Founders - #353 How To Be Rich by J. Paul Getty

Starting point is 00:00:00 If you listened to last week's episode on J. Paul Getty's autobiography, you know that Getty placed a lot of time and energy and money into building relationships with other entrepreneurs, investors, and executives. He knew that relationships between these types of people often produce nonlinear returns. He knew that relationships run the world so much so that he bought a 72-room estate that served as what he called a liaison center, essentially a place specifically created to build relationships. I have not bought an estate to help you build relationships with other founders, investors, and executives, but I do rent out

Starting point is 00:00:36 entire venues and I host founders events so you can build relationships with other founders, investors, and executives that listen to this podcast. These events last for two days and they Thank you. two days, make sure you come to a Founders event. There is one happening July 29th through the 31st in Scotts Valley, California, and you can sign up to attend by going to founderspodcast.com forward slash events. That is founderspodcast.com forward slash events. I hope to see you there, and I hope you enjoy this episode on How to Be Rich by J. Paul Getty. The book that I want to talk to you about today is How to Be Rich and is written by J. Paul Getty. The book that I want to talk to you about today is How to Be Rich and is written by J. Paul Getty. It did not start out as a book, as a matter of fact. The book that I'm holding in my hand was first published over 60 years ago, but it started out

Starting point is 00:01:36 because the founder of Playboy magazine, Hugh Hefner, approached J. Paul Getty in the 1960s, and he asked him to write a series of columns. So he wound up writing, J. Paul Getty in the 1960s, and he asked him to write a series of columns. So he wind up writing, J. Paul Getty wind up writing over five years, 19 different essays with the goal of transferring and educating, basically transferring his experience and the knowledge that J. Paul Getty had about building businesses to the next generation, to what he considered, what he called the younger businessmen of his day. Now, keep in mind, when he's writing these essays, he is 73 years old. So almost everybody else is younger than him. And as such, this book is very different from the autobiography

Starting point is 00:02:17 of J. Paul Getty, which I covered last week. Really, the way I would think about reading this book and what this podcast is going to be is we just have one of, if not the richest person on the planet at the time he's writing this. And he is just telling us the lessons that he derived from 60 years, nearly 60 years of building businesses. And so I want to jump right into why this is a good use of our time. And then then Jay Paul Getty tells us why he's doing this. So the first is why this is a good use of our time. My entire adult life has been devoted to building and operating business enterprises. So he knows a thing or two.

Starting point is 00:02:47 This is why he is doing this. I and so many other successful businessmen have so frequently noted that many young people today enter upon their business careers without sufficient grounding and preparation. They fail to grasp the long range picture. They do not understand and appreciate the universally applicable fundamentals, the basic philosophies, the endless implications and ramifications, and the numberless responsibilities, which are the absolute essentials of business. And he just says right at the very beginning, and something he'll repeat throughout the essays in

Starting point is 00:03:20 the book, I would like to convince young businessmen that there are no surefire, quick and easy formulas for success in business. And so that is the first time that he mentions that, the fact that there's no surefire, quick and easy formula for success in business. But you'll see he repeats. He's got a handful of principles, and he's just going to repeat them in different contexts throughout the book.

Starting point is 00:03:38 So he does give us some background into his life. I'm going to try not to overlap too much for what I covered on his autobiography. But I do want to start out, because he starts the book with this essay called How I Made My First Billion. And the first part of that essay is this adulation, this respect, this love for his father. His father was his hero. His father was the best man he ever knew. As we saw last week, he credits a lot of his success. He says over and over again in his autobiography, my seat at the table was set for me and that seat was set by my father. Do not compare me to John D. Rockefeller.

Starting point is 00:04:09 Rockefeller is a eagle and I am but a sparrow is the line that he uses in the autobiography. He just has this deep respect for these self-made men. So he talks about this. As the son of a successful oil man, I had been exposed to the virus of oil fever ever since childhood. As you and I talked about in the last episode, one of the best things that George Getty, his father, ever did was expose his son to business at a very young age. He's like 10, 11 years old when he's visiting oil fields. He has all these questions. There's no possible way that a 10 or 11 year old can possibly understand everything that's going on, on building an oil business and any business really

Starting point is 00:04:45 but it constantly stretches his understanding of the world and then his son is just able to pick up these ideas little by little as he's exposed to more and more i think it's such a good idea so says my father it was a self-made man who had known extreme poverty in his youth just like rockefeller john d rockefeller who obviously was one of Getty's heroes as well. My father had a practically limitless capacity for hard work, and he had an almost uncanny talent for finding oil. And it was interesting what popped to mind when I got to that paragraph. I jotted down in the note to myself, this is just like William Randolph Hearst's father. I have a book. I did William Randolph Hearst's biography, you know, I think 200 episodes ago, something like that. I have a book on the Hearst family dynasty that I will eventually read

Starting point is 00:05:30 and turn into the podcast. But there's a lot of similarities now that I think about it between J. Paul Getty and William Randolph Hearst. They were both sons of very successful men. Both of their fathers took an innate interest in developing the talent of their son. Getty's father made his money in oil. And the fact that a lot of people that ran into and met George F. Getty said that he had this, you know, he could essentially smell oil. Well, you can go back and read about George Hearst, which is William Randolph Hearst's father. George Hearst winds up founding this thing called the Homestake Mine. He actually listed it on the stock exchange in 1879. That mine produced gold from 1879 all the way up until 2001. I bring that up because Getty's about to mention the similarities between the gold rush, the California gold rush, and what

Starting point is 00:06:16 was happening in Oklahoma about 60 years later. But the similarities between the fathers is anybody that met George F. Getty thought, you know, he could smell oil. He just had this innate capacity to find oil. The same thing was said about George Hearst for gold. In fact, the Native Americans in the area where he was mining for gold gave George Hearst a nickname. And they called him the boy that the earth talks to. And so J. Paul Getty tells us what the oil industry was like when he was introduced to it. He says the atmosphere was identical to that which historians describe as prevailing in the California gold fields during the 1849 gold rush. In Oklahoma, the fever was to find oil, not gold,

Starting point is 00:06:58 and it was an epidemic. And so after college, Getty starts up his own oil company. He tells about how this came to be. My father rejected any ideas that a successful man's son should be given money as a gift after he was old enough to earn his own living. My father did finance some of my early operations, but it was solely on a 70, 30% basis. So what that means is his dad put the money to buy the leases and the equipment. He says, if you find any oil, I get 70 percent of the profits since I'm financing the entire thing and you get 30 percent. And the difference between the beginning of his father's oil career and his own is his father was immediately successful. I think it's something like the first 40 out of the first 43 wells that he drilled, 42 of them came back producers.

Starting point is 00:07:41 Getty had like a year when nothing was happening. And he's like, well, I can't quit now. And he believed he couldn't quit because he says wildcatting was in my blood. And he talks about this little small business that he starts that is going to eventually make him one of the richest people in the world. He says, at this point, I acted as my own geologist, legal advisor, drilling superintendent, explosives expert, and as roughneck and roustabout. I operated in much the same manner as most other wildcatters at this time, with one important exception. Now, this is fascinating. In those days, the science of

Starting point is 00:08:12 petroleum geology had not yet gained very wide acceptance in the oil fields. Many oilmen sneered openly at the idea that some damn bookworm could help them find oil. I was among the few who believed in geology. I studied the subject avidly at every opportunity and applied what I learned to my operations. And so then he's going to describe the difference between like the wildcatters. So think of the wildcatters as the startups and then these entrenched bureaucratic oil companies. So something he's going to repeat over and over again, giving different sets of advice,

Starting point is 00:08:50 is the danger to become standardized, to become bureaucratic. And so even though he's writing about his very early days in business, 50 years after it happened, there's these initial principles that he still adheres to, even when his business is much larger, much more complex, you know, worth billions compared to a million dollars, which is what he's going to make right now. And he says we all faced heavy competition and opposition from major oil firms. He's going to tell several stories throughout the book about how they they do not play fairly, to say the least, and how he saw some of these problems. Some of these huge companies did not always abide by the rules when they engage in legal or financial infighting to smother an independent wildcatter.

Starting point is 00:09:25 This wind up being a good thing for Getty because it made him, it made him develop skills that he needed to survive. I'm reading about these techniques that he needs to develop to survive this opposition from these giant oil companies. And I'm thinking about Michael Jordan, the multiple episodes I've done on Michael Jordan. If you listen to episode 212, which is like this 700 page biography of Michael Jordan that I read. In that book, it talks about the fact that he could not get past for several years, could not get past the Detroit Pistons. They were in his way to win a championship. He could not get past them in the playoffs. And he constantly had to adapt and change his game, his body, his training methods, his practice habits to overcome that obstacle.

Starting point is 00:10:06 But on the other side of the obstacle, now he has a skillset that he would not have had if he didn't have that obstacle or that problem to begin with. The exact same thing is happening here. Wildcatters developed traits and techniques which enabled them to stay in business. We became flexible, adaptable, and versatile,

Starting point is 00:10:21 adept at improvisation and innovation, if for no other reason than because we had to. We had to in order to survive. The big companies employed vast numbers of specialists and consultants. They housed them in large and expensive offices. The Wildcatters found our experts among the hard-bitten veteran oil field workers. We did our own administrative and paperwork, keeping both to a minimum. As for our offices, these more often than not traveled with us in our mud covered automobiles. We drove from one drilling site to another. So we are still in his essay, the first essay called How I Made My First Billion.

Starting point is 00:10:57 And he's going to talk about how a major oil company or a collection of major oil companies are trying to squeeze him and how one other major oil company winds up helping him. And so he has a collection of wells that he's drilling. And each well right now is bringing in thousands of barrels of oil a day. And all of a sudden, he cannot find a buyer for his crude production. He goes to all the firms and they refuse to deal with him. And this is when he realizes, oh, this is a giant oil company that's trying to squeeze me because they want to buy my wells for discounted price. The motives behind this boycott became clear. When I received several calls from brokers offering to buy the lease at a very low price, the brokers refused to name the principals they represented. By then, I was an old hand in

Starting point is 00:11:39 the petroleum industries. I recognized all the classic signs indicating a well-organized squeeze play. Certain interests wanted my lease. Either I sold out at a ridiculously low price, or I'd be left without any market for the oil produced by the wells on the property. Unable to sell my oil, I had to find some way to store it. And so that is the first counter move he makes. He's like, okay, no one will buy this oil. I'm not going to shut down the wells.

Starting point is 00:12:03 I will lease storage tanks, and I will store the oil until I can solve the problem and find a buyer. But he knows the clock is ticking. And he says, when the tanks are topped off, I would have no choice but to shut down my operation entirely. And the next thing he does is really smart. Go straight to the top. He goes to the ultimate decision maker. Now keep in mind, he still doesn't know who's trying to squeeze him. And so at this point, the largest oil company is Shell Oil. And so he goes and makes an appointment with the Shell's company president, Sir George Lay Jones. He says, in desperation, I aimed high, meaning he went straight to the top. He asked for an interview with him personally and was informed that he would be happy to see me. And so Getty describes this meeting that he's having with Sir

Starting point is 00:12:44 George. He says, Sir George listened attentively to what I had to say. The deepening scowl that etched across his face as he heard me was all the proof I needed that his firm was not a party to the boycott and that he heartily disapproved of such tactics. When I finished talking, he smiled. Relax, he grinned. We'll help you. As a starter, the company would buy the next 1.7 million barrels of crude oil that I produced. In addition, Sir George told me, a pipeline would be constructed to link my wells with the Shell Oil Company's pipeline network. And construction was to commence the very next day. And so I just love that simple little story because I think there's

Starting point is 00:13:25 two very valuable lessons. One, you have to stop the bleeding. The worst thing that Getty could have done is panicked and then sold out a very valuable lease just because he was getting squeezed and his cash reserves are dwindling. He's like, okay, I can't sell it. That's fine. I'm going to store it. That at least stops the bleeding for now. And then he knows you have to aim straight for the top. You have to go to the ultimate decision maker because the president of Shell can look how fast he can move. He's like, OK, you have a commitment right now. My word in this one meeting, I will buy the next one point seven million barrels. And then tomorrow, tomorrow morning at your site, I'm sending a construction crew. So your oil goes straight to our pipelines.

Starting point is 00:14:01 Before I move on, there is another note that I left myself in this section, and I wrote, no wonder he wanted complete control. It is very obvious if you read J. Paul Getty's autobiography. What did he do during and after the Depression? He's like, I'm not just going to be drilling wells. I'm going to build a vertically integrated oil company. I'm going to be in complete control of my entire business. And there's many examples in this book. There's many examples in the autobiography by J. Paul Getty, where he is constantly disappointed by relying on what's going on in the other guy's shop. And so at this point in his life, he doesn't have pipelines. He doesn't have his own refineries. He doesn't have his

Starting point is 00:14:38 super tankers, but he's going to get them. And I can't help but think experiences like this heavily influenced him in that direction. And so that is the next part that I want to skip to because he talks about the fact that his father dies and it's the Great Depression is happening. And every all of his advisers, he's still a young man. All of his advisers are saying, hey, we need to liquidate everything now. Says many advise me liquidate everything to sell out not only my father's holdings, but my own firms and interests as well. The business situation can only get worse, they predicted. The economy is going to disintegrate completely, they said.

Starting point is 00:15:11 I didn't see things that way at all. He, this is so miraculous that he goes in the exact opposite. So you have the consensus is, you know, this is the end of the world. Sell now. At least you can convert some of your assets, even if they're pennies on the dollar, into actual cash. And when I get to this section and when he starts talking, I was like, you know what? Actually, I began to envision a completely integrated and self-contained oil business, just like John D. Rockefeller. And just as it was remarkable, the fact that John D.

Starting point is 00:15:38 Rockefeller did that in the very beginning of the oil industry, right? He got in right at the very beginning. When they first discovered oil in Pennsylvania, everybody thought, oh, this is the only place it's going to be. This is going to be a quick buck and this entire industry is going to disintegrate, right? And Rockefeller did not believe that. He believed that it was enduring. And we see that Getty has faith in this idea. And I want to really pause here because now that I've read his autobiography, I've read this book. This is one of the most important turning points in his entire life. Think about this, like this decision that he's making as a young man in 1930. Okay. What, what path before you, Getty, what do you want to do? On the left-hand side, we got, Hey, we're going to sell everything. You know, the world is ending, but at least we'll

Starting point is 00:16:17 have a little bit of money. The right is I'm going to double down. I'm going to make this as my life's work. I'm not only not going to sell my oil wells, I'm going to invest more money in this. This is no different than when Steve Jobs said in that commencement address that you can't connect the dots looking forward. You can only connect the dots looking backwards. So you have to trust in something. You have to trust in your gut, destiny, life, karma, whatever. But what Rockefeller knew, what Getty knew, what Steve Jobs knew,

Starting point is 00:16:43 you have to put your faith in something. The future is always unknown. And so he says, in business, it is never easy to go against the beliefs and attitudes held by the majority. This is exactly what he's doing at this point in his life. The businessman who moves counter to the tide of prevailing opinion must expect to be obstructed, derided, and damned. And it's one thing to say for his competitors or people in the media or people he doesn't know to doubt him. It's his friends and family are doing it as well. My friends and acquaintances felt my buying spree would prove a fatal mistake. And so this idea to listen to your own inner voice, to make decisions based on what you want your life to be, not with the consensus

Starting point is 00:17:20 or the prevailing opinion at the time or your friends or acquaintances is so important because he didn't make his first billion in 1930. If he didn't think about this, he needed to do what he's going through now, where he's vertically integrating. He's taking over this giant oil company. He's getting capacities and skills that his company did not possess because 20 years later, he winds up getting the biggest deal of his life. He gets the concession of the neutral zone, the Saudi the concession of the neutral zone, the Saudi Arabia's portion of the neutral zone. Getty talks about the fact that, you know, 20 years after he blocked this consensus, decided, no, I'm not selling out. I'm doubling down. I'm investing more of my assets. He gets this concession from the king of Saudi Arabia.

Starting point is 00:17:59 And what's crazy is in the neutral zone, they're going to wind up producing, Getty's going to wind up producing 13 billion barrels of oil. I just love thinking about that story. There's the idea behind it. You know, there's a handful of decisions that we make that will change the trajectory of our entire lives. And when we make those decisions, usually we don't have the data. We don't know. We have to put our faith in something. So I'm going to move on to the next essay. And really, the next essay, to me, it talks about the fact that optimism is a moral duty. And he's writing to the young businessmen of that day. And so many of them are saying like, there's no more opportunity. This is 1965. So he says, there will always be room for the man with energy and imagination,

Starting point is 00:18:39 the man who can successfully implement new ideas into new products and services. Anyone who has achieved success is frequently asked the same question by the people he meets. How can I do this too? And then he runs into all these pessimistic young people that you don't have to worry about as competitors because they won't, they're so pessimistic, they won't even start. But you were lucky. You started in business at a time when it was still possible to make millions. You couldn't do it nowadays. No one could. I never cease to be astounded by the prevalence of this negative and totally erroneous attitude among supposedly intelligent people. So something that I picked up over and over again, I think the single best description of what a business is I've ever heard.

Starting point is 00:19:19 I read several years ago, it actually came from Richard Branson. And he says that a business is just an idea that makes someone else's life better. And I think that's such an important thing to remember because not just for the statement, I do think that's a statement of fact. But the reason that there will always be unlimited opportunity is because there's unlimited ways to make other people's lives better. So the reason that there's always unlimited opportunity is because a business is just an idea that makes somebody else's life better.

Starting point is 00:19:44 And there's always ways to make other people's lives better. So imagine being this negative, pessimistic young person in 1965. The name of this essay is You Can Make a Million Today. And their response is, no, you can't. And one of the most remarkable things about reading books, you know, they're 60, 70 years old, 400 years old, is you just see people say the same things over and over again. And so he's going to talk about some of the reasons that these people say, no, you can't do this today. You got in right at the right time, but that time has passed. So he says, I consider myself neither a prophet nor an economist nor a political scientist. I speak simply as a practical working businessman. I

Starting point is 00:20:18 believe the outlook for business is good and that it will become even better as time goes on. We can see from our vantage point that that prediction was accurate, right? I feel that American businessmen have ample reasons to be optimistic about their prospects and profits for years and even decades to come. He's also true about that. He was also right about that, rather. I say this fully aware that in some American business circles, it has long been fashionable to bemoan a lack of opportunity. And so what he means by that is all this list of excuses about what's happening now. And these are impossible problems for the businessmen of today to overcome. So talks about high taxation, excessive labor costs, unfair foreign competition, creeping

Starting point is 00:20:55 socialism. And his response to this is also another benefit of reading this book and his autobiography. J. Paul Getty is going to hold the reader, hold you and I to a high standard. He does not like excuses. I said last week his favorite saying was the sign that was on Harry Truman's desk. The buck stops here. It's clear that Getty believes in extreme ownership. So this is what he says. To my way of thinking, all of this is sheer nonsense. The complaints are merely convenient alibis for the unimaginative, the incompetent, the nearsighted, and narrow-minded, and the lazy. I can't see any validity to the arguments advanced by the pessimist and the defeatist.

Starting point is 00:21:35 But then, calamity howlers have always been with us, chanting one dismal and discouraging chorus or another. Again, something he repeats over and over again. He is a voracious reader of history. And just like in Getty's day, just like before Getty's day, just like in the day that you and I occupy, you're always going to have the pessimists, the defeatists, they're always chanting one dismal and discouraging excuse or another. And so the way I think about what Getty is teaching us right now is that optimism is a moral duty and that pessimism aborts opportunities. That's what he says.

Starting point is 00:22:09 There are always opportunities through which businessmen can profit if they will only recognize and seize them. The last things that American business needs are complaints, alibis, and in ever-increasing numbers, and I believe this with my whole heart, by the way, not just American business, but business all over the world, does need, and in ever-increasing numbers, are young businessmen who are willing and able to assume the responsibilities of progressive, vigorous industrial and commercial leadership. The rewards awaiting such men are practically limitless. Many young, qualified, highly qualified young applicants give up before they start. And so then Getty has advice for young entrepreneurs that don't give in to pessimism, don't give in to defeatism, and actually try to seize opportunities. And so he actually starts out by quoting Harry Truman.

Starting point is 00:22:59 He said, Harry Truman said, I studied the lives of great men and famous women, and I found that the men and women who got to the top were those who did the jobs they had in hand with everything they had with energy and enthusiasm and hard work. And so when I got to that line that says those who got to the top were those who did the jobs they had in hand with everything they had, it made me think of something that Charlie Munger would repeat. He said that him and Buffett believed in Carlisle's prescription. And Munger said that 98% of our attention was devoted to the task at hand. We are believers in Carlisle's prescription, and then he defines it, that the job a man is to do is the job at hand and not see what lies dimly in the distance. Back to Getty.

Starting point is 00:23:47 There are absolutely no safe or surefire formulas for achieving success in business. I believe that there are some fundamental rules to the game, which if followed, will tip the odds for success in your favor. These are rules which I've applied and which every millionaire businessman with whom I am acquainted has also followed. And so he actually makes a list. There's 10 different things. Number one, choose a field which he knows and understands. So figure out where your circle of competence is. Number two, you should never lose sight of the central aim for all businesses,

Starting point is 00:24:20 which is to produce more and better goods to more people. Number three, a sense of thrift is essential for success in business. The businessman must discipline himself to practice economy wherever possible. Number four, be always be on guard against the temptation to over-expand or launch expansion programs blindly. Forced growth can be fatal to any business, new or old. I got to repeat that. Forced growth can be fatal to any business, new or old. There's a great line from David Packer, the founder of HP, where he says that more companies die from indigestion than starvation.

Starting point is 00:24:57 And I think that's exactly what Getty's getting to there for number four. Number five, a businessman must run his own business. He cannot expect his employees to think or do as well as he can. He must maintain close and constant supervision over the entire business. Number six, the businessman must be constantly alert for new ways to improve his products and services and increase his production and sales. So really what he's saying is you should invest in technology. That is something that the great entrepreneurs before Getty, during Getty, and after Getty all believed. In fact, if you read Andrew Carnegie's autobiography, it was probably published 80 years before this book came out, or maybe 60 years, something like that.

Starting point is 00:25:35 But one of the main lessons when you study the early days and as Carnegie built his steel empire, there's a theme in that book, which is invest in technology, the savings compound. It gives you an advantage over slowing moving competitors and can be the difference between a profit and a loss. Number seven, borrowed money must always be promptly repaid. Nothing will destroy a career faster than a bad credit rating. Number eight, a businessman must constantly seek untapped or underexploited markets. Number nine, guarantees should always be honored in the customer's favor. The business that is known to be completely reliable will have little difficulty filling its order books and keeping them filled. And number 10, no matter how many millions and individual masses, if he is in business, he must always consider his wealth as a means for improving living conditions

Starting point is 00:26:25 everywhere. And number 10 is just a lesson that his father taught him. The fact that, you know, don't just sit on a bunch of gold coins like you're Scrooge McDuck. You have more money than you'll ever need. Reinvest that into making more products and services that make other people's lives better. So then I want to skip ahead. He has an essay called The Millionaire Mentality. There's a lot of these ideas in here that I've picked up on reading these books, reading these biographies, and I call this founder mentality. But I just want to tell you a quick story that comes from this essay. It's about the importance of incentives and then making sure that you have people because you don't have to be a founder to have founder mentality, but your top talent should all have founder mentality or what J. Paul Getty describes

Starting point is 00:27:01 as millionaire mentality. And so he goes and he realizes that he's got over 200 different businesses by the time he writes this book. And he talks about this site visit and his top guy running the site, he's like, you know, the guy's got a brain. What's going on here? He's here every day. And yet, as soon as I get here within an hour, I see a list of things that could be improved. And so he's having this conversation with them. And he says, hey, I only need to spend an hour on one of the sites. And I spot several things that we could do better or cheaper and increase production and profits, I told him. Frankly, I can't understand why you don't see them too. And this is the response. But you own the properties, the superintendent declared.

Starting point is 00:27:37 You have a direct personal interest in everything that happens. That's enough to sharpen any man's eyes to ways of saving and thereby making more money. And Getty's response, he's really good with people, actually. He's not, he doesn't get angry. He's like, well, I pay you to do a job. He doesn't start yelling at him, doesn't fire him. What does he do? What did Michael Jordan say? Successful people listen. Those that don't listen don't last long. So Getty hears this response. He goes, oh, truth to truth be told, I never thought of it quite in that way before. So he mulled over what this guy George said for a couple of days. He's like, OK, how can I realign our incentives? So George starts thinking like an owner. And so

Starting point is 00:28:14 he proposes an idea. He goes back and he says, hey, George, I got an idea. Instead of paying you a salary, I'll give you a percent of the profits. And we can just consider this a test. It's not permanent, but if it works out, you'll make more money. And so what happens is he comes back. He says, I inspected my properties again some 60 days after George Miller took over under this new incentive relationship. I checked the operations minutely, but could find nothing wrong. And the reason Getty is telling that story is because he believes that most of the people in your organization fit into a handful of categories. And so he's going to describe some of the categories. The first category is the entrepreneur.

Starting point is 00:28:47 He says, in this first group are those individuals who work best when they work entirely for themselves, when they own and operate their own businesses. Such men do not want to be employed by anyone. Their desire is to be completely independent. They care nothing for the security that a salaried job offers. They want to create their own security. What a great line. They want to create their own security and What a great line. They want to create their own security and build their own futures entirely on their own.

Starting point is 00:29:08 But every business is going to have one or maybe there's only going to be a handful of co-founders. But his whole point is the next segment, this second group of people may never want to build their own business or found their own business, but they're excessively talented if you give them the right incentive structures.

Starting point is 00:29:22 So he says, next are the men who do not want to go into business for themselves, but who achieve the best and sometimes spectacular results when they are employed by others and share in the profits of the business. They want to earn in proportion to what they produce with neither floors nor ceilings on their incomes. George Miller was one who fit into this category. And so Getty's advice to entrepreneurs is really spend a lot of time cultivating and maximizing the talent that's in the second group. Then he's got the third and fourth group.

Starting point is 00:29:53 The fourth one is really funny. He calls it like the postal clerks. Really what he's telling us is like, don't waste your time with these type of people. And one thing he says is that there's some people that just do not have the ability or the desire to learn. And you run into these people in business all the time where they're like, I have 10 years of experience. And what Getty realizes is hilarious.

Starting point is 00:30:11 I chuckled when he said this. He says, many a man who is supposed to have 10 years experience really has only one year's experience repeated 10 times over. And then that kind of person is related to the fourth category, which is really the opposite of this idea that Getty repeats over and over again, that the buck stops here, that the truly talented person wants to take ownership of the outcome. He wants to take responsibility for the mistakes. He wants to take responsibilities for the successes. But then you have a lot of people, which he calls the postal clerks, which essentially don't care at all about how the business performs. They just want their paycheck. They're not really paying attention. And he says, these are the ones who do the least and demand

Starting point is 00:30:47 the most. They view the company for which they work as a cornucopia from which good things should flow to them rather than as something to which they owe loyalty and which they should strive to build. So again, those are, don't waste your time with that kind of person. But then he goes back to the most important category, which is that category number two. You have that executive, you have that talented person, you have somebody in your company, they have this millionaire mentality, even if they're not the founder of the company, they may not be the CEO of the company, but they have that founder mentality. And one way they reveal themselves is by thinking small, which is really fascinating. This will make more sense in a minute. It's more important for the man with the millionaire mentality to be able

Starting point is 00:31:24 to think small in the sense that he gives meticulous attention to even the smallest details and misses no opportunity to reduce costs in his business. This is such an important point. What might seem to be penny pinching at one level might be large scale economy at another. I have an excellent story from Rockefeller's biography, Titan, which will illustrate what he means there. I'll get there in one second. The giant that he talks about, this example of a giant U.S. corporation that actually made a study of the contents of the trash baskets, so the wastebaskets in its administrative offices. So each night for a week, they actually had a team of workers come in, empty the waste, and then they'd sort out the usable items and the company property, which had

Starting point is 00:32:05 actually been tossed into them. So like paper clips, rubber bands, erasers, stuff like that, stuff that could be reused. They took an inventory that's everything in the trash, then they multiplied that total by 52 to estimate what this was costing them for a year. And they figured out that more than $30,000 was being wasted each year. And so then Getty has an example that happened inside of one of his own companies. He says a bright junior executive, this guy had the millionaire mentality, the founder mentality. He devised a shortcut in a production operation, which saved half a cent per unit, but added up to a total yearly savings over $25,000, which is remarkable, is again, this is how they reveal themselves to you, right? This talent is in your organization and there's clever ways in which they

Starting point is 00:32:52 reveal that they are possessed of more talent and drive in the position that they currently have, because this guy winds up saving the company $25,000 a year. That was more than twice of his annual salary. This young man quite definitely has what I term the millionaire mentality. He has the ownership mentality, the founder mentality, right? He is incidentally no longer a junior executive. And so this idea about teaching everybody inside your organization to think small. And so there's a great example in the biography of Rockefeller called Titan, where Rockefeller is thinking small, and I think demonstrates the principle that Getty is trying to teach you and I.

Starting point is 00:33:28 And I'm just going to read from Titan. It says, after watching machine solder caps to the cans, he asked the expert, how many drops of solder do you use on each can? 40, the man replied. Have you ever tried 38? Rockefeller asked. No, I have not. Would you mind having some sealed with 38 and then let me know? When 38 drops were applied, a small percentage of the cans leaked, but none leaked when they applied 39 drops. Hence, 39 drops of solder became the new standard instituted at all standard oil refineries. That one drop of solder, said Rockefeller, still smiling in retirement, saved $2,500 the first year. But that export business kept on increasing after that and doubled and quadrupled and became immensely greater than it was then.

Starting point is 00:34:14 And the savings has gone steadily along. One drop on each can has amounted since to a savings of many hundreds of thousands of dollars. And so the next few essays, Getty keeps going back to what are the kind of people, like what makes a great executive? What makes a poor executive? What makes the person that you want on your team? What makes a person that you want to fire? And he warns about this type of organization man that you're going to see, there's just a bunch of them out there. They reappear in every organization and they have essentially the worst traits that an executive can have. And anytime the Getty finds people like these in his organization, he removes them from his organization. And so the two terrible traits that they have is the way they

Starting point is 00:34:54 speak to subordinates and the way they kiss ass to the bosses. And so he describes this reoccurring management personality that he sees over and over again. He personifies the two worst qualities anyone holding down a managerial job could possibly possess. His attitude towards his subordinate is clearly that of a slave driver. His attitude towards his superior is that of a complete bootlicker, utterly devoid of imagination or common sense. And so immediately after describing the kind of executive you don't want, he talks about the kind that you want. The very first thing you should look for in the executives that you hire and the team that you're building is the ability to think and act for themselves without constantly running to the superiors for advice. This is his, he loves

Starting point is 00:35:38 making lists, which I love as well. So this is Getty's five lessons on leadership. And these leadership traits are not only for your executive team, but also for yourself. Number one, example is the best means to instruct or inspire others. Number two, a good executive accepts full responsibility for the actions of the people under him. How many times? He repeated that over and over again in his autobiography. He's repeating in every single essay, you must have extreme ownership, you must take responsibility for your actions. He talks about people that make excuses. He uses different words, but essentially he's like,

Starting point is 00:36:10 the people that make excuses are just losers. They're never going to do anything. Number three, the best leader never asks anyone under him to do anything that he is unwilling to do himself. One of the things that Getty prides himself is that in an oil business, he can do every single job. He knows his business from A to Z. Therefore, an oil business, he can do every single job. He knows his business from A to Z, therefore there's no problem he can't solve. Number four, the man in charge must be fair but firm with his subordinates. He does not pamper them, and he always bears in

Starting point is 00:36:36 mind that familiarity breeds contempt. He believes that you should treat them fairly, that you hold them to high standards, that you don't pamper them, but you don't become friends with them. He does not believe that leads to a good outcome. Number five, praise should always be given in public and criticism should always be delivered in private. And what I love is he makes this list as like a summary for his experiences, and then he summarizes the summary. So he says, I learned my own lessons in leadership many years ago in the tough, no-nonsense school provided by the oil fields. And so he talks about from an employee's perspective, the best kind of boss and leader you can possibly be. So this is an old-time rigger once told him this, okay? So he says, the best boss is one who knows the business better than I do, but trusts me. That's the kind of man I'll work my tail off for. Knows the business

Starting point is 00:37:21 better than me, but trusts me. And so then Getty gets into the fact that executives must have the skill. They have to communicate clearly and quickly. This is something Napoleon was gifted at. In fact, I pulled a quote when I got to this section about Napoleon that I think of all the time. I'll get to in one second. So it says, time is money in business. Misunderstandings in the interpretation of requests. Usually that's overcomplicated, right? Misunderstandings in the interpretation of requests, reports, or instructions are very costly. The good executive is one who can explain things and tell people what needs to be done quickly and clearly. Need to repeat that. The good executive is one who can explain things and tell people what needs to be

Starting point is 00:37:57 done quickly and clearly. I don't think anybody else is better at this than Napoleon. I'm going to read something from one of Napoleon's biographies. Long orders, which require much time to prepare, to read, and to understand, are the enemies of speed. Napoleon could issue orders of a few sentences, which clearly expressed his intentions and required little time to issue and to understand. Time is money and business, right? That's exactly what Getty just said. Napoleon was able to get his point across in little time to make it to issue and to understand. And so what I think about when I got to that quote in the Napoleon biography is clear thinking

Starting point is 00:38:34 plus clear writing equals more speed. And so another talent and skill that you want your top team and executives in your company to have is this idea of frugality. In fact, Getty says that he's looking for the habitually thrifty person. Listen to this. An individual who is naturally thrifty will have an infinitely greater chance for success than another of equal ability who does not possess this quality. The habitually thrifty person will be able to immediately recognize opportunities for lowering overhead. How many times? We're not even halfway through the book. He's just repeating this over and over again. You've got to watch your costs. You've got to be efficient.

Starting point is 00:39:15 The person who has formed thrifty habits will always have a fluid reserve to meet contingencies and carry him through slack periods. In fact, when I got to this section, there's two things that popped to my mind that I never forgot. It's fascinating how you can read a book, you know, spend 25 hours reading a book, maybe read four or 500 pages, whatever the case is. And, you know, just there's maybe a sentence in there that you can read one sentence that you never forget, one paragraph that you never forget. And so immediately what came to mind when I got to this part is there's this book called A Few Lessons from Warren Buffett. It was episode 202. And something Buffett and Munger notice is that there is this being cost conscious, being thrifty. It is habitual. It is a habit.

Starting point is 00:39:59 Listen to what he says. Our experience, this is Buffett writing now, our experience has been that the manager of an already high-cost operation frequently is uncommonly resourceful in finding new ways to add overhead. To add overhead, he's obituated in adding expenses. operation usually continues to find additional methods to curtail costs, even when his costs are already well below those of his competitors. Buffett's not the only person that noticed that throughout history. It's not the only sentence where I haven't read the book in years and I still remember Sam Walton in his autobiography says it as plainly as you can possibly say it. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you're too inefficient. I love that idea that your brilliance can actually be negated because

Starting point is 00:40:56 you're too inefficient. Another thing that can negate brilliance is the fact that you just don't have the right temperament. You get when something bad happens, you panic, you get scared. So something that Getty preaches over and over again, and Buffett says this as well, is that you have to stay calm. You cannot panic. And he was actually getting this advice as a young man from an older businessman. And this was the older businessman had told him because problems are obviously inevitable. Trouble, stress, all that is inevitable. And so he says, always think of yourself as a man who has just fallen overboard in the middle of a lake. If you keep your wits about you, you can always swim to shore or at least float until someone fishes you out.

Starting point is 00:41:32 But if you lose your head in panic, you're finished. You'll drown. That's very similar to when Buffett says that, you know, ordinary intelligence, not being an absolute moron, like that's table stakes. But once if you have at least ordinary intelligence, what then you need to build a successful career in business is you need temperament to control the urges that actually get other people into trouble. And so other people let stress defeat them. Other people start to panic. Other people are incapable of staying calm and making the right decision. And we already saw that Getty developed that talent earlier in life when

Starting point is 00:42:02 he was talking about the fact that imagine being a young man with not a lot of resources. You think you hit pay dirt, you have all these wells producing thousands of barrels of oil today, and then suddenly one of your unknown and unnamed big competitors completely squeezes you and cuts off all your ability to sell your oil. What they wanted Getty to do was the opposite of what he did. They didn't expect him to stay calm. They wanted him to panic and then buy or sell his very valuable assets to them. And he didn't. He had the right temperament to control the urges that get other people into trouble. And so I've skipped ahead to another essay that's called Business Blunders and Booby

Starting point is 00:42:38 Traps. And he's just recounting a bunch of these reoccurring mistakes and problems that you're likely to run into. And so not only is this section great writing, but it reinforces two of his principles that one, you need to be where the work is happening and to get rid of the bureaucracy, get rid of the paper shuffling, no work about work, just work, no work about work, just work. And he's noticing because you have this rise on all these business school graduates that they're just just building paper empires, and he hates it. The writing is hilarious. Young men generally start out in the business world today as strictly disciplined and passively obedient to some pagan cult. By the time they leave college, where they receive over-specialized

Starting point is 00:43:20 educations, they are virtually sacrificed to the organization. Organization is capitalized and put in quotations, right? So that's the head of this pagan cult. And they are dedicated to serving the complex rituals of writing memos and buck passing. They are and remain forever cloistered from the unanointed laity of the rank and file production workers. Procedural rules are their most honored fetishes. They are conditioned to meet periodically in a solemn conclave and pour over the esoterica of statistical tables and committee reports. They are far removed from the harsh, mundane realities of commerce. I made my first million dollars in the front seat

Starting point is 00:44:04 of a battered, second-hand Model T Ford. This Model T served as my executive office and field headquarters, and sometimes even as my bedroom. Almost every other wildcatter operated in much the same manner. He had no fixed hours, no five-day work week. He had to be his own promoter, his own geologist, legal advisor, explosives expert, drilling superintendent, and jack-of-all-trades. Most of his time was spent in the field, working alongside his men. We wildcatters eliminated all unnecessary administrative overhead expenses in our operations. We familiarized ourselves, so he's comparing and contrasting with the business education that these young guys had, which he finds relatively useless to the business education

Starting point is 00:44:50 that he got actually working. We familiarized ourselves thoroughly with all aspects of our business and kept all of our costs down by exercising unceasing and vigilant supervision over every phase of our business. Years ago, businessmen automatically kept administrative overhead to an absolute minimum. The present day trend is in exactly the opposite direction. The modern business mania is to build greater and ever greater paper shuffling empires. I still believe that the less overhead there is in a business, the better. And he's not done. He does not hold any punches here. This reminds me a lot of Les Schwab. Highly recommend reading Les Schwab's autobiography

Starting point is 00:45:32 if you can get your hands on one. Charlie Munger recommended multiple times reading that book. And at the very minimum, just listen to the episode I did on Les Schwab, which is episode 330. He's gonna sound, Getty sounds a lot like Schwab and Schwab sounds a lot like Getty.

Starting point is 00:45:44 And so Getty's going for it here. He says any executive can do much better job if he peels off his business suit once in a while, climbs into a set of overalls, and gets his hands dirty down in the plant. The vice president in charge of purchasing, who has fed the raw materials he buys into a processing vat or a molding oven, can do a much better job of purchasing. He can often learn more by listening to the conversation of a few production workers for an hour than he can by reading 10,000 specification seats. Advertising and sales managers who have operated a lathe or a punch press and have actually made a component of the product

Starting point is 00:46:21 about which they advertise will be much more convincing and successful in their sales campaigns. The employee relations expert will have a much clearer and better understanding of employee problems in psychology if he spends more time among the employees and less in his paneled office dreaming up new morale-building gimmicks. If you have a business, make sure you're the one who's running it. If you don't want to accept the headaches of being the boss, then either close the business down or sell it to someone who will accept the responsibilities. And then, of course, he ends the essay with a list of history's greatest entrepreneurs that he studied that

Starting point is 00:47:01 did exactly that. They accepted the responsibilities. They paid attention. They were aware of the work happens. He talks about Andrew Mellon. He talks about Andrew Carnegie. He talks about Henry Ford. He talks about George Hartford. He talks about Samuel Kress. He talks about John D. Rockefeller. In Getty's mind is all the information that he learned from reading and studying the great entrepreneurs of the past so then he could use it in building his own company. Getty's a perfect illustration of that line that's in Port Charlie's Almanac, the fact that there's ideas worth billions. And in Getty's life and career, that is literally true. There's ideas worth billions in a $30 history book.

Starting point is 00:47:34 And one of the things I love about Getty is that he's got this deep historical knowledge. He reads voraciously on a topic, but then he has common sense that he learned in just dealing with normal workers and being where the work is done. And you just see that he uses a lot of what I would call common sense and psychology and indirection to get his point across without harming his relationship with his employees. He's really, really good at that. In fact, I love his definition of how he thinks about management. He says, the primary function of management is to obtain results through people. The primary function of management

Starting point is 00:48:08 is to obtain results through people. And so he gives a great example of how he does this. And again, it's like how to win friends and influence people. He understood how to influence and to build relationships with his subordinates, with people that work for him. And so he talks about in one of his companies that employee morale was sagging, and he soon found out why. He said several executives had gotten into their heads that they could arrive for work anywhere from 30 minutes to an hour late each

Starting point is 00:48:32 morning. Naturally, this did not set very well with the rank and file workers who were required to punch time clocks and were docked pay if they were tardy. I've always felt that bad management psychology is best countered by forcefully positive applied psychology. Listen to what he does here. It's very fascinating. I did not waste time issuing threats of disciplinary action. I simply announced that I would now be holding daily conferences in which I expected all management personnel to be present, and the conference would begin 45 minutes before the start of the regular working day. I lost a bit of sleep in the next two weeks or so, but I won a major battle.

Starting point is 00:49:10 My executives got the idea. There was no more habitual tardiness and worker morale was restored. And so then Getty provides another example of, hey, we need to meet bad management psychology with forcefully positive applied psychology. And so he says, I learned an executive had taken some company-owned lumber and nails with which he constructed a dog kennel in his backyard. I felt that he'd set a dangerous precedent which could lead to all kinds of trouble and cause losses to soar if employees learned that he'd gotten away with this.

Starting point is 00:49:42 Since he was a valuable man, I did not want to fire him and relied on another applied psychology strategy. I sent the man a pleasantly worded memo asking for a detailed inventory of the material he'd taken and saying I would have it appraised and the value charged against his salary. The inventory was prepared, the total value was found to be about $4, and this sum was duly charged against his pay. I got the point across. This message spread throughout the company, and the workers, realizing that not even executives could get away with appropriating company property, took the lesson to heart themselves. And something that reappears throughout this book, it also is mentioned multiple times in his autobiography, that he's really helped out,

Starting point is 00:50:23 not only like building, you know, mentors in historical context by voraciously reading history, but there's all these like older businessmen that help him out throughout his entire career. And he learns a very valuable lesson on business leadership from an older, more successful at the time, older, more successful businessman. And it is related to this idea that, you know, you have to stay calm, you don't panic, and that business is problem. so the best companies are just effective problem-solving machines. I remember learning as a youth an invaluable lesson from a man who even then had extensive business holdings and who would later become one of America's wealthiest industrialists. I ran into him one day in the lobby of a Chicago hotel.

Starting point is 00:51:00 How are things going, I asked him. Not good. Terrible, in fact, he replied with a smile. One of my companies has been shoved into a tight corner by the competition. Another is operating in the red and a third doesn't have the cash to meet its short term debts that fall due this month. So a young Getty's like, what the hell are you smiling about? What's happening? And Getty asked him like, you don't seem you're not acting like you're worried. What's going on? Hell, Paul, I'm not the least bit worried, he answered. To tell you the truth, I needed something like this to get me up on my toes. Everything has been going entirely too smoothly for far too long.

Starting point is 00:51:33 An occasional crisis is good for a businessman. There's no better exercise for him than to have a few messes to clean up every now and then. And this is the punchline. The perfect business does not exist. The perfect business does not exist. Snags, difficulties, and crisis crop up in every business. The truly great leader views reverses calmly and coolly. He is fully aware that they are bound to occur occasionally, and he refuses to be unnerved by them. And so as you and I discussed when we went over J. Paul Getty's autobiography, he never retired. He worked until the day he died. And one of the reasons I think, in addition to him being completely obsessed and workaholic and just completely dedicated to what he was doing, I really think that he believed that you should

Starting point is 00:52:21 treat your business as like this living, breathing, constantly changing thing. And so there's one paragraph that really illustrates his management style and the way he ran his business. The concept that any status quo is perfect and permanent, that one must under no circumstances raise questions, voice doubts, or seek improvements can only produce complacency, then stagnation, and finally collapse. There is always something wrong everywhere. And all throughout these essays and throughout the entire book, he's constantly giving advice on how he views the accumulation of assets of you want to be investing and not a speculator. You don't want to interrupt the compounding. Really, the entire book, he's just teaching us

Starting point is 00:52:59 that it's all about the long term, that you should keep a fortress of cash. You should reinvest in your business, use debt sparingly, and doing so will help you survive to reap long term benefits. And this becomes increasingly valuable because it goes against human nature. Most people come up to him like, hey, you're rich. How do I get rich but faster? And so Getty's advice is you can use that impulse in human nature to your benefit. And so he gives this one story where most of the people in the early days of the oil

Starting point is 00:53:23 business, they were just trying to sell contracts. They had no desire to build a long-term business. And they thought, oh, look, look how much money I made in 24 hours. And so Getty tells this story about a guy who bought an oil lease for $4,000. 24 hours later, he sells it to Getty for 8,000. He's like, look, look how much money I made. I made $4,000 in 24 hours. And Getty's like, yeah, but over the next 12 years, I made 800 grand on that lease. All the money is in the long term. You want to own, not trade.

Starting point is 00:53:57 He tells this hilarious story about there's this huge real estate bubble in Miami in the 1920s. In fact, there's a book written about it that my friend Jason Buck gave me called Bubble in the Sun. I'll eventually make an episode about it. But Getty shares an anecdote from this time period where this realtor brings this client out and he shows him this piece of useless swampland. And the client says, you're crazy. No one could ever build anything on this land. It's worthless.

Starting point is 00:54:21 So what, the realtor replied. Land down here ain't for owning. It's for trading. And Getty's point is you want to own, not trade. And so I believe embedded in these stories about the fact that human nature will lead you astray. It's why most people don't build wealth. You have to resist the pull to conform. You have to resist the pull to imitate the people around you. He has an entire essay called The Homogenized Man, which is just this wave after wave of sameness that he sees of these young people coming to business. And it contrasts nicely with one of his last essays, which is The Art of Individuality.

Starting point is 00:54:53 But Getty has an incredible ending to this essay that really hammers the point of why it's so dangerous to become standardized, to become homogenized. He says, Resist the temptation to force yourself into the pattern of the structured man. One needs only to remember that a groove may be safe, but that as time wears away at it, the groove first becomes a rut and then finally a grave. And so if you go back to the title of the book,

Starting point is 00:55:21 How to Be Rich, one of the keys is difference. One of the keys is rejecting what Getty calls the cult of conformity. The successful entrepreneur, the leader, the innovator is the exceptional man. He is not a conformist, except in his adherence to his own ideals and his own beliefs. You will find the conformist, the organization man, in an ever-increasing number in the business world today. He believes that conformity is essential for success in his career. One of these types was complaining to me that he wasn't getting ahead fast enough and asked me if I could offer any advice.

Starting point is 00:55:55 How can I achieve success and wealth in business, he asked? How can I make a million dollars? I can't give you any surefire formulas, I replied, but I'm certain of one thing. You'll go much farther if you stop trying to look and act and think like everyone else. The conformist only demonstrates that he is unimaginative, unenterprising, and mediocre. In contrast, the successful businessman's non-conformity is most obvious and evident in the manner and methods of his business operations and activities. These will be unorthodox in the sense that they are radically unlike those of his less

Starting point is 00:56:30 imaginative and less successful competitors. Often, his innate impatience with the futility of superficial conventions and dogma of all kinds will manifest itself in varying degrees of personal eccentricity. And so he lists examples of other great entrepreneurs that he studies that had these traits. He talks about John D. Rockefeller. He talks about Howard Hughes. He talks about Bernard Baruch. He talks about Conrad Hilton.

Starting point is 00:56:55 He says the people that fall into conformity, they make a massive mistake. They fall prey to a fundamental fallacy. The notion that the majority is automatically and invariably right. Such is hardly the case. The majority is by no means omniscient just because it is the majority. In fact, this is an incredible line. In fact, I found that the line which divides majority opinion from mass hysteria is often so fine as to be virtually invisible. The note I jotted down is a note to myself. Think for yourself. Don't look around. Look in. Don't look around. Look in. The truly successful businessman is essentially a dissenter, a rebel who is seldom, if ever, satisfied with the status quo. He creates

Starting point is 00:57:38 wealth by constantly seeking and often finding new and better ways to do and make things. In business, the mystique of conformity is sapping the dynamic individualism that is the most priceless quality an executive or businessman can possibly possess. There are many pressures that force the young man of today to be a conformist. He is bombarded from all sides by arguments. He does not understand that the arguments are those of the almost-worse and the never-will-be's who want him as company to share the misery of their frustrations and failures. Conforming keeps him a second-string player. By conforming, he misses the limitless opportunities which today present themselves to the imaginative individualist.

Starting point is 00:58:26 I want security, he declares. It is a confession of weakness and cowardice. The men who will make their marks in commerce, industry, and finance are the ones with free-willing imaginations and strong, highly individualistic personalities. They rely on their own judgment rather than on surveys, studies, and committee meetings. They know that every business situation is different from the next and that no thousand volumes could ever contain enough rules to cover all contingencies. The successful businessman is no narrow specialist. He knows and understands all aspects of his business. He can spot a production bottleneck as quickly as he can an accounting error. The successful businessman is a leader who solicits opinion and advice from his subordinates,

Starting point is 00:59:10 but makes the final decisions, gives the orders, and assumes the responsibility for whatever happens. I've said it before and I'll say it again, there is a fantastic demand for such men in business today. The non-conformist, the leader, and the originator has an excellent chance to make his fortune in the business world. To be truly rich, a man must live by his own values. It has always been my contention that an individual who can be relied upon to be himself and to not conform and to be honest unto himself can be relied upon in every other way. He places value on himself and his principles. And that, in the final analysis, is the measure of the true worth of any man. And that is where I'll leave it. Highly recommend picking up this little book.

Starting point is 00:59:59 You could read it all the way through. You could pick it up and read it essay by essay. But I do think he's got a ton of useful advice in here, and I think it's well worth reading. If you buy the book using the link that's in the show notes in your podcast player, or available at founderspodcast.com, you'll be supporting the podcast at the same time. That is 353 books down, 1,000 to go, and I'll talk to you again soon. So real quick, I want to tell you about this tool that I built, that if J. Paul Getty was alive, I know he would subscribe to because not only in this book on how to be rich, but also in his autobiography, he's constantly referencing. You heard him say it. Rockefeller, Conrad Hilton, Andrew Carnegie, Henry Ford, Andrew Mellon. He is constantly referencing the fact that he studied these people, that he downloaded into his brain the ideas that they used to build their business that he could use to build his

Starting point is 01:00:45 business. So after reading the two books that Getty wrote, it's obvious that if he was alive, I believe that he would subscribe to Founders Notes because Charlie Munger said that learning from history is a form of leverage and Founders Notes gives you the superpower to do this on demand. And when I tell you that years and years of my life has gone into making this tool, that is not an exaggeration. Since 2018, I've been inputting all of my life has gone into making this tool. That is not an exaggeration. Since 2018, I've been inputting all of my notes and highlights for every book that I've ever read for this podcast into this app called ReadWise. For years, I've been posting about ReadWise on social media. I've mentioned ReadWise on past episodes of this podcast. I would talk about

Starting point is 01:01:20 ReadWise when I was interviewed on other podcasts. But for years, I was the only one that had access to this tool. And so last year, I approached Tristan, who is one of the founders of ReadWise. I'd built a relationship with Tristan previously. And I said, hey, can we build a tool together? Because for years, people have been asking if they could have access to my ReadWise. And so is there a way we can build a product that allows other people to see what I see? Because I think that would be tremendously valuable. And the result is that you now have access and the ability to this giant searchable database of the collective knowledge of history's greatest entrepreneurs. So there are two primary ways in which I use founders notes. And both of these features, I think, will be excessively valuable for you. The first is keyword search.

Starting point is 01:02:02 So any topic that I'm thinking about, any topic that I need help on, any topic that I want to know more about, I just search that topic into the search bar. The perfect example of this is one time I was asked by a listener, how did history's greatest entrepreneurs think about hiring? I literally just type in hiring into the keyword search. And all of a sudden there's 10 or 15 different examples of history's greatest entrepreneurs talking about useful ideas that they discovered on hiring. The second feature, the second way to search this giant searchable database of collective knowledge of history's greatest entrepreneurs is by asking Sage. Sage is the AI assistant that operates on top of founders notes. You ask Sage a question and Sage will read all my notes, all my highlights and and a transcript for every episode and make a concise summary of the ideas for you. These two features give you a superpower because it allows

Starting point is 01:02:50 you to access the collective knowledge of history-scarred entrepreneurs on demand when you need it. And that is not all. I just added a new feature as well. There is now a private podcast feed with bonus episodes available to every Founders Notes subscriber. There are already 50 short episodes available. This private podcast feed will be updated with new episodes. So all the episodes will be short and focused on one topic. So episodes could be about a subject like leadership or about a person like the best ideas of James Dyson. In fact, that's the next episode I'm working on right now. You can find instructions on how to set up your private podcast feed when you log into Founders Notes. But there's already 50 waiting there for you, and I'm making more right now. So in summary, if you're going to invest and you're going to spend hours and hours

Starting point is 01:03:32 listening to different Founders Podcast episodes, I would encourage you heavily to invest in a subscription for Founders Notes. It makes the lessons that you're learning on the podcast even more powerful. And again, it gives you the superpower to tap into the collective knowledge Thanks for listening. Thank you very much for the extra support. And I'll talk to you again soon.

Founders - #353 How To Be Rich by J. Paul Getty

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.