Founders - #352 J. Paul Getty: The Richest Private Citizen in America

Starting point is 00:00:00 In this episode about J. Paul Getty, you're gonna hear that Getty made it a priority to build relationships with other top entrepreneurs and business people. In fact, he was so dedicated to this idea that he set up a thing that he calls the Liaison Center solely for this purpose. I am doing something similar with the founder events

Starting point is 00:00:17 that I'm hosting. If you want to come build relationships with other founders, investors, and executives that listen to Founders Podcast, make sure you come to a Founders event. There is one happening in beautiful Scotts Valley, California on July 29th through the 31st, and another one happening in Austin, Texas on September 27th through the 29th. These events are all inclusive, which means all you have to do is get yourself there and I take care of the rest. So your lodging, your meals, access to every talk and session, everything is included. If you want to come hang out with me and other founders and investors for two days, make sure you go to

Starting point is 00:00:53 founderspodcast.com forward slash events. That's founderspodcast.com forward slash events and sign up. Hope to see you there. And I hope you enjoy this episode on J. Paul Getty. You cannot bring about prosperity by discouraging thrift. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by destroying the rich. You cannot keep out of trouble by spending more than you earn. You cannot build character and courage by taking away a man's initiative. You cannot help men permanently by doing for them what they could and should do for themselves. I accept these tenets wholeheartedly without reservation. That is an excerpt from the book that I'm going to talk to you about today. That is John Paul Getty actually quoting Abraham Lincoln. Abraham Lincoln is the one that said those words. And that comes from the book that I'm going to talk to you about today. That is John Paul Getty actually quoting Abraham Lincoln. Abraham Lincoln is the one that said those words.

Starting point is 00:01:47 And that comes from the book that I'm going to talk to you about today, which is As I See It, the autobiography of J. Paul Getty. This book is incredible for a number of reasons. One, when he's writing it, J. Paul Getty is considered the richest private citizen in the world. He is also writing it in the last year of his life. This book is over 50 years old. It gets published in 1976, right before it is published, J. Paul Getty dies. So this book is really his last words on his remarkable life. It is also incredible because of the way it is structured. It's almost like you're sitting down and having a one-sided conversation with a wise 83-year-old grandfather, and he's recounting his life. It's not in chron're sitting down and having a one-sided conversation with like a wise 83-year-old grandfather.

Starting point is 00:02:26 And he's recounting his life. It's not in chronological order at all. He's just going to tell you whatever happens to be on his mind at that time. But he also gives you a lot of great advice because he had been an entrepreneur for over 60 years by the time he sits down. And he's still going. He works until the day he dies. And so something that J. Paul Getty repeats over and over again throughout the book is the fact that he considers himself an entrepreneur. His friends are entrepreneurs. He really is just writing down the lessons that he learned in a six decade career for the future benefit of the

Starting point is 00:02:53 entrepreneurs that are going to come after him. And so as he's telling this life story of his, there's just a lot of really great advice for you and I. Before I get there, and that's going to be like 90% of what I want to talk to you about today, I have to start with the relationship that he had with his father. His father is the one that got him involved in the oil business to begin with. He says over and over again, he has a great line that he repeats, that my seat was set for me. Without the love and training of my father, I would not be the man I became. And I think the best way to introduce you to that idea actually comes at the very end of the book.

Starting point is 00:03:29 He's talking about the fact that he becomes friends with the world I became. And I think the best way to introduce you to that idea actually comes at the very end of the book. He's talking about the fact that he becomes friends with, you know, the world's elite. There's a lot, so many stories about, you know, the King of England and all the presidents and all the great entrepreneurs. He knows everybody. This book is thrilling. I hope you, you wind up buying. It's very fun to read actually. But there's a great story at the very end that illustrates this self-awareness that he has, this respect and honor. Remember, he's writing these words 45 years after his father passes away. And this is what he says. Vice President Nelson Rockefeller did me the honor of saying that my entrepreneurial success in the oil business put me on par with his grandfather, John D. Rockefeller Sr. My response was that comparing me to John D. Sr. was like comparing a sparrow to an eagle. My words were not inspired by modesty, but by facts.

Starting point is 00:04:10 John D. Rockefeller began his life poor. He began work as a lowly paid bookkeeper and worked and fought his way up the ladder. I enjoyed the advantage of being born into an already wealthy family. And when I began my business career, I was subsidized by my father. While I did make money and quite a bit of it on my own, I doubt if there would be a Getty empire today if I had not taken over my father's thriving oil business after his death.

Starting point is 00:04:37 Any attempt to compare the Rockefeller empire with the Getty empire is ridiculous. John Dee Sr. went into the oil business at a time when America's petroleum industry was in chaos. He brought order out of that chaos. Rockefeller Sr.'s monopolization saved the U.S. oil industry from total disintegration. And so just because Getty doesn't think you should compare him to John D., I mean, how many people can you compare to John D. for God's sake, right? It doesn't mean he wasn't a phenomenal entrepreneur.

Starting point is 00:05:08 A lot of people try to discount Getty's achievements because he had a successful, relatively small but successful oil company. His dad had a successful oil company. And Getty, when his dad dies, Getty takes over his dad's oil company. Like, oh, you got a huge head start in life. That's true. By Getty's own admission. When he inherits and takes over his dad's company, it's worth $15 million in 1930.

Starting point is 00:05:30 20 years later, that company is valued well over a billion dollars. It is J. Paul Getty that is responsible for that value creation from 15 to well over a billion dollars. So I want to go into, I'm going to start where he just talks a lot about his dad. And his dad just seems like a great man. I would love for my kids when I'm older, or maybe even when I'm long gone to describe me the way that Getty describes his father. So his father was a successful attorney before he founded his oil company. He's actually sent on client business to Oklahoma in 1903. And at his perfect place, perfect time, because in 1903, there's this gigantic oil boom happening in Oklahoma. And it is during this visit where his dad gets infected with what they call oil fever. And his dad decides to switch careers and found an oil company. He starts drilling for

Starting point is 00:06:17 oil and he leases this small plot of land in Oklahoma. He tries to drill 43 wells. This is his first, this is his dad's first attempt in oil and building an oil company, right? He attempts to drill 43 wells. 42 of them came back as producing oil. And Getty's dad does something that's extremely smart. His name is George. So George Getty does something that's extremely smart. He has his son just visit him while on the oil fields. This is well before this is going to be a Getty family business. His son is gaining this valuable experience in the oil industry just by being on site and observing what's going on. He said that drilling fascinated him.

Starting point is 00:06:50 And he starts picking up on how drilling is done, all the jargon that is inside of the industry, all the different jobs that are required to bring about a successful well. And his father imparts in him something that never leaves him and actually only leaves him for two years out of his long 83 year life. And it's the idea that you look at drilling for oil, the oil export exploration that they're doing. It is a challenge and adventure. We're not just building a business. We're hunting and we're hunting for oil. So this is where his dad starts teaching him self-reliance, the value of self-reliance and hard work. Getty is 15 years old when he's doing this. So I'm just going to read this description of what's going on when

Starting point is 00:07:28 he's 15 years old. George Getty's business flourished and expanded during the next three years. When I was not yet 16, I asked my father if I could spend my summer vacations from school working in the oil fields. My father's reply was characteristic. It is all right with me if you're willing to start at the bottom. This meant that I would be employed as a roustabout. That's an oil field laborer whose job it was to perform the heaviest and usually the dirtiest work on the drilling site. My father was explicit about the terms under which I would be employed. I would receive the roustabout's going wage, which was $3 a day for a 12-hour shift.

Starting point is 00:08:08 I could expect no preferential treatment because I was the boss's son. I would have to learn to hold my own with the other men. I had long enjoyed the advantages and comforts that might be expected to go with being a wealthy man's only son. To my astonishment, I adapted readily to this abrupt transition. I took to bunkhouse living and grub shack eating in stride, and I enjoyed both. His dad is just making one great decision after another. It literally changes the trajectory of his son's life. And J. Paul Getty got his full attention because J. Paul Getty was his only son. And he talks about a lot in the book that from the time that he could remember that his dad concerned himself with developing his character.

Starting point is 00:08:47 He says, like, my dad believed in work ethic. He made me learn that money must be earned. He would not give his son just money just because he was rich. He taught him his son how to do sales. Oh, and he was rather strict disciplinarian. So a few years after he starts working in the oil fields, I think he's around 16 years old at the time. During the school year, he's getting bad grades and he's fucking off is essentially what he's doing. He's just not behaving. So his father's like, oh, you want to

Starting point is 00:09:10 get bad grades? You want to fuck off? That's fine. You're going to military school. For the last two or three years of high school, he makes him go to a military school. And the line that J. Paul Getty has about this was looking back at this now as an 83-year-old man, he said, this strict, regimented environment was good for me. His father also taught him the balance. They were both voracious readers. So J. Paul Getty is like reading Napoleon when he's like 12 years old. But he said his dad also taught him the importance of physical culture. So he'd make his son box, run, swim, lift weights. And that emphasis on physical culture is really important because he's going to start out in the oil business as a laborer, as a roughneck, and he's going to learn the business

Starting point is 00:09:48 from A to Z, which is really, really important too. And so when J. Paul Getty is in college, he repeats exactly what he did in high school. During the school year, he's in college. During the summers, he's working in the oil fields. And during one summer, he builds a really important relationship, and it is with what he calls a leathery veteran of the oil trade, this guy they call Grizzle. So Grizzle becomes J. Paul Getty's mentor. These two sentences is why this is so important. Grizzle taught me all he knew about virtually every phase of field operations. And his knowledge of these fields was encyclopedic. And so by the time that J. Paul Getty is 22 years old, by the time he is done with college, think about what his father did for him. He's 11 years old.

Starting point is 00:10:27 He's observing all the stuff going on. He starts working in the fields when he's 15. He's got somewhere around a decade of experience before he begins full time in the trade. He's got his father's guidance. The fact that he knew and believed that his father loved him and that he concerned himself with developing his character, that he wanted his son to be a success. He's got the confidence that he's worked in every single aspect. He knew the business from A to Z. He was mentored by people that had decades of experience in the oil business. All of this is going to come to play. It's going to be really important because

Starting point is 00:10:56 J. Paul Getty is going to start his own oil company at 22 and he's going to make a million dollars and he's going to retire at 24 years old. And when J. Paul Getty describes the way his dad gently guided his career, I pray that I have this patience and tolerance for my own kids. I'm not sure I will. He says, My father then asked the question that most fathers ask sons who have completed their formal educations but have not decided on their careers, what do you intend on doing now?

Starting point is 00:11:23 Listen to the description of his father. Many positive qualities for which George F. Getty was widely liked and admired was his unfailing habit of presenting any arguments in a calm, wholly reasoned, yet always tolerant manner. And so he's laying out the case to his son. He's like, listen, you know, you can, what do you intend to do now? Here's my suggestion there. I've built an oil business that's worth some millions of dollars. I am nearing the age of 60 and you are my only child. And he explicitly tells his son, I've built what I hoped would be a family business.

Starting point is 00:11:58 Would you be willing to consider it? And then this speaks to the wisdom that his father had. He's not like, OK, you're 22. Come in and take over my business. He knows he's going to be operating for many, many years still. He's not yet ready to retire. So he's like, hey, why don't you do this? Try your hand as an independent operator in the oil fields.

Starting point is 00:12:15 If this experiment doesn't work out and if you're unhappy, you don't like the business, when the year is over, you can do whatever you wish and I will not say another word. And so this is the deal. This is why Getty says that his seat at the table was reserved for him. This is what his father proposes. He says, OK, if you find a promising lease, I will furnish the capital for the purchase of the of the lease and any kind of like drilling equipment that you need. And if there's any profits, I'll get 70 percent. You'll do all the work. I'll put up the capital. Obviously, I will get 70 percent of the profits and you can get 30%. And J. Paul Getty agrees to this.

Starting point is 00:12:49 Now, his experience in the beginning of the oil industry is not like his father. You know, his father drills 43 wells, 42 of them come back in your first shot, right? He is not having any kind of success. He's not finding oil at all. And he almost quits multiple times. And then we see something that reoccurs in the books that you and I talk about over and over again. And the way I would say this is that words of encouragement matter. Older, successful, more seasoned entrepreneurs and business people, there's many examples of them of encouraging younger

Starting point is 00:13:20 entrepreneurs, younger versions of themselves. I think of Henry Ford, who idolized Thomas Edison at the time they meet. Henry Ford's unknown. He hasn't really accomplished anything. He's unknown. Thomas Edison might be the most famous person in America. Henry Ford describes this idea as like, hey, this doesn't make sense. All the very few cars that we have, they're all either at the time, either electric or steam. I want to build a car that runs on an internal combustion engine. And Edison immediately understands the impact of Henry Ford's idea. And he says, that's the thing, young man, keep at it. And Henry Ford wrote two books when he was alive. And he references the fact that, you know, the handful of words that sentence from his hero kept him and motivated him to persevere through the inevitable struggles of

Starting point is 00:14:05 bringing that idea to life. And we see something very similar in the life of J. Paul Getty as a young man. He's 22, 23 years old when this is happening. I was frequently on the verge of giving up. That I did not is due in large part to the warm-hearted encouragement and advice I received from older, seasoned oil men like John Markham and R.M. McFarlane. McFarlane was the owner of McMahon Oil Company, one of America's most successful oil producing firms. He went out of his way to befriend me. He bolstered my sagging morale and gave me invaluable counsel and passed on knowledge and lessons that he had learned through long experience.

Starting point is 00:14:48 And so this year experiments, it's almost at the very end. And he says, I had nothing to show for my efforts as a wildcatter, nothing. But he didn't give up. He's encouraged by his father, by these older seasoned oil men. He decides, hey, I'm going to take another shot at this other piece of land. He gets the lease for a shockingly low price of $500, starts drilling and the well starts coming iningly low price of $500, starts drilling, and the well starts coming in at 700 barrels of oil a day. And listen to what he says. Words cannot adequately describe the elation and triumph that one experiences when he brings in his first producing

Starting point is 00:15:19 well. The feelings do not diminish when it's the 10th or 110th well that comes in as a producer. Even later in his career, he still felt the same exact feeling, one of elation and triumph. And he tries his best to describe why it's the case. The sense of elation and triumph is always there. It stems from knowing that one has beaten nature's incalculable odds by finding and capturing a most elusive prey. That is how he describes it. He's constantly describing exploring and drilling for oil as a hunt for oil. And this is when he makes his million dollars really rapidly. He looks up, he's like, oh my God, I'm rich. I'm a millionaire. I'll never be able to spend this much money.

Starting point is 00:16:03 And he makes a mistake. Like, think about all the mistakes you made when you were in your early 20s. And so he's like, all right, I'm rich. I'm retiring. And so he immediately shuts everything down. He abandons all constructive activities, as how he describes it. And he chooses a life of laziness and pleasure. But what's fascinating, he's like, you know, I have everything I want. I'm rich. I'm popping bottles. Like he literally says that. I'm dating all these women. I'm in the perfect place. And he's like, I am depressed. And he realizes that he wants back in the game of business. And this is then once he gets back in the game, he never stops playing. But I love his description of this. And he's just saying there's another oil boom happening this time. It's not in the fields of Oklahoma. It's right next to him in Southern

Starting point is 00:16:43 California. And he says other men were bringing in gushers. They were opening up new fields. I opened up nothing that could possibly gush except for far too many champagne bottles. This state of affairs first nagged, then gnawed, and finally became intolerable. I unretired. And then we get another example of good guy dad. When he goes, talks to his dad about it, I got to get back in the game. Retiring is boring. This is ridiculous. And he says, my father said nothing, not even I told you so. So before I move on to how J. Paul Getty worked, I want to close this section about his dad with his father's death. His father suffers a stroke when he's 75

Starting point is 00:17:25 years old. And this is how J. Paul Getty describes the impact that the death of his father had. Remember, he is writing this 45 years after his father dies. He says, the love, respect, and admiration I had and still have for my father were boundless. His death was a blow that the passing years have only numbed. And for his entire life, J. Paul Getty would keep a diary. So large chunks of this book are words that he wrote many, many years ago. And this is his description. He says, I wrote these words from the heart. They're from the heart and they remain so. And they're about his father, his loving kindness and great heart combined with a charming simplicity of manner made George Getty the idol of all who knew him. His mental ability was outstanding

Starting point is 00:18:05 to the last. I can only strive to carry on to the best of my ability the life work of an abler man. He thought his father was a better man than he was. This is said in no sense as eulogy, but as an impartial appraisal of the facts. Later on in the book, he said that his death, his father's death, was the heaviest blow, the greatest loss that J. Paul Getty had ever suffered in his life. He says, I was 37 when he died and no longer had any freedom of choice over what I would do with the rest of my own life. He is describing a sense of obligation and a desire to carry on the life's work of the greatest man that he had ever met. Okay, so now we're going to get into how he worked. And he was like this from his very early

Starting point is 00:18:51 days in the oil industry. He's still like this as he's writing the book. So there's a handful of things I've tried to organize around specific topics, because if you saw the notes that I have, it's just the same note over and over again, a handful of notes. One, he's a workaholic. Two, he is what many people would consider a micromanager. It was actually a dinner with two founder friends of mine, and we were talking about this idea where micromanagement or being a micromanager has a really bad branding around it. And yet it's just a very common theme over and over again in these books. And they were telling me about somebody else that had rebranded being a micromanager. The other founder says that he's not a micromanager, that he's just in the details.

Starting point is 00:19:29 So the second trait that he has over and over again is that he is in the details. He's definitely a micromanager. Third, if you know your business from A to Z, there's no problem you can't solve. And that is related to being in the details of micromanager. Number four, he's going to say over and over again, I am an autocrat. I want control and things must, they must be done my way. And then five, relationships run the world. J. Paul Getty went out of his way to build relationships with the most powerful politicians and country leaders in the world and the most successful entrepreneurs and investors in the world. In fact, the way he did this, and I'll get to this later, is really smart. He has a company headquarters that he calls, it's called Sutton Plates, but he calls it a liaison center, which is really a relationship center. And he used

Starting point is 00:20:12 that for the sole purpose of building relationships with very successful and powerful people. But I'll get to that a little later on. And so at the time he's writing these words, he owns over 200 different businesses. He's got this just relentless, constant flow of information. He's got thousands of employees. And so he talks to us. He's like, listen, 12-hour workdays are common, and many stretch to 14 hours or more. A steady stream of telexes, cables, written reports, and letters of all kinds poured in from every conceivable corner of the globe. There were countless phone calls. There were executives of Getty companies and engineers, accountants, attorneys, and other businessmen who had to be seen personally. And he wouldn't have it any other way. He says in the book, even at 83 years old, I am still an oil man. I am a wildcatting operator at heart. And several times throughout the book,

Starting point is 00:20:57 he's trying to describe to the reader this misconception. A lot of people, you and I know this is the case. A lot of people from the outside think, oh, entrepreneurs are motivated by money. And obviously we want to build wealth for ourselves and our family. But he picks up on exactly. He's like, this guy's decades. He's a half century past the need to work for money. And he's talking about like why he's doing this. And he says, entrepreneurs are peoples whose mind and energies are constantly being used at peak capacity. In other words, he's alive. He is fully alive when he's engaged in this game that he loves to play. And so when he's not, he applies his workaholic tendencies, obviously, to work.

Starting point is 00:21:36 So when he's not working, he's building relationships, but he's also a voracious reader. And so when I'm thinking about this, I'm like, this is nuts. This guy is like dedicated. Remember, he's reading Napoleon when he's like 12 years old. Now he's 83 when he's talking to you and I. And so what pops into my mind? I think exactly the observation that Charlie Munger made. He's like, the people that rise in life are usually not the smartest and sometimes not even the most diligent, but they're learning machines. They go to bed every night a little

Starting point is 00:21:59 wiser than they were that morning. And boy, does that habit help, particularly when you have a long run ahead of you. When J. Paul Getty started that habit, he didn't know he had a 70-year run ahead of him. And there's something that I skipped over in his childhood that I think I should point out to you now is the fact that when he was in college, he went to these colleges in California, he thought they were terrible. And it wasn't until J. Paul Getty transferred to Oxford that he this actually ignited this lifelong love for self-directed learning. He said before he was being taught and he's like, the key is not to be taught. It's to be it's to learn. And so the environment at Oxford when Getty was there was like, well, you pick your path. You figure out what is what ignites your soul. What do you actually want to learn? Learn lifelong learning is self-directed by nature.

Starting point is 00:22:44 It's not going to work any other way. And so I don't have to even read any part of this section when he's at Oxford to tell you what I feel is the most important idea. The great founders apply their fierce work ethic to lifelong learning too. And all throughout this book, you see when Getty doesn't understand something, his first step is like, I'm going to read everything I can possibly find about the subject. It is self-directed, lifelong learning. And then the last thing I'll say about this addiction, this obsession that he had with work, he speaks about why he never retired again. And he worked until the day he died. And he says, I've been an active businessman for more than 60 years. I still mind the store. My hand is never far from the throttle. And so something that appears over and over again,

Starting point is 00:23:31 there's large chunks of the book that are about this large parts of Getty's life is the fact that he was a micromanager. He's in the details, that even though he's running this gigantic empire, he is actively involved. He is, in many cases, almost every case, he wants to be where the work is actually being done. We just saw this recently in the two-part series on Walt Disney.

Starting point is 00:23:49 He was the same way. Two-part series on Steve Jobs that you just did. He's the exact same way. And so there's a great story, I think we'll illustrate this, that's told by his cousin. His cousin, June, is a close friend with FDR, FDR's president, when this story is taking place. And so he asked June, he's like, how do you find FDR as a person? Is he easy to get along with? And June's response was fantastic. Says he's the easiest man in the world to get along with as long as you do exactly what he wants, she replied. That's one thing you and he have in common.

Starting point is 00:24:21 And so I think when I'm analyzing the way that he approached his work, the fact that he worked all the time, that he's a micromanager, that he's in the details, that he knows his business from A to Z, the fact that he knows he wants control, that he has to have it, he is autocratic, the fact that he leveraged relationships throughout his entire life, all of these things, I think, interact with each other. I think this is a great overview. And this is happening in the early days of his career. He says, my tendency is to be autocratic. I had long ago recognized this in myself. I chose to be my own drilling superintendent because it was the only way that I could be sure that my crews did exactly what I wanted. And paradoxical as it may seem, it gave me a unique sense of independence and self-sufficiency.

Starting point is 00:24:59 I never had to search further than myself when seeking to lay final blame for mistakes or wrong decisions. He quotes a bunch of leaders. One thing he loved about Harry Truman was that the sign that he kept on his desk that he was known for. And he says, like, essentially that sign, it describes like the in the most clearest and most succinct way possible is how Getty operated his business. He believed the leader of the company, the founder of. He believed the leader of the company, the founder of the company, the CEO of the company, you have to take extreme ownership. And he says, Truman provided the clearest and most succinct explanation of what I mean with the sign that he kept on his presidential desk. The sign was four words. The buck stops here.

Starting point is 00:25:40 When the man in charge, it could be a candy factory, a drilling operation, or the nation's government accepts direct final responsibility, he makes full advanced payment for the rewards and privileges he receives. But he talks about the fact that, you know, he's on site. I want to be where the work is done. I know how to do everything. In many cases, I will do it if I need to. I will directly supervise. I will make sure my personal involvement, make sure that it gets done the correct way. And so he talks about that. Like, even at this point, there's independent oil companies, which he considers himself because he's on site.

Starting point is 00:26:23 And then, you know, there's vast oil corporations and they're at faraway headquarters. And the oil men, the actual roughnecks and roustabouts and wildcatters are on site. They just don't respect these like faraway suits and offices essentially. And so he says an oil man who was a working boss, and that's what he considered himself, a working boss, enjoyed a distinct advantage. Oil field workers, they're also known as roughnecks, riggers, or drillers, were and still are a fiercely proud and clannish lot. When a boss knew his way around a rig and could perform any task, oil field workers accepted him as a full member of their exclusive fraternity. So think about that. Remember, we go back to the wisdom of his father. Getty is in his 30s when he's, this part of the story, he's in his 30s. And the decisions that his dad made, hey, let me bring my 11-year-old son out here. He'll observe. He'll

Starting point is 00:27:15 learn through osmosis. He'll ask questions. And then he's 15, he's working the fields. And he's working every summer. And he does that for half of a decade. That decision is paying dividends now, what, 15 years later? And so then like 200 pages later, 150 pages later, I come across this hilarious story because, you know, in the details obviously means knowing how to do every job, being where the work happens. Getty applies it to like the smallest details. Many years later, he's already one of the richest people in the world. There's these letters that are reprinted in the book. And he's going back and forth with the people because he's in England. He sets up because he has to be in Europe, even though he loved.

Starting point is 00:27:56 Many parts of this book is like a love letter to California. And he'd much rather be there, but he's willing to do things that he doesn't want to do, that he's not comfortable with. He's willing to subjugate his own personal desires if it's better for his empire. And so for the last like third of his life, he's set up in Europe because their business is in Saudi Arabia. And Southern California is way too far from the Middle East where his primary business is. He's also got business in obviously in the Americas. He's got it in Europe. He's got it in the Middle East.

Starting point is 00:28:23 But he's like, OK, I have to set up in a very convenient location, even though this isn't the place I want to be. And so he's having this argument over letters with the people that are in charge of his museum in California. And he's pissed off because they're spending too much money on air conditioning. And so he's again, it's one thing to say that you're in the details. Another one to pay attention to how many days the AC is running at this museum that's, what, 5,000 miles away from you? And so I just want to read this to you. Air conditioning. I'm not impressed with the argument that our art objects will be ruined if air conditioning

Starting point is 00:28:56 is not available 168 hours per week. I seem to remember that air conditioning was invented only a few years ago and that all of our 18th century objects necessarily passed a great many decades without the benefit of air conditioning. My instructions are that air conditioning in the museums shall be turned off at all times at night and shall be used during the daytime only on those days which are exceptionally hot. We should have very little need for air conditioning. And then he obviously applies that to the finances of his business. He talks a lot about, he gives advice for fellow entrepreneurs throughout this entire book. And one of this is don't be like William Randolph Hearst. You should reinvest in your business

Starting point is 00:29:33 and you have to keep a fortress of cash and use debt sparingly. This is what he says. I like to keep a lot of financial fat under my belt. There's nothing that can ever take the place of cash. The overwhelming majority of business problems and so many recent business failures result from businessmen exceeding themselves too far. There is most definitely a place and a need for the use of credit in business. However, I have always believed that the businessman who uses credit the most sparingly is the one who has the greatest chance for achieving success. And he talks about the fact that he lived next door. Oh, this is hilarious. So he's comparing the difference between the way William Randolph Hearst ran his business and the way that Getty ran his business. So he says, I have always spent 95% or more of my money

Starting point is 00:30:17 on my business, meaning reinvesting it into the business. While William Randolph Hearst was the opposite. He liked to live like a Roman emperor. Hearst's beach house in Santa Monica cost $3 million. I was his next door neighbor. My house cost $100,000. So think about that. They both live in Santa Monica at the time. Hearst is, and this is for his mistress, actually. So I don't even think William Randolph Hearst lived there most of the time. So that house costs $3 million. I live next door. I paid $100,000 for my house. This is a good illustration of the differences in our attitudes towards money. In 1935, when this is taking place with these neighbors next to Hearst's mistress, in 1935, I was one third as rich as Hearst. And by 1950, I was twice as rich. So again, advice for entrepreneurs, don't be like Hearst.

Starting point is 00:31:06 That's what Getty would tell you. Reinvest in your business, keep a fortress of cash, and use debt sparingly. So then he has more advice for his fellow entrepreneurs. He's like, listen, I know a ton of great entrepreneurs. All the great entrepreneurs I know have these traits. So I want to read this section to you because I absolutely loved it.

Starting point is 00:31:23 He's really good friends with Aristotle Onassis, which I'll talk more about later. But I just love all these traits. So I want to read this section to you because I absolutely loved it. He's really good friends with Aristotle Onassis, which I'll talk more about later. But I just love all these like stories. I'm just obsessed with these stories of the great entrepreneurs that knew each other, how their lives intersected, and how many, you know, how similar they were to each other. I've been friends with a great many entrepreneurs during my business career. All were men who devoted their minds and energies to building productive enterprises. They concentrated on expanding their businesses and making them more efficient to produce more and better goods and services

Starting point is 00:31:49 for more people. They created jobs and wealth. It is the mark of the entrepreneur that he reinvests in his business. And he is always personally involved. Aristotle Onassis was an outstanding example. So this is why I'm reading this entire section to you. I love this. He was a very good friend and it's always fascinating experience to see him operate. I discussed business with him many times. Listen to this. Very often,

Starting point is 00:32:14 I had a retinue of assistants, executives, attorneys, and engineers with me. Aristotle would come to such meetings alone, yet he easily held his own on all points that were discussed. Every enterprise he owned or controlled was his personal business. He was the business. One he had been an artist instead of a businessman, he would paint nothing but immense murals. This innate capacity to think people. And so the list of traits that he just described to us in two paragraphs, the great entrepreneurs I know have these traits. They're devoted their minds and energy to building productive enterprises over the long term. Remember both. Onassis could have retired decades before he did. They're not in it just for the money.

Starting point is 00:33:22 If they were just in it for the money, they would have quit a long time ago. Think about that. They devoted their minds and energy to building productive enterprises over the long term. They concentrated on expanding their empire. They concentrated on making their companies more efficient. They reinvested heavily in their business, which can then help efficiency and expansion. They are always personally involved in the business and they know their shit down to the ground. And you just saw that with Onassis. Onassis shows up by himself and he can handle, you have 10 people across the table,

Starting point is 00:33:52 I know my business down to the ground. It's been a while since I've made an episode about Onassis. I think it's episode 84 and then the last time was episode 211. I'm going to, I have another, I have I think two more biographies on them that I haven't read yet, but I just pulled some highlights and notes. I'm going to, I have another, I have, I think, two more biographies on them that I haven't read yet. But I just pulled some highlights and notes.

Starting point is 00:34:07 I reread them as I was thinking about, I went through Founders Notes and just started searching Onassis. And I found a highlight that I think explains exactly how he was able to do what Getty just described. He says, Onassis spent almost all of his time working. He would pour over shipping journals from Antwerp, Vancouver, Hamburg, and New York,

Starting point is 00:34:25 looking for intelligence, trends, and opportunities. He would scan, study, and memorize tonnage, prices, insurance rates, and schedules of the world's great and small steamship companies, and then attempt to outbid his competitors. He read the maritime sections of at least six foreign language daily newspapers each day. And then before moving on from this section, he reiterates more traits that he admires in others. And it's very simple.

Starting point is 00:34:51 He loves people that are resilient, self-starting, and then self-restarting because he repeats over and over again, it's inevitable you're gonna get knocked down. You have to get back up. So you resilience, self-starting, and then self-restarting. And he talks freely over and over again. Look, there's downsides to this.

Starting point is 00:35:08 Like I'm giving my life to my business. And as a result, I mean, the guy was married five times. You think he's at home a lot? He speaks over and over again about the fact that, listen, many businessmen, myself very much included, frequently complain that there aren't enough hours in the day to take care of the work at hand. And so he takes his time and attention that he would dedicate to having a relationship with his kids or his wife. And he dedicates it to his business.

Starting point is 00:35:30 I gave more time and attention to oil wells than to my home. My autocratic tendencies were no less apparent in my personal life than in business. Do you see what I mean? Like, what's refreshing about this book is, you know, I was always the richest man in the world. He must be perfect. He's like, first of all, Rockefeller, I'm a sparrow compared to his eagle. You know, I had a wonderful dad, a wonderful position in my life. And I was a shit, he says, like I was a shit husband.

Starting point is 00:35:53 He doesn't try to hide it. My autocratic tendencies were no less apparent in my personal life than in business. I was often short-tempered, brusque. I forgot birthdays, anniversaries, and dinner engagements. Each of my wives was jealous and resentful of my preoccupation with business. And then he also has a little line in here, a little zinger though. Okay. He's like, they're jealous of all the time preoccupation with business, yet none showed any visible aversion to sharing in the proceeds of that preoccupation. And him self-analyzing, just

Starting point is 00:36:21 like, how can I be so great at business and so terrible at marriage? It goes on throughout the entire book. And I just started organizing one section. He goes, I see my marital patterns as a violation of Cicero's maxim. To stumble over the same stone twice is a proverbial disgrace. Yet I doggedly persisted in tripping over the same boulder. He repeats, I was very irrational with marriage because work always came first. And he talks about, so here's the problem. He does some interesting things.

Starting point is 00:36:49 Again, this is one of the benefits of reading biographies and autobiographies, in my opinion, because you have some of the smartest, most productive people that ever live, and you see them making bad decisions and mistakes over and over again. And you realize like perfection is not required to attain wonderful professional success. And in Getty's case, like undeniable business genius. And let me give you an example. I'm just making up the years, but at the very beginning, so he gets married five times. But the first three marriages are very bizarre. So it'd be like, get married in 1931, get divorced in 1932, get married in 1932, get

Starting point is 00:37:20 divorced in 1933, get married in 1933, get divorced in 1934. And you look at a sequence of events like how, how, how are you making these decisions? And then another thing is like, not described, not communicating with your wife enough, because a few of his wives complain, like, why are you away from the home so much? You're already rich. Why do you have to work? They didn't understand what was actually driving them. And then, you know, he's a very extreme person. He says, my business interests created problems. I was drilling several wells simultaneously, and it was by no means uncommon for me to stay on the sites overnight for two or

Starting point is 00:37:55 more days. And when I wasn't on the, when he wasn't on the wells, he's traveling extensively all over the world, looking for more opportunity to drill oil. And he didn't see the need to change his habits just because he got married. He says, I found it extremely difficult to change my habits and my patterns merely because a marriage license had been signed and sealed. And then he's able to finally summarize like his failure of marriage and then his success in nearly everything else. There's a great line that I attributed previously to Munger because he repeats it, but he said Buffett is the actual one that taught him that. And Warren Buffett would say that it's not greed that drives the world, it's envy. And Geddes says he's not envious of anybody

Starting point is 00:38:34 else except the people that were able to actually make marriages succeed. He says, whatever my other flaws and weaknesses, I have never been given to envy. Save for the envy I feel towards people who have the ability to make marriage work and endure happily. It is an art in which I have never been given to envy. Save for the envy I feel towards people who have the ability to make marriage work and endure happily. It is an art in which I have never been able to master. My record, five marriages, five divorces, five failures. And he continues, and this speaks to my soul because I feel this way too. A hatred of failure has always been part of my nature and I suppose one of the more pronounced motivating forces in my life. Once I have committed myself Think about that. Hatred of failure is a main motivating force. It is a powerful inner drive.

Starting point is 00:39:22 It is not the love of success. It is the fear of failure that is pushing him. How and why is it that I've been able to build my own automobile, drill oil wells, run an aircraft plant, build and head a business empire, yet remain unable to maintain even one satisfactory marital relationship? It is one hell of a question. And so I want to get into a few giant leaps, giant leaps forward that happened in his business. And I think before I describe two of these such occasions, he talks about the importance of concentration in his own life. And so J. Paul Getty says this. He says, my own nature is such that I'm able to concentrate on whatever is before me and I'm not easily distracted from it. That comes up over and over again in these books. A great description of Edwin Land that I pulled up. He concentrated ferociously on his quest. Let's do a quote from Getty's hero, John D. Rockefeller Sr. This is what

Starting point is 00:40:18 he said. Do not many of us who fail to achieve big things fail because we lack concentration. The art of concentrating the mind on the thing to be done at the proper time and to the exclusion of everything else. A great enabler of concentration is having a long attention span. Because if you hear what just Getty just said, my own nature is that then I'm able to concentrate on whatever is before me and not easily distracted from it. Charlie Munger said, I did not succeed in life by intelligence. I succeeded because I have a long attention span. Getty had a long attention span. So that leads me to these two giant leap forwards in his business. The first one happens in the 1930s. The second will happen in the late 40s. And then he'll reap the benefits in the mid 50s. But it goes back to when his father dies. He takes over the company. It is valued around fifteen point five million dollars in 1930. And so the executors of his father's estate tried to restrict the behavior that J. Paul Getty had and what he wanted to do because they were in a Great Depression and they're excessively worried about the economic situation. The patriarch of the family is dead. Who knows? This may be the high watermark of our wealth.

Starting point is 00:41:30 What are we going to do? They're scared. And Getty thought that was the exact wrong response. He said, my own views were in direct opposition. So now at the time, they just explore and they drill for oil. He's like, no, no, no. I believe now this is the time. The time is right right now to vertically integrate. And this is how he describes his thinking. I was convinced of eventual economic recovery, and I firmly believed in the business dictum that you should buy when prices are low. I urged a program of expansion. Stocks in publicly owned companies with huge, if temporarily undervalued assets, were selling at prices that made them barely believable bargains. There were shares selling for as little as a 20th of their net underlying asset value. That means anyone who purchased them was in effect buying

Starting point is 00:42:19 $20 for every dollar he spent. The Getty companies, my father's and my own, were primarily engaged in oil exploration and production. Their crude had to be sold to refineries or pipeline companies. I reasoned that with share prices being where they were, the time was ideal to obtain control of a company with refinery facilities and marketing outlets. In other words, economic conditions created a unique opportunity to put together an integrated well-to-consumer oil company. It's one thing to know that it is the right idea. It's completely another thing to

Starting point is 00:43:01 actually have the temperament to act on that belief when everybody around you is panicking. He's in the middle of a financial panic. You know what I thought of when I got to this section? Sam Zimuri from the book, The Fish That Ate the Whale, The Life and Times of America's Banana King. There was a great paragraph in that book where Sam Zimuri does something very similar. He knew the time was right for him to expand. Listen to this description. I'm going to read this paragraph to you. It's excellent. There are times when certain

Starting point is 00:43:29 cards sit unclaimed in the common pile, when certain properties become available that will never be available again. A good businessman feels these moments like a fall in the barometric pressure. A great businessman is dumb enough to act on them even when he cannot afford to. So going against the advice of the people advising him, right, and going against the current economic climate, he starts buying shares in this oil company called Tidewater Associated Oil Company. His idea was to accumulate enough shares so that he could win control of Tidewater. Now, this is hilarious. Listen to what he says. Tidewater actually belonged to Standard Oil of New Jersey, which was controlled by the Rockefeller family.

Starting point is 00:44:19 He didn't know it at the time because if you listen to the multiple episodes I've done on Rockefeller and his family, they constantly would hide. They'd have secret ownership in companies over and over again. They did not want people to know how rich they were. They did not want people to know how powerful they were. They love this network of secret allies. So it says they actually belonged to the Standard Oil of New Jersey. Standard Oil of New Jersey was controlled by the Rockefeller family. Had I known this originally, I would never have begun buying Tidewater shares. For a pygmy independent operator such as I was, could hardly stand a chance against one of the world's largest and most powerful major oil companies. By the time I discovered the truth, I was too deeply committed to withdraw from the fray. And so now some of the

Starting point is 00:45:02 owners, it's not just the Rockefeller family owns Tidewater, but some of the other owners like, well, we don't want to be taken over by this Getty guy. So they have an idea. And so on New Year's Day, he gets a call. He is hanging out at William Randolph Hearst Castle in San Simeon, California. I also visited there last year. It's incredible if you ever get the chance to visit. It's open to the public now. I think it's owned by the state of California. It really is this great illustration of this idea that you and I talk about all the time. Mute the world and then build your own. Hearst built his own world and you get to visit a part of it.

Starting point is 00:45:35 It's remarkable. On New Year's Day, he's at the Hearst Castle. They're like, hey, there's some guy on the phone looking for a Getty. And so he's going to talk to the guy calling him is Jay Hopkins. Jay Hopkins in the near future is going to talk to, the guy calling him is Jay Hopkins. Jay Hopkins, in the near future, is going to be the founder of General Dynamics, which is one of the biggest defense companies that still exists to this day. But at the time, Jay Hopkins works for John D. Rockefeller Jr. And so he's telling Getty what's going on. He's like, listen, the standard oil of Jersey, they decide they're going to transfer all of its Tidewater shares to this holding company called Mission Corporation.

Starting point is 00:46:08 Their idea was like, well, we can disperse our holdings so widely that control the company would be out of Getty's reach forever. The problem was that they never told John D. Rockefeller Jr. why they were doing this. And so now Rockefeller Jr. finds that he owns a bunch of shares to this Mission Corporation, and he's willing to share to sell his rights to the Mission Corporation stock for $10 a share. And so he hires Jay Hopkins to help him sell this. And Jay Hopkins calls Jay Paul Getty. And so Jay Paul Getty, of course, like, yes, I want to buy it. But he goes, hey, suppose the Jersey standards management hears that Rockefeller intends to sell. They'll try to talk him out of it. And Jay Hopkins responds to Jay Paul Getty, and he says, not a chance. Rockefeller Jr. is aboard a train bound for Arizona. They can't reach him. It's not like they can send an email or a text at this time in history, right? They

Starting point is 00:47:02 can't reach him, and I have his authorization to sell. So we closed the transaction right then and there over the telephone. He needed that domino to fall because then it brought down a bunch of other dominoes with it. He talks about this, armed with John D. Jr.'s assignment of rights, I approached the other Jersey Standard stockholders with predictable results. Many of them felt that if a Rockefeller thought it was wise to sell his mission corporation rights, that they would be wise to do the same. That was a huge leap forward in his business is going to unlock another opportunity, the opportunity of the lifetime.

Starting point is 00:47:39 So he is going to secure the rights for what is known as the neutral zone between Saudi Arabia and Kuwait. And I just think there's an abundance of lessons in here for us. So this is the year 1948 to 1949. He says Getty Interest obtained the oil concession on Saudi Arabia's half interest in the neutral zone. This is this ground that's lying in between Saudi Arabia and Kuwait. Four years and tens of millions of dollars were spent before a drop of oil was brought to the surface. But by 1954, it was evident that the neutral zone had immense

Starting point is 00:48:12 oil reserves. Getty companies had done considerable international business before. He's describing a giant leap up, right? He does not become what is widely considered the world's richest private citizen without this deal. Getty companies had done considerable international business before. Neutral zone finds and production transformed us into a truly global enterprise. Much work and capital and a sweeping organizational restructuring was needed to make this new business empire viable. Tankers, super tankers, pipelines, storage facilities, and refineries had to be built.

Starting point is 00:48:50 This is my favorite sentence of this entire section. The list of things to be done was awesome, but those things were done. And so I want to spend some time on this deal. There's so many interesting lessons for you and I. So think about this. He's going to miss out on the deal of a lifetime. Then he's going to get the deal of a lifetime, which I'll explain to you in a minute.

Starting point is 00:49:09 He's willing to move his entire life for his biggest deal. This is what I meant about even after he's a wealthy man. He's willing to subjugate his comfort, where he wants to be, what he'd rather be doing, if it's for the betterment of his company. We'll also see that it's hard to overpay for a truly great business. Remember what Charlie Munger said when he's analyzing the success of Berkshire Hathaway, looking back, he's like, oh, we really made the money out of the high quality businesses. So I absolutely love this part because he's talking about missing out on the deal of a

Starting point is 00:49:38 lifetime and then getting the deal of a lifetime. This is great. I have made more than a few business mistakes during my career. Some were whoppers. In 1932, he had the opportunity to bid on the Iraqi oil concession. We were close to reaching an agreement that would have given my companies the right to explore and drill for oil over a vast area. The initial cost would have been minimal, a matter of some tens of thousands of dollars. But there was an abrupt and disastrous break in U.S. crude oil prices. The Great East Texas oil fields had been opened up and crude, so the price of crude, craters, and it goes down to 10 cents a barrel. This was a full-on financial panic.

Starting point is 00:50:21 I was reluctant to expand into the Middle East under these conditions. Think about this. This is why, again, I get so hyped up reading this stuff because it's one thing to know what the right thing to do is. It's another thing to have the courage and the temperament to do so. He knew the time was to expand. We cannot just stay oil explorers forever. We got to vertically integrate. There's a big financial crash. We can pick up, you know, stocks for 1 20th what we could. We have to buy now. Two years later, same situation here.

Starting point is 00:50:57 This is tens of thousands of dollars to get for the opportunity to drill in Iraq. But I didn't do it because I was scared because there's other financial panic. This is not just an overall financial panic with the Great Depression, but a financial panic within my industry. I was reluctant to expand into the Middle East under these conditions and ordered my agents to break off the concession negotiations. It is impossible to estimate

Starting point is 00:51:16 how much revenue the Getty company lost because of my decision. That is 1932. It's going to take them almost, what, 17 years to get another shot at fixing that mistake, and this time at a gigantic cost. But again, it's a kind of a weird thing about this game we're playing. It's truly hard. It sounds so silly to say it, but it's truly hard to overpay for a truly great business. I realized it was imperative that my companies obtain a foothold in the oil rich Middle East. 17 years later, most of the giant corporations that had many times the financial

Starting point is 00:51:52 resources that Getty had at this point had already got all of these great concessions. There was one very significant area that had been passed over, and that was the neutral zone. This zone that I've already described is 2,400 square mile in between Saudi Arabia and Kuwait. So he's like, oh, this might be an opportunity to make up for my mistake that I made in 1932. So he sends, this is the biggest opportunity of his life. He sends the geologist out to look at the neutral zone and he gets back. He says, he sent me this terse cable. It is three words. Structures indicate oil. I absolutely love that. Are we are you and I confused at what what what that message is meant to how that message is meant to be interpreted for J. Paul Getty? No. Structures indicate oil. Sign the damn deal. And this deal is going to be really expensive. And what I love is everybody around Getty saying, oh, he lost it, paid too much. This guy's an idiot. He doesn't know what he's doing.

Starting point is 00:52:49 I'm just going to give you a little bit of like overview of the deal. He had to pay the Saudi Arabian government an immediate cash of $10.5 million. We have to pay them a million dollars a year and a 55% per barrel royalty on all oil produced. We have to pay 25% of our net profits to the Saudi Arabian government. We have to build a refinery and storage facilities in Saudi Arabia. We have to deliver 100,000 gallons of gasoline and 50,000 gallons of kerosene annually to the Saudi Arabian government. We have to pay the salaries of Saudi government inspectors and other personnel.

Starting point is 00:53:21 We have to provide pension and retirement and insurance and other benefits for Saudi Arabian employees of the company. And this is what I mean about it's hard to overpay for a truly great business. This deal makes him one of, if not the richest private citizen in the world. By the standards of some oil companies operating in the Middle East, the terms were viewed as being too much. They were called outrageous. It was widely predicted that Paul Getty has finally overreached and he'll lose his shirt in the Middle East. When in fact, the exact opposite, the exact opposite happened. And so with this expansion of the Getty empire at the same time, he is trying to get his sons involved in the family business as his dad got him involved. And this desire ends in tragedy to the point where he has to ask himself the question, did I cause the pressure that killed

Starting point is 00:54:12 my son? And I think the way to start this is a conversation that J. Paul Getty is having with Winston Churchill's son, Randolph. And Randolph is telling J. Paul Getty that he suffered handicaps and hardships in life because he was the son of a great and famous man and he says that no matter what I do I will always be measured they'll always measure the son's talent against those of his father and essentially his point is that

Starting point is 00:54:35 even if he does achieve his own independent greatness that he'll never can't possibly live up to his father so they'll say that I wasn't good enough so Churchill you know I've read a bunch of books on him, done a bunch of episodes on him. He was pretty upset with the way that Randolph lived his life. In fact, I found a quote that Churchill has on his son. It says, your idle and lazy life is very offensive to me. You appear to be leading a perfectly useless

Starting point is 00:55:00 existence. And what is fascinating about this is the contrast that Getty makes because throughout the first two decades of his own career, he knew he's like, other oil men are going to measure my performance against that of my father. And it seems like Randolph kind of like, you know, had a little pity party and got upset about it. And Getty just worked harder. And my own guess is that one of Getty's greatest regrets in life is the fact that, you know, he was the son of a great father. And I don't think his kids would describe him as that. And part of it is like this fractured lifestyle. He had five different wives, four different baby mamas, if I'm counting correctly. Most of them are not living with him. Like think about how much time Getty's dad spent with his son when they were growing up. Getty did not do the same.

Starting point is 00:55:50 And Getty talks about that. My father's influence and example were the principal forces that formed my nature and character. Unfortunately, I had no like degree of influence and control over the lives of my own sons. The reason for this was, of course, the failure of my marriages. I had hoped and desired that my sons would enter the family business, eventually taking over for me just like I had taken over for my father. I had a wish to perpetuate a dynasty. I would experience many disappointments before learning that I could not predetermine their careers or the course of their lives. So none of his sons were interested. There was one son that showed an interest in that worked in the family business,

Starting point is 00:56:31 and that was his son, George. And so there's many times throughout the book where he's just so excited to have a son that's interested in the same things that he's interested, talks about in his, like the dire entries, Oh, met with George today in London. We talked business for 12 straight hours. This went on and on. And so he's going to call his son's death an accident. Other people have described it as a suicide. I do not know which description is accurate. All I know is that what they all agree on that he drank and he combined drinking with taking barbiturates. And so this is where he's talking about the fact that, oh, my God, did I cause the pressure that

Starting point is 00:57:11 killed my son? And so he gets called to the telephone and he immediately knows something's wrong because he gets on the line and they said, I think you better brace yourself, Mr. Getty. He is told that George, his son, had a stroke and that he's unconscious in a hospital. And then it's updated and it says George died a few minutes ago. And he is not alone when he takes the call. So we have a description of what happens. He says, it's impossible for me to recall much about my emotions or reactions. My memories are vague and confused. I am told that I sat for hours, staring into space, saying nothing. And I can only remember one thought, that it was untrue,

Starting point is 00:57:51 that it was impossible. I had always believed that my first son, George, would outlive me by at least 35 years. The next day, I learned from the newspapers, television, and radio what they had refrained from telling me. George had not died from a stroke, but from the newspapers, television, and radio what they had refrained from telling me. George had not died from a stroke, but from the effects of a lethal combination of alcohol and barbiturates. One question will continue to gnaw at me to the end of my own days. I remember the conversations I had with Randolph Churchill, and I know that all too many businessmen and executives rely on a few evening drinks, and sometimes barbiturates, as a means of easing the tensions and pressures created by their work. Is it possible that these were unduly greater for George because he strove too hard to live up to the images of his grandfather and me. In other words, did I cause the pressure that killed my son?

Starting point is 00:58:50 Absolutely devastating. He experiences multiple family tragedies. His 12-year-old son dies from complications of surgery. He had survived having a tumor taken out and then had a series of ongoing surgeries and died from complications of one. One of his grandsons gets kidnapped, and he's famous or infamous for trying to negotiate with them. His whole point is like, I got 15 other grandchildren. If I just keep immediately paying

Starting point is 00:59:13 out money, I'm signaling to the world that if you want to make money, just kidnap one of my kids. There's entire books. I ordered five different books on Getty, one of which is dedicated to what happens, this danger of, you know, he says, I, you know, I wanted to create a dynasty and much like the Kennedy family, the Kennedy family dynasty, because Joseph Kennedy had similar instincts, desires. There's just a lot of tragedy that happens there. So I'll read the book. I'm not sure if I'll make a podcast on it. If there is some lessons in there for you and I, then I will. But this guilt is present. He mentions it multiple times. He definitely had to live with doubt and guilt over the role that he played in his son's lives.

Starting point is 00:59:55 And so moving on to another, I would say, tenet of his career is the fact that relationships around the world, he went out of his way when he's not working, and I guess this is considered work as well, to build relationships with world-class entrepreneurs. He knew essentially every single US president, nearly all the leaders of the countries in Europe and Middle East, but he did this intentionally. He does something that's very fascinating. I mean, he talks about why it's so important. So he sets this thing up, which I mentioned called the liaison center. So he buys this gigantic estate and it was a very old estate. I think it was first created in like the 1500s and it's called Sutton Place. And if you Google Sutton Place Getty, you'll see it. It's, I think it

Starting point is 01:00:29 sits on like a thousand acres. It's like 72 different rooms. It served as a de facto corporate headquarters. And so he would invite all the people he wanted to build relationships with. They could work out of it. They could stay for days. And he says why. He says the liaison center would provide an easy, relaxed atmosphere and pleasant surroundings in which Getty executives and businessmen from all over the world could meet, exchange views and ideas, yet conduct no formal business. Naturally, plans and programs could and probably would grow out of such meetings. And there are many such examples in the book where J. Paul Getty does this in his own life. And so he knows it's valuable. And I just want to give you one example. And I already mentioned his very close friendship with

Starting point is 01:01:14 Aristotle Onassis. And he says, during the 1950s, Aristotle Onassis and I formed a close friendship and association in several business ventures. This plays a role because as he continues to expand, and now his empire is essentially at almost near its zenith, he's going to need to hammer out a deal with Onassis that Onassis would not offer to other people that weren't his friend. Relationships run the world. Aristotle Onassis had obtained what amounted to a monopoly on tanker transportation of all oil produced in Saudi Arabia. The oil companies were up in arms, for they had their own taker fleets or tankers under charter. The Getty interests were in the

Starting point is 01:01:50 middle of a large-scale tanker construction program in anticipation of the neutral zone production. An Onassis monopoly would wreak havoc with those programs and with much other Getty Company planning. But Ari and I were friends. There was a bond of mutual trust and confidence between us. As always, when the two of us sat down and talked, obstacles were quickly ironed out. Our conversation ended successfully and with a handshake, which for Ari constituted an ironclad agreement. As can be gathered, these meetings with Ari Onassis had far-reaching consequences.

Starting point is 01:02:32 And so by the 1950s, he is a billionaire, a legit billionaire, and that's what they call him. And he's talking towards the end of the book, like what he's reflecting back on his life as an 80 year old man, Like what actually drove me? And I think this series of reflections is the perfect place to close. He says, The Billionaire. I harbored no desire to be the world's richest man, not at any time in my life. I have gone this far on this particular path. There is no reason why I should not go further and see where it leads. It may well be that I will learn something from it myself.

Starting point is 01:03:11 I made my first million dollars quickly, almost overnight. I was stunned at the realization that I had so much. I believed it was all the money I could ever use or need, and I stopped working entirely. I can face myself squarely in the privacy of my study late at night and say that it was not greed or any desire for more money that caused me to come out of retirement at the age of 26 and begin working again. I look back over the years and search my memory and my conscience for the reasons that motivated me. I recall the elements clearly.

Starting point is 01:03:50 The challenge inherent in the search for oil was a powerful factor, as was the sense of responsibility I felt towards my father in the business that he had created and built. What followed was a constant source of astonishment to me. If I can claim personal credit for having made the best of my advantages, it is by likening myself to a tennis player. Once into the game, I did my damnedest to be competitive. I always sought to return the ball, no matter from which direction or with what velocity it came into my side of the court. I always sought to return the ball. That is a great summary of why he kept getting after it.

Starting point is 01:04:31 The challenge inherent in it, the continuation of his hero, his father's life's work, and then Getty's inner competitive drive. I really enjoyed the book. I hope you read it. If you buy the book using the link that's in the show notes in your podcast player or available at founderspodcast.com, you will be supporting the podcast at the same time. That is 352 books down, 1,000 to go. And I'll talk to you again soon. What Getty learned about how Rockefeller built his oil company wound up being worth billions when Getty was building his own oil company. And to this constant reading that he mentions in this love of history, I think Getty understood the truth in what Charlie Munger said, that learning from history is a form of leverage. I think that is why so many, Charlie just puts it to the best. It's like why so many of the people that you and I study on the podcast, they just spend so much time learning from the great people that came before them. Getty obviously included in that now. Learning from history is a form of leverage, and I built a tool that actually gives you the superpower to do this on demand. It is called Founders Notes. Founders Notes started out as the

Starting point is 01:05:38 internal tool. I built this for myself to keep track of all my notes, all my highlights, all my transcripts for every episode that I've ever made. Everything that I've ever used to make the podcast is now in one searchable database. And by searching this database, it actually gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs and use it when you need it. Existing subscribers of Founders Notes have been using it to make decisions inside their company. They've been using it to prepare for client meetings. They've been using it to prepare for board meetings. They've been using it to find ideas on hiring, marketing, leadership, recruiting. Anytime that

Starting point is 01:06:12 you hear me reference a past founder or a past idea on that podcast, that ability comes from me searching Founders Notes. So what you are about to hear is a demo of me using Founders Notes. Included with Founders Notes is a private podcast feed. There's actually these 50 short episodes waiting for you there. I am going to play one of those short episodes now. I was asked, how did History's Greatest Founders think about hiring? What strategies did they use to hire? All I did was a keyword search in Founders Notes to answer this question.

Starting point is 01:06:43 It is a perfect demo of how valuable a subscription to Founders Notes is. If you want to have the ability to tap into the collective knowledge of history's greatest founders on demand, you can get access to by going to foundersnotes.com. That is founders with an S, just like the podcast, foundersnotes.com. I want to start out first with why this is so important. There's actually this book that came out in like 1997. It's called In the Company of Giants. I think it's episode 208 of Founders. It's two Stanford MBA students, if I remember correctly, and they're interviewing a bunch of technology company founders. And in there, Steve Jobs is one of them. This is, you know, right, I think even before he

Starting point is 01:07:19 came back to Apple. And they were talking about, well, yeah, we know it's important to hire, but in a typical startup, a manager or a founder may not always have time to spend recruiting other people. And I first read this, Steve's answer to this, you know, I don't know, two years ago, and I never forgot it. I think it's excellent. I think it sets up why this question is so important. And you should really be spending, especially in the early days, like basically all your time doing this. In a typical startup, a manager may not always have the time to spend recruiting other people.

Starting point is 01:07:49 Then Steve jumps in. I disagree totally. I think it's the most important job. Assume you're by yourself in a startup and you want a partner. You take a lot of time finding a partner, right? He would be half of your company. I'm going to pause there. This idea of looking at each new hire as a percentage of the company is

Starting point is 01:08:05 genius. Why should you take any less time finding a third or fourth of your company or a fifth of your company? When you're in a startup, the first 10 people will determine whether the company succeeds or not. Each is 10% of the company. So why wouldn't you take as much time as necessary to find all A players? If three, three of the 10, were not so great, why would you start a company where 30% of your people are not so great? A small company depends on great people much more than a big company does. Okay, so to answer this question, the advantage that I have making founders and that you have as a byproduct of listening to founders is not only that I've read, you know,

Starting point is 01:08:51 300-something biographies of entrepreneurs now, but I have all of my notes and highlights stored in my ReadWise app. And that means I can search for any topic. I can look at the past highlights of books, or I can search for keywords. So what I did is, first of all, like what I've started to do with these AMA questions is I read them, decide which ones I'm going to do next, and then think about it for a few days. I don't put anything, just literally that I know that's the next question. Just let my brain work on it in the background for a few days. And then I'll go through and start searching all of my notes. And so that's what I did here.

Starting point is 01:09:22 And so there's a bunch of, you know, I don't have, I may have like 10 or 15 different founders talking about hiring. The first idea is the most obvious, but I think probably works best when you're already established. So Steve Jobs is talking about, hey, you know, the great way to hire is just find great work and find the people that did that and then try to hire them. When you're Steve Jobs, that's a lot easier, right? Than if you're just somebody that doesn't have reputation, maybe don't have resources, maybe your company's rather new or not as well known. David Ogilvie, I just did Confessions of an Advertising Man a couple episodes ago, I think 306 or something like that, 307.

Starting point is 01:10:01 And he did the same thing. But he's David Oggovie at that point. So he would find, he'd go through magazines, find great advertising, great copywriting, and he'd write the person a letter and then set up a phone call. And he says he wouldn't, he was so well-known and, you know, he's one of the best in his field that he wouldn't even have to offer a job, just the conversation. Then the person would the he would want to hire the person never mention it and the person would apply to him um and so again i think if you can do that then of course it's straightforward who fine for somebody does great work usually you can do this i actually

Starting point is 01:10:37 have a friend i can't say who it is he's doing this right now actually um i have a friend that's really good at doing this he's finding people that do great stuff on the internet and then just cold DMing them and then convincing them to work on things. And that usually works, especially with people, like younger people earlier in their career. There's a bunch of different ways to think about this and a bunch of different ways to prioritize.

Starting point is 01:10:57 So the first thing that came to mind that I found surprising is you read any biography on Rockefeller and he had a couple ideas where he felt the optimization, you know, table stakes that you're intelligent and you're driven and you're hard working, right? We don't even have, like, if you're listening to this, you already know that, but he prioritized hiring people with social skills. And so this is what he said. The ability to deal with people is as purchasable a commodity as sugar

Starting point is 01:11:25 or coffee. And I pay more for that ability than any other under the sun. There's the second part to this though. And this also works well if you have access to more resources. Rockefeller would hire people as he found, as he found talented people, not as he needed them. It's not like, okay, Standard Oil has six open spots. Let's go find six candidates, right? He'd come across what he considered a talented person. He didn't even matter if he didn't know what they were going to do. He's like, I'm just going to stack his team. And if you really think about his partners at Standard Oil, he essentially built a company, an executive team of founders, because he was buying up all their companies. So it's very rare but um there's

Starting point is 01:12:06 a line from titan i want to read to you taking for granted the growth of his empire he hired talented people as found not as needed and then i found another idea in the hiring like the actual interview process so there's this guy named vannevar bush i did two episodes on him. I think it's 270 and 271. He is the most important American ever in history in terms of connecting the scientific field, private enterprise and the government. The most important person to keep alive for the American war effort was FDR. The second one was Vannevar Bush. Vannevar Bush is like the Forrest Gump of this historical period. He is involved in everything from the Manhattan Project to discovering like a young Claude Shannon to building a mechanical computer. Like this guy literally has done, he's just, he pops up in these books over and over again. If you were reading about American business history during World War II and post-World War II,

Starting point is 01:12:57 you are going to come across the name Vannevar Bush over and over again. I read his fantastic autobiography called Pieces of the Action and I came across this weird highlight. And so this is his brilliant and unusual job interview process. And so he's talking about this organization he's running called Amrad. At Amrad, I hired a young physicist from Texas named C.G. Smith. The way I hired him is interesting. An interview of that sort is always likely to be

Starting point is 01:13:22 on an artificial basis and somewhat embarrassing. So I discussed with him a technical point on which I was then genuinely puzzled. The next day, he came in with a neat solution, and I hired him at once. Here's another idea. This is from Nolan Bushnell. Nolan Bushnell is the founder of Atari, founder of Chuck E. Cheese, and Steve Jobs' mentor. He hired Steve Jobs when Steve Jobs was like 19 at Atari. He would ask people their reading habits in interviews.

Starting point is 01:13:49 This is why. One of the best ways his whole thing was he wanted to build all of his companies laid on a foundation of creative people. So that's what he's looking for. He's like, I need creative people. One of the best ways to find creative people is to ask a simple question.

Starting point is 01:14:01 What books do you like? I've never met a creative person in my life that didn't respond with enthusiasm to a question about reading habits. Actually, which books people read is not as important as the simple fact that they read at all. I've known many talented engineers who hated science fiction but loved, say, books on birdwatching. A blatant but often accurate generalization, people who are curious and passionate read, people who are apathetic and indifferent don't. I remember one... That's such a great line, and I obviously agree with it.

Starting point is 01:14:29 I remember one... I'm going to read it again. A blatant but often accurate generalization. People who are curious and passionate read. People who are apathetic and indifferent don't. I remember one particular woman who, during an interview, told me that she had read every book that I had read. So I started mentioning books I hadn't read and she had read those too. I didn't know how someone in her late 20s found this much time to read so much. But I was so impressed that I hired her right there and assigned her to international marketing, which was having problems. This is why. This is why I'm reading this whole section to you.

Starting point is 01:15:00 A job with a lot of moving parts benefits from a brain that has a lot of moving parts. It wouldn't be possible to have read that many books without such a brain. So do you see what I mean? Like, we start with Steve Jobs saying this is the I'm glad this question exists and why I'm glad that I took the time and I had like the foresight to like, hey, I should really organize my thoughts and notes because there's no way I would have remembered all this without being able to search my read-wise, right? But you have Rockefeller saying, this is what's important to me. You have Bush saying, this is how I hire.

Starting point is 01:15:39 Now you have Nolan Bush now saying, well, here's another weird thing that I learned. Let me go through what Warren Buffett says about this. So this is about the quality. One thing that is consistent, whether it's Jobs, Buffett, Bezos, Peter Thiel, this just pops up over and over again. They talk about the importance of trying to find people that are better than you. The hiring bar constantly has to increase. Now, obviously, the larger the company gets, that's impossible. Steve Jobs has this great quote where he's like, you know, Pixar was the first time I saw an entire team, entire company of A players, but they had 400 players. They had 400 team members. He's like,

Starting point is 01:16:15 at the time, Apple had 3,000. It's like, it's impossible to have 3,000 A players. So there is some number that your company may grow to where it's just, you're just not, you're not going to have thousands of A players. In my argument, I don't even know if you get a 400, I guess you, I mean, I'll take Steve's word for it on there and Pixar definitely produce great products, but it's probably a lot lower than that as well. So Warren Buffett would tell you to use David Ogilvie's hiring philosophy. And so Warren said, Charlie and I know that the right players will make almost any team manager look good. Again, that is why it's the most important function of the founder, And so Warren said, smaller than we are, we should become a company of dwarves. But if each of us hires people who are bigger than we are, we shall become a company of giants. Jeff Bezos used a variation of Ogilvy's idea too. Jeff used to say in Amazon, every time we hire someone, he or she should raise the bar

Starting point is 01:17:17 for the next hire so that the overall talent pool is always improving. They talk about this idea on Amazon where the future hires that we do should be so good that if you had applied for the job you already have at Amazon, you wouldn't get in. That's a very interesting idea. Take your time with recruiting. Take your time with hiring. There's this great book on the history of PayPal. It's written, actually, I've recently become friends with the author. His name is Jimmy Soni. And this is in his book. The most fascinating thing that I found was that PayPal prioritized speed. So from the time they're founded to the time they sell to eBay, it's like four years. Jimmy spent more time researching the book than, he spent six years researching the book. I always tease him. He goes like, you took longer on a book than they took to start and sell their company.

Starting point is 01:18:07 It just speaks to like the quality he's trying to do. But as a byproduct of that, like obviously they move fast, but they prioritize speed over everything else except in one area, recruiting. Max Lutgen kept the bar for talent exceedingly high, even if that came at the expense of speedy staffing. Max kept repeating A's hire A's, B's hire C's,

Starting point is 01:18:26 so the first B you hire takes the whole company down. Let's read that again. A players hire A players, B players hire C players, so the first B player you hire takes the whole company down. Additionally, the company leaders mandated that all prospects, here's another idea for you, all prospects must meet every single member of the team. Now, the next one is the most bizarre.

Starting point is 01:18:49 It makes sense if you study. I did this three-part on Larry Ellison, three-part series on Larry Ellison. I should read those books again because the podcast is like 50 times bigger than when I published those episodes. And he's just, he's crazy. So he would hire based on the confidence, the self-confidence level of the candidate. Listen to this. I have tears in my eyes. I don't know why I'm laughing. Okay. This is just so, because this is, you read about Larry Ellison and he's one of these people it's like really easy to interface with because you just, you just know exactly who he is and what's important to him that's why i think it's so funny ellison insisted that his recruiters hire only the

Starting point is 01:19:29 finest and cockiest new college graduates when they were recruiting from universities they'd ask people are you the smartest person you know and if they said yes they would hire them if they said no they would say who is and they would go hire that guy instead i don't know if you got the smartest people that way, but you definitely got the most arrogant. Ellison's, and this is why, the personality of the founder is largely the culture of the company. Apple is Steve Jobs. Apple is just Steve Jobs with 10,000 lives, right? I was just texting a founder friend of mine. He listens to the podcast. I actually met him through the podcast. And he's going through this process of self-discovery. Like he's already started a bunch of companies that are really successful, but he's like,

Starting point is 01:20:08 I think I'm more of this type of founder than the other type of founder. And that's good that he's doing that because he's, hopefully his next mission is like his life's mission, you know? And you can't get to your life's mission unless you figure out who you are. Ellison knew who he was. Ellison's swaggering combative style became a part of the company's identity. This arrogant culture had a lot to do with Oracle's success. Here's another odd idea for you. Izzy Sharp, the founder of Four Seasons, actually could figure it out that in his business,

Starting point is 01:20:35 which was hotels, right, that hiring the right person could actually be a form of distribution for his hotel. He gave me the idea because of what? What do we know? What do you and I know in our bones? That history's greatest founders all read biographies. They all read biographies of people that came before them and took ideas from them. Izzy Sharp is trying to build Four Seasons. What do you think he did? He picked up a biography of Cesar Ritz, the guy that Ritz Carlton is named after, arguably the greatest hotelier of all time. And when he realized that, oh, shit, Ritz, he says, remembering that Cesar Ritz made his hotels world famous by hiring some of the foremost chefs, we decided to do something similar.

Starting point is 01:21:13 So what is he talking about? Cesar Ritz went out and partnered with August Escoffier. What Cesar Ritz was to building hotels, August Escoffier was to French cooking. And so what happened is you partner with world famous chefs, people come into your restaurant that's in the hotel because the world famous chef, and now they know about your hotel that leads to more get that leads to more activity in your restaurant that you own, but also leads to more brand recognition of your hotel. And then by as a byproduct of that, more people staying at the hotel. So hiring as a form of distribution, this is fascinating is a fascinating idea.

Starting point is 01:21:45 Okay, here's the problem. You can identify great people, right? Maybe they even want to come work. Like you've identified them, you've sold them, hey, this is our mission, this is what we're doing. And yet humans have complicated lives. They have spouses, they have kids, they have a reason maybe they can't move across the country to work for you, even though they want to. So there's a problem-solving element that you see in these books on you have to solve. You've already identified the person. You've recruited them. They can't go for some other reason. Okay. Well, the great founders are not going to take no for an answer. I read in this book called Liftoff, which is about the

Starting point is 01:22:25 first six years of SpaceX. This is what Elon Musk did. They had anticipated his friend's issue. Having convinced Musk they needed to bring this brilliant young engineer from Turkey on board, it became a matter of solving the problem. His wife had a job in San Francisco. She would need one in Los Angeles, right? Because that's where SpaceX is at the time. These were solvable problems, and Elon's better at solving problems than almost anyone else must therefore came into his job interview prepared about halfway through must told the guy that he wants to hire so i heard you don't want to move to la and one of the reasons is that your wife works for google well i just talked to larry and they're going to transfer your wife down to la so what are you going to do now to solve this problem

Starting point is 01:23:03 musk had called his friend larry page the co-founder of Google. The engineer sat in stunned silence for a moment, but then he replied, given all that, he would come to work at SpaceX. That's really smart. There is another idea when you're promoting. Are you going to promote from within or from without? That's dependent on you, depending on what's going on. I do think this is interesting though. There's this guy named Les Schwab who built this, this really valuable chain of like tire companies in the Pacific Northwest. I actually found out about him because Charlie Munger is like, Hey, you should read this biography. He said it in a, he didn't say it to me personally. He said it to in like one of the Berkshire meetings that to study, Les Schwab had one of the most, one of the smartest financial incentive structures or any company that Charlie Munger had come across. So this is what Les Schwab did. He did not want to hire from, he didn't want to hire

Starting point is 01:23:56 other people from other companies because they might come with bad habits. He liked to train his own executives. And so he says, in our 34 years of business, we have never hired a manager from the outside. Every single one of our more than 250 managers and assistant managers started at the bottom changing tires. They have all earned their management job by working up. And then another thing, if you're going to hire the best of the best and A players, A players don't like to be micromanaged. And so this came in Larry Miller's autobiography called Driven. He owns like he owned like 93 companies all throughout Utah car dealerships movie theaters all kinds of crazy stuff but he also owned the the NBA team Utah Jazz and what was fascinating is he's trying to recruit Jerry

Starting point is 01:24:36 Sloan as the coach at the point and Jerry Sloan would only take the job on one condition and I really like it. I really like this idea if you hire me let me run the team in business right that's what you're hiring me for. me run the team and business, right? That's what you're hiring me for. One of the best things we had ever done was hire Jerry Sloan as coach. At the time, he said, I'm only gonna ask you for one thing. If I get fired, let me get fired for my own decisions.

Starting point is 01:24:54 If you hire me, let me run the team slash business. Here's another idea from Thomas Edison that I think is fascinating. Really, the way I think about a founder is like, you're developing skills that you can't hire for. You're going to hire for everything else, but you shouldn't be hireable. And Edison wasn't. Edison expressing his views on the preeminent role of applied scientists, which that's what he considered himself, coined the expression, I can hire mathematicians, but they can't hire me. And so when I read that paragraph for the first time, the note I left myself was develop skills that

Starting point is 01:25:29 you can't hire for. Capitalism rewards things that are both rare and valuable. Estee Lauder would give you advice that you need to hire people aligned with your thinking and values. Hire the best people. This is vital. Hire people who think as you do and treat them well. In our business, they are a top priority. So this idea is like, that seems kind of weird. Hire people who think as you do and treat them well. In our business, they are a top priority. So this idea is like, that seems kind of weird. Like hire people who think like you. There's obviously not one right way to build a business. I think that your business should be an expression of your personality and who you are as a person at the core. And so I think there is an art to the building of your business. And the reason I use the word art,

Starting point is 01:26:05 I don't mean in like a hoity-toity, you know, pretentious manner. That's not me at all. I don't even care about art at all, really. I mean that you're making decisions not just based on economics. Like there are non-economic important decisions based on how you're building your business.

Starting point is 01:26:21 Like you could probably make more money doing decision A, but decision A goes against who you are as a person or you just don't like it or it's just not as elegant or beautiful. And so therefore you don't do it. So that's what I mean about, you know, hire people who think as you do.

Starting point is 01:26:35 And for whatever reason, when I read Estee Lauder say that, I was like, okay, there's like this art to what she's doing. One thing that's gonna be helpful in recruiting, this comes from Peter Thiel. I think this is the book, Zero to One. Understand that most companies don't even differentiate their pitches to potential recruits and to hiring. So therefore, they're just going to buy as a byproduct of that, you're going to wind up with a lower overall talent base. And so he says, what's wrong with valuable stock? Smart people are pressing problems. Nothing.

Starting point is 01:27:02 But every company makes these claims. So they won't help you stand out. General and undifferentiated pitches to join your company. Don't say anything about why a recruit should join your company instead of many others. So that idea of like your pitch, your actual, he would tell you, you shouldn't be building an undifferentiated commodity business. But even above and beyond that, like the mission that you're trying to engage everybody to join you in, that pitch, that sale you're trying to make to potential recruits should be differentiated.

Starting point is 01:27:32 Should not, if that person's applying to five other jobs, there should not be like, it's like, they may not like your mission, they may not like your pitch, but they shouldn't be able to compare it to anything else. Another quote from Nolan Bushnell, hire for passion and intensity. That's what he would do. All right. That's what he did when he found Steve Jobs. If there was a single characteristic that separates Steve Jobs from the massive employees, it was his passionate enthusiasm. Steve had one

Starting point is 01:27:55 full, one speed, full blast. This was the primary reason we hired him. And one thing all these founders have in common is that he know how important hiring is. And when something's important, you do it yourself. This is again, Elon Musk on hiring. He interviewed the first 3000 employees at SpaceX. That's how important it was. One of Musk's most valuable skills was his ability to determine whether someone would fit his mold. His people had to be brilliant. They had to be hardworking and there could be no nonsense. There are a ton of phonies out there and not many who are the real deal, Musk said of his approach to interviewing engineers. I can usually tell within 15 minutes and I can for sure tell within a few days of working with them. Musk made hiring a priority. He personally met with every single person the company hired through the first 3,000

Starting point is 01:28:38 employees. It required late nights and weekends, but he felt it was important to get the right people for his company. And then to close on this, we started with Steve Jobs telling us why it was so important and why it should be a large part of how you spend your time. And now we'll close with what you do after. What do you do after you hire the person? This is what he says. It's not just recruiting. After recruiting, it's building an environment that makes people feel they are surrounded by equally talented people and their work is bigger than they are. The feeling that their work will have a tremendous influence and is part of a strong, clear vision. So that is the end to that 20-minute mini episode. I just re-listened to the whole thing.

Starting point is 01:29:21 And it really does, I think, it's a perfect explanation and illustration of why I think Founders Notes is so valuable. Because some of those books I haven't read in five, six years. And just the ability to have a searchable database of all these ideas, like this collected knowledge of some of history's greatest entrepreneurs to reference and then contextually apply to our own businesses. It's nothing short of, like, it's magic. That's really the way I think about it. I think it's a massive superpower.

Starting point is 01:29:43 It gives me a massive superpower. I couldn't make the podcast without it. I also think if you have access to it, it'll make your business better. And so if you're already running a successful business, I highly recommend that you invest in a subscription and you can do that by going to foundersnotes.com.

Founders - #352 J. Paul Getty: The Richest Private Citizen in America

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