In Search Of Excellence - Strauss Zelnick: Begin With the End in Mind | E07

Episode Date: September 7, 2021

Randall Kaplan is joined by Strauss Zelnick to discuss his role as an executive leader in the world of entertainment and media. They discuss what to prioritize when starting a new career, sacrificing security to pursue your dreams, the value of work ethic and grit in the marketplace, and much more.Topics Include:Why your salary shouldn’t be your top priority when starting a new career. The detriments of modern helicopter parenting. Cultivating the skill of deep listening. The significance of earning money early in life. Why Strauss chose to pursue a business degree when breaking into the world of entertainment. Gracing the cover of Men’s Health Magazine at age 61. Prioritizing healthspan. Using fitness to build relationships. And other topics...Strauss Zelnick is an American businessman and entrepreneur. He is the former VP of Colombia Pictures, one of the largest film production companies in the world, and the former chairman of media conglomerate CBS Corporation. Strauss is the founder, chief executive officer (CEO), and managing partner at ZMC (ZelnickMedia Corporation), a private equity firm managing roughly $775 million. Strauss is also the Chairman and CEO of Take-Two Interactive, a video game holding company based in New York City.Sponsors:Sandee | Bliss: BeachesWant to Connect? Reach out to us online!Website | Instagram | LinkedIn

Everyone starts from nowhere. No one gets anything handed to them, even if they have connections. Being resilient and friendly and kind and incredibly hardworking will open doors, always opens doors. And then, of course, you have to go through the door and do the work and do well. Welcome to In Search of Excellence, our quest for greatness and our desire to be the very best we can be, to learn, educate, and motivate ourselves to live up to our highest potential. It's about planning for excellence and how we achieve excellence through incredibly hard work, dedication, and perseverance. It's about believing in ourselves and the ability to overcome the many obstacles we all face in our lives. Achieving

excellence is our goal and it's never easy to do. We all have different backgrounds, personalities, and surroundings, and we all have different routes on how we hope and want to get there. Today, my guest is my great friend Strauss Zelnick. Strauss is the former COO of 21st Century Fox, the former CEO of BMG Entertainment, the former chairman of CBS. He's the founder and CEO of Zelnick Media, a leading private equity firm that manages over $25 billion in assets. And he's also the chairman and chief executive officer of Take-Two Interactive, a publicly traded video game company that's best known for its Grand Theft Auto franchise. Take-Two has over 5,200 employees around the world, earned more than $3 billion in revenue last year, and has a market

value of $21 billion. Strauss is also a fitness fanatic. He's 63 and looks 40. And in 2018, he graced the cover of Men's Fitness Magazine. Strauss, welcome to In Search of Excellence. Thanks, Randy. Great to see you. Thanks for having me. We have a lot to talk about today, but I want to start off by telling our listeners and viewers how we met 25 years ago. At the time, I was 26 years old and was in my second year practicing law. I wasn't really enjoying it and had decided I wanted to try my hand in the business world. Long story short, I came up with this idea to write letters to CEOs asking for informational job interviews. And when I shared this idea with people, everybody told me it was really stupid, that it was a total waste of time and that nobody

would ever meet with me. So I wrote 300 letters and I got 80 meetings. There's some nuance to the story, which we're going to get into in a little bit. But Strauss, I wrote you a letter and here we are today. So I appreciate you responding to my letter. That's such a great story. And I didn't know that. I had no idea that you devoted that much time. And now I vaguely remember the binder. But what strikes me most is that this long enough ago that we're writing letters as opposed to an email. You've had an amazing career, someone I really look up to. I want to start by talking about your childhood. We all grow up in a certain environment.

It makes us who we are today. What were your parents like and what kind of upbringing did you have? What kind of values did they instill with you then that led the way to where you are today? Well, I grew up in Massachusetts and New Jersey. My dad was a successful lawyer. My mom was occasionally a bookkeeper for his firm. When he started his own firm, she was the bookkeeper, but usually stayed at home and had five siblings. And it was a pretty big, rambunctious crowd. And you had to

take care of yourself and look after your siblings. And these were the days where parents were not helicopter parents. And you basically, especially with six kids, you know, you're kind of, you have to take care of your own afterschool activities. You had to find ways to get around. I had to, if I wanted spending money, I had to earn it. And, but it was very loving, very supportive. Also, my parents were very good about not putting any particular ambition onto me. In other words, whatever I was excited about doing, they were supportive of, arguably too supportive at times. So I had to figure out, you know, on my own where I had talent, where I didn't have talent because they never said, oh, you know, you're not as good at that. You are as good from their

point of view. Anything that I was interested in was good. There was definitely an expectation that you would do well in school and be a responsible, decent person. But apart from that, there really weren't any expectations. I both was expected to and did chart my own course. Certainly, no one in my family thought, wow, you should go into the entertainment business, for example. You mentioned if you needed money, you had to earn money. What kind of things did you do to earn money when you were a child? As a child, I don't think much, but as soon as I was able, I started babysitting. I was a guitar player, so I gave music lessons and ultimately ended up entertaining at children's birthday parties because I realized if I could figure out how to do that, then that would make me a lot

more money per hour than anything else a teenager could do. And I was somewhat successful at it. I was a birthday party clown. And then I got really tired of putting on the clown makeup and I decided I'd just be a birthday party magician. And both worked out pretty well. I wasn't a great magician, but you don't really have to be. I think I was pretty funny. That helped. And I only did birthday parties for five-year-olds because five-year-olds are the perfect age. They're old enough to enjoy what you're up to and young enough

that they don't feel the need to figure out the trick behind the magic. They were just like wide-eyed, curious, and sweet. As soon as I got into six-year-olds and they were tearing apart your tricks and trying to find out how they worked and below five, they couldn't really follow. I also made balloon animals. So I had apparently great talent for making balloon animals, amazingly enough. I didn't even like balloons. So I made enough money to buy my first car doing that.

What kind of car was it? It was the worst car ever made, but it was beautiful. It was a Triumph Spitfire, which was just, Triumphs were just terrible cars. And to put it in context, it was like six years old when I bought it. And I brought it when I was deciding to buy it to my local

English car mechanic and said, what do you think? And he looked it over and he said, whatever you do, don't buy this car. And I did anyway, because I just fell in love with it. And he was right. It was a disaster, but I loved it. I kept it for a couple of years until I ran out of money and I couldn't support the car anymore because I constantly needed work. You mentioned being a magician at kids' parties. My son, Charlie, who's 17 now, he was into magic for a very long time. And one thing I noticed, the success of a magician is largely dependent on your delivery of the trick. It's not so much the trick itself, but how you present the trick. And he's very good at public speaking. I think that's where it came from. Did it also help you to be a magician and learn certain skills at a

very young age that you took with you as you made your career and graduated? Perhaps. I mean, I just, I had no shortage of self-confidence, even if it was misplaced. I was a lousy magician, but the kids seemed to have a good time. But again, I'd selected the audience. So it was the perfect audience. They weren't going to have a bad time, no matter what you did. So you're a great student. Let's talk about when you realized you could succeed in the classroom. Did you always do well at school? You went to Wesleyan and then you got a JD MBA from Harvard, both incredible schools. You graduated summa cum laude from Wesleyan, just incredible, very hard to do. Did that come naturally or did you have to work very hard to get good grades? And walk us through the education starting when it became

important to you. Well, I went to public high school in New Jersey. It wasn't the most demanding school. And I thought of myself as a very good student. But in fact, I was kind of not, you know, I certainly wasn't working as hard as I could possibly work. And I thought my family had been going to Harvard College for generations. So I kind of thought that that's where I was going to go to college. And when I was touring schools, I went, I visited Harvard. I was like, wow, this is perfect for me. It's exactly where I belong and where I to college. And when I was touring schools, I visited Harvard. I was like, wow, this is perfect for me. It's exactly where I belong and where I should go. I sort of neglected to note that at our public high school in New Jersey, the top three kids

got into Harvard every year. And I was not in the top three. I wasn't close to the top three. I was sort of top 5%, which isn't horrible, but it's not the same thing. It was a big school. I applied to Harvard. I didn't really pay much attention to anywhere else I applied because I just made the assumption I was going. But I did apply to Wesleyan, which I'd never heard of. My mom just said, why don't you apply there?

And I applied to a couple other schools. So P.S., I didn't get into Harvard. I didn't get into any other schools I applied to, but I did get into Wesleyan. So the choice was made for me. And I was really like, that was a huge wake-up because I didn't, I just didn't understand. I couldn't process this. So I showed up at Wesleyan with a chip on my shoulder because I thought, you know, why am I here not at Harvard on the one hand? And the other hand, I realized that half the class went to prep school and they were vastly better prepared than I for college. So I just worked my brains out for the first time in my life, because I really hadn't done that in high school. And lo and behold, I did really well at Wesleyan. And my first semester, I think I was first in my class. I stayed there because I was like, just, well, I can do this. I want to do this. And I graduated second in my class. And it was the first time in my life that I'd actually excelled at anything as opposed to sort of thinking I was great at

something or being told by my parents, wow, you're great at this. It was the first time I'd actually excelled, like objectively excelled. So I wasn't a natural student, but I was a good student. And I liked being a student. And to this day, I'm a good student. I get lessons when I want to learn things. I learned ski as an adult, and I got lots of lessons. I'm into fitness. I've got trainers. I learned to speak German. I had a great teacher. I have enormous respect for teachers. And when I set my mind to something, I usually can learn it pretty well. So in that way, yes, I think I'm a good student. And ultimately, I had a great experience at Wesleyan and I had a great experience at Harvard. I went to Harvard, I think, primarily because I wanted to show Harvard that not only could I get into one school at Harvard, I'd get into two. I didn't really need to go to either to be in the entertainment business, but I did have a really good experience there. You always knew you wanted to be in the entertainment business? I did ever since I was a little kid. I thought I wanted to be in the entertainment business? I did ever since

I was a little kid. I thought I wanted to be an entertainer. You know, again, my parents were like, oh yeah, you're really talented. So I played guitar and I wrote a bunch of music. I had like, I was on a really good day. I was mediocre, but I did not know that. And I only really learned that in college because I was playing like the local coffee houses. And I realized that my friends would come to support me. But like when I, when I was 19, I finally had this blinding flash, the obvious, which was no one really liked what I was doing. And I really wasn't very good. I actually abandoned that. And then I started writing and I thought maybe I'd be a writer. And I took that really seriously and did better at that. I have more talent at that, but ultimately I wasn't, I didn't love writing enough to make that a profession.

And it was at that point that I realized, okay, I'm really excited about all things creative. I love entertainment. I love creative properties. I love books and music and movies and television shows. This was before the days of video games. I really don't have a real creative bone on my body. I seem to have some affinity for business. I had a sense I was pretty commercial and decided, well, then maybe

the best way to approach this is be in the entertainment business. And I made that decision pretty early on. Why get a JDMPA if you knew you wanted to be in the entertainment business? I know lots of people who wouldn't spend money on grad school. Not only are you going to one, you're going to two. Why go at all? And why the law degree and the business degree? Why not just the business degree? I applied. First of all, I only applied to three grad schools. And remarkably enough, I got in. And I thought, if you get into the JD MBA program at Harvard, why not go? I also thought, as it turns out correctly, that it's really, really hard to break into the entertainment business. And I thought that set of degrees

would differentiate me and would help me start in the business at a level higher than your standard entry level. Because the way to get into the business in those days, and still now, honestly, was to go work as an assistant or in an agency training program. And neither of those jobs paid enough to live on. I had no ability to ask my family to help support me. But they also give you a very long route to upward mobility in the business. Although it works, it does work. And it's where most people start. So I thought, if I got a JD MBA, especially from a place like Harvard, maybe I could start at a higher level. And indeed, that's exactly what happened. And I sort of was able to catapult my career by spending the four years in grad school. So walk us through it. You graduate Harvard with the JD MBA.

You have a blank canvas in front of you. How did you map out what you wanted to do? Where did you apply? What kind of job were you looking for? And then ultimately, where did you end up? I wanted to run a movie studio. And I would say, one of the things that has defined my career is knowing what I want. And I'm sure you remember from our first meeting, I asked you, what is it that you want? Because anytime I'm in a coaching and mentoring situation, and I'm in many of them, I have hundreds of people I work with in any given time. It's about 25% of my time. The starting point is what do you want, not tomorrow, but mid or long-term? And are you working in service of those goals? And I knew I wanted to run a movie studio for better or for worse. In fact, I wrote the essay in the Harvard Law School

yearbook my first year in grad school. And the essay was about how, despite the fact that I was in law school, I wanted to run a movie studio. And I would think that it would be kind of bizarre to commit that to paper in front of your peers. But I did it intentionally because I really, you know, I wanted to own that ambition. And by telling other people, first of all, I thought it was interesting, perhaps in retrospect, highly egotistical, didn't feel that way at the time because Afro wasn't head of a movie studio. So maybe it looked silly. But by owning the ambition publicly, it sort of cemented it. So I started applying to jobs that no one recruits in the entertainment business, particularly

not at those grad schools. They still don't really recruit. I applied for whatever training programs there were. There were a few. NBC had one. Then, in fact, NBCU still has one now. I didn't get it. But luckily, I had had my first summer job in grad school was at Viacom. And I met a bunch of people and I stayed in touch with them. And one of them had left Viacom Dakota Columbia Pictures Television. And he needed someone to come work for

him to help run the division. And I just met with him regularly until finally I wore him down and he offered me the job. So even though he knew and I knew that I wasn't remotely capable to have the job, I'd actually never worked in my life, right? I'd gone directly from college to grad school. I'd had just had summer jobs, but he took a chance on me and I became director of international television sales at Columbia Pictures. And that was my first job. When you were thinking about your first job, a lot of people will look at a variety of factors, look at money, experience, location, responsibility, people they work with. The industry seemed like it was the most important thing to you.

Where do the other factors rank? Did you even inquire about the money? Did it matter to you at all? Well, it mattered, but I didn't have a choice. It was the only offer I got in the entertainment business. Then I had the standard offers one gets when you're in those programs, which is consulting and investment banking. And I spent a summer doing consulting at McKinsey and I really loved it. I didn't want to be an investment banker because they work too hard. And I have this desire not to work that hard. But also, again, I wanted to run a movie studio. So I had offers from three or four investment banks and offers from three or four consulting firms. And they were very prestigious and they paid a lot of money. And then I managed to eke out this offer from Columbia Pictures that paid about half of what the other jobs offered. And I had student

loans to pay. But I looked at it and said, if my goal is to be head of a movie studio, even though this job at Columbia Pictures is in television distribution, has nothing to do with movies and nothing to do with making movies, aren't I better served to go to Columbia Pictures than to Goldman Sachs or McKinsey? And if that's truly my goal, and I'm always astonished when talented people who have options, and I was fortunate to have these options, will say, well, you know, it pays more. It's like, you shouldn't be worried about what your first job pays. Like, if that's relevant at all to your later career, it's that you have a bigger problem than the one we're discussing. And it's prestigious. Well, who cares about that? It needs to be something that speaks to your greater ambition. And I knew that. And so it was sort of a hard choice because economically it was a bit challenging, but I was getting paid enough to live on.

So I went for it. You mentioned you applied to the NBC training program. How many jobs did you apply for the entertainment business? Was it only these two? And then how did you deal with the rejection? Well, like you, I reached out to a lot of people either through tenuous connections or introductions or a cold. And unlike you, I didn't do all the homework you did. And I wasn't as, I didn't do a very good job of it apparently. So I got a handful of meetings with other people, but the meetings were

typically pretty short and pretty cursory and not super helpful and didn't lead to any other offers. So ultimately I had the banking and the consulting offers and the Columbia Pictures offer. That was it. One of the reasons that I decided to have an open door for everyone, yourself included, was because there were no open doors for me. And I decided if I'm ever fortunate enough to get into the entertainment business, I'm always going to have an open door. I'm going to see anyone who reaches out. And to this day, I do. And that's what led to my coaching and mentoring practice, which wasn't intentional, but that's how it occurred. I share that same philosophy. I had so many people along the way that helped me, took meetings when they had no business taking meetings. I worked really hard

at them. Nonetheless, they're very busy, but I have the same exact philosophy. There isn't a meeting I turn down for someone who has actually earned the meeting. You can't just call up and say, hey, Randy, I'm Sheila or John. I'd like to come in and see you. I'd like them to put a little work into it. But I meet with 100% of those people. Funny enough, by the way, you mentioned Columbia. Mark Platt was the first meeting that I got.

He was a former lawyer. He was running Columbia TriStar Pictures. I remember I'd never been on a movie studio a lot before. I remember I got this reserved parking space in front. Here's this kid from Detroit walking in. In La La Land, I'm in LA, had goosebumps going to his office. There's all these movie posters on the wall, of course, and there's a basketball net behind his desk. And the office is big enough where I think you can shoot a few hoops. But it was really, really cool to me.

And I targeted Mark because he had started his career as a lawyer. And here he was running a studio. So you're there for a few years. And then you leave to go to a company called Vestron, which was in a business, something called the Home Video Company business. What was that and why did you leave? So Vestron was the largest independent home video company in the States. And that was the dawn of new media. And believe it or not, the first two new media for entertainment were pay television and video set distribution. And Vestron had built this great little business and they were recruiting a head of corporate development.

And at that point, I was vice president at Columbia Pictures. I was very ambitious. I knew that if I didn't leave Columbia because I was doing well in television distribution, I'd stay in television distribution my whole career. In those days, particularly the entertainment business wasn't great at saying, what's your ambition? Where do you want to go? I was doing fine. promised that I'd have some line opportunities by the chairman. And nine months after being there, I became the president and chief operating officer of the company, which at that time was the largest independent public company in the entertainment business, which was quite a small company, but they were different times. I was suddenly running a movie studio at the age of 30. So it was kind of not what I expected. I mean, I was ambitious, but I didn't think it would happen that quickly.

And then I greenlit my first picture and it turned out to be a massive hit. And there I was off to the races in the movie business. What was the picture? It was Dirty Dancing. So it became the highest grossing independent film of all time and stayed there for many years until Blair Witch Project eclipsed it years later. It also was the highest grossing movie soundtrack of all time for many, many years. I want to say 15, 20 years. So it sort of cemented us at Vastron and certainly helped me personally. And I stayed there for about three years. And then I was recruited to become president and chief operating officer of what was then called 20th Century Fox.

And now you're at Fox, you're managing 1,200 employees. I think Fox at that time was doing $2 billion a year in revenue. You're now the head of a major studio and you're 32 years old. And I'm going to digress here for another minute and share something about your story and then fill in a couple of details about our meeting as well. I've already talked about my letter writing campaign, but one of the people I wrote a letter to was an investment banker named Mike Yagaman, who was a managing director at Bear Stearns, who ran their media practice. I'd sent him a letter, we had a meeting, And I made a pretty good impression when I met with him. And before it ended, I asked for his help getting intros to CEOs. And it was a huge risk for me. It was a huge risk for him. He didn't know me and he politely declined. But then he said something that really has stuck with me forever. He said, if you want to go hunt moose, go where the moose are. I had no idea what he was talking about.

So I said, what does this mean? And he said, the annual Bear Stearns Media and Entertainment Conference was coming up in a month. It was being held in Laguna, which is one hour away from Los Angeles, where I live. And the CEO of every major entertainment company was going to be there. And he said, Randy, you're invited. And that was really incredible of him. I'll always be grateful for that. I'm sure you remember all the people who did every nice thing for you as you were making your way up. I remember every person who helped me and this was a huge help for me. So I get the invite and then I went to work. I hit the client development code again and researched every CEO is going to be there. And they're around 30 to 40 at the conference. And 75% of them were on my hit list.

I had made a hit list. And then I printed out the articles. And then I was highlighting and putting this letter writing campaign together in the second bedroom of my apartment next to the Jack in the Box in Westwood. So I had this, my list, and you were not on the list. The reason you weren't on the list is I was looking for people in LA and you were based in New York. But when I read about you, I said to myself, I've got to meet this guy. I was 26. And this guy, Strauss Zelnick, is running a movie studio when he's 32 years old. So you became number one on the hit list. I wanted to meet you. I wanted to find out how did you do this, get your advice, maybe even a job. And you were doing basically like a

drive-by. You flew in, you spoke, and then you headed back to New York and you were really busy. I could see people around you. When you speak, you get the circle. There's three people deep and then two. So I kind of waited my turn. I followed you out the door. It goes at the Ritz-Carlton. I introduced myself as you're walking out. And I asked you if you had a few minutes. And you could have blown me off, but you stopped for a second. You shook my hand. And you told me to call your office in New York to set something up. I sent you my letter first, and then I called. We're going to come back to that story again one more time. But you're a 20th century Fox. You're in your dream job. You dreamt about running a studio. Now you're running a huge, well-known studio.

It's incredible. Your dream came true. What were you thinking? And when you got there, what did you actually do running a studio? Well, what I mostly thought was I have no business doing this job. I said to my friends, I'm definitely not capable to do this now, but I'm certainly glad I have the opportunity. And, you know, it was a turnaround. Fox was the last place in the box office when I joined. And within a year, we were first at the box office and stayed there for the remaining three years that I was there, the job was to turn around the business. And it was a pretty moribund, old-fashioned business. And we updated it and updated the team and upgraded the international group and upgraded the dealmaking. The creative part of the business was run by my boss, Joe Roth. I ran the business side of the equation until Joe left. And then I was responsible for both

when Peter Chernin became my boss. And I stayed under Peter, who was a great boss, really great boss, very generous person, very kind person, until the opportunity to go become an entrepreneur came along six months later. I recruited him. The deal with Peter was, he was like, I don't want you to leave, but you can leave if you get your own replacement. So I had to replace myself. I thought pretty highly of the job I was doing. So I said, there's really only one person in the business who I think would do as good or better job than I in this. And that was Bill Mechanic, who was at Disney, very happily. So I didn't know Bill very well, but I knew he was happy in his job. And it took me about six weeks to recruit Bill, but I did. And Bill and Peter went on to do just great work at Fox and build the studio significantly from where we had left it

and innovate in any number of areas. So that was kind of the Fox experience. You were there three to four years. Let's talk a little bit about the time that you were there because you indicated you wanted at some point to be an entrepreneur and you left. But when you took the Fox job, were you thinking, this is going to be the last job I ever have? I'm going to work my way up at Fox and Peter's your boss. But at some point, are you going to replace Peter and report to Rupert Murdoch. What was the picture like when you got there? And were you thinking this whole time, I'm just training for something else? I was always ambitious. The truth is my first goal had been to run a movie studio. And while I wasn't the chairman of the studio, because Peter gave me a responsibility for both

creative and business, at that point, I had the job, effectively had the job. Peter was responsible for a lot of other areas as well. And I'd been running movie businesses for now seven years between Vestron and Fox. And so, sure, all other things being equal, my ambition would have been to be chairman of the studio. And had I been given that opportunity when Joe left, I definitely would have stuck around longer, perhaps much longer. But I was passed over in favor of Peter. And at that point, I looked at it and said, OK, realistically, I have to do this job for four or five years before Peter gets bumped up again, which incidentally is what happened. I think Peter was in that role as chairman for about four or five years before he was

promoted inside the organization. And even if I were really optimistic about my chances, I looked at it and said, you know, that job is not going to be any different than the job I have now, really, because Peter gave me a lot of latitude. So I had to begin to think about what came next. And I sort of redefined my goals from running a movie studio to running a diversified media business with an entrepreneurial slant, which is to say I wanted a piece of the action. So now I had to start thinking about what does that look like?

How can I gain the experience that would enable me to run a diversified media company? And how can I do it while being an entrepreneur? What became clear to me is I had to get experiences in other creative enterprises. And when video games sort of came along and they were just coming along then, I looked at it and thought, wow, this could be like a huge entertainment business. This sort of feels like the movie business in the early days. And if I get in now, not only will I get that experience, but I could probably do it as an entrepreneur and get a piece of the action. So I actually went to Rupert and said, video games are the entertainment business of the future. I'd like to start a video game company. How about if I do it here at Fox and continue to run the movie business? And I'll do that also. I'll start another division because I had numerous divisions reporting to me at Fox, not just motion picture production and distribution. I also had television distribution and home video distribution, pay television distribution. I had it all. So

to me, it wasn't burdensome to start another division. And Rupert said, that's a great idea if you want to start a video game company and I'll support that. I said, well, here's the thing. I want a piece of the action. He was like, no, no, no, that doesn't really work around here. Like you can work here. We pay you well, but you know but it's part of the business. And so I had an opportunity to go to a very early stage startup that hadn't released their first title in Silicon Valley called Crystal Dynamics. And I'm probably the only living person or dead person who's ever voluntarily left the job of president of 20th Century Fox or any other major studio to take a 95% pay cut and move to Silicon Valley. For a company that was less than a year old?

Less than a year old, no revenue. So how did you find out about Crystal Dynamics? Were you reading? I mean, there were no publications even to read at that point, I assume no video game publications, maybe a couple of magazines. So how does this come about? How did you learn about this? A recruiter named Bob Fell, who was a friend of mine, reached out and he was doing the search. And he said, I know you want to do something entrepreneurial and I know you want to broaden your base. Why don't you come look at this? So let's talk about what happened at Crystal Dynamics and where was the video game industry at that point in terms of where it is today? Where was it then?

What did it look like on the map? I know, obviously, you could play board games or console games like Pac-Man. You go to a bowling alley, you play Pac-Man. Asteroids was a big thing. Where was the industry as a whole back then? What did it look like? And obviously, it's very different today. Well, it had already sort of established a similar structure. In those days, the big so-called first parties were Sega and Nintendo.

Sony was just entering the business with PlayStation. Microsoft was not in the business yet, so there was no Xbox. But the hardware really was sega and nintendo that was the meaningful hardware and then on the independent side electronic arts was relatively young but it existed activision was very young but it existed in fact larry probes was ceo of electronic arts he's still the chairman bobby kotick was the ceo of activision he still is there were other players that are not around like thq there There were computer titles and CD-ROM titles. Those businesses obviously no longer exist. And then there were smaller independents and the technology was rapidly escalating. And Crystal Dynamics was formed initially to make games for a new platform called 3DO, which was a 32-bit platform that was going to eclipse

technologically the other platforms. And they were set up to be a software house to support 3DO. I was recruited there. So the business existed. It was early, but it definitely was a real business. I don't remember what the aggregate revenue of the business was. It was quite small, but it existed. You mentioned Bobby Kotick. Bobby was my stepsister's roommate in college at University of Michigan, greatest place on earth, and was coming to our house for Jewish holidays. I met Bobby when I was 13 years old. Bobby actually offered me my first summer job after my freshman year at Michigan.

He and Howard Marks had a company. It was a different name. It was really the predecessor to what became Activision. And I needed to make money that summer. And he offered me a new Apple Macintosh computer, which had just come out. It was $1,995. Unfortunately, I couldn't take the job because I needed to make money that summer. I ultimately dug ditches in a piece of land that became the Waywatchers World Headquarters in Southfield, Michigan. So I've known Bobby a very long time. What an interesting career and similar trajectory that he's had in the video game business, as have you.

You went to BMG after working at Crystal Dynamics. They came calling as well. Did Bob Fell call you up again and said, Hey, I've got this great opportunity for you. Second time around, here you go. No, it was a strange situation. I actually was another recruiter named bill simon who's also a friend to this day who was at corn ferry but bill called on behalf of bmg before i'd

left fox so i told everyone i was leaving and it was about to be announced it hadn't been announced yet and bill called and said you know we'd like to talk to you about being CEO of a big record company, one of the majors. And it was very tempting because, again, I wanted to get experience in other creative businesses and it wouldn't involve a pay cut. And to the contrary, it was a high-paying job. And I thought it would be super interesting and a great opportunity. And they had an interest in other businesses and were willing to invest in other businesses if that's what I wanted to do. But I had to say to Bill, look, I've just accepted a job and it's about to be announced

and I've got to pursue that. I wanted to pursue it as well, but I hadn't put it in the context of, wow, what if there were a competing opportunity at a big, really huge business? I mean, BMG was a $5 billion business in those days. So I declined and went to Crystal and that got announced. Before I declined, he said, why don't you just have dinner with Michael Dornan, who headed the entire entertainment company for Bertelsmann, which was television and recorded music. And I said, sure, I will. And I had dinner with him and I

explained that I wasn't available. And I made sure that Bill told him I wouldn't be available. But we had a really nice dinner. And about a month later, the head of HR from BMG called me and said, look, Michael really thinks you'd be perfect for this. And he's willing to wait for you. And I was like, well, I just started a new gig. I'm building this business from scratch. That's really flattering.

But he can't wait because it's going to take... This is not like a short-term situation. And the HR person from BMG said, that's okay. We're willing to wait. We believe this is going to be the right thing for you to do. We stayed in touch. Ultimately, they asked me to do some consulting work for them on the movie business, which I obviously knew, and they were thinking about getting into. So I did some consulting work on the side, which obviously was disclosed to the folks at Crystal. But that got introduced us to one another. And two years later, when Crystal was very much on its feet, had already launched, hit properties and was exceedingly well financed and had about 250 people, I decided to

leave and become CEO of BMG North America, which was at that point also about a $2 billion business. It was the North American division, but it was with a path towards becoming the CEO of the whole thing. And I did become the CEO of the whole thing a couple of years later. So you're learning the music business, which is new to you. And you also, while you're there, you took some of the video game knowledge and excitement and you brought it to BMG and you created BMG Interactive in-house. What was that? And ultimately, in the interest of time, there's a whole bunch of things I'd love to talk about. But let's talk about what that became and how that led into what you're doing today,

ultimately, in the video game business. I'll try to compress it. I got to BMG and they said, what do you think about the movie business? And I said, it's terrible asset class, which it was. Let's not do that. But let's start a video game business. It's still early days. We have built-in distribution capacity. We'll bring in independent developers and we'll publish their works and we'll distribute it through our worldwide system. And it was, I thought, a pretty clever plan. And we did just that, and built up an array of products. We were developing 40 properties. And right before we were going to launch our first game, the new CEO of Bertelsmann, which was the parent of all of BMG and other businesses, came to me and said,

I don't understand this business. I don't know why you're in it. I don't know why you've wasted all this money in it. I want you to divest the business. So I said, listen, we've already invested in 40 titles. They're all ready to go. We've already built the overhead up. It's already here and in place. The only thing left for us to do is distribute the products and bring money in. And even if we're horrible at it, even if we mostly don't have hits, the structure of the business in those days, we probably would have gotten our capital out or close to it. I said, on the other hand, if you want me to divest a business with unreleased titles, it has almost no value to someone else. I mean, I'll get cents

on the dollar. And he said, I don't care. That's what you should do. So I did because I'm a good soldier and I was employed and I knew what my job was. I sold BMG Interactive to Take-Two Interactive, which was a tiny little public company for $9 or $10 million of stock. It was actually quite a bit of stock in Take-Two because Take-Two was so tiny. And then I went to my boss and said, let's hold the stock minimally. That way, if they do well with it, we'll benefit. Otherwise, I'm going to sell it and get like $9 or $10 million.

And he said, no, no. And remember, we'll benefit. Otherwise, I'm going to sell it and get like $9 or $10 million. And he said, no, no. And remember, we were a $5 billion business. This was a rounding error. He said, no, no, get the cash. Sold the stock, took the cash. A month later, Take-Two Interactive released the first title that came to market that we had developed, which was called Grand Theft Auto. And so Take-Two grew on the back of Grand Theft Auto and Rockstar Games. And that was the juggernaut that grew Take-Two and led to all the other

things that ultimately have happened there. I stayed at BMG for six years, brought the company to second place. Had number one and two players not merged, we would have been in first place. We had a bunch of great hits. I had a experience and i felt at that point i you know i knew the video game business i knew the movie business i knew the television business i knew the home entertainment business i'd gotten a lot of experience and i thought probably time to start my own business and build a diversified media company you know that i can have you know an entrepreneurial stake in uh and did so by founding ZMC. And totally serendipitously,

in a long story we don't have enough time for, seven years later, ZMC took over Take-Two. And we've been building it up ever since. I want to come back to the last piece of our meeting. You were actually at BMG at the time. We didn't sit down for a face-to-face for another few months until you were back in Los Angeles.

And by then, I had been writing all these letters. It was going very, very well. I'd had about 20 to 30 meetings, which meant I'd sat in 20 to 30 lobbies. And in most of them, I waited quite a bit, quite a long time, in one case, more than an hour. Of course, I was the least important person on their calendar that day. So if something came up, I was going to wait. I had studied a long time for each meeting.

I coach people, prepare for the meetings like it's a final exam. And that's what I did. I made an outline. I memorized facts, questions from footnotes of public companies. So I started bringing my outline to these meetings to study while I waited. The same way that I looked at my materials in college right before a test, you look at it, then you put it away, and then you begin your test. I always arrived to every meeting one hour before. I'd wait outside, and then I would come up 15 minutes before. First impressions matter. I wanted to make sure they knew I was there

well before on time. I was there one hour before because in Los Angeles, there could be traffic jams, a whole bunch of other things. So I go out 15 hour before because in Los Angeles, there could be traffic jams, a whole bunch of other things. So I go out 15 minutes before and the office manager, I still remember her name, Liz Ramirez, brought me out a glass of water and said, Strauss will be out shortly. And that was the first thing that I noticed. She said Strauss, not Mr. Zelnick, which was very unusual and different than any meeting that I'd had, which said something to me about the culture and the way that you treated people. So I'm sitting in this really nice lobby and you walk out with one of these headsets on,

the old kind, it wrapped around like an air traffic controller. And you put your hand in front of the mic so whoever you were talking to couldn't hear. And you said to me, I really apologize. I'm running late. I'm on a call and I can't get off. I'll be back in a few minutes. And you walk to me, I really apologize. I'm running late. I'm on a call and I can't get off. I'll be back in a few minutes. And you walk away and I'm thinking to myself, wow, you're running three minutes late and you walk out yourself, not Liz, and apologize to me. It really says a lot about you and the respect you have for people, regardless of where they are

and stature or position. And I've been in the business world now for 30 years. I've never seen anyone else do that. I learned that from you, by the way. So it's something else that I've copied and borrowed from you. As an aside, when I went in there, you were talking to Clive Davis. In the interest of time, we don't need to go into that. But would you say that he's one of the most influential people in the history of the music business? Absolutely. I'm one of those creative. I'm a great guy. I had a great relationship working with him and was very fortunate to work with so many talented people.

And to this day, I work with so many talented people. At the risk of turning it around, I love the, first of all, your memory is extraordinary, Randy. But secondly, really extraordinary, but I knew that already. But I think you briefly described that you dug ditches for a living. And I think your story is that you do whatever it takes to get to the right answer and to get ahead. And whether that involved digging ditches or arriving an hour early or doing five hours of research for one letter, whatever it took for you to get to the next step, that was work that you put in. And the reason you've had the success you've had is ultimately because you have wonderful attributes, that you're smart and charming and nice, but you also put in the work and there's no substitute for hard work. So you said this as an aside, but it's really

compelling and a great reminder that we you know, we all start from nowhere. Everyone, everyone starts from nowhere. No one gets anything handed to them, even if they have connections. And I started from nowhere as well. You started from nowhere, but being resilient and friendly and kind and incredibly hardworking will open doors, always opens doors. And then, of course, you have to go through the door and do the work and do well. I love the reminder that you actually dug ditches. I'm a grinder. And I think that and my work ethic are probably the two most important ingredients of my success throughout my career. And I appreciate the compliment. Back to Take-Two, it sold, I think, more than 130 million copies since inception.

How much has it grown? Yeah, or sorry, Grand Theft Auto. What's the total gross that franchise has brought in to Take-Two? Which now, by the way, I think the value of the sale to Take-Two is around $14 million. And I checked today, I think your market cap is $23 billion today. Yeah, they held on to their 20% stake. Would have worked out really well for BMG. You were referring to the title Grand Theft Auto. That franchise is actually sold in

over 250 million units. And the average selling price is 60 bucks. So you do the math plus virtual currency. It's the highest growing grossing entertainment franchise of any sort of all kind. It's the number one entertainment property that's ever been created. It's an incredible story that Rockstar Games has delivered and continues to deliver. We're going to switch gears in the interest of time. I want to talk about fitness and physical health and mental health, but I also have to share another Strauss story with you. Well, two quick ones. One of the times where I would always call you when I'm coming to New York,

I love spending time with you. I've said this many times. I wish we spend more time together. I really love it when we have time. And thank you once again for this. But you said to me, hey, do you want to work out while we're meeting? I said, sure. So meet me at the Harvard Club. And I thought, okay, I have no idea what that is. That's the closest that I will ever get to Harvard. And I told you I had no clothes. I said, oh, don't worry. They have some there. So we're working out. You're a complete machine. And I'm thinking, it's kind of hard to have a conversation. I'm huffing and puffing. And this was 20 years ago, probably, 15, 18 years ago, something like that. And I could clearly see you're into fitness. And I was thinking, man, I need to get my ass in shape.

And then there was another time where you want to work out in Sports Club Los Angeles, which is a health club there. We get there. We meet in the lobby. I'm looking at you. You're looking at me. You remember? No.

You remember? No. We're sort of laughing about it. Of course, you made one simple're looking at me. You remember? No. You remember? No. We're laughing about it. Of course, she made one simple phone call. We were in 30 seconds. And then we're in there. We're working out. Same thing. And when we're done, we're hanging out in the locker room. We have our towels on. We're going to go take a jacuzzi. It was 8 to 10 feet, this big pool. And you're talking to some guy in the locker room who clearly looks a little bit unique. And we're hanging out.

You're talking. I really, hey, how are you? This is me, Sean. Meet my friend, Randy. Randy, Sean, nice to meet you. We all go into the whirlpool together. We're in there for 15 minutes. More conversation.

Clearly, the guy's in the music business, but I have no idea who he is. And we all went, we got dressed, we showered, we laughed, we laughed before him. And he said, you know who that is, right? I said, I have no idea. And it was Sean Combs. So just says something about how uncool I am and how I'm not with it in the music business, but you love fitness. You are in better shape than anybody that I know, period, regardless of your age. When did this all start and how important is it to you? One thing as well that I've noticed, I'm sure a lot of your friends do too, you work really hard, you're successful, you work very long hours, you have family, commitments, philanthropy. People will always say, I don't have time to work out. I find myself

saying that as well. I'm tired at the end of the day. Can you talk about the whole fitness thing, when it became important to you and give us the whole story, Mr. Men's Fitness. I always got exercise and I always believed in it, but it sort of picked up as time went on and I got more and more into fitness and health. And so when you and I first met, I probably worked out two or three days a week. And then as time went on, I just decided to do more of it. And as I mentioned, I spent a lot of time mentoring and coaching people. And I realized that if I was in the gym an hour a day or close to it, that'd be a great time to talk to someone because you can relax and talk and I wouldn't be subject to phone calls or interruptions in the office. So I would say to people, listen, if you want to get together for

a meeting, we can do that in the office. You want to get a cup of coffee, we can do that. And you'll probably get 20 or 25 minutes. Or if you're interested in working out, you can spend an hour, your call. And so more and more people, including people who worked at my companies would say, okay, well, let's get in a workout. And I found that it was a great way to catch up and also sort of remove barriers because when you're sweating and working hard, you know, pretty hard to maintain your composure or any kind of pretense. And so I was able to have a pretty busy work schedule and also work out. And to this day, I almost never work out alone. I always work out with friends or groups. That makes it much more fun. I sort of feel like by training hard and training often with people

who are a lot younger than I, it keeps me feeling young, even though I'm not young. And that allows me to look at the world through curious, wide, young eyes. And I think that positively influences my investing, but also helps me run entertainment businesses that cater to younger people. So it's been a great blessing, both in terms of the fact that I don't feel remotely old. I don't have any acheses or pains and I stand up straight and I can do all kinds of sports and I don't feel compromised at all by age.

And I do have friends who do feel that way. They feel compromised by age already. I'm not that old. I'm 63. But for a lot of people, they're beginning to feel, you know, like they're slowing down. I don't feel that way. And that influences every part of my life.

So it's been an incredible blessing, great way to spend time with other people, great way to spend time with my kids. And I really, I enjoy the results. I get to eat more too. Well, I remember us having lunch one day at Nate and Al's in Beverly Hills. And the waitress asked you first, what would you like? And you had something super, some eggs that were super healthy. And I'm looking at the corned beef sandwich and I said, Strauss, you're making me feel guilty. And I said, I really want that corned beef. He said, go for the corned beef. So I had a fatty corned beef sandwich and you had this incredible healthy meal, which didn't seem that tasteful to

me. But I remember at the time though, you took it seriously. The fitness was a huge part of your life. And you're talking about longevity. And you could really influence the probability of a longer life if you eat well, take care of yourself. That's part of the motivation as well. I mean, obviously, you feel great mentally, you feel great. But you're also looking at life expectancy as well in there and being productive while you're alive? I think it's more about healthspan than lifespan. I think robust exercise probably can extend your life on average, maybe three to five years. And since the last three to five years may not be so great, I'm not sure that's really why you do it. I think it's more healthspan and mental acuity and just the ability to walk around comfortably. So if we don't

exercise, you know, we lose bone density, which means if you fall, your bones break and we lose our balance, which means you're more likely to fall among many other things. There's also evidence that you're much more at risk for Alzheimer's disease or other forms of dementia if you don't get exercise and that exercise can offset all of these things. So my bone density is the same as a 19 year old, I have great balance. And then when I go skiing, because I'm not a great skier, you know, I fall like I'm 14. And I bounce right back up. Nothing breaks, nothing even bruises, because you know, I'm in reasonably good shape. So it means that I can do activities, you know, at this age that my friends are already dropping out of. And I expect to be able

to do those activities, God willing, in 10 or 15 years that a lot of people won't do because your body is strong and resilient. There's no reason you can't do balance-related activities or activities that put you at some risk of falling. There are many good reasons, but I don't actually think it's lifespan. I think it's much more quality of life, which is what appeals to me. Also, there's so many other factors that affect lifespan that you really can't influence your heredity, disease. So I've never thought that the goal is to live as long as possible. I know there are people who believe that. For me, that's not the case. I just would like to live like a middle-aged person

and then die. That's my goal. We're almost at the end of the show. And I want to ask, what's the best piece of advice you would give to anyone, regardless of age, on how to have a better life, how to have a better career? That's the first part of the question. The second part is, what to you are the three to five most important ingredients of someone's success? Well, the first piece of advice, which we talked about is know what you want. Really think about what you want, not what is wanted for you, not what you see on television, not what your friends are doing. What is it that you want in terms of your life long term, both personally and professionally

and work for that goal? So many people try to pursue other people's ambitions. You need to pursue your own. And the advice that I give with regard to a career, and I think also personally, is the advice I got when I was in grad school in a vastly less well-organized way. I would ask CEOs who came to visit school their top advice for a great career and a great life. And I realized after asking 50 of them or so, they all gave the same advice, essentially, and fell into three buckets. So that's the advice that I give, which is the first is listen.

Most people don't listen. Most people learn how to talk. They don't truly learn how to listen. Listening makes you smarter, makes you more effective, and makes you kinder. And it's a way to develop a relationship with people. The second is work hard. There's no substitute for hard work. We talked about that earlier. Get up early, get to work early, stay late. Especially in the beginning of a career, the only thing that is going to distinguish you from the person next to you is harder work. As you gain some experience and maybe some wisdom, you probably don't have to work quite as hard. But even now, I run three enterprises simultaneously. I work pretty hard. I'm pretty much always on. And finally, never compromise your integrity.

It's ultimately the only thing you have. And I've tried really hard to pursue that advice, all three of those recommendations, imperfectly. And I've made mistakes hard to pursue that advice, all three of those recommendations, imperfectly. And I've made mistakes with regard to all three. But I have always known what I wanted. And if I didn't, I stopped and took time out to think about it and reestablished long-term goals. I've done that again recently. And it served me well.

Honestly, I wouldn't say that I've ever reached a point of achieving all of my goals, and I doubt that I will. But by writing them down and establishing them and owning them emotionally, I'm probably going to get closer than if I didn't do that. Can you share one of your goals that you haven't achieved yet that you want to achieve? Oh, I think one of my goals was to have one of the biggest media and entertainment companies on earth. And we have a very significant enterprise, and I'm really proud of it. But it's not one of the biggest on earth.

It's getting there. It's growing, for sure. I think I want to conclude as well on, we talk about time management as well. And one of the things that we hear about, and which I do a lot of mentoring as well, and people say, ask someone, well, why didn't you do that? Why didn't you do that? I didn't have time. And that phrase should not be part of the English language if you want to get ahead, or if you want to be a friend to someone as well. It comes up a lot in the personal context too. Well, why didn't you do that? Well,

I didn't have time. Well, as you know, I've been working on Sandy or Yelp for Beaches for the last seven years, my full-time job. And Businessweek wanted to write a piece on me. And I thought, all right, who do I know who has a lot of credibility, who people's name would recognize, who I could put Business Week in touch with to see if they'd be interested in talking to them. So I thought of you, and I texted you. And you always text back very fast. You're a very fast responder, no matter where you were. You were actually about to board a red-eye back from Europe on a family vacation. And you said, when do you need this by? And I told you the reporter wants to finish the story tomorrow. So you told me you were landing. And I said, well,

do you want to wait? It's okay if you can't do it. He said, no, I'll do it. So the reporter called you, I think after an overnight flight, you had been on the ground maybe 15 minutes, you were in the car going back to your house. It just really speaks again to the kind of person you are, the kind of friend you are. So that's something I want to leave our listeners and our viewers with. We've had a lot of great lessons today, being a friend, making time for people that you care about, giving back. Very important to you, Strauss, I know, and to me as well. So thank you so much for being a great role model and a friend and for doing our podcast today. I really appreciate it. Well, thanks for having me. I hope I was coherent when I spoke to the reporter. Your memory is extraordinary. I give you all great credit for that. And it's such an optimistic memory too, which is kind of you and kindness is kind of the whole shoot match. So thank you. Thanks for having me.