In Search Of Excellence - Joe Mansueto: "If It's Easy, It Would Already Be Done" | E80

Episode Date: September 26, 2023

Welcome to the second part of our interview with the amazing Joe Mansueto. Joe is the founder and former CEO of Morningstar, a financial services and investment research firm that is one of the most recognized companies in finance. It provides investment research and investment management services to many millions of people around the world. If you haven't yet listened to part one, be sure to check that one out first 00:55 The importance of parental supportJoe’s dad was buying saving bonds for his children for yearsHe gave the accumulated money to Joe to start his businessJoe made sure every dollar was spent wisely 05:07 Can parents give proper advice to children in today’s business environment?You should listen to your own instinctsBut also take into account your parents’ advice 09:06 The importance of cold callingYou learn about perseverance, handling rejection, processing, and not taking it personallyCold calling is a very valuable skill to have 13:40 Bootstrapping and raising moneyEntrepreneurs should not raise a lot of money if they can avoid itSubscription model for MorningstarThe pressures of raising outside money 20:11 Becoming rich should not be your primary goalJoe is more about independence, creativity, and autonomyOne of the byproducts is building wealthHis goal was to build a viable, enduring, independent company, that would survive for a very long timeYou should want to make money, but not at all costs 23:42 Joe’s soccer investmentsWanted to diversify his investmentsLoves soccer and it became his passionBought MLS team in Chicago 28:37 The importance of Extreme PreparationPreparation is essentialImportance of understanding the client and his needsIf you can move the needle for a company, any company will hire youShow the company how you can add value to it 33:26 Reaching out to successful peopleTrust your gut and do something that no one else doesPeople are much more accessible than you thinkSuccessful people want to help and give back 36:56 The responsibility of giving backGiving back is importantFinding meaningful ways of giving back 39:20 The pressure of giving money and being generousWe shouldn’t judge others on their philanthropyJoe signed a giving pledge to set a good exampleMost wealthy people are trying to make the world a better place 42:56 Fill in the blanks to excellenceJoe's biggest lesson in lifeJoe's number one professional goal Joe's number one personal goalThe importance of family and spending time with your childrenThe one piece of advice that you would give your 21-year-old self isJoe's biggest regret And more...Sponsors:Sandee | Bliss: BeachesWant to Connect? Reach out to us online!Website | Instagram | LinkedIn

I won't lie. I mean, building wealth was part of my objective. You know, I wanted to, you know, to earn money. But to me, it was more about independence. To me, the principal allure of being an entrepreneur. I really liked the creativity, the autonomy that came with running my own business. You know, every time that there's a failure, you might evaluate that. What could I have done better? Improve your little pitch the next time. I didn't spend that furiously, capriciously. I made sure that every dollar was spent wisely

to the extent of my abilities. You're listening to part two of my awesome conversation with Joe Mansueto, the CEO of Morningstar. If you haven't yet listened to part one of my awesome conversation with Joe Mansueto, the CEO of Morningstar. If you haven't yet listened to part one, be sure to check that one out first. Without further ado, here's part two with the amazing Joe Mansueto. One of the most common questions I get from people who want to start their own company is about raising capital. How do you do it? How do you start? And it usually comes from friends and family. In your case at Morningstar, you put in 80,000 of your own money to start.

And then over the next five years, you put in another $250,000. Half of that came from savings bonds that your dad had bought for you as a kid. You at some point discovered certain bonds and their bonds numbers. What kind of meaningful impact did that have on you to have your dad supporting you like that and pursue your dreams? And what's your advice to all the other parents out there whose kids want to start companies and the parents don't really want them to take the risk?

How important is it for parents to say, I believe in you? kids want to start companies and the parents don't really want them to take the risk. How important is it for parents to say, I believe in you? Yeah, I think hugely important. I think you have to support your kids. And even though the idea might not seem like a great idea to you as the parent, I would still be supportive of your child. You know, when I started my business, Morningstar, my dad didn't think it was a good idea. He's like, why are you leaving? You've got a great job. You know, you're a stock analyst.

You like investing. But my mom was very supportive. She said, you know, if that's your passion, if that's what you want to do, you know, go for it. And, you know, you're right that, you know, I bootstrapped my company. And we can talk more about that. So I put in all the money I had. You know, I invested in stocks, earnings from a stock analyst, et cetera. And then I quickly ran through that. And so but my father had, you know, these savings bonds that he had in a safety deposit box. And, you know, I noticed the dates on them

when I, you know, you know, he provided them for us to kind of get a start in life. But as soon as we were born as children, he would go like every month and buy the savings bonds for us, you know, $20, $25 savings bonds. And, you know, my dad was an immigrant from, you know, Italy. He came here, you know, when he was three years old and, you know, kind of the typical immigrant story and didn't have, you know, a lot of money, but, you know, through the Navy and, you know, paid for his medical school training. And so he was just kind of getting started, but he set aside enough money to buy, you know, there are four of us children, you know, savings bonds for us, you know, as we, you know, were born. And he did that for probably the first, I don't know, five, 10 years of our life. But then that compounded and,

you know, the nominal value that he put in wasn't all that great. But the compounding over many years turned into $100,000, $200,000. And so when I cashed those to use the funds for Morningstar, I know how hard my dad had worked to earn those. And so, I don't know, it just really impressed upon me the importance of, you know, making sure those funds were well spent. And so, I didn't spend that furiously, you know, capriciously. I made sure that every, you know, dollar was spent wisely to the extent of my abilities. But the fact that he had worked so hard, I knew how hard he worked, how hard he saved. And that, you know, that was, you know, a gift to me, you know, to get a start in life. I don't know. I was just doubly motivated to make sure that it, that it worked. And so,

I don't know, I had that experience myself. And so, you know, for parents out there of would-be entrepreneurs, you know, I think whatever you can do to give your kids, you know, a start in whatever dream they want to pursue. And it doesn't have to be a business. Maybe it's, you know, supporting them as they pursue their acting career, writing career, whatever it is. I think it makes a strong statement that, you know, we'll create an even greater bond between parent and child. And, you know, it's part of a parental responsibility. Similar to you, my dad didn't want me to leave my Sun America job. Eli Broad was my boss.

I reported to him. I was very lucky to have that job. I had a managing director title at 27 years old. And I was learning from someone who's one of the most successful people in business at the time. I think he was one of only three successful people in business at the time. I think he was one of only three people who had started two Fortune 500 companies. And when I told my dad I was going to leave to start a company based in Boston with no funding on technology that was unproven without a CEO, he thought I had lost my marbles. Now, on my mom's side, she said, I believe in you. Not that he didn't, but he's very conservative. He's a lawyer, billed by the hour, worked very, very hard, self-made.

But it was good to hear my mom say that. You have to follow your instinct and your gut. One of my, and he did not understand what we were doing. It was highly technical and yeah, we could explain, we invented a new way, a better, cheaper, faster way to serve web traffic more reliably. And he kind of got it, but he didn't know anything about the technology. He didn't know how deep it was, how unique it was, how proprietary the technology was. And one of my former interns, Ricky Horwitz, who's now my peer, came in and talked to our intern class the other day. And his advice was, don't listen to your parents. And the reason why, he's at an AI company. And our parents don't

really know what's going on in that world either. And he said they're not educated enough in the world of technology to know to give proper advice in today's business environment. Do you think that's true? Yes and no. I mean, I think actually your story and my story are remarkably analogous. It's interesting how your father said no and your mom said yes. But, you know, I think for the subject matter, I think parents are probably not qualified. I think that's right. But in terms of just starting a business in general, you know, kind of not vetting the idea,

you know, maybe parents have, you know, whether it's suitable for the child or not, maybe some, some, some, you know, bits of wisdom, but, but I think the broader point of your friend is probably right, that you've got to listen to your own gut, your own instincts. And, you know, when, when I, when we started, it sounds like you were 27, too, when you started, and that's the age when I started. You know, it's pretty rare for a 27-year-old to start a business. It's practically unheard of. Today, it's common. You know, kids start businesses right out of college. And so it was much more accepted.

It was a little more eyebrow-raising when I did it than probably when you did it. You know, people worked. You know, even though I went to business school, you know, entrepreneurship was not a thing then. Everybody wanted to go work at an investment bank or a consulting firm. There was two entrepreneurship classes at the University of Chicago Business School, and neither of them were well attended. I took them both, but it was just me and a few other people. But it was not a hot thing like it is today. But yeah, you know, I would think, you know, listen to your parents, but then you need to evaluate their advice. Obviously, both of us, you know, listened to our, you know, heard our father's advice and decided,

you know, to take a different course. But our mother's advice was a little more supportive. And it was helpful to have that. But I think, you know, yeah, around the subject matter, things like AI, you know, somebody of my, you know, our generation is probably not as helpful unless they're a professor in that area. And so, yeah, I think parents probably aren't the best sources of advice to vet entrepreneurial ideas. I would say that that's true. I actually left Sun America after three years. I was hired as the assistant to the chairman on my 27th birthday, but I started our tech company when I was 30 years old. I just turned 29.

But similar to you, another one, I had a business in college. I sold T-shirts and I copied the Nike logo and I said, just do it. And I put these beautiful Michigan colors and logos on the shirts. I saw people like Brad Keywell doing it, Lefkowski doing it. And I said, oh, if these guys can do it, so can I. And I would go door to door to each dorm. I buy the t-shirts for $5. I sold the short sleeves for 12. The long sleeves were a dollar more. They cost me, and I sold those for $18. I got kicked out of every single dorm. I think there were 12 or 15 on campus. I went in one hallway, got kicked out. I went through the back door and went to another one. But it was super fun for me and a great experience in terms of cold calling

because it's such an important skill. I think everything we do is sales related. We have to sell as a leader that we can hire and lead people. We have to sell people on coming to work with us. We have to sell our spouses that were good people and good parents and husbands. We have to sell in business. You're selling a product. You're selling a Morningstar subscription service or whatever it is that you're doing. How important is cold calling to our success? Yeah, I think cold calling, you know, I've had a couple of jobs and, you know, throughout my, you know, life where I've cold called and you learn, you know,

what that's about and that it's a numbers game, that you're not going to meet success with every with every say, with every, you know, perspective sale. But I think you learn a lot just about perseverance and numbers and handling rejection, processing that, not taking it personally. And then you learn little things that you can do to up your odds. You know, every time that there's a failure, you might evaluate that. What could I have done better? Improve your little pitch the next time and keep going. And, you know, I've seen it in various businesses where people have to call.

And some people, you know, you get more emotionally distraught by rejection. And I think you have to overcome that. So I think this, you know, any job where you're cold calling, I think will serve you well as an entrepreneur, because that's what it is. You've got to win over customers. You've got to call on them. And I know so much today is done, you know, electronically, digitally, you're not, you know, dealing one-on-one, but I still think, you know, that one-on-one selling, you know, is a very valuable skill to have think, you know, that one on one selling, you know, is a very valuable skill to have. And, you know, seek out a job where you do it. It may not be glamorous. You're selling knives or what something, but it'll be good experience. You know, hopefully it's something

you enjoy doing like your Nike T-shirts. But yeah, I think that's super valuable experience. I also went door to door, um, asking people to pave their driveways with a blacktop. I had never done it before. Um, and I figured, okay, I see, I see people doing that. Um, I probably went up to a front door. I mean, today you wouldn't knock on someone's front door to ask you to do it. It's a different world today, but I went to over a hundred homes, didn't get one sale, but it was a very good experience. It was a very good experience. You know, I didn't take it personally and I learned a lot. Sometimes it doesn't work, but you got to keep coming back and keep fighting. This episode of In Search of Excellence is brought to you by Sandy.com. S-A-N-D-E-E.com. We're a Yelp for beaches and have created the world's most comprehensive beach resource

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Stay sandy, my friends. Let's talk about bootstrapping, which you mentioned. I think it's unusual to do so for first-time founders because they don't have the capital. And a lot of people, unlike what you did and what I did, they just got out of college. They wanted to start a business. They don't realize the lessons and experience and importance of going to work somewhere else. What they do want to do, and it common as they want to raise $10 million right out of the gate and hire people and go quickly,

what's your advice to all the people out there who think raising money is a measure of our success? And talk about the dangers of doing so, not only on a short-term basis, but raising money at valuations that aren't sustainable that limit potential outcomes? Yeah, I always caution would-be entrepreneurs about raising money. To me, equity is very dear. You don't want to give up equity easily. And it may seem like a free good. You can just issue more stock and get money. Hey,

that's a great thing. But it comes at a cost and it's really not a badge of honor to raise a lot of money. And so I really caution would-be entrepreneurs to not raise a lot of money if you can avoid it. You know, when I started Morningstar, as you mentioned, I bootstrapped it. I didn't think I had a fundamental idea as a 27-year-old. Moreover, I chose a business that didn't have high capital requirements. You know, I knew this coming in as an analyst that, you know, it's a knowledge business, really. It's a data business. And the way I constructed the business model was that people paid up front for subscription. Even though everything was databased in the beginning, we produced a publication from this database. But you had to subscribe to it for a quarter or a year.

So money was coming in before I had to deliver a product. So you have to think of how the money flows. So the money was coming in before I had to pay the printer, before I had to pay Barron's for the ad. And it's called deferred subscription revenue. So money is coming in. And that's really what funded the growth of Morningstar throughout our history was this deferred subscription income, people paying advance for services to be delivered in the future. And so I always caution entrepreneurs to think about how the money flows. Most businesses, you put a lot of money up front into a factory, into inventory. Then you need to raise money and then you get paid 60 days later. So you're, and then if the business is growing, the capital demands go up. You need more inventory, you need more factories. So I always like capital light businesses

and businesses where people paid up front. You know, I know a guy here in town, a friend of mine, you know, he's an engineer, immigrant from the Ukraine. And, you know, he was building power plants. Yeah. Any money, he convinced GE to sell him, I think, a couple billion dollars of turbines. Five billion, I think it was. It's a crazy story. Yeah, I think you know the story. And then he found utilities to take the power. And without any money, he built a power plant.

And then he sold this for a fair amount of money. And he's still doing this today, building solar plants and windmills and things. But he did it without using his own capital. But anyway, it's bootstra know, using his own capital. But anyway, it's, you know, bootstrapping, you learn certain lessons about, you know, spending money very frugally. I had a rule that I always use, whatever money was coming in, spend less. And to me, it was about the journey. It wasn't about being the next Microsoft tomorrow. But I knew if we could compound at a high growth rate, eventually we would be big enough.

So the first year in revenue, I did $97,000 in revenue, which I thought was pretty good. The next year, $120,000. So we grew 20%. But still, we're only doing $120,000 in revenue. The next year, $400,000. Then $1 million. $2 million, $4 million, $11 million, $20 million, $30 million. As you noted earlier, this year we'll do $2 billion in sales. That's after 40 years. Next year will be our 40th anniversary.

But we've just kind of, you know, one step ahead of the other. And so the idea that you're going to raise a lot of money and throw it at a problem and hire lots of people, that's a high wire act. It can work, but there's also a good chance you'll fall off the high wire. And, you know, the people who put up the money, they have demands. You know, you don't have time to iterate, learn. One of the things I liked about bootstrapping was that I could take my time to get to know my customer, improve the product, as we talked about earlier. It's not the first version. It wasn't the first product that really let Morningstar take off. It was our second product. But we kind of learned, iterated. And so you need that time. And so one of the downsides of giving up a lot of equity is that the time horizon is going to be really short. The demands, the expectations are going to be super high, the more money you raise. And so try and keep control, you know,

buy yourself the time. As I mentioned earlier, I worked for a venture capital firm for a bit and I saw what happened. You know, usually the entrepreneur, the founder, at some point gets shown the door and professional management comes in. And I didn't like the way that, you know, ended up for me, the founder. So, you know, I really wanted to avoid taking venture capital, having those pressures. And so I would really think hard before you take in outside money. And to the extent that you have to do it, if you can take it from friends and family, more patient money, I think your odds of success will go up versus raising a lot of money from sophisticated institutions where, again, the time horizons, the expectations are going to be sky high. You started in 1984. You went public

in 2005. You're suddenly a billionaire and suddenly people know about it. Was it ever your goal to be a billionaire and where did money rank in terms of your priorities and future goals? And what's your advice to all of the future entrepreneurs? A lot of my interns, most of my interns, whose number one goal is I want to be rich. Yeah, I don't think that should be your primary goal. You know, I won't lie. I mean, building wealth was part of my objective. You know, I wanted to, you know, to earn money. But to me, it was more about, this may sound grandiose, but a bit of artistry and being able to control the, you know, the canvas and, you know, create something that was in your head and not only the product that you're creating, but the culture of the company and just controlling that. But, you know, I did want to build wealth.

You know, that's one of the, you know, the byproducts of all of this, the independence that come with that. And to me, it was always very important to, you know, earn my own keep. You know, how much wealth you need is debatable. You know, I guess more is better than less. But I wanted to be secure. But I wanted to do it on my terms. You know, I said I didn't want to raise a lot of money and try and shoot for the stars. And if it worked, fantastic. If not, I wanted to make sure the business worked. To me, that was the, you know, objective. To me, this was a marathon. I'm a long distance runner. I wanted to finish the race. And so to me, it was more important to have a viable,

enduring, independent company that would survive for a very, very long time. And if I did that, I knew then, you know, it should generate a fair amount of wealth that, you know, I could pass on to my kids and live independently. You know, what the exact numbers are, I didn't really have an idea. To me, it was more building a, you know, business around a passion. And so for would-be entrepreneurs, I would say I would downplay the money aspect. That should not be your primary motivation. You know, I don't think Steve Jobs was motivated by money. You know, he wanted to create something great. He wanted to create, you know, change the world.

You know, that artistry that went into Apple. To me, that's more the model that you'd be thinking of. If you do that, the money will take care of itself. If your aim is first and foremost just to make a lot of money, the model that you'd be thinking of. If you do that, the money will take care of itself. If your aim is first and foremost, just to make a lot of money, you don't care how you do it. You may end up, I don't know, taking a lot of shortcuts, doing things the wrong way. And so I think Buffett says, you know, you should have with investing, you know, some greed, but it should be controlled greed, you know, around some ethics and principles. And so, yeah, you want to make money, but not at all costs.

And there should be some greater aim overarching that that I think is your primary motivation. Let's move on to soccer and we'll start with some stats here. Soccer is the most popular sport in the world. It has 5 billion fans. That's more than 62% of the world's population. It's the fourth most popular sport in the United States behind football, basketball, and baseball. 31% of Americans call themselves soccer fans and other than pickleball is the fastest growing sport in America. You did not play soccer growing up in Munster, Indiana. There was only football, basketball, and baseball, but your kids started to play and you coached at the AYSO level and you loved it. So you love soccer. You've got a ton of money. And in July of 2018,

you paid $117.6 million for a 49% stake in the Chicago Fire soccer team at a valuation of $240 million. And then a year later, you paid $240 million for the 51% you didn't own for a total investment of $321 million, which valued the club at over $400 million. At the time, people said you paid a premium because Major League Soccer was charging $200 million for expansion fee for new teams. Since 2019, the average MLS team's valuation has climbed 85% to $579 million. On February 2nd of this year, only nine years after it joined the mls and paid an expansion fee of 110 million dollars forbes ranked the la football team which is owned by three amazing guys here in la as the first billion dollar franchise is soccer going the way of the

nfl which started in 1920 and is now 103 years old, where it took 82 years for the average team to be worth $500 million and where the average value of an NFL team is $4.1 billion. Well, I think soccer has got a great future, as you enumerated, Randy. And, you know, just to back up a little bit, when I turned 60, I decided to step down for my CEO role at Morningstar. You know, I've been doing it since I was 27. Love doing it. But life is short. If you want to do a few other things, you better get going at some point.

And so I stepped down to or stepped up to executive chair. I'm the executive chair, and then of Morningstar today. But one of the things I wanted to do was diversify my investments a bit and invest in some of my other passions, of one of which is soccer, as you noted. And I got into it through my kids who started playing. And I just became enamored. I mean, it's super fun to watch your kids play soccer. It's a great sport. It's 90 minutes of nonstop action. I think it fits very well into a modern lifestyle. The rest of the world, you know, it's number one around the world. And I think over time, the U.S. will catch up to North America in 2026. So there's a lot of momentum building up to that. And so, you know, there was an opportunity in Chicago to buy the MLS team here. And I looked around the league and I could see that in certain cities, Seattle, Portland,

Atlanta, the MLS team was doing fantastic. LAFC, you know, really connects well with the city. In Chicago, it really wasn't doing that. The location of the stadium wasn't ideal. And I thought I could do some things to improve the club. So I moved the club downtown to Soldier Field, put them on broadcast television, started investing in the team. And it's a journey. We're not done yet. But it's been a blast. I've had so much fun doing it. Not only learning, you know, about the business, about the

sporting side, the business side, I kind of know that piece, how do you sell sponsorships, tickets, and then the civic side, how do you connect with a city very deeply? You can do that through a sports team. So it's been a journey. You know, my whole family loves it, which is another, you know, wonderful aspect. And so I've embarked on that, as you noted, a few years ago. And, you know, it's one of the things I'm doing is I've, you know, broadened my life a bit since stepping down from my CEO role at Morningstar. Are you looking for your next great gift to surprise a friend, colleague or loved one? Bliss Beaches makes the perfect gift.

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what you have researched about me goes way beyond what most people who have interviewed me in the past have dug up. And so I'm impressed with the amount of research that you've done. And so for my career, you know, I'm not sure I'm to the extent of a preparer as you are. You sound, you know, way out there. But, you know, I've tried to prepare as much as I can. I can think of it Morningstar, you know, for important sales presentations, how much work we do in terms of really understanding the client, the need, you know, understanding all the players involved, you know, what their motivation is, understanding the client, the strategy of the client, how we fit into that

strategy, rehearsing the presentation. You know, every time you have an important event, you're always thankful that you've prepared as much as you did. And it always manifests itself in the time that you, when you come to that actual event. And so, yeah, whether it's preparing for a company meeting, a shareholder meeting, you know, it's all hands on deck. We're all preparing and it's a great return on investment. But I know at the end of the day, I find you can only prepare so much. It's like studying for an exam at a certain point. I feel like I've maxed out. I know it.

And I'm just ready to, you know, to go and do it. And often others around me will counsel. Now, let's rehearse one more time. And so others will kind of push me to prepare a little more. And I'm always thankful that they did. Or for an interview, you know, the prep for an interview. You know, people asking those hard questions to prepare for an interview, you know, is always super helpful.

And so sometimes I have to be nudged into a little bit, but I'm always glad I do it. And I think it is great advice for for anybody in any aspect of life is to prepare. And, you know, it's a great it returns many fold the time spent. Well, first, thank you for the compliment. I appreciate it. It's something I take great pride in. I'm writing a book called Extreme Preparation. I'm about to go out on the corporate speaking tour as well, because I've been teaching a

lot of lessons on how extreme preparation leads to results that just would have not been possible. And I give the advice to people, everyone is always hiring. Everyone is hiring always, no matter what. If you're that person, you do the research, you blow people off their chair, you're the most prepared person in the room. There's always room at any company for someone who can do that. Because if they're doing it just for a meeting, imagine what they can do as an employee. You know, that's really true. I got my first job as a stock analyst by bugging the hell out of the research director at Harris Associates.

I'm not sure they were hiring, but, you know, I kept calling him, you know, I sent letters and eventually I think just to, you know, get me off his back, he talked to me, and then we hit it off. And, but it was just kind of pushing and pushing, to the extent where you're wondering, am I being too annoying? And, but yeah, I think you kind of, you show your passion. But you're absolutely right, as somebody who's run a company for many years, involved in many companies today with venture investing and other, the Chicago Fire and other things, people always want great talent. If you can move the needle for a company, you know, bring in revenue, reduce expenses,

any company will hire you. That's such fantastic advice that companies are always hiring. And, you know, the idea that, oh, I didn't see a listing for this. No, you know, go and, and, you know, talk to people, take them out to lunch, take them for coffee, talk to people in and around that, you know, you'll find a way if you can show how you can, you know, make a presentation on ways you can improve whatever it is you're, you know, want to do with that company, give them some ideas. Hey, these are 10 things I think you could do better. And, you know, put in the time, you'll get results. And so you're spot on, Randy. I mean, people are always hiring. People always are. They're hungry for great talent, hung, you know, really hungry for that. And so I'm going to give that advice to my kids too. I love it. You mentioned 27 years old, 27 years old. I was the most unsuccessful lawyer you knew.

I had three jobs in eight months right out of law school. It was a disaster. I set a world record for that, I think. And then I didn't want to be a lawyer. I didn't like law school. It's very hard getting good grades, studying for something that you really can't stand. And it's hard to focus. But I got good grades, moved to LA, $3,000 in the bank. I knew nobody, lost my job five and a half weeks after getting here. And after having a third job in eight months, I said, gosh, this is really not working out. My plan is not working out. I had an idea that I wanted to be the right-hand person for a CEO. I wrote letters. I went on LexisNexis. There was no Google then. I did research. My law firm had one of these all-you-can-eat subscriptions. You had to bill all this to

BizDev. And that's a whole nother story. The manager came into my office one day and said, she closed the door. Her name was Sue Mangels. She closed the door and said, Randy, you billed $40,000 worth of charges to BizDev this month. What's going on? Those weren't actual charges. The firm paid one fee, so I wasn't costing them money.

But when I had this dream to do this, every single person said the same thing. Not a single person is going to meet with you. I got 80 meetings, Michael Eisner, Sumner Redstone, Eli Broad, who ended up being my boss. And it just, I wrote the best letter and that was my goal. I was going to write the best letter they've ever received. And of those 80 meetings, every single one of them said the same thing. I've never taken a cold meeting from my letter in my life, but I had to see the person and wanted to meet the person behind who did it.

And so that was a lesson for me at a young age. Be different. Don't listen to people. Trust your gut. And it's okay to be doing something that no one else does. You know, Sam Zell, who I'm sure you knew, was on my show as well. And Sam said, I couldn't understand why everyone was going left and I was the only one going right.

And I think you just have to trust your instinct and do what you do and believe in yourself. Yeah, people are much more accessible than you think. Just by making the effort. I know I got to know Warren Buffett a bit, just sent him a letter, you know, described kind of my situation, what I was doing, how admiring I was of him. And then he called me and, you know, developed a relationship that we've kind of kept up and he's invited me to his annual meeting every year. And, uh, but it just came from, you know, a letter I had sent him and, uh, and then, you know, developing a, you know, relationship. But at first you think, oh, these people, maybe I can't approach them or, uh, but, you know, even at a young age, which you demonstrated, you can do that. And so, uh, you know, go for it, you know, shoot for the moon,

try. And you'd be surprised what doors open up. You know, people are very willing to help out. People want to help others. People who've been successful want to give back. They want to help that next generation. And so I think they respond very well to, you know, people who want to work hard, who, you know, want to learn. And so I think all of that is very well received by people who've done well in life. You mentioned giving back. So let's talk about your incredible generosity. You signed the giving pledge. You're going to give away billions of dollars during your lifetime. How important is giving back to our success?

Yeah, it's hugely important. You know, if you've been blessed to, you know, accumulate wealth and life or if you haven't, however, you can give back. It doesn't have to be, I suppose, in a monetary form. But if you have been fortunate enough to accumulate wealth, there is a up, you know, become a doctor and a nurse, me to start a business with no, very little capital. And so it's, you know, I'll have plenty of money to give to my kids where they can kind of do whatever they want in life and hopefully not enough where they can do nothing, but enough where they can do anything. And so there's plenty of left over to give back. I think the challenge is to find ways to do that that's meaningful, that you just don't further away and you give it to institutions that can, you know, raise more money, that actually does some good. You know, how do you do good in society and help people. You know, I've tried to focus on a few areas, education,

health, the city of Chicago, entrepreneurship that I, you know, I'm passionate about and hopefully can make a difference. But I feel like I'm still a novice in giving money back. You know, I've spent my life building a company. And so now I'm kind of flipping to that stage of, you know, giving back. And so I'm kind of learning as I go along and trying to, you know, ramp it up slowly, and I'm moving up the learning curve. And, you know, it's kind of a bit trite that it's hard to give away money, but it is. And to do that meaningfully. So I'm on that journey. You know, I'm doing things that resonate with me. I've not set up a big organization, a big foundation and bureaucracy to do it, but it's more

people, institutions that I've come across that I think are doing sensible things and that resonate with me and my wife. Do you feel pressure from people and with all that wealth to give away money? You look at Forbes and the Forbes 400, I think, has something now called the Generosity Index. I mean, I'm getting it wrong, but it lists all the people who have given away the most money each year. And then for the people who haven't given away as much money as they think you should give away, they're not calling them cheap, but certainly when you read about it, you get the impression these people are not generous and they're not giving away money. Yeah. You know, I've seen those, those rankings and lists and, um, I'm not sure I'm a fan of them. I hate to make it a competition, you know, and, uh uh to be you know to judge others on their philanthropy and it's a very personal thing i don't want to really judge others on their philanthropy um desires um i think a lot of us

don't know what people are doing so some of it may be above the you know the surface and visible a lot might be done anonymously, you don't see it. People, you know, it's very personal how people want to go about it. And so I don't really want to sit in judgment of others. And I don't know, it feels a bit unseemly to have others judge, you know, you on that. On the other hand, you know, we did the giving pledge. And I think it's something we felt we were always going to do anyway, is kind of give a fair amount of money away. And as Warren Buffett says to me, well, if you're going to do that, you might as well be on the good side of the ledger, you know, you know, you know, be seen as, you know, and, you know, set a role model. To me, part of the reason to sign that pledge was to be a role model.

You know, we talked earlier about leadership, parenting, setting an example. And so, you know, I think setting an example is, you know, someone has accumulated a fair amount of wealth as to how to behave responsibly with that, to me, was the motivation. Because we debated, my wife and I, about it. Cause we debated my wife and I about it. Do we really want to be public about that? But I think it's important to set a good example that so often you, you hear kind of, you know, wealthy people malign for being greedy, only thinking about themselves, trying to line their pockets,

that that's their motivation. But, you know, most people who've accumulated a fair amount of wealth that I know really don't think that way. They think about what's good for society, how to give back. Yeah, there's a few, you know, examples out there of wealthy people who, you know, are not doing good things, but I think they're in the minority. I think most wealthy people are trying to give back, trying to make the world a better place. They've earned enough money. They're comfortable. They don't really need more. Yeah, they want to build wealth, but I don't think they want to do it in an underhanded way that would be at odds with what's good for society.

And so, you know, I try and do things that, you know, things around education, charter schools, you know, the University of Chicago, health outcomes, you know, the city of Chicago that, you know, hopefully make the world a better place. And really, that's the motivation. And then being public about it is to try and set a good example for others. And to say that, hey, people who have accumulated wealth really are trying to do good things. And they're not all about themselves and their motivations and what they do. Before we finish today, I want to go ahead and ask some open-ended questions. I call this part of my podcast, fill the blank to excellence. Are you ready to play? I'm ready. The biggest lesson I've learned in my life is?

How to do things the right way, not cut corners. I think, you know, eventually, you know, you're rewarded, even if it seems like it's going to cost you something, that doing things the right way over time, you build up a reputation and that the dividends just keep getting greater and greater as you go on in life, that people want to partner with you, they'll want to work with you because of the way that you conduct your life. And so I think the biggest lesson is to do things the right way. Don't even get close to doing something, you know, illegal or, you know, that's questionable, but just to do the right thing. It's very simple. You know, it's kind of, you know, the golden rule or just do things the right way. And if you do that, I think you'll be very well rewarded in life for it. My number one professional goal is?

I think to, oh, I was going to say to raise a good family, but that's a great family, but that's not a professional goal. I think professionally to have an enduring company that helps a lot of people. And so professionally, again, an enduring company that creates a lot of good through its services in the world and also really does well by the people within the company that they can they fulfill feel fulfilled working there that they can grow and nurtures them to really do their best work and they want to work there i know how you're going to answer this one, but I'm going to ask it anyway. My number one personal goal is? Well, I think I just tipped my hand there earlier.

Personal goal is to raise a great family. I mean, my kids are number one. And to make sure my kids, you know, to support them in doing what they want to do. As I mentioned, they're college age now. And to me, you know, there are my wife and mine, you know, our pride and joy. And so, yeah, it's all about family and having a, you know, a family where, you know, we all get along well and we do what we can to support each other. You know, we still vacation together. We like being around each other. To me, that's my greatest personal goal. And to have the kids turn out where you're proud of them as people,

you know, that's a tremendous source of satisfaction. I have five kids. I live for my kids. I just dropped off one of my 21-year-old twins in Wisconsin. She goes to UW in Madison. And I've moved her into college every year. And we had four days alone together, early move-in. So I didn't have to compete with her roommates, her friends. And it was one of the highlights of my life. I don't think I'm ever going to get

in the rest of my lifetime, four days alone with my daughter. And these moments that we have as parents are just so special. And I get teary eyed even thinking about it now because, you know, you love your kids more than anything and you just want them to first be healthy and second to be happy. So I, I couldn't agree more. You know, when I think back, you know, having that, those one-on-one moments with a child are especially meaningful. I know with, uh, I have a girl and two boys, but with my two boys, um, I biked across Iowa with them individually when they were 12 years old for seven days. There's a ride called Rag Bride. It's the most popular bike ride in the US. And it's seven days. You go from the Missouri River to the Mississippi. But I spent seven days with each child separately, but sleeping in a tent

every night. And I look back so fondly on that week with each one of my sons. I would have done it with my daughter, but I didn't know about the ride when she was at that age. And so, but I did it with my two boys. But having that one-on-one time where you spend seven days and not only that, sleeping in a tent with them, you know, for one week, so memorable, so precious. But that, you know, those times you spend with a child or with the entire family, there's nothing that can compare to it. Starting at six years old, I've taken each of my kids on a one-on-one trip each year. As the twin girls got to be eight, 10, they always went together. And again, some of the biggest highlights of my life,

and I tell this to all my friends of parents because we're all busy. There's always a reason why something comes up and you can't go. You got to mark it down. But my friends who have followed my counsel on this have all said, geez, that's one of the best things I've ever done. And I continue to do it as their girls now get older and my son, you know, they're busy with their friends and, you know, I have to, I think bribe is the wrong word, but we go on nice vacations and I think, you know, they pick the locations. They're not economical at times. They

like staying in nice places, but, uh but whatever it takes to get a week with them, with their dad, it's worth every penny of it. Let's continue with a couple more questions here. If you could go back in time, the one piece of advice that you would give your 21-year-old self is? Don't be in a hurry. Enjoy the journey uh i think sometimes i was a little too uh eager uh and so you know i went for example to business school right from undergrad i think it would have been good to work a couple years uh and then go back to business school uh you know when i started business school, I was 21. The average age was 27. I didn't really have much work experience. Everybody else had worked at,

you know, IBM or, you know, some big company. But I think I was in so much of a hurry to kind of get going that I think I could have slowed down a little bit and kind of enjoyed things a little more, maybe gotten a little more out of it. I mean, it all turned out okay. But I think I was always in such a hurry. But, yeah, you know, I think I like the way things turned out. You know, I think sometimes I was maybe frustrated that we weren't rowing more quickly. You know, I look around and see these companies that are 25 million in sales and I'm doing 500,000. It's like, what am I doing wrong?

You know, and so I think I put maybe a little too much pressure on myself early on. But, you know, I think, you know, enjoy the journey. Probably was what I tell myself. The biggest regret is? Oh, biggest regret professionally or just in my life? In your life. Either? Either. Both.

You know, I think more on the upside. know, with family members, you know, when I was in high school, college, you know, I think there's a, I think not until I had kids, I really kind of get outside myself. You know, I think before I had kids, I was more about me and what I was doing. And I think I could have paid more attention to parents, siblings, you know, in high school, college. And I think I was so focused on my business and what I was doing. And to think a little more broadly about those around me, friends. And again, I think, again, it's, you know, it's fantastic starting a business, but it can be all consuming. And it kind of, you know, envelops your life in a way that is good. But maybe a regret is, hey, you know, maybe, you know, because people aren't around forever. You know, my parents are no longer living. And when I think back, it's like, gee, I could have, you know, gone down to Munster, Indiana, spent a little more time with them or, you know, doing, you know, it's those times you can't get back. And so, yeah, I think spending a little more time with loved ones, you know, in my college and the years that I was, you know, early years that I was starting a business. The one thing I've dreamt of doing for a long time,

but haven't is. Oh, I can do most things I want to do. You know, it's funny, we're getting to this stage now where my youngest is going off to college. So we're about to enter this chapter of empty nest hood, which is kind of a new domain for my wife and I. And so, you know, I think the things I've been dreaming about, you know, are things we're about to be able to do, and that we've been so tied to the school calendar for a couple of decades, that we've only taken vacations, you know, in the summer over the, you know, the Christmas holidays. And so to be able to travel, you know, in the fall, in the spring, when things aren't crowded, you know, we have a home up in Michigan that I've not been to in the fall when the leaves are turning for ages because the kids are doing sports in high school. And so just to have the

freedom to travel more. So I'm looking forward to traveling a little more, you know, and having that freedom to work from anywhere. And I love Chicago, but I've been here because the kids have been here. And, you know, my mantra is I follow the kids. You know, if they're home in Chicago, I'll be home in Chicago. But if they're away in college and now we're, you know, approaching this empty nest hood, we've got freedom to really be anywhere. And so I look forward to spending more time, not only in the U.S., but abroad. And those are some of the things I've been kind of looking forward to and, you know, we'll start doing hopefully come fall when we have an empty nest here in Chicago. If you could be one person in the world, who would it be?

Ooh, one person. Gee, that's a lot of people to choose from. You know, I'm really admiring of so many people. You know, Warren Buffett's lived a great life. But, you know, there's a lot of historical figures, um, who have changed the world for the better. Um, you know, you think of what Lincoln did, you know, how he kind of, you know, took the country into a better place through perilous times. You know, I've been reading a lot of biographies, um, you know, Ulysses S. Grant, Harry Truman, Teddy Roosevelt. So my mind is filled with, you know, those kinds of figures. But I think somebody who's done a lot of good in this world, Steve Jobs, has been an

amazing story. You know, I love the way that he approached business, kind of changed it from just being, you know, purely about business, but bringing an artistry component, you know, kind of, you know, how he admired the artist and, you know, brought that aspect into business. So I don't know that there's any one person that's probably an amalgam. But I think somebody who's lived their life with integrity, you know, has made the world a better place. And at the same time, has, you know, raised a family, and that's a lot of people. I'm not sure I could name a single person. So you've kind of stumped me on that, that, that single person. The one question you wish I asked you, but didn't is,

Oh, Randy, you've got some tough questions. I think we've covered a lot about, I'm thinking, my professional life, my family life. Is there anything we didn't touch on? You know, I often talk about, you know, when I interview people, kind of what they're reading. I think, you know, if you ask people what they read, it's kind of a window into who they are. And so I often like to talk about books with people. I often ask people what they're reading to get some ideas. We've kind of maybe touched on a bit what I've been reading, which is, you know, biographies of, I've just went through some of the people I've been reading. I also like reading books on health. I just had lunch with a guy who runs Northwestern Hospital, Dr. Howard Chrisman, and he recommended a book to me called Outlive, which I'm about a quarter of the way through.

And I would highly recommend it. It's written by a guy who went to Stanford Medical School, but studying kind of longevity and looking at what he calls medicine 3.0. Medicine 2.0 is fixing things that have gone wrong. So you have a heart issue, you have cancer. But by then, you know, it's very late to rectify things. Medicine 3.0 is, you know, the seeds of those illnesses have been sown decades earlier. What can you do today that will improve your odds of not getting what he calls the four horsemen of cancer, heart disease, diabetes, and dementia are the four horsemen. So what can you do today to minimize, you know, those odds? And it's a really

good book, very accessible. And so I've been reading that. And so I usually read multiple books, but maybe the one question is, hey, what are you reading that you like? That's a question I often ask people. Joe, this has been an incredible conversation. I've admired you for a long time. I've admired the company. I've known about the company, even looked at buying the company, not that you would have ever sold it. But for many, many years, it's inspired me to do what I'm doing with Sandy. So I appreciate you being a role model, not only to me, but to so many people.

And your generosity is amazing. Congratulations on all you've done. And thank you for all you've done. Thanks for being here. No, thank you, Randy. I enjoyed the conversation. All fun things to talk about. So good luck with your podcast.

And I've enjoyed getting to know you through the podcast as well. Bye.