#339 Joseph Duveen: Robber Baron Art Dealer

What I learned from reading The Days of Duveen by S. N. Behrman. ---- Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes ---- Founders merch available at the Founders shop ---- Patrick and I are looking for partners. If you are building B2B products get in touch here. ---- (0:01) Duveen noticed that Europe had plenty of art and America had plenty of money, and his entire astonishing career was the product of that simple observation. (2:30) The great American millionaires of the Duveen Era were slow-speaking and slow-thinking, cautious, secretive, and maddeningly deliberate. (3:30) How Larry Gagosian Reshaped The Art World by Patrick Radden Keefe. (Founders #325) (4:30) Invest Like The Best #342 Will England: A Primer on Multi-Strategy Hedge Funds (6:00) There is an old two-part rule that often works wonders in business, science, and elsewhere: 1. Take a simple, basic idea and 2. Take it very seriously. — the NEW Poor Charlie's Almanack: The Wit and Wisdom of Charlie Munger. (Founders #329) (10:00) The art dealer Joseph Duveen insisted on making the paintings he sold as scarce and rare as possible. To keep their prices elevated and their status high, he bought up whole collections and stored them in his basement. The paintings that he sold became more than just paintings—they were fetish objects, their value increased by their rarity. — The 48 Laws of Power by Robert Greene. (14:00) Duveen had enormous respect for the prices he set on the objects he bought and sold. Often his clients tried, in various ways, to maneuver him into a position where he might relax his high standards, but he nearly always managed to keep them. (16:00) Wildcatters: A Story of Texans, Oil, and Money by Sally Helgesen. (Founders #338) (18:00) You don’t need many customers if the few customers you do have are the riches people in the world. (22:00) His enthusiasm was irrepressible. (26:00) Duveen felt that his educational mission was two fold —to teach millionaire American collectors what the great works of art were, and to teach them that they could get those works of art only through him. (27:00) When you pay high for the priceless, you're getting it cheap. (31:00) He was interested in practically nothing except his business. (31:00) Certain men are endowed with the faculty of concentrating on their own affairs to the exclusion of what's going on elsewhere in the cosmos. Duveen was that kind of man. (32:00) Monopoly was his method. (38:00) Duveen would pay the servants of staff that worked in the homes of his clients. This was the result: They developed a feeling that it was only fair to transmit to Duveen any information that might interest him. (41:00) The art dealer Joseph Duveen was once confronted with a terrible problem. The millionaires who had paid so dearly for Duveen’s paintings were running out of wall space, and with inheritance taxes getting ever higher, it seemed unlikely that they would keep buying. The solution was the National Gallery of Art in Washington, D. C., which Duveen helped create in 1937 by getting Andrew Mellon to donate his collection to it. The National Gallery was the perfect front for Duveen. In one gesture, his clients avoided taxes, cleared wall space for new purchases, and reduced the number of paintings on the market, maintaining the upward pressure on their prices. All this while the donors created the appearance of being public benefactors. — The 48 Laws of Power by Robert Greene. (48:00) His clients felt better when they paid a lot. It gave them the assurance of acquiring rarity. ---- 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?

  Two quick things before we jump into this episode on Joseph Devine. I just finished listening to this entire episode. It is a wild episode. Imagine building your business based on a handful of clients. Your business only has a handful of clients, but those clients are the wealthiest, some of the wealthiest people in the world. That is the episode that you're about to hear. Before we jump into that, two quick things. If you've been dilly-dallying about investing in a subscription to Founder's Notes, you might want to do that now for the first time ever. And for a limited time only, I got a bunch of requests asking if you could do a one-time option. And so I'm currently testing that right now. You can get access by going to foundersnotes.com. That is founders with an S, foundersnotes.com. I haven't even mentioned it publicly and people are already selecting that option.

• 0:43David Senra?

  So again, the one-time is for a limited time only, foundersnotes.com. I'll talk more about that at the end. The second thing real quick is Patrick O'Shaughnessy from the Invest Like the Best podcast and I are looking for partners. If you're building B2B products and you'd be interested in partnering with Patrick and I, you can go to founderspodcast.com/partnerships. That is partnerships with an S. There you can tell us about what you're working on and then get in touch. Again, that is founderspodcast.com/partnerships. So that's it. Let's jump into this episode. I just finished listening to it. I loved it. I hope you do too.

• 1:14David Senra?

  Joseph Devine noticed that Europe had plenty of art and America had plenty of money. And his entire astonishing career was the product of that one simple observation. Beginning in 1886, when he was 17, he was professionally journeying between Europe, where he stocked up on merchandise, and America, where he sold that merchandise. There was almost nothing Devine wouldn't do for his important clients. These immensely rich Americans were shy and suspicious of casual contacts because of their wealth and often didn't know where to go or what to do with themselves when they traveled abroad. Devine provided them with an entrance to the great country homes of the European nobility.

• 1:57David Senra?

  It was just a coincidence, a fabricated coincidence, which you and I will talk about a few times today, that Devine always did. There's nothing, as you'll see as we go through this, there's nothing in this guy's life and career that was a coincidence. So he'd provide... Rich Americans entrance into these country homes of European nobility. These homes were full of ancestral portraits that were for sale. Duveen also wrangled hotel accommodations and passage on sold-out chips for his clients. He got his clients' houses, and he provided architects to build them houses. And then he saw to it that the architects planned the interiors of these houses with

• 2:39David Senra?

  wall space that demanded plenty of pictures. He even selected brides for some of his clients. These selections of potential brides had to meet the same refined standard that governed his choice of houses for his clients, which meant a bride that was receptive to collecting expensive art. Duveen was not a patient man. He had caloric imperialism, and he felt that the world must stop while he got what he wanted. He had a convulsive drive, a boundless and explosive fervor, and a reckless contempt for works of art handled by rival dealers. That's a funny way to say that he was extremely, extremely competitive.

• 3:21David Senra?

  One time in New York, a millionaire collector who was so undisciplined that he was thinking of buying a 16th-century Italian painting from another art dealer, asked Duveen to come to his mansion on Fifth Avenue to take a look at it. The prospective buyer watched Duveen's face closely, and he saw his nostrils quiver. "I sniff fresh paint," said Duveen. Duveen's remarks about other people's pictures sometimes resulted in lawsuits that lasted for years, cost him hundreds of thousands of dollars, and brought him into courts in New York and London and Paris. In his business, Duveen had to bear that the temperaments of the men that he dealt with were the direct opposite of his own.

• 4:02David Senra?

  The great American millionaires of the Duveen era were slow-speaking, and slow-thinking, and cautious, and secretive, and deliberate. They were the emperors of oil and steel, of department stores and railroads and newspapers, of stocks and bonds, of utilities and banking. And these men had trained themselves to talk slowly and pause before each word. Duveen dealt constantly with cryptic men like J. P. Morgan, and Henry Clay Frick, and Andrew Mellon. That was an excerpt from this long-form, two-part New Yorker profile that I'm going to talk to you about today. It's called "The Days of Duveen: A Legendary Art Dealer and His Clients", and it was written by S. N. Burnham, all the way back in 1951.

• 4:47David Senra?

  And before I jump back into the profile, I want to tell you how this came on my radar. A few months ago, when I was researching and reading about Larry Gagosian, which is the billionaire art dealer, that was episode 325, I mentioned this theme that seems to appear over and over again, that there's always a blueprint. And so there's somebody doing something now, and they were heavily influenced or got the idea from somebody that lived a long time before them. And so Larry Gagosian is alive and operating to this day. But almost 100 years ago, Joseph Duveen built a career that Larry used as a blueprint. In fact, in that piece, I'm reading from episode 325, it says, "Gagosian isn't the first to pull this off. He's a big reader, and one of his favorite subjects is the life of Joseph Duveen, the great art dealer who helped assemble the collections of Andrew Mellon,

• 5:31David Senra?

  J. P. Morgan, and other Gilded Age titans. There are several biographies of Duveen, and Gagosian informed me that he has read them all." And so shortly after that episode came out, Will England, who's the CEO of Walleye Capital, texted me. And he says, "Hey, just so you know, the author, Robert Greene, mentions Joseph Duveen in a bunch of his books, like The 48 Laws of Power and The 33 Strategies of War." And so in addition to this two-part New Yorker profile, there's several highlights from Robert Greene talking about how Duveen, a strategy that Duveen used to build his business. And by the way, just in case you haven't listened to it yet, one of my favorite episodes from last year was on Invest Like the Best. It's Invest Like the Best, number 342. It's actually Will England.

• 6:14David Senra?

  The title is "A Primer on Multi-Strategy Hedge Funds", and I just happened to be lucky enough to be there that day that they recorded it. So I got to spend a few hours with Will. And he has two of my favorite traits: intelligence combined with intensity. And so I want to jump right back into Duveen. The main thing that you and I are going to talk about today is the fact that everything is calculated with him, with Duveen. Nothing is accidental. In many cases, he goes out of his way to disguise his cleverness. So I want to review just a couple ideas that I found fascinating from that introduction, was the fact that, hey... He built his career really on a combination of two ideas, right? It's like this guy just noticed, hey, Europe has plenty of art. At the time he's living, this late 1800s, early 1900s, right?

• 6:59David Senra?

  When he's building his business, Europe has plenty of art, no money. America has plenty of money. And I love that line where it's like his entire astonishing career was a product of that simple observation. So something I thought about as I read that was it's a combination of two of my favorite ideas. One came from Charlie Munger that I've thought about for years. And it's really what I'm trying to do with Founders Podcast is hey, find a simple idea and take that idea seriously. I found that idea when I read Poor Charlie's Dominique many, many years ago for the first time. Cause in that book, Charlie says, there's an old two-part rule that often works wonders in business and science and elsewhere. It is take a simple, basic idea and take it very seriously. And then the second idea that came to mind actually came from the Larry Gagosian profile.

• 7:43David Senra?

  And I have, I've thought about this idea every week and since I've first discovered it in Larry Gagosian profile. And it's actually been on my mind and influencing my decisions constantly. And it's that genius has the fewest moving parts. Joseph DuVine becomes fabulously wealthy, builds an incredible life and business off of that simple idea. His business had very few moving parts. It's like, hey, I'm going to buy all this hard to find art in Europe. And I'm going to connect that. I'm going to then take it across the Atlantic Ocean and sell it to the rich robber barons in America. That's his entire business and everything he does, because genius has the fewest moving parts. It allows him to think about it in ways where if you spread yourself thin or you're working on a million different things, you're not going to come up with the ideas that he does.

• 8:27David Senra?

  So one example of this is like, he was a big believer in practice. And so what would happen is first of all, he built his entire freaking business off of just a handful of clients, which obviously if you're, if your clients are the richest people in the world, you don't need that many of them, right? But what would he do is he would study them intently. He'd get to know like their tastes, their traits, their personality, what's important to him. And then he would build like these little models of how this person acts or thinks. And he would explain that to his secretary. And so the day before, he's got, let's say he's got an appointment tomorrow with Andrew Mellon or Henry Clay Frick or, you know, a ton of these people you and I have studied. I've done episodes on all these people. It's really cool. How many people that are mentioned in this article, in this profile that I've done multiple

• 9:12David Senra?

  episodes on. But let's say he's going to meet with them tomorrow, right? The day before, he will have, literally act out how that interview is likely to go, how that sales process is likely to go. He will map out all the strategic possibilities. He will rehearse it. And then by the time he's in person with the client, it almost seems like second nature, like, oh, this is just spur of the moment. When it's no, everything with this guy is extremely, extremely methodical. Another thing that I noticed, which is very fascinating and something I believe wholeheartedly, the enthusiasm that you have for your product is transferable to other people. And everybody talks to me, it's like, they talk over and over again about his enthusiasm, the fact that he was fun to be around, the fact that he was super excited about what he was doing.

• 9:54David Senra?

  And so it says, "There was never, there was never any doubts in his own mind. Each picture..." So remember, this is written back in 1951. They use the word picture. I think today you and I would use the word painting. So it says, "There were never any doubts in his mind. Each painting he had to sell, each piece of sculpture was the greatest since the last one and until the next one." And the reason he was the most successful art dealer of all time until Larry Gagosian, I think now, obviously Larry Gagosian has surpassed him. Obviously, you know, standing on the, Gagosian is standing on the shoulders of giants, one of those giants being Duveen, was the fact that he was obsessed. Duveen was obsessed with scarcity and controlling supply. And so what he would say is, he would tell his clients, "They could replace the money

• 10:38David Senra?

  that they have many times over, but they were acquiring the irreplaceable when they bought a Duveen." And so let me give you a little summary of this. I'm going to put this down, pick up 48 Laws of Power. This is what is in the book. On this idea of the importance of scarcity and controlling supply to Duveen's business, the art dealer Joseph Duveen insisted on making the paintings he sold as scarce and as rare as possible. To keep their prices elevated and their status high, he bought up entire collections and stored them in his basement. The paintings that he sold became more than just paintings. They were fetish objects. Their value was increased by their rarity. He was intent. Over and over again, he wanted to control supply. He bought entire collections. He'd pay higher prices than anybody else. And then

• 11:23David Senra?

  he would stimulate demand by saying, hey, there's only one of these, but there's, I got 10 clients just like you. And if you don't buy this, I'm going to pick up the phone, I'm going to walk down the street, and I'm going to sell to somebody else, making his clients conscious that whereas he had unique access to great art, his outlets for it were multiple. He watched their doubts about the prices of the art evolving into more acute doubts about whether he would let them buy it. So remember that idea, the importance of controlling supply. It's an idea you and I are going to come back to over and over again. This was very fascinating. He built up this, this massive information network. And so this is going to be repeated throughout his career as well. So it says, Duveen received daily reports from his galleries. So he's got galleries in New York and London and

• 12:05David Senra?

  Paris telling them, or telling him what customers had come in, what pictures they had looked at, and for how long, and what they said about those pictures. From other sources, he got reports on any major collections being offered for sale. He also got reports from his quote unquote runners. These are people that he deployed all over Europe to hunt out noblemen on the verge of settling for solvency and a bit of loose change at the sacrifice of some of their family portraits. These reports might include the gossips coming from servants who had overheard the head of the state saying to an important dealer that he might consider parting with a lovely piece if the price was right. Now, this is another thing that I think was unique to the way Duveen built his business. He wanted

• 12:49David Senra?

  to control supply. He wanted to say, hey, I have literally the best and rarest pieces of art all over the world. They're not available anywhere else. And so to do that, he would routinely pay the highest prices, far exceeding what anyone had paid before. And in this bizarre world of capitalism that we're at at the very, the highest end, this actually made, the fact that he overpaid, made his merchandise more valuable in the eyes of the buyer. So in negotiating with the heads of noble families, Duveen usually won hands down over the other dealers. The brashness of his attacks simply bowled over the dukes and the barons. He didn't waste any time. He talked prices and he talked big prices. He would say, "This is the greatest thing I ever saw. I will pay the biggest price you ever saw."

• 13:34David Senra?

  And no surprise here, to this technique, the dukes and the barons responded warmly. And so they sold only to him. And he would continue this later on. He dies, I think, in the 1930s. So part of his career overlaps with the Great Depression. And it's a depression or no depression. It was Duveen's principle to pay the highest conceivable prices. Listen to this. "A titled Englishwoman had a family portrait to sell. Duveen asked her what she wanted for it, and she meekly said, 'Eighteen thousand pounds.'" Duveen was indignant. "What? Eighteen thousand pounds for a picture of this quality? That is ridiculous, my dear lady. Ridiculous." He began to extol the virtues of the picture as if he were selling it. And indeed, in his mind, right? Instead of buying it, he was already selling it.

• 14:18David Senra?

  A kind of haggle in reverse ensued. Finally, the owner asked him what he thought the picture was worth. And this is a key insight into Duveen's thinking. "Duveen, who had already decided what he would charge some American customer, it would be a price that he could not ask for a picture that had cost him just a mere eighteen thousand pounds. So he shouted reproachfully at her. 'My dear lady, the very least you should let that picture go for is twenty-five thousand pounds.'" Swept off her feet by his enthusiasm—again, that word enthusiasm is going to be repeated over and over again

• 14:58David Senra?

  by people around Duveen—"swept off her feet by his enthusiasm, the lady capitulated." And so this next story is nuts. And it just goes into this idea that a lot of people view—it's part of human nature. We interpret price as a signal for quality, right? A shortcut for quality. So he's like, "Hey, I'm not—you know, you want to sell this to me for eighteen thousand pounds? Nope, I'm going to give you twenty-five thousand pounds." That sounds crazy. But this is why. Duveen had enormous respect for the prices he set on the objects he bought and sold. Often, his clients tried to maneuver him into a position where he might relax his high standards. But he always managed to keep them. There was an instance of this kind of maneuvering in 1934. So he is selling three statues, right? Three busts. He wants to sell them.

• 15:43David Senra?

  All three of them to Rockefeller's son. So this is John D Rockefeller Jr. Okay, so he's like, hey, who's a massive collector and a huge customer of Duveen. And so he's like, hey, I'll sell you. Duveen says, I will sell you these three busts for a million and a half dollars. Rockefeller's, oh, that prices might be too high. So what does Duveen do? When he's presented with that, he does not negotiate down. He's like, oh, I want a million and a half. Rockefeller's like, I'll give you a million. Like, Duveen's like, no, I'm going to give you the busts. Put them up in your house. And I think he gives him a year, right? So it says, it is a year. So he says he allowed Rockefeller a year's options on the bust, right? So they are going to remain for a year in the Rockefeller mansion as non-paying guests. That's hilarious.

• 16:29David Senra?

  During that time, Duveen hoped that the attraction between Rockefeller Jr. and the bust would ripen into emotion that was more intense. And so keep in mind, this is 1934. Look at this like psychological jujitsu that Duveen is going to do on Rockefeller Jr. Right? So a few months later, where, you know, he's got a year. A few months later, Rockefeller writes him a letter. He's like, hey, I have a counterproposal. I'll buy the bust for a million dollars, right? Because the depression is on and most people are feeling the effects of it. And Rockefeller said, hey, you know, you might, because of the depression, you might welcome a million in cash. Duveen's response was that I am not in the stock market and therefore I am immune and not the least bit affected by the depression. Isn't that interesting?

• 17:11David Senra?

  I always love the idea of like the order in which you read things can change your interpretation of it. And so last week, you and I talked about Texas oil billionaires. And Manu Moncrief was very rich through the depression. A lot of the Texas oil billionaires, because they had no money in the stock market. And so in the Northeast at the time, everybody's getting destroyed. All of Texas's wealth is in, you know, coming from the ground. And so they were essentially immune to the effects of the Great Depression. We see something very similar here. He's like, listen, I'm not in, my entire business is selling pictures, right? I'm taking European art and selling it to you rich Americans. I'm not worried about the stock market. And so Duveen actually turns around, it's like, oh, since you're trying to negotiate with me, you're hard up on money.

• 17:55David Senra?

  And so I will come to your assistance. Duveen managed to convey the suggestion that if Rockefeller was in temporary financial difficulty, he, Duveen, was ready to come to his assistance. And so what happens? Okay, so he says, I want, I want to sell these things to you for these three statues for a million and a half dollars. You think that's too high? Take them, let them in your house for a year, right? That's going to expire on the 30, the option's going to expire on the 31st of December. You can either buy them, and I've made it very clear, I'm not budging on the price, right? You can either buy them on December 31st, or I have to take them back. So that's again, a very advanced understanding, setting a deadline of human psychology. And so what happens is, the day before the option expires, Rockefeller writes DuVine, informs

• 18:38David Senra?

  that he's buying all three of them for a million and a half dollars. And it's this fundamental ability to understand and really focus in on his customers. Because he essentially says, the eight or 10 clients, so at this part of the story, they're talking about the fact that he put a lot of money into building, built like a gallery slash like house, very similar to what Gosey did. This is on Fifth Avenue in Manhattan, and he hired great architects, and he had to make it beautiful, because his point was like, well, I have eight or 10 big clients, right? These are the ones, most of them are in New York, these are the ones that are going to enter into this building. The handful of men with whom DuVine did the major part of his business, these eight or 10 clients, would come into this building to look at the garnered possessions of kings and

• 19:21David Senra?

  emperors. And so therefore, they must be provided with an environment that would tend to make them conscious of their right to inherit these possessions. So, one, the interesting thing is, you don't need many customers. If the few customers that you have are the richest people in the world, right? He built his entire business around eight to 10 people. And two, he understood that they were very wealthy. Most of them came from, you know, nothing, or if not, they did, their father came from nothing, in John D. Rockefeller's, Jr.'s case, right? But what they lacked is they didn't have prestige, they didn't have titles, they didn't have nobility, all the things that Europe had in abundance, but no cash. And so it's like, well, if you buy this, right? You were essentially, if you really think about what,

• 20:05David Senra?

  What Duveen is doing, he's teaching his market, he's teaching his customers that buying art was also buying upper-class status. And maybe the highest class possible, because these are the former possessions of kings and emperors. And so, multiple times, it's talked about the fact that this guy, first of all, insane levels of high agency, insane levels of high levels of disagreeableness, although he was very nice and liked, but he wouldn't budge on pricing, whatever case is. But he's also highly competitive, and it makes perfect sense, because he wanted to not just be the best in the world, but literally the only person that these people would ever even think about buying art from. And to constantly teach, repetition is persuasive. And so, to constantly teach them that, that's why he would say, hey, you have plenty of

• 20:50David Senra?

  money, you can replace that money many, many times over, but you're acquiring something that is irreplaceable. Another way he would describe that later on is that you are trading the infinite, which is money, right, with the finite, which is, there's only one of these in the world. And what is also interesting, which Duveen also shares in common with Gagosian, is the fact that he would, essentially, he was the business, right? He would travel all over the world. He'd go rotate between Paris, New York, and London, and his entire business travels with him. And so, when he goes to London, he winds up staying in the same, like, if he's in Paris, he stays at the Ritz, if he's in London, he stays at Claridge's. And he sets up his suite there as, like, miniature art galleries, is the way to think about this.

• 21:34David Senra?

  This is funny. So, he sets up his suite there, right? All of his accommodations at all points on any itinerary anywhere in the world, right? It's going to be transformed into a small-scale art gallery. He invites you over. He may be staying there, but it looks like an art gallery. He arranges the paintings, sculptures, and the objects, so that his clients and friends could visit him in a proper setting and possibly take home some of his furnishings.

• 21:57David Senra?

  I'm telling you, this is the most, one of the most motivating things for me is the fact that there is always a blueprint that I, you get to study these people like, wow, these people are so ruthlessly efficient and brilliant. And then you're like, wait a minute, he got that idea from this other person that lived 50 years before. I can do the same thing. And so this is literally happening, right? Where he's like inviting people over to his hotel room in London. Oh, I love this chair. I love this art. Okay. Do you want it? In the Gagosian, this is like, let's see, this is happening, let's see, 1920s. So let's say 60, 70 years later in New York City, Gagosian invites Bernard Arnault, Arnault, obviously the founder of LVMH. I'm actually working on, I'll give you a sneak peek. I'm

• 22:42David Senra?

  working on another episode of him on Bernard Arnault. I've been practicing pronouncing his name. But he invites, Gagosian invites Arnault over and Arnault just happens to come. He's like, I like these chairs. And Gagosian's like, this is at his, uh, his, uh, home on Fifth Avenue, I'm pretty sure. And he's like, Bernard, it's like, I like these chairs. And like, Gagosian's like, do you want to buy them? And I think they wind up doing a deal right there. But I just love the fact that, you know, this just repeats over and over again. So let's go back to this idea that your enthusiasm, your charisma is transferable to other people. All the people around him as clients described Duveen as an exhilarating companion, right? They said his enthusiasm, how many times? I'm

• 23:25David Senra?

  like, was it 20 pages into this thing? How many times have we already heard the word enthusiasm? His enthusiasm was irrepressible. He engaged in a kind of buffoonery that was irresistible. Most of his friends were older men and they enjoyed his company partly because he made them feel young. And so Andrew Mellon's much older than him. And he summarizes the gift that Duveen's personality was to his business where he told Duveen to his face, the pictures that you sell me always look better when you are here. Think about how powerful his charisma had to be that he could take his aura, right? And transfer it to the picture that you bought from him. And you're like, in his presence, like, this is amazing. This is a reality distortion field. This is Steve Jobs, right? Same exact idea

• 24:08David Senra?

  behind this. And then he leaves and he's like, wait a minute, the picture doesn't look as good when Duveen is not here. And this is not, this is the thing. I think I have notes later on. Cause I kept thinking about, you know, Charlie Munger's psychology of human misjudgment that he went over and over again. People think this is like some willy-fu-fu stuff. These are some of the most sophisticated entrepreneurs to ever live, and it works on them. That should tell you that it's deeply embedded in our human nature, which I'll get to later on. I want to give you an example of one of my favorite maxims comes from Ted Turner, actually came from Ted Turner's dad. Early to bed, early to rise, work like hell, and advertise.

• 24:47David Senra?

  And so what would happen is because DuVine, there was all these unintended positive externalities that came from DuVine constantly outbidding everybody and, you know, he's hell-bent on controlling supply. One way you have to do that is sometimes you have to pay more than you think it's worth. And so he was paying crazy prices. They were so crazy that they were covered, they were newsworthy. So he's got essentially unlimited free advertising because he buys, let's say he spends, I'm going to give you like three examples to spread throughout the 1920s that are covered in the Herald Tribune, which essentially they function as free advertising for him. And so this is like an example. Sir Joseph DuVine, the art dealer, has bought a Rembrandt for $410,000. That's $410,000 in 1926.

• 25:32David Senra?

  One of the highest prices ever paid. And then listen to this next line, I interrupted the sentence for you. Listen to this. So, highest price ever paid, and this Rembrandt had been in the possession of the family for 200 years. Highest price ever paid and unbelievably scarce. The opportunity to buy this comes up only once every 200 years. Do you want to act? And if you act, you have to act now. Another example. Sir Joseph DuVine, the international art dealer, bought in London yesterday the entire collection. He does this all the time. Like he'll buy, you know, one-off pieces if they're the best or whatever. He'll buy entire collections and then he'll just store them. Again, controlling supply.

• 26:12David Senra?

  The entire collection of 120 Italian of the old masters belonging to this very wealthy European, or noble European. This entire collection will be brought to New York. The purchase price was $3 million in 1927. And then not only did his, when he bought merchandise, right? And supply, it was covered, but when he sold, it was also covered. This is again, early to bed, early rise, work like hell and advertise. Andrew Mellon, right? This is the, the son of Judge Mellon, who is the patriarch of the Mellon family dynasty. But at this time, not only is he very wealthy, he's also the Secretary of the Treasury of the United States.

• 26:55David Senra?

  And so now you have DuVine's name associated with literally the best people in the world. Not only are they richest, in some cases, they held the highest, like some of the highest government positions. So it says, Andrew Mellon, the Secretary of Treasury of the United States, has purchased from DuVine for $970,000. A painting, doesn't even matter what the painting is. Here's again, the scarcity, the time aspect of it, right? The painting bears Raphael's signature and the date 1508. And so to other people, it felt like he was overpaying. He understood that his entire business only, it only works if he has, if you can control supply and he has access to literally the best and the most desired art of all the world. And so this is an example of what he would do to make sure that he didn't miss out, right?

• 27:40David Senra?

  It's not like, oh, if I don't win this auction, you know, there's a second thing that's kind of like this. It's like either, it's zero sum. One winner, everybody else loses. The circumstances attending DuVine's purchase of this painting called The Pinky in 1926, illustrate his tenacity and the fight he made to establish his preeminence among the art dealers of the world. From the beginning, DuVine felt that his educational mission was twofold. Number one, to teach millionaire American collectors what the great works of art were. And two, to teach them that they could only get those works of art through him. So number one, I sell the best and I'm the only one that has them, right? And so he, there's this other rival dealer that's like, hey, I'm going to bid on Pinky too. And so what does DuVine do?

• 28:24David Senra?

  DuVine goes to, this, this is an art auction that is being run by Christie's. And he goes to the manager of Christie's and he doesn't even show up, he doesn't even have to show up for the bidding. He just tells the guy, he's like, I have an unlimited bid. Whatever your highest bid is, I will pay more. So by default, he has to be the winner. And this is what he said about this. DuVine admitted that the price he had paid was steep, but he repeated his cardinal dictum. When you pay high for the priceless, you're getting it cheap. Another saying of his endlessly repeated to his American clients was, "You can get all the paintings you want at $50,000 apiece. That is easy, but to get paintings at a quarter of a million dollars apiece, that takes doing."

• 29:08David Senra?

  And then he would go out of his way to stroke and to encourage FOMO, the fear of missing out. He offers this deal to Andrew Mellon. Andrew's like, "Oh, I'm not interested." The next day, he calls up H. E. Huntington. Huntington built a bunch of railroads. He offers it to him. Huntington buys. And then, once it's, in many cases, once they sell, or, excuse me, once the Huntington's or the Rubens buy, they rarely sell. And so even many decades later, when this piece is being written, it's still hanging, that painting was still hanging in the Huntington Mansion in California. And even that worked in DuVine's favor because Mellon heard that, "Oh, the next day, somebody else bought what I said I wasn't interested in. What if I had changed my mind? Now I can't get it.

• 29:53David Senra?

  It's stuck." So then, the next time that DuVine has something that he thinks Mellon is interested in, it causes Mellon to act faster. Mellon did not make the same mistake again. DuVine offers him a painting by Romney. It is the highest price ever paid for Romney. DuVine offered it to him, and Mellon immediately bought it. Multiple times, it talks about that DuVine was aiming for monopoly on purpose. There's a great line where it says, "Monopoly by Peter Thiel in Zero to One", where he says, "Monopoly businesses capture more value than millions of undifferentiated competitors." This is what it sounds like if you have a monopoly. There had never before been anyone like DuVine, the exalted middleman, and he practically monopolized his field.

• 30:37David Senra?

  95 of the 115 paintings in the Mellon collection, right, which gets donated to the public, which I'll talk about why he did this, which was also a genius move in a little bit, came to Mellon through DuVine. Mellon, you have to think about that. At this point, Andrew Mellon, one of the largest art collectors in the United States, He might not be the largest, but he's on the shortlist. He might be the fifth, might be the second, might be the 10th. He's certainly, sure as hell, is not the 100th, right? So one of the largest art collectors in America at the time, 95 of the 115 paintings in his collection came from DuVine. That is, he aimed for Monopoly and he hit his target. Another fascinating thing that I've already mentioned, but it's very obvious when you

• 31:22David Senra?

  read about and you start studying Joseph DuVine, it's like, okay, this guy is super clever. And what makes him even more clever, right? So it talks about that. He enjoyed having the stupid side of his character emphasized in public dinner parties. He'd bring up his mistakes. Most people, you know, they're kind of embarrassed by their failures, embarrassed by their mistakes. They would like hide it, they're being ashamed of it. He wouldn't hide his mistakes. He'd bring them up himself. And this is the line Y, it says, "He enjoyed having the stupid side of his character emphasized." It constituted a disguise for his cleverness. That's how you know somebody's even more clever, the fact that they understand that it's clever to conceal your cleverness. And another thing that clever founders do is they're focused. Listen to this line that comes a couple of pages later.

• 32:06David Senra?

  "He was interested in practically nothing except his business." If you think about the layers in which this guy goes, it's impossible to arrive at the conclusions and come up with the ideas that DuVine had, right? I'm a huge believer that it is not what you do, but it is how you do it. There is a ton of art dealers that don't make any money, and there's a handful, one or two or three, that became billionaires. It's not what you do, it's how you do it. And this idea of crazy focus and just thinking about your business longer and harder than anybody else does, you're going to get so deep down that curve that you're going to come up with ideas that other people in the same field that remain permanently superficial will never have. "Certain men are endowed with the faculty of concentrating on their own affairs to the exclusion of what's going on elsewhere."

• 32:51David Senra?

  DuVine was that kind of man. Going back to this idea of how important it was, this information network that he built up slowly over time, right? Compounds of value becomes one of his greatest assets later in his life. How valuable it is, is that Henry Clay Frick is one of his biggest clients, right? And one of the richest people on the planet now. And yet, Duveen is the expert in this field. So he hears about all the great assets before anybody else does. And so he's having like a launch and a conversation with Henry Clay Frick. And Frick brings up, he's like, man, I lost that painting. I was on the trail of a very great painting. It's this thing called St. John James Park or something like that. And Frick's response, or Duveen's response to Frick was excellent. He goes, oh, my Mr. Frick, I bought that painting.

• 33:34David Senra?

  When you want a great painting, you must come to me because you know, I get the first chance at all of them. Remember, he repeats this over and over again. You can only get the best through me. Ignore these competitors, come straight to me, you will get the best every time. And the greatest way to condense and clarify that idea, in my opinion, is the line monopoly was his method. Monopoly was his method. And I think all these ideas work together to help him build his monopoly. The fact that he was focused on it, he was only interested in his business. There's this line about not a detail that he paid attention to. And I think there's a great story that illustrate, you know, monopoly was his method. Duveen displayed that scrupulous attention to detail that has distinguished the careers of other celebrated generals.

• 34:18David Senra?

  So obviously something you and I have talked about multiple times with the most recent on the, two weeks ago, on the episode of Napoleon's Strategies and Maxims. And so an example of that, it goes back to this information network, right? He knew every, he built relationships and paid people to give him information. And the reason, and I'm going to actually explain, I'm going to explain the story first, and then we'll go into how and like, who are the people that he paid. But this is the reason why. So he would, the way that most people are getting back and forth between Europe and America at this point, right? It's on these transatlantic ships. So he becomes friends with all the deckhands on the ships. And he pays them a lot of money.

• 35:02David Senra?

  In many cases, hundreds of dollars, like he'll tip them, you know, hundreds of dollars. And it's way more than they make. And in return, they make sure because they're setting up and they're deciding where everybody's going to sit on the deck. And they put they what they do, because Duveen has built relationships with them, finds out they have valuable information, pays them for that information, pays them for their service in in like an excessive amount, more so than anybody else is paying them, right? In return, he gets seated and set up next to a bunch of American millionaires that are going, you know, back and forth through Europe. This is another example of what I meant. He has all these like fabricated fabricated coincidences. And so here's an example of that.

• 35:45David Senra?

  And so it says, among the American millionaires that Duveen met through the deck hands, the deck stewards, was Alexander Smith Cochrane, who was a like a carpet baron. So they meet on a boat that's sailing to Europe and they just start chatting. Cochrane happened to mention that he would like someday to see the Buckingham Palace and all these other European palaces. Duveen said casually that he would be delighted to take him through both places. When they got to England, Cochrane found himself strolling through the two palaces. They seemed as accessible to Duveen as the lobby of a hotel. While he was showing Cochrane the royal art, Duveen spoke warmly of Queen Mary and told Cochrane what a high regard he had for her and her taste in art.

• 36:26David Senra?

  He never mentioned that he had things he considered as good as hers in his own galleries. In fact, he never mentioned his galleries at all. When they parted, Cochrane felt a certain obligation to Duveen, a healthy respect for his connections and a sharp curiosity about why a stranger should be so kind. They met again in New York and Duveen took him to see the wonderful Duveens hanging in the private houses of some of his clients, but he did not tell them that they were Duveens. Again, he neglected to mention his great New York gallery. This display of benevolence went on for three years.

• 37:01David Senra?

  Until finally Cochran could not stand it any longer and broke down. Lord Duveen, I would like to see some of your things. His back to the wall, that's hilarious. His back to the wall, Duveen took Cochran to his gallery. He could not spare any paintings. They were all on reserve. See what he just did there? Sorry, they're scarce, they're rare, they're, I have, you know, listen, I'm the only one that has these. But they're spoken for. You know, there's a line, this is like Enzo Ferrari. We talked about this multiple times on the three episodes I did in Enzo Ferrari. People like, Americans who come to Italy, rich Americans come to Italy. They tour the Ferrari factories, like I must have one. And it's just like, yeah, of course, you know, maybe next year, maybe six, seven months from now, whatever the case is. And then the American would leave and Enzo Ferrari's employees would come up to him like, we have a, we have a parking lot full of Enzo Ferraris. Why'd you do that?

• 37:45David Senra?

  And he's like, because Ferraris must never, they must be desired. They must be desired. Duveen's doing the exact same thing. So like, okay, listen, I can't spare any paintings. They're all on reserve, but you know what? I do have these other art objects, these other sculptures. You can buy that. Cochran spent $5 million. So from developing this information network, right? Playing that long game, it might've cost him a couple hundred dollars in tips. Three years later, that turns into a $5 million sale. That is absolutely nuts. So let's go back. Let's go back to what he was building, because I jumped ahead in the story. So this is what he does. He says that he had an unusual spirit of friendliness and he let it shine by building relationships with,

• 38:29David Senra?

  sometimes people are directly involved in the art world. Sometimes they're very indirectly. And so this is like all the people that are, like all the staff that work for a lot of these art collectors. So he'd build relationships with critics, with museum directors, with restorers. He's going to make one guy very wealthy. You know, you have very old art. You need somebody that's very delicate, very talented, they restore it. Architects, decorators and servants. He becomes very generous with the staff and the servants. And in turn, they would give Duveen all the gossip that they hear when people visit their home. And so in one case, right, there's a butler that is working in the Fifth Avenue house of this, one of Duveen's most important clients.

• 39:10David Senra?

  Over the course of their relationship, Duveen gives him $100,000. What is the result, right? He said, not only this butler, but all these other servants. They developed a feeling that it was only fair to transmit to their generous nobleman, that's Duveen, any information that might interest him. And this is nuts. So now he's just gonna lead to more sales. He has an understanding of a deeper, so he has a deeper understanding of the person, what's interesting to them, what's going on in their life, right? It's gonna lead to more sales. But again, DuVine's one of the most competitive people you're ever gonna come across. He, he wants monopoly. So that means therefore you cannot buy from other people. So he winds up getting, winds up knowing when rival dealers are going to make appointments with some of his people like Henry Clay Freyek or Mellon or anybody else, right?

• 39:55David Senra?

  And he just happens to show up. So it says rival deal, when, when, this is hilarious. When rival dealers would show up to offer works of art, they found that they could never see the client alone. Whenever they dropped in, DuVine was already there. And so here's another example of this idea that you and I talked about a few weeks ago on episode 335 on Brad Jacobs' book, How to Make a Few Billion Dollars. Overpay for talent because it's nearly impossible to overpay for talent. And so DuVine had a conviction that anyone who worked for him, high or low, should be compensated in a manner commensurate with the dignity of the association with him, right? I am the best in the world. Everybody associated with me has to be the best and they should be paid like the best. He finds his main restorer.

• 40:40David Senra?

  So this, the people that have to, you know, take these very old paintings, you know, spruce them up, for lack of a better word. There is this guy named Stephen Pachetto. Pachetto was DuVine's main restorer, right? He's moving so much product. As DuVine's business grows, so does Pachetto's. And this is the end result. When Pachetto died in 1949 at the age of 61, he was himself a wealthy man. Such was the trade as DuVine practiced it, that even a restorer who worked for DuVine could leave a fortune.

• 41:12David Senra?

  Now, a large part of this profile is the founding of something that still is available, actually, to us today. It's the National Gallery of Art in Washington DC, which was established in 1937. You can go there to this day and visit it for free. Over 3 million people a year do just that. That is an idea from Joseph DuVine. So I'm actually going to read the summary about the National Gallery of Art in Washington DC that came, that is in the book 48 Laws of Power. Because essentially it describes like, okay, later in his career, DuVine is running into a problem, right? He's got to solve a problem. All the problems that come up in his life, he figures like, okay, this is just an opportunity

• 41:57David Senra?

  that will help me sell more art. And so if you really analyze the career of DuVine, everything he did was an answer to this question or to this problem. Like, how can I solve this problem so I can sell more art? And what he did was genius, and it's the creation of the National Gallery of Art in Washington DC. The art dealer Joseph DuVine was once confronted with a terrible problem. The millionaires who had paid so dearly for DuVine's paintings were running out of wall space. And with inheritance taxes getting even higher, it seemed unlikely that they would keep buying. The solution was the National Gallery of Art in Washington DC, which DuVine helped create in 1937 by getting Andrew Mellon to donate his collection to it.

• 42:40David Senra?

  The National Gallery was the perfect front for DuVine. In one gesture, his clients avoided taxes, cleared wall space for new purchases, and reduced the numbers of paintings on the market, maintaining the upward pressure on their prices. All this while the donors created the appearance of being public benefactors.

• 43:02David Senra?

  That happened in 1937. It goes back to this, these prefabricated coincidences that you see throughout, because they weren't coincidences, right? They were very intentional and deliberate of how, one that DuVine did throughout his entire career, but also in how he met Andrew Mellon. And then Andrew Mellon becomes one of his biggest clients, right? That happened, what would be 16 years earlier in 1921. Listen to this from the same book. In 1921, Andrew Mellon was visiting London and staying in a suite at the Claridge Hotel. Duveen had been targeting him for a while. He wanted him as a client, right? Duveen booked himself into the suite just below Melon's. He had arranged, Duveen had also arranged for his valet to befriend Melon's valet.

• 43:43David Senra?

  Melon's valet told Duve's valet, who then told Duveen that Melon was about to go downstairs and ring for the lift, so the elevator, right? Seconds later, Duveen entered the lift and behold, there was Melon. "How do you do, Mr. Melon?" said Duveen. Remember how he was just striking up these conversations on the deck of the boat, going back and forth between Europe and America? He's doing the exact same thing here, but now he's doing it in an elevator in a very nice hotel in London. So he says, "How do you do, Mr. Melon?" Duveen said, introducing himself. "I'm on my way to the National Gallery to look at some pictures, to look at some paintings, right? How uncanny, that was precisely where Melon was headed and Duveen knew it." And so Duveen was able to accompany him. He knew Melon's tastes inside and out because he studies everybody.

• 44:25David Senra?

  And while the two men wandered through the museum, he dazzled Melon with his knowledge. Once again, quite uncannily, they seemed to have remarkably similar tastes. Melon was pleasantly surprised. Duveen was charming and agreeable and clearly had exquisite taste. That is the beginning of their relationship, right? It lasts for 20 years until Duveen's death contributes untold revenue to Duveen's business and then also culminates with the opening and the founding of the National Gallery of Art in Washington DC. Absolutely incredible. This guy was absolutely incredible. I want to go back to this idea, which I mentioned earlier, and now I found my note. So, human nature is constant. Studying history is like watching game tape on human nature.

• 45:09David Senra?

  These examples are why Charlie Munger spent so much time speaking about and teaching about the psychology of human misjudgment. And so, why did I write that to myself? I get to this, this is what I meant earlier, like these guys, it's not like these tendencies in human nature, right? Only work on dollars, right? These are some of the most smartest, most sophisticated people on the planet, much smarter and more sophisticated than me by far, and yet it works on them. So that's why I want to know about them. And what am I talking about? So- There is this, one of the richest people in America at the time is this guy named S.H. Cress. So he owned a chain, he built a giant retail fortune. So retail department stores, you know, a century before Sam Walton. Think about him like that. Okay. And there's another

• 45:54David Senra?

  guy that you and I have talked about in the past, which is Henry Goldman of Goldman Sachs, right? And so Henry Goldman actually loses his sight and becomes partially or maybe completely blind. And he decides to sell off his entire collection of art. And so he goes and offers it first to his contemporary and his, I don't know if they're friends, but you know, peer or something like that, colleague, Cress. But Goldman loves to move fast. And so he offers it to Cress and the guy brokering the deal between them says, hey, if Cress wants this, tell him that he's got to do it in a hurry. It's got to be decided this afternoon. And Cress is like, oh, is it like, it has to be done today? Like, is he having liquidity

• 46:36David Senra?

  problems? Is he broke? What's going on? And he's like, no, he just wants to get, has nothing to do with insolvency. He just wants to sell this. He wants to do this fast. He doesn't want to waste any time. And so he tells him, hold Goldman off. Like, I'm going to think about it. Hold him off. He keeps repeating, hold him off, hold him off. But as you already know, by now, DuVine does not wait around for anything. And so once he hears about this, he's like, forget that, I'm not waiting. And he buys the entire collection immediately. And then this is where what I meant about the psychology of human misjudgment, right? So he got, Cress gets the offer, says, no, wait, wait, let me think about it. DuVine doesn't. He acts, buys it. Now, it's the exact same collection. It's the exact same collection. But a collection that belongs to DuVine was not a collection

• 47:18David Senra?

  that belonged to Goldman. Even when it's the same collection. So you think about this, this is just same thing happened with Gagosian. Same thing happens, you know, every day. You and I are influenced by brands. Brand is like magic. DuVine is a brand and therefore can increase the price. It's the same exact thing. I could be offered the same product, it could be the exact same product. One of them's, you know, random brand name, the other one's say like an apple or something like that. And it's proven over and again, we will pay more for the brand, even if it's the exact same thing. And that's exactly what happens here because DuVine buys the same collection, doesn't change anything about it. Actually changes like the way it's presented, then goes and shows it to Kress and he goes around. Remember what Mellon said, "These pictures look better when you're here."

• 48:02David Senra?

  He's enthusiastic, he's saying, "This is the best this, and this is the greatest that, and look what this is. It's so rare." And something Duveen knew, he says, "Once a collector had his heart set on a picture, it irritates him to have other people discourage him from buying it." Because Kress has a professional advisor saying, "You know, this is the exact same thing." Like, this is how crazy these psychological tendencies are, right? These are like very smart, accomplished people. They have people saying, "You're not, you're acting irrationally." Then instead of them saying, "You're right," they get mad at the person that's telling them to act irrationally. And so what he does, Kress bought the picture and all the others. Had he bought the pictures directly from Goldman, he would have saved millions of dollars. That's insane. He would have saved millions of dollars, but he wouldn't have had the warm feelings of owning a lot of Duveen's.

• 48:46David Senra?

  Duveen was a brand. The exact same collection in Goldman's hands transferred to Duveen. That same exact collection is now worth millions and millions of dollars more. Where you have one of the most advanced entrepreneurs of that time, willing to pay millions and millions of dollars more, because it's now no longer the Goldman collection, it is a Duveen collection. And this happened over and over again in Duveen's business, and it still happens today. How did it come about that the great money men of this era gradually came to accept Duveen's simple, unworldly view that art was more important than money? Duveen had taught them the idea that art was priceless, and when you pay for the infinite with the finite, you are indeed getting a bargain.

• 49:29David Senra?

  His clients felt better when they paid a lot. That's something that Munger repeats over and over again in Poor Charlie's Almanack, the fact that price is a signal, high price is a signal for high quality. They felt better. They felt better when they paid a lot. "It gave them the assurance of acquiring rarity." A rival dealer of Duveen's, so a lesser dealer, had bought a bust for $22,000. The dealer needed money and offered it for $25,000, thinking that it would tempt his customer into a quick purchase. The customer was turned off. "The moderateness of the price was fatal." "The moderateness of the price was fatal." "Find me a better one," he said.

• 50:13David Senra?

  Duveen would have asked a quarter of a million dollars and got it. The same thing happened when another dealer offered a room, so an entire room, all the furniture, all the busts, all the paintings, right? A dealer offered a room to William Randolph Hearst for $50,000. Hearst spurned it. Duveen offered it to him later. Duveen offered it to Hearst later for $200,000 and Hearst bought it with gratitude. A dealer tried to sell him a rug for $15,000. He was used to paying $60,000 for a clock and $100,000 for necklaces and was suspicious of anything that you could get for a mere 15,000.

• 50:56David Senra?

  "Get me something better," was his response. And Duveen didn't just get his client something better. He got them the best. Duveen built his entire business around the best. And that is where I'll leave it. Highly recommend reading both pieces and I'll also link to the 48 Laws of Power. You'll find all those links down below and they're all available at founderspodcast.com. That is 339 books down, 1,000 ago, and I'll talk to you again soon. If you think about it, the episode that you just heard is a great illustration of this, this quote that is in this book on Charlie Munger, Poor Charlie's Almanack, where it says that there's ideas worth billions in a $30 history book. Because just like Charlie Munger and Warren Buffett talk about in that book, actually,

• 51:41David Senra?

  how much they read biographies, how much time they spend reading history and using history, learning from history as a form of leverage. You know, Larry Gagosian, who starts his career, you know, 40 years after Joseph Duveen dies, by his own admission, reads every single biography that he could get his hands on about Joseph Duveen and essentially patterns his career. They are remarkably similar when you read about both of them. And Gagosian's privately held company is rumored to be doing over a billion dollars a year in revenue. And so a few weeks ago, when Napoleon told you and I that it is profitable to study the campaigns of the great masters, I think Gagosian would agree, obviously Charlie Munger and Warren Buffett would agree, and most of the people that you and I talk about on this podcast, they talk over and over again. I've given you a thousand examples like that.

• 52:24David Senra?

  But I really liked what Napoleon said, that he thought it was important to read over and over and over again. Not just read once, not just listen to one podcast episode, but read over and over again, the campaigns of the greats. And so what I'm trying to build with Founder's Notes is really an echo of this idea that Napoleon talked about, that history must be critically analyzed to discover why successes were obtained and why defeats were inflicted, and that the teaching of strategy is built around history. So I'm going to something that, well, first of all, the entire idea from Founder's Notes came from making Founder's Podcast, right? For years, since 2018, I've been putting every single highlight of the books I read and every single note on the highlights into this app called Readwise.

• 53:07David Senra?

  I've been obsessed with it. I talk about it over and over again. I use it to make the podcast. I've said before, I couldn't make the podcast without it. That's not true. I could make the podcast without it. The podcast would be half as good. I don't know, three quarters as good as it is because of this constant repetition of these ideas. When you hear me in this, in all these episodes, like, oh, that is like this, and this person thought like this, and oh, this is very similar to episode 127, or whatever that is, that comes from this constant rereading what Napoleon said, read over and over again, the campaigns of the great masters. And so the very idea to even build a product around this came because so many people for years were saying, hey, I would love to have access to your notes and highlights. I want access to your notes and highlights. How can we do that?

• 53:50David Senra?

  How could we do that? And I didn't, and for years said, no, no, no, no. Finally reached out to the founders of Readwise, the both fans of the podcast. And I was like, hey, I want to build a product where people can see exactly what I see. So if you sign up at foundersnotes.com, you will see my entire notebook. I really do truly believe with every bone of my body, it is the most valuable notebook in the world for founders, because I don't think anyone else has been as psychopathically obsessed with this idea. I've been sitting in a room essentially by myself for eight years. You know, reading hundreds of thousands of pages and trying to document everything I learn, take that personal curriculum and externalize it to the world, and that is Founder's Podcast. And what I consider Founder's Podcast is Founder's Podcast is essentially

• 54:32David Senra?

  a free trial, right, for Founder's Notes. Founder's Notes takes everything that you and I are learning on the podcast and just takes it to another level. And so as I'm still in the early days of developing this, I've only been developing for a few months, I've purposely kept the price lower, if you really think about it, because it's built only for people that are already running successful companies. You know, I say this over and over again, do not invest in subscription unless you're already running a successful company. The price should be immaterial to you. As far as the value that you get, the price is missing a couple zeros. Now, as I continue to build out different features, obviously, the price will go up in the future. But for now, and if you, obviously, if you sign up now, you're locked in, the price stays the same. You essentially get all the

• 55:12David Senra?

  future, you get all the future features. There we go. Future features for free. I am also doing something for the first time ever, which I mentioned at the beginning, because I'm just a big believer, like Michael Jordan said, that successful people listen, those that don't listen don't last long. And I have a bunch of people saying, hey, I would love a one-time option. So for a limited time, I'm going to test this out. My plan is to make heavy, heavy investments. I think Founder's Notes can be this giant platform. The way I view it, over time, I think it'll be an ever-increasing giant valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. I think it's the platform and the business that will continue to allow me to make and distribute the podcast for free for the rest of my life. And so I'm not just

• 55:55David Senra?

  stopping where it is now, you know, even though I will continue to add my notes and highlights to it forever, because it's embedded in my workflow. Like, if you, if you already have a subscription to Founder's Notes, and you already know this, you've, you've had all my notes and highlights on this, on the episode I just did, way before the episode comes out, because I have to use it to make the episode. It is embedded in my workflow. So that'll never stop as long as I'm doing the podcast, right? And so the ability to read all of my notes, all of my highlights, to search by keyword, to go to the actual books, you can read, and some people are doing this every day. I'm getting a bunch of messages where they're almost like reading it like the morning newspaper. They'll go and pick a different book every day. They'll read the notes and highlights. Some cases, they, they wind up buying the book because they want more context. They go back and re-listen to the episodes. It's really fascinating what, how people are using it so far.

• 56:40David Senra?

  Because again, the way to think about it is just an ever-increasing, giant, valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. The podcast tries to do that, and the magic of the podcast is it does that when your eyes are busy, right? When you're driving, when you're commuting, when you're working out, when you're walking, whatever the case is. Founder's Notes is for when your eyes are not busy. It's this continuation of this, again, ever-increasing, giant, valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. And so I've already been building out other features. So what I want to try to do is, because I want to maintain, I want to keep investing more and more time and money into this thing, I'm going to test out something that was requested by a lot of people, right? So for a limited time, a one-time payment option, then I'm going

• 57:24David Senra?

  to use that money that comes in and then reinvest into more features. Because, so right now, I have two screens up, I know you can't see this, but I have two screens. So I have Founder's Notes is right now, right? Where you can search your highlights. When you sign up, you have this big box at the top, so search highlights, anything that you could think of, a name, an idea, a keyword, it goes in there. Highlight Feed, which is this, what Morgan Housel of, a friend of mine and also the author of Psychology of Money, calls the Smart Twitter Feed. Actually, he heard me say that, and then he started using it, and he said that is what it is. So the Highlight Feed is essentially like a smart Twitter feed, because it gives you a random, it presents highlights and notes from all of, everything that I have in the database, but in a random order. So I just

• 58:08David Senra?

  hit, I just press on it, and it shows me, the first thing is a highlighted note from the autobiography of Christian Dior. The next one is the autobiography of Sam Zell. Then you have Ed Catmull's autobiography, the founder of Pixar. Then you have the book I did on Christopher Nolan. Then you have Mark Twain, James Cameron, Arnold Schwarzenegger, Walt Disney, the Dynasty Book, The Fortunes and Misfortunes of the World's Greatest Families I did a few months ago, Tiger Woods, James Dyson, Ralph Lauren, Ralph Lauren again, this is Warren Buffett, that that's Munger, this is a guy that sold his company to Buffett, this is Van Eber Bush. It goes on and on. I think you get the idea. And so-

• 58:51David Senra?

  What that does is like, I feel the highlight speed is like a prompt for your own thinking. Right. It's like, okay, there's nothing I really want to search today. I don't really want to, there's not a specific book I have in mind. Let me see if I can just prompt my own thinking and just scroll through there and see what comes to mind. You can also do the books. You click on books. That's pretty obvious. I think it's self-explanatory. It's going to have all the books by the title. Some of them have, you know, handful of highlights. Some have a bunch. You can usually take five, 10 minutes at the most to read all my notes and highlights on a specific book. Now, the other screen I have up is, well, like I just said, I'm not stopping there. And so the other screen I have up is a feature that I've been testing for a while where it's a chat interface. So instead of searching by keywords, you just say, like today, what I was searching, it's like, because I've been testing it nonstop.

• 59:36David Senra?

  Tell me about Edmund Land. Why was he important and what did he do? And the connections that it makes, it pulled 50 different highlights. Oh, I forgot to mention that the transcripts for every single episode. It's also, you can search through that as well, which is incredible. But it pulled 50 different highlights, right? To answer this question, then it gives me like 10, nine to 10 bullet points. And then, so I'm using it to, as I do research for the podcast, constantly testing it. But I'm also like asking questions like, hey, I'm having trouble deciding if I should sell my company or not. What advice do you have that'll help me make this decision? Then it gives you, it gives you a bunch of interesting ideas. And I said, hey, have any of history's greatest founders regretted selling their company?

• 1:00:17David Senra?

  And then it continues on pulling and then synthesizing dozens of highlights and gives you an idea of the different perspectives. So in this case, it was, it gives me an idea from Michael Bloomberg, from Ted Turner, from the founder of Trader Joe's, from Henry Singleton, from Jack Ma, from Warren Buffett. All that from me just asking, hey, have any of history's greatest founders regretted selling their company? And if you've used any of these new AI platforms, you know, it's like an idiot savant. You know, maybe half the time it's an idiot and the other half the time it's a savant. But this is only going to get better and better. And even right now, in its current incarnation, it's already making connections that I even missed. So I'm testing this every day.

• 1:00:57David Senra?

  It'll be out to every single person has a subscription for two founders notes relatively soon. You know, maybe a few weeks, something like that. But I'm not stopping there. I really want to organize around this idea that this is an ever increasing giant valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders. And so I'm already building out resources where maybe you don't want to search at all. This is something I want. So everything I'm describing is something I want. So I was like, hey, I want a collection of ideas organized by theme across every book and episode. So instead of learning by person, right? Or me searching for something, or even having a chat interface. Give me one page, two pages, three pages of how all of history's greatest founders thought about topics like marketing, recruiting, distribution, management. How did they hire? How did they fire?

• 1:01:42David Senra?

  This is going to take an unbelievably long time to do. It's going to require a lot of investment. I'm obviously going to hire several people to help me with this. But I wanted to give you a little sneak peek because again, I always think about, one, I've already demonstrated it over and over again, like the collective intelligence that is in for like the audience of the people listening to founders is incredible. And so that advantage that I have of being able to tap into that becomes your advantage because then it's just like positive feedback loop. I get great ideas and then I apply them to founders notes and you benefit as well. So hopefully that made sense. I swear, I was like, I'm going to sit down, instead of talking about this for like 30 minutes or whatever, I don't even know how long I've been talking. I know sometimes at the end of episodes, I go, you know, I kind of go off the rails

• 1:02:27David Senra?

  a little bit. I swear, I was like, I'm going to sit down and, you know, two minutes, just tell them, hey, you have a lifetime option now or a one time option now. If you want this, you know, here's how to get it. Really simple. And then I wind up going, I just, I'm fascinated by this stuff. I'm just fascinated. I was kind of like a skeptic a little bit. And then I started, like an AI skeptic. And then I realized, oh no, like the connections that, the benefit that I have, I have this weird thing where, you know, where it's like, because I'm so enmeshed in all of this and I read and reread every day and a half for almost eight years, these connections just come tumbling out of my mouth. You hear it if I go on other people's podcasts, you hear it on this podcast, you hear it if you've ever spoken to me in person. And it's like, oh, everybody's gonna have this.

• 1:03:08David Senra?

  And it makes me excited because it only makes my ability to make the podcast better. And again, it just organizes like, hey, I want to be really easy to interface with. If you follow me on social media, by the way, please, if you don't already, David Center on LinkedIn, at Founders Podcast, everywhere else. Everything like I'm gonna be easy to interface with. It's like, you're gonna follow these accounts or you're gonna listen to this podcast because you want to learn from his greatest entrepreneurs. That's it. And you know, I don't have to belabor that point. You're smart enough to understand why that's, that's so important to do. And all I can think about is like, this is gonna be a giant platform. Right now, founders and co-founders and some executives and a bunch of investors are using it. I think entire companies are gonna use this.

• 1:03:50David Senra?

  And so if that mission sounds interesting to you and you want to help, a really easy way to help. Sign up either for an annual subscription or a one-time and you can do that at foundersnotes.com. That is founders with an S, foundersnotes.com. Obviously, everything I've talked about is at founderspodcast.com too. So you can go through there, but foundersnotes.com, thank you very much. I've been talking too much. I'll talk to you very soon.