#352 J. Paul Getty: The Richest Private Citizen in America

What I learned from reading As I See it: The Autobiography of J. Paul Getty by J. Paul Getty. ---- Build relationships with other founders, investors, and executives at a Founders Event ---- "Learning from history is a form of leverage." — Charlie Munger. Founders Notes gives you the superpower to learn from history's greatest entrepreneurs on demand. You can search all my notes and highlights from every book I've ever read for the podcast. Get access to Founders Notes here. You can also ask SAGE (the Founders Notes AI assistant) any question and SAGE will read all my notes, highlights, and every transcript from every episode for you. A few questions I've asked SAGE recently: What are the most important leadership lessons from history's greatest entrepreneurs? Can you give me a summary of Warren Buffett's best ideas? (Substitute any founder covered on the podcast and you'll get a comprehensive and easy to read summary of their ideas) How did Edwin Land find new employees to hire? Any unusual sources to find talent? What are some strategies that Cornelius Vanderbilt used against his competitors? Get access to Founders Notes here. ---- (2:00) Vice President Nelson Rockefeller did me the honor of saying that my entrepreneurial success in the oil business put me on a par with his grandfather, John D. Rockefeller Sr. My comment was that comparing me to John D. Sr. was like comparing a sparrow to an eagle. My words were not inspired by modesty, but by facts. (8:00) On his dad sending him to military school: The strict, regimented environment was good for me. (20:00) Entrepreneurs are people whose mind and energies are constantly being used at peak capacity. (28:00) Advice for fellow entrepreneurs: Don’t be like William Randolph Hearst. Reinvest in your business. Keep a fortress of cash. Use debt sparingly. (30:00) The great entrepreneurs I know have these traits: -Devoted their minds and energy to building productive enterprises (over the long term) -They concentrated on expanding -They concentrated on making their companies more efficient -They reinvest heavily in to their business (which can help efficiency and expansion ) -Always personally involved in their business -They know their business down to the ground -They have an innate capacity to think on a large scale (34:00) Five wives can't all be wrong. As one of them told me after our divorce: "You're a great friend, Paul—but as a husband, you're impossible.” (36:00) My business interests created problems [in my marriages]. I was drilling several wells and it was by no means uncommon for me to stay on the sites overnight or even for two days or more. (38:00) A hatred of failure has always been part of my nature and one of the more pronounced motivating forces in my life. Once I have committed myself to any undertaking, a powerful inner drive cuts in and I become intent on seeing it through to a satisfactory conclusion. (38:00) My own nature is such that I am able to concentrate on whatever is before me and am not easily distracted from it. (42:00) There are times when certain cards sit unclaimed in the common pile, when certain properties become available that will never be available again. A good businessman feels these moments like a fall in the barometric pressure. A great businessman is dumb enough to act on them even when he cannot afford to. — The Fish That Ate the Whale: The Life and Times of America's Banana King by Rich Cohen. (Founders #255) (47:00) [On transforming his company for the Saudi Arabia deal] The list of things to be done was awesome, but those things were done. (53:00) Churchill to his son: Your idle and lazy life is very offensive to me. You appear to be leading a perfectly useless existence. (54:00) My father's influence and example where the principle forces that formed my nature and character. ---- “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 ---- 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

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  In this episode about J. Paul Getty, you're going to hear that Getty made it a priority to build relationships with other top entrepreneurs and business people. In fact, he was so dedicated to this idea that he set up a thing that he calls the Liaison Center solely for this purpose. I am doing something similar with the Founder Events that I'm hosting. If you want to come build relationships with other founders, investors, and executives that listen to Founders Podcast, make sure you come to a Founder's Event. There is one happening in beautiful Scots Valley, California on July 29th through the 31st, and another one happening in Austin, Texas on September 27th through the 29th. These events are all-inclusive, which means all you have to do is get yourself there, and I take care of the rest.

• 0:44David Senra?

  So your lodging, your meals, access to every talk and session, everything is included. If you want to come hang out with me and other founders and investors for two days, make sure you go to founderspodcast.com/events. That's founderspodcast.com/events and sign up. Hope to see you there, and I hope you enjoy this episode on J. Paul Getty. You cannot bring about prosperity by discouraging thrift. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by destroying the rich. You cannot keep out of trouble by spending more than you earn. You cannot build character and courage by taking away a man's initiative.

• 1:28David Senra?

  You cannot help men permanently by doing for them what they could and should do for themselves. I accept these tenets wholeheartedly without reservation. That is an excerpt from the book that I'm going to talk to you about today. That is John Paul Getty actually quoting Abraham Lincoln. Abraham Lincoln is the one that said those words, and that comes from the book that I'm going to talk to you about today, which is As I See It: The Autobiography of J. Paul Getty. This book is incredible for a number of reasons. One, when he's writing it, J. Paul Getty is considered the richest private citizen in the world. He is also writing it in the last year of his life. This book is over 50 years old. It gets published in 1976, right before it is published.

• 2:10David Senra?

  Jay Paul Getty dies. So this book is really his last words on his remarkable life. It is also incredible because of the way it is structured. It is, it's almost like you're sitting down and having a one-sided conversation with like a wise 83-year-old grandfather and he's recounting his life. It's not in chronological order at all. He's just going to tell you whatever happens to be on his mind at that time. But he also gives you a lot of great advice because he had been an entrepreneur for over 60 years by the time he sits down and he's still going. He works until the day he dies. And so something that Jay Paul Getty repeats over and over again throughout the book is the fact that he considers himself an entrepreneur. His friends are entrepreneurs. He really is just writing down the lessons that he learned in his six-decade career for the future benefit of the entrepreneurs that are going to come after him.

• 2:54David Senra?

  And so as he's telling this life story of his, there's just a lot of really great advice for you and I. Before I get there, and that's going to be like 90% of what I want to talk to you about today, I have to start with the relationship that he had with his father. His father is the one that got him involved in the oil business to begin with. He says over and over again, he has a great line that he repeats, that "My seat was set for me. Without the love and training of my father, I would not be the man I became." And I think the best way to introduce you to that idea actually comes at the very end of the book. He's talking about the fact that he becomes friends with, you know, the world's elite. There's a lot, so many stories about, you know, the King of England and all the presidents and all the great entrepreneurs. He knows everybody. This book is thrilling. I hope you, you wind up buying. It's very fun to read, actually.

• 3:38David Senra?

  But there's a great story at the very end that illustrates this self-awareness that he has, this respect and honor. Remember, he's, he's writing these words 45 years after his father passes away. And this is what he says. "Vice President Nelson Rockefeller did me the honor of saying that my entrepreneurial success in the oil business put me on par with his grandfather, John D. Rockefeller, Sr. My response was that comparing me to John D. Sr. was like comparing a sparrow to an eagle. My words were not inspired by modesty, but by facts. John D. Rockefeller began his life poor. He began work as a lowly-paid bookkeeper and worked and fought his way up the ladder. I enjoyed the advantage of being born into an already wealthy family.

• 4:21David Senra?

  And when I began my business career, I was subsidized by my father. While I did make money and quite a bit of it on my own, I doubt if there would be a Getty empire today if I had not taken over my father's thriving oil business after his death." Any attempt to compare the Rockefeller Empire with the Getty Empire is ridiculous. John D. Senior went into the oil business at a time when America's petroleum industry was in chaos. He brought order out of that chaos. Rockefeller Senior's monopolization saved the US oil industry from total disintegration. And so, just because Getty doesn't think you should compare him to John D., I mean, how many people can you compare to John D. for God's sake, right?

• 5:06David Senra?

  Doesn't mean he wasn't a phenomenal entrepreneur. A lot of people try to discount Getty's achievements because he had a successful, relatively small but successful oil company. His dad had a successful oil company. And Getty, when his dad dies, Getty takes over his dad's oil company. Like, "Oh, you got a huge head start in life." That's true. By Getty's own admission, when he inherits and takes over his dad's company, it's worth $15 million in 1930. 20 years later, that company is valued well over $1 billion. It is J. Paul Getty that is responsible for that value creation from 15 to well over $1 billion. So, I want to go into, I'm going to start where he just talks a lot about his dad. And his dad just seems like a great man. I would love for my kids, when I'm older, or maybe even when I'm long gone, to describe

• 5:49David Senra?

  me the way that Getty describes his father. So, his father was a successful attorney before he founded his oil company. He's actually sent on client business to Oklahoma in 1903. And at his perfect place, perfect time, because in 1903, there's this gigantic oil boom happening in Oklahoma. And it is during this visit where his dad gets infected with what they call "oil fever." And his dad decides to switch careers and found an oil company. He starts drilling for oil, and he leases this small plot of land in Oklahoma. He tries to drill 43 wells. This is his first, this is his dad's first attempt in building an oil company, right? He attempts to drill 43 wells. 42 of them came back as producing oil. And Getty's dad does something that's extremely smart. His name is George.

• 6:34David Senra?

  So, George Getty does something that's extremely smart. He has his son just visit him while on the oil fields. This is well before this is going to be a Getty family business. His son is gaining this valuable experience in the oil industry just by being on site and observing what's going on. He said that drilling fascinated him. And he starts picking up on how drilling is done, all the jargon that is inside of the industry, all the different jobs that are required to bring about a successful well. And his father imparts in him something that never leaves him, and actually only leaves him for two years out of his long 83-year life. And it's the idea that you look at drilling for oil, the oil exploration that they're doing. It is a challenge and adventure. We're not just building a business, we're hunting and we're hunting for oil.

• 7:18David Senra?

  So this is where his dad starts teaching him self-reliance, the value of self-reliance and hard work. Getty is 15 years old when he's doing this. So I'm just going to read this description of what's going on when he's 15 years old. George Getty's business flourished and expanded during the next three years. When I was not yet 16, I asked my father if I could spend my summer vacations from school, working in the oil fields. My father's reply was characteristic. It is all right with me if you're willing to start at the bottom. This meant that I would be employed as a roustabout. That's an oilfield laborer whose job it was to perform the heaviest and usually the dirtiest work on the drilling site. My father was explicit about the terms under which I would be employed.

• 8:00David Senra?

  I would receive the roustabout's going wage, which was $3 a day for a 12-hour shift. I could expect no preferential treatment because I was the boss's son. I would have to learn to hold my own with the other men. I had long enjoyed the advantages and comforts that might be expected to go with being a wealthy man's only son. To my astonishment, I adapted readily to this abrupt transition. I took to bunkhouse living and grub shack eating in stride, and I enjoyed both. His dad is just making one great decision after another. It literally changes the trajectory of his son's life. And J. Paul Getty got his full attention because J. Paul Getty was his only son. And he talks about a lot in the book that from the time that he could remember, that

• 8:43David Senra?

  his dad concerned himself with developing his character. He says, like, "My dad believed in work ethic. He made me learn that money must be earned. He would not give his son just money just because he was rich. He taught him, his son, how to do sales. Oh, and he was a rather strict disciplinarian." So a few years after, he starts working in the oil fields. I think he's around 16 years old at the time. During the school year, he's getting bad grades and he's fucking off is essentially what he's doing. He's just not behaving. So his father's like, "Hey, you want to get bad grades? You want to fuck off? That's fine. You're going to military school." For the last two or three years of high school, he makes him go to a military school. And the line that J. Paul Getty has about this, looking back at this now as an 83-year-old man, he said, "This strict regimented environment was good for me."

• 9:27David Senra?

  His father also taught him the balance. They were both voracious readers. So J. Paul Getty is like reading Napoleon when he's like 12 years old. But he said his dad also taught him the importance of physical culture. So he'd make his son box, run, swim, lift weights. And that emphasis on physical culture is really important because he's going to start out in the oil business as a laborer, as a roughneck. And he's going to learn the business from A to Z, which is really, really important, too. And so when J. Paul Getty is in college, he repeats exactly what he did in high school. During the school year, he's in college. During the summers, he's working in the oil fields. And during one summer, he builds a really important relationship, and it is with what he calls a leathery veteran of the oil trade, this guy they call Grizzle. So Grizzle becomes J. Paul Getty's mentor. These two sentences is why this is so important.

• 10:11David Senra?

  "Grizzle taught me all he knew about virtually every phase of field operations, and his knowledge of these fields was encyclopedic." And so by the time that J. Paul Getty is 22 years old, by the time he is done with college, think about what his father did for him. He's 11 years old, and he's observing all the stuff going on. He starts working in the fields when he's 15. He's got somewhere around a decade of experience before he begins full-time in the trade. He's got his father's guidance, the fact that he knew and believed that his father loved him and that he concerned himself with developing his character, that he wanted his son to be a success. He's got the confidence that he's worked in every single aspect. He knew the business from A to Z. He was mentored by people that had decades of experience in the oil business. All of this is going to come to play.

• 10:55David Senra?

  It's going to be really important because J. Paul Getty is going to start his own oil company at 22, and he's going to make a million dollars, and he's going to retire at 24 years old. And when J. Paul Getty describes the way his dad gently guided his career, "I pray that I have this patience and tolerance for my own kids. I'm not sure I will." He says, "My father then asked the question that most fathers ask sons who have completed their formal educations but have not decided on their careers. What do you intend on doing now?" Listen to the description of his father. "Many positive qualities for which George F. Getty was widely liked and admired was his unfailing habit of presenting any arguments in a calm, wholly reasoned, yet always tolerant manner."

• 11:39David Senra?

  And so he's laying out the case to his son. He's like, "Listen, what do you intend to do now? Here is my suggestion. I've built an oil business that's worth some millions of dollars." I am nearing the age of 60 and you are my only child. And he explicitly tells his son, I've built what I hoped would be a family business. Would you be willing to consider it? And then this speaks to the wisdom that his father had. He's not like, okay, you're 22, come in and take over my business. He knows he's going to be operating for many, many years. Still, he's not yet ready to retire. She's like, hey, why don't you do this? Try your hand as an independent operator in the oil fields. If this experiment doesn't work out and if you're unhappy, you don't like the business, when the year is over, you can do whatever you wish and I will not say another word.

• 12:23David Senra?

  And so this is the deal. This is why Getty says that his, his seat at the table was reserved for him. This is what his father proposes. He says, okay, if you find a promising lease, I will furnish the capital for the purchase of the, of the lease and any kind of like drilling equipment that you need. And if there's any profits, I'll get 70%. You'll do all the work. I'll put up the capital, obviously. I will get 70% of the profits and you can get 30%. And J. Paul Getty agrees to this. Now, his experience in the beginning of the oil industry is not like his father. You know, his father drills 43 wells, 42 of them come back in your first shot, right? He is not having any kind of success. He's not finding oil at all. And he almost quits multiple times.

• 13:05David Senra?

  And then we see something that reoccurs in the books that you and I talk about over and over again. And the way I would say this is that words of encouragement matter. Older, successful, more seasoned entrepreneurs and business people, there's many examples of them of encouraging younger entrepreneurs, younger versions of themselves. I think of Henry Ford, who idolized Thomas Edison. At the time they meet, Henry Ford's unknown. He's a, nobody, he hasn't really accomplished anything. He's unknown. Thomas Edison might be the most famous person in America. Henry Ford describes this idea as like, hey, this doesn't make sense. All the, the very few cars that we have, they're all either, at the time, either electric or steam. I want to build a car that runs on an internal combustion engine. And Edison immediately understands the impact of Henry Ford's idea.

• 13:49David Senra?

  And he says, that's the thing, young man, keep at it. And, and Henry Ford wrote two books when he was alive. And he references the fact that, you know, the handful of words, that, that sentence from his hero kept him and motivated him to persevere through the inevitable struggles of bringing that idea to life. And we see something very similar in the life of J. Paul Getty as a young man. He's 22, 23 years old when this is happening. I was frequently on the verge of giving up. That I did not is due in large part to the warm-hearted encouragement and advice I received from older, seasoned oilmen like John Markham and R.M. McFarlane. McFarlane was the owner of McMahon Oil Company, one of America's most successful oil-producing firms.

• 14:34David Senra?

  He went out of his way to befriend me. He bolstered my sagging morale and gave me invaluable counsel and passed on knowledge and lessons that he had learned through long experience. And so this year experiment, it's almost at the very end, and he says, "I had nothing to show for my efforts as a wild cutter, nothing." But he didn't give up. He's encouraged by his father, by these older seasoned oilmen. He decides, "Hey, I'm gonna take another shot at this other piece of land." He gets the lease for a shockingly low price of $500, starts drilling, and the well starts coming in at 700 barrels of oil a day. And listen to what he says. "Words cannot adequately describe the elation and triumph that one experiences when he brings in his first producing well.

• 15:19David Senra?

  The feelings do not diminish when it's the 10th or 100th and 10th well that comes in as a producer." Even later in his career, he still felt the same exact feeling, one of elation and triumph. And he tries his best to describe why it's the case. "The sense of elation and triumph is always there. It stems from knowing that one has beaten nature's incalculable odds by finding and capturing a most elusive prey." That is how he describes it. He's constantly describing exploring and drilling for oil as a hunt for oil. And this is when he makes his million dollars really rapidly. He looks up, he's like, "Oh, my God, I'm rich, I'm a millionaire, I'll never be able to spend this much money." And he makes a mistake.

• 16:04David Senra?

  Like, "Think about all the mistakes you made when you were in your early twenties." And so he's like, "All right, I'm rich, I'm retiring." And so he immediately shuts everything down. He abandons all constructive activities, is how he describes it, and he chooses a life of laziness and pleasure. But what's fascinating, he's like, "You know, I have everything I want, I'm rich, I'm popping bottles." Like, he literally says that. "I'm dating all these women, I'm in the perfect place." And he's like, "I am depressed." And he realizes that he wants back in the game of business, and this is then, once he gets back in, it's a game he never stops playing. But I love his description of this, and he's just saying there's another oil boom happening. This time, it's not in the fields of Oklahoma, it's right next to him in Southern California. And he says, "Other men..." We're bringing in gushers. They're opening up new fields.

• 16:49David Senra?

  I opened up nothing that could possibly gush, except for far too many champagne bottles. This state of affairs first nagged, then gnawed, and finally became intolerable. I unretired. And then we get another example of good guy dad. When he goes talks to his dad about it, I gotta get back in the game. Retiring is boring. This is ridiculous. And he says, "My father said nothing, not even 'I told you so.'" So before I move on to how J. Paul Getty worked, I want to close this section about his dad with his father's death. His father suffers a stroke when he's 75 years old. And this is how J. Paul Getty describes the impact that the death of his father had. Remember, he is writing this 45 years after his father dies.

• 17:33David Senra?

  He says, "The love, respect, and admiration I had and still have for my father were boundless. His death was a blow that the passing years have only numbed." And for his entire life, J. Paul Getty would keep a diary. So large chunks of this book are words that he wrote many, many years ago. And this is his description. He says, "I wrote these words from the heart. They're from the heart, and they remain so." And they're about his father. "His loving kindness and great heart, combined with the charming simplicity of manner, made George Getty the idol of all who knew him. His mental ability was outstanding to the last. I can only strive to carry on to the best of my ability the life work of an abler man." He thought his father was a better man than he was.

• 18:15David Senra?

  "This is said in no sense as eulogy, but as an impartial appraisal of the facts." Later on in the book, he said that his death, his father's death, was the heaviest blow, the greatest loss that J. Paul Getty had ever suffered in his life. He says, "I was 37 when he died and no longer had any freedom of choice over what I would do with the rest of my own life." He is describing a sense of obligation and a desire to carry on the life's work of the greatest man that he had ever met. Okay, so now we're gonna get into how he worked. And he was like this from his very early days in the oil industry. He's still like this as he's writing the book. So there's a handful of things I've tried to organize around specific topics, because if you saw the notes that I have,

• 18:59David Senra?

  it's just the same note over and over again, a handful of notes. One, he's a workaholic. Two, he is what many people would consider a micromanager. I was actually at a dinner with two founder friends of mine, and we were talking about this idea where like the micromanagement, or being a micromanager, has a really bad branding around it. And yet, it's just a very common theme over and over again in these books. And they were telling me about somebody else that had rebranded being a micromanager. The other founder says that he's not a micromanager, that he's just in the details. So the second trait that he has over and over again is that he is in the details. He's definitely a micromanager. Third, if you know your business from A to Z, there's no problem you can't solve. And that is related to being in the details of a micromanager. Number four, he's gonna say over and over again,

• 19:44David Senra?

  "I am an autocrat. I want control and things must. They must be done my way." And then five, "Relationships run the world." Jay Paul Getty went out of his way to build relationships with the most powerful politicians and country leaders in the world, and the most successful entrepreneurs and investors in the world. In fact, the way he did this, and I'll get to this later, is really smart. He has a company headquarters that he calls, it's called Sutton Plates, but he calls it a liaison center, which is really a relationship center. And he used that for the sole purpose of building relationships with very successful and powerful people. But I'll get to that a little later on. And so at the time he's writing these words, he owns over 200 different businesses. He's got this relentless, constant flow of information. He's got thousands of employees.

• 20:28David Senra?

  And so he talks about, he's like, "Listen, 12-hour workdays are common, and many stretch to 14 hours or more. A steady stream of telexes, cables, written reports, and letters of all kinds poured in from every conceivable corner of the globe. There were countless phone calls. There were executives of Getty companies, and engineers, accountants, attorneys, and other businessmen who had to be seen personally." And he wouldn't have it any other way. He says in the book, "Even at 83 years old, I am still an oil man. I am a wildcatting operator at heart." And several times throughout the book, he's trying to describe to the reader this misconception. A lot of people, and you and I know this is the case. A lot of people from the outside think, oh, entrepreneurs are motivated by money. And obviously, we want to build wealth for ourselves and our family. But he picks up on exactly, he's like, this guy's decades.

• 21:12David Senra?

  He's a half century past the need to work for money. And he's talking about like, why he's doing this. And he says entrepreneurs are peoples whose mind and energies are constantly being used at peak capacity. In other word, he's alive. He is fully alive when he's engaged in this game that he loves to play. And so when he's not, he applies his workaholic tendencies, obviously, to work. So when he's not working, he's building relationships, but he's also a voracious reader. And so when I'm thinking about this, I'm like, this is nuts. This guy is like dedicated. Remember, he's reading Napoleon when he's like 12 years old. Now he's 83 when he's talking to you and I. And so what pops into my mind? Think exactly the observation that Charlie Munger made. He's like, the people that rise in life are usually not the smartest and sometimes not

• 21:56David Senra?

  even the most diligent, but they're learning machines. They go to bed every night a little wiser than they were that morning. And boy, does that habit help, particularly when you have a long run ahead of you. When Jay Paul Getty started that habit, he didn't know he had a 70-year run ahead of him. And there's something that I skipped over in his childhood that I think I should point out to you now is the fact that when he was in college, he went to these colleges in California, he thought they were terrible. And it wasn't until Jay Paul Getty transferred to Oxford that this actually ignited this lifelong love for self-directed learning. He said before he was being taught, and he's like, the key is not to be taught, it's to learn. And so the environment at Oxford, when Getty was there, was like, well, you pick your path. You figure out what ignites your soul?

• 22:40David Senra?

  What do you actually want to learn? Lifelong learning is self-directed by nature. It's not going to work any other way. And so I don't have to even read any part of this section when he's at Oxford to tell you what I feel is the most important idea. The great founders apply their fierce work ethic to lifelong learning too. And all throughout this book, you see, when Getty doesn't understand something, his first step is like, I'm going to read everything I can possibly find about the subject. It is self-directed lifelong learning.

• 23:08David Senra?

  And then the last thing I'll say about this addiction, this obsession that he had with work, he speaks about why he never retired again. And he worked until the day he died. And he says, "I've been an active businessman for more than 60 years. I still mind the store. My hand is never far from the throttle." And so, something that appears over and over again, there's large chunks of the book that are about this. Large parts of Getty's life is the fact that he was a micromanager. He's in the details. That even though he's running this gigantic empire, he is actively involved. He is, in many cases, almost every case, he wants to be where the work is actually being done. We just saw this recently in the two-part series on Walt Disney. He was the same way. Two-part series on Steve Jobs I just did.

• 23:52David Senra?

  He's the exact same way. And so, there's a great story, I think will illustrate this, that's told by his cousin. His cousin June is a close friend with FDR. FDR's president when this story is taking place. And so, he asked June, he's like, "How do you find FDR as a person? Is he easy to get along with?" And June's response was fantastic. Says, "He's the easiest man in the world to get along with, as long as you do exactly what he wants," she replied. "That's one thing you and he have in common." And so, I think when I'm analyzing the way that he approached his work, the fact that he worked all the time, that he's a micromanager, that he's in the details, that he knows his business from A to Z, the fact that he knows he wants control, that he has to have it, he is autocratic, the fact that he leveraged relationships throughout his entire life.

• 24:37David Senra?

  All of these things, I think, interact with each other. And I think this is a great overview. And this is happening in the early days of his career. He says, "My tendency is to be autocratic. I had long ago recognized this in myself. I chose to be my own drilling superintendent because it was the only way that I could be sure that my crews did exactly what I wanted. And paradoxical as it may seem, it gave me a unique sense of independence and self-sufficiency."

• 25:01David Senra?

  I never had to search further than myself when seeking to lay final blame for mistakes or wrong decisions. He quotes a bunch of leaders. One thing he loved about Harry Truman was that the sign that he kept on his desk that he was known for. And he says, essentially, that sign describes in the most clearest and most succinct way possible is how Getty operated his business. He believed the leader of the company, the founder of the company, the CEO of the company, you have to take extreme ownership. And he says, Truman provided the clearest and most succinct explanation of what I mean with the sign that he kept on his presidential desk. The sign was four words. The buck stops here. When the man in charge, it could be a candy factory, a drilling operation, or the nation's

• 25:44David Senra?

  government, accepts direct final responsibility, he makes full advance payment for the rewards and privileges he receives. He is released from any need to feel beholden or indebted. There's also another positive byproduct of this, because remember, he's an oil man. He's a wildcatter. But he talks about the fact that he's onsite. I want to be where the work is done. I know how to do everything. In many cases, I will do it if I need to. I will directly supervise. I will make sure, my personal involvement, make sure that it gets done the correct way. And so he talks about that. Even at this point, there's independent oil companies, which he considers himself because he's onsite. And then there's vast oil corporations, and they're at faraway headquarters.

• 26:28David Senra?

  And the oil men, the actual roughnecks and roustabouts and wildcatters are onsite. They just don't respect these faraway suits and offices, essentially. And so he says, "An oil man who was a working boss," and that's what he considered himself, "a working boss, enjoyed a distinct advantage. Oilfield workers, they're also known as roughnecks, riggers, or drillers, were and still are a fiercely proud and clannish lot. When a boss knew his way around a rig and could perform any task, oilfield workers accepted him as a full member of their exclusive fraternity." So think about that. Remember, we go back to the wisdom of his father. Getty is in his 30s when he's, at this part of the story, he's in his 30s.

• 27:10David Senra?

  And the decisions that his dad made, hey, let me bring my 11-year-old son out here. He'll observe. He'll learn through osmosis. He'll ask questions. And then he's 15, he's working the fields, and he's working every summer. And he does that for half of a decade. That decision is paying dividends now, what, 15 years later? And so then like 200 pages later, 150 pages later, I come across this hilarious story. Because, you know, in the details obviously means knowing how to do every job, being where the work happens. Getty applies it to like the most smallest details. Many years later, he's already one of the richest people in the world, okay? He's, there's these letters that are reprinted in the book. And he's going back and forth with the people because he's in England.

• 27:52David Senra?

  He sets up because he has to be in Europe, even though he loved. Many parts of this book is like a love letter to California. And he'd much rather be there, but he's willing to do things that he doesn't want to do, that he's not comfortable with. He's willing to, you know, subjugate his own personal desires if it's better for his empire. And so for the last like third of his life, he's set up in Europe because their business is in Saudi Arabia. And Southern California is way too far from the Middle East where his primary businesses. He's also got businesses in, obviously, in the Americas. He's got it in Europe, he's got it in the Middle East, but he's like, okay, I have to set up in a very convenient location, even though this isn't the place I want to be. And so he's having this argument over letters with the people that are in charge of his museum in California.

• 28:35David Senra?

  And he's pissed off because they're spending too much money on air conditioning. And so he's, again, it's one thing to say that you're in the details. Another one to pay attention to how many days the AC is running at this museum. That's what, 5,000 miles away from you? And so I just want to read this to you. "Air conditioning, I'm not impressed with the argument that our art objects will be ruined if air conditioning is not available 168 hours per week. I seem to remember that air conditioning was invented only a few years ago. And that all of our 18th century objects necessarily passed a great many decades without the benefit of air conditioning. My instructions are that air conditioning in the museums shall be turned off at all times at night, and shall be used during the daytime only on those days which are exceptionally hot.

• 29:18David Senra?

  We should have very little need for air conditioning." And then he obviously applies that to the finances of his business. He talks a lot about, he gives advice for fellow entrepreneurs throughout this entire book. And one of this is, "Don't be like William Randolph Hearst. You should reinvest in your business and you have to keep a fortress of cash and use debt sparingly." This is what he says. "I like to keep a lot of financial fat under my belt. There's nothing that can ever take the place of cash. The overwhelming majority of business problems and so many recent business failures result from businessmen exceeding themselves too far. There is most definitely a place and a need for the use of credit in business. However, I have always believed that the businessman who uses credit the most sparingly is the one who has the greatest chance for achieving success."

• 30:02David Senra?

  And he talks about the fact that he lived next door. Oh, this is hilarious. So he's comparing the difference between the way William Randolph Hearst ran his business and the way that Getty ran his business. So he says, "I have always spent 95% or more of my money on my business," meaning reinvesting it into the business, okay? "While William Randolph Hearst was the opposite, he liked to live like a Roman emperor. Hearst's beach house in Santa Monica cost $3 million. I was his next-door neighbor. My house cost $100,000." So think about that. They both live in Santa Monica at the time. Hearst's, and this is for his mistress, actually. So I don't even think William Randolph Hearst lived there most of the time. So that house cost $3 million. I live next door. I paid $100,000 for my house.

• 30:47David Senra?

  This is a good illustration of the differences in our attitudes towards money. "In 1935," when this is taking place, one of these neighbors next to Hearst's mistress, "in 1935, I was 1/3 as rich as Hearst, and by 1950, I was twice as rich." So again, advice for entrepreneurs, don't be like Hearst. That's what Getty would tell you. "Reinvest in your business, keep a fortress of cash, and use debt sparingly." So then he has more advice for his fellow entrepreneurs. He's like, "Listen, I know a ton of great entrepreneurs. All the great entrepreneurs I know have these traits." So I want to read this section to you because I absolutely loved it. He's really good friends with Aristotle Onassis, which I'll talk more about later. But I just love all these stories. I'm just obsessed with these stories of the great entrepreneurs that knew each other, how their lives intersected.

• 31:33David Senra?

  And how many, you know, how similar they were to each other. I've been friends with a great many entrepreneurs during my business career. All were men who devoted their minds and energies to building productive enterprises. They concentrated on expanding their businesses and making them more efficient to produce more and better goods and services for more people. They created jobs and wealth. It is the mark of the entrepreneur that he reinvests in his business. And he is always personally involved. Aristotle Onassis was an outstanding example. So this is why I'm reading this entire section here. I love this. He was a very good friend and it's always fascinating experience to see him operate. I discussed business with him many times. Listen to this.

• 32:13David Senra?

  "Very often, I had a retinue of assistants, executives, attorneys, and engineers with me. Aristotle would come to such meetings alone, yet he easily held his own on all points that were discussed. Every enterprise he owned or controlled was his personal business. He was the business." One of his ex-wives or his first wife, Tino Onassis, said this about Aristotle. "Arby," is what everybody called him. "Arby can't think of anything, on anything but a huge scale. If he had been an artist instead of a businessman, he would paint nothing but immense murals. This innate capacity to think on a large scale is one of the several characteristics

• 32:57David Senra?

  that all entrepreneurs have in common." And if you think about that, he's describing what he admires in other people. And so the list of traits that he just described to us in, you know, two paragraphs. "The great entrepreneurs I know have these traits. They're devoted their minds and energy to building productive enterprises over the long term." Remember both. Onassis could have retired decades before he did. "They're not in it just for the money. If they were just in it for the money, they would have quit a long time ago." Think about that. "They devoted their minds and energy to building productive enterprises over the long term. They concentrated on expanding their empire. They concentrated on making their companies more efficient. They reinvested heavily in their business, which can then help efficiency and expansion.

• 33:42David Senra?

  They are always personally involved in the business. And they know their shit down to the ground." And you just saw that with Onassis. So Onassis shows up by himself and he can handle, you have 10 people across the table? I know my business down to the ground. It's been a while since I've made an episode about Onassis. I think it's episode 84 and then the last time was to episode 211. I'm going to, I have another, I have, I think, two more biographies on them that I haven't read yet. But I just pulled some highlights and notes. I reread them as I was thinking about, I went through Founder's Notes and just started searching Onassis. And I found a highlight that I think explains exactly how he was able to do what Getty just described. He says, "Onassis spent almost all of his time working. He would pore over shipping journals from Anchorage, Vancouver, Hamburg, and New York, looking for intelligence, trends, and opportunities.

• 34:27David Senra?

  He would scan, study, and memorize tonnage, prices, insurance rates, and schedules of the world's great and small steamship companies, and then attempt to outbid his competitors. He read the maritime sections of at least six foreign-language daily newspapers each day." And then before moving on from this section, he reiterates more traits that he admires than others, and it's very simple. He loves people that are resilient, self-starting, and then self-restarting, because he repeats over and over again, "It's inevitable, you're going to get knocked down. You have to get back up." So resilience, self-starting, and then self-restarting. And he talks freely, over and over again. Look, there's downsides to this. Like, "I'm giving my life to my business, and as a result..." I mean, the guy was married five times.

• 35:12David Senra?

  You think he's at home a lot? He speaks over and over again about the fact that, listen, many businessmen, myself very much included, frequently complain that there aren't enough hours in the day to take care of the work at hand. And so he takes his time and attention that he would dedicate to having a relationship with his kids or his wife, and he dedicates this to his business. "I gave more time and attention to oil wells than to my home. My autocratic tendencies were no less apparent in my personal life than in business." Do you see what I mean? Like, what's refreshing about this book is, you know, I always say, "Oh, he's the richest man in the world, he must be perfect." He's like, first of all, Rockefeller, I'm a sparrow compared to his eagle. You know, "I had a wonderful dad, a wonderful position in my life, and I was a shit..." He says, "Like, 'I was a shit husband.'" He doesn't try to hide it.

• 35:54David Senra?

  "My autocratic tendencies were no less apparent in my personal life than in business. I was often short-tempered, brusque. I forgot birthdays, anniversaries, and dinner engagements. Each of my wives was jealous and resentful of my preoccupation with business." And then he also has a little line in here, a little zinger, though. Okay? He's like, "They're jealous of all the time preoccupation with business, yet none showed any visible aversion to sharing in the proceeds of that preoccupation."

• 36:20David Senra?

  And him self analyzing, just like, how can I be so great at business and so terrible at marriage? It goes on throughout the entire book. And I just started organizing one section. And he goes, I see my marital patterns as a violation of Cicero's maxim, "To stumble over the same stone twice is a proverbial disgrace. Yet I doggedly persisted in tripping over the same boulder." He repeats, "I was very irrational with marriage because work always came first." And he talks about, so here's the problem, he does some interesting things again. This is one of the benefits of reading biographies and autobiographies, in my opinion, because you have some of the smartest, most productive people that ever lived, and you see them making bad decisions and mistakes over and over again. And you realize like perfection is not required to attain wonderful professional success.

• 37:04David Senra?

  And in Getty's case, like undeniable business genius. And let me give you an example, I'm just making up the years, but at the very beginning, so he gets married five times. But the first three marriages are very bizarre. So it'd be like, get married in 1931, get divorced in 1932, get married in 1932, get divorced in 1933, get married in 1933, get divorced in 1934. And you look at a sequence of events like, how? How were you making these decisions? And then another thing is like not communicating with your wife enough, because a few of his wives complained, like, why are you away from the home so much? You're already rich. Why do you have to work? They didn't understand what was actually driving him. And then, you know, he's a very extreme person. He says, "My business interests created problems.

• 37:47David Senra?

  I was drilling several wells simultaneously, and it was by no means uncommon for me to stay on the sites overnight for two or more days." And when I wasn't on the, when he wasn't on the wells, he's traveling extensively all over the world, looking for more opportunity to drill oil. And he didn't see the need to change his habits just because he got married. He says, "I found it extremely difficult to change my habits and my patterns merely because a marriage license had been signed and sealed." And then he's able to finally summarize like his failure at marriage and then his success at nearly everything else. There's a great line. That I attributed previously to Munger because he repeats it, but he said Buffett is the actual one that taught him that. And Warren Buffett would say that it's not greed that drives the world. It's envy.

• 38:31David Senra?

  And Getty says he's not envious of anybody else except the people that were able to actually make marriages succeed. He says, "Whatever my other flaws and weaknesses, I have never been given to envy, save for the envy I feel towards people who have the ability to make marriage work and endure happily. It is an art in which I have never been able to master. My record, five marriages, five divorces, five failures." And he continues, and this speaks to my soul because I feel this way too. "A hatred of failure has always been part of my nature, and I suppose one of the more pronounced motivating forces in my life. Once I have committed myself to any undertaking, a powerful inner drive cuts in and I become

• 39:12David Senra?

  intent on seeing it through to a satisfactory conclusion." Think about that. Hatred of failure is a main motivating force. It is a powerful inner drive. It is not the love of success is the fear of failure that is pushing him. "How and why is it that I've been able to build my own automobile, drill oil wells, run an aircraft plant, build and head a business empire, yet remain unable to maintain even one satisfactory marital relationship? It is one hell of a question." And so I want to get into a few giant leaps, giant leaps forward that happened in his business. And I think before I describe two of these such occasions, he talks about the importance of concentration in his own life. And so J. Paul Getty says this.

• 39:57David Senra?

  He says, "My own nature is such that I'm able to concentrate on whatever is before me and I am not easily distracted from it." That comes up over and over again in these books. A great description of it, Edwin Land that I pulled up. "He concentrated ferociously on his quest." Let's do a quote from Getty's hero, John D. Rockefeller, Sr. This is what he said. "Do not many of us who fail to achieve big things fail because we lack concentration, the art of concentrating the mind on the thing to be done at the proper time and to the exclusion of everything else." A great enabler of concentration is having a long attention span. Because if you hear what just Getty just said, "My own nature is that, that I'm able to concentrate on whatever is before me and not easily distracted from it."

• 40:42David Senra?

  Charlie Munger said, "I did not succeed in life by intelligence. I succeeded because I have a long attention span." Getty had a long attention span. So that leads me to these two giant leap forward in his business. The first one happens in the 1930s, the second will happen in the late 40s, and then he'll reap the benefits in the mid 50s. But it goes back to when his father dies. He takes over the company. It is valued around $15.5 million in 1930. And so the executors of his father's estate tried to restrict the behavior that J. Paul Getty had and what he wanted to do because they were in the Great Depression. And they're excessively worried about the economic situation. The patriarch of the family is dead.

• 41:27David Senra?

  Who knows? This may be the high watermark of our wealth. What are we going to do? They're scared. And Getty thought that was the exact wrong response. He said, "My own views were in direct opposition." So now, at the time, they're just drilling, they just explore and they drill for oil. He's like, "No, no, no. I believe now, the time is right, right now, to vertically integrate." And this is how he describes his thinking. "I was convinced of eventual economic recovery, and I firmly believed in the business dictum that you should buy when prices are low. I urged a program of expansion. Stocks in publicly owned companies with huge, if temporarily undervalued assets, were selling at prices that made them barely believable bargains.

• 42:09David Senra?

  There were shares selling for as little as a twentieth of their net underlying asset value. That means anyone who purchased them was, in effect, buying $20 for every dollar he spent. The Getty companies, my father's and my own, were primarily engaged in oil exploration and production. Their crude had to be sold to refineries or pipeline companies. I reasoned that with share prices being where they were, the time was ideal to obtain control of a company with refinery facilities and marketing outlets. In other words, economic conditions created a unique opportunity to put together an integrated well-to-consumer oil company."

• 42:57David Senra?

  It's one thing to know that is the right idea. It's completely another thing to actually have the temperament to act on that belief when everybody around you is panicking. He's in the middle of a financial panic. You know what I thought of when I got to this section? Sam Zemurray from the book The Fish That Ate the Whale, The Life and Times of America's Banana King. There was a great paragraph in that book where Sam Zemurray does something very similar. He knew the time was right for him to expand. Listen to this description. I'm going to read this paragraph to you. It's excellent. "There are times when certain cards sit unclaimed in the common pile, when certain properties become available that will never be available again. A good businessman feels these moments like a fall in the parametric pressure.

• 43:42David Senra?

  A great businessman is dumb enough to act on them even when he cannot afford to." So going against the advice of the people advising him, right? And going against the current economic climate, he starts buying shares in this oil company called Tidewater Associated Oil Company. His idea was to accumulate enough shares so that he could win control of Tidewater. Now, this is hilarious. Listen to what he says. "Tidewater actually belonged to Standard Oil of New Jersey, which was controlled by the Rockefeller family." He didn't know it at the time, because if you listen to the multiple episodes I've done on Rockefeller and his family, they constantly would hide, they'd have secret ownership in

• 44:27David Senra?

  companies over and over again. They did not want people to know how rich they were. They did not want people to know how powerful they were. They loved this network of secret allies. So it says, "They actually belonged to the Standard Oil of New Jersey." "Standard Oil of New Jersey was controlled by the Rockefeller family. Had I known this originally, I would never have begun buying Tidewater shares. For a pygmy-independent operator such as I was, could hardly stand a chance against one of the world's largest and most powerful major oil companies. By the time I discovered the truth, I was too deeply committed to withdraw from the fray." And so now, some of the owners, it's not just the Rockefeller family owns Tidewater, but some of the other owners, like, well, we don't want to be taken over by this Getty guy. So they have an idea. And so on New Year's Day, he gets a call.

• 45:11David Senra?

  He is hanging out at William Randolph Hearst Castle in San Simeon, California. I also visited there last year. It's incredible if you ever get the chance to visit. It's open to the public now. I think it's owned by the state of California. It really is this great illustration of this idea that you and I talk about all the time. Mute the world and then build your own. Hearst built his own world, and you get to visit a part of it. It's remarkable. On New Year's Day, he's at the Hearst Castle. They're like, hey, there's some guy on the phone looking for a Getty. And so he's going to talk to, the guy calling him is Jay Hopkins. Jay Hopkins, in the near future, is going to be the founder of General Dynamics, which is one of the biggest defense companies that still exists to this day.

• 45:53David Senra?

  But at the time, Jay Hopkins works for John D. Rockefeller Jr. And so he's telling Getty what's going on. He's like, listen, Standard Oil of Jersey, they decide they're going to transfer all of its Tidewater shares to this holding company called Mission Corporation. Their idea was like, well, we can disperse our holdings so widely that control the company would be out of Getty's reach forever. The problem was that they never told John D. Rockefeller Jr. why they were doing this. And so now Rockefeller Jr. finds that he owns a bunch of shares to this Mission Corporation, and he's willing to share, to sell his rights to the Mission Corporation's stock for $10 a share. And so he hires Jay Hopkins to help him sell this, and Jay Hopkins calls J. Paul Getty.

• 46:38David Senra?

  And so J. Paul Getty, of course, like, yes, I want to buy it. But he goes, hey, suppose that Jersey Standard's management hears that Rockefeller intends to sell, they'll try to talk him out of it. And Jay Hopkins responds to J. Paul Getty, and he says, not a chance. Rockefeller Jr. is aboard a train bound for Arizona. They can't reach him. It's not like they can send an email or a text at this time in history, right? They can't reach him, and I have his authorization to sell. So we closed the transaction right then and there over the telephone. He needed that domino to fall because then it brought down another, a bunch of other dominos with it. He talks about this, "Armed with John D Jr.'s assignment of rights, I approached the other Jersey Standard

• 47:22David Senra?

  stockholders with predictable results. Many of them felt that if a Rockefeller thought it was wise to sell his Mission Corporation rights, that they would be wised to do the same." That was a huge leap forward in his business, is going to unlock another opportunity, the opportunity of the lifetime. So, he is going to secure the rights for what is known as the neutral zone between Saudi Arabia and Kuwait. And I just think there's an abundance of lessons in here for us. So, this is the year 1948 to 1949. He says, "Gedi interests obtained the oil concession on Saudi Arabia's half-interest in the neutral zone." This is this ground that's lying in between Saudi Arabia and Kuwait. "Four years and tens of millions of dollars were spent before a drop of oil was brought to the surface.

• 48:07David Senra?

  But by 1954, it was evident that the neutral zone had immense oil reserves. Getty companies had done considerable international business before." He's describing a giant leap up, right? He does not become what is widely considered the world's richest private citizen without this deal. "Gedi companies had done considerable international business before. Neutral zone fines and production transformed us into a truly global enterprise. Much work and capital and a sweeping organizational restructuring was needed to make this new business empire viable. Tankers, super tankers, pipelines, storage facilities, and refineries had to be built."

• 48:50David Senra?

  This is my favorite sentence of this entire section. "The list of things to be done was awesome, but those things were done."

• 49:00David Senra?

  And so I want to spend some time on this deal. There's so many interesting lessons for you and I. So, think about this. He's going to miss out on the deal of a lifetime. Then he's going to get the deal of a lifetime, which I'll explain to you in a minute. He's willing to move his entire life for his biggest deal. This is what I meant about even after he's a wealthy man. He's willing to subjugate his comfort, where he wants to be, what he'd rather be doing, if it's for the betterment of his company. We'll also see that it's hard to overpay for a truly great business. Remember what Charlie Munger said, when he's analyzing the success of Berkshire Hathaway, looking back, he's like, "Oh, we really made the money out of the high-quality businesses." So I absolutely love this part because he's talking about missing out on the deal of a lifetime and then getting the deal of a lifetime. This is great. I have made more than a few business mistakes during my career.

• 49:44David Senra?

  Some were whoppers. In 1932, he had the opportunity to bid on the Iraqi oil concession. We were close to reaching an agreement that would have given my companies the right to explore and drill for oil over a vast area. The initial cost would have been minimal, a matter of some tens of thousands of dollars. But there was an abrupt and disastrous break in US crude oil prices. The Great East Texas oil fields had been opened up and crude, so the price of crude, craters, and it goes down to 10 cents a barrel. This was a full-on financial panic. I was reluctant to expand into the Middle East under these conditions.

• 50:26David Senra?

  Think about this, this is why, again, I get so hyped up reading this stuff because it's one thing to know what the right thing to do is, it's another thing to have the courage and the temperament to do so. He knew the time was to expand. We cannot just stay oil explorers forever. We gotta vertically integrate. There's a big financial crash. We can pick up, you know, stocks for 1/20th what we could. We have to buy now. Two years later, same situation here. This is tens of thousands of dollars to get for the opportunity to drill in Iraq. But I didn't do it because I was scared because there was other financial panic. This not just an overall financial panic with the Great Depression, but a financial panic within my industry. I was reluctant to expand into the Middle East under these conditions and ordered my

• 51:11David Senra?

  agents to break off the concession negotiations. It is impossible to estimate how much revenue the Getty company lost because of my decision. That is 1932. It's going to take them almost, what, 17 years to get another shot at fixing that mistake and this time at a gigantic cost. But again, it's a kind of a weird thing about this game we're playing. It's truly hard. It sounds so silly to say it, but it's truly hard to overpay for a truly great business. I realized it was imperative that my companies obtain a foothold in the oil-rich Middle East. 17 years later, most of the giant corporations that had many times the financial resources

• 51:53David Senra?

  that Getty had at this point, had already got all of these great concessions. There was one very significant area that had been passed over, and that was the neutral zone, this zone that I've already described, it's 2,400 Last square mile in between Saudi Arabia and Kuwait. So he's like, oh, this might be an opportunity to make up for my mistake that I made in 1932. So he sends, this is the biggest opportunity of his life. He sends the geologist out to look at, to the neutral zone. And he gets back, he says, he sent me this terse cable. It is three words. Structures indicate oil. I absolutely love that. Are we, are you and I confused that what, what, what that message is meant to, how is that message is meant to be interpreted for J. Paul Getty? No. Structures indicate oil.

• 52:38David Senra?

  Sign the damn deal. And this deal is going to be really expensive. And what I love is everybody around Getty saying, oh, he, he lost it, paid too much. This guy's an idiot. He doesn't know what he's doing. I'm just going to give you a little bit of like overview of the deal. He had to pay the Saudi Arabian government an immediate cash $10.5 million. We have to pay them a million dollars a year and a 55% per barrel royalty on all oil produced. We had to pay 25% of our net profits to the Saudi Arabian government. We have to build a refinery and storage facilities in Saudi Arabia. We have to deliver 100,000 gallons of gasoline and 50,000 gallons of kerosene annually to the Saudi Arabian government. We have to pay the salaries of Saudi government inspectors and other personnel.

• 53:21David Senra?

  We have to provide pension and retirement and insurance and other benefits for Saudi Arabian employees of the company. And this is what I mean about it's hard to overpay for a truly great business. This deal makes him one of, if not the richest private citizen in the world. By the standards of some oil companies operating in the Middle East, the terms were viewed as being too much. They were called outrageous. It was widely predicted that Paul Getty has finally overreached and he'll lose his shirt in the Middle East. When in fact, the exact opposite, the exact opposite happened. And so with this expansion of the Getty empire, at the same time, he is trying to get his sons involved in the family business. As his dad got him involved.

• 54:04David Senra?

  And this desire ends in tragedy, to the point where he has to ask himself the question, did I cause the pressure that killed my son? And I think the way to start this is a conversation that J. Paul Getty is having with Winston Churchill's son Randolph. And Randolph is telling J. Paul Getty that he suffered handicaps and hardships in life because he was the son of a great and famous man. And he says that no matter what I do, I will always be measured. They'll always measure the son's talent against those of his father. And essentially, his point is that even if he does achieve his own independent greatness, that he'll never, can't possibly live up to his father. So they'll say that I wasn't good enough. So Churchill, you know, I've read a bunch of books on him, done a bunch of episodes on him.

• 54:46David Senra?

  He was pretty upset with, with the way that Randolph lived his life. In fact, I found a quote that Churchill has on his son. It says, "Your idle and lazy life is very offensive to me. You appear to be leading a perfectly useless existence." And what is fascinating about this is the contrast that Getty makes because throughout the first two decades of his own career, he knew. He's like, "Other oilmen are going to measure my performance against that of my father." And it seems like Randolph kind of like, you know, had a little pity party and got upset about it and Getty just worked harder. And my own guess is that one of Getty's greatest regrets in life is the fact that,

• 55:27David Senra?

  you know, he was the son of a great father and I don't think his kids would describe him as that. And part of it is just like this fractured lifestyle he had, five different wives, four different baby mamas, if I'm counting correctly. Most of them are not living with him. Like, think about how much time Getty's dad spent with his son when they were growing up. Getty did not do the same. And Getty talks about that. "My father's influence and example were the principal forces that formed my nature and character. Unfortunately, I had no like degree of influence and control over the lives of my own sons. The reason for this was, of course, the failure of my marriages. I had hoped and desired that my sons would enter the family business, eventually taking

• 56:10David Senra?

  over for me, just like I had taken over for my father. I had a wish to perpetuate a dynasty. I would experience many disappointments before learning that I could not predetermine their careers or the course of their lives." So, none of his sons were interested. There was one son that showed an interest in that worked in the family business. And that was his son, George. And so there's many times throughout the book where he's just so excited to have a son that's interested in the same things that he's interested, talks about in his, like, the dire entries, "Oh, met with George today in London. We talked business for 12 straight hours. This went on and on." And so, he's gonna call his son's death an accident. Other people have described it

• 56:54David Senra?

  as a suicide. I do not know which description is accurate. All I know is that, what they all agree on, that he drank, and he combined drinking with taking barbiturates. And so, this is where he's talking about the fact that, "Oh, my God, did I cause the pressure that killed my son?" And so, he gets called to the telephone, and he immediately knows something's wrong, because he gets on the line, and they said, "I think you better brace yourself, Mr. Getty." He is told that George, his son, had a stroke, and that he's unconscious in a hospital. And then, it's updated, and it says, "George died a few minutes ago." And he is not alone when he takes the call, so we have a description of what happens.

• 57:36David Senra?

  He says, "It's impossible for me to recall much about my emotions or reactions. My memories are vague and confused. I am told that I sat for hours staring into space, saying nothing. And I can only remember one thought, that it was untrue, that it was impossible. I had always believed that my first son, George, would outlive me by at least 35 years. The next day, I learned from the newspapers, television, and radio what they had refrained from telling me. George had not died from a stroke, but from the effects of a lethal combination of alcohol and barbiturates. One question will continue to gnaw at me to the end of my own days. I remember the

• 58:18David Senra?

  conversations I had with Randolph Churchill, and I know that all too many businessmen and executives rely on a few evening drinks, and sometimes barbiturates, as a means of easing the tensions and pressures created by their work. Is it possible that these were unduly greater for George because he strove too hard to live up to the images of his grandfather and me? In other words, did I cause the pressure that killed my son?"

• 58:50David Senra?

  Absolutely devastating. He experiences multiple family tragedies. His 12-year-old son dies from complications of a surgery. He had survived having a tumor taken out and then had a series of ongoing surgeries and died from complications of one. One of his grandsons gets kidnapped and he's famous or infamous for trying to negotiate with them. His whole point is like, I got 15 other grandchildren. If I just keep immediately paying out money, I'm signaling to the world that if you want to make money, just kidnap one of my kids. There's entire books. I ordered five different books on Getty, one of which is dedicated to what happens, like this danger of, he says, I wanted to create a dynasty. And much like the Kennedy family, the Kennedy family dynasty, because Joseph Kennedy had similar instincts, desires.

• 59:34David Senra?

  There's just a lot of tragedy that happens there. So I'll read the book. I'm not sure if I'll make a podcast on it. If there is some lessons in there for you and I, then I will. But this guilt is present. He mentions it multiple times. He definitely had to live with doubt and guilt over the role that he played in his son's lives. And so, moving on to another, I would say, tenet of his career is the fact that relationships around the world, he went out of his way, when he's not working, and I guess this is considered work as well, to build relationships with world-class entrepreneurs. He knew essentially every single US president, nearly all the leaders of the countries in Europe and Middle East. But he did this intentionally. He does something that's very fascinating. I mean, he talks about why it's so important. So he sets this thing up, which I mentioned, called the Liaison Center.

• 1:00:17David Senra?

  So he buys this gigantic estate, and it's a very old estate. I think it was first created in the 1500s. And it's called Sutton Place. And if you Google Sutton Place Getty, you'll see it. It's, I think it sits on like 1,000 acres. It's like 72 different rooms. It served as a de facto corporate headquarters. And so, he would invite all the people he wanted to build relationships with. They could work out of it. They could stay for days. And he says why. He says, "The Liaison Center would provide an easy, relaxed atmosphere and pleasant surroundings in which Getty executives and businessmen from all over the world could meet, exchange views and ideas, yet conduct no formal business.

• 1:00:59David Senra?

  Naturally, plans and programs could and probably would grow out of such meetings."

• 1:01:05David Senra?

  And there are many such examples in the book where J. Paul Getty does this in his own life, and so he knows it's valuable. And I just want to give you one example. And I already mentioned his very close friendship with Aristotle Onassis. And he says, "During the 1950s, Aristotle Onassis and I formed a close friendship and association in several business ventures. This plays a role because as he continues to expand, and now his empire is essentially almost near its zenith, he's going to need to hammer out a deal with Onassis that Onassis would not offer to other people that weren't his friend." Relationships run the world. Aristotle Onassis had obtained what amounted to a monopoly on tanker transportation of all oil produced in Saudi Arabia. The oil companies were up in arms, for they had their own tanker fleets, or tankers, under charter. The Getty interests

• 1:01:50David Senra?

  were in the middle of a large-scale tanker construction program in anticipation of the Neutral Zone production. An Onassis monopoly would wreak havoc with those programs, and with much other Getty company planning. But Ari and I were friends. There was a bond of mutual trust and confidence between us. As always, when the two of us sat down and talked, obstacles were quickly ironed out. Our conversation ended successfully, and with a handshake, which, for Ari, constituted an ironclad agreement." As can be gathered, these meetings with Ari Onassis had far-reaching consequences.

• 1:02:32David Senra?

  And so by the 1950s, he is a billionaire, a legit billionaire, and that's what they call him. And he's talking at towards the end of the book, like, what? He's reflecting back on his life as an 80-year-old man, like, what actually drove me? And I think this series of reflections is the perfect place to close. He says, "The billionaire." "I harbored no desire to be the world's richest man, not at any time in my life. I have gone this far on this particular path. There is no reason why I should not go further and see where it leads. It may well be that I will learn something from it myself." I made my first million dollars quickly, almost overnight. I was stunned at the realization that I had so much.

• 1:03:15David Senra?

  I believed it was all the money I could ever use or need, and I stopped working entirely. I can face myself squarely in the privacy of my study, late at night, and say that it was not greed or any desire for more money that caused me to come out of retirement at the age of 26 and begin working again. I look back over the years and search my memory and my conscience for the reasons that motivated me. I recall the elements clearly. The challenge inherent in the search for oil was a powerful factor, as was the sense of responsibility I felt towards my father in the business that he had created and built.

• 1:03:58David Senra?

  What followed was a constant source of astonishment to me. If I can claim personal credit for having made the best of my advantages, it is by likening myself to a tennis player. Once into the game, I did my damnedest to be competitive. I always sought to return the ball, no matter from which direction or with what velocity it came into my side of the court. I always sought to return the ball. That is a great summary of why he kept getting after it. The challenge inherent in it, the continuation of his hero, his father's life's work, and then Getty's inner competitive drive. I really enjoyed the book. I hope you read it.

• 1:04:42David Senra?

  If you buy the book using the link that's in the show notes in your podcast player or available at founderspodcast.com, you will be supporting the podcast at the same time. That is 352 books down, 1,000 to go, and I'll talk to you again soon. One of the things I loved about this book was how Getty repeated that he made it a priority to learn from history. If you really think about it, what Getty learned about how Rockefeller built his oil company wound up being worth billions when Getty was building his own oil company. And to this constant reading that he mentions and this love of history, I think Getty understood the truth in what Charlie Munger said, that learning from history is a form of leverage. I think that is why so many... Charlie just puts to the best. It's like why so many of the people that you and I study on the podcast, they just spend so much time learning from the great people that came before them. Getty obviously included in that now.

• 1:05:27David Senra?

  Learning from history is a form of leverage, and I built a tool that actually gives you the superpower to do this on demand. It is called Founder's Notes. Founder's Notes started out as the internal tool. I built this for myself to keep track of all my notes, all my highlights, all my transcripts for every episode that I've ever made. Everything that I've ever used to make the podcast is now in one searchable database. And by searching this database, it actually gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs and use it when you need it. Existing subscribers of Founder's Notes have been using it to make decisions inside their company. They've been using it to prepare for client meetings. They've been using it to prepare for board meetings. They've been using it to find ideas on hiring, marketing, leadership, recruiting.

• 1:06:11David Senra?

  Anytime that you hear me reference a past founder or a past idea on that podcast, that ability comes from me searching Founder's Notes. So what you are about to hear is a demo of me using Founder's Notes. Included with Founder's Notes is a private podcast feed. There's actually these 50 short episodes waiting for you there. I am going to play one of those short episodes now. I was asked, how did history's greatest founders think about hiring? What strategies did they use to hire? All I did was a keyword search in Founder's Notes to answer this question. It is a perfect demo of how valuable a subscription to Founder's Notes is. If you want to have the ability to tap into the collective knowledge of history's greatest founders on demand, you can get access to by going to foundersnotes.com.

• 1:06:53David Senra?

  That is founders with an S, just like the podcast, foundersnotes.com.

• 1:06:59David Senra?

  I want to start out first with why this is so important. There's actually this book that came out in like 1997. It's called In the Company of Giants. I think it's episode 208 of Founders. It's two Stanford MBA students, if I remember correctly, and they're interviewing a bunch of technology company founders. And in there, Steve Jobs is one of them. This is, you know, right, I think, even before he came back to Apple. And They were talking about, well, yeah, we know it's important to hire, but in a typical startup, a manager or founder may not always have time to spend recruiting other people. And I first read this, Steve's answer to this, you know, I don't know, two years ago, and I never forgot it. I think it's excellent. I think it sets up why this question is so important.

• 1:07:41David Senra?

  And you should really be spending, especially in the early days, like basically all your time doing this. In a typical startup, a manager may not always have the time to spend recruiting other people. Then Steve jumps in. I disagree totally. I think it's the most important job. Assume you're by yourself in a startup and you want a partner. You take a lot of time finding a partner, right? He would be half of your company. I'm going to pause there. This idea of looking at each new hire as a percentage of the company is genius. Why should you take any less time finding a third or a fourth of your company or a fifth of your company? When you're in a startup, the first 10 people will determine whether the company succeeds or not. Each is 10% of the company.

• 1:08:22David Senra?

  So why wouldn't you take as much time as necessary to find all a players? If three, three of the 10 were not so great, why would you start a company where 30% of your people are not so great? A small company depends on great people much more than a big company does. Okay, so to answer this question, the advantage that I have making founders and that you have as a byproduct of listening to founders is not only that I've read, you know, 300 some biographies of entrepreneurs now, but I have all of my notes and highlights stored in my Readwise app. And that means I can search for any topic. I can look at the past highlights of books or I could search for keywords.

• 1:09:02David Senra?

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

• 1:09:47David Senra?

  That's a lot easier, right? Than if you're just somebody that doesn't have reputation, maybe you don't have resources, maybe your company's rather new or not as well-known. David Ogilvie, I just did Confessions of an Advertising Man a couple of episodes ago, I think 306 or something like that, 307. And he did the same thing. But he's David Ogilvie at that point. So he would find, he'd go through magazines, find great advertising, great copywriting, and he'd write the person a letter and then set up a phone call. And he says, he wouldn't, he was so well-known, and you know, he's one of the best in his field, that he wouldn't even have to offer a job, just the conversation, then the person would, he would want to hire the person, never mention it, and the person would apply to him.

• 1:10:28David Senra?

  And so again, I think if you can do that, then of course, it's straightforward. Find somebody who does great work. Usually you can do this, I actually have a friend, I can't say who it is, he's doing this right now, actually. I have a friend that's really good at doing this. He's finding people that do great stuff on the internet and then just cold, cold DMing them and then getting, convincing them to work on things. And that usually works, especially with people, like younger people earlier in their career. There's a bunch of different ways to think about this and a bunch of different ways to prioritize. So the first thing that came to mind, that I found surprising, is you read any biography on Rockefeller, and he had a couple of ideas where he felt the optimization, you know, table stakes, that you're intelligent and you're driven and you're hardworking, right?

• 1:11:12David Senra?

  We don't even have, like, if you're listening to this, you already know that. But he prioritized hiring people with social skills. And so this is what he said, "The ability to deal with people is as purchasable a commodity as sugar or coffee, and I pay for, I pay more for that ability than any other under the sun." There's the two, the second part to this, though, and this is, also works well if you have access to more resources. Rockefeller would hire people as he found, as he found talented people, not as he needed them. It's not like, okay, Standard Oil has six open spots, let's go find six candidates, right? He'd come across what he considered a talented person, it didn't even matter if he didn't know what they were going to do. He's like, I'm just going to stack his team.

• 1:11:54David Senra?

  And if you really think about the, his partners at Standard Oil, he essentially built a company, an executive team of founders, of, because he was buying up all their companies. So it's very rare, but there's a line from Titan I want to read to you. "Taking for granted the growth of his empire, he hired talented people as found, not as needed." And then I found another idea in the hiring, like the actual interview process. So there's this guy named Van Eever Bush. I did two episodes on him. I think it's 270 and 271. He is the most important American ever in history in terms of connecting the scientific field, private enterprise, and the government. The most important person to keep alive for the American war effort was FDR. The second one was Van Eever Bush.

• 1:12:38David Senra?

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

• 1:13:20David Senra?

  An interview of that sort is always likely to be on, on an artificial basis and somewhat embarrassing. So I discussed with him a technical point on which I was then genuinely puzzled. The next day, he came in with a, with a neat solution, and I hired him at once. Here's another idea. This is from Nolan Bushnell. Nolan Bushnell is the founder of Atari, founder of Chuck E. Cheese, and Steve Jobs mentor. He hired Steve Jobs when Steve Jobs was like 19 at Atari. He would ask people their reading habits in interviews. This is why. One of the best ways, his whole thing was he wanted to build, all of his companies laid on a foundation of creative people. So that's what he's looking for. He's like, I need creative people. One of the best ways to find creative people is to ask a simple question. What books do you like?

• 1:14:02David Senra?

  I've never met a creative person in my life that didn't respond with enthusiasm to a question about reading habits. Actually, which books people read is not as important as the simple fact that they read at all. I've known many talented engineers who hated science fiction but loved, say, books on bird watching. A blatant but often accurate generalization, people who are curious and passionate read, people who are apathetic and indifferent don't. I remember, that's such a great line, and I obviously agree with it. I remember one, I'm gonna read it again. A blatant but often accurate generalization. People who are curious and passionate read, people who are apathetic and indifferent don't. I remember one particular woman who during an interview told me that she had read every book that I had read. So I started mentioning books I hadn't read and she had read those too.

• 1:14:47David Senra?

  I didn't know how someone in her late twenties found that time, this much time to read so much. But I was impressed, I was so impressed that I hired her right there and assigned her to international marketing, which was having problems. This is why, this is why I'm reading this whole section to you. A job with a lot of moving parts benefits from a brain that has a lot of moving parts. It wouldn't be possible to have read that many books without such a brain. So do you see what I mean? Like, we start with Steve Jobs saying, this is the most important thing that you, your role as the leader of the company and the founders do, right? And you are, and it's so important to study and this is why I'm glad this, this question exists and why I'm glad that I've, I took the time and I had like the foresight to like, hey, I should really organize my thoughts and notes.

• 1:15:30David Senra?

  Cause there's no way I would have remembered all this without being, being able to search my Readwise, right? But you have Rockefeller saying, this is what's important to me. You have Bush saying, this is how I hire. Now you have Nolan Bushnell saying, well, here's another weird thing that I learned. Let me go through what Warren Buffett says about this. So this is about the quality. One thing that is consistent, whether it's Jobs, Buffett, Bezos, Peter Thiel, this just pops up over and over again. They talk about the importance of trying to find people that, that are better than you. The, the hiring bar constantly has to increase. Now, obviously the larger the company gets, that's impossible. Steve Jobs has this great quote where he's like, you know, Pixar was the first time I see, I saw an entire team, entire company of A players, but they had 400 player, they had 400 team members.

• 1:16:15David Senra?

  He's like, at the time, Apple had 3000. It's like, it's impossible to have 3000 A players. So there is some number. That your company may grow to where it's just, you're just not, you're not going to have thousands of A players. In my argument, I don't even know if you could have 400. I guess, I mean, I'll take Steve's word for it on there. And Pixar definitely produced great products, but it's probably a lot, lot lower than that as well. So Warren Buffett would tell you to use David Ogilvy's hiring philosophy. And so Warren said, Charlie and I know that the right players will make almost any team manager look good. Again, that is why it's the most important function of the founder, maybe directly next to the product. Or right above the product, actually, because those are the people building your product. We subscribe to the philosophy of Ogilvy and Mather's founding genius, David Ogilvy.

• 1:16:57David Senra?

  This is what Ogilvy said, "If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But if each of us hires people who are bigger than we are, we shall become a company of giants." David, or Jeff Bezos, rather, used a variation of Ogilvy's idea too. Jeff used to say in Amazon, "Every time we hire someone, he or she should raise the bar for the next hire so that the overall talent pool is always improving." And they talk about this idea on Amazon where the future hires that we do should be so good that if you had applied for the job you already have in Amazon, you wouldn't get in. That's a very interesting idea. Take your time with recruiting, take your time with hiring. There's this great book on the history of PayPal.

• 1:17:41David Senra?

  It's written, actually, I've recently become friends with the author, his name is Jimmy Sony. And this is in his book. The most fascinating thing that I found was that PayPal prioritized speed. So from the time they're founded to the time they sell to eBay, it's like four years. Jimmy spent more time researching the book than, he spent six years researching the book. I always tease him because like you took longer on a book than they took to start and sell their company. It just speaks to like the quality he's trying to do. But as a byproduct of that, like obviously they move fast, but they prioritize speed over everything else, except in one area, recruiting. Max Ludkin kept the bar for talent exceedingly high, even if that came at the expense of speedy staffing.

• 1:18:22David Senra?

  Max kept repeating, "As hire As, Bs hire Cs, so the first B you hire takes the whole company down." Let's read that again. "A players hire A players, B players hire C players, so the first B player you hire takes the whole company down." Additionally, the team, the company leaders mandated that all prospects, here's another idea for you, all prospects must meet every single member of the team. Now, the next one is the most bizarre. It makes sense if you study, I did this three part on Larry Ellison, three part series on Larry Ellison. I should read those books again because the podcast is like 50 times bigger than, than when I published those episodes. And he's just, it's crazy.

• 1:19:03David Senra?

  So he would hire based on the confidence, the self-confidence level of the candidate. Listen to this. I have tears in my eyes. I don't know why I'm laughing. Okay. This is just so, because this is, you read about Larry Ellison and he's one of these people. It's like really easy to interface with because you just, you just know exactly who he is and what's important to him. That's why I think it's so funny. Ellison insisted that his recruiters hire only the finest and cockiest new college graduates. When they were recruiting from universities, they'd ask people, are you the smartest person you know? And if they said yes, they would hire them. If they said no, they would say, who is? And they would go hire that guy instead. I don't know if you got the smartest people that way, but you definitely got the most arrogant.

• 1:19:48David Senra?

  Ellison's, and this is why, the personality of the founder is largely the culture of the company. Apple is Steve Jobs, Apple's just Steve Jobs with 10,000 lives. Right? I was just texting a founder friend of mine. He listens to the podcast. I actually met him through the podcast. And he's going through this like process of self-discovery. Like he's already started a bunch of companies that are really successful, but he's like, I think I'm more of this type of founder than the other type of founder. And that's good that he's doing that because he's, hopefully his next mission is like his life's mission, you know? And you can't get to your life's mission unless you figure out who you are. Ellison knew who he was. Ellison's swaggering, combative style became a part of the company's identity. This arrogant culture had a lot to do with Oracle's success. Here's another odd idea for you.

• 1:20:31David Senra?

  Izzy Sharp, the founder of Four Seasons, actually could figure it out that in his business, which was hotels, right? That hiring the right person could actually be a form of distribution for his hotel. He gave me the idea. Because of what? What do we know? What do you and I know in our bones? That history's greatest founders all read biographies. They all read biographies of people that came before them and took ideas from them. Izzy Sharp was trying to build Four Seasons. What do you think he did? He picked up a biography of Caesar Ritz. The guy that Ritz Carlton is named after, arguably the greatest hotelier of all time. And when he realized, oh shit, Ritz, he says, remembering that Caesar Ritz made his hotels world famous by hiring some of the foremost chefs, we decided to do something similar. So what is he talking about?

• 1:21:14David Senra?

  Caesar Ritz went out and partnered with August Escafier. What Caesar Ritz was to hotel, to building hotels, August Escafier was to French cooking. And so what happened is you partner with world famous chefs. People come into your restaurant that's in the hotel because of the world famous chef. And now they know about your hotel. That leads to more activity in your restaurant that you own, but also leads to more brand recognition of your hotel. And then as a byproduct of that, more people staying at the hotel. So hiring as a form of distribution, this is fascinating. That is a fascinating idea. Okay, here's a problem. You can identify great people, right? Maybe they even want to come work. Like you've identified them, you've sold them, hey, this is what, this is our mission. This is what we're doing.

• 1:21:57David Senra?

  And yet, humans have complicated lives. They have spouses, they have kids, they have a reason, maybe they can't move across the country to work for you, even though they want to. So there's a problem solving element that you see in these books on, you have to solve, like you've already identified the person, you've recruited them, they can't go for some other reason. Okay, well, the great founders are not going to take no for an answer. I read in, in this book called Liftoff, which is about the first six years of SpaceX. This is what Elon Musk did. They had anticipated his friend's issue, having convinced Musk they needed to bring this brilliant young engineer from Turkey onboard. It became a matter of solving the problem. His wife had a job in San Francisco. She would need one in Los Angeles, right? Because that's where SpaceX is at the time.

• 1:22:42David Senra?

  These were solvable problems and Elon's better at solving problems than almost anyone else. Musk therefore came into his job interview prepared. About halfway through, Musk told the guy that he wants to hire. So I heard you don't want to move to LA. And one of the reasons is that your wife works for Google. Well, I just talked to Larry and they're going to transfer your wife down to LA. So what are you going to do now? To solve this problem, Musk had called his friend Larry Page, the co-founder of Google. The engineer sat in stunned silence for a moment, but then he replied, given all that, he would come to work at SpaceX. That's really smart. There is another idea when you're promoting. Are you going to promote from within or from without? You know, that's dependent on you, depending on what's going on. I do think this is interesting, though.

• 1:23:25David Senra?

  There's this guy named Les Schwab, who built this really valuable chain of tire companies in the Pacific Northwest. I actually found out about him because Charlie Munger is like, hey, you should read this biography. He said it in, he didn't say it to me personally. He said it to, in like one of the Berkshire meetings, that to study, Les Schwab had one of the most, one of the smartest financial incentive structures in any company that Charlie Munger had come across. So this is what Les Schwab did. He did not want to hire from, he didn't want to hire other people from other companies because they might come with bad habits. He liked to train his own executives. And so he says, in our 34 years of business, we have never hired a manager from the outside. Every single one of our more than 250 managers and assistant managers started at the bottom

• 1:24:10David Senra?

  changing tires. They have all earned their management job by working up. And then another thing, if you're going to hire the best of the best in A players, their A players don't like to be micromanaged. And so this came in Larry Miller's autobiography called Driven. He owns like, he owned like 93 companies all throughout Utah, car dealerships, movie theaters, all kinds of crazy stuff. But he also owned the NBA team, Utah Jazz. And what was fascinating is he's trying to recruit Jerry Sloan as the coach at the point. And Jerry Sloan would only take the job on one condition, and I really like it. I really like this idea. If you hire me, let me run the team and business, right? That's what you're hiring me for. One of the best things we had ever done was hire Jerry Sloan as coach. At the time, he said, I'm only going to ask you for one thing. If I get fired, let me get fired for my own decisions.

• 1:24:55David Senra?

  If you hire me, let me run the team/business. Here's another idea. From Thomas Edison that I think is fascinating. Really, the way I think about a founder is like you're developing skills that you can't hire for. You're going to hire for everything else, but you shouldn't be hirable. And Edison wasn't. Edison, expressing his views on the preeminent role of applied scientists, which that's what he considered himself, coined the expression, "I can hire mathematicians, but they can't hire me." And so when I read that paragraph for the first time, the note I left myself was, "Develop skills that you can't hire for. Capitalism rewards things that are both rare and valuable." Estee Lauder would give you advice that you need to hire people aligned with your thinking and values. Hire the best people. This is vital.

• 1:25:40David Senra?

  Hire people who think as you do and treat them well. In our business, they are a top priority. So this idea is like, that seems kind of weird. Like hire people who think like you. There's obviously not one right way to build a business. I think that your business should be an expression of your personality and who you are as a person at the core. And so I think there is an art to the building of your business. And the reason I use the word art, I don't mean in like a hoity-toity, you know, pretentious manner. That's not me at all. I don't even care about art at all, really. I mean that you're making decisions not just based on economics. Like there are non-economic important decisions based on how you're building your business.

• 1:26:21David Senra?

  Like you could probably make more money doing a decision A, but decision A goes against who you are as a person, or you just don't like it, or it's just not as elegant or beautiful. And so therefore you don't do it. So that's what I mean about, you know, hire people who think as you do. And for whatever reason, when I read Estee Lauder say that, I was like, okay, that there's like this art to what she's doing. One thing that's going to be helpful in recruiting, this comes from Peter Thiel. I think this is the book Zero to One. Understand that most companies don't even differentiate their pitches to potential recruits into hiring. So therefore like they're just going to buy, as a byproduct of that, you're going to wind up with a lower overall talent base. And so he says, "What's wrong with valuable stock? Smart people are pressing problems. Nothing. But every company makes these claims. So they won't help you stand out.

• 1:27:06David Senra?

  General and undifferentiated pitches to join your company don't say anything about why a recruit should join your company instead of money, instead of many others." So that idea of like your pitch. Your actual, he would tell you, you shouldn't be building an undifferentiated commodity business. But even above and beyond that, like the mission that you're trying to engage everybody to join you in. That pitch, that sale you're trying to make to potential recruits should be differentiated. It should not, if that person's applying to five other jobs, there should not be like, it's like, they may not like your mission, they may not like your pitch, but they shouldn't be able to compare it to anything else. Another quote from Nolan Bushnell, "Hire for passion and intensity." That's what he would do, or that's what he did when he found Steve Jobs.

• 1:27:48David Senra?

  "If there was a single characteristic to separate Steve Jobs from the mass of employees, it was his passionate enthusiasm. Steve had one speed, full blast. This was the primary reason we hired him." And one thing all these founders have in common is that he know how important hiring is. And when something's important, you do it yourself. This is again Elon Musk on hiring. He interviewed the first 3,000 employees at SpaceX. That's how important it was. "One of Musk's most valuable skills was his ability to determine whether someone would fit his mold. His people had to be brilliant, they had to be hardworking, and there could be no nonsense. There are a ton of phonies out there and not many who are the real deal," Musk said of his approach to interviewing engineers. "I can usually tell within 15 minutes and I can for sure tell within a few days of working with them." Musk made hiring a priority.

• 1:28:33David Senra?

  He personally met with every single person the company hired through the first 3,000 employees. It required late nights and weekends, but he felt it was important to get the right people for his company. And then to close on this, we started with Steve Jobs telling us why it was so important and why it should be a large part of how you spend your time. And now we'll close with what you do after. What do you do after you hire the person? And this is what he says, "It's not just recruiting. After recruiting, it's building an environment that makes people feel they are surrounded by equally talented people and their work is bigger than they are. The feeling that their work will have a tremendous influence and is part of a strong, clear vision." So that is the end to that 20-minute mini-episode. I just re-listened to the whole thing.

• 1:29:16David Senra?

  And it really does, I think, it's a perfect explanation and illustration of why I think Founder's Notes is so valuable. Because some of those books I haven't read in five, six years. And just the ability to have a searchable database of all these ideas, like this collected knowledge of some of history's greatest entrepreneurs to reference and then contextually apply to our own businesses. It's nothing short of, like, it's magic. That's really the way I think about it. I think it's a massive superpower. It gives me a massive superpower. I couldn't have made the podcast without it. I also think if you have access to it, it'll make your business better. And so if you're already running a successful business, I highly recommend that you invest in a subscription. And you can do that by going to foundersnotes.com.