Founders - #59 Howard Hughes: The Definitive Biography of the First American Billionaire

Episode Date: February 11, 2019

What I learned from reading Hughes: The Private Diaries, Memos and Letters; The Definitive Biography of the First American Billionaire.----He was a film director, a producer, a test pilot, inventor, investor, and entrepreneur [0:01]the start of Hughes Tool Company [13:00]during a gold rush sell pickaxe's / great idea about leasing drill bits [19:00]Howard Hughes Jr is on his own at 18 years old [26:00]starting out in the movie business [32:00]his first plane crash/divorce [38:00]Howard Hughes goes broke [48:00]Howard Hughes breaks the world record for the fastest flight around the world / Hitler was always an asshole [56:00]Henry Kaiser and the birth of The Hercules [1:05:00]his 4th plane crash and descent into madness [1:14:00]Howard Hughe's M.O. on corruption and bribes [1:26:00]I am not really interested in people. I am interested in science. –Howard Hughes [1:29:00] ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

He was a film director, a producer, a test pilot, inventor, investor, and entrepreneur. And for most of his life, he was considered to be the richest man in America. At a time when being a millionaire was rare, Hughes had several billion dollars. That alone would have made him intriguing. But Hughes' allure was about far more than money. To unravel his story required the help of hundreds of journalists, lawyers, doctors, investigators, archivists, librarians, acquaintances, and lovers, each contributing pieces of the grand puzzle of Hughes. In addition to interviews, court transcripts, and depositions,

Hughes' own original papers were examined. While he never kept a private diary as such, he wrote over 8,000 pages of memos, notes, letters, and instructions that chronicled his loves, hates, fears, and frustrations. Recently declassified FBI and CIA files were also analyzed. 2,500 pages of detailed surveillance reports. Likewise, over 100,000 pages of sealed legal briefs, corporate records, and inventories were uncovered and read in an effort to gain entrance into the mind and life of this ultimate outsider. The result of years of research, this book tears away the facade that Hughes worked his entire life to create and reveals a man so complex that during his life he remained an illusion even to the few who knew him best. It is a story that only he could tell of a life so extraordinary that it can be found recounted nowhere else. Okay, so that is from the introduction of the book that I want to talk to you about

today, which is Hughes, The Private Diaries, Memos, and Letters, The Definitive Biography of the First American Billionaire. And before I jump into the book, I just want to recount so I was doing some extra research and I came across this article that was published in the Washington Post in 1977, a few years after Hughes died. And let me just read an excerpt to you. So it says, The Amazing Howard Hughes, which can be seen in two episodes on Channel 9 Tonight and Thursday Night from 9 to 11, is both satisfying and unsatisfying.

Based on the book Howard the Amazing Hughes by his longtime associate, Noah Dietrich, Noah Dietrich's a very important person in this story, so please remember his name, in collaboration with all these other people that are important, so I'm skipping over that, the television adaptation of the book satisfies in that the subject is Howard Hughes. But, and this is the part that really stuck out to me when I was reading this article, but the dissatisfaction arises since most of us have read or heard too much about Howard Hughes. Yet, with all that we have read or heard, we have the vague feeling that we don't really know all there is to know about this man so the reason i wanted to start here in particular is that that last paragraph talking about the

dissatisfaction about hearing a lot and being exposed to a lot of stories about him but then at the end of all these stories feeling that you don't really know him that's exactly how i feel going into this podcast um so last sometime i last year, maybe the year before, I attempted to do a Founders episode on this book I read, which is called Howard Hughes' Life and Madness. And I found it so frustrating that I read the entire book and it's massive. It's I think like a 20-hour read, 700 pages, 655 pages, something like that. I actually have it in front of me. That I just refused to do a podcast on it because I was so frustrated by this guy.

So I decided to give it another shot because if you really think about what we're doing here, well, first of all, if this is your first time listening to Founders, welcome. My name is David. The concept of this podcast is extremely straightforward. Every week, I read a biography or an autobiography or a book about somebody that's built a company and just try to understand the person behind it, pull out ideas that we can use in our own lives. So I don't really think I could document the history of entrepreneurship without talking about Howard Hughes. So I gave it another crack. I read this

book. This one was a little bit more palatable because it spent less time talking about what seems to be very clear that Howard Hughes suffered, especially later in his life, from severe mental illness. So he was diagnosed with obsessive compulsive disorder, but he basically had, he wouldn't open himself up to being diagnosed further. And he had his own private set of doctors as we've seen happen with other extremely rich people and you know when they're paying when you're being paid tons and tons of money by the world's richest person you kind of unfortunately look the other way and you don't put the care of your patient first and that's

exactly what Howard happened Howard Hughes so the first book you know probably I read probably 60% of it is all about his descent into into madness which is really hard to read actually and that cultivates with you know him having a lot of yes men around that only we're not looking out for him they were only basically doing whatever he told him to do. And so when he winds up dying in the 1970s, I think he was 70 years old, he was 6'3", but he weighed like 80 pounds. He had been a drug addict on codeine and all other kind of opiates for over a quarter century. And he was basically just skin and bones,

hadn't been in the sun for like 30 years. And they found a bunch of, know broken off needles i think they i think when his autopsy there's like five or seven different needles placed anywhere from his groin to all over his body because he would be taking so much drugs that the the veins would give out so that's that's really hard um to read. It's not pleasant. It's not, and I'm not going to talk much about that on the podcast. I'm going to focus on, you know, his early life because I think that's important. Because up until about the time he's from 19 when he takes over his father's company to about 40, he's certainly eccentric, but something happens.

And I think it's the multiple plane crashes he was in. And obviously, I think after reading this,, he probably had mental illness his whole life. But then the last 30 years of his life is just a descendant of madness. So today we're going to focus mainly on the beginning and up until about 40 years old. So I will say that a lot of times on this podcast, we're learning a lot of good ideas from people based on their experiences. You know, you go back and listen to all the founders episodes and, you know, we benefit greatly from somebody else documenting their entire, the lives of these company builders because we understand their personalities, their philosophy on business. They readily share the

ideas that they gained through experience. And the reason I'm doing this podcast is because I think those ideas are invaluable to anybody that wants to get better at what they're doing. Whether you're running a company, want to run a company, whether you're a freelancer, whether you work in a large company, you can use these ideas yourself and you don't have to go through 70 years of experience

before you have these realizations. Today is going to be different. Today we're going to learn a lot more about what not to do, the kind of person not to be. I don't think, based on the other research I've done, is I don't think I've come across another entrepreneur that the gap of the actual person they were and the mythology is wider.

He was widely beloved, mainly in some cases, deservedly so, where he's the first person to fly around the world. He has all these interesting aviation world records at the time, and that's what made him world, world famous. Based on what I was reading, he's one of the most famous people in the 1930s all across the world. But I can't say, and based on how he treated other people, he wasn't a good person. And a lot of the stuff he did in business is not, you know, we're learning on this podcast, like the power of putting a customer first, of thinking from first principles, of building a product that is so great that people want to give you money for, that can benefit their lives.

And a lot of what howard hughes did was was not that um and a lot of the running of his companies isn't even basically i mean noah dietrich for all intents and purposes was the person running he was actually who howard hughes was so i just want to have that i just want to set that out at the beginning so um you understand my perspective on this because there's's gonna be a lot in this book that is just not Behavior that I think we should replicate but at the same time we should understand that it's out there. It's Tons of humans he Howard Hughes wasn't the first person act like this He's not gonna be the last so I do think it gives us an understanding of like the reality that we operate in

so with that What all I could think about is, and I looked for books, there's tons of books written about Howard Hughes, tons of information about Howard Hughes, Howard Hughes Jr. that is. But I couldn't help but think that the book that I really wanted to read,

the person that I think is overlooked, who is extremely important because he built one of the most successful companies ever is his father um howard hughes senior i guess that would be so that's where i'm going to start the book uh we're going to learn a little bit about howard's dad um and so i'm gonna they're gonna the howard they're they're in the book right now is Howard Hughes Sr. So it says, Howard was not a student. Howard was mechanical. While he had no patience to sit at a desk and learn,

this sounds fairly familiar to people that have listened to a bunch of his podcasts, he could spend hours at a workbench tinkering with clocks and motors. When Felix attempted to, this is Felix's Howard Hughes Sr uh senior's dad and howard hughes jr's grand grandfather obviously when howard hughes attempted to put his oldest son to work at his law office hughes rebelled after only a few months and set out on what he would later call his adventure in the frontier of opportunity the year was 1895 and for a rugged tall 26 year old american or 26 year old america was a land of discovery so as we're going to see here i really feel like there's a there's like a typical personality type of people that become entrepreneurs i do think that now given the the

advances of technology that that is actually going to widen. But there is just certain people that are just not content making a good salary sitting at a desk and that they're willing to take on an insane amount of risk just for the ability to do their own thing and to kind of call their own shots. And Howard Hughes Sr. was definitely like that. And a lot of having that appetite for risk does not always guarantee success. For most of his life, He was not very successful. He had a failure after failure after failure, which I think is important for us to understand because you know,

he winds up creating an invention, which is a drill bit, getting a patent on that invention. And that, that, that singular invention came from a life of failure. And a lot of people are like, you know, you see this mythology. It's like, oh, if you want to start a company, you have to do it really young. Well, we know, people listening to this podcast know that's not true. Ray Kroc was not young when he started his company. Sam Walton was not young when he started his company.

In this case, Howard Hughes Sr. was over 40 years old by the time he found his first actual success at business. So before we get there, let's just hear a little bit about his life. He says, for the next eight years, Hughes traveled across the Midwest, roaming through Colorado and Oklahoma, looking for his fortune in zinc and silver mines and on gambling boats full of women and desperate men. It was an erratic existence that found Hughes riding the ebbs and tides of riches and poverty. So he's going through all basically gambling, trying to, it's basically a lot of speculation is what it is.

And so being a speculator, he hears about all these people making money in Texas and Louisiana around in the early 1900s from oil. So he's like, OK, I need to get down there. He said, I heard the roar in Joplin and made the seat for the disturbance. So he says, OK, I heard things were going on here. I need to get down there and see if I can make some money. So he gets down there and he starts. He goes, he was blindly speculated on oil leases and tried drilling for oil for himself with rented equipment. While his schemes failed to generate continuing income,

they did bring him in contact with another wildcatter, wildcatter were the names of the oil speculators at the time, named Walter Bedford Sharp and a partnership that would lead both to riches and then on the next page it just has a sentence that kind of gives you an idea of what he's what's going on at this time he said hughes moved from boomtown to boomtown mean oil boomtown learning about drilling from hands-on experience that's going to be important because this is the start of of howard senior's business i said so by the start of he wasn't having much success at the time but he was learning and that's equally as important he says by the time uh by the start of 1908 howard hugh senior felt like a failure he had lost the

attention of his wife and rarely saw his son striking it Rich was no longer the fanciful dream of a young vagabond. It was now a necessity for the 38-year-old braggart. Ironically, the key to his fortune was to be found in his failure. This is an important lesson for all of us. Throughout his years as a wildcatter, Hughes was repeatedly frustrated by his lack of success in striking oil. The problem he claimed was not the location of his wells, but rather his inability to drill deep enough to tap the oil reserves he was certain remained undiscovered beneath bedrock and there's no really way at this time for him to tend to know that other than just a belief he was going off instinct here he said faced with the reality that no known drill bit could dig through the impenetrable rock, he became obsessed with the challenge to design such a bit

and worked for months in a futile effort to achieve positive results. It took a chance meeting in a Shreveport, this is in Louisiana, bar called the Oyster Pub to motivate Hughes toward his future. It was there he happened upon a millwright named Granny Humason who was attempting to interest the riggers in a drill bit that he had conceived that resembled two engaging pine cones. His concept called for the cones to rotate in opposite direction, meshing like a coffee grinder.

So everybody else is laughing at this guy that's trying to sell a new drill bit. They laughed at his design i thought you know you can't improve it's already working people are making money at oil we don't need your stupid design but hughes looked at it differently he said hughes took it seriously enough to pay 150 for the two sewing thread spools that humason had carved to illustrate his invention he then takes this and he says howard engaged a machine shop to fabricate a prototype of the drill for experimental use. Still uncertain that his concept would actually work, Hughes took the finished prototype, mounted it on a rod in a press, and attempted to drill through a six-inch thick piece of granite.

Legend has it that the drill bit drilled through the granite, drilled through the workbench, and was chewing through the concrete floor of the workshop before the machinery could be stopped. So that little invention, he's going to wind up patenting it. Let me see if that hasn't happened yet. Nope. yeah. So right after this, he's granted a patent in August of 1909. And this invention is the basis of one of the most, I would argue, one of the most profitable companies of all time. And without this invention, we would never know the name of Howard Hughes Jr. because by the time so Howard Hughes his wife or his wife his um the son that is his dad dies of a heart attack at 54 years old and his two years earlier his mom had died when she was in like her late 30s going into for surgery and she never woke

up from the anesthesia so by the time he's 19 years old both of his parents are dead and he's given 50 ownership of hughes to come tool company which is the basis uh which at that time was already hugely successful and he actually does you know some smart things where he buys out the other 50 was owned by family members and one one uh his grandparents sold them their 25 interest in the tool company for 10 dollars and the other person i think it was uncle interest in the tool company for $10. And the other person, I think it was uncle, sold him the other 25% for like 200 grand. But this is a company that I have a note here that just to show you understand the size and the scope of how important this company was or how profitable it was rather. Hughes Tool Company was founded in 1908. I think they started started making real money.

No, actually, yes, founded in 1909, sorry. And then Hughes started it with this guy named Walter Sharp, but Sharp died in 1912, three years later. So by the time the company matures in the 1940s, it was making about $40 million a year in profits in the 40s. And so if you use these calculators online that tell you about what the equivalent of that would be in 2018 dollars, 2019 dollars, that's equivalent of about $500 million a year today. And Howard Hughes Jr.. owned a hundred percent of the company he had complete control so he had this cash cow that he didn't have to invent never had to work in that was basically throwing off the equivalent of 500 million dollars a year today and it all started from this little invention

and something we can learn that can be applied to a million different things is, hold on. Okay, so we've heard this. I don't know if I've covered this before, but I've certainly read about it a lot. So in a gold rush, the smartest strategy is to sell pickaxes, right? Instead of going out and trying to rush for gold you sell the equipment that the people that are trying to go out and rush for gold are are that need to do that right well in the oil boom which is happening around this time uh in uh this time in american history it the equivalent of that is sell drills and that's exactly what hughes does but he also

has a just a straight genius insight that i would never even have thought of, I don't think. And I would say the modern-day equivalent of this, based on the profitability that you see, is like AWS. Like everybody is – almost every business is slowly turning into an internet-enabled digital business. And so you see with AWS where they make billions and billions a year, they have much higher profits than the overall Amazon profit margin is. They're doing the exact same thing, but they're doing the modern day equivalent of what Hughes Tool Company was doing in the oil boom is what I'm trying to say. Okay. So it says, this is the genius idea that Howard Hughes Sr. had. With the oil business in a boom phase, there seemed to be an unlimited thirst within the industry for the essential Hughes bit. So everybody's going out, they want to make money, they need his bit to access hidden oil fields that other bits can't

get down to. And again, he's got a monopoly on the market because he's got the patent. So it says, but this is the genius thing he did. Hughes refused to sell his bit outright. Instead, he leased the bit on a monthly basis, providing free sharpening and maintenance as the device required. In this manner, each bit paid for itself within a few months, and with each successive month was generating nearly all profit.

I've read that sentence. First of all, that's a great idea. Secondly, I kind of feel like that's the difference of software as a service. Back in the day, if you're old enough, you remember you'd go to a store and you'd buy a box of software and it'd be a one-time charge. You just go home and you have it. Now they're like, well, we're not going to sell you the software outright. We're going to sell it to you and we're going to maintain everything for you. We're going to make sure it's updated. We're going to keep improving the product, but we're going to charge you monthly. And this is kind of what Hughes was

doing, but for drill bits, which was extremely important at the time. Okay, so now we're going to start talking about Howard Hughes Jr. And in this case, he finds, this is the example of him finding his life's passion, which was aviation. And then starting his first tiny, tiny business when he was a kid. Because he's very, he definitely was a smart person. He definitely was a tinkerer. He was interested in mechanical machines. He was interested in science.

He was interested in experiments. But he just didn't care about the oil business at all. And so that was kind of bequeathed to him by his father, which led to what he was able to do. So he does something his dad wants him to do. He says, let me just jump into the story. He said he put out his hand and requested a $5 bill. $5, that's it, his father questioned, shaking his head in excitement. Sonny, so that's what they called when his parents were alive.

He wasn't called Howard. He was called when his parents were alive he wasn't called howard he was called sunny and then he changes his name so um from sunny to howard and then uh at least asking people to call him howard and then eventually he just tells people to call him hughes so it says um chickens had an excitement sunny took the five dollars as he pointed to the seaplane anchored in the harbor and the sign overhead five dollars a ride the plane was part of a local sightseeing and tourist attraction although big howard had never himself been in an airplane and had little faith in their safety he joined his son in the seaplane the 10-minute flight was agreeably short

for the elder hughes who felt sick from the ride as for his son he was exhilarated and inspired by the sensation of flying and he knew he had found his calling in life. So now this is a little description of what his childhood was like. He was really bad in school, didn't care about it, but he would make things. He'd make his own radios, I guess like the precursor to CB radios. I don't know exactly what they're called. And he would tinker with engines and internal combustion engines and all this other stuff. So he actually makes something. He said he spent most of his days alone in his bedroom or in his garage workshop where

he fashioned a motor and starter onto his bike, turning it into a primitive motorcycle. Word spread quickly that there was a new addition to the neighborhood, turning Sonny into an entrepreneur when he began charging five cents a ride. So, you know, I love seeing this kind of thing where you see like a flash of entrepreneur at a young age. So I got something people want and they're willing to pay for it. He starts to do a lot of reading after that flight and he just becomes completely obsessed with the idea of aviation. So he said he had begun to read about a pair of British flyers who had won a challenge in London

as the first pilots to fly across the Atlantic. To Sonny, it was more than an adventurous exploit. It was fascination, exploration, and fantasy in an arena that had yet to be tapped. It became his arena. It became his dream. school was relatively unimportant considering he had made up his mind about flying algebra and spelling did not fit into that picture as a result sonny had poor grades and erratic classroom attendance so here we're going to jump right into an example of like an idea I just don't

think is really smart, which is really spoiling your child. So right before he turns 18, he's in high school and he's not really going that much. But this gives you an idea of how to the degree which Howard Hughes Jr. was spoiled. His allowance was $5,000 a month at a time when $5,000 represented the median annual income for the average family of four. So what would that be equivalent today? I think the average annual income in America for a family of four is something in the range of like $50,000, maybe a little higher. So that'd be an equivalent of paying your 16-year-old $50,000 a month

or whatever that actual number is. So this is how his mom has already passed away at this time a year or two later. His dad does too. His dad's in his office talking about all these exciting plans for the future. He's in a meeting, and then all of a sudden he clutches his chest and collapses and falls dead on the floor. And this is the transition now for Howard Hughes Jr. With the death of his father, Sonny Hughes made the transition from boy to man

with the instinct of a survivor and the sorrow of an orphan. His world went from a life where days slid beyond themselves into weeks without distinction to minutes that lasted for hours with an ache that saw no joy. The man who was his hero, the man he only wanted to please, died without warning or an opportunity to say goodbye. So at the time, Howard is 18 and 19 years old. And he wasn't considered an adult by Texas state law. You weren't considered an adult until 21. So even though he inherited 50% of Hughes Tool Company,

and this is like an ugly aspect of human nature. So there was like extended relatives, like his uncle that didn't really like his dad, but now was put as like Howard's guardian. And basically they didn't care about Howard either. He just wanted access to the money and control the company. So Howard sees that. He actually does something really smart here.

He plots. No one knew, but he was plotting an escape and a way out. So he said, Howard began a detailed and organized effort to take control of both his life and his money with a heretofore unrecognized brilliance he began his blitz by announcing his intention to pay his relatives for their share of the hughes to come to a company they accepted howard's offer of cash in exchange for a company they had no chance of running in any case. In 1924, Hughes Tool Company became Howard's in its totality. They were unaware that away from the course, meaning he was playing a lot of golf at the time,

Howard was studying the inheritance laws of Texas. In particular, he was fascinated by a statute that allowed a 19-year-old resident of the state to be declared by the court an adult in the eyes of the law. So he files this petition, and he gets what they call the disabilities of youth removed. So now it's saying, hey, he doesn't need a guardian. He's in control of everything, of his own destiny. And after this, as a result, Howard returned to the house his father built with a confidence that few teenagers can muster. He was tall, handsome, rich, and inspired.

He moved through the stately mansion, master of his domain. Looking up, he saw his destiny. There on the edge of space, it was written in the sky. So now he's in control. He's like, okay. And we see this this tendency in in a lot of entrepreneurs but i think it's uh this this desire for control is um especially exacerbated with hughes because i think his he suffered from um severe obsessive compulsive

disorder and i'll give you some examples of that later but he he's very much does not want to be told what to do by other people and he wants things exactly like he almost creates what i would say is like he creates his own reality within the like a smaller world within the larger world where he has absolute complete control and so first before he does this he's got to figure out what he wants his life to be and so now he we get to the part of the book where he's thinking about things it's the initial reflections that came to mind were of those things he did not want to do. Run his father's business, for instance. He had little desire to sit in an office in Houston and sell drill bits.

On the back of a receipt, he wrote the words Hughes tool and then promptly crossed it out. Thinking again, he topped a small piece of paper with things I want to be. He wrote, number one, the best golfer in the world. Number two, the best pilot. And number three, the most famous producer of moving pictures. And this is to give you a little insight into his bizarre personality. And despite a history of joyful holiday celebrations spent with his family,

the new Hughes, this is what he was asking to be called at the time, the adult Hughes celebrated none ever again. He starts doing that really early. Who knows? We can't really psychoanalyze this guy, but that sounds like some kind of childhood trauma or who knows what it was actually. Okay. So at this time, he realizes that he was really good at understanding the necessity of appearances, even though he was very manipulative. So he convinced this 19-year-old woman, Ella Rice, to marry him,

even though she didn't really want to. But at the time in Houston, it was common for arranged marriages based on your family's financial situation or socioeconomic status, I guess. And so her mom made her marry howard and then howard just basically um he moves to california because i forget this i'm out i'm out of texas and then he lets his wife they live together for a little bit but then he just sends her back to houston and ignores her so this is what i mean about like we're gonna see a lot of personality traits are just i'm sharing them with you so you understand who the person was but it's not like this is like he just didn't seem to care and and we'll see in a minute he

even talks or later on the podcast or he just talks about he says i'm not interested in people whatsoever like they just didn't fact like they were they seemed to me like like i don't know if tools is the right word it's just like they just they were like actors in this play where he was at center stage and he would just dismiss them at his at his pleasures so this example when hughes neither arrived in houston nor telephoned ella sent telegrams several dozen of them each one more desperate than the last attempting to understand how their honeymoon had dissolved into first separate bedrooms and then separate states when he refused to accept her telephone calls she wired

i cannot understand why i've not heard from you so eventually they get divorced he just he basically just ignores to her norris or stops talking to her completely um and then he's cheating on her constantly um when he's in california too so he does not seem to accept the emotions or the opinions of other humans. They just don't seem to really exist to him. And maybe if you have – I think what exacerbated that, not only do I think it's some kind of mental illness, which people don't choose to have that, so I can't really – I'm not saying blame, but some of the decisions just seem to be like a selfish, spoiled kid. So I don't know how much of that was under his control or how much was not.

But to the extent that it is under your control, this is not behavior that you want to emulate in any fashion. Okay, so this is him starting out in the movie business. business and he's he he has like a vindictive like he he basically quit so he starts on the movie business he fails at the beginning and then he quits but he only goes again just to prove that his uncle like wrong and you'll see this in a minute so it says um he meets this guy on this actor on the golf course in la he says As each man moved to seize the opportunity before him, it took but a handshake to open a new chapter in show business history. When Graves, this is the actor,

told Hughes that he needed $40,000 for the film budget, the gullible Texan never flinched as he took out his checkbook and gave the actor the entire amount. As Graves began the picture, Hughes haunted the set. This is actually something that's smart. He very much learned by observing and talking to people.

And he says he took copious notes, and he asked the actors and cameramen questioning everything. He was questioning everything they were doing. So almost like to the point of pestering. Like, why are you doing it? Why do you do it that way? And then he'd write down their answers. It basically is a way to provide his own education into the business.

So it says, by that point, Ralph Graves had spent the $40,000 and would ask for another $40,000 more before he had finished Hugh's first film. It was titled Swell Hogan. When Hugh screened the finished picture, he discovered that however wonderful an actor Graves may have been, he had little talent as a director. Swell Hogan was said to have been such an embarrassment that he was ordered the projector projectionist to burn the only prints and to never mention its contents to anyone hughes was eighty thousand dollars poor but a whole lot wiser he would not make the same mistake

on film number two. So after the success, he said, Hughes was no longer as interested in the money-hungry movie business. He had learned his lesson and might not have ever made another film if it had not been for a call from his drunken uncle Rupert. His uncle was lashing out at his nephew. It took only his uncle's arrogant advice to quit the business to persuade Hughes that he had to prove him wrong. So he jumps back into the business just out of, you know, kind of ego

or just saying, hey, you know, I can do, like I can actually be successful at this. Even it didn't sound like he was actually motivated internally to do so though. So he actually, his next film is widely successful. The film was budgeted 150,000 and it made Hughes over $75,000 in profit. Again that's $75,000 in 1927 dollars. The next the next film was even more successful. The film made 614 grand in profit. It subsequently won a best director at the first oscars and more than just smiling hughes was crowing particularly when he thought of his smug uncle rupert who had neither an oscar to his credit nor the 600 grand in his pocket okay so that's

his start in the movie business and then we're going to see how does he become an aviator which is what he's most widely known as. It said, on May 21, 1927, Charles Lindbergh successfully piloted the first nonstop solo transatlantic flight in his single-engine plane. It was a flight that captivated an envious Hughes who eagerly sought details of the journey and forced him to squarely face his last goal. He was eager to return to the sky and hired a pilot to teach him fly. It was then, in mid-1927, that Howard Hughes, at 21 years old,

knew he was living his dream. Okay, so this one, this two sentences actually gives you a good idea of looking to not only his personality, but his management style. The world of Howard Hughes was one of his own creation. Every person, every costume, every scrape of scene decoration, all became his personal domain. And with an eye to detail that frustrated as it impressed, he began to take control.

So what they're talking about is a lot of, he'd hire, you know, he'd just be financing these films and hire a director, and then inevitably he'd show up and tell the director how to do his job and they'd quit constantly one after another one after another and so um this is an example of that hughes suggested hughes needled hughes overruled to the point that on september 30th reed which was his director on this movie threw up his hands and shouted the immortal words. If you know so much about it, why don't you direct the damn thing yourself? That was all Howard Hughes needed to hear.

He accepted the challenge. Okay, so now I want to jump to... He's got a series of plane crashes. I think a total of four. And this is the first one so this is against it he's shooting the um the film that's going to be hell's angel and and um it actually winds up being hugely successful film one of the most extensive productions ever made but it's uh it's about like dog fights and um between like the germans and british in world war one and he hires a bunch of stunt pilots and says

hey i'm gonna you know i can do that too so it says against the advice of his crew he leaped into a small scout plane and and took off to join his stunt pilots in the air as the cameras rolled hugh's plane went into a sudden tailspin and shot towards the ground hugh's was only beginning to bring the plane up from its free fall when it slammed into the ground. Trapped inside the cockpit, he was pulled to safety by his crew and rushed to a hospital where he was in a coma with a crushed cheekbone and numerous lacerations. So this is, he's still married to Ella at the time. And so she's in Houston, but she hears about the plane crash, so she rushes to LA, and this is more of his personality.

She immediately returned to Los Angeles, only to be berated by her husband for overreacting to the situation. She pleaded with him to cut his work schedule and hire another director for Hell's Angels. It was a suggestion that impacted their marriage in the most fundamental way. Hughes considered Hell's Angels to be his baby. To suggest abandoning the project was a huge misjudgment on ella's part the couple moved to opposite corners of the ring of their marriage and prepared for a fight so that leads to um to a divorce and that's also uh like a i would say fundamental personality trait of his anytime somebody tried to tell him what to do, he would just basically eliminate them from his life,

including employees, where he'd get a letter from a director saying, hey, I don't want you interfering. Then the director would hear back a few hours later, he's fired. People running huge successful companies, like this company that he found, Hughes Aircraft, which at its peak was doing like $11 billion a year in revenue. And, you know, Hughes would take, he would take personnel from the aircraft company,

who at the time was building planes and equipment for the U.S. military during World War II, and he would take them without telling anybody and have them work on like a movie he was doing. And so the guy running the company was like, hey, you can't do this, and he was fired. There was no discussion with him, which again is just really not smart. So two personality traits,

both simplified in two different sentences. Hughes had learned from his father that every man has his price. So one of his most, Hughes' most famous quotes is that every man has his price. If that wasn't true, men like me wouldn't be able to exist.

And this is another example of, okay, like, you know, this is a fundamental, anytime you have centralized power, that centralized power has the ability to be bribed or to be influenced, right? Well, what Hughes is was saying here the reason i'm not going to talk too much about the aircraft company in this podcast is because a lot of it is crony capitalism and

i think that it needs to be called out because i think the the freedom to start your own company to do your own thing is very important to protect and i think then that's fundamental to like a capitalist free society right but when you see the these examples of crony capitalism that a lot of uh people point to as capitalism it gives the rest of us a bad name and could in the future impede our freedom to create the products we want so this is not some some behavior and what i mean by that is like his entire life, Howard Hughes was bribing politicians, Democrat and Republican alike. He would bribe, for example, he was awarded tons of contracts based on bribing FDR's son. He'd give him tons of money. He'd send three women to his hotel room every night, basically sending them

prostitutes. He would give loans to like Richard Nixon's brother to start a company when he has a fight with Senator Owen Brewster over like basically where, hey, we gave you $40 million. You haven't given us a plane. What the hell happened to the money? And Owen Brewster wasn't a good guy in his own right. He was getting paid off by Juan Tripp, who was the CEO of Pan Am at the time. But he winds up getting, not only did he defeat Owen Brewster, which I'll talk about in a little bit, but he then makes sure that he doesn't get reelected by just dumping tons and tons of money into his opponent. So his entire life, like, you know, building Hughes aircraft where you're just basically bribing politicians and they're accepting money

and they do this constantly. Like it happens where Hughes tries to shield a bunch of money for tax purposes. So he starts this Hughes Medical Institute. But it's like, it's a sham company. And the IRS finds out it's a sham. He's like, hey, you're just doing this. You're putting assets from heels to a company,

which is throwing off all these profits. You're putting it into this quote unquote foundation. That's not actually doing anything or like the, the amount they actually dedicate to medical research is like a tiny percent, like maybe like less than 1% kind of thing. And the IRS is, is now going after him for, for, um, for, you you know basically evading taxes and what does he do he pays off the vice president at the time which i can't remember who it was and suddenly the irs

reverses his decision so that's the kind of stuff like i'm not naive i understand that that's happened it happens today it'll happen in the future it'll happen it's happened in human history i'm just saying like that that kind of stuff for like for people that entrepreneurship the freedom to do like what you want to do and to build the products that uh like that needs to be called out because if not like that this constant crony capitalism is you know could impede our ability to to do what we want to for normal entrepreneurs people that are you know that are actually building products that people want not the ones that are bribing uh government officials or this person's sister like you know that that kind of stuff so it's just and he was open about it i mean it's it's in his own handwriting in his notes you're constantly

talking about let's buy this guy off let's buy this guy off when he's living later on in las vegas and you know he's super paranoid about germs. The U.S. government starts doing nuclear testing in Nevada but not in Vegas. And so Hughes is convinced that those particles, those nuclear particles, are going to kill him even though at the time he's hauled off in a penthouse that he doesn't leave for several years and never opens the blinds for like years um and he says in in his own written documentation that he'll spend every single bit of his money so he can control the white house so they can then the american government can stop doing testing near him so he is very much in his dna just like okay whatever

i'll get what i want by bribing people and i think like the point of this podcast is like no let's focus on the like build a product that people want. And then you get success through that. I don't like seeing this this other this other bullshit, even though, again, like, unfortunately, it is a part of of humanity. And then the next page and I'll get more into that, too. You'll see a little bit more details but it was just you know it's not it's not i don't think it's right so um the next page it talks about you know his modus operandi it says it was typical hughes when it came to intrigue

a complex plan where simplicity would have better served the purpose. And that's, like, you know how we've been talking about, like, the clarity of mind of Steve Jobs? Hughes is the exact opposite. Like, he made things way harder and way more difficult. And again, like, I have no idea if this is who he was or what's responsible, whether it's mental illness or not, but it's very, like, I would consider his behavior like schizophrenic. It just didn't make any sense.

It was just it was decisions based on like a mind I think seeped in paranoia. Okay, so before we get there his first huge success. This is the at the premiere of Hell's Angels. So this is the evening in the film where it triumphed for Hughes, and he would later remember it as the best night of his life. At 24, he had completed the most expensive film ever made in Hollywood without any help from a studio. He had orchestrated a premiere event that would never again be equaled

in its complexity or effect, and he had captured the love of a woman who was a major star in hollywood and it had done it all on his own terms so this is like the kind of thing which i would have wished to see more of hughes like he was able to make pictures that were you know people loved audience adored they made money that's completely different than paying off the government's you get contracts to build planes at inflated prices. But he just kind of got – he soured on Hollywood later in his life, and eventually he became the first individual to ever own a Hollywood studio outright. But he just kind of just – he just started – I guess got distracted.

He starts buying up land and hotels and all these other businesses, which are not as unique nor profitable as running, you know, if you have the ability to make films. And he certainly did. He made a ton of money in the theater business. Okay, so this is an example of a successive compulsive disorder and I think caused a lot of health problems. They talked about like if you look at pictures from Howard Hughes, and again, some of this is because he got addicted to painkillers from all these plane crashes.

But he exacerbated the problem by working nonstop, not resting, not understanding the need for sleep. He'd work for like 48 hours at a time, not eat, not sleep, very erratic behavior. And this is, so anyways, my point being is like you can see him at, let's say, 30 years old, see a picture of him, and then see a picture again at 40 years old, and it looks like he's like a, the only thing I would say is like there's a show that was really popular like probably five or ten years ago, Breaking Bad it was about like meth right and so i started seeing a lot of these like public service announcements or advertisements and it would show you like what your what you look like before meth and what you look like after and you know you a person would basically age 20 or 30 years in a matter of a few uh like you know in a very short time span that's what i I would say. Like he, maybe not, it wasn't that dramatic with Howard Hughes,

but he did not, those 10 years of his life, what was occurring during that, like had him, he just looked a lot older. He didn't look, at 30, he looked young and vibrant. At 40, he looked decaying and old. And it's shocking to me that he was able to survive another 30 years after that. But anyways, we're going to hear about how he worked.

Hughes was working at a pace unmatched by even the major studios. At one point in early 1931, he had formed four films in various stages of production and insisted on producing each one himself. Driven by his need to become the most famous producer of moving pictures, he was unwilling to delegate responsibility, thus ensuring that the shotgun of glory not miss its mark. So what he's talking about is he claimed not to like attention, but he loved adulation from other people.

And to the point where like another business person, they could be a, like he would, he would be induced into a state of rage. Let's say somebody else was written about in the newspapers in a fawning manner that he was used to having. He would like lash out, start throwing things, start getting really mad at the people around him and trying to find ways to like sabotage that other person, which is just insane behavior. Now, this was something I came across that was not in the first book I read on Howard Hughes.

And I didn't know that he basically went broke. So it says, Hughes ended 1932. So remember, in 1931, he's spending all this money. And all that money is coming from the Hughes tool company profits. And he's doing all these pictures at once. He's doing all the work for himself. So it says, Hughes ended in the following next year. It says, Hughes ended 1932 facing an even bigger devastation. He was out of money, totally broke.

Moreover, he was deeply in debt. So there was a bust in the oil industry and Hughes Tool Company started. It wasn't profitable anymore, which is very it comes back out of this. And we're going to see that here in a minute. But let me just tell you like how he does the opposite of what I would recommend, not even me, but most of the entrepreneurs that we cover on this podcast about the importance of frugality, of watching your expenses, of making sure that you're spending money in ways that make sense. And over the long term, we understand that most companies are incapable of doing so,

which is why most of them go out of business eventually, usually after the founder leaves or whatever the case happens. So Hughes is not paying attention. And even though Hughes' tool company was making less money and eventually becoming unprofitable, he was spending $250,000 a week at this time. And this is going on at the beginning of the Great Depression where you have people that can't even feed their families. And he's buying like, you know, he buys a house for this woman, for a girl he wants to date.

He spent $50,000 on carpets. He spent $135,000 on furniture. He buys two new Rolls Royces. He turned down $10,000 to help fund the Los Angeles Public Library, but spent $20,000 on a jewelry for this, some woman that he wanted to date. Um, he's just very,

he's the opposite of frugal. So I don't, I don't, I don't remember ever reading that. So I was, I was fascinating. Um, and then this is the result of what happened.

I didn't know he actually went and got a job. So this is by 1932. Thanks to the great depression, the U S economy had hit rock bottom and banks were folding up. Like banks were folding up. I didn't know he actually went and got a job. in Texas. It did get his attention, however, when Noah Dietrich arrived at his house, sat him down in the kitchen, and told him the money cupboard was bare. So Noah Dietrich's in charge of running all of the most profitable parts of the Hughes empire. And it says, since Hughes never carried cash and charged everything he bought to Hughes tools, at first he did not realize the impact this news would have on his life while the rest of america was having trouble placing

food on the table hughes felt the effect only when he decided to buy a new plane and was told that he needed to pay for his purchase with cash it was a foreign concept one that took took some getting used to and so uh this is you're gonna see um you're gonna see the you know standard you know mo for hughes he says when dietrich delivered the news that hughes was attempting to spend money he no longer had he reacted in typical fashion rather than acknowledge the situation and make an effort to economize hughes sent dietrich to live in houston to find out why those fellows and this is a quote from hughes find out why those fellows are running my company into the goddamn ground.

He took the opportunity to back away from the declining film business, close his company offices, sever his contract with stars and directors, and refuse to comment to the press. For a man whose entire persona was linked to his unbelievable wealth, it was a humiliating circumstance.

So he says, so this is the shocking part. This is his employment with American Airlines, which is his sole time in his life where he earned a salaried income. He had shocked pilots and passengers alike when it was discovered he was working as a co-pilot with American Airlines at the wage of $250 per month. Had the airline not mishandled the processing of his paperwork, he claimed he would have kept the job

That's probably a lie. But um, this is so weird Like I wish the company I couldn't find anything else about this but I wish the book went into more detail because like when did he start like how I want to know like how this happened. How is this guy who was really really famous for being wealthy? He also signed up under like a false identity, which he does a lot throughout his life. I don't know. This is just one paragraph in the book and then the author moves out. I'm like, wait a minute. This could be an entire chapter here. I want more details. Unfortunately, I don't have them for you. Okay. So Dietrich goes down to

Houston, starts to reinvest in the company, the oil business at the same time. Overall, the industry starts to rebound. But there was a bizarre twist that actually got Hughes' tools back to profitability. And we see this a lot of companies that benefited from the repeal of prohibition and built entire empires basically off of selling alcohol at extremely high margins. And Hughes 2 Company was one of them, and I didn't know that either. I found this fascinating. So it says, Dietrich managed to turn around the Houston plan,

but through slightly unconventional means. With the end of Prohibition in 1933, they're naming this guy that was running Hughes Tool in Houston. His name is Colonel Coodell. Colonel Coodell had opened the Gulf Brewing Company inside part of the Tool Company in an effort to offset the business falloff from the Depression. So they're waiting for the oil industry to rebound so they're selling booze with dietrich's arrival in texas the struggling brewery took on new life his taste buds leading the way to celebrated beer called grand prize although it had not won any with the success of his beer and a turnaround underway in the oil business, Hughes' tool returned to profitability. And so again, this had nothing really to do with Howard Hughes.

He didn't have any part in it. He occupies himself flying, playing golf, thinking about different things to do. And now this is his second plane crash. He wants to capture the world record for the fastest flight speed. So this is on his final pass. He had just banked West when his engine stopped the mighty motor, unforgiving without fuel plumbing to earth,

plummeting to earth at slightly over 180 miles per hour. He will skim defense and slid to a rather bumpy stop in a beat field. Hughes hoisted himself out of the cockpit and leaned against his damaged plane waiting for his rescuers. Only then did he learn that he had beaten the old record with an average speed of 352 miles per hour. His only comment, it'll go faster. So he wants to beat, think it's lindberg who has the uh this is a while later who has the um record for the fastest transatlantic flight our flight i'm sorry the fastest flight across the world this is where it makes him like super super famous but i found something interesting um in the so, you know, you take off

from New York and you're going, you're heading east and you have to stop to refuel a bunch of times. And this, well, let me just read it to you. The next leg of the journey took Hughes and his crew over Germany, where Adolf Hitler had made it clear that the plane was not welcome. The Nazi government was concerned about the potential for spying and was arming itself for war. A compromise was reached when Hughes agreed to fly at 12,000 feet, well above the range that any spying could effectively be carried out. Nevertheless, the Lockheed, which is the plane he was flying,

was tracked as it crossed the country by Luftwaffe escorts, which is the German army at the time, military. I just pulled that part out because it just shows that Adolf Hitler was an asshole. Okay, so I'm going to skip over most of the details of the flight because we know the outcome. This one sentence is a good summary. He was no longer Howard Hughes. He was America's hero. It was his zenith. It would become his

bane. And this is when he becomes one of the most famous people on the planet. So this is another example we see around this time. There's a lot of fortunes built around war, especially World War II in America. And this is the impact the war has on Hughes Tool Company. With the outbreak of World War II in Europe, Hughes' business fortunes improved enormously. There was a drastic need for oil to fuel tanks and planes, and with it an expansion in production at Hughes Tool in Houston, which still controlled a virtual monopoly on drilling bits.

Profits from the business had grown dramatically from the shock of the Depression. Hughes' tool had over 200 versions and sizes of the bit in its catalog. So that's the time where I was telling you that in the 1940s they were making about $40 million. They made like $385 million or something like that in eight years uh which is an insane amount of money when you when you factor in um like what

actually uh the value of it in today's terms okay so this is a glimpse into his life at 36 years old it's also to give some context he he's he Hughes Aircraft Company. Again, he doesn't really run it. It's hugely successful, but to the degree that I would say that he's responsible for the success in this sense is the degree to which he bribed officials to get preferential treatment. But that doesn't take away from the engineers that worked there, and they actually built amazing technology. This is what I was talking about at the beginning, where there's hardly a gap between the mythology of Howard Hughes and based on the books and the writings that I've read and the actual reality of Howard Hughes. Yes, he took extreme risks as an aviator, and he had a lot of ideas about product development, but the actual work and the experimentation was done by a lot of other people. And so he's trying to develop this this thing at uh this this this new

plane called the d2 um but during this time well let me just read it to you in the aftermath of his bout with venereal disease hughes dedicated himself to proving the d2 was the plane of the future so what they're talking about is he caught syphilis from several actresses that he was lovers with. So he worked tirelessly, refining lines and its aerodynamics before taking the plane for several test flights over a dry lake bed in Palm Springs, only to rework the engine's thrust and flaps. Each night, he returned back home,

merely long enough to have his evening meal with faith this is some young starlet that he was living with before sending her home to her parents and then heading to the studio to attempt to edit the outlaw it was a schedule that left little time for socializing and for most of 1941 hugh stepped outside the spotlight of eccentricity while tumbling further into its depths at times caught up in the editing process he worked 48 hours straight without sleeping or eating leaving the darkened darkened basement of the office this is where he was doing editing his eyes squinting at the harsh reality that was that was hollywood with the news that japan had bombed pearl Harbor and America was at war, his workday lengthened.

If that was possible for somebody who was already working 24 hours a day. And there's some advancements. They actually came up with some good ideas. He redirected his energy to creating a flexible ammunition line for fighter planes whose guns came equipped with inadequately small boxes to hold bullets. He formed an armament division of Hughes Tool, and he hired 500 employees to manufacture more than a million feet of the flexible chute, the basis of which are still in use today. This is what I mean when I was talking about at the beginning of the podcast,

where it's like, you can study this guy and you don't know who he is, you know? Where, listen, he had a company that he didn't have to run. He could have easily just collected millions and millions of dollars all day, did nothing else. He could have been dating actresses and playing golf all day. He did reinvest those profits into real technology, and there is a real credit that he did that.

He didn't have to do it. But at the same time, I don't know how much of he did it because he, like, it seemed like he wanted to develop technology, but he also did it to also personally profit. And he personally profited, you know, in a way that gave him an unfair advantage. And that was just because he had more money than other companies so he could bribe more people. Okay, so that's why he's just really confusing figure to me. Like now I've read, let's see, over between this book and last book, over a thousand

pages. And I'm just like scratching my head, like who is this guy? Okay, so this is interesting. We always talk about the idea that books are the original hyperlinks. So I just ordered another book on this guy because he's insane. I've never heard of him before, but he's a huge character. There's this guy named Henry Kayser and the birth of the idea for Hercules. So Hercules is this plane that Howard Hughes collects a lot of money from the government to make, and it's basically saying, hey, how can we make the largest plane in the world because all of our boats are getting the aircraft carriers and stuff, where they're sending heavy machinery by boat over to fight the war in europe but they're getting they're losing a ton of equipment and a ton of money because they're getting shot they're getting

torpedoed so they're like hey why don't we um henry and howard wind up doing a partnership and they're like why don't we build the world's biggest plane we just fly over the atlantic instead of and that would basically uh solve our problem so let me tell you about more about this henry kaiser guy as world war ii deepened the american fighting force became casualties to the german uh became casualties to german and japanese there was an ever-increasing demand for military ships and planes to reinforce the dwindling u.s supply henry j kaiser a one-time builder of roads and dams, revolutionized the shipbuilding industry with an assembly line that was capable of building an

entire military vessel in four and a half days. Upon learning that his ships were sitting targets for enemy submarines, he concocted a concept of a flying cargo ship that would be able to transport men and supplies across the Atlantic in the sky where no submarines could shoot them down had someone else suggested such a concept it is doubtful that anyone would have listened coming from the mouth of Kaiser however made it sound totally feasible um so a little background of I love this this is one of my my, I want to, like, I collected a lot of quotes, like I've told you before. And so I put this also where I store the rest of my quotes in my phone. But it says, Kaiser, a man who coined the quotation, trouble is only an opportunity in work clothes.

I love that perspective when you think about building anything. Trouble is only an opportunity in work clothes. Put his organization into seeking the most concentrated source of aeronautical engineering manpower. While companies like Lockheed, Boeing, and Douglas had the experience, they were operating at peak capacity for the war effort. Hughes Aircraft, on the other hand, had excess engineers, all devoted to developing the D-2, that plane that Howard Hughes says is the future. While Kaiser had never met Hughes personally,

he was well aware of his aviation accomplishments and placed a call to his aircraft division. And now you're going to see some bizarre intricacies into the Hughes organization. He placed a call to his aircraft division, his tool company, and his Romaine Street headquarters in an effort to speak with him directly. When days evaporated into weeks, Hughes failed to return his calls. Kaiser became outraged with both Dietrich and Henley, stressing it was their patriotic duty to locate a man they claimed checked in with his office infrequently at best. While Kaiser was putting the pressure on a huge organization to produce its boss the man himself meaning Hughes was cloistered in

a San Francisco in San Francisco battling pneumonia he had gone to the Bay Area to finish working on the final edit of the film the outlaw after 18 months of work he had only reduced the film down to four hours and 16 minutes still double its presentation length the long hours and infrequent eating schedule had left his body depleted and ripe for the infection that finally put him in a San Francisco hospital. They actually thought he was going to die several times because what I talked about earlier,

he didn't take care of himself, he wouldn't sleep, he wouldn't eat. He'd catch these, there's several times where he was on quote unquote his deathbed. Before I continue, because this is going to be hilarious when Kaiser actually finds him, I just want to tell you a little bit about kaiser because this guy seems insane in a good way henry kaiser organized construction companies to build a hoover uh the hoover grand coulee and bonneville dams as well

as the san francisco oakland uh bridge during world war ii he ran seven shipyards that used assembly line production to build 1400 ships for the u.s by his death in 1967 he had founded over 100 companies including including kaiser aluminum kaiser gypsum kaiser fraser automobiles kaiser hospitals and the hawaiian village resort which he sold in 1961 to the hilton corporation for 21 million dollars all right so now kaiser finds hughes he says kaiser located him and made an appointment to meet the aviation legend when the 60 year old Kaiser strolled Kaiser strolled briskly into Hughes suite at the Fairmont the millionaire was only dressed was dressed in his only suit and was lying on the living room

sofa groaning seeing the ailing Hughes did not deflate his spirit as Kaiser lifted both hands and boomed get up man we got a war to win. For once, Hughes was not so easy to convince, telling Kaiser, who had promised the government delivery of the first flying boat in 10 months, that he was crazy. So he's saying we can't do this in 10 months, or at the very least, overly optimistic. After all, Hughes had spent three years developing the D2 and was still not in production with the plane. Now you can see why later on, a few years later, the government comes after Hughes for wasting their money. Either Kaiser's enthusiasm was contagious or Hughes was too sick to resist. Whatever the reason, the headlines of newspapers across the country in 1942 screamed the news that Kaiser and

Hughes had formed an alliance to build 500 of the giant airplanes in what he labeled the most ambitious aviation program the world has ever known. All right, so skipping ahead, he had a live-in girlfriend called Faith, and she has a description in her diary about Howard Hughes I want to read to you. There is a strange quirk in Howard, stranger than all of his other peculiarities. Once he has become involved with a project or a person, he cannot let them get away from his control. Once owning something, he has to own it for always. And this is so strong in him, I believe it is unconscious. It is so much part of his presence that it is like his brown-black eyes, his high-pitched voice.

It is him, and it is the most self-destroying element of his character. Okay, so this is pretty crazy. This is his third plane crash, and this is how it changed him. Now he's going to start his beginning of his descent into darkness. There was nothing extraordinary about the flight. After circling Hoover Dam three times, Von Rosenberg, he's on a plane with a bunch of regulators from the Civil Aeronautics Administration, and Von Rosenberg is one of them.

Von Rosenberg instructed he used to land the plane in a section of the massive man-made lake known as Vegas Wash. It was a simple landing on a placid lake. As the Swarovski, or Sarkoski, I don't know how to pronounce it. It's the name of the plane. Let's just say it's a plane. As the plane hit the water,

Hughes skimmed its surface before the plane suddenly bucked and pitched right, its wings slamming into water. The right engine's propeller cracked in two on impact and sliced its way through the cockpit, hacking a hole in the fuselage which began to flood. Hughes was stunned in his seat as the frigid mountain water hit his legs and chest. Von Rosenberg felt a flash of pain and then a numbing sensation cleansed his body as he screamed to Hughes to open the escape hatch. Klein, Klein, Von Rosberg shouted as he slid down the slide of the plane into the water. He's talking about Kiko Klein, which is another person on board.

Blandfield, this other guy on the board, was gripping at the edge of the plane with his left hand, his right arm supporting felt. Felt, he used his mechanic. Part of the plane with his left hand. His right arm supporting felt. He used his mechanic. Part of the mechanic's head had been severed off by the propeller blade. Blood pulsed from the gaping wound and began to flow unabated into the lake. Kiko Klein

had disappeared with his seat and an entire section of the fuselage into the depths of the lake. In the hospital later that afternoon, the four remaining crew members were separated. Von Rosenberg had suffered a broken back and spent the next three months in a full body cast. Blanford and Hughes had only suffered cuts and scrapes and were released later that same afternoon. Felt died within two hours of massive brain damage and blood loss, and Klein's body was never recovered. When Hughes returned to Bel Air following the deadly accident, he was a changed man. Reminded again of his own mortality, he was

a reptile shedding its skin, stripping away memories of the past or at least material possessions attached to them. So he starts burning all of his possessions. And Faith, his girlfriend at the time, attempted to convince Hughes to save at least one letter from his father and mother, but to no avail. Those letters in particular he made certain were completely burned. And she writes in her diary, there was nothing left from his past, not even memories. So after this, Noah Dietrich talks about the fundamental changes he observed in howards he

says noah would later testify that hughes was showing the first signs of enormous strain he began to haunt the empty hangars at hughes aircraft long after his employees had punched out for the evening night watchman clocked his activities as he roamed the various research divisions using a flashlight to eliminate blueprints for plane designs and developments he would often spend hours simply staring at the d2 a plane that had been overshadowed by the rush to construct the hercules which are these big seaplanes that him and kaiser joined together hughes would talk to himself as he rubbed his fingers over the skin of the high-speed bomber. And he has a complete breakdown here. It says, the meticulous perfectionist began to repeat himself, giving an instruction three,

four, five times in the course of the same minute. His employees were reluctant to criticize their boss and allowed his unusual behavior to continue. Only Noah Dietrich felt confident enough to challenge Hughes. More than challenged, he urged him to seek immediate medical help. I think you ought to see a doctor, Dietrich recommended. I made a tally on a pad. You repeated the same sentence 33 times. You've been repeating yourself a great deal lately. When Dr. Vern Mason took Hughes' call, he instantly recognized the symptoms of a nervous breakdown. His advice took the form of an edict. Stop work and take a vacation or your body will do it without you. Howard Hughes was petrified when he returned the telephone receiver to its cradle. His hands trembled. He slipped them between his

knees and allowed his head to drop. Still, his hands trembled, joined now by a flood of tears. His mind raced with details, plane specifications, soundtrack scores, movie deals, the perfume of Ava Gardner, the misty green eyes of Faith D'Amagro, his unfinished will, 3,800 employees, faces, names, figures, details, details, details. When Hughes opened his eyes, he discovered that he'd fallen asleep. Hours had passed. His shirt was damp with nervous perspiration. He was cold, yet he felt he had a fever. He wanted to hide, but nowhere to run. He only knew he had to try. Telephoning Noah Dietrich, he confirmed his assistant's suspicions and informed him that he was taking some time off. I don't want you trying to find me either, Hughes warned. And with that, Howard

Hughes disappeared into the night. For the next 11 months, Hughes never contacted his office and had no interaction with any of his companies. So when he does come back, this is when they're developing like a fast spy plane and he wants to test it. This is his fourth plane crash and the worst one. And from here on in, he becomes a codeine addict. The XF-11 was traveling at 155 miles per hour when it smashed into the home of dentist Jules Zimmerman in Beverly Hills, shearing off the top half onto the lawn. Seconds later, the plane's right wing sliced through the upstairs bedrooms

of actress Rosemary DeCamp, who was in the room with her husband, John. The plane continued its rampage through the DeCamp garage, plowed into a row of trees lining their neighbor's yard before finally exploding and bursting into flames. The impact of the explosion was so great that it sent one of the plane's two engines flying 60 feet into the air. Flames shot 100 feet in the air Marine Sergeant William Lloyd Durkin who was visiting his son James in the neighborhood raced to the edge of the burning XF-11 just as Hughes pushed his way out of the cockpit stumbled onto the wing and fell to the ground

Duncan rolled Hughes away from the intense heats and flames and dragged the pilot out of danger he's taken to the hospital, he says a lung punctured in six places, eight broken ribs, a broken left shoulder third degree burns on the left hand, a severe gash to the left side of danger. He's taken to the hospital. He says, a lung punctured in six places, eight broken ribs, a broken left shoulder, third-degree burns on the left hand, a severe gash to the left side of his head, and a broken nose.

And the after effect, he says, morphine injections were administered at the first sign of discomfort. And this is where he has now, kind of very similar to, I think, what Michael Jackson, I think maybe even Prince had as well. They have private doctors that will just dole out copious amounts of drugs to them. So from here on in, he has an entire basically private drug dealer in the form of doctors.

So something else that happens after this is this is when Senator Owenen brewster they're they're looking into like hey we've spent you know tons and tons of millions of money uh 40 million on this 7 million over here tons of government money like where is the stuff that war is over at this point like you never delivered the planes where you needed for the war what happened and so they start to um they try to subpoena him so he has to come in and testify and he does this huge cat and mouse thing for a long time but the author makes this um sentence that i thought was important uh the news of the attempted service meaning serving him with subpoena sent him into hiding moving from house to house in a cat and mouse game to escape a frightening tight to escape a tightening dragnet

rather the experience while exciting on the surface would leave a deep psychological impact that would affect his behavior for the remainder of his life um and so he's moving around with actress jean peters who he winds up marrying but she's there and she's describing what's happening so uh they can't find howard hughes but they can subpoena other people in his organization so they start these uh these um hearings in congress and and hughes is listening on uh the, and Hughes is listening on the radio. And this is just bizarre behavior, and I kind of laughed, honestly. It says, Gene Peters described Hughes' reaction to Ferguson's announcement as something, basically he's saying, hey, we're going to find him

and we're going to make him come in here. And he says, Gene Peters described Hughes' reaction to Ferguson's announcement as something close to a highland jig. As the aviator began to dance around the room chanting you gotta catch me first shit ass shit ass being his newly acquired curse phrase you've gotta catch me first so just i just i just uh in my in my mind i just picture this this guy who's you know on drugs at the time recuperating from an uh fromating from a disastrous plane crash in like his pajamas, doing this highland jig and just calling people shit ashes. I don't know why I found that funny.

It just was to me. Okay. So this is something he's, this is an interesting, you know, cause he remember Howard Hughes is a great celebrity at this time and this is kind of an insight into human nature where from what I'm reading like he did waste a lot of money of the government's money but he was so beloved that he was able to use like his

celebrity and like I think there is a stream of for most compared to most countries like a stream of, compared to most countries, like a stream of rugged individualism, you know, that is at least in our mythology and our culture, whatever you want to call it, where he was widely cheered for basically taking on the government

as like a David and Goliath kind of clash, even though David in this sense has billions and billions of dollars. But, well, I'll just tell you how this went. of clash even though david in this sense has billions and billions of dollars but um well let me i'll just tell you how this went ferguson's purpose was presumably to discover what the government had bought with the with its 42 million dollars in cash by the time he got its answer the question had been left twisting in the wind so long that it no longer resembled an investigation of hughes but rather an investigation of the senate itself. And so before this, Hughes had met, this is what I'm talking about, the government corruption that was rampant.

Hughes had met with Brewster, the guy that started this whole look into what he did with the money because Brewster received a hell of a lot of money from Pan Am. Pan Am had basically a government monopoly on transatlantic rights at this time hughes had a controlling interest in this uh this other airline called twa and he started to compete want to compete with um one trip which is the ceo of pan am at the time and hughes met with him and brucer said hey um if you just agree to merge twa with pan am i'll just drop this other thing. So Hughes is like, you know, you're squeezing me here. You're doing this because it's corruption. Now, that part seems to be true, but it's also true that he wastes a lot of money. So no one's

like an angel in this situation, right? But he goes, this is Hughes. Now he flies to Washington and agrees to take part in these hearings. Senator Brewster told me in so many words that if I would agree to merge TWA with Pan Am and go along with his scheme for Community American Airline, there would be no further hearings in this matter. In his 47 minutes in front of the committee, he had the crowd inflamed to applause, laughter, and contempt as Ferguson vainly moved to restore order. Ashtray enhanced. He was beating this ashtrayly moved to restore order. Ashtray in hand. So he's like beating this ashtray to try to get people to calm down

that were watching this. Brewster, taking the stand in his own defense, attempted to diffuse the situation. His voice cracking, his answers uncertain, he had spent an hour and 37 minutes digging a hole for himself, a hole that Hughes had mapped and outlined. After hearing Brewster's version of his meeting with Hughes,

Ferguson made the mistake of asking Hughes if he had any questions for the senator. Yes, Hughes answered, about 200 to 500. The audience applauded. Ferguson banged his ashtray. Hughes stretched his long legs out under the tables as if he were lounging by a neighbor's pool with no place to go. As the days toiled on hughes maintained the pressure on the senate committee that was constantly outflanked second guest and understaffed hughes publicly hughes publicity campaign included sending out press releases photographs and specification sheets to the media this is actually shows he actually like knows something about

manipulation or how to influence people so he's saying okay while he's doing this he's sending out press releases photographs and specification sheets to the media so giving them uh wait like he's giving them data so they can amplify his message then he did something else he provided recordings of the meeting with brewster oh boy and transcripts of the recordings in addition to the millions of listeners that heard the proceedings over live radio broadcasts it was also the first senate committee investigation to be seen live over a new invention called television what americans heard they cheered they liked the outspoken spunk of a man who when asked by ferguson to once again produce meyer for questioning answered i don't think i will so meyer is hughes one of hughes

right hand guys he was the one responsible for bribing all of these officials and like he bribed not only uhDR's son, all these other politicians and their relatives, but he also bribed generals. They would give him interest-free loans. One general was obsessed with eating filet mignon and lobster tails, so they would have deliveries constantly sent to his home

and they'd stuff his fridge full of the finest foods ever. But straight, outright, outright 100 corruption is what they were engaged in um let's see a manufacturer who was so impassioned by the hercules that he said this is direct quote from hughes i have put the sweat of my life into this thing my reputation is wrapped up in it i have stated that if it fails i will leave the country and i mean it um he says nobody kicks around in this country without acquiring a reputation good or bad i'm supposed to be capricious a playboy eccentric but i don't believe that i have the reputation for a liar for 23 years nobody has questioned my word i think my reputation in that respect meets

what most texans considered important cheers were heard from the chesapeake to the san francisco bay so he winds up winning this battle and they drop, nothing ever comes of this. This is a great quote on his personality. Unlike others who were forced into accepting the world where they were delivered, Hughes stubbornly determined to live one of his own creation. And so this is what, I'm not going to spend too much time here because it's very unpleasant, but just give you an example of like what who he starts to become. And The Aviator, the movie with Leonardo DiCaprio playing Howard Hughes, gives you a good insight into Hughes, like this kind of behavior. So he has all these memos, a very explicit way to do certain things.

And he's obsessed with using Kleenexes to to avoid germs so it says this is a memo he wrote in 1950 to his staff is extremely important to me that nobody ever goes into any room closet cabinet bathroom or any other arena used to store any of the things which are for me either food equipment magazines paper supplies kleenex no matter what it is equally important to me that nobody ever opens any door or or opening to any room cabinet or closet or anything used to store any of my things even for one thousandth of an inch or for one thousandth of a second and that's like a very short one he's got some of the last pages so i'm not going to read it's just freaking bizarre. But this is the weird dichotomy here

where the further he slips into madness, the better his companies perform. So he basically sets this up where he's got all these people, so he says he's got this guy named Frank William Gay is kind of like his conduit to the outside world. So this is with Gay on phones, meaning answering all his calls, Nadine on keyboard, that's the secretary, Dietrich on tools, the tool company, and George on aircraft, the guy running his aircraft company.

Hughes found himself with nothing to do for the first time in 23 years except count his money, which was then reproducing itself at the rate of $42,000 a day at a time when the average salary in the U.S. was $8,000 a year. So what is that? Over five times what people make in a year, he's making in a day. Oh, and so here's an example of his MO with corruptions. From Hughes' simplified perspective, all things problematic could be settled with money. Every man has its price, Hughes said. If they didn't, people like me couldn't exist.

In this case, the price was $100,000. Dietrich placed a call to the head of the Democratic National Committee promising a donation of $100,000 to candidates of the DNC's choice, courtesy of Howard Hughes. And while the donation came without covenants, Dietrich let it be known that Hughes would be very pleased to have his company removed from the litigation. This is just one example. Several telephone calls later, and 20 individual $5,000 checks,

Hughes' tools were dropped from the formal charges, and two employees pleaded no contest to a lesser offense. Hughes ended up paying their $20,000 fine and then had them fired. So what he's talking about is they used their government contracts to purchase discounted planes at $17,000 and then resold them for $100,000 each.

And then he's gone full crazy in this sense. At this time, he's living in a darkened suite at the Beverly Hills Hotel, doesn't let sunlight in, and he says, as far as Hughes was concerned, it was the triumph of leveraged coercion, and he delighted in the power. When he heard from Dietrich that his effort had been successful, he was lying naked on his bed in a room lit only by the ear to

ear grin on his face so it's another thing um he would spend a lot of his life naked after this period because he'd watch movies like he watched one movie i think like 120 times in a row i'd sit in a chair wouldn't move drinking only like milk and eating chicken and would have be completely naked except like a Kleenex covering his genitals So like that's like that's way outside the scope of the point of this podcast like what so I'm not gonna spend much time here but it is important to To understand that his his his doctor Mason this guy that I mentioned earlier, says explicitly, well, here, I'll just read this, that we need to declare this guy incompetent. Soon after Dietrich had handled the details of the loan, this is a loan that goes to Nixon's, he gives money to Nixon's mother, to his brother, to all these people. These people are just 100% corrupt again. Soon after, Dietrich had handled the details of the loan,

he received a rather mysterious call from Dr. Vern Mason, who wanted to schedule an imperative and extremely private meeting. Given the urgency in Mason's voice, Dietrich offered to leave to have Mason come to his home. It was an offer that Mason accepted. When Mason arrived at the Dietrich home, he declined a drink, although according to Dietrich, he was nervous enough to need one. The reason for the secrecy and the spate of nerves became clear as he spoke and the reason he wanted to be in person

because they're uh the fbi and the cra i tapped howard hughes phones and had like uh what 2500 pages something like that of uh notes on his life and they put him under constant surveillance and uh so the doctor says noah i think it's time has come for you to have Howard declared incompetent. And unfortunately, they don't do so. And I, you know, it might be because it's against their economic interests. Unfortunately, that is a part of human nature that we should understand. So we have an accurate representation of reality that, you know, the last 20 years of his life, he's surrounded by people that don't they don't care about his well-being and they're just going to indulge his every um his every like uh request because they make tons of money in some cases they have guy like

he starts paying this this one guy in vegas to to be his like man on the street he's paying like uh ten thousand dollars a week in 1960s with an unlimited expense account. He buys the guy yachts and houses. And, you know, at that point in his life, he doesn't even know what's going on. 15 years earlier, his doctor was saying he should be declared incompetent. His mind just completely, you know, just turned to mush. So I'm not going to go into any more detail here. I do want to read this one quote that comes from the 1940s

where I think Hughes is for a rare glimpse into who he is in a person, personally. And he's doing an interview with this writer. He says, My father never suggested that I do something, Hughes told writer Dwight Whitney in the 1940s. He just told me. He shoved things down my throat and i had to like it he had meaning his dad a quality that i never had he was a terrifically loved man i am not i don't have the ability to win people to win people the way he did i suppose i'm

not like other men most of them like to study people. I'm not nearly as interested in people as I should be, I guess. What I am tremendously interested in, Hughes said, pausing then to think, what I am tremendously interested in is science. And with that, he closed his eyes and dreamed. So I'll leave the story of Howard Hughes there. If anybody finds a book on Howard Hughes Sr., I've searched, I can't find anything.

Please let me know because I would love to read it because I do kind of want to learn, other than I think his genius idea of leasing those out, I do want to learn more about the, you know, this book only talked about 40 years of, of Hughes seniors life in, you know, maybe five pages. But he, it's very interesting to me, like how to learn more about how he built up his business, what he was doing in detail before he started the company,

which I think is something we could all learn from. So if you learn from my work, if you enjoy what I'm doing and you wanna see more of this, please support the podcast. As you just saw, I presented the entire podcast without ads. The only way I'm able to do that is if the people that are actually learning from this

and get value out of it, agree to actually sign up and support the podcast with their actual. And I do this because I think it's the best user experience for you, the listener. As a podcast fan myself, I just want to present the information. I want to have the right incentives. And if I'm supported by the audience and people that give value, I make sure that I do everything I can to make sure that I'm always optimizing for you

and not, say, advertisers. So I was reading something this week that kind of crystallizes why I feel this way says perhaps most importantly I believe that more and more consumers are coming to grips with the reality of online media When everything is free you too often end up getting exactly what you paid for If you consider the time wasted reading clickbait a few bucks a month for content you trust isn't such a bad idea And that's what I'm asking for direct support from you. So how I do that, not only do I make every single podcast available for free with no ads, I have something that I've been working on that's extremely important to me.

And I take a copious amount of notes just like I do when I read books, which is just a podcast you heard. I do when entrepreneurs appear on podcasts or they give talks or lectures. I think the beauty of podcasts is it allows us to have access to brilliant people every day. And I think for most of us, we don't get to interact with truly fascinating and brilliant people, but you can access them through podcasts. So when I listen to people talk, like entrepreneurs talk about their business, like why they started the company, how they think about the market they're in, how they get customers, what books influence them, what tools they use. I take notes and I write that down and I do a weekly email. And I call that weekly email

Founders Notes. And the tagline is Founders Notes helps you know what other founders are thinking. I go out and I collect key ideas from entrepreneurs and I deliver them to your inbox so you can get better at whatever it is you're working on. Just like we want to spend time reading books about entrepreneurs, about their lives, and then listening to this podcast. I assume the reason you're listening to this is so you can learn something and to get better. Um, I think we could do, somebody needs to do the same for, for podcasts that focus on people starting companies, which is no one else is doing it. So that's the focus I'm on, uh, that I want to focus on. And I've been doing this for a long time. I've been taking notes on podcasts since I started listening to podcasts. I just thought everybody did. Um, so, so far I've done, I think I'm up to 145

different founders. And again, the way I present the email, for those of you who haven't signed up yet, it's in a bullet form. So every Sunday you'll get, if you sign up and you agree to support, it costs $10 a month right now or a hundred dollars a year. So it's up to you. All you have to do is choose whether you want to support monthly or annually. It takes less than two, a minute or two to sign up. And then you just sit back. You have access to my full archive, but I also just deliver an email to your inbox every Sunday morning. Every Sunday, that'll have notes from seven different founders talking about all the things I just discussed,

like how they think about their business, different ideas. So the goal here is for us to all, it self-improvement but not self-help you know there's an important distinction there so their experiences that people have where they spend years of their life building something and then go and talk freely about what they learned that is extremely valuable and that's the main thesis behind why i started this into a product is that somebody needs to go out and collect these ideas because we can all benefit from them. It's like a cheat code at life, a cheat code of getting better at work. If you will, you don't have to live through 145 lifetimes to understand how they think about things. So, um, I find the information extremely valuable. The feedback I've been getting

so far is most people that are reading it do as well. So i cannot like the podcast you just listened to um i was actually listening to a podcast with this guy um he's he's started he's building one of the first america uh started one of the first mechanical uh watch companies in america so a lot of the production has been sent out to europe or mexico or other places and he's like no you know i'm gonna make these by hand um and i'm gonna do it here because i think like i want to bring back jobs high-paying jobs and and people will buy are willing to buy if you let them know like this is important and for him all of the all his supplies all his equipment comes from america he um he makes them here he's reinvesting the money

that they that people give through the purchase of watches back into America. But he has such a great – he's like, listen, each of these watches is 80 hours of handmade love. And I realized it's like I don't know if people understand how long these podcasts take for me to make because I'm a one-man show. And I think that's also important why I'm asking you to support directly because you're not giving your money, your earned money uh to a faceless corporation you're giving it to an individual that you want to support you want to see more of this work out in the world to spread to be able to spread these ideas and so this the only way I'm able to spend to spend so much time let me back up real quick before I get there I just saw something on Twitter where this somebody hosts podcasts he's like look at all this this prep I have to do for the podcast I'm doing.

It was like four pages of notes. I'm glad you're taking the time to do that, but try reading 500 pages or 400 pages. That's what I have to do before I even sit down to record. I have to read the entire book. I highlight. I take notes. Then I do extra research to get more depth into understanding of like, what does this actually mean?

Then I record myself, then I edit, and then I publish. So each of these podcasts take 20, 30, sometimes 40 hours of handmade love. And the only way I can afford to do that, to dedicate so much time is by people stepping up and willing to support the work so I can keep doing this. And I'm not some, some, you know, listen, podcast got to decide how they want to do this. Some people just say, Hey, my podcast is so valuable. Just donate to me. I, but what, what we're doing

on this podcast is we're studying human nature. We all understand that there needs to be added incentives. Yes. Some people will do that, absolutely. But a lot more people will do that if you also give them something. So not only am I going to make podcasts free and available to download for everybody, no matter where they are in the world, whether they can support me or not, but I also do all this extra work where you're getting very valuable ideas in the form of Founders Notes, which is going to, like, it's just going to grow. This knowledge that's trapped in audio is important.

And so like in most cases, what Founders Notes is doing is taking 10 to 15 hours of audio a week and turning it into key ideas that you can read in 10 minutes. That's extremely valuable. And I think when I look at like how can i design uh the most value to the people that listen to my podcast like i want to i want to not only give away my podcast for free but i want to say hey if you'll support the podcast by signing up signing up for founders notes i'm also doing this thing that is valuable even if there were if you even if you don't listen to the podcast and somehow people have signed up i'm getting emails from people that subscribe to founders notes that don't even listen to the podcast which is interesting to me so i don't know if people

subscribers are telling them about it i should actually start to ask but um my point being is like it's valuable it's valuable enough it's worth way more than ten dollars a month or a hundred dollars a year just in the ideas because you can apply these ideas in whatever it is you're doing and reap those benefits whether it's efficiency benefits whether you just get smarter you get a better you better job you design products, whatever the case is. And we know the entire point of doing this podcast. It's really hard for people to learn these things other than from people that have done it.

There is no school of entrepreneurship. That's why I spend so much time reading these books, because they just have counterintuitive ideas that you only know by tinkering, by trial and error, by experience. So that's my pitch. That's my plea. I hope that I'm doing enough work for you that you find this valuable and that you're willing to sign up. You go to founderspodcast.com and you can see the link there. If not, it's on your podcast player. It's in every single episode. All you have to do is tap that button. And like I said, it takes less than a minute to sign up. So I really appreciate that. If you do get value for my work, please do so. The second thing is, so I have a private podcast feed and it's a free podcast feed.

And what are we learning here? Like when you study all these people that have built companies, we understand that we have got, the only advantage we have in life is to think differently, right? It's to collect information that's useful and apply those lessons and think differently. So if you've listened to a lot of podcasts, which I assume you do, you know almost every single person, podcaster says the same thing. And they say, hey, please leave a review. Please leave a rating. This is very helpful. And it is. There's a reason why everybody repeats that. Now, what I understand from the lessons that I've learned from reading a review please leave a rating this is very helpful and it is there's a reason why everybody repeats that now what i understand from the lessons that i've learned from reading these books is that's not good enough for me i have to i'm not i'm an independent podcaster i don't have a large social following i don't i'm not part of a podcast network right so i have got to do things

in a different manner than anybody else because you see there's a you know there's a lot of big money flowing into podcasting, a lot of corporations, a lot of celebrities are doing it. And I don't have the resources to compete with that. So I have got to find a smarter way, which is the lessons that we learn a lot in these books. And so for me, I was like,

listen, I want to incentivize people to leave a rating review because it's important. But I want to do something in addition to not only giving you a free podcast. So I created an entire separate podcast fee i call it a reviewer only podcast i what happens is if you leave a rating or review right so in places like apple podcast or stitcher you can you know leave a five-star rating and you can write what you like about the podcast i also read all them thank you very much you take a screenshot you email it to me at foundersreviews at gmail.com founders justers, just like the name of the podcast, reviews with an S, reviews at gmail.com.

I reply back with the private podcast feed link. I reply back to every single one. As of this recording, I've replied back to every single person that's emailed me. So if you've emailed me, haven't received a response, make sure you email me again. Or you can always get in touch with me on Twitter too. My Twitter account is on every, if you go to Found haven't received a response make sure you email me again or you can always get in touch with me on twitter too my twitter account is on every if you go to founders podcast it's on every single um page there um but anyways the reason i'm doing this is because if you do that you'll unlock four i've already done four um four private podcasts

right but not only that when i give you access to the feed as i do them in the future they automatically pop up in your podcast player just like any other podcast does. So for a minute or two minutes or three minutes of your time, I'm giving you hours, tens, what would wind up being hundreds of hours of work from me in the future because I want to incentivize you to help me out. I need your help by leaving these ratings and reviews and I have to do that. I have to perform better than people that are just asking you. So now there's some podcasts like Overcast, Breaker, these other podcasts where they have like heart features or star features. When they do that, when you press that button, you're recommending the other people in the network that, hey, I like this episode. So that applies. You can't leave a review there. But if you just pick your favorite episode,

it's interesting to me because I also get to see what episode you guys really like, which is kind of cool. Leave a heart. Leave a star. Take a screenshot of that. Email it to me. I'll send you the private podcast link with instructions on how to add it to your podcast player. It's really, really simple. And so I feel very comfortable with that.

Like I said before, I'm going to make that the best return on investment that you've ever had for two or three minutes of your time. So I have four up there. Two on Steve Jobs. Yeah. Two on Steve Jobs, who I think like we're not even close to being done to learn from. One on Max Levchin, which is the co-founder of PayPal. Oh, and one on Samuel Bronfman. I had to think about it. He was the guy that started Seagram's. He built a family business that lasted like 140 years it's fascinating guy um so i did that and then i'm reading this other book that i talked about last week which has to do with i think a lot about the future of work having a child i think you have to but not only for my child but for myself and it's just i feel like when you see what our kids are being taught in school and you see what the jobs are available in the world like

there's a huge disconnect there so it's something i spend a lot of time thinking about and this book is called unscaled how ai and a new generational upstart is creating the economy of the future um i by the time i release that episode next week i will probably have already recorded this podcast too um because it's it's rather short book it's like 200 pages and I'm personally fascinated by the subject. And I just think that we have the opportunity. It really, I wouldn't say it depresses me because that's not the right word, but I think entrepreneurship

is one of the most important concepts in the world. In the world. And it's a vehicle for economic freedom for people that just are outside of the main. You know, like if you grew up in a rich family and you got to go to private school and you shepherd into all these high, you know, Ivy League schools and then come out and get a high-paying job, like that's a tiny, tiny track for a tiny, tiny percentage of all the humans on earth.

But the internet has demolished that playing field where now all of us have the opportunity to outpour and actually receive the economic benefit that we are able to give to other people right and what what is disconcerting to me is like in my own country i know a lot of people listen to this all over the world but like entrepreneurship's at a 40-year low and in my opinion it should be the reverse it should be the opposite trend it's easier now it's easier sort of business doesn't mean it's easier to succeed at it Which is why I spend so much time sharing these ideas with you because I want you to do well I want you like entrepreneurship changed my life

I was the first person in my family to graduate high school the first person to graduate college understand like without the internet without me Being able to access books and podcasts and youtube and unlearning whatever I want to learn like I would have been destroyed so that's why like I'm so passionate about people learning these ideas. Like it is life-changing. We need more of this, not less of this. And I love seeing things like just the weird things

that people come up with in a way to make the living and do things that they love and that other people benefit from. So it just, I'm very interested to make this recording of this next book because, and it's also, I'm going to read some other books about this too, because I do think that the thesis of the book is that economy is a scale, just a history of entrepreneurship, you know, let's say two, 300 years, whatever time frame you want to put on it, was big was always better. And now his whole thesis, which i'm pro uh you know predisposed to like is

like it's the internet is dismantling your entire economy and re and rebuilding it and that thesis on economies of scale has turned on its head and that most people i don't think understand that because most people always say oh i've always been told bigger is better bigger is better bigger is better so most people go out and try to do this. Meanwhile, you're seeing weird little companies. Like I saw a company that handles distribution for independent music artists. And they have 100,000 paying customers. And there's three people in the entire company. That's an example of unscaling. And they're not outsourcing the jobs to India or the Philippines.

They're outsourcing them to bots. They're using technology to gain this leverage. So I want to see more opportunities like that for people because I think there's a lot of people that could be entrepreneurs that don't think they can, but they have all kinds of ideas. And that's all it is. Entrepreneurship is just an idea. It's, hey, I think this thing I have is valuable. And if I tell people about it and they agree it's's, hey, I think this thing I have is valuable. And if I tell people about it and they agree it's valuable, well, human nature is they're going to pay you money for that.

We buy things that are valuable, whether I go downstairs and buy a smoothie because I'm hungry or I buy a car because I need to get somewhere or whatever the case is. Humans will clearly exchange money for value. And what I'm saying is like, now we have what, what deems, what people can deem valuable is much, much broader than people, than it was 10 years ago, 20 years ago, 30 years ago. And I think that trend going forward is only going to continue. So I want to use, like we're studying people that built usually big businesses, but I don't have a desire to build a big, big business. Now I want to use like we're studying people that built usually big businesses but I don't have a desire to build a big big business now I want to have an impactful business I want to have a

business that that helps people and I want to spread that as much as I can but that doesn't necessarily mean it's going to be more people right I'm rather introverted I don't like really managing people anytime I've been in that situation in the past I found myself to be unhappy so what what these technologies are going to allow us to do is we're going to be able to unleash an entire generation of people all over the world that never would even consider the idea of being entrepreneurs but can be because they have some unique skill or talent or just a different way to look at things and you don't need you know a massive office with massive raised massive amounts of money from a venture capitalist or or a uh or a bank and there's nothing wrong if that's the route you want to go you have to be who you are you know i'm saying but i'm just saying like when you when you can access what the book calls renting this technology is the way they they um is the way the author and his name's i gotta give him credit his name's i think hermont tanija i don't know if that's how you pronounce it but he that's the

term he uses renting it um it just completely it flips it inverses what is actually valuable and if you focus on your core competency what you'll realize and people that have already subscribed to founders notes know this because i've taken notes on several entrepreneurs that have said this like every single business process has now you can either be accessed to an api or or it can be accessed to another entire company that's just devoted for that and so what that means is you have this modularity where you can focus on what you're absolutely good at and then find people that are absolutely good so maybe like there's i just found out but it's one company that does um think about if you're selling physical products called happy

returns when people you know people buy stuff they're going to return stuff all the time that process they call the reverse the reverse logistics process is a pain in the ass well now you can just hire this company and they do it do everything for you and then you could focus on your core competency whatever that is so anyways there's tons and tons of examples all over um and i again i uh i just think that that is more of the future and that's when i think about like my own daughter like you know like i don't if she wants to go out and get a job by all means like i it's your her life do it but i just want her to understand that the barriers to entry of starting

your own business is a lot smaller um and that applies not only for the kids that are that are young now but people today people are there in kids that are that are young now But people today people are there in jobs that are trapped in jobs that they fucking hate There I know so many people that are miserable That would be so much happier just to be able to call their own shots to do their own thing Even if it's a tiny one-person business They would be better off and you have one goal right at this life. Why are we going to spend it being miserable? So if I can do anything,

if I can go out and I can be the conduit to go out and read these books, get these ideas to you in an easy to understand fashion, then I want to do that. And if I can listen to these podcasts and take these notes and email them to you so you can use these ideas in your own lives, I want to do that because I think that gives you the tool. Like it bursts open a dam of entrepreneurship and I want to burst that open. I do not want to see trends where it's, you know, that's more centralization, less people, more people going to work for companies they don't want to work for and less people being able to do their own things. Because what did Edwin Land teach us? If you remember that book, Insisting on the Impossible, his dream of a thousand small corporations, like instead of this one corporation, it's one giant centralized organization. He's like, my dream is for a thousand

corporations each reinvesting and investing $25 million into research and development and developing more technology and more products that we can all use, more diversification. Well, we don't have to stop at a thousand what about a hundred million different businesses like there's seven billion people on the planet each one could it doesn't have to be a single individual like in in unscaled there's some you know there's some companies that are using this technology there's hundreds of people but they have impacts that used to require thousands or tens of thousands of people that's what i want to empower people, and I want to try to play some kind of small role

because I think it's fundamentally life-changing. So I wasn't expecting to say that. All that, I hope you understand, I don't sit down with things written. I just go off of, I have notes in a book or highlights, but I just try to speak from the heart because there's no way I can keep this podcast. I can't keep doing it.

I want to do this podcast for a very long time. There's no way I can do that if I have to, like, script everything out. I just have to talk how I am as a person, and hopefully people will respond well to that. So that was an example of that. Thank you very much for your support. If you like what I'm doing, please support financially. I rely on it. I need you to do that.

And please tell your friends about it. Thank you very much. I'll be back next week.