#366 Mr. Beast Leaked Memo

What I learned from reading How To Succeed in Mr. Beast Production and how ideas from Sam Zell, Charlie Munger, Nick Sleep, Warren Buffett, Sam Zemurray, Bob Kierlin, Steve Jobs, Li Lu, Edwin Land, Larry Ellison, Bill Gates, Jeff Bezos, James Cameron, Anna Wintour, Walt Disney, Bernard Arnault, and Brad Jacobs immediately came to mind. ---- Ramp gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud by going to Ramp and learning how they can help your business control your costs and save more. ---- Founders Notes gives you the superpower to learn from history's greatest entrepreneurs on demand. You can search all my notes and highlights from every book I've ever read for the podcast. Get access to Founders Notes here. ---- Join my free email newsletter to get my top 10 highlights from every book ---- Follow Founders Podcast on YouTube (Video coming soon!) ---- “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?

  A few months ago, I got to spend seven hours over two days with John Mackey, the founder of Whole Foods. And it was during one of our conversations that John Mackey told me one of the craziest things that anyone has ever said about the podcast. By the time we had met, he'd already listened to over 100 episodes. And he said that if founders had existed when he was younger, Whole Foods would still be an independent company. That since the podcast and all of history's greatest entrepreneurs constantly emphasize the importance of controlling expenses, he would have put more of a priority on it. Especially during good times, it is natural for a company and for human nature to not watch their costs as closely because everything else is going so well. The importance of that idea was noticed over 150 years ago by Andrew Carnegie. He would go around repeating this mantra.

• 0:42David Senra?

  He would say, "Profits and prices were cyclical, subject to any number of transient forces of the marketplace. Costs, however, could be strictly controlled, and any savings achieved in costs were permanent." This is something I was talking about with my friend Eric, who's the co-founder and CEO of Ramp. Ramp is now a partner of this podcast. I've gotten to know all the co-founders of Ramp and have spent a ton of time with them over the last year or two. They all listen to the podcast, and they've picked up on the fact that the main theme from the podcast is on the importance of watching your costs and controlling your spend, and how doing so gives you a massive competitive advantage. That is a main theme for Ramp. The reason Ramp exists is to give you everything you need to control your spend. Ramp gives you everything you need to control your costs. Ramp gives you easy-to-use corporate cards for your entire team, automated expense reporting,

• 1:27David Senra?

  and cost control. Those two words, "cost control." There's a line in Andrew Carnegie's biography that says, "Cost control became nearly an obsession." Carnegie is not alone with that obsession. In fact, one other thing that John Mackey told me was, which was really surprising, he talked about the role that Walmart played in Whole Foods' success. That potential competitors to Whole Foods tried to compete first with Walmart, and they found that it was impossible to do so. Here's what Sam Walton said in his autobiography. "Our money was made by controlling expenses. You can make a lot of different mistakes and still recover if you run an efficient operation, or you can be brilliant and still go out of business if you're too inefficient. Ramp helps you run an efficient organization.

• 2:08David Senra?

  Ramp is everything you need to control spend and optimize your financial operations, all on a single platform." Ramp's website is incredible. I hope you go check it out. Make history's greatest entrepreneurs proud by going to ramp.com to learn how they can help your business control costs. That is ramp.com.

• 2:25David Senra?

  I'm usually very reluctant to make an episode about a young founder that hopefully has decades left in their career, but I made an exception for this leaked memo, which is called "How to Succeed in Mr. Beast's Production." And really, there's two primary reasons I wanted to make this episode. One, I know Jimmy. He listens to this podcast. We spend a bunch of time talking about the ideas found on the podcast, found from the life and work of Hishy's entrepreneurs and all these biographies. I also flew and visited his headquarters, Beast's headquarters, with my friend Rick Gerson. So Rick has invested in Jimmy's company, and Rick and I spent seven straight hours with Jimmy. We got to see his entire operation. We sat in on meetings with his top team.

• 3:06David Senra?

  We talked to his CFO. And I would say we got a very intense download of how Jimmy thinks about YouTube and how he thinks about the business empire that he is building and the business empire that he wants to build. The second reason I wanted to make this episode is because I devoured the memo. And from the very first page, it's obvious how a lot of the ideas contained in this memo will relate to the biographies that you and I study every week. And so I printed out the memo and I went through it just like I do all the biographies, really the way I read anything. So it starts off, he says, "Hi, I'm Jimmy. And as the team is growing larger, I no longer get to spend as much time with everyone as I used to. The first dozen employees had unfiltered and unlimited access to me to learn as much as they could about my vision and what I wanted.

• 3:51David Senra?

  Sadly, you don't have that luxury. So I thought it would be useful to try to brain dump as much as I can into this silly little book to give new people and to help bring them up to speed on everything we've learned over the past decade with this channel. We've been through a lot, and chances are, most of the problems you face, we've dealt with. So I genuinely believe that if you attentively read and understand the knowledge here, you'll be much better set up for success." So right from the very beginning. When he's like, hey, this stuff may be new to you, but we have a ton of experience and likely the problems that you're encountering are not novel. We can explain what you're likely to run into and how to solve them. So this was my exact experience when I talked to Sam Zell, when I had lunch with him, when I had dinner with Charlie Munger.

• 4:33David Senra?

  They had entire historical databases of companies and industries and all these examples from 60 to 70 years of experience of building companies, of studying companies. By the time I met them, there's probably not a single novel problem that they have not seen in the past. There was a great line from last week's episode on Nick Sleep's partnership letters that talks about this, you know, him doing all this thinking, spending all this time trying to think through problems. He arrives at a conclusion and realizes, wait, Buffett figured this out 50 years ago. He says, "As a young man, there's something slightly depressing about thinking things through for a while, arriving at a somewhat reasoned conclusion, only to find that others have been there before you and years earlier. In some respects, we are 50 years behind Buffett."

• 5:15David Senra?

  And I think these two lines that Jimmy wrote, "We've been through a lot and chances are most of the problems you face, we've dealt with. So Jimmy believes if you actually read and understand the knowledge here, you'll be much better set up for success." I think that's why you find in people that reach the top of the profession, they have this historical database they can draw in, draw from in their head. It's exactly why Sam Zell and Charlie Munger spent so much time reading and studying history. And so back to Jimmy, he says, "This is not a rulebook. I need to kick this thing off by saying the purpose of this is not to give you a bunch of rules to follow. What we do is complex and changes based on the situation. I need you to repeat this in your head three times. I will apply everything I read with a grain of salt. This is not an inclusive list of everything. I hope this inspires you with questions and to come to us to learn more.

• 5:58David Senra?

  I could make a separate book for creative, a separate book for production, a separate book for editors, et cetera, but I think that's dumb. Everything we do here is interconnected and the more you understand about what others are doing and trying to accomplish, the better set up for success you will be. I advise everyone to read this in its entirety." A good example of this is James Warren. He understands every single part of this company at a deep level, and as a result, can make decisions faster than anyone else. The stuff you will be reading about, he knows like the back of his hand. I've seen a team of five people work on a project for a week just to give up, and James solved it in 30 minutes. That shows the power that comes when you understand everything in this book deeply. So I'll pause and interrupt myself there. So there's something that happens over and over again.

• 6:42David Senra?

  My favorite line on this comes from Sam Zellmeyer from the book The Fish That Ate The Whale. He says, "If you know your business from A to Z, there's no problem you can't solve." And in addition to that line from Sam Zellmeyer, I had a bunch of notes around just this one section on James Warren, this idea that he understands every single part of the company at a deep level, and as a result, can make decisions faster than anyone else. You can have a team of five that can fail to solve a problem over a week, and he solves it in 30 minutes. In Sam Zell's autobiography, he talks about one of the most important relationships that he ever made was with this extremely famous and wealthy family that's in Chicago. It's the Pritzker family. And Jay Pritzker, I think, is close to 19 or 20 years older than Sam Zell, serves as almost like a friend and a mentor to him for a very long time, and teaches him a lot. In fact, in the autobiography,

• 7:25David Senra?

  Sam Zell writes that Jay Pritzker was the smartest financial guy he ever met. And so one of the things that Sam Zell said that he learned from Jay Pritzker that I've never forgotten, even though I read the book over two years ago, I think, is he says that Jay taught me to use simplicity as a strategy. He had an uncanny ability to grasp an extremely complex situation and immediately locate the weakness. He always said that if there were 12 steps in a deal, the whole thing depended on just one of them. The others would either work themselves out or were less important. And Sam said that Jay was able to identify the most important part extremely fast. It reminds me of what Buffett said about Munger, that he says, "Charlie's got the best 30-second mind in the world.

• 8:08David Senra?

  If I call him and describe a problem to him, any kind of a situation, he gets to the essence of it immediately." I think that's exactly what Jimmy is describing, the talent that James has, and the importance of knowing as much as you can and as deep as you can about every single aspect of your business. I think this goes back to what Nick Sleep wrote in his investment letters. One of his favorite quotes was that "The art of being wise is the art of knowing what to overlook." You bring a deal to Jay Pritzker, you say, here's 10 important things. He's like, bullshit. There's the one important thing. Solve that and everything else falls in line. And so back to this, Jimmy ends this section with very important advice. The more you know about why we do things and what we're trying to accomplish, the better off we will be. The next section is what is your goal here?

• 8:52David Senra?

  Your goal here is to make the best YouTube videos possible. That's the number one goal of this production company. It's not to make the best produced videos, not to make the funniest videos, not to make the best looking videos, not the highest quality videos. It's to make the best YouTube videos possible. Everything we want will come if we strive for that. This sounds obvious, but after six months in the weeds, a lot of people tend to forget what we are actually trying to achieve here. So I think the best thing to do here is look at this paragraph through the lens of what you and I talked about all the way back on episode 360. Robert Kirland, Bob Kirland is the founder of Fastenal. He wrote this little 98-page book that's excessively hard to find. And Bob's entire thesis, he's got one idea in that book.

• 9:35David Senra?

  And his idea is that the leader of a company, leader of an organization, they have to maintain commitment to the organization's common goal. Every single person in your organization should know the organization's common goal. It should be repeated over and over again. It is very natural, he talks about in the book, that you'll drift from it, you'll overcomplicate things. And then the leader's job is to say, no, no, no, we got to get back on track. We got to go back to our commitment to this shared, common goal. And so in Bob Kirland's case, his common goal was growth through customer service. In Jimmy's case, it's we will make the best YouTube videos possible. And if we do that, everything we will want will come to us if we strive for that. And in many cases, your employees will respond to that. There's a book that I've read three times that I absolutely love. It's called Creative Selection.

• 10:18David Senra?

  It's episode 281, which I think I titled Working with Steve Jobs, because that book was written by a programmer that demoed multiple times and worked for Steve for years. And he has a line in that book that I think is very important to why it's so beneficial to make your thinking as clearly as possible. So it makes you easy to interface with. And for Steve, he did it in three words, insanely great products. Do you want to build insanely great products? Come with me. If you don't, this isn't the place for you. And so in that book, Creative Selection, the author Ken Kosyenda describes what it's like to be on the receiving end of this. Steve Jobs provided his single-minded focus on making great products and his vision motivated me.

• 10:56David Senra?

  Okay, so the next section is "I don't care how traditional media does things. This is not Hollywood and I do not want it to be Hollywood." And if that sentence is a turn-off to you, then you're probably at the wrong job. I genuinely mean that. YouTube is the future and I believe with every fiber of my body, it's going to keep growing. So I want to pause it right there. When I got to this section, I was thinking about one of my favorite things that I've studied and learned or watched and read in the last month is that video where Li Lu, he goes to Columbia Business School, it's like 17 minutes long, he just lights them up. He is essentially disgusted at their lack of dedication and their lack of commitment and work ethic. Towards the end of that video, Li Lu says, "All of my employees never went to business school, never worked for an established management firm, some of them never even

• 11:41David Senra?

  had accounting. I found it easier to train them than somebody who did." This is something that reoccurs a lot in these biographies, that the founders find that it's better to have no experience than bad experience, better to have no habits than bad habits. And so Jimmy is saying, "This is not Hollywood, I don't want it to be Hollywood." He believes that YouTube is the future and he says, "I believe with every fiber of my body, that's going to keep growing. 99% of movies or TV shows would flop on YouTube. On top of that, they would be wildly unprofitable, have no flexibility in long lead times that can't adapt to trends. You need to be nimble and produce content our way, not the way you were taught before. If you want the highest probability of success, I beg you to learn why we do what we do at a deep level before you try to fix anything."

• 12:24David Senra?

  And he puts "fix" in quotation marks. "We've done countless videos and invested hundreds of thousands of hours collectively building how we do things. It's not perfect, but we have a reason for how we do most stuff and it's probably a decent one." And then he moves on to this next section and he says, "The amount of hours you work is irrelevant. Recall the story about James solving a problem in 30 minutes that a team of five couldn't in a week. In that example, does it really matter how many hours they worked? Obviously, we want grinders that put in the hours and love you guys to death at due, but at the end of the day, you will be judged on results, not hours. We are a results-based company. Get shit done and move the goalposts." And then Jimmy makes it very clear

• 13:10David Senra?

  the kind of people that he wants working with them. I only want A players. You're either an A player, B player, or C player. There's only room in this company for A players. A players are obsessive. They learn from mistakes. They're coachable, intelligent. They don't make excuses. They believe in YouTube. They see the value of this company and are in the best in the goddamn world at their job. B players are new people that need to be trained into A players. And C players are just average employees. They aren't exceptional. They aren't obsessive about learning. C players are poisonous and should be transitioned to a different company immediately. I think one of the companies that had the largest collections of A players in the early days was PayPal. If you read that book that my friend Jimmy Soni wrote about the history of PayPal, it's called The Founders.

• 13:55David Senra?

  There's a quote in there from Max Levchin. And he was talking about the fact that PayPal prioritized speed over everything else, except in one area, which is recruiting and hiring. And so Max would repeat this mantra over and over again because it says, 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. And one thing they did in the early days is that they mandated that every single potential prospect would have to meet every single member of the team.

• 14:31David Senra?

  And so back to this. I spent basically five years of my life locked in a room studying virality on YouTube. Some days, me and some other nerds would spend 20 hours straight studying the most minor thing. And the result of those probably 20,000 to 30,000 hours of studying is I'd say I have a good grasp on what makes YouTube videos do well. And so because this memo was originally meant just to be read by people that are working in Mr. Beast's production, it's going to talk about things that I'm going to omit. If you're interested in making videos, he's going to talk about click through rate, average view duration, average view percentage. I'm obviously going to skip over that because I want to get to one of the most interesting things that he says. And he says this a few times, and I think this is a really great idea. And so he's talking about something that's happening inside a video. We're going to skip over that, but this is the main idea. He says, another way to look at this is it's a

• 15:16David Senra?

  Segment that only Mr. Beast can do this. The emphasis that Jimmy is placing on doing things that only he can do, things that only his team can do, that is straight from Steve Jobs, that is straight from Edwin Land. Edwin Land has this motto, he says, my motto, don't do anything that someone else can do. That is one of the most important ideas that I've ever learned from all the reading for the podcast. Don't do anything that someone else can do. And a few pages later, Jimmy is going to give an example of that. We offered someone $500,000 that they could live in a circle in a field for 100 days. And instead of starting with his house in the circle that he would live in, we bring the house in on a crane 30 seconds into the video. Why? Because who the fuck else on YouTube can do that?

• 16:00David Senra?

  The impression that leaves on the viewer is invaluable to us. Anytime we do something that no other creator can do, that separates us in their mind and makes our videos more special to them. You cannot track the wow factor, but I can describe it. Anything that no other YouTuber can do. And so when I got to this part, I immediately thought of a story that I read in a biography of Larry Ellison. The biography is called The Billionaire and the Mechanic. And so Larry Ellison is obviously an extreme winner. He's ruthlessly competitive. And so the book is about him trying to win the America's Cup race. And in the book, Larry is talking to his sailing team about other sailing teams. And he has this idea to build this giant, what he calls a hard wing. All the other competitors are using these soft main sails.

• 16:45David Senra?

  And so Larry is looking for essentially what Edwin Land said, what Jimmy's saying right here is like, what can we do that no one else can do? And so he says, Larry went on, I know that most people think trying to build a hard wing of this size is crazy, but that's the beauty of the idea. The other side isn't trying to build one. So we'll have a wing and they won't. And the note I left on that section when I first read it is a great summary of this. If we can do something really hard, we won't have any competition. Okay, so the next chapter gets into the actual creating of the content. I would summarize this entire section, and this is where I have tons of notes. I might have more notes than is actually words on the page. "The good ones no more." That was a line from David Ogilvie. When he says "the good ones no more," he's talking about advertising agencies. But you see it with literally every single profession on the planet.

• 17:30David Senra?

  And so let me read what Jimmy says first. He says, "I want to pass on things I see new people typically fail out, and in general, what I want. Our videos are hard, and they're only going to get harder. This is why I want the best people in the world and people who are obsessed with YouTube. I want you to be obsessed with YouTube. Get rid of Netflix and Hulu and watch tons of YouTube. It will, without a doubt in my mind, make you more successful here. The more invested you are in the world of YouTube, the more you'll understand how we can stand out and be more original, what we could be doing better, etc. You should also really try to watch every Mr. Beast video on all the channels. This sounds obvious, but I've asked multiple people this week

• 18:13David Senra?

  what they thought about last week's gaming video, and not a single person had seen it." What he wants and the people that he's working with, what he wants there. It's really what Ogilvie's describing when he says "the good ones no more." This comes up over and over again. Think about the film, all the filmmakers that did, Tarantino, Spielberg. They have entire databases of the history of film in their head. They will literally watch some of their favorite movies 50, 100 different times. There's ideas that they learned in like 1975 that they didn't use in their own movie till 20 years later. There's countless examples of this in the biographies that I read and in the episodes I make. Think about the early days of Microsoft. One of my favorite all-time biographies is of a young Bill Gates.

• 18:58David Senra?

  It's called "Hard Drive." The book ends when he's like 35 years old. This is a description of Bill Gates when he's in his twenties. If you talk to Bill about any software company or any hardware company, there's a very high probability that he will be able to tell you who the CEO is, what their revenues were last year, what they're currently working on, and what the problems are with their products. He's very, very knowledgeable and he prides himself on knowing what's going on in his industry. Here's another example from one of Edwin Land's biographies, the fact that he knew he was going to dedicate his life to the science of light. He was like 12 when he was doing this. It says, "Land began to read about optical science and discover the textbook, Physical Optics by Robert Wood, who was a professor of physics at John Hopkins University. Wood was a great experimenter of great ingenuity in the areas of optics, light, electricity, and photography,

• 19:42David Senra?

  which is obviously what is what Edwin Land dedicated his life to. "Land slept with Wood's book under his pillow and read it nightly in the way that our forefathers read the Bible." A few years into the future, Edwin Land's going to go to Harvard, go to the library and read every single book about light in the Harvard library. Then, once he reaches the end, drops out, moves to New York, and does the exact same thing with the New York Public Library. You see this absolute obsession with collecting as much information as possible over and over again. John D. Rockefeller, before he started his own business, he works for, it's Hewlett and Tuttle. And so, he's a bookkeeper and an office boy for them. He's very young. Look what he does. It says, "A fascination with business that can only be called a passion held him to the office.

• 20:24David Senra?

  Figures in the ledgers were to him like words to a poet. The yearly accounting books resembled volumes of history. I used to go over the old books," he said. And soon, he read the, he read the entire, every single accounting book for the entire history, going back to the entire history of the company. This is the end result of that. "And soon, he knew more about the firm than Hewlett did and more about the commission business, past and present, than anyone else in Cleveland." There's a ton of examples in Steve Jobs' biographies of him knowing the entire history of Silicon Valley, knowing the companies, knowing the founders. And in many cases, if the founders were alive, he'd go build relationships with them. But he would also study the great work from the past. He could tell you how the work he was doing on the Macintosh

• 21:08David Senra?

  related to Alexander Graham Bell's work on the telephone. And I want to bring that up as we go into the next section because I think a lot of what Jimmy's writing about, it's like, this is effort, this is caring, this is passion. I don't know if you can teach this. My personal viewpoint on this is what Jeff Bezos said. People don't have ideas, ideas have people. So he continues, "On top of learning from watching YouTube, I'd love you to read the book, The Goal. I used to make everyone read it. I know bottlenecks may seem obvious, but just not knowing and understanding something as simple as bottlenecks has fucked tons of videos." And so he gives some examples of mistakes made in the past and how to avoid them. Let's say you're in production and a video you're assigned to is put up 45 days out. A lot of things need to happen before you can start working on it.

• 21:50David Senra?

  The big things would probably be a thumbnail sketch and creative on your team to write the video. Do not just go to them and say, "I need creative, let me know when it's done." And "I need a thumbnail, let me know when it's done." This is what most people do and it's one of the reasons why we fail so much. I want you to look them in the eye and tell them that they are the bottleneck and take it a step further and explain why they are the bottleneck so you both are on the same page. Tyler, you are my bottleneck. I have 45 days to make this video happen and I cannot begin to work on it until I know what the contents of the video is. I need you to confirm you understand this is important and we need to set a date on when the creative will be done. Now, let's say Tyler and you agree that it will be done in five days.

• 22:31David Senra?

  You don't get to set a reminder for five days and not talk to him for five days. Every single day you must check in on Tyler and make sure he is still on track to hit the target date. I want less excuses in this company. Take ownership and don't give your project a chance to fail. I want you to have a mindset that God himself couldn't stop you from making this video on time." And so again, I think this section, this is not, you don't have to be a genius. This is effort, this is caring about what you're doing. When he gets to the point where it's like, "I want less excuses in the company" because I just reread my past highlights from that book, The Billionaire and the Mechanic, which is about Larry Ellison, it made me think of Larry Ellison again. Let me read this excerpt from the book.

• 23:12David Senra?

  Larry was teaching the sailing master about other kinds of high stakes decision making. Larry had told Russell a story of when he was working with the Israeli Defense Forces, reviewing the progress on one of their new oracle systems. The Israeli general began the meeting by studying Larry and asking him, "What did you bring me today, results or excuses?" And so there'll be several times in the memo where Jimmy repeats, you know, the idea was like, "We're all working together. If you ask somebody to do something and you don't follow up and then they don't do it, you can't just say, 'Oh, well, I did my job.'" No, the job is the result. The job is not asking it to be done, the job is getting it done. And then Jimmy just continues, he says, "Hey, I just want to brain dump about a bunch of random things and explain why we do or why we say certain things.

• 23:56David Senra?

  These are cheat codes and you should take them to heart." So one of them that he says is, "Say the negatives. Do not just tell people on your team or me why something is good. It is infinitely more valuable to tell us why it's not good." And what you could say here is really, "Just tell us the bad news because the good news takes care of itself." This is what Charlie Munger calls the Persian messenger syndrome. And in Poor Charlie's Almanac, Charlie says, "Ancient Persians actually killed some messengers whose sole fault was that they brought home truthful bad news of like a battle loss, for example. It was actually safer for the messenger to run away and hide instead of doing his job as a wiser boss would have wanted it done." Persian messenger syndrome is alive and well in modern life.

• 24:39David Senra?

  The proper anecdote to creating Persian messenger syndrome is exactly what Jimmy's doing here, and its bad effects is to develop through exercise of will, a habit of welcoming bad news. At Berkshire, there is a common injunction, "Always tell us the bad news promptly. It's only the good news that can wait." Another section I want to talk to you about, "Don't take anything at face value, always dig." One of the common themes we're probably seeing is accountability, and this doubles down on that. "Don't take anything at face value, always dig. If someone says something's too good to be true, find out why." If you need 10,000 pillows by next week and you've called 10 pillow companies and none of them have more than a few hundred in stock... But the 11th company magically has 10,000 pillows.

• 25:23David Senra?

  Investigate. Are the pillows shitty? Why the fuck does no one want your pillows? Push and get answers. What tends to happen is people think their job is done by finding 10,000 pillows and just order them only for us to find problems when they arrive. But then it's too close to the filming window to fix it. Do not overly trust people outside the company. Verify what they say. It is your fault if they don't pull through. So I'm on page 16 when you print this thing out. I think it's 36 pages in length. And what I would say is the summary so far is just a handful of things that all work well together. It's ownership, it's accountability, it's creativity, and it's effort. And you've probably had a very similar experience to Jimmy's. The fact that when you're, when you're working with other people,

• 26:04David Senra?

  it's remarkable how rare the combination of those four traits are in a single individual and that a single individual can apply those four traits consistently over a long period of time. And so then Jimmy goes into how does he want people in the company to communicate? And he calls this a higher form of communication. If you spend any amount of time with James, you'll hear him bring up higher forms of communication a lot because it's important and somehow very overlooked by most people. The worst thing you could ever do when you need something for your critical component is email someone at the company. The best is to talk to them in real life. It's very important you know when to call people for stuff, grab them in real life, and when to text them. The lower the form of communication, the more miscommunication you will face.

• 26:47David Senra?

  As I'm typing this to you, you have no idea if I'm laughing, smiling, happy, mad, or sad. You can't read my body language or my face. And because of that, it's not guaranteed that you'll understand what I'm conveying. One week out from a video and the thing you're working on just went south? Minimum, a multi-way call with the heads of that video. Ideally, you grab them in real life. The more complex what needs to be said is, the higher the form of communication you should use. Call first, then text if they don't answer. Since we're on the topic of communication, written communication also does not constitute communication unless they confirm they read it.

• 27:26David Senra?

  And then the next section goes back to the importance of ownership. Own your mistakes. I hate excuses and I despise with my entire soul when people just try to save face instead of learn from how they messed up. Mistakes are okay. Genuinely, they are, and I expect you to make a lot. That is perfectly fine. Every veteran here has cost me a million dollars at one point or another, and you can go ask them yourself if I ever held it over their heads. The reason I'm okay with your fuck-ups is because I know that's how you learn. I see it as me investing in you and your brain. Hence, while I have zero tolerance for C players and they must go immediately, those fuck-ups could be done by an A player that will retain the information learned.

• 28:11David Senra?

  I just beg you that you learn from every mistake and try not to repeat it. That's a really important point that he makes. Mistakes are okay. Genuinely, they are. I expect you to make a lot. There's this great line in this book called "The Unpublished David Ogilvie", which is this collection of internal memos that David wrote over like half a century as he was building his company. And he's warning his companies, like, "As we get bigger and more successful, we stop taking risks. We stop being entrepreneurs." And so he tells a great story about the importance of this. He says, "Are we free-wheeling entrepreneurs, ready to take risk in new ventures? Or are we too frightened of making mistakes? When the toy buyer at Sears made a mistake which cost his company 10 million bucks, I asked the head of Sears, 'Are you going to fire him?'

• 28:54David Senra?

  He replied, 'Hell, no. I fire people who don't make mistakes.'" That's a similar line of thinking that Bezos says. I think he said it in his shareholder letters. He might have said it in an interview. But if you're not making mistakes, you're not taking enough risk. And so, and Bezos even takes it a step further. He's like, "Well, the bigger the company gets, the more expensive the mistakes should be because we're getting bigger as a company."

• 29:17David Senra?

  And so this next part went viral on Twitter and was sent to me by a bunch of people. It says, "Use consultants. Consultants are literally cheat codes. Need to make the world's largest slice of cake? Start by calling the person who made the previous world's largest slice of cake. He's already done countless tests and can save you weeks, save you weeks' worth of work." I really want to drill this point home because I'm a massive believer in consultants. Because I've spent almost a decade of my life hyper obsessing over YouTube, I can show a brand-new creator how to go from 100 subscribers to 10,000 in a month. On their own, it would take them years to do it. Consultants are a gift from God. Please take advantage of them in every single freaking task assigned to you. Always, always, always ask yourself first if you can find a consultant to help you.

• 30:01David Senra?

  This is so important that I'm demanding you repeat this three times in your head. I will always check for consultants when I'm assigned a task. And then this next piece of advice really has to do with finding high agents, really, working with high-agency people. And so he says, "When dealing with people outside of Mr. Beast Productions, never take 'no' at face value. If we need a store to buy everything inside of, and you call the local Dollar Tree and the person that answers says, 'No, you can't film here,' that literally doesn't mean shit. Talk to other employees and see if they are, or if any of the other employees are fans, or if they have kids that are fans of the channel. Try talking to their boss. Talk to their boss's boss. Have me DM them on Twitter and try their social team. If after all avenues are exhausted and you're left with a 'no,' that doesn't mean don't try the other Dollar Trees,

• 30:44David Senra?

  because the manager of those could be huge fans and willing to bend the rules. This is what we call pushing through 'no.' Do not just stop because one person told you 'no.' Stop when all conceivable options are exhausted." And so if you want to see what a high-agency person looks like, one of my favorite examples of this is when I was reading a biography of James Cameron, the filmmaker. When he was in his early twenties, he was, uh, he, first of all, he couldn't get into... University of Southern California Film School was like the best in the country. He couldn't get into it. He was working like a bunch of blue collar jobs. So he's a janitor, he's a truck driver. And so he'd work a blue collar job during the day and then at night he would just obsess over movies. And so one day he had the idea, it was like, well, I can't get into film school, but that

• 31:28David Senra?

  doesn't mean they can stop me from creating my own film school. And so he went to the library at USC. He would start photocopying all the graduate student theses on very esoteric filmmaking subjects. He would fill fat binders with all these technical papers and then on breaks from driving a truck. And at night he would read through. And so there's a line in the biography, it says, "For the cost of a couple hundred dollars in photocopying, he essentially put himself through a graduate course in visual effects at the top film school in the country without ever meeting a single professor." James Cameron gave himself a graduate level degree in filmmaking for a few hundred dollars. Okay, then he has a section, just really random things you should know. He says, "I still have tons of notes around producing content that I can't really break

• 32:13David Senra?

  into their own sections, so I'm gonna rapid fire them here, so you at least hear them once before starting your journey." Goes back to what I said earlier, one of the most important ideas is don't do anything else, don't do anything someone else can do. "Spectacles are videos that only the Mr. Beast channel can do. Not every video should be a spectacle, and we realize these videos are hard, but that is the point." Another random rapid fire note. "I'd rather you be honest with each other than nice to each other." And I think that sentence, "I'd rather you be honest with each other than nice to each other," we should actually stop for just a second and go into a little more detail because this goes back to when you're reading the memo, if you watch any of Jimmy's interviews or you talk to him, it's like very obvious that he holds up the work as the most important

• 32:58David Senra?

  thing. That does a few things. One, I think I'd said earlier, makes them easy to interface with. But two, it also like, if you're gonna work there, like you understand what's gonna be asked of you. And you're an adult, you can choose if you wanna work in that environment or not. And the story that's in my mind that I think illustrates this perfectly is Johnny Ive was talking to Vanity Fair a few years after Steve Jobs died. And it's like a three-minute video. I've probably watched the video, I don't know, 50 times, maybe. At the end of the video, he says something that's very fascinating. And he tells the story when Steve called him vain. And it's interesting to note, this is one of the top three lessons he ever learned from Steve Jobs. This is what the, one of the three answers he gave to that question, what are the three lessons you learned most from him? So this is what Johnny said.

• 33:42David Senra?

  "I remember asking Steve about this. I said, 'It could be perceived that his critique of a piece of work was a little harsh, and that we've been putting our heart and soul into this. And I asked him, 'Could we not moderate the things we said a little?'" And he said, "Why?" And I said, "'Because I care about the team.'" And Steve said this brutally brilliant, insightful thing. He said, "No, Johnny, you're just really vain. You just want people to like you. I'm surprised at you. I thought you held the work up as the most important, not how you believed you were being perceived by other people." And Johnny said, "And I was terribly cross, because I knew he was right." When Jimmy writes, "I'd rather you be honest with each other than nice to each other,"

• 34:27David Senra?

  what he's saying is that he holds work as the most important. So then he asks and then answers, "What is the goal of our content?" "To excite me. The goal of our content is to excite me. That's what it always has been and always will be. I'm willing to count to 100,000, bury myself alive, or walk a marathon in the world's largest pair of shoes if I must. I just want to do what makes me happy and ultimately makes the viewers happy. This channel is my baby, and I've given up my life for it. This is the one thing I will never compromise on. I have zero issues throwing away a multimillion-dollar video if I don't think it's up to my standards." There's examples in both Steve Jobs biography and Anna Wintour's biography of them doing the exact same thing.

• 35:12David Senra?

  There's a guy that worked for Steve Jobs, who was part of his advertising agency for many years. He wrote this book called Insanely Simple. Talks about, you know, they spent millions of dollars, or a million dollars, on an ad campaign. And after the money was spent, Steve didn't think, still didn't think it was good enough, so he didn't care. He scratched, he scratched the whole thing. Same thing with Anna Wintour. I think in her case, it was like, you know, many photo shoots they spent hundreds of thousands of dollars on. She didn't think the quality was there, she would not allow it to go out. So he goes back to this. This is the one thing I will never compromise on. I have zero issues throwing away multimillion dollar video if I don't think it's up to my standards. We must always be improving and innovating. The camera angles need to always get better. The pacing, the story, the jokes, the color, the lighting, the music, the props, the people,

• 35:55David Senra?

  our framing, our ideas, literally everything must always be improving and innovating. That is what excites me. That is literally what I live for. And so there's also something that pops up a lot, especially when he's talking about the way they're making videos, the metrics that they monitor. It really has to do with the fact that he's obsessed with every single second of the video. So you can think about that as a founder being obsessed with every single aspect of the customer experience. It's very similar to what Walt Disney said, that if we lose the details, we lose everything. And I think what the great founders know is that details matter at the very beginning when your company's small, because the attention to detail is what makes your company grow large, and then these tiny changes in a large company can have massive effects.

• 36:38David Senra?

  And so I just want to pull this one instance. So he says, this is one example, I guess. One video, he's comparing the performance of two different videos. One gets 120 million views and one gets only, it's funny, he says only 45 million, which is still a ton. So he says, you know, one video gets 120 million views and the other only 45 million. Look at these retention numbers and see if you can pick which one got triple the views. So remember, he's saying why he's a stickler for every single second of a video. May seem insignificant when you're small, but it's the attention to detail that makes you grow into a large company. And then the details really matter because a tiny, tiny difference can have a massive impact as we're about to see, because there's nobody else that's operating at the scale that Jimmy is. He's the biggest internet creator in the world. And so he shows a graph.

• 37:21David Senra?

  He says, people on average watch this video a minute and 38 seconds longer than the other video of the same length. And then he types in all caps, of course it got triple the views. It's clear as day for YouTube that people like this video much more. The longer people watch, the better a video will do. This is why I'm such a stickler about every single second of a video. Now, the point that jumped out at me is the fact that the difference, if you can make two products, and in this case it's a video, both of them are about 11 minutes long. If one is watched, if you're at Jimmy's scale, right? If one is watched just a minute and a half longer on average, 90 seconds, 90 second difference at this scale gives you 80 million views.

• 38:07David Senra?

  And then he goes back to something he's already repeated multiple times. You should watch our videos. If you're going to be working for the Beast brand, you should be a fan of the Beast brand. A lot of very valuable knowledge comes while watching vast amounts of our videos. Quantity has a quality all of its own. This is something that repeats over and over again. I just did this episode on this Rare Bernard Arnault interview. You know, at this point in his career, he's done 10,000 store visits, tens of thousands of hours dedicated to retail, in the same way that Mr. Beast has tens of 20,000, 30,000 hours studying YouTube, which means that Jimmy could look at a video and see things that are invisible to you and I, in exactly the same way that's referenced in the Rare Bernard Arnault interview, that he walks into a store and something's

• 38:51David Senra?

  obvious to him that's invisible to everybody else. That comes from quantity. So it says, "A lot of very valuable knowledge comes while watching vast amounts of our videos." I feel silly for having to write this, but all the time I talk to new people that have seen at most like five of our or six of our videos, and it's mind blowing that they don't see a problem with that. To get 60% up to speed, I'd watch our last 50 videos. If you're a monster and really want to understand the history of the company and the innovations we've been through, I'd recommend you watch every video back until you hit the 10 million subscribers special. If you've seen every video we've made since 10 million, then you will have a lot more

• 39:31David Senra?

  context and information that others don't, and it will make you that much more valuable. And then he ends the memo with a finer chapter called "Your Career." If you've made it this far, you're probably at least semi-interested in this being your career, so I wanted to chat about that. Because if you're ambitious and you want to dedicate your life to work, you've picked the best company in America to do it at. I really don't care to hoard a bunch of money, and I deeply believe in rewarding the people that helped this business get to where it needs to be. So this is something I knew before reading this memo, because I've used it as an example in talks with a lot of different founders, to something that Jimmy told me a long time ago. He pays for talent. There's a line that Steve Jobs said, "That in everything I've done, it really pays to go after the best people in the world."

• 40:15David Senra?

  If Jimmy thinks you're the best video editor, or the best person running the videos, or the best data guy, he is going to pay you a ton. And I've met, when I was there, I met a bunch of the top people on his team. And they're young, but they're the best in the world at what they do. And so this is actually really, I would use Jimmy as an example in private conversations of this idea that pops up in the books, that you can't overpay for talent. And so I was going back and searching through Founder's Notes of like, what's the best way to describe this? And I actually found the, I searched through the transcript of this book by Brad Jacobs called How to Make a Few Billion Dollars. I think Brad's now in his ninth separate billion-dollar company? Maybe his eighth? If you haven't read his book, go read it. It's incredible. If you haven't listened to the episode, go listen to it. It's incredible.

• 41:00David Senra?

  And so I just want to read from that transcript because I think this will illustrate the idea of what Jimmy just said here is accurate. He's like, I really don't care to hoard a bunch of money. I deeply believe in rewarding the people that help this business get to where it needs to be. And so in the episode on How to Make a Few Billion Dollars, it says, and what do you do with A players? You overpay the hell out of them. Because here's the thing. The reason you should overpay them is because it's nearly impossible to overpay for talent, meaning somebody's the best in the world at what they do. Think about Steve Jobs, what Steve Jobs said earlier. In some fields, the best person is not twice as good. They're a hundred times as good. Think about when Steve Jobs was coming back to Apple. Apple bought Next for almost half a billion dollars. The way to think about that is Apple paid a half a billion dollars to rehire Steve Jobs,

• 41:45David Senra?

  and they got the deal of a century. And so Brad Jacobs says, it makes no financial sense to skimp on a salary and incentives to save $100,000 a year when hiring the second-best candidate may cost you millions of dollars in lost profit. Another way to summarize that is never, ever forget the dynamic range of humans. So he goes back to this. We need more leaders in the company. We need hard-working, obsessive, coachable, intelligent grinders that can step up and lead. If you want to become a production manager, tell James your intention and ask him why you suck and how you can become better. Seriously, he will give you a list of things that you need to improve on to become what we need. And if you actually listen and master those things, we will give you a shot at the

• 42:28David Senra?

  role. I think the best biography of Steve Jobs ever written was Becoming Steve Jobs. And in that book, it said Steve didn't give his team much formal feedback. During the US versus Microsoft antitrust case, Microsoft subpoenaed all my personnel records at Apple. So I'm sitting down with our lawyer and he says, I've gotten your file from HR. He pulls it out and there's only one piece of paper in it, something meaningless. And he's like, where is your file? Where's your annual reviews and all that? I told him that it never had an annual review. Steve didn't believe in reviews. He disliked all that formality. His feeling was, I give you feedback all the time. What do you need a review for? And so back to this, just go and ask, like, what do you want? Why? How? This is the role in the company that I want?

• 43:13David Senra?

  How can I get there? And he says, we'll give you a list of things that you need to improve on to become what we need. And if you actually listen and master those things, we will give you a shot at the role. This isn't a bureaucratic corporate company. The more responsibility, risk you help us navigate and overall bullshit that you deal with, the more you'll make. And if you want more of that, we will gladly help train you to receive it. There is infinite room for you to grow here. We will win and we are going to build something amazing. I see a world where this company is worth tens of billions of dollars. And those of you that helped build this will be rewarded. I want nothing more than for you to go all in, be obsessive all day, every day, and become so goddamn valuable, this company can't operate without you. And in return for becoming so

• 43:56David Senra?

  valuable, I hope to give you an incredible experience, a fun place to work, and of course, more money than you could ever dream of making at any other company. Now, read this all over again, because I guarantee you, you didn't retain enough. And that is the last line of the memo. The last line of the memo made me think of this line from Les Schwab, who's one of Charlie Munger and Warren Buffett's favorite founders. And Les Schwab said, whatever you do, you must do it with gusto. You must do it in volume. It is a case of repeat, repeat, repeat. And that is where I'll leave it. For the full story, highly recommend reading the leaked memo. I will leave a link down below. You can read it for free online. That is 366 books down, 1,000 to go, and I'll talk to you again soon.