Founders - #35 George Lucas: A Life

Episode Date: August 26, 2018

What I learned from reading George Lucas: A Life by Brian Jay Jones. ---Lucas unapologetically invested in what he believed in the most: himself.“What we’re striving for is total freedom, where we can finance our pictures, make them our way, release them where we want them released, and be completely free to express ourselves,” explained Lucas. “That’s very hard to do in the world of business. In this country, the only thing that speaks is money and you have to have the money in order to have the power to be free.”George looked at it like a businessman, saying, ‘Wait a minute. The studios borrowed money, took a 35 percent distribution fee off the top. This is crazy. Why don’t we borrow the money ourselves?' Some of the bravest and/or most reckless acts were not aesthetic, but financial.My thing about art is that I don’t like the word art because it means pretension and bullshit, and I equate those two directly. I don’t think of myself as an artist, and I don’t think I ever will. I’m a craftsman. I don’t make a work of art; I make a movie. You couldn’t pay me enough money to go through what you have to go through to make a movie. It’s excruciating. It’s horrible. You get physically sick. I get a very bad cough and a cold whenever I direct. I don’t know whether it’s psychosomatic or not. You feel terrible. There is an immense amount of pressure, and emotional pain. But I do it anyway, and I really love to do it. It’s like climbing mountains.I was seriously, seriously depressed at that point because nothing had gone right. Everything was screwed up. I was desperately unhappy. That was a very dark period for me. We were in dire financial straits. I was in debt to my parents, in debt to Francis Coppola, in debt to my agent; I was so far in debt I thought I’d never get out.He was fascinated not only by Scrooge McDuck’s exploits but also by his conniving capitalist ways. “Work smarter, not harder,” was Scrooge’s motto, and his stories were full of inventive schemes that, more often than not, made him even richer and more successful. In Scrooge’s world, hard work paid off, yes — but so did cleverness and a desire to do something in a way no one had ever thought of before. The lessons Lucas learned from Uncle Scrooge would shape the kind of artist and businessman he would become in the future: conservative and driven, believing strongly in his own vision and pursuing it aggressively.I sit at my desk for eight hours a day no matter what happens, even if I don’t write anything. It’s a terrible way to live. But I do it; I sit down and I do it. I can’t get out of my chair until five o clock or five-thirty. It’s like being in school. It’s the only way I can force myself to write. Most days, no words would be written at all. At 5:30 he would tromp downstairs to watch the evening news, glaring with anger over a TV dinner as he stewed about the blank pages he’d left upstairs.Sitting next to him was a thirty-one-year-old independent filmmaker from northern California named John Korty. When he digressed into the details of his filmmaking Lucas really took an interest. For the past three years, Korty had been running his own filmmaking facility out of his barn at Stinson Beach, a small ocean resort town just north of San Francisco. He had privately raised the $100,000 for Crazy Quilt by hitting up friends, colleagues, and even his actors for money, shot the movie locally, then edited it on his own equipment. At the film’s premiere, it received a lengthy standing ovation, and Hollywood executives fell over themselves scrambling to distribute it and recruit Korty. But Korty was having none of it. “From what I saw of Hollywood, they can keep it right now,” Korty said. “I would rather work for myself. In Hollywood you have a producer breathing down your neck. Here in northern California I am happier working with less money. The risk of failure is far less . We can complete a film in maybe a year, getting the results we want.” This was exactly what they had in mind for themselves. “Korty inspired us both,” said Coppola. “He was a real innovator.”How many people think the solution to gaining quality control, improving fiscal responsibility, and stimulating technological innovation is to start their own special effects company?” Ron Howard said admiringly. “But that’s what he did.” ----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

George Lucas unapologetically invested in what he believed in most, himself. As a result, the film empire he created would empower not just him, but other filmmakers to produce movies exactly as they envisioned them, without a studio imposing its own priorities, grousing about budgets, or micromanaging the process. George Lucas, the small-town son, had said no to the family business, then built a cinematic empire based on his own uncompromising vision of the film industry, not as it was, but as he thought it should be. Much of that vision lay in the possibilities presented by

new technology, technologies Lucas developed with his own money, an inherent ability to hire the right people, and a knack for asking the right questions. I can't help feeling that George Lucas has never been fully appreciated by the industry for his remarkable innovations, said the director Peter Jackson. He is the Thomas Edison of the modern film industry. And that was an excerpt from the book that I want to

talk to you about today, George Lucas, A Life by Brian J. Jones. In case you're new to Founders, every week I read a biography of an entrepreneur and then I share some of the ideas that I learned. So I want to tell you how I found the idea for this book. Last week, I did a podcast, I created a podcast on Ed Catmull, which was one of the founders of Pixar and based on his book Creativity Inc., which was absolutely a fantastic book. And in the book, he mentions George Lucas a lot because he went to work for George Lucas in the beginnings of Pixar, actually were contained within one

of the companies that George Lucas founds, which is Industrial Light and Magic. In Creativity Inc., Ed Catmull talks about a lot of the ideas that George Lucas had for business. A lot of these ideas I thought were really interesting. I included them in last week's podcast if you want to learn a little bit more about that. So that made me go look for a book on George Lucas. So I ordered the book and read it, and not surprisingly, there's a lot of useful information in here. So I want to

share some of those ideas with you today. So let's get into the book. So one thing that's very common studying the biography of George Lucas, he was very much thought from first principles. So we even see this as a young age. He's going, he's raised a Protestant and he starts to question from an early age. And let me just read this part. He found himself wondering, what is God? But more than that, what is reality? What is this? It's as if you reach a point and suddenly you say, wait a second, what is the world? What are we? What am I? And how do I function in this? And what's going on here?

And you'll see this later on in the book too, where he just analyzes the film industry and then even the technologies that they're using. And he's like, what is this? This doesn't make sense. Why are we doing things like this? Something I found interesting, skipping ahead a little bit, he didn't like school, but he loved to read. And he was obsessed with comic books. And a lot of the stories and that he learned as a kid wind up in

the Star Wars movie later on. So this is Lucas talking about that, about his love for comic books. I was addicted to them, said Lucas. I used to love to read those books. It started me on a lifelong love of history. And as a kid kid I spent a lot of time trying to relate the past to the present so something I loved about George Lucas and something I want to I try to do myself is that he learned from fictional characters he thought there was a lot of value in storytelling about humanity even if the the exact details were not true. And to that point, he actually learned from one fictional character in particular, and it actually surprised me.

And it was Scrooge McDuck. So let me tell you a little bit about that. He was fascinated not only by Scrooge's exploits, but also by his conniving four-color capitalist ways. Work smarter, not harder, was Scrooge's motto. And his stories were full of inventive schemes that more often than not made him even richer and more successful. In Scrooge's world, hard work paid off, yes, but so did cleverness and a desire to do something in a way no one had ever thought of before. That line right there, I think, is a very good summary of

George Lucas. A desire to do something in a way no one had ever thought of before. That line right there, I think is a very good summary of George Lucas. A desire to do something in a way no one had ever thought before. The lessons Lucas learned from Uncle Scrooge would, to some extent, shape the kind of artist and businessman he would become in the future. Remember that word artist, because it's interesting that the author is describing him as that when Lucas himself refrains from using that term to apply to himself. And we'll talk about that in the podcast soon. So it says, to some extent, it would shape the kind of artist and businessman he would become in the future. Conservative and driven, believing strongly in his own vision and pursuing it aggressively. So he grows up, George Lucas grows up in a small town in California called Modesto. His father was like a very rigid, conservative, self-made man.

He started the town's largest stationery store and gradually expanded it over his lifetime. By the time George Lucas is old enough to start working, his father wants him to take over the family business. George starts working there, then winds up quitting. And the note I left myself is his complete confidence in himself was apparent at a young age. And it said, I got really mad at my father and told him, I'll never work in a job where I have to do the same thing over and over again every day. And he just didn't want to hear that. You'll be back in a few years, George Sr. told his son knowingly. I'll never be back, Lucas shot back.

And as a matter of fact, I'm going to be a millionaire before I'm 30. So before, George Lucas, the interesting thing to me was George Lucas didn't think about film or making movies or becoming a filmmaker until he went to cinema school at USC. His first obsession was cars. So what he would do is he thought he would either be a race car driver or a race car driver mechanic. He was obsessed with cars, working on them and making them go faster.

And while he was still at the last year of high school, he winds up getting in this devastating car crash that should have killed him if he wasn't ejected from the car because somebody hit him uh it sent the car uh flipped over like seven or eight times and the car got wrapped around a tree by the time it hit the tree he was already out of uh he like was thrown out of the car and he was laying on the ground um if he was still in the car he would have died and so this is what he calls the start of his second life. He did a lot of thinking about the accident, about life, and about the universe and his place in it. It wasn't lost on him that he had been saved by the failure of

the very racing belt he had installed to protect himself. And this is, I think, the most important part. I realized more than anything else what a thin thread we hang on in life lucas said and i really wanted to make something out of my life so at this point before this he was kind of like a nerdy wall like he just didn't he could be very focused on things he was passionate about but he didn't care about school he got d's and c's and he's there's a big change when he starts to apply himself. And that's the word that him and his dad use over and over again about just making sure that whatever you're doing, you're applying yourself at it. So he starts college. At the time, he's

like, okay, I want to start getting into photography and he wants to go to art school. And his dad's like, no way in hell you're going to do that so let's learn a little bit about that here now that lucas oh so before this he's he's in the local community college um and he's picking instead of you know in high school they're directing what you what you should learn he got to pick the classes so you see a difference here now that lucas was in charge of his own educational destiny and no longer subject to the requirements of the California public school system, he could choose courses that truly interested him. Sociology, anthropology, psychology, stuff you didn't get in high school, Lucas said. These were things I was really interested in, and that sparked me. I was into something I really cared about, and my whole

grade situation just turned around, he said. I thought I was a terrible student, and then suddenly I was a great student. So after attending community college, he wants to transfer, and he wants to go to art school. And this is something that his dad is very against, and we're going to see that here. No way, George Sr. told his son flatly. I'm not going to pay for that. Do it on your own if you want, but you'll never make a living as an artist. So George Lucas's friend is going to USC and he says, hey, there's a well-known film school down here. Why don't you check it out? And when he

tells his dad he wants to go to USC, his dad was very open to that idea. And then the film school was called, it wasn't called an art school or studying film, it was called cinema. So using that, studying cinema at USC is the way he pitched it to his dad and his dad agreed. And this one decision, this decision to study cinema at USC changes his life. This is a turning point in his life. And we're going to hear Lucas talk a little bit about that. For many, reality finally began when they entered film school. Lucas, for one, knew he had found his way. I was sort of floundering for something, he said. And so when I finally discovered film, I really fell madly in love with it. I ate it and slept it 24 hours a day. There was no going back after that.

So during film school, he went to meeting a lot of older directors and producers and people working in the film industry. And something that was present throughout his life, he always looked for people he could learn from. And usually those were older people. So he comes to meet this legendary filmmaker called Haskell Wexler. And then later on, we're going to see he kind of replicates the mentorship and the friendship that he had with Wexler with Francis Ford Coppola. And this is Lucas describing why he sought out people, usually older, that he could learn from. And he said, that's one of the ways of learning, Lucas acknowledged later. You attach

yourself to somebody older and wiser than you, learn everything they have to teach, and then move on to your own accomplishments. Looking for summer work in the film industry, he would be disappointed. Every film company's door he banged on along Ventura Boulevard was closed in his face. So before I want to interject here, the first day of film school, his professors announced to the entire class, don't do this. You cannot get a job in the film industry by going to film school because at the time it was highly tightly controlled. And he said, just stop now, get a refund in your tuition. Do not do this, which I found really interesting and surprising. So George Lucas is seeing a little bit of that here.

Let's go back to the book. Film was strictly an old boy's network, an insider's game, closed off to those with no industry connections, relations, or contacts. Everyone I went into, I said I was looking for a job and I'd do anything, said Lucas. No luck. So at the time, Wexler, he becomes friends with Wexler. Wexler's working in the film industry, but we're going to see that didn't really yield too much fruit for his job hunt. It says, but not even Wexler could get Lucas a job working in his own company unless Lucas was in the union. Lucas, this is an important part, never a joiner and with an

antipathy to unions learned from his conservative father bristled. It was another lesson he would, he wouldn't soon forget to get into the movie machine. One had to be a part of the system and Lucas had already decided he didn't like the system or the machine for that matter. So right there, first or second year of film school, he's realizing, like he's kind of sowing his lifelong hatred for the film industry and Hollywood in particular. And a lot of the things that we're going to talk about today, you'll see that manifest. His entire thing was trying to make enough money so nobody could tell him what to do because he was obsessed with controlling his own destiny and the interesting part that i found is uh the the cinema school at usc right before um lucas started attending was kind of like compared to like

almost like a depression they weren't uh the students that came before weren't really making any films of note they weren't winning any awards. They weren't making any money. This all changes with starting with George Lucas and then all the people that are in the same spot at this time. And so Lucas and his fellow film students would become a mafia, very similar to what we know as the PayPal mafia and how this small group of people that made PayPal

now went on later on in life to build all these other companies. They're going to do the same thing but with film. So let's learn a little bit about that now. Lucas generally referred to them as the USC Mafia. These are all his friends that he meets in film school. That would end up being a more appropriate designation, as they would all regularly hire, fire, and conspire with one another on countless projects over the next five decades, putting together a kind of system on their own. So here's just a

list of some of the movies that they're going to make. American Graffiti, Indiana Jones and the Temple of Doom, Star Wars, Starsky and Hutch, Grease, Apocalypse Now, Dirty Harry, Conan the Barbarian, Red Dawn, and the list just goes on and on. So I want to skip ahead a little bit and I want to give you a glimpse into a little bit about his personality that we see in film school and we'll see this much more developed as he gets older. While most students diligently put together short stop action clips are brief hand-drawn cartoons lucas had something very different in mind so he gets the the uh assignment to create a film and the instructor just told him hey you know we're going to take this easy we're just going to show you how to make a basic movie but you don't have to worry about the story anything else so it says lucas had something

very different in mind following the opening title card reading, Look at Life, you can actually see this still on George Lucas's first film. It's a minute long. It's called Look at Life. Lucas made his intentions immediately clear with his first on-screen credit. This was no student assignment. It was a short film by George Lucas. Lucas had chosen to set his film to music, an open defiance of the professor's instructions. That's something we're going to see a lot of. He didn't really have a respect for other people's rules. Over the next 55 seconds, in perfect sync with an explosion of drums and other percussion instruments, Lucas barraged viewers with machine gun fire of images, hurling across the screen one after another.

The images are mostly of unrest and disorder, race riots, police dogs, attacking protesters, gesturing politicians, dead bodies. Keep in mind something I just want to interject there. Even I was watching interviews with Lucas to prepare for this podcast and he references it a lot that he's a product of the sixties. So you see that in a lot of the messages that his films have and this is the first example we have lucas ends on an unequivocal downbeat with a clipping that reads anyone for survival which fades into end and then trails off into a lone question mark which slowly recedes into a blur even 50 years later later, Look at Life is an impressive debut.

Aggressive, political, and utterly confident. And here we're going to get a view into his utter confidence. As soon as I made my first film, I thought, hey, I'm good at this. I know how to do this. From then on, I never questioned it. And another glimpse on a few pages later, which I really love, that shows us more of this personality, more of this confidence. A memory, this is a memory of a fellow film student. He knew how to do it, and he was going to make sure everyone knew that he knew. So this is also how he comes up with his movies. This is a little bit about what his life was like during film school. One of his friends would always constantly try to get him out to go to parties, and Lucas was just heads down focused on film. So it says, Lucas preferred shutting himself in

the top floor bedroom, sitting at the drawing board, planning his films, and sketching out ideas. George would usually stay upstairs in his room, drawing these little star troopers. But for Lucas, that was even better than partying. I'd be working all day, all night, living on chocolate bars and coffee, said Lucas. It was a great life. So everything's great about that except the chocolate bars because he gets diabetes rather young.

His diet wasn't the best. And this is also where we're going to see the start of a personality quirk, maybe personality preference is a better way to put it. And this lasts his entire career. And that's he preferred working alone, which is kind of hilarious that he winds up founding a multi-billion dollar company with 2000 employees. Because I think in his perfect world, he would just lock himself in a room and make films without anybody's interference. And he obviously didn't go that route. He had to rely on actors.

But Ron Howard, who appeared in American Graffiti, tells us one story where he's telling George Lucas that, hey, I want to be more than an actor. I just started going to film school because I want to be a director. And Lucas is like, no, you should get an animation because then you could tell your stories without having to rely on actors. And Ron Howard's like, wait a minute. Like the guy that I'm on set with is telling me in a roundabout way that he hates actors. And he doesn't really hate him, but he just he doesn't like people messing with his vision. OK, so let's go back to that personality preference.

So it says, he was becoming increasingly cranky about the ideas of working with others and preferred doing everything himself. He could be easily irritated if he was saddled with crew members who couldn't keep up with him. So they're talking about continuing to make films in school. The first film he did by himself. Now he's doing multiple films and he's running crews. He says, I was really incensed at the democratic process of filmmaking where we helped a student who couldn't quite make it, Lucas said later. I was into making it a competition.

Who can get it done first and best? If they couldn't cut the mustard, they shouldn't have been there. And this leads into what the note I left myself is the dictator. And let's, well, this is a little bit about his senior project. Lucas, however, would both write and direct his senior project, heading up a crew that would eventually swell to 14 people. They'd all be working together closely, sure, but ultimately they'd be doing it Lucas's way. His teacher imposed some terms and conditions on the project, most of which Lucas shrugged off are disregarded entirely.

The rules were of no concern to him. So remember we started the podcast talking about he really thinks about first principle thinking. And it's not that he was violating rules just to violate rules. He just would analyze the rule like that doesn't make sense. That's dumb. Like the first rule, don't put music in your first film. Why? Why can't we do that? And the professor's reason was, oh, it's too complicated or whatever the case is. Well, George just did it anyways. And you're going to see him breaking a rule here, but it kind of makes sense if you really, if he's, he's focused on getting the film done. And if you're just making up arbitrary rules that, that get in that way, then he probably will just disregard that rule. So he says, I broke them all.

All of us did, said Lucas. Whenever I broke the rules, I made a good film. So there wasn't much the faculty could do about it. And this is one example of that. Lucas didn't want to limit his use of the equipment to the building's regular hours either. So you could only use the editing equipment from normal business hours like Monday through Friday, nine to five, something like that. So he said, we'd shimmy up the drain spout, cross over the roof, jump down into the patio, and then break into the

editing room so we could work all weekend, said Lucas. So I want to skip ahead. Something I love about reading these biographies is learning about who they were before they became the people we know. So it's, you know, everybody knows who Elon Musk is now or Henry Ford is now, but these biographies, you always see these little stories of who they were before they became infamous or famous or successful or whatever adjective you want to put on it. As such, I really try to focus on their first jobs, their first businesses. and i want to talk a little bit about his first job in the film industry and it's working for the u.s government which lucas was kind of this like counterculture you know person at the time so this is a little weird for him

but he learns things on his first job that he carries with him later on in life and business so lucas landed a position with the u.s information agency a grip, the person responsible for maintaining and carrying the camera equipment for its teams working on education and propaganda films. It wasn't much, but it was still the kind of opportunity most film school graduates would have killed for. George Lucas, heir to the stationary store, car crash survivor, lover of photography and film, was officially working in the film

industry, albeit just barely. And it was during his time here that he realized, hey, maybe I do want to be a director, not just an editor. While Lucas didn't like cutting together footage of someone saying things I didn't really believe in just because I had to make a living, more than anything else, he just didn't like being bossed around. Being told which shots he could do and couldn't use annoyed him. The director would come over and say, you can't cut it this way. You've got to cut it that way, said Lucas. And I said, I don't like this. At that point, I was really wanting to be an editor and a cameraman. And in the course of doing this, I sort of said, you know, maybe I want to be an editor and a cameraman and in the course of doing this i sort of said you know maybe i want to be a director i don't want people to tell me what to do so this is a very common theme in the

book and throughout his life he has an absolute unrelenting desire for control in fact as i was reading i came across the the word control so much I had to look up how many times it appeared. The word control appears 122 times in this book. So in addition to control, he was also relentlessly resourceful. We're going to see an example of that skipping ahead. At times, it was practically guerrilla filmmaking, as Lucas and his crew would shoot as much as they could in a parking garage before the light changed or they ran out of time. And even with the military's equipment at their disposal, there were still shortages and equipment failures. Through it all, Lucas simply coped and improvised with a resilience that impressed the hardened Navy officers. Lacking a proper dolly for moving shots,

for instance, Lucas and his cameraman Zip Zerman, simply mounted the camera sturdily on their shoulders and sat stone still on a rolling platform as it was towed slowly backward. So I want to skip ahead. I want to talk to you about how he winds up meeting one of the most important people in his life, which is Francis Ford Coppola. They become lifelong friends. They even start their first business together. They develop more of like a brotherly relationship because they do have several falling out fallings out but usually wind up reconciling lucas won an award for one of his films and the reward of for the award is the ability to hang out on a real live movie set i think for like 90 days and the only movie that was being filmed at the time was the one Francis Ford Coppola was directing.

And this is just a funny story about how Francis Ford Coppola first meets George Lucas. Lucas loitered around the set of Finian's Rainbow for several days, quietly watching, observing, with his arms folded, mouth set tight. Eventually, the director noticed this skinny young man was watching him and asked someone who it was. Learning that his guest was a student observer from USC, he coyly sided over to the stone-faced Lucas between takes. See anything interesting? he asked Lucas. Lucas shook his head slowly.

Nope, he said flatly. Not yet. And this, said the director, a burly bearded 28-year-old named Francis Ford Coppola, is how I met George Lucas. So they talk about how important Francis Ford Coppola was to other film students. He was a few years older, about five years older than Lucas and Spielberg and some of these other guys. And they talked about why they looked up to him. And it says, he actually succeeded in getting his hand on the doorknob and flinging open the door.

And suddenly there was a crack of light. And you could see that one of us, a film student without any connections to the film business, had put one foot in front of another and actually made the transition from being a film student to being someone who made a feature film sponsored by one of the studios and this is steven spielberg talking about coppola coppola was my shining star francis was the first inspiration to a lot of young filmmakers because he broke through before many others and this is lucas talking about one of the reasons he admired Coppola. An impressed Lucas could only shake his head in awe at Coppola's colossal nerve.

Francis could sell ice to the Eskimos, Lucas said later. He has charisma beyond logic. I can now see what kind of men the great Caesars of history were. Their magnetism. And for Coppola's part, he just really wanted a friend and a brother. He was one of the most successful, one of the youngest people to be successful in the film industry. And he didn't, as such, he didn't really have people around him that was his own age. So he talks about what made him, like, why did he strike up a friendship with George Lucas? And he

says, I was anxious to have a friend, said Coppola. And as things turned out, something I'd never had, which was a younger brother. And as brothers tend to do, the two of them would bicker, So during this time, Coppola is directing a movie. This is another insight into George's personality. So he hangs around the set for a little bit, but then he just gets bored and he leaves. And so him leaving is actually something that inspired Coppola to give him a job. So it says, Coppola noticed the young man's absence and was not amused. What are you doing? He demanded of Lucas. Aren't I entertaining enough for you?

When Lucas explained that he preferred doing to watching, Coppola nodded sympathetically and gave Lucas a job as his administrative assistant, promising $3,000 for six months work. So it was through, he starts working very closely with, with Coppola. I'm going to skip over large parts because I do want to start getting into where did he get the inspiration to not only like start his company but the way he started his company and him George Lucas Coppola and a lot of these other guys were very inspired by a relatively unknown independent filmmaker okay so at the time everything was studio driven and people like Francis Ford Coppola

and George Lucas didn't like all the control that the studios had over films. You know, you could write up a script, you could direct it, you could turn it in, and then they would just arbitrarily cut things out and they hated that. So this is actually a really, really important part of the book. And this is where Lucas finds his inspiration and his eventual business model and modus operandi. So as a result of working with Coppola, Coppola is famous. He gets invited to all these filmmaking events. In one case, he couldn't go. So he sends Lucas in his place. And this is very important because this is where Lucas finds his inspiration. And so sitting next to him, meaning George Lucas, was a 31-year-old independent filmmaker from Northern California named John Cordy. While Cordy spoke eloquently at the topic at hand, it was when he digressed into the details of his filmmaking that Lucas really took an interest.

For the past three years, Cordy had been running his own filmmaking facility out of his barn at Stinson Beach, a small ocean resort town just north of San Francisco. He had privately raised $100,000 for his movie by hitting up friends, colleagues, and even his actors for money. He shot the movie locally and then edited it on his own equipment. At the film's premiere at the Museum of Modern Art in San Francisco, it received a lengthy standing ovation, and Hollywood executives fell over themselves scrambling to distribute it and recruit Cordy, but Cordy was having none of it. From what I saw of Hollywood, they can keep it right now, Cordy said. I would rather work for myself. In Hollywood, you have a producer breathing down your neck. Hollywood is dying slowly. This is all Cordy still talking. Here in Northern California, I am happier working with less money. The risk of failure is far less.

We can complete a film in maybe a year getting the results we want. This was exactly what they had in mind for themselves, meaning Lucas and Coppola. Cordy inspired us both, said Coppola. He was the real innovator. So they take this idea, and this is where George Lucas, he actually starts his first company with Coppola. And let's learn a little bit about that. So skipping ahead a little bit in the book, we're to the point where they start this company. Coppola and Lucas had seen the future and Cordy's barn on the beach. And Coppola was going to build his own cinematic community somewhere. If you can do it, he had told Cordy

enthusiastically, we can. Coppola had a name in mind, a tip of the hat to Scott Hansen and his wonderful optical toy, American Zoetrope. So it was a combination of what he saw with Cordy and what he saw with Scott Hansen that gave him the idea for the basic blueprint for American Zoetrope. So Coppola named himself president of Zoetrope, of course, and appointed Lucas executive vice president. When we got up here, the Hollywood students said, you can't possibly make movies up here. And we said, well, we don't care. And I said, I love San Francisco and that's where I want to live and I don't care. I kept being stubborn and persistent. That's Coppola talking.

And I remember George saying, well uh we may all be back in a year with our tails we turn our legs but at least it was fun while we were doing it and who knows what will happen okay so do you remember that part where lucas is talking about how coppola can sell ice to eskimos so coppola gets a studio to fund this company this new company of theirs with the agreement that they're going to produce six films for the studio. And some of the films are going to be made by Lucas, some are going to be made by Coppola, and some are going to be made by other filmmakers that join the community. So the first of those movies was this movie that Lucas makes called THX 1138. And this is another

insight to his personality and how he works, and that he refuses to accept the status quo. So let's learn a little bit about that here. At its core, THX 1138 was about refusing to accept the status quo. It's about a hero who lives in an anthill and dares to go outside, Lucas would say later. In a way, that's what he and Coppola were doing with Zotro. Like THX, they too had broken away from the system in pursuit of a freedom that could be had if one was willing to walk away from the status quo. As Lucas noted, this issue of leaving a safe environment and going into the unknown would be an underlying premise of his first three films, running in a thematic straight line from THX through American Graffiti and on to Star Wars. So he gets done shooting the movie.

Skipping ahead, I found this interesting. Another personality quirk or personality preference of his was that he preferred to work in solitude. With the shooting complete, he took his film, all 250,000 feet of it, home to Mill Valley, that's where he's living with his wife, where he planned to edit the movie in his attic rather than at the new facilities at Zoetrope. And this is why he did it. The offices were too busy and noisy, Lucas explained, with too many distractions. It's like trying to write a novel in a newspaper office. THX, while it has

a critical claim, the studio hated it. It's actually what leads to the downfall of their company really fast because it was the first film when the studio saw it, they wind up pulling all the funding for all the rest of the six films. And so this is the precursor to Lucasfilm. It also sets the stage for one of the best movies, in my opinion, of all time, The Godfather, which, of course, was directed by Francis Ford Coppola. At the time, Warner Studios is really pissed off. They're regretting their decision to go with all these independent filmmakers like Lucas.

And as a result, the company is hemorrhaging cash. It says, with Warner running out of patience and the company hemorrhaging cash, Coppola was in desperate need of money. Then, in the late summer of 1970, came an offer he couldn't refuse. For much of 1970, executives at Paramount had been wooing Coppola to take the helm

of a low-budget action film based on one of the biggest books of 1969, a sprawling gangster novel by Mario Puzo called The Godfather. Coppola was with Lucas recutting THX in the Mill Valley editing room. This is really interesting to me that stuck out. They spent all this money on these offices in downtown san francisco and there's like an analogy to like the modern day open offices here so they spend all this money on office they can't get any work done here so now they're both at luke at george lucas's apartment cutting the film it's just really interesting to me so i said when uh so they're in mill valley editing room when paramount

executive peter bark called one once more to offer him the Godfather. They've just offered me this Italian gangster movie, Coppola told Lucas. It's like a $3 million potboiler based on the bestseller. Should I do it? To Lucas, whose father had always reinforced the concept of staying in the black, the answer was obvious. So Lucas, for all the money he made, was still relatively financially conservative. And you'll see that in his answer. He goes, I don't think you have any choice, he told Coppola. We're in debt. You've got to get a job. So on September 28th,

Coppola signed the deal with Paramount to direct The Godfather with production to begin in the spring of 1971. He was offered $75,000 to direct it, plus 6% of the profits. Not much, especially if the film didn't work. And given that Coppola was a lavish spender, so this is Coppola explaining his lavish spending ways. It takes no imagination to live within your means, Coppola liked to say.

So this lavish spending is actually one of the reasons that he and George go separate ways. They still remain friends, but they start their own company separate from one another. So this note I left myself, it says, sowing the desire for complete control. And what happens, well, let me just read and you'll see why. It was another move Lucas never forgot or forgave. This was George's first experience with studio interference. And so George spent a season in hell because this was his baby. They're talking about THX. This was his very first film, and he felt the studio was mangling it.

So what happens is they cut out arbitrarily four minutes from his film. Those four minutes turned Lucas' cynicism towards Hollywood into outright rage. There was no point for them to do it other than to exercise some power, he said. Their attitude was, we can screw around with your movie so we're going to. We fought it and they did it and I was angry about it. He had no patience with executives who argued that they had only cut four minutes from a 90-minute film. They were cutting the fingers off my baby, he fumed. So we're going to skip ahead a little bit.

This is the point where he splits with Coppola. And now we finally arrived at the founding of Lucasfilm. Mostly their disagreement was sparked by their differing management styles and attitudes towards money. I'm very cautious, said Lucas. I don't borrow money. I'm very cautious, said Lucas. I don't borrow money. I'm very protective of the things that I build. Lucas was always tight with a dollar, and he had watched in dismay as Coppola continued to spend money recklessly, sometimes gleefully, on exotic equipment and expensive invitations.

Determined to control his own projects, no studio, he vowed, would ever force him to compromise his vision again. Lucas enlisted the help of entertainment lawyer Tom Pollock to draft the incorporation papers for his own company. In 1971, Lucas officially opened Lucasfilm Ltd. His own independent production company ran out of his little house in Mill Valley. Its lone employees were him and Marcia. Marcia is his wife and also a film editor. She actually wins the Oscar editing, I think it was the first Star Wars. So moving on, we're going to just go deeper. A lot of the examples I'm going to talk about now is his viewpoint and his philosophy on work which is super important to understand and I think we all can learn a lot from.

So THX comes out, people like it but it's not commercially successful. And this is where the two things I'm going to tell you about right now is where the birth for american graffiti which is his first uh commercially successful film and then the birth of star wars so it says but lucas wasn't ready to start on another science fiction movie just yet after thx i was considered a cold weird director a science fiction sort of guy who carried a calculator and i'm not like that at all. Coppola too had challenged Lucas to try something different. Don't be so weird, Coppola told him.

Try to do something that's human. Don't do these abstract things. He advised Lucas, why don't you try to write something out of your own life that has warmth and humor? So out of that, he writes the script for American Graffiti based on his time in Modesto, California. It's like a coming-of-age comedy. It winds up being fantastically successful.

It has all these young actors that wind up becoming very successful in the film industry, like Ron Howard, Harrison Ford, Richard Dreyfuss. It's through the writing of the script for American Graffiti. Lucas is pitching it to get financing from other studios at the time. Remember, he doesn't have any money, so he still needs to work within the studio system. And while he's writing American Graffiti, he also has the idea which becomes the birth of the Star Wars. So he goes to meet the guy that's running the studio. I think they're at the Cannes Film Festival. And this is the birth of Star Wars. Here they sealed the deal on American Graffiti. And the executive asked, did Lucas have anything else? Lucas told him all about his ideas for his unnamed space opera

fantasy film in the vein of Flash Gordon. Great, we'll make a deal for that too. And that, said Lucas later, was really the birth of Star Wars. It was only a notion up to them. At that point, it became an obligation. Skipping ahead, another thing he just loves. The note I left here is, I will just do it myself. And it reminds me, I was listening to this podcast a long time ago with the independent director Robert Rodriguez, who broke into the film industry in a very similar way where he just made his own film, like little small budget films himself, and eventually led him to being able to do other projects he wanted to do. But he named one of his first production companies, Nevermind I'll Do It Myself Productions. So I think this is a very common theme, especially with entrepreneurs too.

How George arrives at this conclusion is he hated writing. He was not good at it. And so he hires a writer for American Graffiti, pays him the little bit of money he has. The script comes back. He hates it. And so now he has a script he can't use and no money. So he said, that's it. My intense desire to get a writer had backfired on me. And I ended up with an unusable script and no money. Excruciating as the experience might be, Lucas would just write it himself. So over the next three weeks, Lucas wrote from 8 in the morning until 8 in the evening, seven days a week, bleeding on the page, as he would always put it. And we'll see that example. He uses that term every time he's forced to write.

And so something I found most admirable, and I don't even know if I, I'm pretty sure I couldn't do what he's about to do here, is at the time he has a small company with his wife. They have almost no money. He's hell bent on one day working for himself with no one else being able to control him. And so the note I left was maintaining focus through struggle and they have the script for american graffiti his agent berg is shopping it around and he's forced to say no to a bunch of opportunities that would give him the money he desperately needs at the time as berg shopped around the American Graffiti script, he found that while there were a few takers for the film, there were studios interested in Lucas as a director. The studio made Lucas an attractive offer, upping his directing fee to $100,000 as well as a piece

of the net profits. I had all these producers calling me saying, I hear you're really good at material that doesn't have a story, and they were offering me a lot of money, but they were terrible projects. Still, he did need the money. Lucas turned down every offer, but it wasn't easy. This was a very dark period for me, he said later. We were in dire financial straits. I turned down directing at my bleakest point when I was in debt to my parents, in debt to Francis Coppola, in debt to my agent. I was so far in debt I thought I'd never get out. It took years to get from my first film to my second film, banging on doors, trying to get people to give me a chance remember lucas writing

struggling with no money in the bank getting little jobs eking out a living trying to stay alive and pushing a script that nobody wanted so just think about that the last those last two paragraphs the description of what his life was he's in his uh mid-20s at the time. And he goes from that to over the course of the next 40 years of his career, creating some of the most successful movies of all time and selling his company for $4 billion. So he shoots, skipping ahead a little bit, he shoots American Graffiti, and this is what I found, I love this metaphor that he uses, so it's called painful but satisfying, like climbing a mountain, so Lucas completed filming on American Graffiti on Friday, August 4th, 1972, perhaps predictably, the final two weeks had been bogged down by one mechanical failure after another,

with a broken tie rod hampering the shooting of a stunt car, underexposed film requiring a long round of retakes, and a flat tire that kept the airplane in the final scene firmly on the ground. Lucas was glad it was over. You couldn't pay me enough money to go through what you have to go through to make a movie, he complained to the New York Times. It's excruciating. It's horrible. You get physically sick. I get a very bad cough and cold whenever I direct. I don't know whether it's psychosomatic or not. You feel terrible. There's an immense amount of pressure and emotional pain, but I do it anyway and I really love to do it. It's like climbing mountains. Okay, so I want to skip ahead. American Graffiti is done. At least he's to do it. It's like climbing mountains. Okay, so I want to skip ahead.

American Graffiti is done. At least he's done with it. And this is another entry into our critics don't know shit segment. And again, I say that a little bit tugging cheek. It's not to say that when you're starting a company or you're creating a product or you're making something that criticisms that you get might they might actually be helpful for you to listen to it's just as a reminder that whether the criticism is valid or not it's a constant every single biography and every single example you have other people telling these entrepreneurs and these founders that they're dumb that they can't do, that it's not going to work out.

So listen to it. And if it helps you, then make changes based on what you learn. But just understand that it has nothing to do with you, really. It's human nature. So it says, Lucas slunk home to fume to Marcia, to friends, and to anyone who would listen. I don't know what to do, he moaned. The picture people are responding off the wall. So what he's talking about is when they would show American graffiti in theaters like private showings to people to

gauge their audience reaction, people love the film. So he's saying people are responding off the wall. And they keep telling me they're going to put it on television. So he's saying that people are responding off the wall and they keep telling me they're going to put it on television. So they are the studio executives. So they do a bunch of these private screenings at American Graffiti. People love it, but the studio executives think their opinion is more important. And they're like, oh, this movie sucks. We don't feel comfortable putting it out. And we're just going to go straight to TV. And the reason this is in the critics don't know shit segment is because the studio wanted to send the movie straight to TV. They wind up not doing that.

They release it into the movies. It had a million dollar budget. It goes on to make $140 million. They spent a million making it. Didn't think it was good enough almost put it on tv and luckily for them they didn't listen to their own criticism and it makes 140x return it becomes at the time one of the most success most uh efficient like most profitable uh films in history so it says in the end universal pulled only three scenes totaling a little more than four minutes out of american graffiti but lucas was apoplectic there was no reason for the cutting

he complained it was just arbitrary it was a formative experience for lucas another important part lucas had seen hollywood tamper with no mutilate his art. Not once, but twice now. He wasn't going to let it happen again. It's more a moral issue than anything else, Lucas said plainly. And this is why it's so important. That was the beginning of his passion to become an independent filmmaker so that he would have total control, there's that word again, over his films and not be under some NBA studio executive who himself had never written or directed or edited a film from the ground up. Those four excised minutes would spawn an empire that would answer to the one independent entrepreneur and dictator who mattered, George Lucas. And we're going to see as a result of this, of the film, he starts to make a little

bit of money at the time, a lot of money. Um, and we're going to start to see how he slowly, but surely works his way and then eventually buys his freedom. That's the way he puts it. So he goes with his points in the film, Luke Lucas earned nearly $4 million after taxes. And as he vowed to his father more than a decade before, Lucas was a millionaire before the age of 30. In fact, he had done it with two years to spare. As the film's distributor, Universal 2, earned its piece of the movie, Lucas gagged on every cent. The idea that the suits actually made a profit on his movie were just appalling to him. So earlier I pointed out how the author is using the word artist to describe Lucas and so

this paragraph skipping ahead a little bit I want to share with you because I just love the idea of entrepreneurship as a practice. And we're going to learn how Lucas views himself, like what term he uses to describe what he does. And also he talks about the only way he can work. So this is more of his personality. One of its biggest fans, meaning American Graffiti, was the New York Times, which featured both the film and Lucas in several stories over two months and hailed American Graffiti

as a work of art. Lucas wasn't sure whether to bristle at that label or not. My thing about art is that I don't like the word art because it means pretension and bullshit. And I equate those two directly. I don't think of myself as an artist and I don't think I ever will. I'm a craftsman. I don't make a work of art. I make a movie. And this is really interesting. The next sentence and it gives us a great insight to how he thinks about himself and his art or his craft. I should say, I know how good I am. Graffiti is a success because it came entirely from my head. It was my concept. And that is the only way I can work.

You know what I was thinking about while I was reading this book too? Is there's probably more than two reasons that people decide to start companies, become entrepreneurs and founders. But I would say the two main reasons, there's some overlap. But to me, setting this is like you have the main motivator maybe that's the way to put it is there's two things you could choose from it's because of money you know if you're a successful founder you will make more money than you do at a job or control and i think a lot of the people that we've talked about

on pod on these podcasts are motivated more by control now they make money as a result of that control because they have a belief in their own idea and their own vision and they execute on that um george definitely did does not become an independent filmmaker and an entrepreneur because of money he definitely does it because his desire for control and what i think think about is like all the difference between you have some people that are able to like Lucasfilm stays private, right? He only wanted one shareholder his entire life. So at the sale, by the time he sells it to Disney, like 40 years later, he's the lone shareholder. And so entrepreneurs that can retain ownership of their company tend to be able to retain

control this is another example again we're really looking into the lucas's philosophy on working and where he comes with his ideas and he loved to learn from other filmmakers just like we're trying here to learn from other entrepreneurs and founders he had a new cinematic muse an eclectic black and white film called 2187 by a brilliant 30 year old montagonist i don't i'm not sure what that word is named arthur lipset lucas admitted to watching the film 20 or 30 times it had a very powerful effect on me lucas said it was very much the kind of thing that i wanted to do i was extremely influenced by that particular movie not only would it have a profound impact on the way he thought about and used sound in his

films but it would also even subtly inspire a key part of lucas Star Wars mythos. Something I found also interesting, skipping ahead, he has a distaste for opulence. And in the book, so I come across, there's a bunch of quotes in all these books that don't make it into the podcast. And so I've started putting them on the Twitter feed for the Founders Podcast. It's at Founders Podcast if you're interested in them. And one of the ones that are in this book that I just love, if you had to describe Lucas's philosophy on business in just a handful of words, like an aphorism, this would be it. It says, stay small, be the best, don't lose money.

And so we're going to see where he arrives at, where he arrived at this conclusion. And he arrived at that conclusion by seeing the opposite. It was, it says it was the first time he had a chance to see a major motion picture being made, meaning a major motion picture with multimillion dollar budget and Lucas, never a patient bystander to begin with, wasn't impressed. We had never been around such opulence.

Zillions of dollars being spent every five minutes on this huge, unwieldy thing, Lucas said later. It was mind-boggling. Boggling to us because we had been making films for $300. And seeing this incredible waste. That was the worst of Hollywood. Another example of Lucas's personality and how he approached work was that he was methodically planned and detailed. And it says, his most important decision in one second. Before that, here's just another paragraph that reminded me that George wanted freedom

and this is the goal of Lucasfilm. What we are striving for is total freedom where we can finance our pictures, make them our way, release them when we want them released and be completely free to express ourselves, explained Lucas. That's very hard to do in the world of business. In this country,

the only thing that speaks is money, and you have to have the money in order to have the power to be free. So just in a few sentences there, we see a very clear goal in why he started his company. This is his, what I would argue is most important decision ever. We just talked about how he always thinks in the future, tries to think about the future and capitalizes on the option and on all the options. And this is before the actual work on Star Wars begins. He has the ideas, but before the actual shooting. So he's negotiating with Fox executives. And this decision, I think, has become really famous. I talked about it in the podcast last week on Ed Catmull. But this is, well, let's just go right into it.

Fox executives might have worried that Lucas would attempt to leverage his newfound reputation into a higher director's fee for Star Wars. So what they're talking about there is he's coming off the massive success of American Graffiti. So at the time, most people would say, hey, now you're even more successful. So for the next film, you need to ask for more money. And he said his agent, Jeff Berg, was convinced that they could easily negotiate a fee of a half a million dollars. But typically, Lucas didn't want money. He wanted control.

Fox thought I was going to come back and demand millions of dollars and all these gross points, recalled Lucas. I said, I'll do it for the deal memo. But we haven't talked about things like merchandising rights and sequel rights. He would insist that those particular clauses normally considered underbrushed in a contract remain negotiable as he and Fox moved forward with their formal contract. He would also insist that the Star Wars be produced by Lucasfilm, thereby ensuring that he could keep an eye on the bottom line and that any expenses billed against the new film were really his. I was very careful to say, I don't want money, Lucas explained later. I said, I don't want anything financial, but I do want the rights to make the sequels.

Friends, like the Hayeks, were aghast at Lucas' stubbornness. These are other people that work in the film industry. But then they didn't share, and this is really important, but then they didn't share or even understand his vision for the film. He would say, they're not giving me control. They're not giving me the rights to the sequels. So he gets the rights to the sequels. Before we go into that, I just found this random great George Lucas quote that I think helps us understand who he was as a person, or is as a person. He's still alive. And I just want to tell you real quick. I was not that willing to listen to other people's ideas. I wanted everything to be my way.

I didn't mind getting input from the creative people around me, but not the executives. I fought for many years to make sure no one could tell me what to do. So I want to skip ahead to this wonderful quote. It talks about the world was changing and George Lucas was a main reason for that. So we know now in retrospect, Lucas got what he was negotiating for eventually. He got the rights to the sequels. He got the right for the merchandising, which becomes way more valid. And instead of me trying to summarize that, let me just read this part from you.

And no one, not even Lucas, appreciated that by securing sequel merchandising rights he had just negotiated for himself a billion dollar clause decades later a fox executive would shake his head in wonder at lucas's instincts and audacity george was enormously farsighted and the studio wasn't because they didn't know the world was changing. George did know the world was changing. I mean, he changed it. I love that line. So skipping ahead, I found this particularly interesting, okay? This is how he wrote Star Wars. And again, we know Star Wars wars now i don't even know they have what six seven eight movies out whatever the number is made billions of dollars but again

things don't start like that going back to the jeff bezos quote that i love is that every oak tree starts from an acorn so this is uh how he's writing star wars remember he wants to do everything himself as much as possible and he hates writing i sit at my desk for eight hours a day no matter what happens even if i don't write anything he explained it's a terrible way to live but i do it i sit down and i do it i can't get out of my chair until five o'clock or 5 30 it's like being in school it's the only way I can force myself to write. Over his desk, he hung a wall calendar to track his progress, vowing to write five pages daily and marking off each day with a big dramatic X. Most days, no words would be written at all. At 5.30, he would tromp downstairs to watch the evening news with Walter Cronkite, glaring with anger over a TV dinner as he stewed about the blank pages he left upstairs.

You go crazy writing. So this is the main idea of Star Wars and then how he made a little bit of progress. And it says, one of the key visions I had to the film when I started was of a dogfight in space with spaceships. Two ships flying through space, shooting each other. That was my original idea. I said I want to make that movie. I want to see that. Trying to get the dogfight in his head down on paper was difficult.

So Lucas began taping old war movies on television, compiling footage of airplane battles from other films. Eventually, he would have more than 20 hours on tape, which he would transfer to 16mm film, then tightly edit down to a reel about 8 minutes long. And this is an important takeaway from that. While he didn't know it yet, the reel of dogfighting, swooping, tail-spinning aircraft would be one of the most important bits of the film he would ever put together. The wet concrete he would pour into the mold for the cornerstone of his own film empire. So the criticism I was talking about earlier, that never ends.

He's getting more criticism and he's now becoming depressed. After more than two years of writing, of bleeding on the page, Lucas knew he was finally close to getting it right, and yet his own progress depressed him. While Lucas saw Star Wars as his response to a weary world in need of new heroes and mythologies, his friends saw it as a juvenile exercise unworthy of his talent. Wasn't this the boy wonder whose experimental films and tone poems had dazzled intellectuals and amazed audiences? They said, George, you should be making more of an artistic statement. People said I should have made Apocalypse Now after graffiti. They said I should be doing movies like Taxi Driver. Even with all this, though,

there's several examples where he just decided just to persevere and kept going with his own vision about what he wanted his life to be like and his career to be like. So it says, What Lucas really wanted now was to get started. By the end of 1975, he had been struggling with Star Wars

for nearly three years, suffering through rejection at the hands of two studios, dealing with the skepticism of his friends, So this brings us to actually two important ideas. The first one is something I saw on Twitter. And it's like one of the greatest screenwriters of all time talking about how he he's always surprised at like what his work happens and his takeaway was that no one knows what they are doing so just create and so that's the first important idea he says i didn't really know where to go with it and i've never fully resolved it it's very hard he's talking about the script for star wars

it's very hard stumbling across talking about the script for Star Wars. I never have been in the end Lucas said I really didn't think we were going to make any money at all on Star Wars and the second important idea that comes from this is the power of deadlines and he says I never arrived at a degree of satisfaction where I thought the screenplay was perfect he said later if I hadn't been forced to shoot the film I would doubtless still be rewriting it now I think that's's just state of mind. I think a lot of people making anything understand. You have to overcome these constant bouts with doubt. And just as he goes to show you, even when he's creating the script, which goes on to be a massive success, one of the most successful movies of all time, he's like, ah, I don't even like it.

And if he wasn't forced to actually start shooting the movie he could still be rewriting the script today so no one knows what they're doing just create and remember the power of deadlines a little bit about this because um i always like uh comparing how it actually was to the finished product so we know star wars a lot of us probably like that movie but the shooting of star wars was a major pain in the ass for george and it said it was the first of what would be 84 long excruciating days filming star wars 20 days severely over schedule and the shoot was a disaster almost from the beginning i was very depressed about the whole thing lucas said lucas's misery was due partly to the fact that he had already lost control of his own film.

He lay the blame at the feet of executives of 20th Century Fox who had nickel and dimed him every step of the way, denying him the money he needed to ensure that everything worked. And then again, going back to, it's not that criticism couldn't be valued, but that we just understand that it's always present. You're going to see an example here. Fox, the executives of Fox were skeptical. Science fiction, they insisted, was a dead genre. It was very, very difficult getting things to work. Everything was a prototype. Like, gee, we're going to build this. We have no money, but we have to try to make this work. But nothing really worked. So you're talking about Fox wouldn't relinquish the money he wanted for special effects. This also leads him to founding his second company. Lucas vowed he'd never cede control over his films to executives at the studios again. What did they know about filmmaking?

If Star Wars worked out, one thing would have to change for sure. He would control the money. Everything was screwed up i was desperately unhappy i was seriously seriously depressed at that point because nothing had gone wrong or gone right a little more than a year before was scheduled to hit theaters star wars project was a mess and the movie was going to be terrible lucas was certain of it so skipping it a little bit of a head he has this idea about that control is actually binary and this this genesis of thought is going to um it's going to be like the seed that causes him to come up with his second multi-billion dollar idea and again everything's rooted in control so it talks about he wanted

certain uh people were recommending uh this guy trumbull to do special effects on star wars and he says if you hire trumbull to do your special effects he does your special effects i was very nervous about that lucas said later i wanted to be able to say it must look like this not that i don't want to be handed an effect at the end of five months and be told, here's your special effects, sir. I want to be able to have more say of what's going on. It's really become binary. Either you do it yourself or you don't get a say. So he doesn't he does not hire Trumbull.

He winds up doing this all himself. And this is where he found he comes up with the idea to found the special effects company called Industrial Light and Magic. And Industrial Light and Magic does all the special effects for Star Wars, but then it becomes a giant company in its own right. I think for the first 14 years of its existence, it won 16 Oscars or something like that. It was just amazing how many other movie studios were using George Lucas' technology. So it says, Industrial light and magic would stand as one of the cornerstones of Lucas' film empire, an investment that would set him well on the way to becoming a multi-billionaire. And this is this quote from

Ron Howard's a great illustration of how unique this approach was. How many people think that solution to gaining control, improving fiscal responsibility, and stimulating technological innovation is to start their own special effects company, Ron Howard said admiringly. But that's what he did. So he finishes Star Wars. He has a rough cut, which doesn't have all of the special effects aren't done yet. But again, he's going to have to persevere through more criticism. Something I haven't talked about but that's present very much in the book is he develops from a young age, when they were both in their 20s, a lifelong, very close relationship, almost like a kindred spirit with Steven Spielberg. So this is criticism and then Spielberg backs Lucas. So just to set the scene, he's hosting a couple friends over for a private showing,

and he wants to get other people's opinions on it. It says, when the lights went up, Marcia, who hadn't seen the film since the first cut, burst into tears, certain it was a disaster. Remember, that's his wife. Hayek muttered that he found the opening crawl jiggly, and it went on forever. Barwood tried to be supportive, reassuring Lucas that there was still enough time to fix everything if they could shoot some extra footage. De Palma, this is Brian De Palma, the famous director, he did movies like Scarface. De Palma,

however, was blistering in his criticism, carping about everything from Leia's hair to Vader's non-dramatic entrance in the opening scene. What's all this force shit? De Palma thundered. Where's the blood when they shoot people? De Palma would continue to rail at Lucas over dinner at a Chinese restaurant like a crazed dog. Still, there was one person in the room who was impressed. I loved it because I loved the story and the characters, said Spielberg. I was probably the only one who liked it, and I told George how much I loved it because I loved the story and the characters, said Spielberg. I was probably the only one who liked it, and I told George how much I loved it. That evening, Ladd, this is the executive at 20th Century Fox,

called Spielberg on the sly to ask what he thought about what he had seen. Spielberg told the executive he thought he had a hit on his hands, one that would make about 50 or 60 million dollars. Wow, were we wrong, laughed Spielberg. And before moving on to this great marketing idea, I just want to give you an idea of what the friendship was like between George Lucas and Spielberg. Lucas said later, he refers to Spielberg as my partner, my pal, my inspiration, my challenge. Spielberg and Lucas actually, I think, accomplished something that's relatively rare. They have a lifelong friendship, but at the same time, they're competitors because they want to constantly impress each other with their films,

and they also become collaborators. Let's get into this great marketing idea they had for Star Wars. So they have the idea that Lucas has this massive script, and they hire a ghostwriter to turn the script into a book and release it before Star Wars movies come out. So it says, why don't we do a novelization and comic book adaption early? Why not tailor a campaign and build off that? The novel, this is the one I just described, had been released in November 1976, just ahead of the first movie trailer,

and by February 1977, had sold out of the first movie trailer. And by February 1997, excuse me, 1977, had sold out of its first print run of 125,000 copies with the movie still three months away. What was the result of this? By the spring of 1977, enthusiasm for Star Wars

was like a pot rolling to a slow boil and the lid was about to blow off. Okay. So this next part is what is all the fuss about? Remember Spielberg saying, hey, you have a hit on your hand. It's going to probably make 50 or 60 million. I saw in an interview later, George Lucas said that his guess, his response back to Spielberg at that time was that, oh no, it's only going to make like 15 to 20 million. Okay. So Star Wars is, uh, is being released and George Lucas goes to have lunch with his wife. And here he gets the first glimpse because he had no idea. So, uh, he says from their table in the back, he and Marcia could see out the front window onto the street, which was becoming more and more

crowded with people. It was like a mob scene, Lucas recalled. One lane of traffic was blocked off, there were police there, there were lines, eight or nine people wide, going both ways around the block. They finished their lunch and then stepped out onto the street to see what the fuss was all about. I thought someone must be premiering a movie, Lucas said later. Someone was. In huge letters on the marquee on both sides of the entrance above the loud teeming crowd were two words, Star Wars. Okay, so the success of Star Wars, remember he has points off the back end, he controls the merchandising rights and the sequel lights. So he arrives at, again, one of the most important realizations of his life. And he's like, if you control the funding,

then you control the percentage of the profits. So let's learn a little bit about that here. For the sequel then, he would try to realize as much of his dream as possible. And that meant controlling as much of it as possible. Starting with perhaps the most vital component in filmmaking, the funding. It galled Lucas that Fox got to keep to pocket

60% of the profits for doing what he saw as absolutely nothing. He remained as contemptuous as ever of studios and making the movie. I know what I'm doing for my 50%. I put my heart and soul in this. My whole career is at stake. I have to actually go out and make the movie. What are you doing for your 50%? George looked at it like a businessman saying, wait a minute. The student, this is, he realizes like, what's the source of the studio's funding? He says, the studio's borrowed money and then took a 35 35 distribution fee off the top this is crazy why don't we just borrow the money ourselves and then this is the key takeaway so some of the bravest and most reckless acts were not aesthetic but financial for the sequel then lucas matter-of-factly informed Ladd, remember that's the

executive of 20th Century Fox, that he would be financing the film himself using the profits from Star Wars as collateral for a bank loan, while Fox would be tasked with the distribution. It changed the whole nature of the deal and nobody had expected that, said Lucas, noting with some glee that when the tables got turned and the same system worked against them they felt betrayed and cheated fox also agreed to give lucas final cut promised not to meddle with production and handed over all merchandising and television rights with this we're going to see the result with this hands-off approach the studio would receive a decreasing share of the profits as the film made more money,

eventually bottoming out at a 22.5% share to Lucasfilm's whopping 77.5%. The note I left myself is this freedom or bankruptcy? This is his situation when he is starting The Empire Strikes Back. Even those who knew Lucas were aghast at his bullheaded determination to finance the entire film himself. Independence was one thing. Bankruptcy was another. But those people were missing the point. Lucas wasn't paying for a movie.

He was buying his own creative freedom. This was the perfect opportunity to become independent of the Hollywood system, he said. There would be no bean counters nickel and diming him, denying him the money he needed to get a shot just right. And even better, there would be no studio executive staring over his shoulder in the editing room, forcing him to make what he saw as arbitrary changes. That's the part I want to avoid. This next part just gives you a glimpse into George's financial situation before the empire strikes back. Everything I own, everything I ever earned is wrapped up in empire strikes back, he said

nervously. We don't know whether empire is going to turn out to be another more American Graffiti. If it should be a flop, I will lose everything. What he's talking about there is with the success of American Graffiti, the studios pressured him into doing a sequel called More American Graffiti. But he thought that American Graffiti didn't need a sequel. He did it anyways, and it wasn't successful. So's saying well just because star wars was successful doesn't ensure that the sequel is going to be successful look at what happened with american graffiti so he has belief in his own vision for what empire strikes back is and we see that he's taking all the profits that he had made previously from star wars and american

graffiti and he's putting them into this movie and this is the results from this gamble. Lucasfilm would pocket more than $100 million in profits. Lucas had literally bet the ranch on Empire and won. This is the part going back a little bit when they were talking about, hey, this might be the most important decision Lucas ever made in his life, how he got the rights for not only sequels, but the merchandising so 100 millions of profit 100 excuse me 100 million in profits on one movie that's amazing right but here's something that just blew my mind talking about they which is lucasfilm makes three times as much on toys as they do on films so uh lucas again he's not one for conspicuous consumption he rolls all his profits back into the business and this is the idea for skywalker ranch and then eventually what becomes pixar

so here's the crazy thing i didn't know about before reading the book so i knew about star wars knew about lucasfilm i didn't know that he founded industrial light magic i didn't know he found he was intro i knew, based on the book last week that he was integral in the starting of Pixar. But he also found another company, THX.

So, look at what, look at, like, he's the intersection of four major companies. Lucasfilm, Pixar,

THX, and Industrial Light and Magic. And it all comes out, all of these businesses happen because he has, he's very set about how he wants things, has problems he's solving his own problems but then he's very set on what those solutions should look like so this is a little bit about skywalker ranch and he envisioned working with his friends in a ranch house in the middle of nowhere i wanted a place full of the most

advanced technology where we could sit see the trees and think about things lucas had scouted out an isolated piece of property about 1700 acres he walked the property rolling and shaded and saw miles and miles of peace and possibility this is where he would build his ranch and this is uh where he's hiring so he hires ed catmull the subject of last week's podcast to solve a problem and i put this is example 123 876 why we are lucky to be living in the age of internet anybody who's worked with film realizes what a stupid 19th century idea it is argued lucas and that was because, with traditional film, every single element in a shot had to be assembled individually, then put together on the optical compositor, a process that was a time-consuming headache, created considerable room for error, and often

left the film scratched or faded. For someone who coveted control, especially someone who built his movies in the editing process, digital filmmaking, in which all the elements could be manipulated directly on a computer screen with no image degradation, seemed ideal. For Catmull and his staff, all science fiction geeks, blown away by Star Wars, working for Lucas was a dream job. In all of Hollywood, George was the only person to actually invest in filmmaking technology in a serious way, said Catmull. The big studios were too risk-averse, but George understood the value of technical change. He was the one that provided the support when nobody else

did. Lucas pit them to work developing a digital filmmaking workshop complete with a digital editing system, a digital audio system, and a digital printer where the images would be combined and manipulated. And then out of that, they would develop the technology which would eventually lead to Pixar that Pixar would then use once Steve Jobs bought them and they pivoted away from hardware and to, uh, actually creating, uh, feature length animated films. And this is another, um, example of him finding, founding another technology company based on need. So he, he's been, the entire career he's obsessed with the way his, his, uh, his movies sound. So he develops some of the best audio technology and then he he basically

goes around and sells this technology to movie theaters one at a time so that the way his films sound when he listens to them with this technology is the way audiences now and it's called thx so you're probably very familiar with that in the coming decades more than 4 000 theaters around the world would undergo lucas's quality control process on their way to becoming thx certified cinemas audiences too would come to recognize the metallic thx logo shown just before a film accompanied by its deep note which slowly builds in volume as it swirls throughout the sound system and eventually makes the entire theater rumble as the definitive mark of great movie sound. Lucas had controlled the way his movies were filmed,

edited, financed, and merchandised. Now he would control the way they sounded in theaters as well. And that is where I'm going to leave the story. If you want the full story, click and you want to support the podcast at the same time, click the link that's in the bio and at founderspodcast.com and order the book. A small percentage of the sale will go directly to me

at no additional cost to you and you'll get to read a great book. And finally, I just want to let you know, I have an unbelievable sense of gratitude for all the support I love listening to podcasts and I love making them and there'd be no point in making them

if no one listened to them so thank you very much for listening this far thank you for the support thank you for the reviews thank you for telling your friends and I will talk to you next week