Founders - Steven Spielberg

Starting point is 00:00:00 I just re-listened to this entire episode, and it's remarkable, not only like the filmmaking genius that Spielberg is, but the way that he built a business and the way he thought about building the business around his life's work. And the reason I went back and re-listened to this, and the reason I originally did this episode almost three years ago, the reason I'm republishing it now, in case you missed it the first time, or even if you'd listened to the first time, I'd highly encourage you to re-listen to it. You'd be surprised how much you're going to forget. But because I was working on the Tarantino episode last week, and he kept talking about it multiple times in Tarantino's book, he's talking about the fact that he thought that Spielberg's a natural-born filmmaker genius,

Starting point is 00:00:37 that he's made some of the greatest movies in film history. Tarantino would talk about Spielberg's gift of taking an idea they had in his mind and then making it real. And the other reason that I wanted to go back and study Spielberg is because in this episode, I talk about one of my favorite biographies of all time, which I covered seven years ago on episode 35. And it was George Lucas, A Life by Brian Jane Jones. I have spent the whole week, I'm still in the processes of rereading and really diving deep into George Lucas's life and work again. And so while I'm working on that, I think Spielberg is the perfect bridge from Tarantino to Lucas, because if you study Spielberg, Lucas is going to play a role in his life. And if you study Lucas,

Starting point is 00:01:14 Spielberg plays a role in his life. And what is fascinating is when you study all three, they have an idea that they have in common, right? And it's the fact that it talks about in this episode, it's talked about in the Tarantino episode, it'll be talked about in the Lucas episode. Spielberg in particular, he would watch and rewatch movies he loved. And it's the fact that it talks about in this episode is talked about in Tarantino episode. We talked about the Lucas episode, Spielberg in particular. He would watch and rewatch movies he loved. And then decades later, entire scenes from those movies would appear in Spielberg's own movies. That's this exact same thing as Edwin Land's ideas showing up in Steve Jobs companies and products. It's the same thing as Sam Walton's ideas showing up in Jeff Bezos's companies and products.

Starting point is 00:01:46 And a main theme that reappears for anybody gets to the top of their profession, anybody becomes great at what they do is they are seeped in the industry, the history of their industry. They talk about over and over again. They don't just read a book one time. They don't just watch a movie one time. They don't just have one conversation. They do it over and over and over again. That is why if you have not done so already, I'm going to highly recommend that you subscribe to Founders Notes. That's foundersnotes.com. You go to foundersnotes.com. That's founders with an S. For six years, I have been cataloging all my notes, my highlights, transcripts for every single episode, notes and highlights in every single book that I've done for the podcast. And

Starting point is 00:02:21 now by signing up for a subscription to Founders Notes, you get access to all my notes and highlights. You can search by keyword, by person, by subject. It's this giant database on the collective knowledge of history's greatest entrepreneurs. You can also read all my highlights and notes by book. You can have all my notes and highlights presented to you in random order on the highlights feed feature. I've been searching by keyword. I've been rereading by highlights, and I've been rereading in random order on the highlights feed feature. I've been searching by keyword. I've been rereading by highlights, and I've been rereading in random order on the highlights feed for years. I literally could not make the podcast without this tool. Now I've added a new feature that I'm super excited about. I can't stop talking about. It's actually called Sage. It is Founders Notes AI. And the name actually came from a Founders Notes subscriber because he heard all these names that I was trying

Starting point is 00:03:05 to figure out what to name this feature. He's like, no, that doesn't describe what this feature actually does. And he's like, you should call it Sage because Sage is a profoundly wise person that is often looked to for guidance and advice. And so what Sage does, it's like search on steroids. You can ask it a question. It'll search every single note, every single highlight, every single transcript, and it'll start making connections. It's been making connections that I've even missed. And so as I was re-listening to this episode, I went to Founders Notes and I asked it, I was like, what are the most, I asked Sage, what are the most important ideas to learn from Steven Spielberg? And then it gives an

Starting point is 00:03:34 outline of the top nine, what it feels the top nine ideas are most important to learn from Steven Spielberg. And the interesting part is if you press on expand, it actually tells you what it searched to come up with the answer. And obviously it's going to search, you know, the episode I did on Steven Spielberg. But then it searched when I mentioned Spielberg in a Steve Jobs episode, when I mentioned Spielberg in a Christopher Nolan and James Cameron episode. When I mentioned Spielberg in an episode on the creation of Pixar. And so I really believe a subscription to Founders Notes is the perfect companion if you're going to invest tens, dozens of hours, hundreds of hours of listening to Founders Podcast. It is the tool that will help you condense and clarify the

Starting point is 00:04:14 collective knowledge of history's greatest founders, so then you can use their ideas in your work. Highly recommend getting a subscription going to foundersnotes.com. That's founders with an S, foundersnotes.com. I appreciate the support and I hope you enjoy this episode on Steven Spielberg. One of his boyhood friends recalls Spielberg saying he could envision himself going to the Academy Awards and accepting an Oscar and thanking the Academy. He was 12. I've been really serious about filmmaking as a career since I was 12 years old, Spielberg said. I don't excuse those early years as a hobby. Do you know what I'm saying? I really did start then. That was an excerpt from the book that we talked about today, which is Steven Spielberg,

Starting point is 00:04:57 a biography, and it was written by Joseph McBride. And that is one of the reasons I wanted to read a biography of Spielberg, because I think it's so there's a few reasons. But one of them is the fact that from 12, from the age of 12 to 74, which is how old he is today, he's had the same goal. He has been making movies for 62 years. It's very rare for somebody to do something for that long, for 62 years. So I think that's somebody that we should obviously be studying and learning from. Another reason that he came to my attention is because he appears in one of my favorite books that I've ever read for the podcast. That's back on Founders number 35, and that's the biography of George Lucas. It's called George Lucas, A Life. And George and

Starting point is 00:05:39 Steven met when they were in their early 20s, and they became best friends and collaborators throughout their entire career. And I actually just re-listened to that episode. And then I reread, I want to make sure I'm rereading my highlights from that book, from that George Lucas book every year, because I think what he did, his approach to filmmaking that made him a multi-billionaire, there's a lot of ideas that he used. He just, in his work that we can use in ours, where he just approached the industry. He's like, well, why is, he just kept asking why, like why are movies made this way? Why are they financed this way? Why are they owned this way?

Starting point is 00:06:07 Why are they distributed this way? And he constantly questioned every aspect and realized, hey, I could come up with a better way to do things. And my favorite sentence in that entire book, and that's another gigantic book, it's like 500 pages, it's George Lucas unapologetically invested

Starting point is 00:06:22 in what he believed in most, himself. And we'll see today that Steven Spielberg did the exact same thing. So for today's podcast, it took a really, really long time. This is a gigantic book. It's almost 500 pages. The author interviewed over 325 people that knew Steven Spielberg. It goes into amazing detail of all the movies he made up until the end of the book. The book ends, he had just finished

Starting point is 00:06:45 Schindler's List and Jurassic Park. He's just over 50 years old. And in addition to reading the book, I also watched and took notes on this documentary that's on HBO Max right now, which serves as another biography of Steven Spielberg as well. It's two and a half hours long. So between the book and watching the documentary and taking notes, it took me about 30 hours of prep work before I'm sitting down to talk to you about it. So I'm going to be working off my notes from the book and the notes from the documentary as well. Before I jump into the book, I want to tie something that's remarkable that maybe you knew this. It blew my mind when I found this out, because I'll tell you how Steven Spielberg reminds me of Coco Chanel. So a few weeks ago,

Starting point is 00:07:23 a few months ago, I read the second biography of Coco Chanel that I've read. And she started off as an orphan. And I wind up, before she died, she was the richest woman in the world. And part of the way she got that way was because she signed one of the most lucrative deals in history. She previously made a mistake when she started her perfume company. She wound up giving away 90% of it. Didn't realize that Chanel No. 5 was going to be one of the most successfully commercial products ever made. And so like 20,

Starting point is 00:07:50 15, 20 years later, she winds up redoing the deal and she gets 2% of all sales globally for Chanel No. 5. That made her, in today's dollars, that means she made $300 million a year and she had a clause in that deal where the company had to pay for every single one of her living expenses. So Spielberg has a very similar deal. I just found out because I'm going to be reading a biography of Michael Jordan soon as well that he has a deal like this. Michael Jordan gets 5% of all sales from his Jordan shoe brand. And he's estimated to make about $150 million a year in present day because they're doing around $3 billion a year in sales.

Starting point is 00:08:31 So Spielberg winds up, and this deal is done after the book ends, but he winds up signing a deal where he gets 2% of all the ticket revenue at Universal Studios, the theme parks. And so that's rumored to pay him out. Again, this is just from this one deal. It's rumored to pay him about $50 to $75 million a year.

Starting point is 00:08:52 They keep trying, Universal keeps trying to buy him out. They say, hey, we'll give you a couple billion just to buy you out of this contract. And he keeps saying no. And one of the reasons I think that he keeps saying no is because in that contract, it's not only the Universal theme park that's in Orlando, but it's any future theme park that they built. And I think they're making a new one in China and somewhere else. I can't remember the other destination or the other place, rather. But he's going to get 2% of all ticket sales on that.

Starting point is 00:09:17 And the last time I looked, it was something like 10 to 12 million people a year buy tickets to just their Universal theme park in Orlando. And for some reason, when I was reading about that, an idea or quote from the founder of Shopify, Toby Luque, popped into my mind. And he says, you have to remember that the world is nonlinear. Spielberg, you know, had this passion for movies that started when he was 12 years old. He had no idea what opportunities him pursuing that passion over multiple decades could unlock in the future. Certainly couldn't have predicted that, hey, I can get 2% of all tickets at Universal Studios, you know, multiple decades in the future. So let's go to right when he's 16 years old. He had just made this movie. It's called Firelight. He winds up remaking this movie when he becomes a professional filmmaker. That's the movie.

Starting point is 00:10:05 The remake of this movie is Close Encounters of the Third Kind. But we see his personality at 16 years old, and a lot of this sticks with him for his whole life. He went by Steve Spielberg at this point in his career. Steve Spielberg had been shooting film obsessively for more than seven years with a mono-moniacal dedication that made him virtually oblivious to schoolwork, dating, sports, and other normal adolescent pursuits. So this idea of mono

Starting point is 00:10:33 maniacal dedication is something that's going to appear over and over again in the book. It appears over and over again in the documentary as well. He repeats it over and over again. He's like, I had one focus. I was obsessed with movies. I knew right away that this is what I was going to do for the rest of my life. And so he says, I know they're quoting him when he was, he's reflecting back at this time as being a young man, a young filmmaker. I was more or less a boy with a passion for a hobby that grew out of control and somewhat, that grew out of control and somewhat consumed me. I discovered something I could do and people would be interested in it and me. I knew that after my third or fourth little film that this was going to be a career, not just a hobby. And that's another thing that just makes Spielberg extremely interesting. Like how many people

Starting point is 00:11:15 realize from such a young age, two people come to mind that were similar to Spielberg. It was like, okay, I knew by the time I was a teenager what I was going to do for my life. Ingvar Kamprad, which is the founder of IKEA. I've covered him back on, I think, on Founders No. 102. He started IKEA, like 14 years old, worked on it until he died when he was in his 80s. And then Kobe Bryant knew from the time he was a teenager. He's like, okay, my goal is to be the greatest basketball player of all time. So I think it's rare for anybody to find what they really want to do in life, but even more

Starting point is 00:11:42 rare that you know from such a young age. It's just remarkable. So that's a little bit about the family life and the fact that he was really uncontrollable. He was a born director and we're going to see this. So his mom is talking. She said, our house was run like a studio. We really worked hard for him. Your life was not worth a dime if you didn't because he nagged you like crazy. Stephen had this way of directing everything. Remember, he's 16 years old this time. Not just his movies, his life. He directed our household.

Starting point is 00:12:09 He was a terrible student in school, but I never thought what was going to become of him. His mom was so tolerant of her son's lack of interest in school that she often let him stay home, feigning illness so he could edit his movies. So there's a lot about the uncertainty of his early family life that pops up in his movies. Talked about it at length in the documentary. It's covered over and over again in the book as well. His mom, he didn't really consider her a mom. She was more like a friend. She basically had no rules. She wasn't interested in growing up. His parents wind up getting divorced, and I'll get into the bizarre story, just crazy story, what his mom does. But then you have, so and I'll get into the bizarre story, just crazy story what his mom does. But then you have, so on one end you have his mom who's kind of like a

Starting point is 00:12:49 friend, right? And then his dad is this really gifted engineer that is highly recruited by the major technology companies of his day. So they move around, you know, from the East Coast to Phoenix to then he winds up in Silicon Valley and his dad was a workaholic. So Steve, Stephen winds up emulating his dad. But in Stephen's movies, a lot of them has to do with like an absentee dad. So they wind up reconciling later on in life. But Stephen had a really hard time with that. And Stephen's dad also took a bad approach, in my opinion, a bad approach. We kind of try to direct what his son was going to do with his life, force him into, hey, study math, study engineering, be an engineer like me. And Stephen, he just wasn't interested in that. He wasn't interested in school. He knew, okay,

Starting point is 00:13:32 I'm going to be a director. Not just I'm going to work in the film industry. I'm going to be a director. So he starts talking to his dad about wanting to be a director. And his dad tries to, what's the way to put this? He tries to make him think smaller. So you'll see what I mean right here. So he says, he said, I want to be a director. And I said, well, if you want to be a director, you got to start at the bottom. You got to be a gopher and work your way up. And he said, no, dad, the first picture I do, I'm going to be a director. And he was. That blew my mind. That takes gut. And here's another quote from a young Steven Spielberg, making movies grows on you. You can't shake it. I like directing movies above all. All I know for sure is I've gone too

Starting point is 00:14:20 far to back out now. And so this idea, there's no turning back. This obviously conflicts with a lot of conventional life advice, but it appears over and over again in these biographies. These people are just like, I have no plan B. I'm all in on this idea. This is something he talks about in the book. A quote from the documentary says it there too. And now, you know, the book ends. This book ends. He's just over 50 years old. The documentary takes place.

Starting point is 00:14:44 He's in his early 70s. And he says, I realized there was no going back. This was going to be what I was going to do or I was going to die trying. This was going to be the rest of my life. So a few pages later, there's two sentences, each on separate pages that I think are very interesting, very quick lessons here. And one is that it's obvious Spielberg was one capable of independent thought. And part of that came out of the fact that he just felt like a misfit. He felt different than everybody else. He felt he wasn't understood. He was not interested in the other things that were expected of a kid, a young person his age.

Starting point is 00:15:20 And he says, I never felt comfortable with myself because I was never part of the majority. I felt like an alien. Then he talks about his approach to filmmaking, which is very common for, I think, how you make a good product. The fact that you put your place in, you put yourself in the place of the customer. Like you make what you want to see.

Starting point is 00:15:39 And so he says Spielberg wants to find his approach to filmmaking by declaring, I am the audience. Recently, this is a 10 year anniversary of Steve Jobs' death, and I was rereading some notes from this book about how they created the iPod. And Steve Jobs and his team at Apple said they knew that the iPod was going to be a success because they loved using it. And Spielberg has a similar approach. He's like, I make movies that I want to see. A trait that we see in his earlier life that he keeps up for the rest of his career. The book ends with Jurassic Park, with them discovering, oh my God, he winds up trying to

Starting point is 00:16:15 hire... He didn't know that CGI had advanced so much, right? That they could actually have the velociraptors and Tyrannosaurus rex look like they did in that movie and so originally they were trying to physically make like these costumes they were going to have whether they were machines or they had people dressed up as them trying to run and trying to emulate what wind up being reproduced by the computer in the movie but from the very beginning he was obsessed with with finding the latest latest cutting edge technology that he could apply to his craft. This is something that's very important. And really, the way to think about technology is not just computers. This technology is just a better way to do something, right? And

Starting point is 00:16:52 you should invest in it because the savings compound. The money he saved, instead of having 30 or 50 different people running around, think about all the people that had to make the actual, the steel, the plastic, the materials that the dinosaurs had to be made out of could all be replaced by software. And Jurassic Park winds up being one of the most profitable movies. I think he made like $250 million. He's probably made more since then, you know, in the 20 years since then, just off that movie. It's just remarkable. And part of that was investing in technology. Invest in technology, savings compounds, Steven's fascination with all kinds of cutting edge technology and his mastery of the tools of filmmaking have been evident from the earliest days of his professional career. And there's actually a scene where I'm getting ahead of myself, but there's a scene in that documentary where Stephen goes up to Industrial Light and Magic, which is George Lucas' special effects company, and

Starting point is 00:17:46 they created the CGI for I think it was the Tyrannosaurus Rex running, if I remember the scene correctly. And they just could not believe what they were seeing on the computer screen. They compared that moment, right, that was taking place at Industrial Light and Magic to when sound was first introduced

Starting point is 00:18:02 to movies. The fact that they said it opened up a whole new way. If you could imagine it, you could do it. You weren't limited to plastic or steel. Another thing from his early childhood, and then I want to get into how he breaks into the industry because there's a lot of interesting lessons in there. One of my favorite quotes that I've read in all the books that I've covered for this podcast comes from Yvon Chouinard in his book, Let My People Go Surfing. And he says one of his favorite sayings about entrepreneurship is

Starting point is 00:18:29 if you want to understand the entrepreneur, study the juvenile delinquent. The delinquent is saying with his actions, this sucks. I'm going to do my own thing. And Yvon's like, that's how I approached my work. Stephen was very much the same way,

Starting point is 00:18:42 but he was like a bad little devil since he was a little kid and this is his aunt talking about that he's like we have a word for him in yiddish we call him amazing it said lovingly you know but it means a mischievous little devil and he was that okay so this is a little bit at the very beginning how did you know he becomes the youngest director ever signed um he's very much like a prodigy, like a wonder kid. So main theme in Spielberg's work, singular focus, which I'll repeat over and over again today. And enthusiasm attracts mentors. And it is extremely important,

Starting point is 00:19:16 especially when he was a 21, 20 year old kid, 21 year old kid, 22 year old kid, even in his early 30s. He's constantly when he's already successful constantly seeking out older wiser people that can help um and one thing that they're attracted in return to him is because he's he gives a damn he clearly has soul in the game his enthusiasm we are you and i talk about this on the podcast i remember again passion is infectious we just respond to it um and so you'll see the mentors found his passion and his enthusiasm for film and like, wow, OK, I want to help. I want to help this kid as much as I can. So it says he cares about one thing, making films. Spielberg was a genuine, you know,

Starting point is 00:19:57 before I read the sentence to you, another note I left myself on the page. You can change an existing industry. Lucas and Spielberg did. And so this is a description when they come in, you know, the golden age of Hollywood's over. And now in large part to Lucas, Spielberg, Francis Ford Coppola, Martin Scorsese, Brian De Palma, all of which are friends, which is one of the most amazing things about this book and about the documentary as well. Because you have all these young filmmakers, they came in an existing industry, an already successful mature industry, and started questioning everything.

Starting point is 00:20:29 You know, at the time, we're about to read to you, it's like young people were just actors. You were not put in position to make movies, to be in charge at all. And through their talent, their enthusiasm, their hard work, they're like, no, no,

Starting point is 00:20:38 we're going to do it differently. You don't have a monopoly on the medium of filmmaking, which I find personally very, very inspiring. Fibber was a genuine novelty when he arrived in Hollywood. The movie industry at the time was still middle-aged man's profession. The young people on the Universal lot were actors.

Starting point is 00:20:54 One of the first contacts he made in Hollywood was Charles Chuck Silvers. This guy is extremely important. Older generation. He's the Universal Pictures film librarian. And he became the earliest mentor, Steve's earliest mentor in the film industry. And so his relationship with Silvers, because he starts as an intern there, develops a relationship with him. He, Silvers helps him get signed to this other, the other, the other most important, or I guess now he has more another important mentor this guy

Starting point is 00:21:27 named shinberg um i'll get there in a minute but before i get there the the what i'm going to read to you is also important it's like it's yeah you're passionate yeah you're enthusiastic but you also have to have a piece of work that you can point to you need a calling card you can't just say hey i'm excited about making films okay well have you made a film and also advice, Steve, I was watching him on YouTube, advice he gives to young filmmakers that want to make films. He's like, you can do this with your phone now. Like, you have to make films. You need a piece of work that you can point to as an accident calling card. And so Spielberg goes out and he makes a short film. It's called Amblin, which is also later on becomes the name of his company. But it says Spielberg did manage to direct an independent short film called Amblin in the summer of 1968, several months after his 21st birthday.

Starting point is 00:22:11 Amblin was what brought Spielberg to the attention of Sid Sheinberg, then vice president of production for Universal TV, who offered Spielberg a directing contract. So these two mentors lay the foundation for his career, his relationship with Universal. Think about how crazy it is. He's going to start out as an intern and eventually get 2% of all their ticket revenue later on, many decades later. So that's Chuck Silvers and Sid Sheenberg, the important characters. Spielberg, 21, is believed to be the youngest filmmaker ever ever contracted by a major studio. So I go back to what his parents say about him as a young person, too, because Not only the dissolution of his parents' marriage, they're fighting all the time,

Starting point is 00:23:08 but also they kept moving around. They went from a Jewish community to being the only Jewish people around, so there's a lot of anti-Semitism he had to deal with. But it says, when he was growing up, I didn't know he was a genius, his own mother later admitted. Frankly, I didn't know what the hell he was. You see, Stephen wasn't exactly cuddly.

Starting point is 00:23:25 He was scary. When Stephen woke up from a nap, I shook. My mother used to say the world is going to hear of this boy. She continues. No one ever said no to him. He always gets what he wants. Asked how she influenced her son's development. She replied, I gave him freedom.

Starting point is 00:23:41 Stephen inquired what he called his father's workaholic personality. He was like this even in high school. And he definitely liked that for, I mean, it's funny because later in the book, he's like, yeah, I had his first son's born. I think he's around 40 years old. So he's like, you know, I'm going to just not work weekends. I'm going to be home. He does that for a very short amount of time, but he's definitely an obsessive. Stephen acquired what he called his father's workaholic personality along with such trait as his love of storytelling

Starting point is 00:24:07 and his fascination with high technology that his father introduced him to. Steven's tendency to withdraw into his own world is also a legacy from his father. Like Steven, his father was an introverted person. Then talks about more about his mom's influence on Steven just realizing, hey, I don't really want to be an adult. I want to create these,

Starting point is 00:24:24 I want to live like this fantasy world. The rule at home was really want to be an adult. I want to create these, I want to live like this fantasy world. The rule at home was just don't be an adult. Who needs to be anything but 10? We never grew up at home because she never grew up, Stephen commented. And so one of his favorite stories when he was younger was Peter Pan. And so something he took away from that story,

Starting point is 00:24:39 he says he was mightily impressed by Peter's defiant declaration. I don't want to go to school and learn solemn things. No one is going to catch me, lady. I always wanted to be a little boy and have fun, Spielberg admitted. I've always felt like Peter Pan. I still feel like Peter Pan. It has been very hard for me to grow up.

Starting point is 00:24:57 And that theme continues throughout the book. There's a quote in here that's describing Citizen Kane, the movie that comes from the main character of Citizen Kane, which is Charles Foster Kane, which is actually built upon the real life of William Randolph Hearst. And I think this quote from William Randolph Hearst, it also applies to Steven Spielberg, which he says the same thing later on. And the quote about William Randolph Hearst is, he was disappointed in the world, so he built one of his own. That's a way to think about Stephen's approach to his work and his career. And so Stephen said, I never felt life was good enough,

Starting point is 00:25:31 so I had to embellish it. That was also something that caught me semi by surprise. How much Stephen lies. Constantly just making up stories. He would lie about his age over and over again. Constantly wanted to make it seem like he was younger uh than he actually was so it's more impressive if you know he starts directing uh tv when he's 20 or 21 when he's actually maybe 22 or 23 there's just a ton of stories about that a ton of stories he made up about like his origination story about how he

Starting point is 00:26:01 broke into universal studios commandeered an office and then went to just went to work and nobody noticed for two years that wound up being not true but just this whole theme of like i'm just gonna you know i don't like my life i'm gonna create it even if i have to lie and bend the truth is definitely uh something that that appears in the life story of steven spielberg this is about something like, I was surprised at how many of things that happened to his childhood, in his childhood, that he would reference in movies many, many decades into the future, over and over again. And so this is one of them. I think this is actually a scene that is in his movie, Catch Me If You Can, which he made, I think, in 2002. And this is something that happened to him back in his 60s. And this

Starting point is 00:26:45 is the fact that this is very traumatic for him, but Steve's mom marries his dad's best friend that the family considered like an uncle. They didn't tell their kids. Stephen's dad, even though his mom fell in love with his best friend and left him and married him, Stephen's dad, even though his mom fell in love with his best friend and Mary and left him and married him. Stephen's dad told his kids that he was responsible for the divorce. And so for 20, 30 years, he was largely alienated from his father based on another lie. This is bizarre.

Starting point is 00:27:16 And they talk about it in the book, which I'm about to read you now. And then his sisters are interviewed in the documentary. That was like, this was bananas. Like this was our uncle Bernie. And our mom runs off and marries our uncle Bernie. So it like, this was bananas. Like this was our uncle Bernie and our mom runs off and marries our uncle Bernie. So it says, uh, Bernie Adler was an engineer who followed Arnold

Starting point is 00:27:31 out from New Jersey and worked as his assistant at GE at General Electric. Bernie was almost like a member of the Spielberg family. The kids called him uncle Bernie. He was always there. He did everything with them. Uh, Spielberg's mom would enter into an enduring marriage with Bernie Adler. She said she found Bernie so funny, so bright, so moral that I fell madly in love with him. And so this was rather embarrassing for the kids because even there's quotes from the neighbors in Phoenix. They're like, we weren't actually sure who the father was. And so there's a scene where leonardo dicaprio in catch me if you can is sitting down with his dad saying hey you know let's call your mom let's

Starting point is 00:28:10 call mom whatever the case is and the dad says no he she ran off and married my best friend that actually happened in spielberg's life and then in another plot twist bernie winds up dying many years later and now steven and his mom are are Stephen's dad and his mom who are like in their 80s or 90s. They're extremely they got to be in their 90s or back together. OK, so let's go. I want to move ahead a little bit because Steve Stephen has this like encyclopedic knowledge of the history of films, and he's constantly going back doing the same thing you and I are doing right now. We go back through the history of entrepreneurship, he's constantly going back doing the same thing you and I are doing right now we go back through the history of entrepreneurship find ideas that are useful and apply them to our work he did that in film over and over again he's like oh I like that idea

Starting point is 00:28:51 in fact I will take that exact same shot and so this was very similar to um David Geffen when I read his his biography for the podcast that Stephen that's Stephen's obviously future partner he would he was obsessed with show business he would just hang up hang out at the movies all day are in steven's case it's the movies i think in david geffen's case it's broadway shows so you pay like a quarter and you could hang out there all day so it says steven's movie fanaticism was nurtured at the kiva theater on main street in scottsdale arizona parents would drop off their kids on saturdays and leave them all day with 50 cents admission to a program that would include westerns and Tarzan movies sci-fi and monster movies it was a great sat it was it was Saturdays were great Spielberg recalled I was in the movies all

Starting point is 00:29:33 day long every Saturday I've seen absolute duplicates in Spielberg movies of scenes that we used to see back in the 1950s at the Kiva theater they give an example of this when Harrison Ford in Raiders of the Lost Ark rides his horse down the hill and jumps onto the truck carrying the Ark, Spielberg got that shot from the 1937 serial Zorro Rides Again. Even the camera angle.

Starting point is 00:29:56 One of Spielberg's heroes and he has a bunch of filmmakers that he would look up to and idolize and in many cases emulate would be Alfred Hitchcock. So Arnold, his dad, Arnold Spielberg, took Steven to see Alfred Hitchcock's movie Psycho. Now what's crazy is this idea,

Starting point is 00:30:14 does it even say in the book? No, I think I, okay, let me read this to you and then he talks about this in the documentary. Steven later told a neighbor how impressed he had been with Hitchcock's employment of the power of suggestion. Steve talked about the shower scene in Psycho, how Hitchcock never showed any real violence. He showed you the knife and this and that, but most of it was in the viewer's mind.

Starting point is 00:30:35 So he uses that idea, the shower scene from Psycho. Steve uses that, the power of suggestion with Jaws. In the movie Jaws, the shark winds are breaking down, right? They didn't expect it to break down. So now you have the star of the movie you can't even use. And he comes up with this idea, if you've seen the movie, of the barrels, those yellow barrels that are tied to the shark. And he uses the power of suggestion showing the movement of the barrels, never actually showing the shark. And that's an idea that he learned when he was a young person watching Alfred Hitchcock.

Starting point is 00:31:07 This is another example of how important studying the filmmakers that came before him were for his career. It says, the movies that impressed Stephen the most when he was a boy were two epics directed by David Lean, The Bridge on the River Kwai and The Lawrence of Arabia. Spielberg later called Lean the greatest influence I ever had. He emulated Lean's sense of visual storytelling throughout his career. He says the scope and audacity of those films filled my dreams with unlimited possibilities. You know what's crazy? In the documentary, he says that he watches great films over and over and over again, right? Just

Starting point is 00:31:40 like we should be reading books or any kind of experiences that we have. Books is the most obvious example here. You may read a book once and then you read it five years later and it's like, oh, the book changed. No, the book's the same. You change, right? He still sees Lawrence of Arabia every year. He talks about that in the documentary. The movie came out in 1962. Okay, so now he's college-aged. This is where he meets...

Starting point is 00:32:07 We're going to go into more detail about where he meets that mentor, Chuck Silvers. He gets a meeting and a tour where the Universal's head librarian. And this was Silvers' impression of Spielberg at that age, okay? He explained how he wrote, photographed, and directed his own pictures, casting them with neighborhood and school friends, devising the special effects, and even making the costumes. Stephen was such a delight, he said. That energy. Not only that impressed me, but with Stephen, nothing was impossible. That attitude came through. It was so clear. He was so excited by everything. When we walked onto a dubbing stage, how impressed he was. At some point in time, it dawned on me that I was talking to somebody who had a burning ambition.

Starting point is 00:32:49 And not only that, he was going to accomplish his mission. He was very young for his age in all other respects. But when it came to motion pictures, god damn, I knew he was going to do something. I didn't know what the hell he was going to do, but he was going to do something. You can't walk away from a kid like that. Just out of curiosity, you want to sit and watch. And so this is a quote from, he's a senior in high school, from the school newspaper. This is right after he met Silvers. So he says, Steve Spielberg worked with Hollywood directors to summer Universal Pictures. Spielberg spent the whole vacation working as an unpaid clerical assistant in the Universal editorial department.

Starting point is 00:33:30 The job enables Spielberg to roam the lot watching films and television shows being shot and to hang out with film editors and other post-production people, learning the craft of professional filmmaking. He would continue hanging out on the lot all through his college years until with Silver's help he was hired as a director. This is more on the beginning this this this beginning opportunity to Universal and the note of myself is this is amazing he starts out as an intern at Universal now gets two percent of all Universal tickets. Reminded me of uh remember that book The Gambler on Kirk Kerkorian I I think it was like Founders No. 67, somewhere back there.

Starting point is 00:34:06 But Kirk Kerkorian starts out as a day laborer on the lot of MGM Studios. I think he's like moving around heavy rocks for production, right? He's getting $2.60 a day. 30 years later, he owns MGM and the return on investment makes him $260,000 a day. From $2.60 as a day laborer a day to owning MGM and making $260,000 a day. A lot can happen in one lifetime. But the reason I'm bringing this up to you is because Spielberg does something here that you and I have talked about over and over again,

Starting point is 00:34:42 the importance of developing your own curriculum. We call this personal curriculum. I think a better term for it comes from Bill Gurley, that talk, it's called How to Run Down a Dream. It's on YouTube. And he talks about what he learned by studying Danny Meyer, not Phil Knight, Bobby Knight, and Bob Dylan, I think is the musician. But the fact that they would, all the work that they're doing, that's not work. So all the stuff that they're trying to learn, that they apply to work. He called it professional research. And he goes into detail in that talk, how they all did that and how it enhanced their work. It's a fascinating talk.

Starting point is 00:35:19 But anyways, so says Spielberg began his apprenticeship at Universal in the summer of 1964. His mentor, Chuck Silvers, recalls that the ambitious teenager gradually worked out his own curriculum. They say it specifically here. He's working on his own curriculum on the lot, visiting sets, talking with editors and sound mixers. He was kind of a guest, a self-appointed observer who made his own arrangements with the people who responded to him. Many chapters later, it picks up this theme about the importance of developing your own personal curriculum, your own professional research. So it says Spielberg remained essentially an autodidact. Spielberg followed his own eccentric path to a professional directing career.

Starting point is 00:35:58 Universal Studios, in effect, was Spielberg's film school. He couldn't get into film school. Every single film school rejected him. Giving him an education that was both more personal and more conventional than he would have received in an academic environment. Spielberg devised what amounted to his own private tutorial program at Universal, immersing himself in the aspects of filmmaking he found most crucial to his development. And so it's this point where he finds other like minds. And this is just, again, I repeat myself, but this just blew my mind. Like the day Jaws comes out, Spielberg's driving around with Martin Scorsese. Like before Martin Scorsese was Martin Scorsese. The idea that you have George Lucas, Brian De Palma, Steven Spielberg, Martin Scorsese, Francis Ford Coppola. You have a group of crazy people who were all obsessed with movies all struggling to make it at this point right now you fast forward 50 years and they're all hugely successful but not this point

Starting point is 00:36:50 and the whole group winds up becoming successful and dominates the movie business all the time all the time though they're giving each other feedback trying they're friendly but they're trying to compete with each other they go back and forth between producing like the most financially successful movies at a time first First it's Godfather. Then I think Spielberg passes them. And then I think Lucas passes Spielberg. It's just absolutely remarkable. And I've already read biographies on Lucas and Spielberg.

Starting point is 00:37:17 I'm looking for biographies on the rest of these people as well. But let me just tell you a little bit more about this time in history because I found this fascinating. And I find it fascinating because, again, they're doing this to an already mature industry. There's always room for more opportunity. It just starts with questioning why things are done the way they are, right? So they're called the movie brass, this whole crew, and sometimes referred to as the USC mafia. And there's a bunch of us, not just these five people. There's screenwriters. There's entertainment attorneys, they're all helping each other. It's very fascinating. At the time they came to Hollywood, generations of nepotism had made the studios terminally inbred and unwelcoming to newcomers. The studio system, long under siege from television,

Starting point is 00:37:56 falling box office receipts, and skyrocketing costs was in a state of impending collapse. How fascinating is that? From the outside, it's like, why are you wasting your time making movies? What is wrong with you? Television is the future. This, look at this. They're making less money. You can't get in. You have to go, people are going to film school and the professors are saying, don't go to film school because you'll never get hired. It's just very fascinating. That's when they're like, okay, at the very bottom of the market, so to speak, they're like, okay, well, this is where the opportunity can't go anywhere up from. I can't go anywhere else from here, but up. Right. The future seemed daunting for the for the determined young movie fanatics who came of age in the 60s and for whom film historians coined the phrase the movie brand.

Starting point is 00:38:38 Spielberg vividly remembers how he and such other self-starters, that's how he's describing himself, Lucas and Scorsese, had to chisel and dynamite their way into a profession that never really looked to young people except as actors. There were no willing producers at that time I was trying to break into the business. My first thrusts were met with a great deal of animosity but all these people the movie brats usc mafia this is a description of them were unwilling to settle for such limited dreams they ate breathe and slept movies with a passion earlier generations had brought to writing or painting and so what they needed is they needed somebody like francis ford coppola who was the first young director to break through and then once they saw wait a minute that guy can do it and he's great talented they're not they weren't saying he wasn't talented but it's like okay he's not he's like a couple years older than me I can do

Starting point is 00:39:33 it too it's extremely important it took Coppola to start breaking down the doors of Hollywood for other film school graduates in the late 60s he became as Spielberg put it all of our godfathers and so now we fast forward uh to when Spielberg and Lucas start becoming friends. They wind up being pals, inspirers, collaborators, but they're pushing each other because of how talented they were. So Spielberg, you know, is like, I'm a young hotshot. I'm good, too. Oh, wait, there's another me. Right. There's always another you. Like, you got to know that. And so what what Spielberg realizes, like he watches Lucas's film, he's like, oh, my God, I'm sick to my stomach at how good this guy is. and had directed 15 short films by that time. And this little movie was better than all of my little movies combined. So he says now, you know,

Starting point is 00:40:28 before he had all these people like Frank Capra, Walt Disney, Alfred Hitchcock, David Lean, all these people, but he's like, now I can have a role model and a collaborator and somebody that inspires me that's my own age that's doing the same stuff I'm trying to do. So he says, now, instead of having those role models,

Starting point is 00:40:42 rather with someone nearer to my own age, someone I could actually get to know, compete with and draw inspiration from. And that was remarkable how, you know, they're obviously very driven, big egos, but they didn't have big egos with each other. Right. They're like, listen, we're competing, but I'm also being inspired from you. And they were able to maintain like a friendship. Right. And they had the maturity to realize, hey, it's we're going to get a lot farther if we can help each other than if we just like, oh, I hate that guy because he's doing the same thing I'm doing. Well, this is not a zero sum game. Like people can like your movies, George, and they can like my movies as well.

Starting point is 00:41:17 It doesn't have to be just one filmmaker. The fact that they were able to do that at such a young age is very, very admirable. So here's another fantastic little story from the book. And hell yes for Chuck Silvers is what I wrote here on my note on this page because if we ever have the opportunity to stick up for a young, talented person, we should do it. And this is an example of that because Stephen's dad, who is now divorced and living with his dad steven's living with his dad but basically gone

Starting point is 00:41:45 all the time because he's obsessed with uh with movies steven's dad realizes hey he's spending a lot of time universal spending a lot of time with this this guy named chuck i'm gonna call this guy chuck and tell him hey my son needs to be focused on college steven didn't want to go to college he winds up placating his his i think mainly his dad uh it goes to like long beach college or long beach university something like that but he doesn't give a shit about that like he's spending all his time universal winds up dropping out and the reason i say hell yes for chuck silvers is because look at the conversation that he has he's like your dad doesn't understand the opportunity and how gifted you are and this is not an opportunity that waits around,

Starting point is 00:42:25 right, for you to finish school. Shortly before Steven started college, Arnold made a phone call to Chuck Silvers, Steven's mentor at Universal, who described their conversation, the only substantial one he and Arnold ever had, as spirited. He's going to Long Beach State. I'd appreciate it if you would do what you can to make sure that he goes to school. Silvers said he couldn't do that. Look, there's something you've got to understand about the motion picture business, he told Stephen's father. For Stephen to realize his ambitions, he's going to need a hell of a big break.

Starting point is 00:42:54 Somebody's going to have to put a lot of faith and a lot of money up so the rest of us can see if Stephen is who he appears to be. I'm his friend. If it comes to a choice of Stephen having the opportunity to direct something that he could use as a showcase, I will his friend. If it comes to a choice of Steven having the opportunity to direct something that he could use as a showcase, I will advise Steven to do it. School be damned. Lightning doesn't strike twice in the same place in this industry, so you'd better be ready for it. They

Starting point is 00:43:16 don't care whether you've got a degree or not. What they are interested in is what he can put up on the screen. And so his dad's like, well, okay, that's fine. I still want to go to school. Silver's reaction is with talent like Steven Spielberg, you don't get, you don't set that kind of goal. What the hell good is a degree that wasn't Steven? And this is such an important part of this whole thing about this. Like, I'm not trying to direct him what to do. I'm trying to be there for him. So Silver says, my idea of encouragement was to be there. Basically, that's the only function I really served. Somehow, I always became a listening board every time he got a story idea, every time he shot some film. Asked why he went so far out of his way

Starting point is 00:43:58 to help Steven, Silver replied simply, I liked him. I admired this lump of raw material. Just think about, just pause and think about what is happening in the story. How important. There is an alternate future where Steven does not have the help of Chuck Silvers, somebody that is a film historian, somebody that's been with Universal, somebody can help guide him. Somebody that's a few decades older than him. And we don't know the name of Steven Spielberg because that wasn't that opportunity didn't present itself. He didn't actually stand up for this person. He's like, hey, this guy is talented. The work he's putting onto the world is important. I'm going to be there to encourage that. That is just so, so important if we're giving the opportunity to do that for people and steven winds up and playing that that same role in the future for young

Starting point is 00:44:50 filmmakers and young writers and young producers it's so so important and it's another idea that he got from chuck which i'll talk to you about later but i just want to pull out this thing what his what his father's telling him to do right he's going to school he's going to drop out but this is just a reflection of how disjointed school can be from real life. And this is something that Phil Knight, founder of Nike, and Fred Smith, founder of FedEx, dealt with too. They both wrote papers about exactly what they were going to do. The idea for Nike, the idea for FedEx, and I think they both got a C. Same thing happens to Spielberg. This is so silly. Nothing sums up the frustrations of Spielberg's academic experience at Long Beach State better than his record in the TV productions help. He often would walk

Starting point is 00:45:46 up to stars and directors and producers on the studio streets and invited them to lunch. Cary Grant and Rock Hudson were among those who accepted. This is the same thing that a young Steve Jobs did. He called up Bill Hewlett, if I remember correctly. I think it was Bill, not David. Either one, the partners, calls him up, asks for parts, says, I'm a 14, 12-year-old kid, winds up getting a summer job. Later on, when he's like 18, 19, he calls up all the people, Bob Noyce, founder of Intel, the guy that did microsystems, I can't remember his name, a company. I greatly admired the people that knew. So I called them up. I asked if I could talk to them, if I can have lunch, coffee with them. Yeah. Some people are going to ignore you. Some people are going to not be able to do it, whatever the case is. But some people will say, yes, just shoot your shot. A few pages later, look at this. This is repeated over and over again. It's so important. Professional research, personal curriculum. We've got to develop that.

Starting point is 00:46:45 Spielberg asked a million questions to the editors. It was a process of absolute technical application. He worked out his own curriculum. I am not making up these words. This is the author using this sentence, this statement that you and I have talked about over and over again, multiple times in this biography. He worked out his own curriculum. It was the real world. There's no school you can really go to learn to be a filmmaker.

Starting point is 00:47:10 That's not what they teach. And then later on, we have Silvers talking about this. He's like, listen, I helped him, but my impact, I tried to open as many doors as I could, give him advice from an older, wiser perspective. But you can't teach, like who's going to teach Da Vinci, right? This is a very, very interesting, just quick paragraph for you. I don't want to cast myself in any way as his teacher. I wish to hell I had been. How the hell do you teach Maria Callas how to sing? Who taught Da Vinci? You can expose people to things, but they have to have it in themselves. As far as I'm concerned, he's the most gifted person in motion pictures. And so with the fact that Spielberg obviously was extremely, he calls himself a self-starter. He had a piece of work, which I have to repeat is

Starting point is 00:47:58 very important. You have to have something you can point to. It's not just like, oh, come, you know, I'm just somebody you don't even know, you know you know come help me like they see that this kid's out here hustling he's out here working he's actually doing this he's really interested in this industry that i'm in right and he's got something to point to so because he had like a calling card he was able to get signed and then he's just so grateful because he feels chuck silvers is the one that like opened all the doors for him at universals he's like, be my manager. And listen, Chuck is so wise here. And he just has one request.

Starting point is 00:48:31 He's like, listen, I'm just doing this because I want to help you. But you have to pay this forward. After your success, his one request, Chuck's one request to Steven Spielberg is the same thing. It's why Ingvar Kamprad said over and over again, founder of IKEA, why am I writing this book? People told me I didn't want to write an autobiography. I resisted the idea. He says explicitly, the argument that convinced me from his co-writer was that you know stuff that will help future entrepreneurs and you love entrepreneurs. And so that's why he wrote the IKEA story, because I'm going to, now he's passed on. It's a good thing he did because we wouldn't have had access to his ideas. Sam Walton, same thing. I'm writing this book because I wanted to help you. Phil Knight. There's some kind of instinct. These people are older. I think

Starting point is 00:49:15 in that case, in those three examples I just gave you, I think they were all in their seventies by the time they wrote it. And in Sam Walton's case, he knows he's dying. He's super, super sick. He talks about in the book, he's got cancer everywhere, right? But it was very important for them. Bob Noyce, same thing in Intel. They're like, what the hell, Bob? You're wealthy. You could be doing anything in the world.

Starting point is 00:49:36 Why are you spending time having 19-year-old, 20-year-old Steve Jobs at your house? Why are you going to give these talks? Why are you doing all these investments? He's like, I need to restock the stream I fished from. It's that natural human instinct to be like, OK, I benefited greatly from this knowledge, from this industry, from this mentorship. I'm going to go and turn it around and do it for the next generation, too. It's amazing.

Starting point is 00:49:57 So Spielberg then asked me if I'd be as a manager. Silver said, I said, Steven, you need someone who knows a hell of a lot more about the business than I do. I'm not the right person. He asked me what I wanted for helping him. I said, well, Steven, by the time you really make it big, I'll probably be too goddamn old for you to do me any good. In effect, what I told him was, when you can, pass it on. When you make it big, you could be nice to young people. I learned from people I had no way of thinking. Oh, excuse me. I learned from people I had no way of thinking. I learned from people I had no way of thinking. You can pass that on. Steve made me a promise and he kept it. You look at the list of first-time directors and new writers and first-time producers he has made

Starting point is 00:50:40 an opportunity for. He puts his money and he puts his business personality on the line. Okay, so he's already signed as a director. Again, I've repeated this over and over again. I'm going to repeat it one more time because it's a note I left myself on this page. There's two notes for myself. Number one, have a piece of work that you can point to, right? He set up a screaming of Amblin. It was an incredible piece of work. This is how he gets signed. But this guy named Sid Scheinberg. So think of this as mentor number two in Steven's life. And they're still friends to this day, which again, like, this is something I always look for. Like if, if like when you meet new people, it's like, it's very important that they have,

Starting point is 00:51:14 they've been able to develop relationships for a long time because like you can fool, like you can fake being a good person for, you know, a couple months, maybe a year, maybe even a few years. you know if somebody's known you for 20 years like you can't fake being a scumbag for that long right and steven something that he talks about i actually i wasn't going to talk about this now but i might as well because it pops my mind it's like something that that i think is an idea that we can take from spielberg he talks about like the reason he's able to work so quickly now is because he's worked with the same people for decades, right? His editors, his visual effects people, the people like when he's on a new project, he winds up hiring a lot of the same people over again, because he says,

Starting point is 00:51:54 like, we just have a way, like all the knowledge we have working with each other, it compounds. And that compounding makes it easier for us to communicate and work faster. He's like, if I had to hire brand new people every few years to do a project, he's like, I couldn't do this. This is very similar. If you, I did a three-part series on Larry Ellison. He said the same thing. He's like the reason he's like the core programming team at Oracle for the first, I forget it was like 10 years, whatever the time period was like, it didn't change. It was like the same 30 people, whatever the number was, right? I can't, these numbers might be wrong, but the main point I'm telling you is definitely, I remember correctly. But the idea is like, you don't want all this

Starting point is 00:52:28 turnover where you see these people jumping from project to project, working with constantly new people. Yeah, you might want to do that. You might want to get some fresh idea and new blood in there. But the idea is like, well, just like money compounds, time compounds, knowledge compounds too. And now you've been working together. You have a way of a fundamental understanding that has taken years to develop. And if you keep switching, like you're interrupting the compounding. And so Stephen applies that to not only the people he works with, but his professional relationships up and down. Like not only the people he hires, but the people that hired him.

Starting point is 00:52:57 It's very fascinating. So he has this piece of work. Sid winds up hiring him, gives him a contract. He makes him do TV first. Stephen does not want to do TV, right? So the second thing is you may not like your first opportunity, but you got to do your level best. So the script was terrible. Spielberg said later, I really didn't want to do the show. I told Sid, Jesus, can I do something else?

Starting point is 00:53:16 He said, I'd take this opportunity if I were you. And of course, I took it. I would have done anything. And so he talks about the very beginning something also that might surprise you to this day from the from the first time he makes a movie till now he's constantly throwing up nervous uh every time i start a new scene i'm nervous talks about vomiting over and over again he's a 65 year old man when he's talking about this right and the same thing he that was happening to him when he was younger.

Starting point is 00:53:46 Like, we just don't, and I'm glad he shares this because from the outside, it's like, oh, this guy obviously knows everything. He's got, I don't even know what, four of the, I don't know what the number is now, but I think when this book ends, he has four of the top 10 highest grossing movies of all time. Like, just outsized, remarkable success. This guy clearly knows what he's doing, and yet you don't see before the camera turns on, he's in the corner throwing. I was so frightened that even the whole period is a bit of a blank blank for me i was walking on eggs i didn't know if you if i'd ever i don't know if

Starting point is 00:54:12 you've never been to bed for four days in a row it's like taking drugs i don't take drugs i never had or i would have used every drug under and over the counter at the time the show put me through dire straits it was a good discipline but a very bad experience so you have he goes from the euphoria, right, of being signed, youngest director ever, to the terror of not liking the work and being very bad at it. He has a breakdown and he winds up having to take a, really the high from being, getting signed. And then the fall of being despondent. He has to take a break. Not only had he failed to interest Universal in letting him bring to life all the stories I had in my head, but no one was even offering him TV episodes to direct. I was in a despondent,

Starting point is 00:54:54 comatose state. And I told Sid I wanted a leave of absence and I got it. And there's one more sentence about this point in his life, because I think it's extremely important to remember success is not a straight line. He didn't just go from Night Gallery, the show he didn't like, to Jaws. His career stalled at a number of occasions. Okay, so there's an idea that popped up in the book and in my notes multiple times for the documentary. And it's this idea that he thinks visually. And really the way I think about this is like, you got to find the perfect medium or the perfect format for your skillset. And there's another way to put it. Somebody else later on the documentary says that Spielberg speaks cinema as his native language. And Spielberg in the documentary also gives advice. He's just like, you have this idea of what you want to do,

Starting point is 00:55:43 and it's only in your head. And he says, no one can help you holding the entire idea in your head, that that is your job. That's something that you have to figure out how to do. And I think that's his approach to movie making. So let's go back to the book. He thinks visually he's in the perfect format for his skill set. And he says he seemed to be able to see more than other people saw. He didn't seem to waste any time. He didn't seem to get caught up in what directors often do. Eating up camera time, eating up miles and miles of film. This is back before there was digital film. There was literally, with a physical film, they produced literally, that's true, miles of film on a movie.

Starting point is 00:56:20 He seemed to cut on the floor. We knew that this boy knew about the camera. And then he combined this, this, the way he thought visually, which is perfect for obviously being a filmmaker with the fact that it's just try not to be a dick. Just try to be, you're going to get farther if you can avoid that. And a lot of people would interact with Steven, like, okay, like he's not, he's got, he says he has a nice manner this gets you a long way when a director has the attitude I don't know everything about this but would you like to try something which is how Stephen interacts with the people his co-workers you're willing to knock

Starting point is 00:56:55 yourself out for that director and so I think at this point in his career where he's really struggling it was very helpful to have all these other filmmakers around him these young filmmakers because he's suffering internally but this is the note of myself positive forward motion regardless of internal suffering which is just a really smart idea they're all not really getting what they like they they're their talent and their drive is is currently not being like there's no evidence of actual accomplishments like they're not getting as far as they think they could based on the talent they already have and the drive they have. So it says, we were all ambitious and wanting to work and none of us were getting the kind of work that we wanted to do. Stephen knew he wanted to do features, meaning movies. When Stephen was very

Starting point is 00:57:39 discouraged trying to sell a script and break in, he always had a positive forward motion, whatever he may have been suffering inside. So positive forward motion, regardless of external circumstances. So eventually he does get the opportunity to direct a movie. It's called Sugarland. It flops. And it's very dangerous as much as like the film industry talks about, oh yeah, it's an art and everything else. It's like, yeah, you have a couple of flops and you're out of the industry real quick. Right. And so he was in a very precarious position because he was being pushed in to do a shark movie. And he's like, what the hell? I don't want to do this shark movie. And the real the lesson here is that his biggest win, Jaws is by far the most important thing to ever happen to the career of Spielberg.

Starting point is 00:58:25 And he says it right. His biggest win is going to come right after what he thought at the time was his biggest failure. When he received the bad news about Sugar Land in April 1974, Spielberg did not have much time to sit around engaging in second guessing or nursing his wounds. He was on the Massachusetts island of Martha's Vineyard, immersed in preparations to make another film. It was a modestly budgeted thriller called Jaws. So we're going to get into Jaws. I want to take a slight tangent first.

Starting point is 00:58:56 I do have to tell you, I'll just take it up front. Jaws is, was his, Spielberg calls Jaws his free pass into his future. And that's completely due to his its financial success at the time it it was released it was the most profitable movie ever made and he's like once i had that i got final cut on every single project i ever did moving forward in my career i got to choose which projects i did i got to choose what they look like it bought me my freedom and again finances buy you freedom uh i want to before jaws they're shopping this this idea of a of a um of a science fiction film that is going to eventually become uh close

Starting point is 00:59:32 encounters of a third kind which is also successful but i want to pull something out here because i think it's important something we talked about on this autobiography of sid meyer sid meyer is the computer programmer the game designer that made Civilization. The main idea of that book was so important is the fact that you discover that questioning conventional wisdom can be very profitable. Sid wanted to make a strategy game. Everybody said, nope, strategy games, you can't make any money doing that. He does it anyways. He releases Civilization. It sells 51 million copies, right? And so we see the exact same thing here. Lucas and Spielberg, they're trying to shop this project. It says, in two decades since Star Wars and The Close Encounters were released, science fiction films have accounted

Starting point is 01:00:16 for half of the top 20 box office hits. But before George Lucas and Spielberg revived the genre, there was no real appetite at the studios for science fiction. The conventional wisdom was science fiction films never make money. So questioning conventional wisdom can be profitable. Let's get to the making of Jaws, because it was a just constantly in flux. They're rewriting the script the night before. Not sure if they'll have it done before the next day, if they can actually shoot anything. It went over budget and over schedule. I think like three times, like it was supposed to take like 57 days. I think it took

Starting point is 01:00:54 like 150 days, something like that. But it says, and then they wind up, the shark winds up, like the main character winds up disappearing. So it's just amazing, like how resourceful he had to be. So he says, I hired a man named Carl Gottlieb, who was an old friend of mine, and he came with me to Martha's Vineyard, essentially to polish the script as the actor sat with me every night, often only 24 hours before the shot and improvise. To facilitate their work on the script, Gottlieb and Spielberg shared a house on location, and Gottlieb would continue to work on the revisions after Spielberg went to sleep. Each morning, Gottlieb would give new pages to the company typist, and by 8.30 in the morning, they would be approved and ready for filming. It was incredibly tense. And so halfway through, Spielberg wants to quit. And this is just a

Starting point is 01:01:36 reminder, your mind will play tricks on you. Lucas thought Star Wars was going to flop, if you remember that. Spielberg says the same thing. He's like, I'm going to be out of the movie business. This movie is not going to do well. I had two failures in a row and I'm done. Sid had words with Spielberg over Jaws. It was one of the few disagreements that Steven and I had. I literally forced him to do it. I think he was upset for a while and he turned to me and said, why are you making me do this B movie?

Starting point is 01:01:59 He was scared. He felt overwhelmed. He wasn't sure he was the right guy for it. The picture was important to him, vitally important. There was such huge professional stakes. Nothing was ready. It was at that stage completely out of control as it was during most of the shooting. Jaws ran into so many production problems that exasperated crew members began referring to the movie as flaws. Spielberg later admitted, I thought it would be a turkey. This is more about the terror part of Euphoria and Terror, right? Imagine having to shoot a shark movie without the shark. He

Starting point is 01:02:31 thought he was doomed. And this ends up being his greatest achievement. It's just wild. For weeks after shooting started, Bruce simply refused to work. That's the name of the shark. That night, Richard Dreyfuss declared, if any of us had any sense, we'd all bail out now. Spielberg anxiously shot around the star of the movie. Out of desperation, he began shooting barrels instead of the shark. In the movie, the barrels are affixed to a shark by the harpoon, and they cruise the ocean surface as a stand-in for the submerged creature. We were very scared. I didn't know whether any of us could do it. We thought we're making a picture called Jaws, and we don't have the fucking shark.

Starting point is 01:03:03 Today, with computers, you could just put the shark in. In those days it was a strictly mechanical thing. The pressure on the 27 year old director was enormous. I thought my career as a filmmaker was over. I heard rumors from back in Hollywood that I would never work again because no one would ever take a no one had ever taken a film a hundred days over schedule let alone a director whose first picture had failed at the box office. There were moments of solitude sitting on the boat thinking this can't be done. It was stupid to begin with. We'll never finish it. No one is ever going to see this picture, and I'm never going to work in this town again. Think about the mind games that he had to deal with when making the movie. The movie is finished. The movie is released. This is what happens.

Starting point is 01:03:43 Jaws surpassed Francis Ford Coppola's The Godfather to become the most successful film in motion picture history to that date. Jaws held that distinction until November 77, when it was dethroned by George Lucas' Star Wars. Spielberg took out an ad in the Hollywood trade papers showing a little robot from Star Wars

Starting point is 01:03:59 R2-D2 catching Bruce the Shark in his jaws with a fishing hook. Congratulating Lucas for capturing the box office title, Spielberg wrote, wear it well, your pal Steven. And again, just remarkable that all these guys were friends. So after Jaws, he has a, Jaws is a hit, Close Encounters of the Third Kind is a hit. He's like, oh, I can do anything.

Starting point is 01:04:20 Real high on his own supply. So he tries to do this comedy called 1941. And this really the point of the reason I'm bringing this to your attention is because sometimes you learn more from failure. And 1941 winds up being a failure. He has a reputation that, you know, yeah, Jaws is successful, Close Encounters of the Third Time is successful, but he's always over budget. He's always like he's not disciplined. And so he learns from George Lucas that you have to watch your costs. You have to be disciplined about this. And so, again, George Lucas that you have to watch your costs. You have to

Starting point is 01:04:45 be disciplined about this. And so again, it's where Lucas plays a huge influence in his life. But first it says Spielberg used to say that he was born again after 1941. That's the big, gigantic failure, the mistake. Working as a hired hand for Lucas, a conservative and highly disciplined producer, Spielberg used Raiders of the Lost Ark as a form of professional rehab. So after 1941, Lucas is like, hey, I have this idea I'm going to be a producer for. This is, you know, Raiders of the Lost Ark, one of the most successful film franchises in film history. They don't know it at that time, obviously. He's like, will you direct this for me? And so Spielberg, Lucas and Spielberg are now on set. It's Spielberg, the director,

Starting point is 01:05:23 Lucas lets him be as a director but he's the one you know putting up the money making sure everything runs on time and so that's where he's just learning and from here on in he becomes you know he had a bad reputation lucas goes around selling trying to sell the movie and they're like well who's going to direct like spielberg like now we're out like how could you be out he just did jaws and close the cutters of third kind and like talked about you know the guy not lying about the budget but saying yeah we can do it for 20 million it comes in at 60 million like that's gonna piss these people off right so it says the lucas spielberg proposal was presented to the studios the proposal dare to assault oh i'm bringing i'm bringing this to

Starting point is 01:05:58 your attention because there's a quote from george lucas's biography that's fantastic and he says some of the bravest and most reckless acts that we did were not aesthetic, but financial. Again, highly recommend it. All founders, I think, should read George Lucas's biography. How many people do you know that founded multiple billion dollar businesses and did it? He just has this, not aggression, but just this, damn it, I'll do it myself attitude that you just can't you just love you absolutely love um so says they're going around shopping this and now they're saying okay this is after star wars this is after jaws this is we're playing a different game here so it says the

Starting point is 01:06:35 proposal dared to assault the standard hollywood financial practices on several especially sensitive points chief among them was that while the distributor would be expected to put up the movie's budgeted 20 million dollars uh it would receive no distribution fee and take no overhead charge so that's like these hollywood accounting this is a term for like the shenanigans this financial shenanigans that was known in the industry at the time those items usually accounted for more than 50 of the gross film rentals besides demanding large sums of money up front lucas and spielberg also wanted enormous shares of the gross, a demand that was especially unusual for a director in that era.

Starting point is 01:07:08 And while the distributor would be allowed to recover their entire cost of Raiders from gross film rentals before Lucas and Spielberg started to receive their shares of the gross, Lucas would eventually

Starting point is 01:07:20 all have full ownership of the movie. Studios were taken aback by such chutzpah. And so with Lucas's help, he becomes this disciplined, watch-your-cost director. So it says, we knew we had to, now they're talking about shooting the movie,

Starting point is 01:07:38 we knew how to compromise. There were some moments where it would go to take two or three and take four, and something wasn't working. So, you know, multiple takes. Steven would say, that's it. Let's move on.

Starting point is 01:07:50 We'll figure out another way to do it. He was very, very good in that respect. Raiders was the first picture he brought in on budget. I heard Steven say that his friends were doing smaller pictures than him, less expensive pictures than him, coming in on budget and they were able to see money on the back end steven rarely had that opportunity so he was bound and determined to bring a picture in on budget so he could see the back end so really what lucas taught him is like you gotta watch that's nice you make a lot of money at the box office but you'll make a lot more money personally if you watch your costs and so he takes what he learned from Lucas and on the Raider, the Indiana Jones movies, right? And he applies it to E.T. and check this out.

Starting point is 01:08:32 This is now we're in the euphoria part of his career. E.T. prints money. So he winds up, he's like, all right, I'm doing this movie for $10 million. E.T. was so tough because Stephen had made a bet with Universal that he could do this thing for $10 million. Completing E.T. within that budget enabled him to satisfy his obligation for the final remaining film from his 1975 contract with Universal. In the first weeks, and he winds up coming in on budget and on time, right? In the first weeks, check this out, this is going to blow your mind. In the first weeks after the film's release on June 11th, 1982, we're talking $1982, which is even crazier what I'm about to tell you. Spielberg personally was earning as much as half a million dollars per day as his share of the profits.

Starting point is 01:09:15 And so as his movies become more financially successful, he's able to demand better and better deals. He also is learning from his third mentor, Stephen Ross. So it says, and I don't know if myself, is you don't make three or four billion dollars by accident. Referring to Spielberg. Spielberg's as good as a businessman as he is a director. Spielberg is renowned and sometimes deployed in Hollywood for driving hard bargains with everyone from technicians to actors to studio chiefs. In recent years, his standard deal has been a remarkable 50% of the distributor's gross on his pictures. And they said you compare that with 5% or 15% of gross

Starting point is 01:09:54 that even major stars command. So he's making a lot more money, right? The studios also fully finance Spielberg's films, even though that he owns it, that he owned, that the movies owned or shared by Amblin, his, his company. Steven gets the studios to carry the risk and he takes in the money. And so he winds up becoming real good friends with the head of Time, the head of, is this Warner Brothers or Time Warner at the time? I'm not sure. Time Warner. So he says, his connection came through his close friendship with Steve Ross, the chairman of the board of Time Warner.

Starting point is 01:10:29 Ross was the most colorful and controversial of the film industry mentors to whom Spielberg had attached himself. Assuming the roles of Spielberg's best friend and idealized father figure, as well as business mentor, Ross began educating Spielberg in the finer aspects of life as a Hollywood mogul. In the documentary, Tom Hanks talks about working with Spielberg is remarkable because how resourceful he is. You could plan something out as best you can, circumstances dictated, it's not going to work out. And he comes up with just, he just makes the most of whatever is there. And we see an example of this when he's on location filming his first movie in China. So while preparing for the first day of shooting in Shanghai, assistant director David Tomlin

Starting point is 01:11:11 plotted out all the crowd movements and everything. And I planned to keep the road clear so there could be traffic movement. I drew it all out and told everyone what to do. Then 5,000 people suddenly flooded the road. I went crazy. I said to Steven, oh Jesus, it's all gone wrong. He said, looks great. Roll the cameras, action. He was happy with how it looked and I wasn't gonna argue with the 5,000 people. He's very good like that.

Starting point is 01:11:35 He's not pedantic. Whatever is there, he makes it work. That's the most important sentence of that entire paragraph. Whatever's there, he makes it work. That's the assistant director talking about something they made in the 80s. Tom Hanks said the exact same thing when they were making Save a Private Ryan. Another thing that Stephen talks about in this book, talks about in the documentary over and over again,

Starting point is 01:11:54 is how important family is to him. The fact that he's got like seven kids, something like that. He got divorced for the first time. He felt like a failure, then got remarried. They'd been married for a long time. He says it's extremely important to him because of the traumatic childhood he had. And he's got this scene and hook that he took to heart. And I think it's fantastic. And so they're going back and forth. It's the character Peter and his wife. And it says,

Starting point is 01:12:16 your children love you. They want to play with you. How long do you think that lasts? We have a few special years with our children when they're the ones who want us around. So fast, Peter. It's a few years that it's over. You are not being careful and you are missing it. That is the lesson Peter learns in Hook. And it is one Spielberg took to heart in his own life. And I would say that is the major life regret that I've seen in a lot of these biographies and autobiographies. And when they're writing in these books, it's too late. It's the fact that they over-optimized for their work life at expense of their children. They all tell you not to do it. It's a regret they can't do anything about.

Starting point is 01:12:59 The best term I've ever heard about this came from Ingvar Kamprad's autobiography, because he did that. His three boys, if I'm not mistaken, he's like, I missed their childhood because I was building Ikea and I messed up. I shouldn't have done that. And it says, childhood does not allow itself to be reconquered. There's also a line in the Hook movie with Peter Pan that I think Spielberg took this idea and ran with it as well. And that's the idea to make life the adventure it's supposed to be. So, Granny Wendy tells Peter, your adventures are over. Oh no, he replies. To live. To live will be an awfully big adventure.

Starting point is 01:13:40 So when the book ends, he had just finished Schindler's List and Jurassic Park, finally gets his Academy Award that he'd been dreaming about since he was 12, that he had been snubbed for multiple decades before then, has two of the burden of escalating expectations, and Spielberg, who still bites his fingernails and throws up before coming to a set in the morning, cannot help feeling the horrendous pressure of having to top himself, of simply having to be Steven Spielberg. But throughout his 28 years as a professional filmmaker, he has maintained a sense of inner balance that so far has enabled him to avoid losing his nerve.

Starting point is 01:14:27 He seems comfortable, even if others are not, with his own complexities and contradictions. When his high school friend Chuck Case visited him at the Long Beach airport during the filming of 1941, Spielberg surveyed his army of uniformed actors and World War II airplanes and said with a childlike smile, You know, they pay me to do this. And that is where I'll leave it for the full story. Read the book, and I highly recommend watching the documentary as well. It was fantastic. If you want to buy the book using the link that's in the show notes, you'll be supporting the podcast at the same time. That is 209 books down, 1,000

Starting point is 01:15:05 to go. And I'll talk to you again soon. Okay. So what you're about to hear is this question I was asked a few months ago. I actually recorded this a few months ago. They asked, how did History's Greatest Entrepreneurs think about hiring? All the answers. People think I have a better memory than I actually do. If people say, oh, David, you have a great memory. My wife would laugh at that because I forget things all the time. It's not to have a good memory. It's I reread things over and over and over again. Every single answer, every single reference you're about to hear in this 20 minute mini episode came from me searching all of my notes and highlights. That option is now available to you. If you like what you hear, if you think it's valuable, if you're already running

Starting point is 01:15:44 a successful company, and you want an easy way to reference the ideas of history's greatest entrepreneurs in a searchable database that you can go through at your convenience anytime you want, then you can go to foundersnotes.com and sign up. I want to start out first with why this is so important. There's actually this book that came out in like 1997. It's called In the Company of Giants. I think it's episode 208 of Founders. It's two Stanford MBA students, if I remember correctly. And they're interviewing a bunch of technology company founders. And in there, Steve Jobs is one of them. This is, you know, right, I think, even before he came back to Apple. And they were talking about, well, yeah, we know it's important to hire. But in a typical

Starting point is 01:16:23 startup, a manager or founder may not always have time to spend recruiting other people. And I first read Steve's answer to this, I don't know, two years ago, and I never forgot it. I think it's excellent. I think it sets up why this question is so important. And you should really be spending, especially in the early days, basically all your time doing this. In a typical startup, a manager may not always have the time to spend recruiting other people. Then Steve jumps in. I disagree totally. I think it's the most important job. Assume you're by yourself in a startup and you want a partner. You take a lot of time finding a partner, right? He would be half of your company. I'm going to pause there. This idea of looking at

Starting point is 01:17:01 each new hire as a percentage of the company is genius. Why should you take any less time finding a third or fourth of your company or a fifth of your company? When you're in a startup, the first 10 people will determine whether the company succeeds or not. Each is 10% of the company. So why wouldn't you take as much time as necessary to find all A players? If three, three of the 10, were not so great, why would you start a company where 30% of your people are not so great? A small company depends on great people much more than a big company does. Okay, so to answer this question, the advantage that I have making founders and that you have as a byproduct of listening to founders is not only that I've read 300-something biographies of entrepreneurs now, but I have all of my notes and highlights stored in my ReadWise app. And that means I can search for any topic.

Starting point is 01:17:58 I can look at the past highlights of books or I can search for keywords. So what I did is, first of all, like what I've started to do with these AMA questions is I read them, decide which ones I'm going to do next, and then think about it for a few days. I don't put any, I just literally, I know that's the next question, just let my brain work on it in the background for a few days. And then I'll go through and start searching all of my notes. And so that's what I did here. And so there's a bunch of, you know, I don't have, I may have like 10 or 15 different founders talking about hiring. The first idea is the most obvious, but I think probably works best when you're already established. So Steve Jobs is talking about, hey, you know, the great way to hire is just find great work and find the people that did that and then try to hire them. When you're Steve Jobs, that's a lot easier,

Starting point is 01:18:47 right? Than if you're just somebody that doesn't have reputation, maybe you don't have resources, maybe your company's rather new or not as well known. David Ogilvie, I just did Confessions of an Advertising Man a couple episodes ago, I think 306 or something like that, 307. And he did the same thing. But he's David Ogilvie at that point. So he would find, he'd go through magazines, find great advertising, great copywriting, and he'd the same thing. But he's David Olgovie at that point. So he would find, he'd go through magazines, find great advertising, great copywriting, and he'd write the person a letter and then set up a phone call. And he says he was so well-known

Starting point is 01:19:14 and he's one of the best in his field that he wouldn't even have to offer a job, just the conversation, then the person would, he'd want to hire the person, never mention it, and the person would apply to him. And so again, I think if you can do that, then of course, it's straightforward. Find somebody who does great work. Usually you can do this. I actually have a friend, I can't say who it is. He's doing this right now, actually. I have a friend that's

Starting point is 01:19:40 really good at doing this. He's finding people that do great stuff on the internet and then just cold, cold DMing them and then getting, convincing them to work on things. And that usually works, especially with people like younger people earlier in their career. There's a bunch of different ways to think about this and a bunch of different ways to prioritize. So the first thing that, that, that came to mind that I found surprising is you read any biography on Rockefeller and he had a couple ideas where he felt the optimization, you know, table stakes that you're intelligent and you're driven and you're hardworking, right? We don't even have, like, if you're listening to this, you already know that. But he prioritized hiring people with social skills. And so this is what he said. The ability to deal with people

Starting point is 01:20:20 is as purchasable a commodity as sugar or coffee. And I pay more for that ability than any other under the sun. There's the second part to this, though. And this also works well if you have access to more resources. Rockefeller would hire people as he found, as he found talented people, not as he needed them. It's not like, okay, Standard Oil has six open spots. Let's go find six candidates, right? He'd come across what he considered a talented person. It didn't even matter if he didn't know what they were going to do. He's like, I'm just going to stack his team. And if you really think about his partners at Standard Oil, he essentially built a company, an executive team of founders, because he was buying up all their companies. So it's very rare.

Starting point is 01:21:03 But there's a line from Titan I want to read to you. Taking for granted the growth of his empire, he hired talented people as found, not as needed. And then I found another idea in the hiring, like the actual interview process. So there's this guy named Vannevar Bush. I did two episodes on him. I think it's 270 and 271. He is the most important American ever in history in terms of connecting the scientific field, private enterprise, and the government. The most important person to keep alive for the American war effort was FDR. The second one was Van Iver Bush. Van Iver Bush is like the Forrest Gump of this historical period. He is involved in

Starting point is 01:21:41 everything from the Manhattan Project to discovering like a young Claude Shannon to building a mechanical computer. Like this guy literally has done, he's just, he pops up in these books over and over again. If you were reading about American business history during World War II and post-World War II, you are going to come across the name Vannevar Bush over and over again. I read his fantastic autobiography called Pieces of the Action, and I came across this weird highlight. And so this is his brilliant and unusual job interview process. And so he's talking about this organization he's running called Amrad. At Amrad, I hired a young physicist from Texas named C.G. Smith.

Starting point is 01:22:17 The way I hired him is interesting. An interview of that sort is always likely to be on an artificial basis and somewhat embarrassing. So I discussed with him a technical point on which I was then genuinely puzzled. The next day, he came in with a neat solution, and I hired him at once. Here's another idea. This is from Nolan Bushnell. Nolan Bushnell is the founder of Atari, founder of Chuck E. Cheese, and Steve Jobs' mentor. He hired Steve Jobs when Steve Jobs was like 19 at Atari.

Starting point is 01:22:44 He would ask people their reading habits in interviews. This is why. One of the best ways his whole thing was he wanted to build all of his companies laid on a foundation of creative people. So that's what he's looking for. He's like, I need creative people. One of the best ways to find creative people is to ask a simple question. What books do you like? I've never met a creative person in my life that didn't respond with enthusiasm to a question about reading habits. Actually, which books people read is not as important as the simple fact that they read it all. I've known many talented engineers who hated science fiction but loved, say, books on birdwatching. A blatant but often accurate

Starting point is 01:23:18 generalization. People who are curious and passionate read. People who are apathetic and indifferent don't. I remember one... That's such a great line, and I obviously agree with it. I remember one, I'm going to read it again, a blatant but often accurate generalization. People who are curious and passionate read, people who are apathetic and indifferent don't. I remember one particular woman who during an interview told me that she had read every book that I had read. So I started mentioning books I hadn't read, and she had read those too. I didn read. So I started mentioning books I hadn't read and she had read those too. I didn't know how someone in her late 20s found this much time to read so much.

Starting point is 01:23:50 But I was impressed. I was so impressed that I hired her right there and assigned her to international marketing, which was having problems. This is why. This is why I'm reading this whole section to you. A job with a lot of moving parts benefits from a brain that has a lot of moving parts.

Starting point is 01:24:04 It wouldn't be possible to have read that many books benefits from a brain that has a lot of moving parts. It wouldn't be possible to have read that many books without such a brain. So do you see what I mean? Like we start with Steve Jobs saying, this is the most important thing that your role as the leader of the company, the founders do, right? And you are, and it's so important to study. And this is why I'm glad this question exists and why I'm glad that I've, I took the time and I had like the foresight to like, hey, I should really organize my thoughts and notes because there's no way I would have remembered all this without me being able to search my read wise, right? But you have Rockefeller saying this is what's important to me. You have Bush saying this is how I hire. Now you have Nolan Bush now saying, well, here's another weird thing

Starting point is 01:24:41 that I learned. Let me go through what Warren Buffett says about this. So this is about the quality. One thing that is consistent, whether it's Jobs, Buffett, Bezos, Peter Thiel, this just pops up over and over again. They talk about the importance of trying to find people that are better than you. The hiring bar constantly has to increase. Now, obviously, the larger the company gets, that's impossible. Steve Jobs has this great quote where he's like, you know, Pixar was the first time I saw an entire team, entire company of A players, but they had 400 players. They had 400 team members. He's like,

Starting point is 01:25:14 at the time, Apple had 3,000. It's like, it's impossible to have 3,000 A players. So there is some number that your company may grow to where it's just, you're just not, you're not going to have thousands of A players. In my argument, I don't even know if you get a 400, I guess you, I mean, I'll take Steve's word for it on there and Pixar definitely produced great products, but it's probably a lot lower than that as well. So Warren Buffett would tell you to use David Ogilvie's hiring philosophy. And so Warren said, Charlie and I know that the right players will make almost any team manager look good. Again, that is why it's the most important function of the founder. Maybe directly next to the product or right above the product, actually, because those

Starting point is 01:25:51 are the people building your product. We subscribe to the philosophy of Ogilvy and Mathers founding genius, David Ogilvy. This is what Ogilvy said. If each of us hires people who are smaller than we are, we should become a company of dwarfs. But if each of us hires people who are bigger than we are, we shall become a company of giants. Jeff Bezos used a variation of Algovie's idea too. Jeff used to say in Amazon, every time we hire someone, he or she should raise the bar for the next hire so that the overall talent pool is always improving. They talk about this idea on Amazon where the future hires that we do should

Starting point is 01:26:27 be so good that if you had applied for the job you already have at Amazon, you wouldn't get in. That's a very interesting idea. Take your time with recruiting. Take your time with hiring. There's this great book on the history of PayPal. It's written, actually, I've recently become friends with the author. His name is Jimmy Soni. And this is in his book. The most fascinating thing that I found was that PayPal prioritized speed. So from the time they're founded to the time they sell to eBay, it's like four years. Jimmy spent more time researching the book than, he spent six years researching the book.

Starting point is 01:27:02 I always tease him. He's like, you took longer on a book than they took to start and sell their company. It just speaks to, like, the quality he's trying to do. But as a byproduct of that, like, obviously they move fast, but they prioritize speed over everything else except in one area, recruiting. Max Lutgen kept the bar for talent exceedingly high, even if that came at the expense of speedy staffing. Max kept repeating A's hire A's, B's hire C's. So the first B you hire takes the whole company down. Let's read that again. A players hire A players, B players hire C players. So the first B player you hire takes the whole company down. Additionally, the team, the company leaders mandated that all prospects, here's another idea for you. All prospects must meet every single member of the team. Now, the next one is the most bizarre. It makes sense if you study. I did this three part on Larry Ellison, three part series on Larry Ellison. I should read those books again because the podcast is like 50 times bigger than when I published those episodes. And he's crazy so he would hire based on the confidence the self-confidence level

Starting point is 01:28:07 of the candidate listen to this i have tears in my eyes i don't know why i'm laughing okay this is just so because this is you read about larry ellison and he's one of these people it's like really easy to interface with because he just you just know exactly who he is and what's important to him that's why I think it's so funny. Ellison insisted that his recruiters hire only the finest and cockiest new college graduates. When they were recruiting from universities, they'd ask people, are you the smartest person you know? And if they said yes, they would hire them.

Starting point is 01:28:39 If they said no, they would say who is, and they would go hire that guy instead. I don't know if you got the smartest people that way, but you definitely got the most arrogant. Ellison's, and this is why, the personality of the founder is largely the culture of the company. Apple is Steve Jobs. Apple is just Steve Jobs with 10,000 lives, right? I was just texting a founder friend of mine. He listens to the podcast. I actually met him through the podcast. And he's going through this process of self-discovery. Like he's already started a bunch of companies that are really successful, but he's like, I think I'm more of this type of founder than the other type of founder. And that's good that he's doing that because he's, hopefully his next mission is like his life's mission, you know?

Starting point is 01:29:15 And you can't get to your life's mission unless you figured out who you are. Ellison knew who he was. Ellison's swaggering combative style became a part of the company's identity. This arrogant Here's another odd idea for you. Izzy Sharp, the founder of Four Seasons, actually could figure it out that in his business, which was hotels, right, that hiring the right person could actually be a form of distribution for his hotel. He gave me the idea because of what? What do we know? What do you and I know in our bones? That history's greatest founders all read biographies. They all read biographies of people that came before them and took ideas from them. Izzy Sharp is trying to build Four

Starting point is 01:29:53 Seasons. What do you think he did? He picked up a biography of Cesar Ritz, the guy that Ritz Carlton is named after, arguably the greatest hotelier of all time. And when he realized that, oh shit, Ritz, he says, remembering that Cesar Ritz made his hotels world famous by hiring some of the foremost chefs, we decided to do something similar. So what is he talking about? Cesar Ritz went out and partnered with August Escoffier. What Cesar Ritz was to hotel, to building hotels, August Escoffier was to French cooking. And so what happened is you partner with world famous chefs, people come into your restaurant that's in the hotel because the world famous chef,

Starting point is 01:30:28 and now they know about your hotel that leads to more get that leads to more activity in your restaurant that you own, but also leads to more brand recognition of your hotel. And then by as a byproduct of that more people staying at the hotel. So hiring as a form of distribution, this is fascinating as a fascinating idea. Okay, here's the problem. You can identify great people, right? Maybe they even want to come work. Like you've identified them. You've sold them, hey, this is our mission. This is what we're doing. And yet humans have complicated lives. They have spouses. They have kids. They have a reason maybe they can't move across the country to work for you, even though they want to. So there's a problem-solving element that you see in these books on you have to solve which is about the first six years of SpaceX.

Starting point is 01:31:25 This is what Elon Musk did. They had anticipated his friend's issue. Having convinced Musk they needed to bring this brilliant young engineer from Turkey on board, it became a matter of solving the problem. His wife had a job in San Francisco. She would need one in Los Angeles, right? Because that's where SpaceX is at the time. These were solvable problems, and Elon's better at solving problems than almost anyone else.

Starting point is 01:31:49 Musk, therefore, came into his job interview prepared. About halfway through, Musk told the guy that he wants to hire, so I heard you don't want to move to LA, and one of the reasons is that your wife works for Google. Well, I just talked to Larry, and they're going to transfer your wife down to LA, so what are you going to do now? To solve this problem, Musk had called his friend Larry Page, the co-founder of Google. The engineer sat in stunned silence for a moment, but then he replied, given all that, he would come to work at SpaceX. That's really smart. There is another idea when you're promoting. Are you going to promote from within or from without? That's dependent on you, depending on what's going on. I do think this is interesting, though. There's this guy named Les Schwab who built this really valuable chain of tire companies in the Pacific Northwest. I actually found out about him because Charlie Munger is like, hey, you should read this biography.

Starting point is 01:32:34 He didn't say it to me personally. meetings that to study, Les Schwab had one of the smartest financial incentive structures or any company that Charlie Munger had come across. So this is what Les Schwab did. He did not want to hire from, he didn't want to hire other people from other companies because they might come with bad habits. He liked to train his own executives. And so he says, in our 34 years of business, we have never hired a manager from the outside. Every single one of our more than 250 managers and assistant managers started at the bottom

Starting point is 01:33:09 changing tires. They have all earned their management job by working up. And then another thing, if you're going to hire the best of the best and A players, A players don't like to be micromanaged. And so this came in Larry Miller's autobiography called Driven. He owns like, he owned like 93 companies all throughout Utah, car dealerships, movie theaters, all kinds of crazy stuff. But he also owned the NBA team, Utah Jazz. And what was fascinating is he's trying to recruit Jerry Sloan as the coach at the point.

Starting point is 01:33:36 And Jerry Sloan would only take the job on one condition, and I really like it. I really like this idea. If you hire me, let me run the team in business, right? That's what you're hiring me for. One of the best things we had ever done was hire Jerry Sloan as coach. At the time, he said, I'm only going to ask you for one thing. If I get fired, let me get fired for my own decisions. If you hire me, let me run the team slash business. Here's another idea from Thomas Edison that I think is fascinating. Really, the way I think about a founder is like, you're developing skills that you can't hire for. You're going to hire for everything else,

Starting point is 01:34:11 but you shouldn't be hireable. And Edison wasn't. Edison expressing his views on the preeminent role of applied scientists, which that's what he considered himself, coined the expression, I can hire mathematicians, but they can't hire me. And so when I read that paragraph for the first time, the note I left myself was develop skills that you can't hire for. Capitalism rewards things that are both rare and valuable. S.J. Lauder would give you advice that you need to hire people aligned with your thinking and values. Hire the best people. This is vital. Hire people who think as you do and treat them well. In our business, they are a top priority. So this idea is like, that seems kind of weird. Like hire people who think like you.

Starting point is 01:34:50 There's obviously not one right way to build a business. I think that your business should be an expression of your personality and who you are as a person at the core. And so I think there is an art to the building of your business. And the reason I use the word art, I don't mean in like a hoity-toity, you know, pretentious manner. That's not me at all. I don't even care about art at all, really. I mean that you're making decisions

Starting point is 01:35:13 not just based on economics. Like there are non-economic important decisions based on how you're building your business. Like you could probably make more money doing decision A, but decision A goes against who you are as a person, or you just don't like it, or it's just not as elegant or beautiful. And so therefore you don't do it. So that's what I mean about, you know, hire people who think as you do. And for whatever reason, when I read Estee Lauder say that, I was like,

Starting point is 01:35:37 okay, there's like this art to what she's doing. One thing that's going to be helpful in recruiting, this comes from Peter Thiel. I think this is the book Zero to One. Understand that most companies don't even differentiate their pitches to potential recruits and to hiring. So therefore, as a byproduct of that, you're going to wind up with a lower overall talent base. And so he says, what's wrong with valuable stock? Smart people are pressing problems. Nothing.

Starting point is 01:36:01 But every company makes these claims. So they won't help you stand out. General and undifferentiated pitches to join your company. problems. Nothing. But every company makes these claims. So they won't help you stand out. General and undifferentiated pitches to join your company don't say anything about why a recruit should join your company instead of many others. So that idea of like your pitch, your actual, he would tell you you shouldn't be building an undifferentiated commodity business. But even above and beyond that, like the mission that you're trying to engage everybody to join you in, that pitch, that sale you're trying to make to potential recruits should

Starting point is 01:36:30 be differentiated. If that person's applying to five other jobs, there should not be like, it's like, they may not like your mission, they may not like your pitch, but they shouldn't be able to compare it to anything else. Another quote from Nolan Bushnell, hire for passion and intensity. That's what he would do. Or that's what he did when he found Steve Jobs. If there was a single characteristic that separates Steve Jobs from the mass of employees, it was his passionate enthusiasm. Steve had one full, one speed, full blast.

Starting point is 01:36:57 This was the primary reason we hired him. And one thing all these founders have in common is that he know how important hiring is. And when something's important, you do it yourself. This is, again, Elon Musk on hiring. He interviewed the first 3,000 employees at SpaceX. That's how important it was. One of Musk's most valuable skills was his ability to determine whether someone would fit his mold.

Starting point is 01:37:16 His people had to be brilliant. They had to be hardworking. And there could be no nonsense. There are a ton of phonies out there and not many who are the real deal, Musk said, of his approach to interviewing engineers. I can usually tell within 15 minutes and I can for sure tell within a few days of working with them. Musk made hiring a priority. He personally met with every single person the company hired through the first 3,000 employees. It required late nights and weekends, but he felt it was important to get the right people for his company.

Starting point is 01:37:43 And then to close on this, we started with Steve Jobs telling us why it was so important and why it should be a large part of how you spend your time. And now we'll close with what you do after. What do you do after you hire the person? This is what he says. It's not just recruiting.

Starting point is 01:37:56 After recruiting, it's building an environment that makes people feel they are surrounded by equally talented people and their work is bigger than they are. The feeling that their work will have a tremendous influence and is part of a strong, clear vision. So that is the end to that 20 minute mini episode. I just re-listened to the whole thing and it really does, I think, it's a perfect explanation and illustration of why I think Founders Notes is so valuable because some of those books I haven't read in five, six years.

Starting point is 01:38:31 And just the ability to have a searchable database of all these ideas, like this collected knowledge of some of history's greatest entrepreneurs to reference and then contextually apply to our own businesses. It's nothing short of like, it's magic. That's really the way I think about it. I think it's a massive superpower. It gives me a massive superpower. I couldn't make the podcast without it. I also think if you have access to it, it'll make your business

Starting point is 01:38:46 better. And so if you're already running a successful business, I highly recommend that you invest in a subscription. And you can do that by going to foundersnotes.com.

Founders - Steven Spielberg

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