#67 Conrad Hilton: Hilton Hotel Dynasty

What I learned from reading The Hiltons: The True Story of an American Dynasty by J. Randy Taraborrelli. 100 years ago he was a man with $5000 to his name (0:01) the curse of the ambitious/early life + work (6:35) Conrad Hilton is inspired by Helen Keller's optimism (13:00) the first Hilton hotel + more failed businesses (14:45) Conrad at 32 years old /falling back into the Hotel business by accident (25:30) losing it all / The Great Depression (35:00) The Great Depression's effect on his business and marriage (49:00) Conrad's advice on how to make decisions (56:22) Conrad Hilton's philosophy on money (1:03:47) it is important to have friends around you that increase your ambition (1:11:30) the regrets of Conrad Hilton (1:23:48) ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

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• 0:00David Senra?

  As of December 31st, 2011, the assets of the Conrad Hilton Foundation were approximately $2 billion. Probably more money than Conrad Hilton ever could have imagined making in his lifetime. After all, almost 100 years ago, he was a man with just $5,000 to his name, all of which he decided to use to purchase the Ramshackle Mobley Hotel in Cisco, Texas. If not for the help of his devoted mother and an assortment of friends, he never would have been able to put together the balance of the $40,000 purchase price. From there, his empire grew not only in this country, but around the world. His is a true, genuine, American success story.

• 0:45David Senra?

  Or as his son Baron once proudly put it, "It's definitely one for the record books, and not a day goes by that I don't sit and marvel at what my father did with his life. It is my hope that others are inspired by my father's story." So that was just a random paragraph I found towards the end of this gigantic book that I'm going to talk to you about today. So that book is "The Hiltons: The True Story of an American Dynasty," and it was written by J. Randy Terra Borelli. And just two quick things before I jump back into the book. One, don't forget to sign up for the Misfit feed. Every other podcast I do is available exclusively for Misfits.

• 1:28David Senra?

  To sign up, all you have to do is tap the link that's in the show notes on your podcast player, and within like 15 or 20 seconds, you have access to that feed. And of course, like every other podcast I do, both the free ones and the ones for Misfits, none of them have ads in it. Second, if you want access to yet another private podcast feed, this one, all you have to do is leave a review. If you leave a review, screenshot it and send it to me at [email protected]. I'll reply back to your email with the private podcast feed. And if you're listening on Overcast, all you have to do for that is tap the star, which is how you recommend individual episodes on Overcast. It turns gold. Take a screenshot of that, send it to me. Okay, so let's jump into this book.

• 2:12David Senra?

  There's a lot, I have a lot of notes. Like I said earlier, it was a gigantic book, like 500 pages long. So I'm going to read to you what I thought was originally going to be the intro of the podcast, and this is from the prologue, and it just kind of outlines a little bit, well, a lot about Conrad Hilton, actually. It says, "It was true that throughout his lifetime Conrad Hilton had been a man used to being in complete control of himself, and some might argue everyone around him. As one of the most successful businessmen in the world, he had made hundreds of millions of dollars with hotels around the world bearing his name. He certainly didn't carve out such a niche by allowing others

• 2:52David Senra?

  to impose their will upon him. It had long been Conrad's belief that merely being related to him should not guarantee his heirs a carefree, privileged life. He had made his money in what he called the good old fashioned way, meaning he had earned it. A product of the Great Depression, he wanted his relatives to inherit his work ethic, not his money." So what they're talking about there is, I would say, like, a good 15% towards the end of the book, after Conrad dies, is this protracted fight by some of his relatives to overturn his will.

• 3:32David Senra?

  And Conrad, he did like 10 or 15 different revisions of his will throughout his lifetime as he aged, and in every single one, he would allocate basically less than 1% of his assets to his family members, or even people that worked for him, or whatever the case was. So, at the time he died, he had somewhere around what today would be a net worth, around $10 billion, maybe a little less, but an astounding amount of money at the time, and he gave over 99% of that to charity. And most of that money would go to helping like the children, the sick, he was really into donating to hospitals, and especially the Catholic Church. As we're going

• 4:16David Senra?

  to learn today, he was an extremely devout religious man. He was kind of, I would describe him, especially some of the behavior towards his, like, his children and other family members, he was a bit of a hard ass. And, so-

• 4:32David Senra?

  But I wouldn't look at that in isolation, as we'll learn. Like, he started his business in the depths of the Great Depression. And so, as we've seen with some of the founders in the past that went through and lived through the Great Depression, it affected the way they thought about money for the rest of their lives. Okay, so let's jump into, he has this idea about being the curse, that there's the curse of the ambitious, and then we're gonna go into a little bit about like how his religious beliefs affected like his worth. So he says, Conrad was a new breed of businessman for his times, optimistic when there seemed little reason to be, especially during the war and the depression. He had faith in America and in her ability to rise once again, to be a nation greater

• 5:15David Senra?

  than ever before, and to prosper if just given a bit of time to do so. But more than anything, he wanted to be at the forefront of this national renaissance. A crazy story is that he breaks ground, I don't know if he breaks ground or if it's actually finished, I actually can't remember, but let's say he finishes a hotel, the largest project he ever made, he borrowed like over a million dollars for a hotel, this is right at the end of the 1920s, and 11 days later is when the stock market crashes. So he just had really bad timing. So Conrad would kneel and pray every night on a small rug when he was just a boy about 10.

• 5:56David Senra?

  So he has this conversation, this conversation about tell you about what this priest happens when he's about 10 years old, and the priest tells him, the priest had told him that if he had said the Hail Mary and then Saint Joseph pray for us three times in rapid succession, God would always take care of him. Therefore, every single day for the last 40 some years, he had made sure to start each prayer session with his God, with his God, with those specific prayers, in that exact order. His religion was always a source of comfort for him. Still, he often wondered how it was that a man so accomplished could also be so lonely. I'll tell you more about that later. "I guess you could say it's the curse of the ambitious," he said.

• 6:41David Senra?

  "Perhaps I'm a walking cliche. I have everything, yet it sometimes feels as if I have little. He had been alone for so long that it had gotten to the point where his greatest passions seemed to take the form of inanimate objects." So I need to lay this foundation so you understand that his one true love of his life was work, especially the hotel industry, which I'll tell you how he stumbles into that. But this whole, this is a reoccurring theme, especially as he gets, because he lives, I think he lived to his like 91 years old, something like that. And a lot of the conversations he has in his 80s, as we'll see, is like filled with regret. And it's this idea that, you know, he was alone for so long. He was married a total of three times.

• 7:24David Senra?

  And it wasn't until he was in his 80s that he finally found somebody that he said he would like truly loved. So we're going to hear a little bit about how, what the author's saying here about his greatest passions seem to take form of inanimate objects. This is what he means. "He now referred to his hotels as his women. 'She's a great dame, that one,' he would say of his Texas holdings, the Abilene Hilton. 'No woman can match her,' he would opine of his Dallas Hilton. 'Luckily for me, she could not find a better suitor,' he observed of the Sir Francis Drake Hotel in San Francisco. Besides his religion, the only thing that truly mattered to him, that gave him the most pleasure, was his work. Conrad would once again do what he had done whenever he felt a lack of something, a lack of something in his personal life.

• 8:08David Senra?

  He would go about the business of filling the void," meaning he'd go and try to do another acquisition of a hotel. "He wasn't the kind of man to play it safe. He was shrewd, and he liked to take chances. He wanted to live his life for all it was worth, damn the consequences." Okay, so now I'm going to go back in the timeline, and I want to talk to you about his early life and work. And this is, these are the parts of these books that I personally find most motivating, because I just told you he died with almost a $10 million net worth. And Conrad, as we'll see, as with a lot of the people that, a lot of entrepreneurs that we've covered on the podcast, they don't start in a good spot. And he's definitely did not start out in a good spot.

• 8:49David Senra?

  So it says he was born on a snowy Christmas day in 1887. He was the second of nine children. Most of the children were born in the adobe dwelling that housed Gus's general store. Gus is his father. And this was in San Antonio, a territory of New Mexico. New Mexico was not part of the Union at the time. Says because he was the family's first born son, he was expected to take his place in the general store while he was still young. Thus, it was at his father's elbow that he began his apprenticeship into the world of business, mastering the laws of supply and demand and honing the entrepreneurial skills that would serve him so well for the rest of his life.

• 9:31David Senra?

  An adventurous, high spirited lad, he also undertook on his own such productive ventures as going into the produce business, first by cultivating a piece of his father's land, and then by planting and later selling vegetables door to door. Though he could barely peer over the counter at Gus's store, he was there almost every day after school. This is where he would first learn the value of hard work and tough negotiation. Now that sounds like a good place to start, right? Your father owns his own business. This is where you're learning about how to deal with customers and how to deal with inventory. But this description gives you a more accurate idea of like his early living conditions.

• 10:15David Senra?

  Pictures of the homestead show a dilapidated structure that looked as if it might collapse at any moment. "We're talking about cowboy country here," observed one of Hilton's relatives. Cowboy hats, horses, stagecoaches, dirt roads, moonshine and saloons, the works. And so as we're going to see, his dad was really tough on him. And I definitely think that Conrad emulated his dad to some degree with his own children. So it says Conrad's summer vacations were spent back in San Antonio, working for $5 a month at A.H. Hilton. That was the name of his dad's store. An ever growing business that now housed the post office, the telegraph office, the

• 10:56David Senra?

  Studebaker dealership, a livery stable, and a lumber building materials operation. Gus Hilton was nothing if not entrepreneurial. Not only was he managing the store, but he also bartered with prospectors, giving them provisions, clothing, food, and money in return for a percentage of their profit. On some days, he would take off into the wilderness to sell tobacco and food to beaver trappers, sometimes trading his goods for theirs. Gus was busy all of the time, tough and unyielding, not only in business, but at home as well. He expected a lot of his children. He actually saw something of himself in Connie and wanted nothing more than to see the boy make something of himself.

• 11:41David Senra?

  Therefore, he pressured him a great deal and was often critical when some observers felt it might have better served the boy to be encouraging. So this part about being really hard on his son, pressuring him a great deal to be successful, and being critical, that you could say that paragraph that's talking about how Gus was to Conrad, same, Conrad was exactly the same to, I would say mainly to his two older boys, a lesser degree to his third, his third son. But he has two boys, Nicky and Baron, and I think he would come to regret being this critical. Just remember I said that for later on in the story, especially when it comes to Nicky,

• 12:25David Senra?

  because Nicky, he has a tragic ending to his life. Okay, but we're not there yet, we're still, when Conrad's a young man. Okay, so he's working with his son, he's getting, you know, he's working extremely hard, he's around, let's see, he's around, I think fifteen years, fifteen years old at this time. And they kept sending him to these different schools, he would drop out, not wanna, like, he wanted to be at home, learning from his father. And they would always, especially his mother would overrule like his, his decisions, like, no, I can learn everything I need to know at home. So he actually finds inspiration from the biography of Helen Keller. So it says, "One day he found a copy of the book, of a book by Helen Keller, the twenty-three

• 13:08David Senra?

  year old Alabama native who was handicapped after contracting scarlet fever as a baby. Late into the night in his room, he read her autobiography, it was called Optimism, the message of which he found transformative. Keller wrote, 'Optimism is the faith that leads to achievement. Nothing can be done without hope.'" So I would definitely say that Conrad internalized that lesson, because he was definitely optimistic throughout his entire life, even when he had no reason to be, which is very difficult. "With a newfound courage gleaned from Keller's book..." Conrad eventually announced to his parents that he would not be returning to school. "His decision was final," he said, "even though he was only 15." Gus responded without appearing to show the slightest sign of annoyance. "All right," he decided.

• 13:52David Senra?

  "I guess you'll be worth $25 a month on a full-time basis." So now he's just started making $5, now he's making $25 because he's working full-time. "I believe now, looking back, that my parents took note of my conviction, and this encouraged them to change their minds."

• 14:12David Senra?

  Okay, so this is interesting, though. So I just gave you a description of all the different ventures that Gus was into. And I read that, I'm like, "Damn, that's like... Wouldn't it be better if you just focused on one or two things? I mean, preferably one, preferably one."

• 14:27David Senra?

  And it turns out, like, it might have been a better... A better strategy for old Gus. So this is how the... The first Hilton... The first ever Hilton Hotel comes by: One necessity and two accident. And then I'm gonna get into the first few careers that Conrad had. Because it wasn't until he was in his 30s that he actually discovered what was gonna be his life's work, which was hotel. To become a hotelier, I guess is what they call it. Okay. "In 1907, the financial panic that came without warning hit the country and all but wiped out Gus Hilton's finances. Gathering his family about him, Gus spelled out the dire situation and asked for suggestions. Casting his eyes upon the floor, 19-year-old Conrad,

• 15:11David Senra?

  after a few moments of silence, looked up, broke into a smile and announced, 'We should open a hotel. Let's take five or six of our 10 rooms of the house that he lived in and make a hotel. This place needs a hotel.'" So what would happen is...

• 15:26David Senra?

  Gus had nine children. Every time a child was born, he'd... He'd... Himself, he would build an addition to the house to house the extra Hilton child. And over time, now they have, you know, this... This big structure. It's not like a luxury structure by any means, but it does have room. And in the area there, and there's a lot of prospectors... They call them wildcatters, which is basically people looking to... To strike it rich with oil. Okay, so it says, um, uh, we should open a hotel, okay. This place needs a hotel, meaning the city inn. Conrad further suggested that while his father ran the hotel, his mothers and sisters could handle the kitchen duty, and he, meaning Conrad, would be responsible for baggage. He further speculated that $2.50 a day for each bed would be a reasonable amount to charge guests.

• 16:11David Senra?

  Much to his amazement, his father actually thought the idea might work. Um, so they, they get to work right on it, uh, right away. Within six weeks, the news of hotels spread throughout the area, all the way to Chicago. Just saying, hey, if you're going to this little part of San Antonio, um, why don't you stay at the Hiltons? And then it says, this is one of the, um, I guess the advertisements they did. It says, "They serve the best meals in the West, and they have a boy there who is a crackerjack at making things comfortable for you," meaning Conrad. "Everyone got something out of our hotel. Travelers got cleanliness, comfort, and a good table for their $2.50 a day. We all worked hard, and no one harder than my mother." I wouldn't, and this is, uh, I should have told you, but this is a direct quote from Conrad.

• 16:52David Senra?

  Now, towards the end of his life, looking back at how important this lesson was for him. He said, "We all worked hard, and no one harder than my mother. I wouldn't take a million dollars for what those days taught me, and I'd give a million dollars for one of the suppers that she'd served. Not only did Conrad manage the hotel, but he worked the desk, was the concierge, and did pretty much everything he could think of to keep the enterprise afloat." So, there's gonna be like a 10-year gap before he goes back into the hotel industry, but he's the exact same thing when he goes back into the industry. He knew, remember that, uh, that quote from Samuel Zemurray that I always reference, the Banana King? Where he's like, uh, "As long as you know, there's no problem you can't solve if you know your business from A to Z."

• 17:37David Senra?

  How he started, you know, peddling bananas. Bananas are about to go rotten, uh, that's how he got his start. Then he literally went into every single section of, uh, from, uh, owning the land that the bananas were produced on, to cultivating the bananas, to owning the ships that they were on, to owning the, uh, just every single, like, the entire, um, the entire...

• 18:00David Senra?

  Like vertically integrated corporation that he would need to actually eventually become the largest producer of bananas in the world. But anyways, to a certain degree Conrad emulated that in the sense that at the beginning of his career, he was not shy about, you know, he would be the maid, he would check you in, he would take care of your bags, he would do everything. So later on in his life, he knew exactly, like he was able to systematize, like what an actual, like a way, like a way to make like a, I would say like a structure for hospitality. To the degree where like, he does a deal that he comes to regret later in his life, where he sells off the rights to the Hilton brand overseas. So in like

• 18:42David Senra?

  Asia and Europe and whatever cases. And the companies that had signed up and were doing joint ventures with him at that time, canceled because they're like, no, no, we want to do business with Conrad Hilton. Because we believe in his, the, his management structure on how to manage hotels, which he of course slowly learned over four decades. And he's like, now you're turning over the management hotels to these other people. We're not, we don't want to do business with them. We want to do business with you. So anyways, so he's doing everything he could to keep the enterprise afloat. With the family solvent, thanks to Conrad's bright ideas, he enrolled at the New Mexico School of Mines in nearby Saco- Saco-Roe, some little tiny town. So he didn't really like school, but what he learned there proved invaluable as he excelled at higher mathematics,

• 19:26David Senra?

  providing the best possible mental muscles necessary, now direct quote from Conrad, for whatever career he would choose. So he sucked at school, but he really liked numbers. And again, this is something he carries with Professor's life, every day, he would read and analyze, even when he had, you know, I think tens of thousands of hotel rooms, he would read the profit and loss statements, the daily profit and loss statements of every single hotel, every day. He did this his entire life until the point where his eyesight was going bad. I think he was in like his 70s, 80s at the time. So you'd have to have somebody else read, read, like the, the P and L's to him. But he was obsessed with, with numbers. Okay. So it says in 1911, when he was 24, the territory of New Mexico was admitted to the Union.

• 20:12David Senra?

  Again, I have to repeat, like, he did not know he was gonna be a hotelier until he stumbles into it by accident. So he's, "Okay, well, we're gonna go into the United States." So, this is, actually shocked me. He says, "Conrad entered the political arena. He was swiftly elected to a seat in the lower house of the new state's first legislature." He doesn't last long there. He says, "He found working as a lawmaker slow and dull."

• 20:37David Senra?

  So, only serves one term there. "The work was way too boring," and he says, "Okay." Returning to San Antonio, more frustrated and more determined than ever to make it. "He reasoned that since there was no bank in his small hometown, he would become a banker." This is something he wanted to do for a long time. "With about $30,000, $3,000 of his own, and the rest scrounged up from friends and investors, Conrad opened the New Mexico State Bank of San Antonio in September 1913." He was just 26. So, the reason I brought up the fact, first, it was surprising to me that he was a lawmaker, the youngest ever for the state of New Mexico. But, he met a lot of people in those two years that he was a lawmaker, to the point where now, he was well-known in society, and he was able to, people, like, kinda trusted him, even though he was really young.

• 21:23David Senra?

  I mean, think about being 26-year-old today and trying to start a bank, like, that's... It just sounds a little crazy, right? However, he was able to raise capital, but he, the, his dad had warned him previously, he's like, "This town is way too small for a bank, it's gonna fail." That's exactly what happens. "So, customers failed to materialize, and by year's end, the bank would close its doors." Another failure. "Would his father always be right?" Conrad wondered. Restless for new challenges, in 1916, this is another weird twist of events here. "Conrad, at 29-years-old, took on the management of a musical group formed by his violin-playing sister, Eva, and two of her female friends, calling themselves the Hilton Trio."

• 22:08David Senra?

  Conrad was certain that people would flock to see the trio, and there's more of his optimism. Unfortunately, that didn't happen. Despite his best efforts, his first entrance into show business was a colossal failure." And I would just wanna, before I move on from there, same situation. Not only was he their manager, but he was their agent and he was their roadie as well. So he did not shy away from doing hard work and he preferred to do everything himself. Okay, so then right around this time, that was in 1916, and the World War was going on. So in 1917, he's actually drafted into the army.

• 22:48David Senra?

  And because he has experience working in Gus's Dry Goods store, he's sent to France. And he's running, basically, they call it the Quartermaster Corps. So he's not in, like, on the front lines, but it's, like, basically managing all the supplies that the soldiers need. And he uses, like, this time, as a learning experience. It says, "Being in France gave Conrad a whole new worldview and expanded his scope of experience outside of his humble beginnings." This is a direct quote from him. "Before I had been a big frog in a small pond, now in Paris, I realize that I was just a tadpole in a big ocean." So while he was sent away, I think he's 19, no, how old is he now?

• 23:34David Senra?

  Almost 30. Yeah, he's almost 30. He receives devastating news. "He received a shocking telegram from his mother telling him that his father had died and asking him to come home. He was shattered that he was unable to pay his last respects to the often critical father he still loved very much and respected deeply."

• 23:56David Senra?

  So what happened is actually, his father owned the town's first automobile. It was actually a Ford model. And he was killed on New Year's Day when the vehicle failed to negotiate a turn in the road. And it was actually the town they lived in, their first death by car accident. It says, "Although Conrad knew full well that his father would have wanted him to take over the family business, he realized that San Antonio's boom days were over. If he ever were to make it big, it wouldn't be here."

• 24:25David Senra?

  So now we got to the part of him finally finding his life's work. So it says ironically the automotive technol- and it does it by accident if we're gonna see here in a minute. Ironically, the automotive technology that had claimed the life of Conrad Hilton's father would be the impetus that would propel Conrad to his next venture, the oil fields of Texas. He wouldn't be a wildcatter though. Instead, he would exploit the booming support apparatus that was springing up around the oil industry. So he wanted to sell pickaxes basically, using that metaphor that's widely known. It says with $5,000, his entire life savings pinned to the inside of his coat, Conrad Hilton, now 32, soon after struck out for Texas. So I jumped ahead a little bit there.

• 25:08David Senra?

  So his father undoubtedly wanted him to take over his business, but his mom, who was also a very strong and iron-willed woman, told him, "No, this town is not big enough for you." And she says, the quote from her that he remembers later on in his life, she tells him, "You'll have to find your own frontier, Connie." Everybody called him Connie, by the way. And so this is the mindset that Conrad had at 32 because he's still held back on being successful, even though everything he's done up until this point was a failure. "I thought, I dreamed, schemed of nothing but how to get a toehold in the amazing pageant that was Texas."

• 25:45David Senra?

  So he winds up finding a bank. He does a deal, he's like, "Okay, I wanna buy-" remember, he still wants to be a banker, right? And he agrees in principle to a deal. And then the person that owns the bank changes his mind. So now he's really down because he's just like, "This sucks." They agreed on a price. And then the guy's like, "No, no, I'm not gonna do it anymore." So frustrated and bitterly disappointed, Conrad retreated to a nearby hotel called The Mobley to ponder his next move. The Mobley was a two-story red brick down-in-the-dumps operation catering to the roughnecks who worked in the oil fields. And they're not joking, I went and looked up what it looked like.

• 26:27David Senra?

  Yeah. Very humble beginnings to the Hilton Empire. "When I first saw it," he would recall, "it looked like a convenient place to sleep, nothing more." "Despite its dilapidated condition, Conrad was astonished to find that the place was fully occupied, with a waiting list of customers attracted to its low room cost." Remember last week, we talked about Marc Andreessen's idea that the most important indicator or the most important thing that's correlated with success in business? It's not the product, it's not the founder, it's the market, in his opinion. And he's saying like, when you have a market that is growing, like, somebody's going to satisfy that market. It has to be satisfied, so might as well be you.

• 27:09David Senra?

  The Mobley is, you know, kind of a down-in-the-dumps crappy little two-story building. But the owner at the time had nothing but demand, because he's in a good market, right? So it says, "Conrad was astonished to find the place was fully occupied with a waiting list of customers attracted to the low-room cost." They already started, not only that, he had people, he had three separate customer segments here. He said, "People that would rent it by the hour, the day, and then like longer, like weeks or months." Says, "Though the Mobley had the appearance of a flop house," that was the word I was looking for, it's a flop house. "Conrad still saw a great promise in it. He became even more enthused about the 40-room facility than he had been about the possibility of striking a rich in the oil industry.

• 27:51David Senra?

  Therefore, when he learned that the Mobley's proprietor wanted to sell it and enter the oil fields himself, Conrad made an offer of $40,000." That's the $40,000 that I referenced at the opening of the podcast. "This, his second foray into the hotel business, would be the decision of a lifetime for young Conrad. He seemed to know it too. When the deal was completed, he sent his mother a telegram. Frontier found. Water deep down here. Launched first ship in Cisco." So he had definitely had like this southern, not only a southern accent, but a southern like vocabulary. Even when he was living in LA and he owned a bunch of the one, some of the most famous hotels in, in New York. He routinely appeared with like a cowboy hat on. It's kind of funny.

• 28:36David Senra?

  There was one thing Conrad Hilton knew for sure was important, the careful utilization. This is so, so important, super important about his dedication to efficiency and not waste. And you, it's weird that you see these corporations nowadays, they do the opposite. They, they overindulge themselves when they're successful. Says, "There was one thing Conrad Hilton knew for sure was important, the careful utilization of space. To that end, he ripped out the lobby and sectioned it off into bedrooms. He then reduced the size of the front desk by half and added a retail shop. Removing three chairs and a sofa from another section of the lobby, he installed a newsstand." He was not, he was, I mean, as we'll see, he had a, he survived the Great Depression for God's sake. And he would never claim bankruptcy. I heard a recording of his voice saying that like,

• 29:18David Senra?

  he felt that 80% of the hotels in America went bankrupt in, during the Great Depression. And he's, he felt that him claiming bankruptcy would be admitting quitting and he just would, he refused to quit. But this whole idea of this, this modus operandi that he's doing on his first, his first hotel, he does over and over again. He constantly will buy like a dilapidated hotel or a hotel that's like down and out. And just revamp it. And then usually he would, he would just realize these people don't know what they're doing. They don't know how to run a hotel, like they're not using their space. Like your space is what you're paying for when you buy a hotel. Why are you not using it? So again, like something that's obvious in hindsight, but for some reason, so many people running the businesses don't, didn't see it.

• 30:00David Senra?

  "It was with Mobley, it was with the Mobley that Hilton began to understand that a staff of contented employees usually resulted in a thriving business. He began to encourage regular meetings with his staff, listening to all their concerns and taking care of each as best he could. Caring about his employees and viewing them as people with families and lives of their owns, own rather than merely his charges would become an integral way of doing business for Conrad. And in years to come would account for much of his success as a hotelier." This is very similar to what we talked about last week with Henry Kaiser. He's like, "Listen, I'm, I'm, we're in the construction business. This is hard labor. Like in, in some of the most unforgiving climates in the world and it's so expensive." For us to, to, to, to train all these employees to do the job the way we want them done,

• 30:45David Senra?

  if we don't invest in them, then our, our turnover is going to be higher and, and that means that we're going to have to pay more money in training. Like, why don't we just take care of the employees that we have? You're seeing the same exact thing here for Conrad. Uh, he's soon outlined for his employees his personal guidelines for success and then asked that they adhere to them. His code could easily apply today, almost a hundred years later, more than a hundred years later now, as one for better living. As he put it at the time, direct quote from him, "Find your own particular talent, be big, be, be honest, live with enthusiasm. Don't let your possessions possess you. Don't worry about your problems. Look up to people when you can and down to no one. Don't cling to the past.

• 31:28David Senra?

  Assume your full share of responsibility in the world and finally pray consistently and constantly." So this whole thing about being big, he tells it to his kids over and over again. Just be big, be the bigger person. And he also applied it to like their own, um, like, uh, their own ambitions. Okay. So his, his first hotel is a wild success and Conrad is not the kind of person that sits around. He moves extremely fast. Now, that can obviously be a great trait, but probably not a good idea to expand rapidly when, in a, in a few years from now, you're going to run into the largest, uh, the largest financial, um, recession or financial depression that your

• 32:12David Senra?

  country's ever seen. But he doesn't know that yet. So he's doing just as, you know, his personality allows. Uh, so he decided that he would focus on his new passion. In doing so, his success would be like a juggernaut that could not be stopped. By 1923, Hilton had more than 500 rooms in Texas in different small hotels that he had purchased along the way. So that, if I'm not mistaken, is, he goes from 40 rooms to 500 in four years. I think I have those years correct. Um, so he had five, Hilton had more than 500 rooms. Sorry. I don't know if I just said 400. I meant to say 500. 500 rooms in Texas in different small hotels he had purchased along the way. Because these were all dilapidated establishments that appeared to be on the verge of closing,

• 32:54David Senra?

  Conrad was able to get them for a steal. He even does this later in life where he gets a hotel that costs like...

• 33:01David Senra?

  I think it costs over a million dollars to build in Chicago, maybe in the 40s, and he gets it for like 250,000. So this is definitely something like a strategy he keeps for his whole life. He would then invest in renovating them with his own special touches. This is what I was mentioning earlier. Turning extra space in lobbies into rooms, or in some cases, bars, closets into gift shops, and before long, they were all turning a profit. Once Conrad was making about a hundred thousand dollars a year, that's an astounding amount of money, just after a few years in the 1920s, he began to fantasize about building a hotel that would bear his own name. It didn't take long for that dream to come true.

• 33:39David Senra?

  Conrad broke ground for the Dallas Hilton on January 26, 1924. He was 37 years old. Okay, so that's the first one he builds. That's not the biggest one I was referencing earlier, though. I think that one was in... Oh wait, no, that was the one. Okay, so let me get into... He's gonna... He loses it all very, very quickly here. Conrad Hilton was having a good run. Unfortunately, it wouldn't last. Everything was about to come to a crashing halt in October 1929 with the onslaught of the Great Depression. Now, there were far fewer traveling businessmen. The Depression couldn't have happened at a worse time for Conrad. He was right in the middle of building the Dallas Hilton.

• 34:24David Senra?

  See, I thought that it was... So he's broke on 1924, so it took five years to build? Okay, so I was mistaken about that. This was the hotel. As things went from bad to worse, in less than a year, he found himself deeply in debt, having lost all but one of his hotels. Okay, so hold on one second. I gotta move my notes here. Okay. Okay, so within a year, you see that he's expanding fast, gets to a ton of hotel rooms, and then, within one year, you know, obviously, he's buying all these... He's buying all these properties that he was expanding for the last five, six years, but he's doing it with debt. So it says, "As things went from bad to worse, in less than a year, he found himself deeply in debt, having lost all but one of his hotels."

• 35:09David Senra?

  And the one that he didn't lose was the El Paso Hilton. At $500,000 in debt, he was all but ruined. The rapid speed by which things had taken a turn was stunning. "I was heartsick about it," he would later recall. But of course, everyone in business was facing ruination at this time in our history. "I had a sense that if I could just survive this, I could survive anything." And this is probably the most important, at least for me, probably the most important lesson that I took away from Conrad Hilton was just his actions that he took during this time was nothing short of extraordinary. The like the will and the perseverance that this guy had. I mean, if he would have lost it, there would have never been, you know, Hilton Empire.

• 35:53David Senra?

  He did everything he could, just he's like, "Listen, I'll lose all my other hotels. I'll get them back later, but I can't lose this one." Okay, so he says, so he says, "Listen, if I, if I, if I could just survive this, I could survive anything." He winds up being true, that winds up being true. "Conrad was still a determined man, even in the face of so much adversity. He believed that if he could at least keep the El Paso Hilton in business, he might actually be able to ride out the depression. He was the kind of man who always believed that no bad situation should be permanent." Again, another trait I think that we should all steal. So this is, so he has this Hilton, but again, the El Paso Hilton, but it's not going to be at full capacity because no one's really traveling. So this is what he does. He says, "Conrad had some of the rooms of the El Paso Hilton boarded up.

• 36:35David Senra?

  He cut back on heating, electricity, whatever he could think of to lower his overhead." So he's got this $40,000 lease payment coming up on the property. And if he doesn't make it, he's going to like have to fore, they're going to foreclose on him. So he hears about this, this bank in Missouri that's willing to loan him the money. He takes a prop plane out there, which is a really expensive way to travel to time. Once he gets there, the banker said he changed his mind. So now he's at, he's just frantic. He's like, "This is it. This is the end of the line." So he goes back to Texas to begin brainstorming with a group of his suppliers and his mother. This is just a smart move that, that he does here. So he meets with all the people that, that he's buying supplies to run his hotel and his mom, who's still living at the hotel at the time.

• 37:18David Senra?

  And he says, "He promised that if they each contributed $5,000 to help him out of this tight spot, he would do business with them for as long as he was a hotel owner." So they agree because again if he's buying dairy, buying all this other stuff from them, um, they're gonna make, as long as he survives, they'll make that money back and then some over the course of their, uh, of their relationship with the, with the hotel. And he honors this agreement, of course. So they agree. And it says, "Had he not made that payment, he will, he would have most certainly lost his, his empire right then and there." So that's just a crazy story to me because you're talking about forty thousand dollars

• 37:57David Senra?

  and that is the, what his entire, what he's able to, to accomplish later on in life, all hinges there. If they say, "No, I can't do it," or "No, I don't have the money," whatever the case is, that property's foreclosed. There may never, we may never know the name of Conrad Hilton, or the Hilton Hotel brand, right? And then you think of like, not only do you have like a really rough starting point in life in general, but he gets this peak in his, uh, his early thirties, then goes all the way back down to essentially close to zero. And then from there, still builds back up and then, you know, the, the company is massive. I think when they, there's a private, I think it was Blackstone Private Equity Group bought Hilton

• 38:41David Senra?

  for like twenty billion dollars, if I'm not mistaken. So, I mean, that's just astonishing to me. Um, okay, so he says, "Though he managed to save the El Paso Hilton, he was still in big trouble." Um, yeah, so not only does he owe like the money in the lease, but he owes suppliers. And so one, in this example, like he gets taken to court. Um, Conrad owed just a hundred and seventy-eight dollars to a furniture company and they took him to court for that debt. "At that point, his attorney strongly encouraged him to declare bankruptcy. Pounding his fists on his desk during more than a few meetings with those same lawyers, Hilton steadfastly refused. He insisted that the situation was just temporary and he was going to wait it out."

• 39:22David Senra?

  Over eighty percent of the hotels in America went bankrupt during the Depression.

• 39:33David Senra?

  All of the creditors, if they wanted to, could have called in their notes and totally wiped him out. But many of them realized that he was doing the best he could under horrible circumstances. They had faith in him, and plus, he was a good barterer like his dad. For instance, there was a dairy supplier in El Paso whose bill was due, and Conrad said, "Look, if you'd just extend me more credit, as long as I'm operating a hotel here, I'll buy all my dairy products from you." And he did, for many years. He never forgot. So he survives the Great Depression. America got back on her feet, and as she did, Hilton's small empire also began to recover. Because he had so stubbornly refused to default on his many bills,

• 40:15David Senra?

  he found his reputation greatly enhanced among creditors and future backers. They all wanted to sell to Conrad Hilton because he was the one who didn't declare bankruptcy. This was partly how he was able to acquire so many hotels in the future. So, this theme keeps popping up in these books, that, you know, it's so important not to quit because future opportunities compound. And if you give up now in year one, or year two, or year five, you don't know what those opportunities in year 20 look like. We saw this last week again with Henry Kaiser, when he was having a hard time, basically wasn't able to, like, wasn't really making a profit, but he kept his,

• 40:58David Senra?

  kept paying his employees, kept them loyal to him while he had that paving company up in, like, Vancouver. And that paving company, the work that the paving company did over a series of years, I think it was like 12 or 13 years, opened up for an opportunity to be a subcontractor building roads in Cuba. Which that one contract gave his company way more money than all the, than the 13 years of being a paver did. So again, he wouldn't have reached that huge opportunity that happened in year 13, it might be year 12, I don't remember the exact one, but you get the point. That, he wouldn't have had that giant opportunity in year 13 if he didn't understand, like, playing for the long term and doing the right thing in year four and five. The same thing is happening to Conrad, because if he would have claimed bankruptcy, his creditors wouldn't have got a dollar, or they would have got greatly reduced amount of money.

• 41:43David Senra?

  And again, those opportunities compound in the future where he's able to get these, like here, let's see, the Sir Francis Drake in San Francisco, he gets for $275,000. And I think he has to assume some of the debt, but it was, it costs $4.1 million to build. So you keep collecting properties like this, not only do they make income, but you're paying one tenth of the price it costs to build them, or one twentieth, or whatever the number is, like, that's how you accumulate wealth over a long period of time. So it's kind of how Conrad did it, at least. Okay, so now, where are we at?

• 42:26David Senra?

  Okay, so this is, he's older, wiser, and more cautious. Now, we're in the 1940s. Okay? So, on December 7th, 1941, the Japanese attacked Pearl Harbor. On December 28th, Conrad went to New York at the behest of his friend Arnold Kirkeby, a good friend who was the founder of the Kirkeby Hotel chain. He says, "I've got, I've got this bug in my ear about the Hotel Pierre," he told Conrad. "What do you think about going into a little joint venture?" Ordinarily, Conrad would not have been able to resist at least closely examining the possibility of acquiring another hotel, but at this particular time, he thought it best to be prudent. Now, why is he saying that? Because America was just attacked. Clearly, there's gonna be a war going on. So he says, "With the country at war, and the battleground now extending to America's own shores, no one knew quite

• 43:11David Senra?

  what to expect. At the least, he suspected that vacation travel would decline." Conrad agreed to do an inspection of the Fifth Avenue Hotel in order to gauge the possibility." And the reason he's doing this, because this is a goal of his that he harbored for many, many years. "Making it big in New York was still a major goal of his. All of his success somehow seemed insignificant to him when he thought of the valuable real estate in New York, and how much he wanted a piece of that action." Conrad could talk to almost anybody about almost anything. Though he counted, and this is a little bit about his personality, I'll switch gears here. Though he counted, though he counted his friends, many distinguished and important heads of state and governments, one of the great paradoxes of his personality was that he was fundamentally quite shy.

• 43:57David Senra?

  I think he had friends for different purposes. He'd have a friend to play golf with, a friend to ride horses with, a friend to do various things with, play cards, that sort of thing. But he didn't have a lot of close friends. He was, to a large extent, a private man. He was very, this, I mean, listen, everybody that we talk about. Everybody in the world's weird if you get close enough, right? Especially these eccentrics that we study, like, they're not gonna write a book about you if you're entirely normal. Um, but he was very bizarre where, um, for I would say, I don't know, like, forty years of his life, he lived alone. He, now, he had, uh, he was wealthy by that time, so he had, like, you know, servants, like maids, stuff like that. But even when he gets married, he gets married for a second time at fifty-five years old,

• 44:40David Senra?

  I think he's fifty-five, and then he gets married again when he's like eighty. So he's married for like, three or four years when he's fifty-five, they get divorced. That's Shahzad Gabor, or I guess it's like, according to the author, like, uh, one of the, like, the Kim Kardashian of her day, where she was just famous for being famous, she didn't really have, like, she wa, she was just well-known for being well-known. Um, but anyways, like, even when she moves in with him, he refuses to share a room with her. And like, he won't, she's forbid to go in his room, like, he was just extremely private, weird, weird dude. Um, and then he, I think he winds up sharing a bedroom later on in life, cause he gets married, like, two, I think he's married for like, three or four years right before he dies, so. But he, this whole idea that he's a large extent a private man, that's an understatement.

• 45:23David Senra?

  Alright, so it says, um, so he, he's in, this, now we're gonna get a, insight of, like, you know, he's an extremely driven man, he's got family, but he's also, like, kind of a lonely guy. Um, so he's in New York City, around New Year's Eve, uh, checking out the Hotel Pierre for a potential deal, and the scene I'm bringing you into is just like, he's in a bar, it's New Year's Eve nineteen forty-one, and he's just, he's depressed. And it says, "Because he was alone in a roomful of happy strangers, this one somehow felt even more discouraging than the others. While he had previously done a lot with his life, all around him it was glaringly obvious that others had somehow done what he hadn't.

• 46:04David Senra?

  They had forged genuine relationships with spouses and partners with whom they were now happily sharing their lives. Maybe none of them had his money, but they seemed to have much more. When he put his life under heavy scrutiny, he didn't like what he saw." If only he had been at home with his sons, perhaps he would have felt better about these things. So again, this is a paradox of people. And we've seen this many times, especially when these autobiographies that see entrepreneurs write towards the end of their lives. The reason I bring this up is because like, not only do we want to learn about entrepreneurship on this podcast, but we want to learn about life. Because entrepreneurship is just a

• 46:47David Senra?

  small, a segment, a sub, like a, like a small part, an important part, don't get me wrong, of your overall life. And it's, it's just, I think, like, it's helpful for me to bring to my own attention that no matter what kind of success you can have in business, that you have to have a well-rounded life to achieve satisfaction. I'm not going to use the word happiness, because I think happiness is temporary, but just looking back at your life when you're 70, 80 years old, hopefully you lived much longer than that, but like, I'm satisfied. I like the decisions I made. I'm not going to live with regrets. And, you know, I definitely felt, feel after reading this book that Conrad had those regrets up until the time he meets

• 47:29David Senra?

  his final wife. But, you know, he, I think they got married when he was, let's say, let me just say 87, he dies at 91. You know, I'm sure he wanted that love of his life much, for a much larger point of his life. At least he did find it, though. But this is gonna, there's several parts of this book where, you know, Conrad is extremely upset at himself for how he, for not taking the time to develop relationships and realizing that, yeah, you could have, he literally had the largest hotel company in the world, and he's depressed. So, we're humans, we need more than just success. And I guess I bring that up because I think a lot of people think, oh, they're rich, or they're successful,

• 48:13David Senra?

  like, what do they have to complain about? But we see that's not true. I mean, the two examples that just came to mind right now while I was sitting here thinking about that passage, is, I mean, look at the people who had tons of success in the world that killed themselves. The two that come to mind right now is Kate Spade, founder of Kate Spade, and Anthony Bourdain. And it's hard to find two more successful people, more loved people. And yet, because of like, internal struggles, like, they chose to...

• 48:40David Senra?

  You know, to end their own lives. So I don't know, it's just important to bring that up because I think that some people might see these books as like, like we're idolizing these people and we're not, we're learning from them and we're learning the good things and we're also learning, you know, in a lot of cases like, what not to do. So with, I think if Conrad was alive today, and he could talk to you directly, he would be like, he would say, hey, listen, I screwed this up, invest, find like the love of your life. He had kids, he had a strong relationship with them, but you know, he severely missed a large part of what it is to be human. Alright, so now the book's gonna go a little bit back in timeline because we're gonna talk about like the Great Depression's effect on not only his business, but his marriage. And this is something, because he was married,

• 49:23David Senra?

  this is something he was very, like, tormented him throughout his whole life. Says, "Before the end of the 1920s, he was well ahead of his goal of acquiring at least one hotel a year." So now just, we're gonna list off, I'm just gonna list up, instead of telling you where they're at, just gonna tell you how many rooms he buys. So 100 rooms cost 400 grand. 100 rooms costing 400, another 100 rooms costing $400,000. 40 rooms costing $900,000. 200 rooms costing $800,000. This is all the acquisitions before the Great Depression.

• 49:56David Senra?

  And then, so now, so this, he's got, not only is like, the Great Depression about to happen, but his best friend dies. Says, "The family tragedy struck when Conrad's younger brother was struck down with tuberculosis meningitis. His death rocked the family and Conrad had lost his best friend." So there were tough times, he's trying to save all hotels, so as a result of that, he began spending a great deal of time away from home. He was trying to come up with imaginative ways to remain solvent. At one point, matters became so dire that he considered borrowing against his life insurance policy. "Of course you must do it," Mary advised, and Mary's his first wife. This bad, and the mother of his first three children.

• 50:40David Senra?

  Mary advised him, "This bad spell will not last forever," echoing his own philosophy. "And when it's over, you'll come out of, come out on the other side bigger and better than ever." He borrowed against the policy and used that money to stay afloat.

• 50:55David Senra?

  Soon the money he had borrowed against the policy ran out and Hilton was right back to where he had started from, trying desperately to save his empire. Every day was an uphill climb, it wore him down. "Don't you dare give up," his mother told him. "Some men jump out windows, some quit, some go to church, some pray, so pray harder, Connie." Meanwhile, as things continued to go from bad to worse, Conrad's wife became more restless. She now claimed that Conrad was distant and inattentive. Making matters even more complex, though, Conrad had just opened a new hotel and he couldn't afford his own home. So he gives up his house. Therefore, he moved his family into a suite in a new El Paso Hilton.

• 51:39David Senra?

  Mary wasn't happy about any of it. None of it made sense to her, and as far as she was concerned, it suggested that Conrad was more devoted to the solvency of his hotel empire than he was to her and the security of their family. So they have two sons at this time, and they're all living in the hotel. And, um, so now we're gonna see the, what Mary is talking about, because we're gonna get some notes from his own diary, and this is of course gonna lead to divorce. So, and this is, you know, rather sad. Conrad's wife was like 15 years younger than him at the time, she felt she wasn't getting attention, and she starts having an affair with like a football coach.

• 52:24David Senra?

  And even after that, Connie didn't want a divorce because he was strict Catholic and you're not allowed to divorce. So it says Connie wasn't a quitter. He tried, and in all fairness, so did Mary. Then, much to everyone's amazement, Mary ended up pregnant in October 32. Nine months later, little Eric was born. However, in Conrad's diary, he seems oddly indifferent toward the event. "Mary expecting a baby," he noted simply. He is just as unsentimental as in his entry on July 1, 1933. Eric Michael Hilton, born at St. Paul's at 10 a.m., then immediately thereafter, must get something solid to show Greenwood. I know I can straighten that hotel out if only I get the chance.

• 53:10David Senra?

  No time to stop off and see Mary or the baby. Called everyone I could think of as a substitute banker. My time's running out. That was a really fascinating part of the book to me. We will see what he's writing to himself in his own diary in arguably the worst time of his life. And so later on in life Conrad has a fourth daughter by Zsa Zsa Gabor. But he knows that daughter's not his because he had, he'd already been divorced from Zsa Zsa at that time. And it had been like 18 months since they had sexual, what he calls sexual relations. And yet he didn't want to like, I don't, he called her his daughter the whole time.

• 53:55David Senra?

  But there's like stuff in his will and notes that he writes to attorneys and so forth. Where he's like, listen, I know this is not my daughter. He calls her his daughter, she calls him daddy.

• 54:08David Senra?

  But he knows it's not her, his. So, but again, he considers it one of his children. So that's, that's I guess a whole separate part of the story. But the reason I bring this up now is because there's a good chance Eric's not his son either. He never says anything like he does about Francesca explicitly saying, hey, no, this is not mine. But his wife's having an affair, he's not, they're about to get divorced. He's not never home and she winds up pregnant. So a lot of people, you know, suspected that that's not his kid, but he never said anything about it. And he took care of him and Eric winds up working in his, in his company too. And the guy Mac married, divorces Conrad, marries Mac and Mac dies from a heart attack at like 47.

• 54:50David Senra?

  So at that time Eric, I think is a teenager and so he spends a lot of time with.

• 54:57David Senra?

  Not, I shouldn't say a lot of time. Conrad kind of looks after his own son. And you know what's weird too, like after they get divorced? Conrad gets custody of his two older sons, Nikki, the first born, and Bearin, the second. But then lets Eric live with Mac and Mary. That kind of insinuates that he kind of knows. But anyways, Mary had enough. She announced that if Conrad didn't file for divorce, she would have to do it. "For his marriage to end in divorce proved a torturous proposition for a man who by his own admission, started every single day on his knees in church. He would make no mention of the possibility of Mary's indiscretion anywhere in his memoir, choosing instead to keep his and her dignity intact." So that's another thing. He's a very formal person. So even if he didn't want to like,

• 55:40David Senra?

  he was rather famous at the time. He's not going to have a custody fight. There was no really way to test paternity, according to the book. I haven't looked into the accuracy of those claims, but this is, I think Francesca was born in like the 40s. So he just, he just kind of accepted it. So this is the end result of his divorce. "Conrad Hilton was never quite the same after the divorce. He was a proud man whose ego had been crushed by the dissolution of his marriage." So not only was he a proud person individually, but he's also knew that like in the eyes of God, he was a disappointment.

• 56:17David Senra?

  Okay, so here's a little bit on his personality and then advice on business decision-making from Conrad. "If someone had, someone were to have told him that he couldn't purchase a luxury hotel in which he was emotionally invested, he would become all the more determined to make that property his own. It was just the way he trafficked in the world. People thought a lot of things about him, none of which were opinions that mattered much to him. He had always lived his life on his own terms," which I think is extremely important. "Throughout his lifetime, Conrad had often stated that his secret weapon in business was his close spiritual relationship to his God. He had made each of his major hotel decisions only after a great deal of prayerful deliberation."

• 56:59David Senra?

  He fervently believed he would be guided in the right direction if he simply asked for such guidance. "It's not enough to just pray," he once observed. "You have to be able to listen." "Call it intuition, or call it gut instinct, call it what you will, but I recognize that little voice we all have in our heads as being the answer to our prayers." "You have to be willing to listen, and then make decisions based on what the voice is telling you." "A major problem, as I see it anyway," he continued, "is that many of us have not worked to cultivate that certain inner voice."

• 57:37David Senra?

  "We make snap decisions. Many of us don't even think. We just react to situations at hand." "I have found that this isn't the way." So I think that's a hugely important idea, and I like how he says, "Listen, I call it God, I call it prayer, you might call it meditation, you might call it instinct, whatever it is, just like that inner voice, that's what I call it." Like, you know what it is that you should be doing, you know! You might lie to yourself and make excuses for why you can't do it, or why it hasn't happened yet, but you know what it is. And I think like, no one's going to be truly satisfied when they get to their... Let's use, okay, let's, let's take a step back here, right? Let's, one of the best ideas from the Everything Store, the book on Jeff Bezos, is that,

• 58:21David Senra?

  that idea, that, that framework he uses to make decisions, which I think is hugely valuable. And he calls it, in typical geeky terms, "The Regret Minimization Framework." And so when he, to give you some context, in case you haven't heard me talk about this, even though I've brought it up all the time, because I think it's a more an idea, is, um, you know, he's in his twenties, hugely successful working at a quantitative hedge fund in Manhattan, has a wife, has a beautiful apartment in the Upper West Side, making tons of money, and then he's like, "I'm gonna quit." Because the internet is, I've never seen anything that grows that fast. I forgot what the percentage was, but year over year at that time was like, let's say, 20,000%, whatever the number, it was just some crazy number like that. And how he arrived at the decision and he made, he's like, "Listen,

• 59:06David Senra?

  I just knew that if I'm sitting on my deathbed, you know, in my 80s or 90s, and I'm looking back, I would regret not taking part, and playing a part in, in, in the age of the internet."

• 59:20David Senra?

  On the other side, I knew for a fact that when you're 80 or 90, you're reflecting back in your life, you're not going to be like, "Oh, I wish I stayed another year or six months to get that bonus." Like, that's just not things that you would even contemplate. So I like that idea of filtering your decisions through the future you that's towards the end of your life, making that decision of like, "What would he think or she think of a decision I'm about to make now?"

• 59:46David Senra?

  And a lot of that comes from knowing yourself, like, what is really important to you? You know, like, the idea, everybody told Jeff, like, "You're going to quit." Like, you're wildly successful, you're working for this really smart eccentric billionaire, you had the world, like, you have all these opportunities knocking your door, you're relatively young, and you're going to quit to sell books on the internet? And now, we obviously see how that played out. But even if it didn't play out, let's say, Amazon just stayed a successful bookstore on the internet, and it didn't expand to what it is now, obviously making him one of the richest people in the world. He still wouldn't, I don't think, he still would have regretted just staying and working for somebody else instead of going out and just trying to work in an industry that he felt extremely passionate about.

• 1:00:28David Senra?

  So, the inner voice, what Conrad's saying here is like, "Listen, it's just not, we're making snap decisions, many of us don't even think, we just react to situations in hand, I've found that this is not the way." So not only, like, take your time to think, but listen to the results of the computation that your brain is working, is making. Part of the reason why I try to read some of these books, you know, sometimes they just, they take a long time, but I try to split them over several days as much as I can, because I want, I want more time for these ideas to sit in my brain, because that's going to make it easier when I sit down and try to talk to you about the key insights and what I learned from this, is like, making sure that, like, it just sits in my brain, and let this, these computation, these like, these cycles of computation happen.

• 1:01:13David Senra?

  Let me go have several times of sleep, let it really get in there, so I'm able to, you know, hopefully make this as valuable as possible for you. I love Conrad's idea of practice.

• 1:01:28David Senra?

  I just started reading, I'm just going to, I might make it, it's a weird book that I'm going to bring up, but I might make it like a reviewer-only episode or something like that, or maybe a bonus episode for Misfits, I don't know what I'm going to do with that yet, but, um...

• 1:01:43David Senra?

  It's Kobe Bryant's book Mamba Mentality. Because I think the way he was dedicated to the practice aspect of his craft, physical training aspect of his craft, all the stuff that was not the actual games. And the level of dedication that he put into that, I think that can make you successful in any domain. It just happened he chose basketball. But you could choose a company, you could choose whatever it is that you want to do. But I particularly like the idea that Conrad looked at things like practice. So now skipping ahead, "When Hilton acquired the 1012 Room Roosevelt Hotel in the spring of 1943 and announced a purchase to a close friend, his friend was only able to muster one word: 'Why?'"

• 1:02:28David Senra?

  "'Because it's a fine hotel, and because I've got to practice,' responded Conrad. 'Practice for what?' "'For the Waldorf,' Conrad said. 'I'm not quite ready for that one yet.'" "Long before the term 'multitasking' became part of our lexicon, it epitomized Hilton's octopus-like juggling act, keeping several projects going at the same time." So he fantasized about owning the Waldorf. He wouldn't use the word fantasize, he'd say he dreamed. He talked a lot to his sons about the importance of dreaming, having dreams, and then going about and trying to realize those dreams. But Waldorf was a story he felt was the finest hotel in the world, and I think it took him like two decades till he finally owned it.

• 1:03:11David Senra?

  But I like this idea, he's like, "I'm gonna buy this because it's a big luxury hotel. It's not the best in the world, but it's one of the best in the world, and it's gonna serve as practice for when I actually achieve my dreams." I don't know, I find that to be fascinating, that he used that term. Okay, so this is Conrad's philosophy on money, which I found really interesting. And he's married to Zsa Zsa Gabor at the time, she's like 30 years younger than him. He said this was one of the dumbest things he ever did in his life. But he said, "Conrad fully understood that Zsa Zsa enjoyed spending money, and he certainly had a lot of it to spend. The question for him wasn't whether or not he could afford to subsidize her extravagant taste, it was whether or not it made sense to him.

• 1:03:54David Senra?

  He quickly realized that Zsa Zsa didn't understand the value of money. He had worked hard for his wealth, and he continued to work for it. What did she do to earn a living? Nothing, really."

• 1:04:08David Senra?

  The question of finances would always be an issue in Conrad's relationship with others, especially with family members. To him, it was a simple black and white matter. He had earned his money fair and square, and he wasn't giving it away to anyone, giving away to anyone, even to family members. Some would say that he was incredibly cheap. In his own mind, however, this wasn't the case. Proof of his generous nature, he would often, to prove his generous nature, he would offer up the names of the many charities to which he regularly donated. Would a cheap man be so philanthropic? He had few limits when it came to giving money to charities, especially to Catholic aid organizations. However, when it came to his family members, as well as friends,

• 1:04:53David Senra?

  he believed that they, all of them, should demonstrate a work ethic similar to his own, earn their own way, and not expect to benefit from his own station in life. Moreover, he felt it wasn't even fair. This is such an interesting concept, and I think he might be... When I originally read the book, I was like, "God, this guy's being kind of like a dick for no reason." But it's not like, to me, I think I was being unfair. Like, it was an unfair characterization of him. Because like, the example, like, his daughter, like, wasn't... She didn't want to live with her mother, she was having problems, and she's like, "Can I please live here?" And even though she was like 24 at the time, he's like, he's living in this like 20,000

• 1:05:38David Senra?

  square foot house, and he tells her, "No, because there's no room." And it, it's not that there wasn't room, it's like, he felt it was like her own responsibility to provide shelter for herself, you know? And the reason I, the reason I say it's probably unfair is because he believed, well, let me just read this. "Moreover, he felt it wasn't even fair to give them money. His financing of their lives would, he felt, be detrimental to them in the long run, eroding any motivation they might have to achieve wealth on their own, and also diminish their appreciation for the value of the dollar." So he uses this word over and over again. Not in this book, but in other like, uh, like I would, other research I was doing about him. He called it like the destruction.

• 1:06:20David Senra?

  Like when rich people give their kids a lot of money, he says it destroys them. Um, so in this, in the book case, he's saying like it's destroying their work ethic, but he's saying, no, it destroys them as people. Makes them turn to drugs and alcohol and all, and all the other, you know, he was rather, he, even though he drank. Um, but you know, rather religious, pious kind of person. So he, he definitely thought. After finishing the book, I kind of understood, um, you know, his thoughts and, you know. Some people say, hey, you gave 1% of your assets, um, to your family and the people that served you for a long time. And some people might think that's a little unfair, but you know, he, he did give 99% to people that actually needed it.

• 1:07:01David Senra?

  And people trying to heal sick kids, people that were ill, stuff like that. So. I don't know. It's, he was a very complicated man, I guess is my point. Um, okay. So fueling his philosophy of money, no doubt, was that Conrad had survived the great depression. He knew what it was like to lose everything and work hard to get it all back.

• 1:07:25David Senra?

  Um, so this is a little bit more about his personality, which I found, uh, fascinating. This is more, he's still married to Zaza at the time and, um, you know, he, she was a young, she was really young. She's like a kid when they met, basically. He was a grown man, 30, 30 years her senior. Tried to put on a budget. She didn't know what to do. She was, you know, she was a gold digger. Let's just call it what it is. She was married nine times. She fought, only married rich people and divorced them for money. But she says, this is Conrad, he says, glamour I found is expensive, he later recalled. And Zaza was glamour raised to the last degree. Another issue was that, was, that was raised for Conrad was that he viewed, uh.

• 1:08:04David Senra?

  Oh, this is, so this is more, uh, let me, this is me kind of expounding on the idea that he was, he was dedicated to like the service of others, which he definitely was. Says another issue that was raised for Conrad was that he viewed Zaza as inherently self-involved. He was a man who lived his life trying to find ways to be of service. And through many philanthropic efforts fueled by his businesses, he sought to contribute to society, which he definitely did. Whether it would be the simple goodwill measure of speaking about prayer to a large assembly, as he often did, or whether it had to do with making sure people in foreign countries were able to support their families by virtue of their jobs with his hotels, he truly cared about his fellow man. It wasn't an act.

• 1:08:48David Senra?

  So when Zaza would come to him and say, "Hey, I need money for mink coats and all this other stuff." He's like, "First of all, you're out of your damn mind. And second, why don't you go, instead of asking me for money, go serve people, less fortunate people." So he's like, "Why don't you go to soup kitchens, serve homeless people?" And she was, I mean, the book does not, the book makes her look basically a terrible person. She didn't give a shit about charity. She didn't care about other people. She didn't even like, she wouldn't even raise her daughter correctly because she was so self-involved with her like, her show business career. And instead of spending time with her daughter, she would be off with like this new husband, living in Europe for a little bit. And then they divorce after a few months or a year. And then instead of spending more time with her daughter, she'd go off and find another man.

• 1:09:32David Senra?

  It was just like, just really a terrible person. I can't imagine like having to be around her. To the point where he's on his deathbed in the hospital, suffering, about to die from pneumonia. And she, the family's like, "No, you guys have been divorced for 30 something years. Like, you need to ask the Hilton family if you can visit them." And she wouldn't take no for an answer. She tried to show up there, she had to be physically escorted out of there. And it turns out like, she wanted to see him before he died to make sure that he leaves money for her and her daughter in his will. I mean, that's just, that's repugnant human behavior by somebody that's so self-involved, someone that cannot look outside of their own. Like, it's just, it's just amazing. He gave her money throughout his life.

• 1:10:15David Senra?

  Like, he didn't, like, not a lot of money, but he would help her, like, get her own deals. He would negotiate with agents and stuff on her behalf, never take a dollar. And after he dies, 20 years later, she says that, uh, that his daughter Francesca, which is, she says is his, the daughter she, they have together, which of course, you can't have a daughter with somebody when you haven't had sex with them for 18 months. And she writes a memoir in like the 90s, saying that he raped her. And that Francesca was a, was a product of rape. And like, that's clearly not true. So it's just a terrible human being. Alright.

• 1:10:51David Senra?

  And then this is how Zsa Zsa described Conrad, "There is no other man like this one. He has only one passion in his life: Hilton Hotels."

• 1:11:03David Senra?

  So I would, um, there's so many other stories I'm obviously skipping over, like, this is a massive book. And, um, like, there's just so much more. I'm focusing mainly on the parts that have to do with Conrad and his business. But, uh, I'll tell you more at the end, what I, what I particularly enjoyed about the book. Because I was rather melancholic when I finished it. Okay.

• 1:11:31David Senra?

  Okay, so this is, um, "The important to have friends around you to increase your ambition, a good strategy, and a great quote." Okay, so, um, he's, he's thinking about buying hotels in Chicago. This is before he makes his move to New York. He says, "For advice, he called about his, he called upon his friend Henry Crown, a successful businessman who had made a fortune with his Material Service Corporation." That's the name of the company that he founded. Henry Crown's in this book a lot, so much to the point where I went and looked for, like, a biography of his. I haven't found it yet. So if you run across it, please let me know. So he says, "Material Service Corporation, which sold gravel, lime, and coal to builders in Chicago. In his meeting with Crown, Hilton said that he'd been negotiating to purchase the Stevens Hotel,

• 1:12:15David Senra?

  but was having no luck with the owner. He said that he'd come to the conclusion that the sale simply wasn't going to happen. And so now he had set his sights on the Palmer House, which is another hotel in, uh, Chicago." What I want to bring up there is he's negotiating, uh, before he's having this conversation with Henry Crown. Conrad's negotiating with the owner of the Stevens Hotel and they come to agreement and they even have a handshake agreement. It's like, okay, uh, he's like, I'll sell the hotel to you, but I want to make a $500,000 profit on it. So you have to pay $500,000 more than I have invested in it. Conrad's like, okay. Then the guy disappears for a few weeks. He goes, oh, I changed my mind. I want to make 650. Conrad's like, okay, because he really wants this hotel. It's like, well, I think it might've been the largest hotel in the world at the time. The army was actually using it during World War II for like army barracks or whatever. But then the guy disappears again for a few

• 1:13:00David Senra?

  weeks. Comes back, oh, now I want to make a million dollars. I want to, um, I want to make a million dollars profit. And so Conrad's like, okay. And then the guy disappears again. He's like, this is just not going to happen. This guy's jerking me around. So it says, um, uh, he said, you have no luck with the owner. He said that he come to conclusion that the sale simply wasn't going to happen. So now he wants the Palmer House. Well, is the Palmer House even for sale? Crown wondered. I don't know, replied Hilton. Well, find out, my good man, said Crown. And if so, now, why not buy both the Palmer and the Stevens? Conrad didn't even have that idea in his mind yet. At that bold suggestion, Conrad had to smile. Henry Crown was a man much like himself, someone who saw no reason his wildest ambitions could not be attained. He had already made a fortune in the construction

• 1:13:45David Senra?

  business and held interest in banks, electronics, and the oil business, as well as railroad and shipbuilding enterprises. He also owned real estate in Illinois, California, and New York. In just a few years, he would go on to own the Empire State Building, then the world's tallest skyscraper. Hilton made an offer, uh, so now Hilton's negotiating with the owner of Palmer House. This is a guy named Hollis. Hilton made an offer, uh, to Hollis for 18.5 million for the Palmer House, contingent upon him taking a look at the hotel's financial and tax records and the rest of the corporation's books. So I'm bringing this up because this also tells you kind of like the integrity with which Conrad did business. However, when it came to Hollis's attention that Hilton had also been trying to buy the Stevens, he balked, saying that the Palmer House trustees

• 1:14:29David Senra?

  would not allow his hotel books to be viewed by anyone who could one day turn out to be the competition for them. Hilton impressed upon Hollis that he had no success in purchasing the Stevens and that as far as he was concerned, it just wasn't going to happen. So. Hollis lets him see the books. While he does this, he has a really good strategy. Conrad asks his assistant, this guy named Keith that's working for him. Or that's his last name, his name's Willard Keith. He says, "Hey, I have an idea," Conrad said. "Why don't you set up a little meeting with your friend, Mr. Healy?" That's the guy that owns the Stevens Hotel. "And find out what the hell is going on with him and his Stevens Hotel." And I think you know where I'm going here, that it's kind of human nature when you can't have something, you're gonna want it more.

• 1:15:14David Senra?

  And so he's gonna try to get Keith to tell Mr. Healy, he's like, "Oh no, this deal's over." Like, he's already moved on, like, it's too late, you missed your chance. So as directed over drinks, Keith said that Healy, Keith told Healy that he had blown it with Hilton where the Stevens was concerned. That Conrad had gotten tired of his waffling and had abandoned the idea of ever purchasing the hotel. "His mind was now set on the Palmer House, and there was no changing it. If it was a ploy, it worked. Now Healy wanted to unload the Stevens more than ever. The next day, he called Conrad with a new proposal." And he said, "Okay, fine, I just want, let's go back to our original deal, just a half a million dollars in profit for me." "The rest of the negotiation was quick and easy.

• 1:15:59David Senra?

  Before Conrad Hilton knew it, his dream of owning the Stevens had come true." And this is another dream that took a few years to materialize. "What happened next is quite remarkable. After closing the deal on the Stevens, Conrad took a meeting with Hollis, the gentleman with whom he was been negotiating the possible sale of the Palmer House. Reluctantly, he explained what had happened, that the sale of the Stevens Hotel had unexpectedly been consummated. He said that he hoped Hollis wouldn't be upset and think Hilton, and thought that Hilton had been lying earlier when he said the sale was not going to happen. Thus his interest in the Palmer House. At first, Hollis was skeptical. "The whole thing sounds suspect to me," he said. "It's a matter of my integrity," Hilton told him.

• 1:16:43David Senra?

  "It's important that you think of what you think of me, and I don't want you to think I was lying." Hollis said he might actually still be interested in selling the Palmer House, but considering all that had happened, he now felt he deserved a better price for it. Conrad agreed, so ends up paying him an extra $900,000 more over than the deal that um, he'd previously offered him. Hollis accepted, the two men shook hands, and that was all there was to it, Hilton later called. "No pens, pencils, papers, lawyers, or witnesses."

• 1:17:17David Senra?

  So, do you remember the part I said how Gus was really hard on Conrad, and then in turn Conrad was really hard on his sons? His oldest son um, was kinda like a screw up. So, his second son Baron winds up running Hilton, right? And um, and that was his father's decision, because Baron was very much like Conrad, smart, hardworking. Um, Nicky, the oldest son, was an alcoholic and a drug addict. And, he's the kinda, he was just, I mean for lack of a better word, just kind of a loser. Like, he'd be given an important position in the Hilton organization, and you know, he'd be doing well for a while, and then he'd just start doing drugs and alcohol again.

• 1:18:01David Senra?

  And he would say stuff like, "Oh, I don't need to show up, my pop, my dad owns the place." Uh, where Baron, you know, had a work ethic similar to Conrad's, where he was in the office six days a week. And um, Conrad was really hard on Nicky, to the point where um, like, the division that Nicky was uh, was running was actually sold to TDWA, the airline. And um, Nicky felt he didn't have anything, like, he was kind of embarrassed publicly. So anyways, uh, he winds up trying to kill himself. He slits his wrists, and a few months later, they say he dies from a heart attack, but it's pretty clearly that he um, he had an overdose, whether it was of drugs,

• 1:18:46David Senra?

  this thing called like, Secanol, which I guess is the same thing Marilyn Monroe was addicted to. But um,

• 1:18:52David Senra?

  It looks like he killed himself, whether it was accidental or not, and he left behind a wife and a six and seven year old son. So it's extremely sad.

• 1:19:01David Senra?

  The book, the author, this guy, J. Randy Terra Borelli, he's actually a really good storyteller because the main character is obviously the patriarch of the family is Conrad, but you get to, as you read the book, you get to know all of the, like the Hilton family tree, and it was a giant family. Conrad had four kids that he claimed, 18 grandkids. Even after, like, there'd be divorces in the family, the ex-wives and everybody would still get together. So this gigantic family and um, I guess I bring that up is because like if you're gonna read the book, like you're gonna learn a lot about Conrad's business, but you're gonna learn more about life.

• 1:19:42David Senra?

  And there's just some unbelievably sad, like you see the whole scope because we, we see what life was like for Conrad's parents before he was, he's, uh, he was born, then you know, his entire 91 year old, 91, the 91 years of his life. Then you see, you know, what happens after, there's like another probably like 100 pages after he dies, maybe the last like 50 or 75, something like that. And you just see like what happens to all the characters in the story. So not only like, the reason I say that the author did a fantastic job and why I'd recommend you read the book is because like, you, you have emotional attachments. There was many times where I just had like tears in my eyes reading this book. Like the, and the scenery, the writing was so vivid where you have like Conrad as, I think he was, I don't know, let's say 70 years old when Nikki died.

• 1:20:27David Senra?

  And he's at the wake of his firstborn son and he's just heaving to the point where like he can't stand, this is a, this is a hard dude. Somebody that like showed no emotion to his whole life, didn't ask for, like he was just a really rigid, hard person. And he can, he can't even stand, like he's collapsing under the weight of his grief. And has to be supported by his two sons, those two surviving sons on each side, like, it's just a crazy story and like, you see.

• 1:20:56David Senra?

  The experiences of maybe let's say 20 Hiltons and the author does a good job of telling you like where they are now. This book is a few years old, it's published I think in 2014. But we see, you know, like what happens, what happens to Conrad's wife? She dies of a heart attack at 59, you know? His son dies of a drug overdose at 42. His other son, his other son's married for 57 years and she gets multiple sclerosis and she dies in her 70s. And it's just like, I don't know, I guess it's, we're all on this journey called life and you're gonna like, we're gonna experience this, like your loved ones are good, like things are good, both great, great things and terrible things are gonna happen and I think they're all contained in this book. So this is kind of like a microcosm of one family that I think is probably applicable to everything. And then the book ends.

• 1:21:41David Senra?

  And there's so, there's another, one more part I'm gonna read to you. But this just popped in my mind, so I'm just gonna talk about it now while it's on my mind, but um.

• 1:21:52David Senra?

  The book ends with the epilogue and it flashes, so the author does this amazing job of like, you know, the family, it brings it up to present day, 2010. And, um, and then the epilogue, it flashes back to when the entire family's alive and most of these people at the, you know, 2010 are dead. Goes back to 1965. It brings you back to one of their famous family dinners at Conrad's estate. And you got, you know, you know what it reminds me of, have you ever watched the movie Godfather? At the end of Godfather, after Michael is taking over the family, his older brother Sonny's dead, his dad is dead. He killed, he has his, um, his wife's husband killed.

• 1:22:38David Senra?

  They flashback at the end of that movie and it's when Michael's much younger. And he's telling, everybody else is still, you know, the flashback, everybody is alive again. And they're all sitting around a table, they're like, you know, their grandkids are there, everybody's there. And they bring up the fact that like Michael's gonna go into, um, to the armed services. That, when I read the epilogue of this book, that's exactly what I thought of, like they're, they did the exact same thing. Cause it's not necessarily something special happens at this dinner. It's just two or three pages of like. Setting the stage of this is who's there. Like, the person I just told you that died a few years ago, like, this person's alive, and at this time, they're only 40 years old. And like, their kids are there. I don't know, it's just like, it was just a really fantastic, fantastic book.

• 1:23:23David Senra?

  And, um, this book is actually sent to me by somebody on Twitter. Uh, they DM me on Twitter and recommended me reading this. So, thank you very much. And if you have a book that you want me to read to feature on the podcast, please let me know. Uh, you can, @founderspodcast on Twitter, email me, or do whatever you want. But, uh, I just want to close here with, um, with the regrets. And this is Conrad at 62 years old. "Now at 62, when he looked back on his life, he was of course proud of all his business achievements, but he did have certain regrets. He realized that with all he had accomplished, he had never had one of the most cherished things that life had to offer: fun.

• 1:24:04David Senra?

  His greatest source of entertainment had always been trafficking in big business, making deals, courting some grand hotel, and finally acquiring her and making her his own. If I only had, if only I'd had just a little of whatever it is Nikki had that made his life such a good time for him," Conrad told his attorney, Myron, "I think maybe I would have been happier." When Myron commented that Conrad didn't seem to be particularly unhappy, he shrugged his shoulders and said, "Well, it's too late now to worry about it, but I have to confess, I do wish I'd had more fun. If you don't mind me saying so, maybe even some more romance." "Does that make me sound like an old fool?"

• 1:24:49David Senra?

  he asked Myron. Myron smiled at him. "Yes, it does," he told Conrad. "An old fool, just like the rest of us." And that's where I'm going to leave this story. Uh, to read the full story and support the podcast at the same time, you can go to amazon.com/sop/founderspodcast, and you can buy this book using that link. Not only will you see this book, but you'll see every single book that I've done so far for the podcast, so it's kind of like a visual representation of the podcast in reverse chronological order. And if you go to that link, you can go to that URL, or you can just tap it, it's in the show notes as well. You'll also see the book, uh, that I'm working on for next week as well. And that's where I'm going to leave things for this week.

• 1:25:33David Senra?

  Thank you very much for listening, and I'll talk to you next week.