Founders - #339 Joseph Duveen: Robber Baron Art Dealer

Starting point is 00:00:00 Two quick things before we jump into this episode on Joseph Devine. I just finished listening to this entire episode. It is a wild episode. Imagine building your business based on a handful of clients. Your business only has a handful of clients, but those clients are some of the wealthiest people in the world. That is the episode that you're about to hear. Before we jump into that, two quick things. If you've been dilly-dallying about investing in a subscription to Founders Notes, you might want to do that now for the first time ever. And for a limited time only, I got a bunch of requests asking if you could do a one-time option.

Starting point is 00:00:32 And so I'm currently testing that right now. You can get access by going to foundersnotes.com. That is founders with an S, foundersnotes.com. I haven't even mentioned it publicly, and people are already selecting that option. So again, the one time is for a limited time only foundersnotes.com. I'll talk more about that at the end. The second thing real quick is Patrick O'Shaughnessy from the invest like the best podcast and I are looking for partners. If you're building B2B products and you'd be interested in partnering with Patrick and I,

Starting point is 00:00:57 you can go to founderspodcast.com forward slash partnerships. That is partnerships with an S. There you can tell us about what you're working on and then get in touch. Again, that is founderspodcast.com forward slash partnerships. So that's it. Let's jump into this episode. I just finished listening to it. I loved it. I hope you do too. Joseph Devine noticed that Europe had plenty of art and America had plenty of money and his entire astonishing career was the product of that one simple observation. Beginning in 1886, when he was 17, he was perpetually journeying between Europe, where he stocked up on merchandise, and America, where he sold that merchandise. There was almost nothing Duveen wouldn't do for his important clients.

Starting point is 00:01:40 These immensely rich Americans were shy and suspicious of casual contacts because of their wealth and often didn't know where to go or what to do with themselves when they traveled abroad. Duveen provided them with an entrance to the great country homes of the European nobility. It was just a coincidence, a fabricated coincidence, which you and I will talk about a few times today that Duveen always did. There's nothing, as you'll see as we go through this, there's nothing in this guy's life and career that was a coincidence. So he'd provide rich Americans entrance into these country homes of

Starting point is 00:02:16 European nobility. These homes were full of ancestral portraits that were for sale. Duveen also wrangled hotel accommodations and passage on sold-out ships for his clients. He got his clients' houses, and he provided architects to build them houses. And then he saw to it that the architects planned the interiors of these houses with wall space that demanded plenty of pictures. He even selected brides for some of his clients. These selections of potential brides had to meet the same refined standard that governed his choice of houses for his clients, which meant a bride that was receptive to collecting expensive art.

Starting point is 00:03:00 Duveen was not a patient man. He had choleric imperialism, and he felt that the world must stop while he got what he wanted. He had a convulsive drive, a boundless and explosive fervor, and a reckless contempt for works of art handled by rival dealers. That's a funny way to say that he was thinking of buying a 16th century Italian painting from another art dealer asked Duveen to come to his mansion on Fifth Avenue to take a look at it. The prospective buyer watched Duveen's face closely and he saw his nostrils quiver. I sniff fresh paint, said Duveen. Duveen's remarks about other people's pictures sometimes resulted in lawsuits that lasted for years, cost him hundreds of thousands of dollars, and brought him into courts in New York and London and Paris. In his business, Duveen had to bear that the temperaments of the men that he dealt with were the direct opposite of his own. The great American millionaires of the Duveen era were slow

Starting point is 00:04:05 speaking and slow thinking and cautious and secretive and deliberate. They were the emperors of oil and steel, of department stores and railroads and newspapers, of stocks and bonds, of utilities and banking. And these men had trained themselves to talk slowly and pause before each word. Duveen dealt constantly with cryptic men like J.P. Morgan and Henry Clay Frick and Andrew Mellon. That was an excerpt from this long-form, two-part New Yorker profile that I'm going to talk to you about today. It's called The Days of Duveen, a legendary art dealer and his clients, and it was written by S.N. Burnham all the way back in 1951. And before I jump back into the profile, I want to tell you how this came on my radar.

Starting point is 00:04:51 A few months ago, when I was researching and reading about Larry Gagosian, which is the billionaire art dealer, that was episode 325, I mentioned this theme that seems to appear over and over again, that there's always a blueprint. And so there's somebody doing something now, and they were heavily influenced or got the idea from somebody that lived a long time before them. And so Larry Gagosian is alive and operating to this day. But almost 100 years ago, Joseph Duveen built a career that Larry used as a blueprint. In fact, in that piece, I'm reading from episode 325, it says Gagosian isn't the first to pull this off. He's a big reader. And one of his favorite subjects is the life of Joseph Duveen, the great art dealer who helped assemble the collections of Andrew Mellon, J.P. Morgan, and other Gilded Age titans.

Starting point is 00:05:34 There are several biographies of Duveen, and Gagosian informed me that he has read them all. And so shortly after that episode came out, Will England, who's the CEO of Walleye Capital, texted me, and he says, hey, just so you know, the author Robert Greene mentions Joseph Devine in a bunch of his books, like the 48 Laws of Power and the 33 Strategy for War. And so in addition to this two-part New Yorker profile, there's several highlights from Robert Greene talking about how Devine, some strategies that Devine used to build his business. And by the way, just in case you haven't listened to it yet, one of my favorite episodes from last year was on Invest Like the Best. It's Invest Like the Best number 342. It's actually Will England. The title

Starting point is 00:06:15 is A Primer on Multi-Strategy Hedge Funds. And I just happened to be lucky enough to be there that day that they recorded it. So I got to spend a few hours with Will. And he has two of my favorite traits, intelligence combined with intensity. And so I want to jump right back into Duveen. Main thing that you and I are going to talk about today is the fact that everything is calculated with him, with Duveen. Nothing is accidental. In many cases, he goes out of his way to disguise his cleverness. So I want to review just a couple ideas that I found fascinating from that introduction was the fact that, hey, he built his career really on a combination of two ideas, right? It's like this guy just noticed, hey, Europe has plenty of art at the time he's living

Starting point is 00:06:57 this late 1800s, early 1900s, right? When he's building his business, Europe has plenty of art, no money. America has plenty of money. And I love that line where it's like his entire astonishing career was the product of that simple observation. So something I thought about as I read that was it's a combination of two of my favorite ideas. One came from Charlie Munger that I've thought about for years. And it's really what I'm trying to do with Founders Podcast is, hey, find a simple idea and take that idea seriously. I found that idea

Starting point is 00:07:23 when I read Poor Charlie's Nominac many, many years ago for the first time. Because in that book, Charlie says, there's an old two-part rule that often works wonders in business and science and elsewhere. It is take a simple, basic idea and take it very seriously. And then the second idea that came to mind actually came from the Larry Gagosian profile. And I've thought about this idea every week. And since I've first discovered it in the Larry Gagosian profile, and it's actually

Starting point is 00:07:50 been on my mind and influencing my decisions constantly. And it's that genius has the fewest moving parts. Joseph Duveen becomes fabulously wealthy, builds an incredible life and business off of that simple idea. His business had very few moving parts. It's like, hey, I'm going to buy all this hard to find art in Europe and I'm going to connect that. I'm going to then take it across the Atlantic Ocean and sell it to the rich robber barons in America. That's his entire business and everything he does because genius has the fewest moving parts. It allows him to think about it in ways where if you spread yourself thin or you're working on a million different things, you're not going to come up with the ideas that he does. So one example of this is like, he was a big believer in practice. And so what would happen

Starting point is 00:08:32 is, first of all, he built his entire freaking business off of just a handful of clients, which obviously, if you're, if your clients are the richest people in the world, you don't need that many of them, right? But what would he do is he would study them intently, he'd get to know like, their, their tastes, their traits, traits their personality what's important to him and then he would build like these little models of how this person acts or thinks and he would explain that to his secretary and so the day before the he's got let's say he's got an appointment tomorrow with andrew mellon or henry clay frick or you know a ton of these people you and i've studied i've done episodes on all these people.

Starting point is 00:09:05 It's really cool how many people that are mentioned in this article, in this profile that I've done multiple episodes on. But let's say he's gonna meet with them tomorrow, right? The day before, he will have literally act out how that interview is likely to go, how that sales process is likely to go. He will map out all the strategic possibilities. He will rehearse it. And then by the time he's in person with the client,

Starting point is 00:09:28 it almost seems like second nature, like, oh, this is just spur of the moment when it's no, everything with this guy is extremely, extremely methodical. Another thing that I noticed, which is very fascinating and something I believe wholeheartedly, the enthusiasm that you have for your product is transferable to other people. And everybody talks to me, they talk over and over again about his enthusiasm, the fact that he was fun to be around, the fact that he was super excited about what he was doing. And so it says there was never any doubts in his own mind. Each picture. So remember, this is written back in 1951. They use the word picture. I think today you and I would use the

Starting point is 00:10:04 word painting. So it says there were never any doubts in his mind. Each painting he had to sell, each piece of standing on the Gagosian is standing on the shoulders of giants. One of those giants being Duveen was the fact that he was obsessed. Duveen was obsessed with scarcity and controlling supply. And so what he would say is he would tell his clients they could replace the money that they have many times over, but they were acquiring the irreplaceable when they bought a Duveen. And so let me give you a little summary of this. I'm going to put this down, pick up 48 Laws of Power. This is what is in the book on this idea of the importance of scarcity and controlling supply to Duveen's business. The art dealer Joseph Duveen insisted on making the paintings he sold as scarce and

Starting point is 00:10:59 as rare as possible to keep their prices elevated and their status high. He bought up entire collections and stored them in his basement. The paintings that he sold became more than just paintings. They were fetish objects. Their value was increased by their rarity. He was intent. Over and over again, he wanted to control supply.

Starting point is 00:11:18 He bought entire collections. He'd pay higher prices than anybody else. And then he would stimulate demand by saying, hey, there's only one of these, but I got 10 clients just like you. And if you don't buy this, I'm going to pick up the phone. I'm going to walk down the street. I'm going to sell to somebody else, making his clients conscious that whereas he had unique access to great art, his outlets for it were multiple. He watched their doubts about the prices of the art evolving into more acute doubts about

Starting point is 00:11:44 whether he would let them buy it. So remember that idea, the importance of controlling supply. It's an idea you and I are going to come back to over and over again. This was very fascinating. He built up this massive information network. And so this is going to be repeated throughout his career as well. So it says Duveen received daily reports from his galleries. So he's got galleries in New York and London and Paris telling them or telling him what customers had come in, what pictures they had looked at and for how long and what they said about those pictures. From other sources, he got reports on any major collections being offered for sale.

Starting point is 00:12:18 He also got reports from his quote unquote runners. These are people that he deployed all over Europe to hunt out noblemen on the verge of settling for solvency and a bit of loose change at the sacrifice of some of their family portraits. These reports might include the gossips coming from servants who had overheard the head of the state saying to an important dealer that he might consider parting with a lovely piece if the price was right. Now, this is another thing that I think was unique to the way Duveen built his business. He wanted to control supply. He wanted to say, hey, I have literally the best and rarest pieces of art all over the world.

Starting point is 00:12:57 They're not available anywhere else. And so to do that, he would routinely pay the highest prices, far exceeding what anyone had paid before. And in this bizarre world of capitalism that we're at at the very highest end, this actually made the fact that he overpaid made his merchandise more valuable in the eyes of the buyer. So in negotiating with the heads of noble families, Duveen usually won hands down over the other dealers. The brashness of his attacks simply bowled over the dukes and the barons. He didn't waste any time. He talked prices and he talked big prices. He would say, this is the greatest thing I ever saw. I will pay the biggest price you ever saw.

Starting point is 00:13:34 And no surprise here to this technique, the dukes and the barons responded warmly. And so they sold only to him. And he would continue this later on. He dies, I think, in the 1930s. So part of his career overlaps with the Great Depression. And it's a depression or no depression. It was Duveen's principle to pay the highest conceivable prices. Listen to this. A titled English woman had a family portrait to sell. Duveen asked her what she wanted for it

Starting point is 00:13:58 and she meekly said 18,000 pounds. Duveen was indignant. What? 18,000 pounds for a picture of this quality? That is ridiculous, my dear lady. Ridiculous. He began to extol the virtues of the picture as if he were selling it. And indeed, in his mind, right, instead of buying it, he was already selling it. A kind of haggle in reverse ensued. Finally, the owner asked him what he thought the picture was worth. And this is a key insight into Duveen's thinking. Duveen, who had already decided what he would charge some

Starting point is 00:14:32 American customer, it would be a price that he could not ask for a picture that had cost him just a mere 18,000 pounds. So he shouted reproachfully at her, My dear lady, the very least you should let that picture go for is £25,000. Swept off her feet by his enthusiasm. Again, that word enthusiasm is going to be repeated over and over again by people around Duveen. Swept off her feet by his enthusiasm, the lady capitulated. And so this next story is nuts. And it just goes into this idea that a lot of people view. It's part of human nature.

Starting point is 00:15:09 We interpret price as a signal for quality, right? A shortcut for quality. So he's like, hey, I'm not, you know, you want to sell this to me for 18,000 pounds? Nope, I'm going to give you 25,000 pounds. That sounds crazy. But this is why. Duveen had enormous respect for the prices he set on the objects he bought and sold. Often his clients tried to maneuver him into a position where he might relax his high standards,

Starting point is 00:15:31 but he always managed to keep them. There was an instance of this kind of maneuvering in 1934. So he is selling three statues, right? Three busts. He wants to sell them, all three of them, to Rockefeller's son. So this is John D. Rockefeller Jr. Okay, so he's like, hey, who's a massive collector and a huge customer of Duveen. And so he's like, hey, I'll sell you. Duveen says, I will sell you these three busts for a million and a half dollars. Rockefeller's, oh, that price might be too high. So what does Duveen do? When

Starting point is 00:16:03 he's presented with that he does not negotiate down he's like oh I want a million and a half Rockefeller's like I'll give you a million like Duveen's like no I'm going to give you the busts put them up in your house and I think he gives them a year right so it says it is a year so he says he allowed Rockefeller a year's options on the bust right So they are going to remain for a year in the Rockefeller mansion as non-paying guests. That's hilarious. During that time, Duveen hoped that the attraction between Rockefeller Jr. and the bus would ripen into emotion that was more intense. And so keep in mind, this is 1934.

Starting point is 00:16:38 Look at this, like, psychological jujitsu that Duveen is going to do on Rockefeller Jr. Right. So a few months later, where, you know, he's got a year, a few months later, Rockefeller writes him a letter. He's like, hey, I have a counterproposal. I'll buy the bus for a million dollars, right? Because the depression is on and most people are feeling the effects of it. And Rockefeller said, hey, you know, you might, because of the depression, you might welcome a million in cash. Duveen's response was that I am not in the stock market and therefore I am immune and not the least bit affected by the depression. Isn't that

Starting point is 00:17:10 interesting? I always love the idea of like the order in which you read things can change your interpretation of it. And so last week, you and I talked about Texas oil billionaires and Monty Moncrief was very rich through the depression. A lot of the Texas oil billionaires. And Monty Moncrief was very rich through the Depression. A lot of the Texas oil billionaires, because they had no money in the stock market. And so in the Northeast at the time, everybody's getting destroyed. All of Texas's wealth is in, you know, coming from the ground. And so they were essentially immune to the effects of the Great Depression. We see something very similar here. He's like, listen, I'm not in my entire business is selling pictures, right? I'm taking European art and selling it to rich

Starting point is 00:17:48 Americans. I'm not worried about the stock market. And so Duveen actually turns around. It's like, oh, since you're trying to negotiate with me, you're hard up on money. And so I will come to your assistance. Duveen managed to convey the suggestion that if Rockefeller was in temporary financial difficulty, he, Duveen, was ready to come to his assistance. And so what happens? Okay. So he says, I want to sell these things to you for these three statues for a million and a half dollars. You think that's too high. Take them, let them in your house for a year, right? That's going to expire on the 30th. The option is going to expire on the 31st of December. You can either buy them, and I've made it very clear, I'm not budging on

Starting point is 00:18:23 the price, right? You can either buy them on December 31st, or I have to take them back. So that's, again, a very advanced understanding, setting a deadline of human psychology. And so what happens is the day before the option expires, Rockefeller writes Duveen and forms and he's buying all three of them for a million and a half dollars. And it's this fundamental ability to understand and really focus in on its customers. Because he essentially says the eight or 10 clients. So in this part of the story, they're talking about the fact that he put a lot of money into building, built like a gallery slash like house, very similar to what Gagosian did. This is on Fifth Avenue in Manhattan. And he hired great architects and he had to make it beautiful because his point was like, well, I have eight or ten big clients. Right. These are the ones most of them are in New York.

Starting point is 00:19:10 These are the ones that are going to enter into this building. The handful of men with whom Duveen did the major part of his business. These eight or ten clients would come into this building to look at the garnered possessions of kings and emperors. And so therefore, they must be provided with an environment that would tend to make them conscious of their right to inherit these possessions. So one, the interesting thing is you don't need many customers if the few customers that you have are the richest people in the world, right? He built his entire business around eight to 10 people. And two, he understood that they were very wealthy. Most of them came from, you know, nothing. Or if not, they did.

Starting point is 00:19:47 Their father came from nothing. In John D. Rockefeller's, Junior's case, right? But what they lacked is they didn't have prestige. They didn't have titles. They didn't have nobility. All the things that Europe had in abundance, but no cash. And so it's like, well, if you buy this, right, you are essentially, if you really think about what, what, what Duveen is right, you are essentially, if you really think about what, um, what,

Starting point is 00:20:05 what, uh, Duveen is doing, he's, he's teaching his market. He's teaching his customers that buying art was also buying upper class status and maybe the, the, the highest class possible because these are the former possessions of Kings and emperors. And so multiple times it's talked about the fact that this guy, first of all, insane levels of high agency, insane levels of high levels of disagreeableness, although he was very nice and liked, but he wouldn't budge on pricing, whatever cases. But he's also highly competitive. And it makes perfect sense because he wanted to

Starting point is 00:20:35 not just be the best in the world, but literally the only person that these people would ever even think about buying art from. And to constantly teach, you know, repetition is persuasive. And so to constantly teach them that, that's why he would say, hey, you know, you have plenty of money. You can replace that money many, many times over, but you are acquiring something that is irreplaceable. Another way he would describe that later on is that you are trading the infinite, which is money, right, with the finite, which is there's only one of these in the world. And what is also interesting, which Devine also shares in common with Gagosian, is the fact that he would essentially, he was the business, right? He would travel all over the world. He'd go

Starting point is 00:21:14 rotate between Paris, New York, and London, and his entire business travels with him. And so when he goes to London, he winds up staying in the same, like if he's in Paris, he stays at the Ritz. If he's in London, he stays at Claridge's. And he sets up his suite there as like miniature art galleries is the way to think about this. This is very, this is funny. So he sets up his suite there, right? All of his accommodations at all points on any itinerary, anywhere in the world, right? It's going to be transformed into a small scale art gallery.

Starting point is 00:21:44 He invites you over. He may be staying there, but it looks like an art gallery. He arranges the paintings, sculptures, and the objects so that his clients and friends could visit him in a proper setting and possibly take home some of his furnishings. I'm telling you, this is the most, one of the most motivating things for me is the fact that there is always a blueprint that I, you get to study these people like, wow, these people are so ruthlessly efficient and brilliant. And then you're like, wait a minute, he got that idea from this other person that lived 50 years before I can do the same thing. And so this is literally happening, right? Where he's like inviting people over to

Starting point is 00:22:21 his hotel room in London. Oh, I love this chair. I love this art. Okay, do you want it? In the Gagos, this is like, let's see, this is happening, let's see, 1920s. So let's say 60, 70 years later in New York City, Gagosian invites Bernard Arnault. Obviously the founder of LVMH. I'm actually working on, I'll give you a sneak peek.

Starting point is 00:22:42 I'm working on another episode of him on Bernard Arnault. I've been practicing pronouncing his name. But he invites, Gagosian invites Arnault over and Arnault just happens to come. He's like, I like these chairs.

Starting point is 00:22:55 And Gagosian's like, this is at his home on Fifth Avenue, I'm pretty sure. And he's like, Bernard, it's like, I like these chairs.

Starting point is 00:23:04 And Gagosian's like, do you want to buy them? And I think they wind up doing a deal right there. But I just love the fact that, you know, this just repeats over and over again. So let's go back to this idea that your enthusiasm, your charisma is transferable to other people. All the people around him, his clients described Duveen as an exhilarating companion, right? They said his enthusiasm, how many times? I'm like, what is this, 20 pages into this thing? How many times have we already heard the word enthusiasm? His enthusiasm was irrepressible. He engaged in a kind of buffoonery that was irresistible.

Starting point is 00:23:40 Most of his friends were older men and they enjoyed his company partly because he made them feel young. And so Andrew Mellon's much older than him. And he summarizes the gift that Duveen's personality was to his business, where he told Duveen to his face, the pictures that you sell me always look better when you are here. Think about how powerful his charisma had to be that he could take his aura, right, and transfer it to the picture that you bought from him. And you're like in his presence, like, this is amazing. This is a reality distortion field. This is Steve Jobs, right? Same exact idea behind this. And then he leaves and he's like, wait a minute.

Starting point is 00:24:10 The picture doesn't look as good when Duveen is not here. And this is not, this is the thing. I think I have notes later on. Cause I kept thinking about, you know, Charlie Munger's psychology of human misjudgment that he went over and over again. People think this is like some Willy Foo Foo stuff. These are some of the most sophisticated entrepreneurs to ever live.

Starting point is 00:24:31 And it works on them. That should tell you that it's deeply embedded in our human nature, which I'll get to later on. I want to give you an example of one of my favorite maxims comes from Ted Turner. Actually came from Ted Turner's dad. Early to bed, early to rise rise work like hell and advertise and so what would happen is because Duveen there was all these unintended positive externalities that came from Duveen constantly outbidding everybody and you know he's hell-bent on controlling supply one way you have to do that

Starting point is 00:25:00 is sometimes you have to pay more than you think it's worth. And so he was paying crazy prices. They were so crazy that they were covered. They were newsworthy. So he's got essentially unlimited free advertising because he buys, let's say he spends, I'm going to give you like three examples that spread throughout the 1920s that are covered in the Herald Tribune, which essentially they function as free advertising for him. And so this is like a example sir joseph devine the art dealer has bought a ram brand for four hundred and ten thousand dollars it's four hundred ten thousand dollars in 1926 one of the highest prices ever paid and then listen to this next line i interrupted the sentence for you listen to this so highest price ever paid and

Starting point is 00:25:41 this this rembrandt had been in the possession of the family for 200 years. Highest price ever paid and unbelievably scarce. The opportunity to buy this comes up only once every 200 years. Do you want to act? And if you act, you have to act now. Another example. Sir Joseph Devine, the international art dealer, bought in London yesterday the entire collection. He does this all the time.

Starting point is 00:26:05 He'll buy one-off pieces if they're the best or whatever. He'll buy entire collections, and then he'll just store them. Again, controlling supply. The entire collection of 120 Italian of the old masters belonging to this very wealthy European or noble European. This entire collection will be brought to New York. The purchase price was $3 million in 1927 dollars. And then not only did his when he bought merchandise, right, and supply, it was covered. But when he sold, it was also covered. This is, again, early to bed, early

Starting point is 00:26:39 rise, work like hell and advertise Andrew Mellon. Right. This is the son of Judge Mellon, who is the patriarch of the Mellon family dynasty. But at this time, not only is he very wealthy, he's also the secretary of the treasury of the United States. And so now you have Duveen's name associated with literally the best people in the world. Not only are they richest, in some cases, they hold the highest, like some of the highest government positions. So it says Andrew Mellon, the Secretary of Treasury of the United States, has purchased from Duveen for $970,000. A painting, doesn't even matter what the painting is. Here's again, the scarcity, the time aspect of it, right? The painting bears Raphael's signature and the date 1508. And so to other people, it felt like he was overpaying. He

Starting point is 00:27:26 understood that his entire business only works if he has, if you can control supply and he has access to literally the best and the most desired art of all the world. And so this is an example of what he would do to make sure that he didn't miss out, right? It's not like, oh, if I don't win this auction, you know, there's a second thing that's kind of like this. It's like either it's zero sum. One winner, everybody else loses. The circumstances attending Duveen's purchase of this painting called The Pinky in 1926 illustrate his tenacity in the fight he made to establish his preeminence among the art dealers of the world. From the beginning, Duveen felt that his educational mission was twofold. Number one, to teach millionaire American

Starting point is 00:28:05 collectors what the great works of art were. And two, to teach them that they could only get those works of art through him. So number one, I sell the best and I'm the only one that has them, right? And so there's this other rival dealer that's like, hey, I'm going to bid on Pinky too. And so what does Duveen do? Duveen goes to this. This is an art auction that is being run by Christie's. And he goes to the manager of Christie's and he doesn't even show up. He doesn't have to show up for the bidding. He just tells the guy he's like, I have an unlimited bid. Whatever your highest bid is, I will pay more. So by default, he has to be the winner. And this is what he said about this.

Starting point is 00:28:44 Duveen admitted that the price he had paid was steep, but he repeated his cardinal dictum. When you pay high for the priceless, you're getting it cheap. Another saying of his endlessly repeated to his American clients was, you can get all the paintings you want at $50,000 a piece. That is easy.

Starting point is 00:29:03 But to get paintings at a quarter of a million dollars a piece, that takes doing. And then he would go out of his way to stroke and to encourage FOMO, the fear of missing out. He offers this deal to Andrew Mellon. Andrew's like, oh, I'm not interested. The next day he calls up H.E. Huntington. Huntington built a bunch of railroads. He offers it to him, Huntington buys. And then once it's, in many cases, once they sell, or excuse me, once the Huntingtons or other brands buy, they rarely sell.

Starting point is 00:29:34 And so even many decades later, when this piece is being written, it's still hanging, that painting was still hanging in the Huntington mansion in California. And even that worked in Duveen's favor because Mellon heard that, oh, the next day somebody else bought what I said I wasn't interested in. What if I had changed my mind? Now I can't get it. It's stuck. So then the next time that Duveen has something that he thinks Mellon is interested in, it causes Mellon to act faster. Mellon did not make the same mistake again. Duveen offers him a painting by Romney.

Starting point is 00:30:05 It is the highest price ever paid for Romney. Duveen offered it to him and Mellon immediately bought it. Multiple times it talks about that Duveen was aiming for Monopoly on purpose. There's a great line where it says Monopoly by Peter Thiel and zero to one, where he says, Monopoly businesses capture more value than millions of undifferentiated competitors. This is what it sounds like if you have a monopoly. There had never before been anyone like Duveen, the exalted middleman, and he practically monopolized his field. 95 of the 115 paintings in the Mellon collection, right, which gets donated to the public, which I'll talk about why he did this was also a genius move in a little bit, came to Mellon through Duveen. Mellon, think about that. At this point, Andrew Mellon, one of the largest art collectors in the United States.

Starting point is 00:30:59 He might not be the largest, but, you know, he's on the short list. He might be the fifth, might be the second, might be the 10th. He certainly sure as hell is not the short list. He might be the fifth, might be the second, might be the 10th. He certainly, sure as hell, is not the 100th, right? So one of the largest art collectors in America at the time. 95 of the 115 paintings in his collection came from Duveen. That is, he aimed for Monopoly and he hit his target. Another fascinating thing that I've already mentioned, but it's very obvious when you read about and you start studying Joseph Devine, it's like, OK, this guy is super clever. And what makes him even more clever. Right. So talks about that. He enjoyed having the stupid side of his character emphasized in public dinner parties. He'd bring up his mistakes like most people, you know, they're kind of embarrassed by their failures, embarrassed by their mistakes.

Starting point is 00:31:41 They would like hide it. They're being ashamed of it. He wouldn't hide his mistakes. He'd bring them up himself. And this is the line why. It says he enjoyed having the stupid side of his character emphasized. It constituted a disguise for his cleverness. That's how you know somebody's even more clever. The fact that they understand that it's clever to conceal your cleverness. And another thing that clever founders do is they're focused.

Starting point is 00:32:04 Listen to this line that comes a couple of pages later. He was interested in practically nothing except his business. If you think about the layers in which this guy goes, it's impossible to arrive at the conclusions and come up with the ideas that Duveen had, right? I'm a huge believer that it is not what you do, but it is how you do it. There is a ton of art dealers that don't make any money

Starting point is 00:32:24 and there's a handful, one or two or three, that became billionaires. not what you do, but it is how you do it. There is a ton of art dealers that don't make any money, and there's a handful, one or two or three, that became billionaires. It's not what you do, it's how you do it. And this idea of crazy focus and just thinking about your business longer and harder than anybody else does, you're going to get so deep down that curve that you're going to come up with ideas that other people in the same field that remain permanently superficial will never have. Certain men are endowed with the faculty of concentrating on their own affairs to the exclusion of what's going on elsewhere. Duveen was that kind of man. Going back to this idea of how important it was, this information network that he built

Starting point is 00:32:57 up slowly over time, right? Compounds of value becomes one of his greatest assets later in his life. How valuable it is, is that Henry Clay Frick is one of his biggest clients, right? And one of the richest people on the planet now. And yet Duveen is the expert in his field. So he hears about all the great assets before anybody else does. And so he's having like a long-term conversation with Henry Clay Frick and Frick brings up, he's like, man, I lost that painting. I was on the trail of a very great painting. It's this thing called St. James Park or something like that. And Duveen's response to Frick was excellent. He goes, oh,

Starting point is 00:33:32 Mr. Frick, I bought that painting. When you want a great painting, you must come to me because you know I get the first chance at all of them. Remember, he repeats this over and over again. You can only get the best through me. Ignore these competitors. Come straight to me. You will get the best every time. And the greatest way to condense and clarify that idea, in my opinion, is the line, monopoly was his method. Monopoly was his method. And I think all these ideas work together to help him build his monopoly. The fact that he was focused on it, he was only interested in his business. There's this line about the not a detail that he paid attention to and i think there's a great story that illustrate you know monopoly was this method

Starting point is 00:34:11 duveen displayed that scrupulous attention to detail that has distinguished the careers of others other celebrated generals so obviously something you and i have talked about multiple times uh with the most recent on the two weeks ago on the episode of Napoleon's strategies and maxims. And so an example of that, it goes back to this information network, right? He knew every he built relationships and paid people to give him information. And the reason and I'm going to actually explain I'm going to explain the story first and then we'll go into how and like who are

Starting point is 00:34:45 the people that he paid but this is the reason why so he would the way that most people are getting back and forth between europe and america at this point all right it's on these transatlantic ships so he becomes friends with all the deckhands on the ships and he pays them a lot of money in many cases hundreds of dollars like he'll tip them you know hundreds of dollars and it's way more than they make and in return they make sure because they're setting up and they're deciding where everybody's going to sit on the deck and they put they what they do because devine devine has built relations with them finds out they have valuable information pays them for that information pays pays them for their service in like an excessive amount,

Starting point is 00:35:26 more so than anybody else is paying them, right? In return, he gets seated and set up next to a bunch of American millionaires that are going back and forth through Europe. This is another example of what I meant. He has all these like fabricated coincidences. And so here's an example of that. And so it says, among the American millionaires that Devine met through the deck hands, the deck stewards, was Alexander Smith Cochran, who was like a carpet baron. So they meet on a boat that's sailing to Europe, and they just start chatting. Cochran happened to mention that he would like someday to see the Buckingham Palace and all these other European palaces, Duveen said casually that he would be delighted

Starting point is 00:36:06 to take him through both places. When they got to England, Cochran found himself strolling through the two palaces. They seemed as accessible to Duveen as the lobby of a hotel. While he was showing Cochran the royal art, Duveen spoke warmly of Queen Mary and told Cochran what a high regard he had

Starting point is 00:36:24 for her and her taste in art. He never mentioned that he had things he considered as good as hers in his own galleries. In fact, he never mentioned his galleries at all. When they parted, Cochran felt a certain obligation to Devine, a healthy respect for his connections and a sharp curiosity about why a stranger should be so kind. They met again in New York and Duveen took him to see the wonderful Duveens hanging in the private houses of some of his clients, but he did not tell them that they were Duveens. Again, he neglected to mention his great New York gallery. This display of benevolence went on for three years

Starting point is 00:36:59 until finally Cochran could not stand it any longer and broke down. Lord Duveen, I would like to see some of your things. His back to the wall, that's hilarious, his back to the wall, Duveen took Cochran to his gallery. He could not spare any paintings. They were all unreserved. See what he just did there? Sorry, they're scarce, they're rare. I have, you know, listen, I'm the only one that has these,

Starting point is 00:37:21 but there's something for, you know, there's a line. This is like Enzo Ferrari. We talked about this multiple times on the line. This is like Enzo Ferrari. We talked about this multiple times on the three episodes I did on Enzo Ferrari. People like, Americans who come to Italy, rich Americans come to Italy, they tour the Ferrari factory. It's like, I must have one. And Enzo's like, yeah, of course, you know, maybe next

Starting point is 00:37:35 year, maybe six months from now, whatever the case is. And then the American would leave and Enzo Ferrari's employees would come up to him like, we have a parking lot full of unzo Ferraris. Why did you do that? And he's like, because Ferraris must never, they must be desired. They must be desired.

Starting point is 00:37:50 Duveen's doing the exact same thing. So like, okay, listen, I can't spare any paintings. They're all on reserve. But you know what? I do have these other art objects, these other sculptures. You can buy that. Cochran spent $5 million. So from developing this information network, right, playing that long game,

Starting point is 00:38:07 might have cost him a couple hundred dollars in tips. Three years later, that turns into a $5 million sale. That is absolutely nuts. So let's go back. Let's go back to what he was building, because I jumped ahead in the story. So this is what he does. He says that he had an unusual spirit of friendliness, and he let it shine by building relationships with some. Sometimes people are directly involved in the art world. Sometimes they're very indirectly. So this is like all the people that are like all the staff that work for a lot of these art collectors. So he'd build relationships with critics, with museum directors, with restorers. He's going to make one guy very wealthy. You know, you have very old art.

Starting point is 00:38:46 You need somebody that's very delicate, very talented. They restore it. Architects, decorators, and servants. He becomes very generous with the staff and the servants. And in turn, they would give Duveen all the gossip that they hear when people visit their home. And so in one case, right, there's a butler that is working in the Fifth Avenue house of this, one of Duveen's most important clients. Over the course of their relationship, Duveen gives him $100,000. What is the result, right? He said, not only this butler, but all these other servants. They developed a feeling that it was only

Starting point is 00:39:21 fair to transmit to their generous nobleman, that's Duveen, any information that might interest him. And this is nuts. So now he's going to lead to more sales. He has an understanding of a deeper, so he has a deeper understanding of the person, what's interesting to them, what's going on in their life, right? It's going to lead to more sales. But again, Duveen's one of the most competitive people you're ever going to come across. He wants monopoly. So that means, therefore, you cannot buy from other people. So he winds up knowing when rival dealers are going to make appointments with some of his people like Henry Clay Frick or Mellon or anybody else, right? And he just happens to show up. So it says, this is hilarious, when rival dealers would show up to

Starting point is 00:40:03 offer works of art, they found that they could never see the client alone. Whenever talent. And so Duveen had a conviction that anyone who worked for him, high or low, should be compensated in a manner commensurate with the dignity of the association with him, right? I am the best in the world. Everybody associated with me has to be the best and they should be paid like the best. He finds his main restorer. So the people that have to take these very old paintings, spruce them up, for lack of a better word. There is this guy named Steven Pichetto. Pichetto was Duveen's main restorer, right? He's moving so much product. As Duveen's business grows, so does Pichetto's. And this is

Starting point is 00:40:57 the end result. When Pichetto died in 1949 at the age of 61, he was himself a wealthy man. Such was the trade as Duveen practiced it, that even a restorer who worked for Duveen could leave a fortune. Now, a large part of this profile is the founding of something that still is available actually to us today. It's the National Gallery of Art in Washington, D.C., which was established in 1937. You can go there to this day and visit it for free. Over three million people a year do just that. That is an idea from Joseph Duveen. So I'm actually going to read the summary about the National Gallery of Art in Washington, D.C. that came that is in the book 48 Laws of Power, because essentially it describes like, okay, later in his career, Duveen is running into a problem, right? He's got to solve a problem.

Starting point is 00:41:52 All the problems that come up in his life, he figures like, okay, this is just an opportunity that will help me sell more art. And so if you really analyze the career of Duveen, everything he did was an answer to this question or to this problem. Like, how can I solve this problem so I can sell more art? And what he did was genius. And it's the creation of the National Gallery of Art in Washington, D.C. The art dealer Joseph Duveen was once confronted with a terrible problem. The millionaires who had paid so dearly for Duveen's paintings were running out of wall

Starting point is 00:42:23 space. And with inheritance taxes getting even higher, it seemed unlikely that they would keep buying. The solution was the National Gallery of Art in Washington, D.C., which Duveen helped create in 1937 by getting Andrew Mellon to donate his collection to it. The National Gallery was the perfect front for Duveen. In one gesture, his clients avoided taxes, cleared wall space for new purchases, and reduced the numbers of paintings on the market, maintaining the upward pressure on their prices. All this while the donors created the appearance of being public benefactors. That happened in 1937. It goes back to these prefabricated coincidences that you see throughout, because they weren't coincidences, right? They were very intentional and deliberate

Starting point is 00:43:12 of how one that Duveen did throughout his entire career, but also in how he met Andrew Mellon, and then Andrew Mellon becomes one of his biggest clients, right? That happened 16 years earlier in 1921. Listen to this from the same book. In 1921, Andrew Mellon was visiting London and staying in a suite at the Claridge Hotel. Duveen had been targeting him for a while. He wanted him as a client, right? Duveen booked himself into the suite just below Mellon's. He had arranged, Duveen had also arranged for his valet to befriend Mellon's valet.

Starting point is 00:43:43 Mellon's valet told Duvee's valet told Duvet's valet, who then told Duveen that Mellon was about to go downstairs and ring for the lift. So the elevator, right? Seconds later, Duveen entered the lift and behold, there was Mellon. How do you do, Mr. Mellon, said Duveen. Remember how he was just striking up these conversations on the deck of the boat going back and forth between Europe and America. He's doing the exact same thing here, but now he's doing it in an elevator in a very nice hotel in London. So he says, how do you do, Mr. Mellon? Duveen said, introducing himself, I'm on my way to the National Gallery to look at some pictures, to look at some paintings, right? How uncanny. That was

Starting point is 00:44:17 precisely where Mellon was headed and Duveen knew it. And so Duveen was able to accompany him. He knew Mellon's taste inside and out because he studies everybody. And while the two men wandered through the museum, he dazzled Mellon with his knowledge. Once again, quite uncannily, they seemed It lasts for 20 years until Duveen's death contributes untold revenue to Duveen's business, and then also culminates with the opening and the founding of the National Gallery of Art in Washington, D.C. Absolutely incredible. This guy was absolutely incredible. I want to go back to this idea, which I mentioned earlier, and I found my note. So human nature is constant. Studying history is like watching game tape on human nature. These examples are why Charlie Munger spent so much time speaking about and teaching about the psychology of human misjudgment. And so why did I write that to myself? I get to this. This is what I meant

Starting point is 00:45:20 earlier. Like these guys, it's not like these tendencies in human nature, right? Only work on dullards, right? These are some of the most smartest, most sophisticated people on the planet, much smarter and more sophisticated than me by far. And yet it works on them. So that's why. So he owned a chain. He built a giant retail fortune. So retail department stores, you know, a century before Sam Walton. Think about him like that. Okay. And there's another guy that you and I've talked about in the past, which is Henry Goldman of Goldman Sachs. Right. And so Henry Goldman actually loses his sight and becomes partially or maybe completely blind. And he decides to sell off his entire collection of art. And so he goes and offers it first to his contemporary and his, I don't know if they're friends, but, you know, peer or something like that, colleague, Kress. But Goldman loves to move fast. And so he offers this to Kress and the guy brokering the deal between them says, hey, if Kress wants this,

Starting point is 00:46:29 tell him that he's got to do it in a hurry. It's got to be decided this afternoon. And Kress is like, oh, is it like it has to be done today? Like, is he having liquidity problems? Is he broke? What's going on? And he's like, no, he just wants to get, it has nothing to do with insolvency. He just wants to sell this.

Starting point is 00:46:43 He wants to do this fast. He doesn't want to waste any time. And so he tells him, hold Goldman off like I'm going to think about it. Hold him off. He keeps repeating, hold him off, hold him off. But as you already know, by now, Duveen does not wait around for anything. And so once he hears about this, he's like, forget that. I'm not waiting. And he buys the entire collection immediately. And then this is where what I meant about the psychology of human misjudgment. Right. So he got Crest gets the offer, says, no, wait, wait, let me think about it. Duveen doesn't, he acts, buys it. Now it's the exact same collection. It's the exact same collection,

Starting point is 00:47:15 but a collection that belongs to Duveen was not a collection that belonged to Goldman, even when it's the same collection. So you think about this, it's just same thing happened with Gagosian. Same thing happens, you know, every day. You and I are influenced by brands. Brand is like magic. Duveen is a brand and therefore can increase the price. It's the same exact thing. I could be offered the same product.

Starting point is 00:47:38 It could be the exact same product. One of them's, you know, random brand name. The other ones say like an Apple or something like that. And it's been proven over and again, we will pay more for the brand, even if it's the exact same thing. And that's exactly what happens here because Duveen buys the same collection. Doesn't change anything about it. It actually changes like the way it's presented, then goes and shows it to Kress and he goes around. Remember what Mellon said, these pictures look better when you're here. He's enthusiastic. He's saying, this is the best this, and this is the greatest that, and look what this is. It's so rare.

Starting point is 00:48:08 And something Duveen knew, he says, once a collector had his heart set on a picture, it irritates him to have other people discourage him from buying it. Because Crest has a professional advisor saying, you know, this is the exact same thing. Like, this is how crazy these psychological tendencies are, right? These are like very smart, accomplished people. They have people saying, you're not, you're acting irrationally. Then instead of them saying you're right, they get mad at the person that's telling them to act irrationally. And so what he does, Kress bought the picture and all the others. Had he bought the pictures directly from Goldman, he would have saved millions of dollars. That's insane. He would have saved millions of dollars,

Starting point is 00:48:42 but we wouldn't have had the warm feelings of owning a lot of Duveen's. Duveen was a brand. The exact same collection in Goldman's hands transferred to Duveen. That same exact collection is now worth millions and millions of dollars more, where you have one of the most advanced entrepreneurs of that time willing to pay millions and millions of dollars more because it's now no longer the Goldman collection, it is a Duveen collection. And this happened over and over again in Duveen's business and it still happens today. How did it come about that the great money men of this era gradually came to accept Duveen's simple, unworldly view that art was more important than money? Duveen had taught them the idea that art was priceless and when you pay for the infinite

Starting point is 00:49:25 with the finite, you are indeed getting a bargain. His clients felt better when they paid a lot. That's something that Munger repeats over and over again in Port Charlie's Almanac, the fact that price is a signal, high price is a signal for high quality. They felt better. They felt better when they paid a lot. It gave them the assurance of acquiring rarity. A rival dealer of Duveen, so a lesser dealer, had bought a bust for $22,000. The dealer needed money and offered it for $25,000, thinking that it would tempt his customer into a quick purchase. The customer was turned off. The moderateness of the price was fatal. The moderateness of the price was fatal. Find me a better one, he said. Duveen would have asked a

Starting point is 00:50:14 quarter of a million dollars and got it. The same thing happened when another dealer offered a room, so an entire room, all the furniture, all the bus, all the paintings, right? A dealer offered a room to William Randolph Hearst for $50,000. Hearst spurned it. Duveen offered it to him later. Duveen offered it to Hearst later for $200,000 and Hearst bought it with gratitude. A dealer tried to sell him a rug for $15,000. He was used to paying $60,000 for a clock and $100,000 for necklaces and was suspicious of anything that you could get for a mere $15,000. Get me something better was his response. And Duveen didn't just get his clients something better.

Starting point is 00:51:02 He got them the best. Duveen built his entire business around the best. And that is where I'll leave it. Highly recommend reading both pieces, and I'll also link to the 48 Laws of Power. You'll find all those links down below, and they're all available at founderspodcast.com. That is 339 books down, 1,000 to go. And I'll talk to you again soon. If you think about it, the episode that you just heard is a great illustration of this quote that is in this book on Charlie Munger, Poor Charlie's Almanac, how much time they spend reading history and using history, learning from history as a form of leverage. You know, Larry Gagosian,

Starting point is 00:51:53 who starts his career, you know, 40 years after Joseph Devine dies by his own admission, reads every single biography that he could get his hands on about Joseph Devine and essentially patterns his career. They are remarkably similar when you read about both of them. And Gagosian's privately held company is rumored to be doing over a billion dollars a year in revenue. And so a few weeks ago, when Napoleon told you and I that it is profitable to study the campaigns of the great masters, I think Gagosian would agree. Obviously, Charlie Munger and Warren Buffett would agree. And most of the people that you and I talk about in this podcast, they talk over and over again. I've given you a thousand examples like that. But I really liked what Napoleon said, that he thought it was important to read over and over and over again, not just read once, not just listen to one podcast episode, but read over and over again

Starting point is 00:52:32 the campaigns of the greats. And so what I'm trying to build with Founders Notes is really an echo of this idea that Napoleon talked about, that history must be critically analyzed to discover why successes were obtained and why defeats were inflicted, and that the teaching of strategy is built around history. So I'm going to something that, well, first of all, the entire idea from Founders Notes came from making Founders Podcasts, right? For years, since 2018, I've been putting every single highlight of the books I read and every single note on the highlights into this app called Readwise. I've been obsessed with it. I talk about it over and over again. I use it to make the podcast. I've said before I couldn't make the podcast without it. That's not true. I could make

Starting point is 00:53:15 the podcast without it. The podcast would be half as good, I don't know, three quarters as good as it is because of this constant repetition of these ideas. When you hear me in this, in all these episodes, like, oh, that is like this, and this person thought like this, and oh, this is very similar to episode 127 or whatever that is, that comes from this constant rereading what Napoleon said, read over and over again the campaigns of the great masters. And so the very idea to even build a product around this came because so many people for years were saying, hey, I would love to have access to your notes and highlights. I want access to your notes and highlights. How can we do that? How can we do that? And I didn't know.

Starting point is 00:53:52 And for years I said, no, no, no, no. Finally reached out to the founders of Readwise, the both fans of the podcast. And I was like, hey, I want to build a product where people can see exactly what I see. So if you sign up at foundersnotes.com, you will see my entire notebook. I really do truly believe with every bone of my body is the most valuable notebook in the world for founders, because I don't think anyone else has been as psychopathically obsessed with this idea. I've been sitting in a room essentially for my by myself for eight years, you know, reading hundreds of thousands of pages and trying to document everything I learn, take that personal curriculum and externalize it to the world. And that is Founders Podcast.

Starting point is 00:54:28 And what I consider Founders Podcast is Founders Podcast is essentially a free trial for Founders Notes. Founders Notes takes everything that you and I are learning on the podcast and just takes it to another level. And so as I'm still in the early days of developing this, I've only been developing for a few months, I've purposely kept the price lower. If you really think about it, because it's built only for people that are already running successful companies, you know, I say this over and over again, do not invest in subscription, unless you're already running a successful company, the price should be immaterial to you. As far as the value that you get, the price is missing a couple zeros. Now, as I continue to build out different features, obviously, the price will go up in the future. But for now, if you obviously if you sign up now, you're locked in, the price stays the same, you essentially get all the future, you get all the future features, there we go future features for free. I am also doing something for the first time ever, which I mentioned at the beginning, because I'm just a big believer, like Michael Jordan said that successful people listen, those that don't listen don't last long. And I have a bunch of

Starting point is 00:55:27 people saying, hey, I would love a one-time option. So for a limited time, I'm going to test this out. My plan is to make heavy, heavy investments. I think Founders Notes can be this giant platform. The way I view it, over time, I think it'll be an ever-increasing, giant, valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. I think it's the platform and the business that will continue to allow me to make and distribute the podcast for free for the rest of my life. And so I'm not just stopping where it is now, even though I will continue to add my notes and highlights to it forever, because it's embedded in my workflow.

Starting point is 00:56:01 If you already have a subscription to Founders Notes and you already know this, you've, you've had all my notes and highlights on this, on the episode I just did before, way before the episode comes up, because I have to use it to make the episode. It is embedded in my workflow. So that'll never stop as long as I'm doing the podcast. Right. And so the ability to read all of my notes, all of my highlights, to search by keyword, to go to the actual books you can read. Some people are doing this every day. I'm getting a bunch of messages where they're almost like reading it like the morning newspaper. They'll go and pick a different book every day. They'll read the notes and highlights. Some cases, they wind up buying the book because they want more

Starting point is 00:56:36 context. They go back and re-listen to the episodes. It's really fascinating how people are using it so far. Because again, the way to think about it, it's just an ever-increasing, giant, valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. The podcast tries to do that. And the magic of the podcast is it does that when your eyes are busy, right? When you're driving, when you're commuting, when you're working out, when you're walking, whatever the case is. Founders notes is for when your eyes are not busy. It's this continuation of this, again, ever increasing giant valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. And so I've already been

Starting point is 00:57:08 building out other features. So what I want to try to do is because I want to maintain, I want to keep investing more and more time and money into this thing. I'm going to test out something that was requested by a lot of people, right? So for a limited time, a one time payment option, then I'm going to use that money that comes in and then reinvest into more features. Because so right now I have two screens up. I know you can't see this, but I have two screens. So I have founders notes as is right now, right?

Starting point is 00:57:34 Where you can search your highlights. When you sign up, you have this big box at the top. So search highlights, anything that you could think of, a name, an idea, a keyword that goes in there. Highlight feed, which is this what Morgan Housel of a friend of mine and also the author of Psychology of Money calls the smart Twitter feed, right? Actually, he heard me say that and then he started using it and he said that is what it is.

Starting point is 00:57:57 So the highlight feed is essentially like a smart Twitter feed because it gives you a random, it presents highlights and notes from all of everything that I have in the database, but in a random order. So I just hit, I just press on it. And it shows me the first thing is a highlight note from the autobiography of Christian Dior. The next one is the autobiography of Sam Zell. Then you have Ed Catmull's autobiography, the founder of Pixar. Then you have the book I did on Christopher Nolan. Then you have Mark Twain, James Cameron, Arnold Schwarzenegger, Walt Disney, the Dynasty book, The Fortunes and Misfortunes of the World's Greatest Families I did a few months ago, Tiger Woods, James Dyson, Ralph Lauren, Ralph Lauren again.

Starting point is 00:58:42 This is Warren Buffett. That's Munger. This is a guy that sold his company to Buffett. This is Vannevar Bush. It goes on and on. I think you get the idea. And so what that does is I feel the highlight speed is like a prompt for your own thinking. It's like, okay, there's nothing I really want to search today.

Starting point is 00:58:58 I don't really want to – there's not a specific book I have in mind. Let me see if I can just prompt my own thinking and just scroll through there and see what comes to mind. You can also do the books. You click on books. That's pretty obvious. I think it's self-explanatory. It's going to have all the books by the title. Some of them have, you know, a handful of highlights. Some have a bunch. You can usually take five, 10 minutes at the most to read all my notes and highlights on a specific book. Now, the other screen I have up is, well, like I just said, I'm not stopping there. And so the other screen I have up is a feature that I've been testing for a while where it's a chat

Starting point is 00:59:29 interface. So instead of searching by keywords, you just say, like today, what I was searching, it's like, because I've been testing it nonstop, tell me about Edwin Land. Why was he important? And what did he do? And the connections that it makes, it pulled 50 different highlights. Oh, I forgot to mention that the transcripts for every single episode, it's also, you can search through that as well, which is incredible, but it pulled 50 different highlights, right? To answer this question. Then it gives me like 10, nine to 10 bullet points. And then, so I'm using it to, as I do research for the podcast, constantly testing testing it but i'm also like asking questions like hey i'm having trouble deciding if i should sell my company or not what advice do you have that

Starting point is 01:00:09 helped me make this decision then it gives you a poll gives you a bunch of interesting ideas and i said hey have any of history's greatest founders regretted selling their company and then it continues on pulling and then synthesizing dozens of highlights and gives you an idea of the different perspectives so in this case it was and gives you an idea of the different perspectives. So in this case, it gives me an idea from Michael Bloomberg, from Ted Turner, from the founder of Trader Joe's, from Henry Singleton, from Jack Ma, from Warren Buffett. All that from me just asking, hey, have any of history's greatest founders regretted selling their company? And if you use any of these new AI platforms, you know it's like an idiot savant. You know, maybe half the time it's an idiot

Starting point is 01:00:46 and the other half the time it's a savant but this is only gonna get better and better and even right now in its current incarnation, it's already making connections that I even missed. So I'm testing this every day. It'll be out to every single person that has a subscription for two founders notes relatively soon, you know, maybe a few weeks,

Starting point is 01:01:04 something like that but I'm not stopping there. I want to organize around this idea that this is an ever increasing giant valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. And so I'm already building out resources where maybe you don't want to search at all. This is something I want. So everything I'm describing something I want. So I was like, hey, I want a collection of ideas organized by theme across every book and episode. So instead of learning by person, right, or me searching for something or even having a chat interface,

Starting point is 01:01:30 give me one page, two page, three pages of how all of History's Greatest founders thought about topics like marketing, recruiting, distribution, management. How did they hire? How did they fire? This is going to take an unbelievably long time to do. It's going to require a lot of investment. I'm obviously going to hire several people to help

Starting point is 01:01:49 me with this. But I wanted to give you a little sneak peek because again, I always think about, one, I've already demonstrated, it's already demonstrated over and over again, like the collective intelligence that is in for like the audience of the people listening to Founders is incredible. And so that advantage that I have of being able to tap into that becomes your advantage because then it's just like positive feedback loop. I get great ideas and then I apply them to Founders Notes and you benefit as well. So hopefully that made sense. I swear, I was like, I'm going to sit down, instead of talking about this for like 30

Starting point is 01:02:18 minutes or whatever, I don't even know how long I've been talking. I know sometimes at the end of episodes, I go, you know, I kind of go off the rails a little bit. I swear, I was like, I'm going to sit down and, you know, two minutes just telling them, hey, do you have a lifetime option now or a one-time option now? If you want this, you know, here's how to get it. Really simple.

Starting point is 01:02:39 And then I wind up going, I just, I'm fascinated by this stuff. I'm just fascinated. I was kind of like a skeptic a little bit. And then started i started the like an ai skeptic and then i realized oh no like the connections that the benefit that i have i have this weird thing where you know where it's like because i'm so enmeshed in all of this and i read and reread every day and a half for almost eight years these connections just come tumbling out of my mouth you hear it if i go on other people's podcasts you hear it on this podcast you hear it if you've ever spoken to me in person and it's like oh

Starting point is 01:03:07 everybody's gonna have this and it makes me excited because it only makes my ability to make the podcast better and again just organize it's like hey i want to be really easy to interface with if you follow me on social media by the way please if you don't already david center on linkedin at founders podcast everywhere else uh, I'm going to be easy to interface with. It's like, you're going to follow these accounts or you're going to listen to this podcast because you want to learn from his or her greatest entrepreneurs. That's it. And, you know, I don't have to belabor that point.

Starting point is 01:03:34 You're smart enough to understand why that's so important to do. And all I can think about is, like, this is going to be a giant platform. Right now, founders and co-founders and some executives and a bunch of investors are using it. I think entire companies are going to use this. And so if that mission sounds interesting to you and you want to help, a really easy way to help,

Starting point is 01:03:54 sign up either for an annual subscription or a one-time and you can do that at foundersnotes.com. That is founders with an S, foundersnotes.com. Obviously, everything I talk about is at founderspodcast.com too. So you can go through there. But foundersnotes.com. Obviously, everything I talk about is at founderspodcast.com too. So you can go through there.

Starting point is 01:04:07 But foundersnotes.com, thank you very much. I've been talking too much. I'll talk to you very soon.

Founders - #339 Joseph Duveen: Robber Baron Art Dealer

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