his shrewdness in this, right? He's dealing with complicated, large organizations and the people within them. And he can move them around on the like a chess board beautifully. Obviously, you know, some of his tactics were distasteful, but he was very

effective. And so this is another example of that. He's getting pulled back in the music business. He doesn't want to go to the music business. He still wants to be Louis B. Mayer. So he's like, I'm going to go back in the music business, but only on my turns. So he's got Moe Osten, who, along with Stephen Ross, is the head of Warner, and Warner's becoming this huge media conglomerate, right eventually he's gonna turn on mo but that happens later so this is but geffen told mo osten that he would not content to simply run a label in part because of his failure at warner brothers he wanted more than ever to prove himself a worthy producer of motion pictures geffen told osten that he would make a record deal if warner also agreed to bankroll him in movie and theater ventures this is a very unique he remember i

started the podcast talking about he understood what steve jobs said that this life is malleable well gavin's like i'm gonna make my own deal you're gonna you're gonna fund my my if you want my music business you have to fund my movie and broadway pictures too broadway uh i guess theater uh so it says you have to bankroll my movie and theater ventures geffen had three years to stew about his first crack at the entertainment business analyzing what he did well and figuring out the areas where he wanted to succeed. Now, in a brilliant piece of handiwork, he cut himself one of the broadest deals in Hollywood. And then while he's doing this, he does something that every other founder that we studied does as well.

They cap their downside. This is so important in life. Cap your downside, leave your upside unlimited. Warner put up all the money but split any profits 50-50 with Geffen. Oh my goodness. For Geffen, who said his own net worth had now grown to $30 million, there was zero downside. If the plays and musicals he picked were losers,

Warner would shoulder 100% of the losses. It's so perplexing that large corporations allow, like they take on, like they take on the wrong like they're on the wrong side of this transaction just because they hope that in the future they're going to get a tiny percentage to the upside it's really interesting um okay so i'm going to skip over giant parts now and we're going to get to the part where he's got to do that's geffen records that he just set up right now warner put up millions and millions of dollars for it the part i'm going to tell you right now is how he gets them to give them he gets warner to give him 50 the 50 of geffen records that he doesn't own for free then he goes and turns and sells it

to another company for 550 million dollars this is, I don't even know how that's possible. And the tricks he uses are really dirty. Okay, it says, it was to be the most important negotiation of Geffen's life, and he successfully extracted an extraordinary deal that within a few years helped him make him one of the wealthiest men in the country. In pulling off the deal, he showed himself to be a shrewd, remarkably focused strategist. That's definitely true.

He had an uncanny ability to understand people true recognize their weaknesses yes and capitalize on them yes the negotiation also showed once again that geffen had the rare ability to envision success he clearly understood his power and knew how to get what he wanted his strongest asset is himself and he knew that so i do i think that's a smart move but But the negotiation also showed David Geffen at his worst as a man willing to implode any business or personal relationship to attain his goal. Geffen's technique was preposterous, duplicitous, and downright awful. So there's two main decision makers at Warner, Mo Osteen, who I just told you about, and Stephen Ross.

He thought Ross, he had more of an advantage with Ross. So he intentionally destroys his relationship with Moe Osteen. He starts going, and these are people that have helped him, right, greatly. Talks about that Moe's a liar, he's a cheat, damages the relationship. He has a, David has a friendship with Moe's wife, and he intentionally takes Moe's wife out to dinner and tells him, like, your husband doesn't love you, you're ugly, like, just terrible things, and intentionally ruins his relationship with his wife because he

knows his wife would go back and tell Moe all the things he said and then ruin the relationship with Moe. That way, when it's time to negotiate, the only person left standing is Stephen Ross, and Ross is going to give him what he wants. So there's the book goes on multiple pages of all this like duplicitous behavior. I'm going to skip to the part where David's crazy plan worked. Steve Ross had done Geffen the favor of setting him up in a business with a very handsome terms at a time when the industry had branded him a failure. Now Geffen was repaying him by demanding ownership of the venture into which Ross has sunk millions. Geffen would be free to sell the label without having to give Warner a dime. Frightened that Geffen might cause a public stink if both of his demands were vetoed, Ross, as Geffen had predicted, agreed to relinquish the equity

stake. So, his crazy plan worked. He now owns Ge hundred percent. I just want to bring you another point. This is interesting to me on two things. One, because this is his future, David Geffen's future business partner that he's talking about. And two, David Geffen also has all of these traits, which again goes to the point where people really can't think about themselves or anybody about themselves. He went on a tirade, bad-mouthing Steven Spielberg to anyone who would listen. He's selfish, self-centered, egomaniacal,

and worst of all, greedy. So are you. It is crazy. Obviously, Spielberg, Katzenberg, and Geffen get together and they start DreamWorks. And so now we're back to the other side of David. He was an extremely gifted entrepreneur. He just was.

This is a really surprising part of the book. In a surprising twist, David Geffen saves Calvin Klein from bankruptcy. So it says they become friends, and eventually David discovers that Calvin Klein from bankruptcy. So it says they become friends, and eventually David discovers that Calvin Klein, which is a private company at the time, was almost going out of business. So it says, but in 1991, there was one thing Calvin Klein did not tell Geffen.

His privately held fashion empire was on the brink of bankruptcy. So it winds up, this comes out, and David's like, I'm going to help you. And this is the other side of it. He could be extremely ruthless, but he also was was very helpful and he did wind up saving calvin klein um so they have this discussion like how much money do you have he's like i'm not sure and he's like well it's your company you need to know like call your cfo you need to get on this right away calvin was he was not involved in the the intricacies the details of his business as a

result you know he was on the precipice of failure. And so Geffen steps in and starts just running it. He said, Geffen surmised that the company should be transformed from a manufacturing firm to a design, marketing, and licensing company. You guys stink at manufacturing, he said. You need to get out of that business. Instead, and this is where they had a lot of debt because they wanted to be manufacturers.

Instead, Geffen continued, the company needed, he just had a lot of good ideas instead geffen continued the company needed to focus on what it really knew how to design and market the calvin klein brand name so this is where david geffen is gifted he knew what he was best at and he went all in on that and that's another takeaway from reading all these biographies is like these people don't succeed because they're perfect the inspiring part is they succeed in spite of their imperfections. And you can too. All right.

And we're going to see this where he's like, okay, I've clearly identified what you're strong at. You don't even know what you're strong at. You need to lean into what you're strong at. So focus on what you really know. How to design and market the Calvin Klein brand name. Calvin, you should only be focusing on aesthetics, Geffen said. You should be designing the clothes and overseeing the marketing and advertising. Geffen reprimanded Klein and this other guy that's working with them for excesses they could not

afford. Among other things, he told them to sell the company Jet, which cost them $2.5 million a year to maintain. He also told Klein to fire his chief financial officer. Chief financial officer should have warned you, should have known the finance of the business before it got out of hand. Here was the fixer in action. David Geffen was now involved in the kind of problem solving that energized him more than anything else. He then made an extraordinary offer to purchase all the company's outstanding junk bond debt. Remember this early 90s, extremely common practice led by Michael Milliken. So Calvin Klein had a 62, what is it, 62 million dollars of junk bond debt and David's going to buy it up for him. He made an insurance offer to purchase all the company's outstanding junk bond debt,

which had a face value of 62 million dollars. The company did not even have enough money to cover its next payment, debt payment of 15 million. But Geffen said he would cover the entire bill so they would have some breathing room. And then he goes, David buys the debt and then goes and leverages his relationship with people in other investment banks and winds up getting it written down to some degree. And the company turned around.

And that is the positive. One of the positives of David is that he could be extremely generous. That's why I said I was really confused when I sat down to start this, because, you know, he's all of these things. He's not just, he's also ruthless, but generous, kind, and extremely mean, gifted entrepreneurial, and then ruthless to, like, his employees, it just, it's very complex, this book shows you, like, the whole, like, the totalitarian, the totalitarian, I don't know, the total picture, let me just say that, of Geffen, and I think Geffen made a mistake, though, where, one, if you're gonna, like, he authorized a biography and then changed his mind

and then decides, even though it was too late to change his mind, and then treats the person that's going to write the biography poorly. So this book is a fascinating book, especially, like, you hear about all kinds of behind the scenes of making, you know making records that are famous for decades. They've been well known in movies. And you see these machinations that happen behind the scenes. But I would say going into it, what's the chance that, think about if you were hired to write a book about somebody and then that person treats you really poorly.

Like we have to know that there's going to be some emphasis. It's only natural. It's only human. It's going to be colored that way. So what I'm trying to do is really pull out, yeah, he's still alive, so extremely flawed person on an interpersonal level, but he's also extremely gifted at what he chose to do. And yet you could be gifted at what you chose to do,

and if you choose the wrong path, the path that you don't really want to be on, and you're doing it just for money, you probably won't be happy. A lot of lessons here. All right. So I'm going to close on this. This is David Geffen's assessment of David Geffen. The entire history of his life since he was a really young man, he would constantly be trying to work out his mental demons, and so he'd see a psychiatrist weekly, I think, for his whole life. And, you know, he got a lot of insights into who he was as a person, so this is some quotes from a Rolling Stone interview. I've been working on myself and my demons and my nonsense

and my fucked-upness for a long time, which is not to say that I'm still not a little fucked up. I think you get better and better in tiny increments and you die unhealed. So I'll leave the story there. If you want to buy the book and support the podcast at the same time, buy the book using the link that's in the show notes, or it's also available at founderspodcast.com. If you buy a book, buy this book or any of the other, I think it's 110 or 112 books on that list right now if you want to take a look. If you buy any of those books using that link, Amazon sends me a small percentage of the sale at no additional cost to you. It's a great way to get a book, read a book that may change your life and support the podcast at the same time. One other favor, please this week tell at least one other person

that doesn't already know that Founders exist about this podcast. I'd greatly appreciate it, and I will talk to you again soon.