#327 Ted Turner

What I learned from reading Ted Turner's Autobiography. ---- Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes ---- Listen to Art of Investing #4 David Senra Lessons from the Founder Historian. ---- (9:00) My net worth dropped by about 67 million per week, or nearly 10 million per day, every day for two and a half years. (10:00) Once to drive home a point about the difficulties of attracting good loyal employees he told me: Jesus only had to pick 12 disciples and even one of those didn't turn out well. (10:00) Early to bed, early to rise, work like hell, and advertise . (11:00) Total Recall: My Unbelievably True Life Story by Arnold Schwarzenegger. (Founders #141) (13:30) The problem isn't getting rich, it's staying sane. — Charlie Munger (17:00) I learned a lesson that would stick with me throughout my career. When the chips are down in the pressure's on it's amazing to how creative people can be. (20:00) My father always maintained many of the different billboard businesses as separate legal entities. (He didn’t want to dilute ownership of his main company and separate entities allowed for periodic reorganization to offset capital gains liabilities. (20:30) When you own an asset your job is to maximize its value. (23:00) He combines the assets he has in a way his competitors can not. (24:00) The more I learned about TV stations the more I realized that ours was a disaster. Of the 35 people who were on the payroll when we took over only two were still there a year later —the custodian and the receptionist. (25:00) Ted Turner believed in the power of television more than almost anybody else. (30:30) My dad taught me early on that longterm relationships with your customers and partners are very important. You never know how the guy who you're friendly with today might be able to help you tomorrow. (31:00) Cable Cowboy: John Malone and the Rise of the Modern Cable Business by Mark Robichaux. (Founders #268) (32:00) What other people in his industry sees as a threat, Ted sees as an opportunity. (37:00) These issues were all unchartered territory. All of us, the regulators, the broadcasters, the program suppliers and the leagues were sorting things out on the fly. I was working as hard as I could. I'd go all out during the day, working on sales, distribution, regulatory issues, whatever the battle happened to be, and I'd worked right up until it was time to fall asleep. I had a pull down Murphy bed in my office and I would literally work until the point of total exhaustion. Then I'd put my head on the pillow at night worried about problems. Then I'd wake up and spend the entire next day trying to solve them. (44:00) One of the most important ideas in the book is the power of Belief: Clearly the company for whom the economics of 24 hour news would have made the most sense with a big three broadcasters. They already had most of what was needed: studios, bureaus, reporters, anchors. They had everything but a belief in cable. (45:00) I'm going to be a billionaire. And here's why. I'm going to put this station up on a satellite and I'm going to get a news thing going. Sports, movies and news, 24 hours a day, all over the world. He said this in 1976. (46:00) Henry Ford didn't need focus groups to tell him that people would prefer inexpensive, dependable automobiles over horses. Alexander Graham Bell never stopped to worry about whether people would prefer speaking to each other on a phone. (49:00) I'm always convinced that one of the reasons that I've been successful is that I've almost always competed against people who were bigger and stronger, but who had less commitment and desire than I did. For Turner Broadcasting this dispute meant everything. We had to win. (52:00) Ted’s Superstation idea is printing money: $177 million in revenue and $66 million in profit. This is in the 1980s! (53:00) It would be 13 years before we faced another 24 hour news channel. (57:00) He has a keen understanding of how to combine assets to create an advantage that no one else has. (58:00) The Gambler: How Penniless Dropout Kirk Kerkorian Became the Greatest Deal Maker in Capitalist History by William C. Rempel. (Founders #65) (58:00) Genius has the fewest moving parts. Never get into deals that are too complicated. ---- Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes ---- “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?

  Okay, so two quick things before we jump into this unbelievable episode on Ted Turner. I think the intro to this podcast is one of, frankly, just one of the most shocking intros that I've ever done. And it kind of sets the tone for Ted's just incredible, you know, multi-decade-long career. The first thing I want to talk to you about is I was invited to fly to Notre Dame to actually speak to a class called The Art of Investing. That class was actually recorded and turned into a podcast. So whatever podcast player you're listening to this on, if you don't mind, going and searching for Art of Investing, do me a favor, follow that show and then listen to episode number four.

• 0:42David Senra?

  The feedback on that episode has been incredible, but more importantly to you is that in about 90 minutes, I try to summarize the best I can about the main lessons that I've learned from this, you know, seven or eight years of intensive study on history's greatest founders. The second thing I want to tell you about is this collaboration that I have with Readwise. A bunch of people have already subscribed to this. So back in 2019, one of the co-founders of my favorite app, the best app I pay for, I literally could not make the podcast without it, is called Readwise. I've been talking about it for years. I've been tweeting about it for years. Every single other interview on other people's podcasts I go on, I talk about this. And I did this way before I knew I was going to partner with them on my own product. So I built this product with Readwise.

• 1:27David Senra?

  It's called Founder's Notes. You can see it at foundersnotes.com and it's founders with an S, just like the podcast. So foundersnotes.com. I got a DM from Tristan in 2019, and he was the one that made me aware of Readwise. It was perfect. And the reason it was perfect is because I have way more highlights and notes on my books than most people do. So I have over 20,000. Over the years, I've added over 20,000 highlights and notes for all the books that I read for the podcast to the Readwise app. And so, and the reason I do that is because I'm able to search everything that I've ever done. I use this every day. I search it every day. It really is the world's most valuable notebook for founders. So I contacted the founders of Readwise and said, hey, can we do this? Can we actually do this project together?

• 2:12David Senra?

  I want to make my own version. I want people to have access to everything that I see. Literally, if you sign up at foundersnotes.com, you are able to search and see every single one of my highlights and notes. It's exactly what I see. And so as an illustration of just one of the ways that I use this is at the end of this episode, I'm going to include this 20-minute episode I made for my AMA feed, where somebody asked me, like, how did history's greatest entrepreneurs think about hiring? And anytime I'm asked a question like that, anytime I'm making a podcast, what I do is I'm constantly searching my Readwise app, which is now available at foundersnotes.com. And it gives me a complete list of all the different ways

• 2:54David Senra?

  that history's greatest founders have thought about whatever subject I happen to be thinking about or working on or investigating. So at the very end of this episode, you're going to hear me speak for 20 minutes. And it's answering the question, how did history's greatest entrepreneurs think about hiring? And all that information came from me searching my notes and highlights, which is exactly what you can do with Founder's Notes. Keep in mind, this is made for founders already running successful companies. Those already running successful companies will get the most value out of this because it's a way for you to reference the thoughts and ideas of history's greatest founders. And then you know how to apply them to whatever's going on in your company at this very moment. The other thing I want to tell you, it is currently priced at 50% what it will be. So it's actually going to double in price.

• 3:37David Senra?

  And the reason I did this is because I'm adding a bunch of features that I think are incredible. And I have to build up the landing page and everything else. If you sign up now, obviously, as I add features, you don't have to pay any additional. I truly do believe it is the world's most valuable notebook for founders, and the value you get out of it will be incredible. You can get immediate access to over 20,000 of my highlights and notes right now by going to foundersnotes.com.

• 4:02David Senra?

  Turner Advertising Company was already one of the largest billboard companies in the South when my father put together a deal that would make it the biggest. My father had developed a close relationship with a successful billboard operator in Minnesota named Bob Nagel, and together they hatched a deal. They would go in, purchase General Outdoor, and then split it into two pieces. Nagel's company would take the properties in the North while my father would own the markets in the South. This merger would quadruple our revenues overnight. To afford the deal, my father had to finance nearly all of the purchase price. When the dust settled on the General Outdoor acquisition, my father moved into our new

• 4:43David Senra?

  headquarters as CEO of the biggest outdoor advertising company in the South. Dad was elated. This was the most energized I had ever seen him. Unbeknownst to all of us, this upbeat behavior came just as he was approaching the brink of a collapse. Almost overnight, his behavior became significantly more erratic and unpredictable. One day, he'd be high as a kite, and the next, he'd be in a state of abject depression. He had always been a fairly large man, but now he was putting on more weight and growing a big potbelly. After years of smoking two or three packs of cigarettes a day, he had developed a bad case of emphysema that, combined with his drinking and his weight gain, took a heavy

• 5:27David Senra?

  toll on him physically. It's clear to me now that reaching new heights in business and material wealth actually undermined his mental state. He told me a memorable story on this subject. He was preparing to enter Duke University just as the Great Depression hit. His parents lost nearly everything, and they struggled to tell him that they could no longer afford his tuition. At that young age, he consoled his mother, saying, "Don't worry, Mom. When I grow up, I'm going to work really hard, and I'm going to be a success. I'm going to be a millionaire, and I'm going to own a plantation and a yacht." He had achieved all three of these things. He said that now having checked off each of these goals, he was having a really tough time reevaluating things

• 6:11David Senra?

  and coming up with a plan for the rest of his life. He then told me something that I've never forgotten. He said, "Son, you be sure to set your goals so high that you can't possibly accomplish them in one lifetime. That way, you'll always have something ahead of you. I made the mistake of setting my goals too low, and now I'm having a hard time coming up with new ones." In addition to achieving all that he'd ever hoped to, this new acquisition seemed to trigger other insecurities in Dad. Seeing his parents lose everything in the depression created a deep-seated concern about going too far into debt. His post-acquisition interest payments were big, and the company needed large capital investments to continue its growth. The billboard business was doing well,

• 6:55David Senra?

  and he shouldn't have had trouble meeting his obligations. This was an irrational fear of losing everything, and it began to consume him. He tried to get his addictions under control by checking into rehab. They managed to curb his drinking and his smoking, but then he was also prescribed a variety of medications. My dad basically swapped alcohol and tobacco for prescription drugs. After years of grooming me to succeed him, all of a sudden, he seemed in a panic about the company's future. It was the middle of the week, and I was in Atlanta working. My phone rang, and it was my father calling. He said that he was calling to tell me that he was selling a large chunk of the company. I couldn't believe it. I was stunned. I tried to talk him out of it. I told him that the company was doing well,

• 7:39David Senra?

  and there was no doubt in my mind that we could make our debt payments. When it was clear I wasn't getting anywhere, my shock gave way to anger, and I said, "Dad, all of my life, you taught me to work hard and not to be a quitter. And now you're the one who's quitting. What happened to you? How could you do this?" Dad remained surprisingly calm and unmoved. I hung up the phone, dazed and disappointed. Just a few days later, I got another call. But this time, it was my stepmother. Dad was dead. After having a relaxing breakfast, my father walked up to his bathroom, climbed into the tub, and shot himself. I never thought it would come to this. I had lost my best friend. That is an insane excerpt from the book that we're going to talk about today,

• 8:24David Senra?

  which is Ted Turner's autobiography. It is called Call Me Ted. I want to start a few years before his father's suicide. Ted is around, this is, this is an insane story. There's so much that's going on that happens in this book. So Ted is around 24, 25 years old when his dad kills himself. He inherits his dad's company. The company is worth in like today's dollars at that time, something around $15 million. For the next 50 years, Ted Turner is going to work on this company. He's going to sell the company to Time Warner for $8 billion. And then a few years later, Time Warner is going to merge with AOL. Ted Turner's stock goes up to a value of $10 billion.

• 9:08David Senra?

  And then he winds up losing over the next 30 months, $8 billion. He has this funny line in the book where he says, "My net worth dropped by about 67 million per week or nearly 10 million per day, every day for two and a half years. Losing that much money so quickly might have been a record, but it obviously wasn't the kind that I was hoping to set." So his merger, his sale to Time Warner actually happens about 37 years in the future from where we are. His dad is still alive. He just, he's around college age. He'd been working for his dad's billboard company every summer and every year since he was 12 years old. So he's like, okay, I have a very complicated relationship with my father, but I need to stop delaying the inevitable and I'm actually going to work full time at the Turner Advertising

• 9:51David Senra?

  Company, which at this point in history is just an outdoor advertising company. Their sole focus is they have a bunch of billboards. And so Ted describes the education that his dad is giving him once he comes to work with his dad full time. "There were many days when he'd drive me to and from work and the entire ride, he'd only talk to me about the business. It was almost as though he gave me the business degree that he didn't get in college. He'd punctuate his lessons with funny stories or memorable expressions. Once, to drive home a point about the difficulties of attracting good, loyal employees, he told me, 'Heck, Jesus only had to pick 12 disciples and even one of those didn't turn out well.'" One of his favorite mottos was one that I've used for myself ever since.

• 10:33David Senra?

  Early to bed, early to rise, work like hell and advertise. That's a great line. It's funny, actually, that Arnold Schwarzenegger actually adopted that as his motto as well. He would repeat in his biography, early to bed, early to rise, work like hell and advertise. And so, one thing that sticks out about Ted Turner is, in his early life, his dad sent him to a bunch of, like, Christian military academies. And he was really trying to teach his son, like, self-discipline and a fierce work ethic. Ted is clearly being groomed to take over his dad's company. He's going into the company, and he doesn't want people to think that he's getting handouts. And this is the first time we see a hint that Ted is definitely a workaholic. Many times, he never leaves his office. He sets up a bed, he sleeps there, he wakes up, gets to work, he works all the time. And he does that later on in life, but he's also doing this as a 21-year-old.

• 11:18David Senra?

  "I was trying to do my best to do everything right. I would work the hardest, follow every rule, and seek excellence in everything I did. As the boss's son, I made a point to impress the other employees by being the first one to arrive every morning and the last one to leave at night." And so, there's probably about 50 pages that just deal with the relationship that Ted had with his father. There's a bunch of stuff in here. It's interesting that we're still, we haven't got to the point where his dad shoots himself, and then Ted's response is that he lost his best friend, because frankly, there was a lot of times where it was like, man, I wouldn't want my son to describe me this way. They had a very complicated, contemptuous relationship. His dad is definitely a control freak. His dad is definitely a dictator. Ted's own

• 11:59David Senra?

  kids would describe Ted that way as well. But at this point, when you're 21, he's like, I'm my own man, too. And so, he's actually having a conversation with his dad, because it's just reaching a boiling point, where his dad's just trying to control every single decision, personal or professional, that Ted is gonna make. And this is what he says to his dad. "Dad, it gets tough when you're involved in every aspect of my life. You tell me where I should live, who I should date. I'd like you to consider letting me be myself a little bit. In my business life, I'll do anything you say, but please, try not to bug me so much about my personal life. When I want advice, I'll ask for it. But if not, please let me try to work this out for myself." And the fact that Ted stood up for himself, told his Dad exactly who he felt and what he wanted to happen was really important because this was what happens next.

• 12:43David Senra?

  He actually gets a letter from his dad. Well, first he's driving him to the airport and his dad tells him, "Son, you're starting out where most men finish." Meaning here I was 21 years old, running a business. A few days after, I got a letter from him telling me what a great job I was doing and how proud he was of me. "My father was very sparing with his praise and nothing he ever did before or after that day ever made me feel as good." Within three years of that letter, his father would be dead. And so as I go over all the notes of this complicated deal he put together, the fact that he was abusing drugs and alcohol, the fact that he was out of rehab. There's a line that I heard from Charlie Munger one day that I've never forgotten.

• 13:24David Senra?

  And it's something that he's realized with human history, with a lot of like really successful entrepreneurs and executives. And he says that the problem isn't getting rich, the problem is staying sane. The problem isn't getting rich, the problem is staying sane. Ted's father got rich, but he was incapable of staying sane. So imagine you're Ted Turner at this point in the story. You're 24 years old, your father, who was your best friend, didn't say anything, didn't leave a note, went into the bathroom and shot himself in the head. So not only did you lose your best friend, but now you have to try to save his company. And what he's realizing is he had signed this deal to sell off these assets back to Bob Nagel the day before he killed himself. And he actually wrote it, it was a handwritten note.

• 14:09David Senra?

  And so from Ted's perspective, it's like, okay, well, my dad and Bob Nagel were friends. My dad was obviously not of a sound mind when he entered this agreement, considering that he signed it one day and then popped his top the next. "I'm gonna get out of this deal." But now he's a 24-year-old inexperienced entrepreneur going to a 60-year-old man that has built an incredible company, saying, "Hey, how can we get out of this deal?" And Bob's like, "Listen, I admire your father, I'm very sad that he died, but I'm not, I have no intention of letting you get out of this deal. This deal will continue and go forward." And so this is the first time in the book, we see some traits that Ted's gonna have his whole life. He likes to fight, he just does, he doesn't back down.

• 14:50David Senra?

  The giant conglomerates that this guy takes on in the early days of like the cable industry and the satellite TV industry is incredible. He's involved in multiple lawsuits. And so he's like, okay, well, this guy thinks I'm just some snot-nosed 24-year-old rich kid. He thought, oh, like, I'm gonna threaten his son. His dad's not here to save him. He's gonna back down. Ted doesn't do that at all. And so Ted's like, okay, let me go and actually read all of like this very informal agreement. And what he realizes is that Bob Nagel made a giant mistake, that he did not actually call for a non-complete clause for the employees of Ted's dad's company. And so Ted's idea is like, how can I severely diminish the value of this asset so Bob's

• 15:34David Senra?

  not gonna actually want it anymore? And so he says, I'm gonna jump his leases. So I didn't know anything about this. He says, "In the billboard business, a company's leases are its most valuable assets. And if you really wanted to mess up a competitor, jumping the leases was a great way to do it." So what does that mean? Most of these leases, so what the billboard companies did, right? They'd go around to people that owned a bunch of land next to highways or high-traffic areas. They'd go knock on the door and say, "Hey, we'd like to put up a billboard here. In return, we'll pay you..." You know, this is 1950, so it's like, "We'll pay you $25 a month or $50 a month. You can enter into these agreements with us. But guess what? If you change your mind, you can always cancel a lease within 60 to 90 days." And so Ted's like, "Okay, so I'm gonna jump all these leases.

• 16:18David Senra?

  I'm gonna use the exact same people." So the exact same group of people that signed up the leases are now gonna contact these people again, but with, from a different company, and say, "Hey, I know you can cancel in 60 to 90 days. You're getting paid $50 a month or $25 a month. Guess what? We're gonna pay you $75 a month if you'll switch that lease to our company." So for the next few weeks, all Ted Turner and his team do is they go and work the phones, and they're feverishly just renegotiating and jumping all of these leases. And over, in a matter of a few weeks, he did significant damage to these assets that Nagel wanted to acquire. And so- Finally, Niggle figures out what he's doing. And so there he comes up with a deal.

• 16:59David Senra?

  He's like, OK, if you pay me $200,000, then we can cancel the deal. And Ted's like, OK, great. I agree right away. Here's the problem. Ted doesn't have $200,000. This is another main theme from his career. He's constantly agreeing to deals. Then he realizes, oh, I don't have that money. So he's got to constantly get really creative on how to raise the funds. This gets really complicated later on. This is like a more simple idea. So he had this idea where he's like, OK, we have this agreement. I'm going to pay him 200 grand. I'm going to keep all the assets that my dad was trying to get rid of the day before he committed suicide. But I need to find a creative way out. And so this is what Ted says in the book. Let me read this part two. I learned a lesson that would stick with me throughout my career. When the chips are down and the pressure is on,

• 17:42David Senra?

  it's amazing to see how creative people can be. And with a 90-day clock ticking, so Bob gave him 90 days to come up with the money, we had to get really creative very fast. So now this is very interesting. He realized, well, Bob's a very rich guy. He makes a lot of income at this point in American history. The top, he was at the highest bracket, like income tax bracket. And so at this point, he's like, well, if I pay you 200 grand in cash, that's taxed at a 90% rate. So you wind up with, what, $20,000? And the government, the US government gets 180,000. Obviously, you don't want to do that because this is being treated as a short-term capital game. And therefore, it's taxed as ordinary income, right? And so he goes, well, what if I actually give you stock in Turner Advertising,

• 18:27David Senra?

  which is the company that he inherited from his dad? And then that way, you can hold the equity as long as you need to to shield yourself from any heavy tax that you would get on a short-term game, gain. And Bob's like, OK, I accept that offer. So I want to jump to another example where Ted always has to get really creative when he's financing these deals. And something to know about him, he's acquisitive by nature. If he has billboards in Georgia, he wants to expand into Tennessee. If he has billboards, he wants to get into radio. If he has billboards in radio, he wants to get into billboards, radio, and TV. If he starts buying the Atlanta Braves, then he wants to also own the Atlanta Hawks. This is something he does his entire life. He's very, very acquisitive. At this point, he says, I'm eager to expand. I found a very profitable billboard company in Chattanooga, Tennessee,

• 19:12David Senra?

  but the price was $1 million. Great, I'll buy it. Here's the problem. I didn't have that kind of cash. So he convinces the seller, right? This is how he makes the acquisition of No Money Down. He's like, will you finance 75% of the purchase price over seven years at a very high interest rate? He says, yes. Then he goes to a bank that's actually looking to expand their investments in the South, and they lent Ted the rest of the money in return for equity in the Chattanooga company. And so this is another important thing that he learned from his dad. His main company, right, is Turner Advertising. If you're going to go and acquire another company, don't just fold that into Turner Advertising. You want to keep that as a separate entity. He says, my father always maintained

• 19:54David Senra?

  many of the different billboard businesses as separate legal entities. And so in this deal, this is important. Why? For two reasons. He could offer the bank the equity in the Chattanooga company without diluting his ownership of the main entity, which is Turner Advertising, okay? It also allows for periodic reorganization to offset potential capital gains liabilities. And especially at the time, this is still important to this day, but it's really important when your top marginal tax rate is 90%. So he continues to expand by acquisition, but he's not content being the biggest billboard company around. He wants to get into new and exciting industries. So the first thing he does, he's like, okay, I want to go and buy a bunch of radio stations. Now, this is very important because he repeats multiple times throughout the book

• 20:38David Senra?

  that when you own an asset, your job is to maximize its value. And what Ted is really great at, this may be the most important idea other than he failed to, he's a dictator. And if you're a dictator, you want to listen to James Dyson when he said one of the most important things is retention of total control. Ted is a dictator, but then sells his company and then loses control and is very frustrated when he watches other people take $10 billion of his assets and drive it into the ground. And so that was another big mistake. But other than that, I think the most important idea in this book for me. Is that he's really great at combining his assets in a way that his competitors can't. So you can think about this as like you find an advantage by doing only what you can do. And so there's a bunch of people that own radio stations. That's great.

• 21:22David Senra?

  Not many people own a bunch of radio stations and also own a billboard company. And so this, this idea, what he's about to do here, he also does when he gets into TV, which we're going to jump into a minute. So he starts buying up these radio stations. He's like, well, I'm just not going to like, if I'm going to buy my first radio station, like, what is the advantage that I have that other people don't? I should buy a radio station in the same market where I already have billboards. So there's two things that happen here. One, he, he benefits from an efficiency in sales and promotion because he's selling ads. It's the same thing. Like if I'm selling ads on a, on a billboard, right? My sales team can sell ads on billboards. My sales team, the same very sales, the very same sales team can also sell ads in a radio station.

• 22:05David Senra?

  So that was fascinating, but even better is what he does. So let's say I own a radio station, right? And I want to compete. What do you want? You want more listeners than the other people. It's, it's, this isn't podcasts, right? It's not like, oh, anybody all over the world can listen to it. You're listening to it in a specific geog- you're constrained by a specific geographic location. So therefore it is a much more zero sum game. So I want to take listenership, right? Away from the people because we're fighting over, let's say, all the residents of Atlanta. And I want to beat the other radio stations. And so what happens is like, okay, well, you have a radio station. I have a radio station. We're competing against each other. But guess what? I have the, the biggest billboard, outdoor billboard and outdoor advertising company in this area.

• 22:49David Senra?

  15% of my ad sales or my ad inventory on my billboard company, every month goes unsold. Guess what I'm going to do? I'm going to put ads for my radio station. I'm going to use that unsold inventory because it has no cost to me, right? I'm going to put the ads for my radio station on these billboards. That's going to increase listenership. I'm going to have more listeners than you. I'm going to make more money in ad revenue. Eventually I can acquire all these other radio stations. He does this exact same idea in local TV stations before he gets into satellite and cable TV as well. And again, it comes from this main idea. He does this in a variety of ways. He's combining the assets that he has in a way that his competitors cannot.

• 23:32David Senra?

  And he's also good at taking ideas that worked in one industry and transferring to another. He doesn't even like, like, if you really think how crazy this is, right? 90%, uh, maybe not, 80% of the book is his career in TV. He says, "I never developed a passion," this is why, "I never developed a passion for radio the way I later would for television." This is why he's gonna start getting into the TV business. He thought the TV business was way more exciting and he says you should always bet on the medium that looked like it would grow the fastest. And obviously, TV is gonna grow a lot faster than radio is from this point in history. And so he's like, "Well, listen, if it comes down to buying a lousy radio station or a lousy TV station, then the, the, the choice is easy." Because I wanna bet on the medium that looked like it would grow.

• 24:16David Senra?

  And so when he buys this local TV station, you're only watching if you're in and around the Atlanta area. This is before, remember, there's, there's, we're decades before the internet, for God's sake. But this was before cable and satellite TV. That does not exist. This is all like an antenna. So he does the exact same thing here. He's like, "Okay, well, I still have this, you know, 15% of the billboard inventory. It's gonna go unsold, so I'm just gonna put ads for my TV station on these billboards, just like I did when I only had radio stations." And when he says that these are lousy, right? These are lousy TV stations, he means it. Listen to this. This is the first channel that he buys, the first station he buys. "The more I learned about TV stations, the more I realized that ours was a disaster.

• 24:58David Senra?

  Of the 35 people who were on the payroll when we took over, only two were still there a year later. The custodian and the receptionist."

• 25:08David Senra?

  One of the, the, the most important things about Ted Turner and understanding his career is that he believed in the power of TV. Specifically, if you could have a 24-hour station, or if you could reach people all over the world. If you were not constrained by, you know, just the, the small, being in one small city, right? He believed in the power of television more than almost anybody else. Remember, he built a media company. All of his money is going to come from ads. And so this is the first hint that he gets that TV can be an incredible distribution channel. And so one of the people that are paying him to do a show on their TV is these televangelists that are going to wind up becoming infamous many decades into the future. It's Jim and Tammy Faye Baker.

• 25:53David Senra?

  Jim is known for, he becomes one of the largest televangelists in the world and then gets caught, I think, with a bunch of hookers and he like cries on TV and stuff. This is like a very well-known event that happened, but this is multiple decades before that happened. And listen to this. "The only show that aired live from our studios was a religious program hosted by a young couple named Jim and Tammy Faye Baker. Well before they went on to national fame, they got started with this local show and before long, they were bringing in more money in a week than the entire station made in a month." Okay, so at this point in Ted's career, he is, he owns one. There's only two independent TV stations in the Atlanta area. He owns one of them. The other one is going to go out of business.

• 26:35David Senra?

  Remember, he said they're lousy businesses, especially when there's almost no financing. So when you get in a jam, it's really hard to get financing. But what happens here is a blessing because he's like, okay, well, it helps if I can be the only one bidding because you're buying content. And at this time, it is restricted by your geographical location. That means that you can't bid on syndicated programming from, say, MGM, right? MGM Studios for Atlanta unless you own a show, unless you own a station in Atlanta. So there's only two previous bidders. Now the other bidder is gone. And so he's the only buyer in this entire market. And so what Ted's also really good at is he happens to understand, he spends a lot

• 27:16David Senra?

  of his time thinking about, thinking about and understanding the financial incentives of the person that he is buying from. Again, he understands the financial incentives of the person he is buying from. And so he's like, well, if the other station's gone, no one else in Atlanta is buying old movies. And why is that important? Because there's thousands of old movies and thousands of TV shows that no one else is competing to air them on in the market that right now he finds himself with the temporary monopoly on, right? And these old films were long since fully amortized by the studios and they don't have to pay any of the talent. So that means that any revenue that is generated by selling these old movies to Ted drops straight to their bottom line.

• 28:01David Senra?

  And so as a result of this, he's able to get great pricing. He buys about every single movie that he can get his hands on and he strikes long-term deals whenever possible because this isn't going to, this series of events, like this advantage is going to change as soon as there's another bidder in the market. So the long-term part of that is actually really important. And he's doing business with MGM, Warner Brothers, Paramount, MCA, all of them. And then he also has sports. What he realizes that now that we're in the 1970s, that local sports is huge. And so he winds up being the one he bids on and he winds up broadcasting all the Atlanta Braves baseball games. And so this is an idea that you and I've talked about over and over again, the fact that relationships run the world. This is how he winds up buying the Atlanta Braves and why.

• 28:46David Senra?

  Remember, his channel is the one that carries the Braves games. And so he's like, listen, the ratings for the local Atlanta Braves games, I think is the highest thing, highest rated show that he has on his TV network, or his TV station, rather, right? But the problem is like that fluctuates whether the team is winning or losing. Team wins more games, obviously more people tune in, right? And so he goes to the president of the club. His name's Dan. He's like, Dan, I consider us to be partners. We need to add some more excitement next year. What are you going to do to get the team on track? And Dan tells him, well, I'm not going to do anything because I'm going to sell the team. And Ted's freaking out. He's like, what are you talking about? Who are you going to sell it to? And Dan says, I'm going to sell it to you. And the reason I say relationships run the world is because, one, it's in these, you see this in these biographies over and over again, but it's also something that his dad told him a long time ago.

• 29:31David Senra?

  He says, my dad taught me early on that long-term relationships with your customers and partners are very important. You never know how the guy who you're friendly with today might be able to help you tomorrow. And so what's happening? He's like, they're offering me a first look chance to buy the franchise. And this is another example where Ted does not have the money. And this is what he says. It's like, it doesn't matter. I don't have any money. I have to do this. The Braves were a key asset and I had to go for them. By owning the team, I could control its long-term TV rights. They were too important to his TV station. And so they're like, okay, we want $10 million for the team. Could you imagine buying a professional sports team for $10 million, by the way? And so this is where he has to get creative. He's like, okay, I can give you a million dollars down and then you give me nine years to pay

• 30:15David Senra?

  the rest at a high interest rate. And they say, yes. Another smart thing Ted does. So he understood, this is very fascinating. We're going to get into literally the invention of the cable TV industry. The best book I've read on this is actually Cable Cowboy. It's actually episode 268, if you haven't gone back and listened to it. It tells the story of John Malone. Oh, that's another thing. The remarkable thing about this book is all the different people that, at the time, they're still coming up, but these people are like world famous. A lot of these people now are in their 80s. Most of them are multi billionaires. I love reading stories about people, like these intersection of these like A players that all either know each other, sometimes they collaborate. Like, let me give you an example. Ted Turner goes to a meeting. There's four people in the meeting.

• 31:00David Senra?

  Ted Turner, John Malone, Warren Buffett, and Bob Iger. And this is before Bob Iger was the CEO of Disney. John Malone's in this book all the time because he saves Ted's ass a couple of times. But also, the book is structured in a way where like Ted will be telling a story. And then there'll be other people throughout his life that commentate on what was also taking place at that time. And some of them, you know, were like, I have a little different view on that. And so John Malone, what I think I'm going to do is actually, you could buy the Kindle version of the book and just search John Malone and just read all of like Malone's excerpts. And I think it's actually, that's even worth the price of the book alone. There's just a million like really interesting people that are spread throughout the book. That was one of my favorite parts of reading the book. But let me get back to this, though.

• 31:45David Senra?

  What was fascinating is right now Ted is considered a broadcaster. He owns a TV station. You can only get access to that TV station when, if you have like an antenna. And yet, this is the, the brand new cable TV industry is going to be seen as a threat by Broadcasters. Ted is a broadcaster and he realizes this is not a threat. This is an opportunity. So he says, I also saw that people were signing up for a new service to get local stations. They were unable to tune into with their antenna, which is the basis of his TV business at this point. This technology was often referred to as CATV,

• 32:26David Senra?

  which stood for Community Attenna Television, or more simply, cable TV. Ted thinks this is a massive opportunity. So anytime he thinks there's a massive opportunity, Ted does the same thing. He goes and tries to build relationships with the good, with the main players in that industry. So he goes and becomes friendly with the cable TV operators. And this is hilarious because this is what they tell him. They told me that I was their first friendly broadcaster that they had ever met. Back then broadcasters saw cable operators as the enemy. For many years, local TV stations had a monopoly and they viewed cable operators with fear and suspicion. Why? Because broadcasters say, hey, how dare you import distant stations? I have a local monopoly and you're coming over the top.

• 33:11David Senra?

  And Ted thought that was a stupid position to have because he's like, no, you're not coming over the top. You're greatly expanding my audience. Now, instead of 20,000 people watching the show or 100,000 people watching the show, there's going to be millions of people watching my shows. So at this point, he starts the first, they call it a superstation. So he's credited with creating this, like the superstation concept. He was the first person. This is actually going to be TBS, what we know as TBS. And he's always on the forefront. He's so, usually so far ahead of other people that whether it's financial institution like banks, don't understand how to loan them money because they don't understand what he's doing. Or in many cases advertisers, they're not comfortable. And so this was fascinating. Because he couldn't convince traditional advertisers to buy ads,

• 33:55David Senra?

  he finds small companies with products to sell and then gives them distribution. So the thing that saves his ass until he can bridge this gap is the fact that he does direct response. So think about, you've undoubtedly seen these. Let's say you are a manufacturer of steak knives and you're a small company. You go on TV and you, you know, sell your, sell your steak knives in like a two-minute commercial, like Billy Mays style, right? These are the small companies that he chooses to partner with. And here's the thing, this is again, he's always proving his concept. He knows that TV can be an incredible distribution channel because back when nobody was watching his station, he saw Jim and Tammy Faye Baker make all this money. And it's the same thing that's happening now when he expands to this region.

• 34:38David Senra?

  He's like, of course, the bigger the market, of course, you're going to increase your sales. So he says, "We managed to sell a lot of merchandise. Direct response revenue would prove to be vital for us while we worked to convince traditional advertisers that we were well worth considering." And remember, I said he was acquisitive. He sees this article and it mentions that there's this brand new company called Home Box Office, HBO, that is going to be a new pay for movie channel that's going to distribute their signal not by antenna, not by cable, but by satellite. This is going to be both, one, a massive opportunity and a big headache because he's buying content from other people. Those people that are selling the content usually like to sell it by, again, they're geographically constrained. He's like, "No, no, no.

• 35:22David Senra?

  Not only am I don't want to just put in like one little city or one little state, I'm going to broadcast this all over the world and people flip out." So I'll get there in one second. Now, this is also interesting, and it is John Malone's take on Ted Turner at this point in Ted's career, that he was impervious to roadblocks that would stop people from even starting. So he says, this is John Malone, remember, John Malone describing Ted Turner. "He always had this kind of basic, almost childish logic about him that refuses to accept artificial impediments. I think one of his biggest secrets of success over the years is that the things that most of us would sit there and ponder, all these regulatory and legal reasons why it might not be something you could do, and Ted would just say, 'Oh, hell, you can overcome those

• 36:05David Senra?

  kind of things,' and he'd just go and do it." And so he's making enemies everywhere. He's fighting with, he's like, "We managed to alienate the Hollywood studios, the sports leagues, the broadcast networks, and the local stations all over the country." And so he has to fight this actually in Washington. There's going to be a bunch of lawsuits, a bunch of regulations. This is what I mean, he's going to describe what he did. This is one of the most difficult periods of his life, but this also speaks to this obsessive, workaholic nature that he has. There is a bunch of- Stuff in the book about his childhood, which was crazy, about the way he went through multiple divorces, talks about, you know, wasn't really around when his kids were there. If you're interested in that, I'm going to skip over that. I want to focus on really

• 36:49David Senra?

  how he built his business, but there is a lot of that in the book and it's well worth reading. But this is, he's describing the hardest part of, period of his life. These issues were all uncharted territory. All of us, the regulators, the broadcasters, the program suppliers and the leagues, the sports leagues, were sorting things out on the fly. I was working as hard as I could. I'd go all out during the day, working on sales, distribution, regulatory issues, whatever the battle happened to be, and I'd work right up until it was time to fall asleep. I had a pulled down Murphy bed in my office and I would literally work until the point of total exhaustion. Then I'd put my head on the pillow at night, worried about problems. Then I'd wake up and spend the entire next day trying to solve

• 37:30David Senra?

  them. And so in many cases, the solutions he comes up with to these problems is very creative. And so, one of the problems he has at this point, is there's this company called Nielsen. So Nielsen is the one that measures viewership for regular TV stations. At this point, remember, he's one of the first, I think he is the first superstation on a satellite. And they're like, hey, we're not going to measure your audience. We can't document your audience outside of Atlanta. You know, you're spread out all over the place. It's too expensive for us to do it. And if they don't do it, then he can't sell ads against it because he can't prove how big his audience is, right? They, they literally turn over the Nielsen data to the advertisers and that's what they sell their ads against. Now, here's the problem. He's like, yeah, but this is bullshit. This is not why you're

• 38:12David Senra?

  saying that. Your real motivation is because your customer base is actually the broadcast networks and the local stations, and I'm competing them and outcompeting them with the satellite. And so eventually, he's going to threaten to sue them. They're going to wind up acquiescing to his demands. But before then, he's like, this is a problem. I need to prove, like essentially, his problem is like, okay, how can I prove that people all over the country are watching my superstation if I don't have any analytics? And this is where he had that blessing in disguise, where he couldn't, or earlier in the story, he couldn't sell regional, nobody would buy regional advertising, right? So he's like, oh, I gotta go to direct response. And he realizes, oh, okay. Well, since we were running so much and we're relying on direct response so much, we know where our customers are because they send in personal checks.

• 38:56David Senra?

  And the postmark tells us where the check comes from. Check this out. Direct response advertising could be a solution to our problems. Since many of our orders for direct response products came in the form of personal checks mailed directly to our Atlanta offices, we could tell where they were coming from based on the postmarks on the envelopes. So he has his team. He says, okay, I want you to put all the checks from our customers into one of two piles. You have the Atlanta pile, which is the market that Nielsen wants to verify, and the non-Atlanta pile. And very quickly, he realized, oh, my God. The non-Atlanta stack grew to such a size that it dwarfed the size of the local one. Obviously, I have a lot larger audience outside of Atlanta than I do inside of it.

• 39:41David Senra?

  And so he's doing anything he can to get an advantage and to keep his company alive. But keep in mind, there's usually a very slow lag. And he describes this part of human nature. It's like, no one wants to be the first person that does something, but once other people do it, a lot of people flood in. It was nearly two full years before we got any meaningful national buys. What we were doing was so new and so unique that everyone was slow to adapt. But once a few of the biggest players validated our concept, the rest began to follow. And then he's constantly looking for these ways to differentiate himself from competitors. I remember, so when I was a kid, there was this thing called TV Guide. TV Guide was literally a physical book that would tell you what's on TV. Eventually, it got digitized. And essentially, they copied what was in the book onto TV.

• 40:25David Senra?

  But what I couldn't understand is like, when I'd wanna watch like TNT or TBS, which Ted Turner owned. They would start their programs at a different hour. And I didn't know why. And so Ted's gonna explain why. And it worked because this worked on me. So he says, "The listings in the TV guide for every other channel started and ended at the top and the bottom of the hour." So it was very common for TV. Everything starts at seven, everything ends, the next show starts at eight. Everybody does it the exact same way. And he's like, "Okay, well, if we can extend a program through the end of the hour," and then we'd start, he pushed the start time back five minutes. I think this was, TBS was five minutes. I thought, when I was younger, one of them was five and 15 minutes, but maybe it was all five. So he's describing why he did this. "We're gonna extend a program through the end of the hour and start the following one at 7:05."

• 41:09David Senra?

  "I envisioned that people watching our competition would start flipping around at the end of their shows. And while the other channels would all be running commercials, we'd be showing programming." "The other benefit of this strategy was that we got our own little slot in every program guide." "A group of channels would be listed together at the top and bottom of the hour, but we were by ourselves on the 05 and 35 minute mark." "We tried this and immediately our ratings improved." And so, again, this constant trial and error. Another thing that he does, that he gets criticized for later on, that I thought was actually really smart, is he did heavy investments. Remember, he's like buying all these old movies, right?

• 41:53David Senra?

  He's syndicating all these old movies. He's using them in a bunch of different formats, a bunch of different TV stations that he owns. And there's a new technology comes along that would recolorize them. This is like decades ago, and it was very expensive. He'd have to pay like 200 grand per every, every single film. And you're like, "Oh, you wanna take this black and white film and you wanna turn it to color? Great, Ted, that's gonna be 200 grand." And no, everybody's like, "You're out of your mind, it's way too expensive." People considered it was like, like, almost like graffiti because why are you doing this? It was meant to be black and white. Ted didn't care about any of that stuff. And what happens, he's just like, okay, I could run the black and white version of that movie. And then I could invest 200,000. Then now I have the color version and I'd run that exact same movie. One is in black and white, one is in color.

• 42:37David Senra?

  The color one would get six times the amount of viewers. So in other words, it would pay for itself very quickly. Because you've got six times the audience. Ted is always paying attention. Ted is always adaptable. And that leads him, I think if most people ask like, what is Ted Turner known for? I think it would be the invention of the first, the world's first 24 hour news station, CNN. And what was fascinating, he's like, well, that idea was rather obvious. And why was it obvious to him and other people? Because he's paying attention to this industry. He's obsessed with this industry. And he's like, well, what came before CNN? Well, you had HBO, which is a 24 hour movie network. People love that. Then you had ESPN, which is a 24 hour sports service and people love that. Why wouldn't there, there should be a 24 hour news channel?

• 43:22David Senra?

  And he thought about this idea for five years before he winds up doing it. Because he's like, obviously, the big three networks, ABC, CBS, NBC. They have tons of reporters. They have news bureaus all over the world. They have all these assets that I don't have, that I have to build to do. Obviously, they see that we should just take those assets, produce more content. So instead of doing, they, they did news four hours a day at this time. Let's add an extra 20 hours. We're going to do it 24 hours a day. And of course, we're going to grow a giant audience. And so for five years, Ted Turner has this idea. He's just waiting, waiting, waiting, and they don't do it. And that leads us to one of the most important ideas in the book, the power of belief.

• 44:03David Senra?

  Clearly, the companies for whom the economics of 24 hour news would have made the most sense were the big three broadcasters. They already had most of what was needed. Studios, bureaus, reporters, anchors. They had everything but a belief in cable.

• 44:20David Senra?

  And this is such an important point because over and over again, in the early days of his career, they would call, he's like, Ted Turner's nuts. This guy's crazy. He's not nuts. He's not crazy. He's early. He sees something that you don't see. Listen to this. He's 38 years old, and this is how much he has a belief in cable, in cable TV. He's on a plane, and he's like, I'm gonna be a billionaire. He's saying this in October of 1976. He's 38. So it says, the guy's telling the story that's sitting next to him. We managed to get seats together on the plane. He pulls out a copy of the Delta Airlines magazine, and he turns to the map of the United States and starts explaining to me how he's going to be a billionaire. Make sure you buy my stock. I'm going to be a billionaire, and here's why. I'm going

• 45:04David Senra?

  to put this station up on a satellite, and I'm gonna get a news thing going. Sports, movies, and news, 24 hours a day, all over the world. He said that in 1976. That is incredible. I haven't even mentioned yet the fact that this guy is a voracious reader, and you already know, before I say this to you, what do you think he's reading? What do you think he's reading? You know what he's reading. He's reading history. He's reading biographies. He's constantly, I don't know if I'm gonna, there's some highlights on this, but he's constantly comparing stuff he read in books, like from history to what's taking place in his, in his life. And I love this part. He's like, I'm often asked if we ever did any formal research on the viability of a 24-hour news, or 24-hour cable news station.

• 45:48David Senra?

  My answer is, no. I had spent over five years thinking about it. Henry Ford didn't need focus groups to tell him that people would prefer inexpensive, dependable automobiles over horses. Alexander Graham Bell never stopped to worry about whether people would prefer speaking to each other on a phone. If viewers liked watching news on television, why wouldn't they want the option to do it any hour of the day? And so when I say that I think the highest order bit is his belief in cable, and I can prove to you that he believed it, because you have all these people saying Ted Turner was like, literally jumping up on desks, and people were like, literally like screaming, that people didn't understand what he saw. But- His actions show this.

• 46:33David Senra?

  And he's like, you know what? I don't have enough money or experience. Uh, I believe in this idea of CNN so much. I'm gonna sell off all my other assets to fund this unproven idea. And so this is where it gets really crazy, what he was willing to do, uh, to make this dream happen. He says, listen, we're breaking one of the golden rules of startups. We're launching a business and we know, we know we do not have sufficient capital. It's not gonna be profitable enough on the money we have. So he's like, okay, I gotta figure out what the hell I'm doing. And again, I, like I said before, he's always so far ahead. There's no lenders or investors. They don't understand what he's doing. So like, he's like, okay, my only option is like, I gotta sell assets. And I'm gonna put all these profitable assets that would make me a very rich man if I just did that.

• 47:14David Senra?

  And I'm going to sell them all, take that money and maybe light it all on fire if CNN fails. This is pretty wild. So he has to go to these like very difficult, almost like loan sharks. It, they're highly collateralized, they're very high interest rate, uh, late rates. He wants to taking money from a factoring company. So they actually come in and actually check his books every week before giving him more cash. But the main idea I want to tell you about what's going on here is really asking your question, uh, asking yourself the question like, what is the most valuable but least strategic asset that I have? That I can sell so I can actually make it to the next fuel station? That's gonna make more sense because he's gonna do another, uh, historical analogy. And so he's looking around all the stuff he's owning.

• 47:58David Senra?

  He's like, okay, I'm selling the billboard, selling the radio station. So he's like, whoa, I own the Atlanta Braves and the Atlanta Hawks, but I can't, and they're very, very valuable, but they're too important strategically to the actual, like all, like his, his TV stations, right? He's like, I can't sell them. And so he's looking around for the most valuable and least strategic asset. He has this local TV station in Charlotte that eight years before he had bought for a million dollars. Remember, he's always early. And now that business is valued at 20 million. So he sells that for $20 million, takes a $19 million profit. And this is why, this is excellent. I've always been a student of military history. I thought the CNN launch strategy was similar to Rommel's desert campaign during World War II. So Rommel was a German general. He's fighting the British in World War II.

• 48:43David Senra?

  He knew he didn't have enough fuel to conduct an entire offensive. He's, he's a tanker. He's, they have Panzer tanks at this point. What he intended to do was strike when they weren't expecting it, meaning the British, overrun their lines and then capture their fuel dumps. At that point, he could refuel his Panzers, tanks, and continue the offensive. This is, this is Ted's strategy. My vision for financing CNN was similar. If we had enough cash to get on the air and could somehow get through our first year of operation, people would see that this was viable. And then, once the concept was proven, we would have easier access to capital. So he kind of has like a burn the boats, no Plan B mentality. There is something that happens over and over again where it's like, how the hell is

• 49:25David Senra?

  this guy, this little startup, going against some of the biggest companies in the world? Some of those profitable companies in the world? He talks about like, uh, going to meetings with some of the people he's competing with. They're at like this like shack in Atlanta. He goes up to their, their company headquarters in New York. And it's like they're eating on like China from Versailles. They have a million dollar artwork and like, what the hell is going on? And he winds up winning. And he talks about this and he says, I'm always convinced that one of the reasons that I've been successful is that I've almost always competed against people who were bigger and stronger, but who had less commitment and desire than I did. And so in this case, he's fighting RCA. RCA was a huge company, but for Turner Broadcasting, this dispute meant everything. We had to win.

• 50:09David Senra?

  And so I just went through and looked at all my notes that are, that's happening during this time, trying to figure out like, what is the main theme here? And there's just a couple of things that he has that his opponents don't, even though they have more assets than he shouldn't have won. He's fully committed, right? Where they have, this is just like one dispute and they had, they're a huge conglomerate. They're not fully focused. He has a stronger desire as a result of that. He has more belief by far, by far. He's got more belief about cable and satellite TV than anyone else. More belief about the fact that this makes no sense, that no one else has made a 24-hour cable news network yet. And he's got the highest level of enthusiasm. This guy is one of the greatest one-on-one salespeople, even when he recruits talent, they just say over and over again.

• 50:53David Senra?

  Listen, he's very charismatic and his enthusiasm is very infectious. And you will, it's almost like how people describe Steve Jobs, like that reality distortion field, that when you're in his presence, like there's an aura, you cannot understand it. And you know that because when you leave it, you're almost like you snap out of it. You stop being hypnotized and you're like, what the hell just happened? This guy completely hypnotic, Ted Turner is capable of completely hypnotizing people with his enthusiasm and his sheer belief in what he is doing. And so there's a bunch of times where he's, there's a bunch of anti-competitive behavior. He threatens all these like antitrust and monopolistic lawsuits. In this case, he launches CNN and then ABC and Westinghouse are gonna do a joint venture.

• 51:37David Senra?

  They're essentially gonna copy CNN, but instead of charging the cable networks for it, they're gonna be like, oh, you can have our channels for free. Ted Turner's like, you know, this is predatory anti-competitive behavior, willing to sue you, winds up not backing down. They wind up saying, okay, they never launched their version. I think it was called like SNC or something like that. And they're like, okay, we'll, we'll back out of this. You have to pay us $25 million. Ted's like, I don't have that money right now, but I have to, again, how many times has he said this? I don't have the money, but I have to do this deal. And so it says, uh, "One of my top financial advisors reasoned with me that fighting it out with them, with, with Westinghouse and ABC, was costing me right now $4 million a month. So for the cost of about six months or more of fighting, well, we could buy them out

• 52:22David Senra?

  altogether. We decided to settle for the 25 million." Now, this is, that's interesting, that's fine. This is the crazy, mind-blowing thing that you, I can't understand. The next sentence blows my mind. CNN obviously gets a large viewership, it's obviously working, even though he's gonna bleed a couple million dollars for a few years before it becomes wildly profitable. We know that his, that 24-hour like superstation, because his, his TBS superstation is printing money, right? I think they were making around this time A hundred, I want to say 160, let me see if I can find it real quick. Hundred and, sorry, 177 million in revenue and 66 million in profit. So clearly, why wouldn't that work with news as well, right? It's a 24-hour satellite station.

• 53:06David Senra?

  And so this is the crazy thing, the crazy sentence. After he settles with ABC and Westinghouse and they never launched their 24-hour news network, it says, "It would be 13 years before we faced another 24-hour news channel." Imagine having an unbelievably lucrative, brand-new opportunity and you don't even have a competitor for 13 years. And again, Ted uses an historical analogy. Turner Broadcasting defeating ABC and Westinghouse in the early 1980s was like Luxembourg, going to war with both the United States and Soviet Union and winning. And so there's several examples in the book where it's like, okay, why aren't they, these broadcast networks, why aren't they doing a 24-hour news station, right?

• 53:49David Senra?

  If you're a broadcast network, and so what I mean by broadcast network, and we'll be clear about this, this is like the big three. This is ABC, CBS, and NBC, right? And everything he's doing is like, these are cable networks. And he's like, why aren't, like, a broadcast network and a cable network under the same ownership actually makes a lot of sense? Why is nobody doing this? I think this is another example of the fact that he just understood the industry more so than other people. And you have an inkling that you might be able to do that because there's something that's obvious to you, like an opportunity hiding in plain sight, that's obvious to you that no one else sees. So he says, "To my continued amazement, the networks stayed on the sidelines and watched the launch of other cable channels." So not only did you have his TBS, the superstation, you have ESPN, you have HBO, you have all these other experiments, you're seeing things like MTV, Nickelodeon, the Discovery Channel.

• 54:34David Senra?

  And his hypothesis, Ted's hypothesis about why this was happening is saying, it's almost like the innovator's dilemma. "They were worrying more about the previous night's ratings and the money that comes from that than the long-term future of their business." And so he keeps trying to merge Turner Broadcasting with, this is, again, just how this whole thing ends up. When he tries to merge later on with GE, and he's having this conversation with Jack Welch. The note I left myself, there's not even a highlight there, but I'm just like reading about this page after page after page. There's probably like 100 pages where this is like, he's always trying to be a bigger, part of a bigger company. And to me, it's like, that's not your personality. And so I just wrote to myself, why does he keep trying to sell his company? And then have a position at the larger company?

• 55:18David Senra?

  He's not going to be in charge. And I didn't know, when I wrote that note to myself, what was going to happen when he gets to Time Warner and effectively gets fired. But we're not there yet. So at this point, he's still, again, trying to merge Turner Broadcasting with another one of the big three networks. And his whole point, and this is just about the news part of it, which I thought was really smart. He's like, well, you guys have, in this case, at CBS, you guys at CBS, you have four hours of news a day, right? Okay, I have CNN and I have headline news. So we have 48 hours. That means if we combine, we have 52 hours. 48 plus four, right? 52 hours against which to amortize our costs. ABC and NBC has the same thing you do. They have four hours a day.

• 56:02David Senra?

  Combine with me, we have 52 now. And then we can amortize the cost across those 52 and we'll leave our competitors in the dust. And there's another benefit because the antitrust rules at this time prohibited the broadcast networks from vertically integrating. So that means they cannot produce their own programming at this time. They would license most of their shows from like Hollywood studios. And so his whole point was like, okay, well CBS, you're going and you're going to a studio and you're leasing a show like MASH. MASH was like the biggest TV show at this point in history. So you get the first run of MASH, but then the actual owner of the show, which in this case is 20th Century Fox, then goes around and sells its reruns to a local station or a cable channel.

• 56:44David Senra?

  And CBS doesn't make a dime off this off-network syndication, but you would make a dime if you owned a cable network. So he's like, if CBS and the superstation, which is TBS, were part of the same company, we could negotiate a comprehensive corporate deal with Fox. CBS can build the show into a hit, right? They get their first run. And then TBS would have the option to syndicate the hit episodes. In other words, you'd make more money. You'd make money on both the transactions. Right now, you're only making money on one of the transactions. And you could argue that because it's a hit on CBS is what gives the value. For the secondary transaction is Ted's point here, which is like really smart. This guy is just very keen is the way I guess I would think about it.

• 57:26David Senra?

  Like he has a keen understanding of how to combine assets to create an advantage that no one else has. And I think the mistake he makes, which we're going to get to here now, is he just lets his deals get too complex. And so CBS turns him down and says, like, OK, well, I need content. Like, what can I do? And he goes and does a deal with MGM. And remember how his dad killed himself because he thought he overleveraged himself and he was risking everything else? Ted Turner actually does that. And he overleverages himself in this deal. Kirk Kerkorian, who I did a long time ago, I'm going to reread that book. So many people ask me to do another episode on it. I think it's like episode 65, so probably, you know, five or six years ago. His book called The Gambler, a lot of people know it. It's an excellent book. It's the biography of Kirk Kerkorian.

• 58:09David Senra?

  So Ted Turner is actually buying MGM from Kirk Kerkorian. And he winds up screwing himself and he actually has to call on John Malone and John Malone saves him. And as a result, then he has like some veto power. So this is like the first step where Ted Turner actually kind of has a boss, not a complete boss, but hey, over a certain amount, he can't just go and like buy and do deals anymore without like approval from his board. This is really important, actually, because I think genius has the fewest moving parts. And I think the biggest weakness that I see in this book and one I want to avoid for myself is like, never get into deals that are too complicated. Ted's deals are way too complicated.

• 58:53David Senra?

  They have way too much debt and they rely on the future company performance that is impossible to predict. And so he finds himself in a bad deal and very, a few months away from losing everything. And good thing he is good friends with and calls John Malone, who's really good at situations like this. By the end of 1986, it was clear that if I didn't do something soon, I'd be having to transfer my stock to Kocorian within a couple of months. John Malone understood my situation and he and I set to work immediately, knowing that if we didn't successfully change the company's ownership structure, within five quarters, I would lose control of Turner Broadcasting, exactly what his father feared.

• 59:34David Senra?

  Ted did. This is insane. Calling on John Malone turned out to be the best thing I could have done. And so John Malone also describes what's going on. I'm just going to pull out one sentence here. I think you'll get, you'll understand this. He took his leverage too high and the structure of the leverage was a problem. And so it goes into all these deals he's trying to do with these giant companies. I mentioned GE and Jack Welch before. He tries, he almost does a deal where he sells to Bill Gates and Microsoft. And that's when I was like, hey, why is he keep trying to sell the company? And then have a position at the larger company that he's not going to be in charge of. And part of this is because he's already lost complete autonomy. He does not adhere to James Dyson's principle of retention of total control, the importance of retention of total control. And Bill Gates talks about this.

• 1:00:19David Senra?

  He's like, listen, Ted had these weird control provisions relative to the other cable guys who owned pieces of his company. This is the rescue package that John Malone put together to save him from Kirk Kerkorian. It drove Ted kind of crazy. He never really knew how to deal with having sort of a boss. So it's not really a boss, but it's kind of a boss, you know? You get up one morning with a wild idea and then you have to think, am I going to get vetoed? Ted did not like this. And again, I really think the most important, most prominent instinct, natural instinct in founder and entrepreneurial types is the control and conquer instinct. I think what we think we want money or prestige or status, but I really think what we actually want is control.

• 1:01:01David Senra?

  And so I think there's a lot of wisdom in James Dyson's maxim that retention of total control, never relinquish total control. And I think the loss of total control, being exhausted and flat out running for three decades, and then also somebody offering you $8 billion leads to why he sold to Time Warner. The final reason I agreed to do the deal was a simple one. I was tired. It was now more than 30 years since my father's death and I'd been running the company on my own ever since. 30 years of long weeks and 18 hour days would get to anyone. And by this time, I was flat out exhausted. I made the official announcement in September of 1995.

• 1:01:44David Senra?

  The little billboard company that I struggled to hold together had grown into a diversified entity that was being acquired at a value of more than $8 billion. I would now be the largest shareholder of the biggest communication company in the world. I wish my father could have seen what we'd accomplished with the business that he'd left. I'm sure he would have been proud.

• 1:02:08David Senra?

  And that is where I'll leave it. Highly recommend reading the book if you're interested in building a media company. I think there's a lot of ideas actually here that are transferable outside of media, including this just really smart way to combine assets in a way that your competitors can't. It is unbelievably dense. It is easy to read, but there's so much going on on every page. What I would do is, one, take your time with it. And two, I would go and highlight and do a lot of notes. And then what I would do is I would re-- there was so much going on even like a single page or maybe two or three pages. I'd have to rewrite out what actually is happening to understand. So I would definitely take your time with it. If you want to buy the book and support the podcast at the same time, there'll be a link down below. That is 337 books down, 1,000 to go, and I'll talk to you again soon. Okay, so what you're about to hear is this question I was asked a few months ago. I

• 1:02:53David Senra?

  actually recorded this a few months ago. They asked, how did history's greatest entrepreneurs think about hiring? All the answers. People think I have a better memory than I actually do. You know, if people say, David, you have a great memory. My wife would laugh at that because I forget things all the time. It's not that I have a good memory. It's I reread things over and over and over again. Every single answer, every single reference you're about to hear in this 20-minute mini-episode came from me searching all of my notes and highlights. That option is now available to you. If you like what you hear, if you think it's valuable, if you're already running a successful company and you want an easy way to reference the ideas of history's greatest entrepreneurs in a searchable database

• 1:03:34David Senra?

  that you can go through at your convenience anytime you want, then you can go to foundersnotes.com and sign up.

• 1:03:41David 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. And you should really be spending, especially in the early days,

• 1:04:26David Senra?

  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. So why wouldn't you take as much time as necessary to find all a players?

• 1:05:09David Senra?

  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. 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.

• 1:05:53David Senra?

  I don't put any, I just literally, I know that's the next question, just let my brain work on it in the background for a few days. And then I'll go through. And start searching all of my notes. And so that's what I did here. And so there's a bunch of, you know, I don't have, I may have like 10 or 15 different founders talking about hiring. The first idea is the most obvious, but I think probably works best when you're already established. So Steve Jobs is talking about, hey, you know, the great way to hire is just find great work and find the people that did that and then try to hire them. When you're Steve Jobs, that's a lot easier, right? Than if you're just somebody that doesn't have a reputation, maybe you don't have resources, maybe your company's rather new or not as well-known.

• 1:06:36David Senra?

  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. 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.

• 1:07:22David Senra?

  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? 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

• 1:08:05David Senra?

  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. 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.

• 1:08:49David Senra?

  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 Eebergen 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 empires, and the government. The most important person to keep alive for the American war effort was FDR. The second one was Van Eebergen Bush. Van Eebergen 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.

• 1:09:34David Senra?

  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 Eebergen 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. 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.

• 1:10:19David Senra?

  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? 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.

• 1:11:04David Senra?

  People who are apathetic and indifferent don't. I remember one, that's such a great line, and I obviously agree with it. I remember one, I'm 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. I didn't know how someone in her late 20s found that, 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.

• 1:11:47David Senra?

  It wouldn't be possible to have read that many books without such a brain. So do you see what I mean? Like, we start with Steve Jobs saying, this is the most important thing that your role as the leader of the company and the founders do, right? And you are, and it's so important to study, and this is why I'm glad this question exists, and why I'm glad that I took the time and I had like the foresight to like, hey, I should really organize my thoughts and notes. Because there's no way I would have remembered all this without 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.

• 1:12:31David Senra?

  Whether it's Jobs, Buffett, Bezos, Peter Thiel, this just pops up over and over again. They talk about the importance of trying to find people that are better than you. The hiring bar constantly has to increase. Now, obviously, the larger the company gets, that's impossible. Steve Jobs has this great quote where he's like, you know, Pixar was the first time I see, I saw an entire team, entire company of A players, but they had 400 players. They had 400 team members. He's like, at the time, Apple had 3,000. It's like, it's impossible to have 3,000 A players. So there is some number that your company may grow to, where it's just, you're just not, you're not going to have thousands of A players. In my argument, I don't even know if you could have 400. I guess, I mean, I'll take Steve's word for it on there. And Pixar definitely produced great products,

• 1:13:15David Senra?

  but it's probably a lot lower than that as well. So Warren Buffett would tell you to use David Ogilvie's hiring philosophy. And so Warren said, Charlie and I know that the right players will make almost any team manager look good. Again, that is why it's the most important function of the founder, maybe directly next to the product, or right above the product, actually, because those are the people building your product. We subscribe to the philosophy of Ogilvie and Mather's founding genius, David Ogilvie. This is what Ogilvie 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 Ogilvie'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

• 1:14:00David Senra?

  so that the overall talent pool is always improving. 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. It's written, actually, I've recently become friends with the author. His name is Jimmy Sony.

• 1:14:28David Senra?

  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 Levchin kept the bar for talent exceedingly high, even if that came at the expense of speedy staffing. Max kept repeating, A's hire A's, B's hire C's. So the first B you hire takes the whole company down. Let's read that again.

• 1:15:13David Senra?

  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 publish those episodes. And he's just, it's crazy. 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.

• 1:15:56David Senra?

  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. 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.

• 1:16:42David Senra?

  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. Izzy Sharp, the founder of Four Seasons, actually could figure it out that in his business, which was hotels, right? That hiring, 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?

• 1:17:27David Senra?

  What do you and I know in our bones? That history's greatest founders all read biographies. They all read biographies of people that came before them and took ideas from them. Izzy Sharp is trying to build Four Seasons. What do you think he did? He picked up a biography of Cesar Ritz. The guy that, Ritz Carlton is named after, arguably the greatest hotelier of all time. And when he realized, oh shit, Ritz, he says, remembering that Cesar Ritz made his hotels world famous by hiring some of the foremost chefs, we decided to do something similar. So what is he talking about? Cesar Ritz went out and partnered with August Escafier. What Cesar 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.

• 1:18:12David Senra?

  That leads to more, 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 the problem. You can identify great people, right? Maybe they even want to come work, like you've identified them. You've sold them, hey, this is what, this is our mission. This is what we're doing. And yet, humans have complicated lives. They have spouses, they have kids, they have a reason, maybe they can't move across the country. To work for you, even though they want to. So there's a problem solving element that you see in these books on you have to solve.

• 1:18:56David Senra?

  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, um, 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? Cause that's where SpaceX is at the time. They're, 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.

• 1:19:39David Senra?

  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. There's this guy named Les Schwab, who built this, this really valuable chain of like 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 a, he didn't say it to me personally.

• 1:20:21David Senra?

  He said it to, uh, in like one of the Berkshire meetings that to study, Les Schwab had one of the most, uh, one of the smartest, uh, financial incentive structures in any company that, 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 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.

• 1:21:06David Senra?

  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, 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. If you hire me, let me run the team slash business. Here's another idea from Thomas Edison that I think is fascinating. Really, the way I think about a founder is like, you're developing skills that you can't hire for.

• 1:21:51David Senra?

  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. Hire people who think as you do and treat them well. In our business, they are 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.

• 1:22:35David Senra?

  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. 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.

• 1:23:17David Senra?

  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. 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,

• 1:24:00David Senra?

  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. 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. If there was a single characteristic that separates Steve Jobs from the mass of employees, it was his passionate enthusiasm. Steve had one full, one speed, full blast. 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.

• 1:24:46David Senra?

  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 sure, I can for sure tell within a few days of working with them. Musk made hiring a priority. He personally met with every single person the company hired through the first 3,000 employees. It required late nights and weekends, but he felt it was important to get the right people for his company. And then to close on this, we started with Steve Jobs telling us why it was so important

• 1:25:30David Senra?

  and why it should be a large part of how you spend your time. And now we'll close with what you do after. What do you do after you hire the person? This is what he says. It's not just recruiting. After recruiting, it's building an environment that makes people feel they are surrounded by equally talented people and their work is bigger than they are. The feeling that their work will have a tremendous influence and is part of a strong, clear vision. So that is the end to that 20 minute mini episode. I just re-listened to the whole thing and it really does. I think it's a perfect explanation and illustration of why I think 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

• 1:26:14David Senra?

  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.