#345 George Lucas

0:00 I don't think you have to listen to the Quentin Tarantino episode. the Steven Spielberg episode before you listen to this episode on George Lucas. But if you haven't listened to them, I would listen to them after you listen to this episode because you're gonna see so much similarities in how they approach their work. I talked about last week how Spielberg would watch and re watch movies that he loved. Decades later, entire scenes from those movies would appear in his own movies. Tarantine would do the exact same thing.

0:24 George Lucas talks about doing this, you're gonna hear him being addicted to reading biographies, studying history, reading science fiction. A lot of the stuff that he was learning as a young person he would use a decade later. And the influences that he used to build Star Wars, which is obviously the cornerstone of his multi billion dollar Empire have been well documented. And you see the exact same thing with company builders. This is just like Edwin Land's ideas that show up in Steve Jobs companies and products.

0:47 It's just like Sam Walton's ideas showing up in Jeff Bezos' companies and products. It's just like Henry Singleton's. Ideas showing up. And how Warren Buffett And Charlie Munger built Berkshire Hathaway. Charlie Munger said Henry Singleton was the smartest person that he ever met. Warren Buffett said it was a crime that business schools didn't study him.

1:03 And so I go back and start reading about Henry Singleton, you realize, oh wow. These ideas that I was attributing to Munger and Buffett actually originated with Singleton. And that is a main theme that reappears over and over again for anybody that gets to the top of their profession. Anybody who becomes great at what they do is seeped. They are all seeped in the history of their industry. They talk about these ideas over and over again. You don't just read A book one time. They don't just watch a movie one time. They don't just have one conversation. They do it over and over and over again.

1:29 That is why, if you haven't done so already, I highly recommend that you subscribe to Founders Notes. For six years, I've been cataloging All of my notes. All of my highlights for every single book. That I've read for the podcast. And it blew my mind because that's exactly what Quentin Tarantino did. He would keep scrapbooks, make notes, and he actually kept files on index cards. Of every single movie and what he wanted to remember about the movie.

1:51 For every single movie he's ever watched. And then because he cataloged all those ideas, he was able to use them in future movies. And so now you're able to. Re now by signing up for Founders Notes, when you get a subscription, you get access to all my notes, all my highlights, transcripts for every single episode. You can search by keyword, by person, by subject. It's this giant database of the collective knowledge of history's greatest entrepreneurs. You can also read all of my notes and highlights by book. You can have all of my notes and highlights presented to you in a random order on the highlights feed. I've been searching by keyword, I've been rereading my highlights by book, and I've been rereading my highlights in random order on the highlight feed for years. I built this tool for me for I had this for half a decade before anybody else had access to it. I literally could not make The podcast without this tool. And now I've add a new feature that I'm super excited about that may have made it a thousand times more valuable. It's actually called Sage. It is the founders' notes.

2:38 AI. And the name actually came because there's a bunch of Existing Founder Notes subscribers. They were beta testing this feature for me. And one of them emailed me'cause he heard some of the names.

2:48 This feature's incredible, but I can't figure out what to name it. And he said that none of the names were good enough because they don't actually describe what the feature does. And he said you should call it Sage. And he sent me the definition. of Sage. Sage is a profoundly wise person that is often looked to for guidance and advice. And that's exactly what Sage does. It's like search on steroids. You can ask it a question and it'll search every single note, every single highlight, every single transcript. Meaning every single word I've ever uttered on this podcast, and it'll start making connections. It's been making connections that I've even missed. And so I mentioned last week after I re-listened to the Steven Spielberg episode, I was asking Sage, I was like, give me What are the most important ideas to learn from Steven Spielberg? And within twenty, thirty seconds, it gives me this outline. Of the top nine, what it feels is the top nine most important lessons from Steven Spielberg. Now the interesting part is.

3:34 If you press on expand, it actually tells you what it searched to come up with the answer. So you could just read the outline. Or if you choose to, you can go deeper and see what it actually fetched and what it searched. To come up with the answer. And of course it's gonna search the Steven Spielberg episode because I'd done the episode a few years ago. But what is fascinating is also included ideas when I mentioned Steven Spielberg on a Steve Jobs episode when I mentioned Spielberg on the Christopher Nolan in the James Cameron episode. It pulled an idea from Spielberg that I mentioned in an episode on Pixar. Its memory far exceeds mine. And so I really do believe a subscription to Founders Notes is the perfect companion. If you're going to invest

4:08 Tens of hours, dozens of hours, you know. I've Hundreds of just people have listened to hundreds of hours listening to this podcast. Founders notes and Sage in particular is the tool that'll help you condense and clarify the collective knowledge of history's greatest founders. So then you can use their ideas in your work. Just like Bezos used Walton's ideas.

4:26 Just like jobs use lands ideas. Just like Spielberg and Tarantino and Lucas. used past filmmakers and everything they read. All the ideas they they derive from that. in their work.

4:37 I highly recommend getting a subscription, and you can do that by going to foundersnotes.com. That is founders with an S, just like the podcast, foundersNotes.com. I also leave a link down below in the show notes. I appreciate the support and I hope you enjoy this episode on George Lucas. George Lucas unapologetically invested in what he believed in the most. Himself. As a result

4:58 The film empire that he created would empower not just him But other filmmakers to produce movies exactly As they envision them. Without a studio imposing its own priorities. Complaining about budgets.

5:12 are micromanaging the process. George Lucas. The small town sun Of the owner of a stationary store. Had said no.

5:21 To the family business. And then built A cinematic empire. Based on his own Uncompromising vision.

5:29 Of the film industry. Not as it was. But as he thought it should be. Much of that vision. Lay in the possibilities presented by new technology.

5:40 Technology that Lucas developed with his own money. I can't help feeling that George Lucas has never been fully appreciated. by the industry for his remarkable innovations. The director Peter Jackson once said. George Lucas is the Thomas Edison of the modern film industry.

5:59 But George Lucas knew what he had done. He knew his place, and And he seemed comfortable with it. When asked by interviewer Charlie Rose What he thought the first line of his obituary might say.

6:11 Lucas gave Perhaps the best summation of his lengthy career. In two single syllable words. His answer? I tried.

6:23 That was an excerpt from the book that I'm going to talk to you about today, which is George Lucas A Life. And it was written by Brian J. Jones. Brian J. Jones writes excellent biographies. He wrote this one. I read his biography on Doctor Seuss, which was excellent. And then he also wrote An incredible biography on Jim Henson. So I originally read this book.

6:40 Like seven years ago, it was episode thirty five. And there's some ideas in it that I've never forgotten. That sentence where it's like, you know, he uh unapologetically invested in what he believed in most. Himself. is my favorite sentence in the entire book. And I also think that concept, investing in yourself, is the The concrete in the foundation.

6:57 Of his empire, if you will. So I wanna go to the beginning, which is really fascinating. Because The book is gonna talk a lot about his childhood. But it doesn't start there. It opens up right in the middle.

7:08 Of him shooting Star Wars. And I think his despair and depression and struggle that's going on Uh, you see this a lot in not only with with founder biographies that you and I talk about. But especially with the filmmaker biographies. Uh, Tarantino talks about this, Christopher Nolan talks about this, James Cameron talks about this, Steven Spielberg talks about this.

7:26 You'll see this in George Lucas. It is very hard to understand at the time you're doing something. how it's actually gonna turn out and how impactful it was. He had no idea. There's no possible way when George Lucas started working on Star Wars that he could have predicted the impact that those movies would have on the world. And then, of course, the influence and control it had over the building of his business. And thinking about how difficult this movie was to make is fascinating to think about. But what I'm really interested in is how this experience influences.

7:51 This intense desire for control and independence that is the main theme of Lucas' life and career. So he says. The shoot was a disaster from the beginning. I was very depressed about the whole thing. His misery was due partly to the fact that he felt he had already lost control of his film. The executives at twentieth Century Fox Had nickel and dimed him.

8:11 every step of the way. They would deny them him the money that he needed to ensure that everything worked. The people at Fox were also sceptical. Science fiction, they said. Was a dead genre. And they were actually right about that. At this time in history, science fiction was in in the films was a dead genre. The difference was you needed the right people to show up. And those people happened to be George Lucas and his lifelong friend Steven Spielberg. Steven Spielberg makes close encounters of the third kind, and Lucas, of course, made Star Wars. Go back to Lucas. It was very, very difficult to get things to work. Everything was a prototype.

8:43 We had to build this and we had to build it with no money, but we had to make this work. The problem is nothing really worked as we wanted. Lucas vowed he would never cede control over his film to executives. At the studios again. And something he would repeat over and over again, it's like what do they actually know about filmmaking? They've never made a film. But they would come down and talk to him and tell him this is how you should make the movie. And he says they decided they know more about making movies than directors.

9:07 And here's the problem, you can't fight them. Because they've got the money. And so Lucas vowed one thing. If Star Wars worked out, one thing would he would have to change for sure. He would control The money. Back to Lucas. I was seriously, seriously depressed at this point because nothing had gone right.

9:24 Everything was screwed up. I was desperately unhappy a little more than a year. Before it was scheduled to hit theaters. Star Wars was a mess and the movie was going to be terrible.

9:35 Lucas was certain of it. And I think that's a really important place to start when you analyze the career. Of George Lucas, the depth of his depression is going to influence all the decisions he's going to make. And in turn. the success of those decisions that he makes makes him a multi, multi, multi billionaire.

9:52 So I wanna touch on a few things in his childhood'cause I think it would give us you and I a better understanding of just really why he ran the business. uh the way he did he was the sole shareholder. The only shareholder in Lucasfilm

10:05 When he send sells it to Disney. for over four billion dollars. And he's got this, I would say juvenile delinquent streak in him. Since he was a very young boy. Lot of this came out of this

10:17 kind of butting heads or fighting that he would have with his father because Lucas is kinda like a hippie or a rebel and his dad's the exact opposite of that. So his dad is actually George Lucas Senior. And so George Lucas Junior describes his dad as a very old fashioned kind of guy. He was a kind of classic small town businessman. That you would see in a movie, he owned a stationary store.

10:40 And Lucas said later in interviews that he was He would remember being very, very angry at his father for most of his childhood. And I think the main reason for that is because his dad was intent on controlling him. Something else that Lucas never had that he looked for his entire life. He really talks about the importance of mentorship, but he never had an older brother. And so throughout his entire career you see him trying to attach himself

11:00 to a slightly older, almost like bigger brother figure. And he talks about Why this was so important. He said that's one of the ways that you learn. You attach yourself to somebody older and wiser than you. You learn everything they have to teach, and then you move on to your own accomplishments. And so another way that George Lucas was searching for mentorship.

11:18 was not only for like older brother Uh figures, but also through books. He was never very good in school. But he loved To read. Uh

11:27 I got to this section of the book and it reminded me of I saw this interview. That's that was that's pretty incredible. All the way back in two thousand twelve. Uh, it's with Elon Musk and he's being interviewed by this guy named Kevin Rose. I will grab the link. from YouTube and put it in the show notes in case you want to watch it. Highly recommend you do.

11:42 'Cause it's in the early it's it takes place on on like the Tesla, the factory floor of Tesla. back when I think they only had one model in production, it was like the early uh model S. Uh was in production. But Kevin was asking Elon, I was like, Well trying to figure out like how did you do all this? Like you emigrated from Canada, you didn't have a lot of money, you moved to California. You started your first company when you were just in your early twenties.

12:03 And he was like, Well, how did you learn how to start a company? Did you read the the question from Kevin to Elon was Did you read a lot of business books? And his answer actually had a huge influence on, you know, my desire and like my dedication to to making this podcast. And'cause Elon said, No, I didn't read business books. I read biographies and autobiographies. I thought they were helpful.

12:24 And then he went on to say that this was a way to develop mentors in a historical context. And you see that. With a very young George Lucas. He talks about he didn't like school, but he loved reading, and he amassed this enormous collection. of these things called landmark books, which is a series of Biographies. Writ for young readers.

12:43 and reflecting on this time in his life, uh, George Lucas says, I was addicted to those. It started me on a lifelong love of history. And as a kid, I spent a lot of time Trying to relate the past. To the present. And just like everybody else that gets to the top of their profession. Lucas references and uses that

13:01 learning from history as a form of leverage. He'll talk about I watched this uh interview with him and Christopher Nolan that took place probably a decade ago. And in that Lucas is just talking about the fact that all this reading and studying of history that he was doing as a kid influence the storyline for Star Wars. And then Lucas continues to use the entire world and all of its experiences as like this giant classroom. And so he actually is This was hilarious.

13:23 You know who's gonna have what fictional character's gonna have a huge influence on the way that Lucas builds his empire and thinks about building his business. Scrooge McDuck. I remember watching Scrooge McDuck and DuckTales when like I was a kid. I didn't even know that it was around when Lucas was a kid. And so

13:38 Listen to the the the lessons he draws from watching You know, Scrooge McDuck, which is the The money hoarding, globe trodding uncle of Donald Duck, right? And so it says Lucas was fascinated not only by Scrooge's exploits, but also by his conniving capitalist ways. Work smarter, not harder.

13:56 was Scrooge's motto, and yet his stories were full full of inventive schemes That more often than not made him richer and even more successful. In Scrooge's world, hard work paid off. But so did cleverness and a desire to do something in a way No one had ever thought of before. Think of it. Come on.

14:13 Like that that Think about the life and career of George Lucas. The desire to do something in a way that no one had ever thought of before. That is exactly Lucas's approach to the filmmaking industry. Movie making w had been around for four or five decades before Lucas came along. Think about why Peter Jackson said, Hey, this guy's the Thomas Edison.

14:31 Of our industry. You know what? I wasn't even thinking about going here. I was gonna talk to you this later, but I'm gonna jump ahead. Because I think it's one of the most important ideas in the book. And I might repeat this in the future. But He talked about the fact that he was so uh dissatisfied with that he could not make the vision in his head real.

14:48 Right? That there was not that the computer graphics weren't there. The special effects weren't there. So he's like, What's the solution? I'm gonna start my own company. I have to create the technology that I want to see in the world just so I can make the movies Look how I want them to look. And so he founds this company called Industrial Light and Magic, which absolutely dominates

15:05 In special effects for a couple decades. Ron Howard. has this excellent quote later in the book. Right, talking about the fact that Who the hell would do something like that? And he I think he summarizes it better than I ever could.

15:17 He goes, How many people think the solution to gaining quality control? Improving fiscal responsibility and stimulating technological innovation. Is to start their own special effects company. Ron Howard said admiringly. But that's what George did.

15:32 Back to Scrooge McDuck. In Scrooge's world, hard work paid off, but so did cleverness and a desire to do something. In a way No one had ever thought of before. Scrooge's ethic reflected honor, honesty, and allowing other people to believe in their own ideas. not trying to force everyone into one form, which is I think

15:49 Exactly how he described what his dad was trying to do. To him. His dad was trying to make another him. And George's like, but I'm not the same as you. I want to live life on my terms. The lessons Lucas learned from Uncle Scrooge would shape the kind of businessman he would become in the future, conservative and driven, believing strongly in his own vision and pursuing it aggressively. Let's go back to more of his juvenile delinquent ways. As his grade suffered, Lucas began to look more and more like the juvenile delinquent his teachers were already convinced that he was.

16:19 One of my favorite lines ever describing founder mentality and and entrepreneurs comes from Ivan Chinard. who is the founder of Patagonia. He says if you want to understand the entrepreneur Stud the juvenile delinquent. The delinquent is saying with his actions, This sucks, I'm going to do My own thing.

16:35 His grades were so bad, his dad was convinced that he was gonna be a loser. Lucas thought his father's lack of interest in him was typical. And it was probably understandable. I was a hellraiser and I didn't do very well in school. My father wrote me off. And then it doesn't help that

16:50 He's not doing well at school. doesn't really have a direction in what he wants to do in life yet. And so he goes and briefly works for his dad. At the stationary store. This d he doesn't last long.

17:01 He quits and then him and his dad get back into this argument. And so this is Lucas' description of that. I get really mad at my father and I told him I'll never work in a job where I have to do the same thing over and over again every day. His father responded, You'll be back in a few years. I'll never be back, Lucas said.

17:17 As a matter of fact, I'm going to be a millionaire before I'm thirty. And that is one of the smartest insights that a young George Lucas ever had. The fact that he realized that you need to make money. Not to buy a bunch of useless shit, but to actually buy your own freedom, and that's exactly what he uses his money for. So he is Yeah.

17:35 It's almost like a a contrast i in bedded in one person. Because He will bet literally the house, which he does multiple times. On the the success.

17:46 of one movie, but he's unbelievably fisk fiscally conservative. Uh with the way he runs his business. And that fiscal conservatism actually breaks up. He has like co founder breakups with Francis Ford Coppolo because Copa was the Essentially the exact opposite.

18:02 George Lucas was always very, very concerned about protecting his downside because all he wanted to do is never jeopardize anything that g that would cause him to relinquish his freedom over what he worked on. You can think of George Lucas's constant invention in vertical integration as just a way, uh another form of control. And that control to make sure that no one else can ever, ever Tell him what to do. And so he gets to college, he's like, I have no idea what I'm gonna do. So he just goes to like a little junior college, a little uh community college. And then he realizes he all he knew he's like, Listen, I'm not stupid. Remember the Tarantino episode? I don't know if I I should have back up. Why am I doing

18:33 Like Lucas right now. Uh I think if you listen to re listen to the Spielberg episode I just republished a couple of days ago and then Tarantino. I think this line through what I'm doing right now. Tarantino studied sp there there are about ten Ten to fifteen years before he did.

18:48 uh Tarantino studied Spielberg and Lucas. He the all the movie brats, which I'll get into like the rest of these guys. There's essentially like these filmmaking geniuses that all met in the early twenties. And in many cases they're seventy, eighty years old today and they're still friends. But I find this fascinating because Tarantino studied Spielberg and Lucas, Spielberg and Lucas studied Walt Disney. Well, Disney's the next episode. I'm reading the seven hundred page biography of him now. So it's taken me a long time. This book I have in my hand is a monster.

19:15 Uh over five hundred pages. I have the hardcover version. And it took me over thirty hours to to read and research and really think about before I sat down and talked to you. Uh today. So The connection to what's happening in Lucas's life is very similar to Tarantino's. you know, not great in school.

19:29 But clearly not dumb. He just doesn't like other people telling him what he should study. Tarantino was the same way. So he gets to junior college and now You know, college the first time he can actually pick his classes. And so once he's in control. Of his own curriculum.

19:43 He becomes a phenomenal student. And so once it's time to be done with junior college, he's gotta figure out like what do I where do I transfer and what am I gonna study? And this conversation with his dad actually changes the trajectory of his life forever. Because Lucas is like I'm gonna go to art school. His dad's like this old school nineteen fifties super conservative American businessman. He's like, there's no way in hell.

20:03 That my son Like I'm you're you're gonna go to art school, there's no way in hell I'm paying for it. And he told his son, like, there's no way you're gonna make money, you can't do that. And so one of Lucas's friends says, Hey, why don't you If you're not gonna go to art school, take a look at USC, University of Southern California has this new cinematography school.

20:22 And keep in mind, this is the mid nineteen sixties. There's not many film schools in the United States. And so this is why uh Tarantino last week in his book. Would talk about the movie Brats. He said they love movies, they dreamed of movies, and they even received degrees in movies back when that was a dubious major. And Lucas talks about this, like it was embarrassing. Other people are like, You're going to film school, you're going and they didn't even call it film school, they call it cinematic.

20:44 Cinematography school. Like what the hell is this? And he says, uh I lost a lot of face. The idea of going into film was a really goofy idea at the time. But what was fascinating is his dad's like there's no way in hell I'm playing for art school.

20:56 Then he was impressed that his son got accepted into USC and he didn't understand. They said, you know, the school cinema or cinematography. He didn't understand. That it was his way of getting to A form of art school. And so his dad agrees to help him out, pay his tuition. Um and help'em get housing.

21:11 And the reason I say that decision changed the trajectory of George Lucas's life is because that's when he meet essentially just a collection of filmmakers. who are all obsessed with movies, they're all young, and they wind up helping each other for decades. It's almost like the island of misfit toys be because before this it says For many of them, it was the first time they had a clique of their own, a gathering place where they could talk about their interest, movies without

21:33 Eye rolling from uh the other cool kids. For many reality finally began. When they entered film school. Lucas knew that he had found his way before he wasn't sure. He was in the cars, he had all the other Uh interest.

21:45 And then he's like, Oh wait, this is it. I was sort of floundering for something. And when I finally discovered film, I really fell madly in love with it. I ate it, I slept it 24 hours a day. There was no going back after that. That is a direct quote from George Lucas. There was no going back after that. You know what it's fascinating? I just I'm gonna put this book down.

22:03 Picking up the Steven Spielberg book that I republished last week, right? That book is Twenty five years old, maybe? This book is twenty five years old. listen to how Steven Spielberg describes. He uses the exact Same Language.

22:16 This is what Spielberg said. Making movies grows on you. You can't shake it. I like directing above all. All I know for sure.

22:25 is I've gone too far to back out now. There is No going back. They both discovered what they're gonna do. Now. This is the fascinating part because this turns into the US C mafia. Spielberg's part of that, even though he didn't go to US C.

22:39 You're talking about A group of super talented filmmakers. And a lot of'em come out to um California, even though they call it the UC Mafia. Uh yeah, but some of them like uh Martin Scorsese, Oliver Stone, they went to NYU. Brian De Palmer went to Columbia.

22:53 Francis Ford Copel is at U C L A. Spielberg's on the lot getting his own curriculum. I think I Universal or yeah, it was that universal. Lucas if we wanna uh one of a group of highly motivated and young filmmakers. They were all friends who would have a lasting impact on film and culture.

23:08 This is another example that relationships run the world. You see it over and over again in these books. It's so important to develop relationships with other people that are just like you in even if you're they don't look at themselves as competitors. They c they tend to compete, but they also collaborate. But they all need each other because they're trying to break into a system that is close. Uh at this point in history Unless you're part of a union.

23:29 Uh unless you already know somebody in the industry, you're not breaking in even it with a film degree. It's yet another illustration of one of my favorite concepts from Game of Thrones, where they said those on the margins. often come to control the center. At this time Spielberg, Scorsese, De Palma, Coppola.

23:44 Lucas, they are on the margin. The center is controlled by these old school conservative studios that are locking all these young people out. It was very it was unheard of. To have A director in their twenties. And yet this network that they're building and the talent that they have for their craft, like th those on the margins often come to control the center. They become

24:02 The center. Now this is really fascinating. 'Cause when I had dinner with Charlie Munger, this is the advice that he gave us. I'll get there in one second. So it talks about They refer to themselves as the mafia, right?

24:13 that would end up being a more appropriate designation as they would all regularly hire, fire, and conspire. with one another on countless projects over the next five decades. Putting together a kind of system of Their own. Munger talked about the importance. He didn't use the word relationships from the world. That's the maximum that I put on it.

24:32 But he talked about That's exactly what him and Buffett did. I think he was thirty five when he met Buffett. Buffett was what, twenty eight, twenty nine, something like that. he talked over and over again the importance of the advice he gave us is like you have to develop relationships with with people. He's like you

24:45 They were still doing deals. He's something something like uh I can't remember exactly how I put it, I have to go back and read my notes or listen to the episode again. I think it's episode two ninety five. If you haven't listened to it yet. But he talked about the fact that they would meet people, you know, in their th their twenties, thirties, and forties, and they would do business and do deals. For the rest of their lives. many of the people that he was r that Charlie was referring to, because Charlie was ninety nine when I met him.

25:07 We're dead. But he said that's exactly what they did. Okay, so let's go back to this idea where Lucas is just He's unmanageable. He's a juvenile delinquent.

25:17 And so now he's in film school and you know, the the film professors are like, Okay, we're gonna Practice making films and they give you like this sheet of instructions and it must be you know, film it must be filmed in black and white. must be this you must the story must look this way. It must not go over You know, this length and

25:34 George Lucas is like, I don't give a damn uh about your instructions. I'm gonna do what I want. Lucas made his intentions immediately clear with his first onscreen credit. This was no student assignment. It was a short film by George Lucas. That is the big Letters that's what he put on this movie that he's making.

25:49 Lucas had chosen to set his film to music in open defiance. of his professor's instructions. And so the movie he made is called Look at Life. Even fifty years later, look at life as an impressive debut, aggressive, political, and utterly confident. As soon as I made my first film, I thought hey, I'm good at this.

26:08 I know how to do this. From then on I never questioned it, Lucas said. And right from the rip he is completely obsessed. He preferred shutting himself in his top floor bedroom. Sitting at the drawing board.

26:21 Planning out his films and sketching out ideas. I would always try to get him to go out to parties and clubs and stuff. This is his roommate. And George would usually stay upstairs in his room. Drawing these things. He called them little star troopers. This is like a decade before Star Wars. So he's drawing these things he calls

26:38 Little star troopers. But for Lucas, that was better than parting. I'd be working all day and all night, living on chocolate bars and coffee, said Lucas. It was a great life. I had enthusiasm. enthusiasm and I was too busy to get into drugs. Movies.

26:54 Where his addiction We were passionate about movies. We were always scrambling to get our next fix. Listen to how they're describing this. This is how he knew. Is what you should be doing with your life. Described. working as your next fix to get a little film in the camera and shoot something.

27:09 And then here's a glimpse of something that he's gonna have problems with his entire life. He wasn't really a big fan of collaborators, he wanted subordinates. Uh, again, he is a dictator, he wants you know prefers working Alone. In many cases I almost feel like

27:24 He was born at the wrong time because it even says like he's really kind of really bad on set, didn't know how to deal with humans. He's super shy, wouldn't talk. Wouldn't give instructions. And yet he said like he really made films in the editing room. He's just by himself self editing. And so I I almost think like if he was born now he's gonna especially with all these new technologies, basically you're gonna have one person

27:44 Like filmmakers,'cause they're gonna use all this technology. I think that's how George Would have. Uh would have preferred. And you see this from very early age'cause he he's getting all these assignments when he's in film school. And

27:54 You know, th they're gonna make you work on teams. And he did not like that. He was becoming increasingly cranky about the idea of working with others and preferred doing everything himself. He could be easily irritated. If he was saddled with crew members who could not keep up with him. He's also super, super competitive. Later on in the book,

28:11 It says something like uh Francis Four Coppa. responds back'cause ju a few times Lucas says I'm retired, never making movies again. He does this a few times and Couple of like He'll be back and they're like, Why do you think he's gonna be back? It's like 'Cause George loves winning too much. And so young George says.

28:26 I was into make I was really into making it a competition. Who can get it done first and best. If they couldn't cut the mustard, they shouldn't have been there. And then he also has some talents obviously everybody else. So it's clear that he was one of USC's most dexterous editors. Lucas worked quickly. And without complaint. He'd cover up any defects, shortages, or missing shots.

28:45 In the editing room. And that's not an exaggeration. I I it is funny, I'm not even gonna talk about it'cause this book's gigantic and I've covered it on other like Steve Jobs and Ed Cadmo episodes. Well you know, he started Pixar. He's the one that had That hired Ed Catmole, he's the one that sold

28:59 Pixar two to Steve Jobs when George Lucas is going through a divorce, which also goes into a lot of detail in the book. uh which I won't cover, but this idea of being able to kind of sit at a computer and make a movie. You know, I think if he could have done that, if he was alive now, that's what he would do. Because

29:14 A typical movie that he would make, like his first movie he shot for three days. I mean, you know, he's on set for three days. But then he edited for ten weeks. His favorite part about the movie making process. He hated writing, which we'll get into. He he forced himself to do it. He's got some ideas on how to do that. He wasn't good on set, but he would li that's all he wanna do. He wanted to be alone in the editing room. But we're not there yet. We're still in film school. This is more juvenile delinquent behavior. Listen what he's breaking into. This is hilarious.

29:41 So he says uh the new the rules were of no concern to him. I broke them all. He said, Whenever I broke the rules, I made a good film, so there wasn't much that the faculty could do about it. George Lucas was very resourceful. He always would find a way to get what he needed in terms of equipment. and bodies to put together a crew. Like uh sometimes when you film

29:58 Like when you film Star Wars in London later on, they have these like really strict rules for the London like film union. You know, it's like you said you have to start at eight thirty. There has to be a T. I'm not even joking about this. You have to start at eight thirty, then you have to break for tea at ten PM or ten AM. And then you have to break for an hour lunch at one o'clock, and then you need another tea break at four o'clock, and then you can't work past six. And he's like, This is madness. He didn't want any kind of restrictions. So they would break into the equipment room to get not only

30:23 materials that they needed. Like an expensive camera. But they would also break into facilities. It says Lucas didn't want to limit his use of the equipment to the building's regular hours either. We'd shimmy up the drain spout, cross over the roof. jump into the patio and break into the editing rooms.

30:38 So we could work all weekend. And this idea that you use a juvenile delinquent actions to actually be more productive. Uh, one of my favorite stories from history about this is Edwin Lan. He's trying to do all these experiments, doesn't have the money for Uh for the equipment he needs.

30:52 So him and his future wife, they actually like break into I can't I think it was NYU. It might've been Columbia. But they break into a university and then all night they're just illegally using their science experiments. or scientific equipment to to make experience uh experiments, rather. And this idea where Lucas is like, What the hell, you guys don't work weekends, this is absurd.

31:10 In the early days, way before it turns into Polaroid. Land's first company is called Lan Wheelrate, if I'm remembering correctly. And land. H had won a bunch of awards. He was like pretty well known uh well known scientist. By the time he's like nineteen.

31:24 And so he gets recruited to all these other he's running his company. uh, but he's getting recruited to all these other companies. Maybe they could like buy his company or convince him to come over. And I remember there's a conversation that takes place. with Land and his co founders, co founders concerned. 'Cause his co founder is more like the money guy.

31:41 His co founder is concerned that he's gonna leave. And Lan goes they start work at, you know, nine, they end at five, and they don't work weekends. And so his co founder's like, Yeah, I know, are you gonna go Are you gonna leave and go work with them? And Lance response response goes Of course not. How would I get anything done?

31:56 So you see. George Lucas is like, Wait a minute, you you gave us this assignment To make this film. Uh, we don't have the right camera, so I'll just break it and take that. And then I can't edit on the weekends or at night? Are you ups are you absurd?

32:08 So this is a guy now this this is also causes a severe health problems. When he's older. He' when he's doing Star Wars, he's working like twenty hours a day. This c and that like I'm I'm chuckling. Because he's just like he had these tendencies from a very early age.

32:24 Uh, but you know, winds up he winds up getting divorced because of this. Who ends up having health problems because of this. I think he burned out, you know, a few years before. He he might have directed more movies and had a longer career if he if he worked on consistency over intensity, but he Uh in terms of Optimizing or consistent your intensity. He went full throttle on intensity.

32:43 And so he's gonna graduate film school. Again, I said like those on the margins often kind of could control the center is such an important uh concept. You see it over and over again. Because even if you gr when you graduate film school this time. There there's no there's no mainstream movie studios hiring you. And so he starts working for the U S government, making like these propaganda films for them during Vietnam.

33:02 Making his own little movies on the side. he's gonna wind up uh being able to learn he wins like this this grant. to spend some time on uh an actual like big budget movie studio set. And that's really important because that's where he's gonna meet uh Francis Ford Coppola.

33:18 But before I get to that, I just want to point out like this is Kind of hilarious. And I feel the exact same way that he does. And if you're listening to this, you'd probably do two. And at the beginning he's he's working on a like a movie set. And his idea was like, you know, he didn't think he wanted to be a director. I don't really think he liked people.

33:35 And He wanted he's like, I'll be a cameraman or an editor. And He gets a job. working on that and he's like I these people are bossing me around. Like

33:45 He goes. More than anything else, I didn't like being bossed around. I didn't like being told which shots. I could do and wouldn't and w what shots I couldn't. They'd annoyed him.

33:55 And he says at this point I was really wanted to be an editor and a cameraman. And then in the course of doing this I asked, Well Maybe I want to be a director, and you know how he figured out why he wanted to be a director? Because He figured out who is the person on the movie set that no one else can tell what to do.

34:11 The answer to that is the director, so he's like, Okay, I guess that's what I'll do. I'll be that. So he's making a short movie at the same time he has like two job two jobs. He again he's got he's a workaholic the whole his entire life. Something that his wife, you know, causes the breakup of their marriage. So he definitely pays a price for this. But uh at this point

34:29 He makes this like short movie, he's eventually gonna turn it into a longer movie. Uh called THX eleven thirty eight, but this is a shorter version of it. And His I wanna Talk this because

34:41 It winds up winning a bunch of awards and and people go like people watching it really think it's incredible. And one person in the audience was his dad. And I think this is a very important part in their relationship. says he could appreciate that his son had found his calling. His son had earned the respect of his peers. Now I had been against this thing of his going to the cinema cinema school from day one. But we guessed. He had finally found his niche.

35:03 As we drove home I said to his mom I think we put our money on the right horse. And so as a result of that little film doing well, he gets two things that happen. He gets a

35:16 U s a s like a grant from Columbia Pictures where student filmmakers can come watch a real like film, like a big budget m uh mainstream movie studio film take place, right? And the second part Is he gets to shadow the director, which is gonna be Francis Ford Copa. Now

35:33 This is really important because This is what I meant. It's it's really hard to There's almost like this contrast between this this innate fiscal conservatism, this hatred of debt. Uh this hatred of risk. That's

35:45 George Lucas has with being full risk on. Which he's forced to do on his first movie American second movie, American Graffiti, and his third and fourth, Star Wars, and then Return of the Jedi. Not return of the Jedi. Uh Empire Strikes Back. I think it's the second one. But this idea where it's like he'll bet everything he has if it if he thinks that bet is successful and buy his creative freedom

36:04 And part of this because he's on this big movie set for the first time and he was disgusted by it. It says it was the first time he had a chance to see a major motion picture being made, and Lucas was not impressed. We had been around such opulence. Zillions of dollars being spent every five minutes on this huge unwieldy thing, Lucas said. It was mind boggling. Because we've been making films for three hundred dollars.

36:24 And we saw this as an incredible waste. That was the worst of Hollywood. So this relentless resourcefulness that he's always going to have. Like I'm gonna get into some of the numbers of his movies later. It is remarkable and think of them again, like I said last week in the Tarantino episode.

36:39 Like these are miniature businesses. And viewed through that, the financial performance of his miniature businesses is remarkable. Before we get there, so now he's on this set of this movie. And this is really important because Francis Fort Copa is like five, six years older. than all the other movie brats and he's the one. It's like you know how people like the first time you can run, people thought you'll never be able to run a four minute humans can't run a four minute mile.

37:00 And then one person does it. And then immediately all these other people start doing it. Same thing here. But their first interaction was hilarious. So Coppolov notices this like skinny young man Beard, glasses. Sitting there with his arms folded.

37:13 Not saying a word. And so he walks up, they tell him, Oh, that's a student observer from US C So he walks up to Lucas and he goes, Hey, do you see anything interesting? And Lucas shook his head and said, Nope.

37:23 Not yet. And this Is how I met George Lucas. Francis Ford Copa said. Now him and Francis

37:30 are gonna wind up being very good friends right from the moment that they meet. go back to this advice that Charlie Munger gave, right? Develop relationships, relationships around the world. Lucas is twenty three. When he meets Copala. Copa is Coppola is twenty eight. They're going to be making movies, doing deals, starting companies, breaking up, fighting for decades, right? But it's really important.

37:49 Because at that time there is no young directors. There's no twenty eight year old director in the in a doing a major movie studio. You have to be an independent filmmaker to do that. And so Copel inspires not just Lucas, he inspires Steven Spielberg too. I want to read this paragraph to you.

38:03 Coppola actually succeeded in getting his hand on the doorknob and flinging open the door. And suddenly there was a crack of light. And you could see that one of us, a film student without any connections had put one foot in front of the other and actually made the transition from being a film student To being somebody who made a feature film sponsored by one of the studios.

38:21 To Steven Spielberg. Coppola was a shining star. Spielberg said Francis was the first inspiration for to a lot of young filmmakers because he broke through Before many others.

38:32 So not only did Coppola prove to Spielberg and Lucas that hey this is possible But the influence that Coppola had on Lucas too is like listen, you have to learn to write. At this time and you'll see Lucas make this this mistake a few times. He tries to outsource the writing. And

38:47 Copa was saying, Hey, uh the what separates just a director to a filmmaker is like you have to any director he would tell Lucas, like any Great director. has to know how to put together a screenplay.

39:00 And so he would repeat to Lucas over and over again, like if no one's gonna take you seriously unless you write. And that wind up being excellent advice because Lucas. Forced himself to write Star Wars, which is obviously, you know, the f his entire empire. The reason he was able to sell. the the his company, you know, thirty, forty years into the future to Disney for many, many billions of dollars.

39:20 And It's also one that that that Coppola was, you know, older Slightly older, but also like really showing hey, we can young filmmakers can have a chance or like we can get in here and do this. But it's also He's one of the most charismatic people that ever lived. I did an episode on Copal a long time ago. I'll link it down below.

39:36 And everybody the the women in his life say this. The people that work for him say this. Spielberg and Lucas say this. In fact, listen to what how Lucas describes Coppola's just

39:47 Charisma. He says Francis could sell ice to the Eskimos. He has charisma beyond logic. I can now see what kind of men the great Caesars of history were. Coppola was magnetic.

39:59 So I told you about Lucas meaning Coppola. Right, I have not told you about this friendship. This might even be more important. Arguably it is more important to the c his career.

40:08 The friendship that he has with Steven Spielberg, which is exactly why I published that episode last week. And I think it again, to Tarantino, to Spielberg. to Lucas and then Disney next week. I think it'll be like a uh t these will all tie together. But

40:22 He goes uh y a young twenty one year old Steven Spielberg goes to Just a screening and they don't tell you what you're gonna watch beforehand. And he sees this student film. And that student film was this T H X. Eleven thirty eight and

40:35 This is Spielberg's response. He says, I couldn't believe it was a student film. I was awestruck. My first impression was I hate you. I hate that guy, man. He's so much better than I am. Afterwards, Spielberg headed backstage where he found Lucas with Coppola.

40:49 Spielberg remember remember the moment. Uh warmly and vividly. George was really a friendly guy. We shook hands and became friends from that moment on. And so Gonna pause there. When he says the they I hate that guy. They both have extremely mature

41:02 perspectives on this. He's just like there's people going to see a Spielberg movie has no like him being successful does not it's not it's all positive sum. It's not zero sum. They can go see Jaws and then Next year they'll go see Star Wars. And so there's obviously some kind of inherent competitiveness, but they they really thought of each other as more collaborators. And Spielberg has said multiple times that George Lucas inspired him. It said at the time of

41:23 His first encounter with Lucas in early nineteen sixty eight, Spielberg's filmmaking was still more aspiring than actual. And Spielberg talked about this. Like no longer did his role models have to be these older, in many cases, deceased filmmakers. They're actually someone his own age. Someone I can actually get to know, compete with and draw inspiration from. And then it was around this time that Lucas finds

41:43 his inspiration and his blueprint is gonna be a blueprint for both him and Coppola as well. And he's around the same age, slightly older. And it's this guy named John Cordy. So Lucas is invited. He sits on a panel. He goes to a conference. sits on a panel with other filmmakers who made books into movies.

42:00 And one of the guys sitting next to him on this panel Is A thirty one year old, so slightly older. And he was an independent filmmaker lived in Northern California. At this time.

42:11 Lucas is in LA. He hates LA. He hates Hollywood. He hates the studio systems. He's grew up in Northern California. He wants to go back, but he's not sure how to do it. And so

42:21 John is sitting on this panel and he starts going into the details of his filmmaking. And Lucas is like oh wow, this is this is our blueprint. And so it says John had been running his own filmmaking facility out of a barn. In a small ocean town just north of San Francisco. He had privately raised a hundred thousand dollars for this movie that he was premiering.

42:40 By hitting up friends, colleagues, and even as actors for money. He shot the movie locally and then edited it on his own equipment. At the film's premiere, it received a lengthy standing ovation. And Hollywood executives fell over themselves, scrambling to distribute it. And recruit Cordy.

42:56 But Cordy was having none of it. From what I saw of Hollywood, they can keep it, he said. I would rather work for myself. In Hollywood, you have a producer breathing down your neck. I am happier working with less money. The risk of failure is far less. We can complete a film in maybe a year. Getting the results we want. That's the end of

43:13 John Courty describing how he does it. It was a speech. That either Francis for Cobla, it could have came out of Francis's mouth. Could have come out of George Lucas's mouth. But he's the one that

43:22 They had this idea in their mind, but then they see something that's like, oh, that's not just an idea. This guy's actually doing it. And so Lucas asked like can I come visit your setup and I'm gonna bring Francis Ford Coppolo with me. And so what they show up to is Cordy lives in a house on the property. He also has a barn. That barn serves as this like movie making studio. This is exactly. What I mean, Lucas is gonna do it on a bigger scale. They're about Lucas and Copel are about to found a company that tries to do this.

43:47 And then that that company's gonna fail. But Lucas does it to the Skywalker Ranch. uh where it's like there's no new movie studio there, but you can edit, you can do everything else that you need to do. And they what they realize is like, Oh, this is exactly Like this is our future. This is what we're going to do.

44:01 And so shortly after this, they find another blueprint. So Coppola actually flies to Denmark to visit another independent film company. It's this Danish filmmaker's name's Morgan Scott Hansen. And keep in mind. I need to back this up'cause it's so important. Lucas is twenty four years old.

44:17 He's twenty four years old when this is happening, Coppola is twenty nine. Okay. So Scott Hansen Is In Denmark. He's not in San Francisco. He's in Denmark.

44:25 But he's working out of this old mansion. That's on a hillside that overlooks a body of water. And it's filled with state of the art equipment. Come on, this is Skywalker Ranch. fifteen, sixteen years before

44:38 Lucas has the money to do exactly this. And so a couple of tours, Morgan, Scott Hansen's Facility. Loves it's like I'm gonna do the exact same thing. And then on the way out

44:48 Morgan gives him a uh like a gift, and it's this nineteenth century optical toy. And you essentially like spin it and it has like a series it produces like an illusion of movement. And it's called a zoe trope. And it's actually Greek, meaning life movement. And Coppola love the word and the description so much, that's the comp that's what they're gonna name. Coppola decides to name the company he's about to start with. George Lucas, Zoe Trope.

45:13 And so he tells Lucas, like this is exactly what we need to do. We need to get a big old house, like uh kind of like a f a frat house, right? And in that Fraut House, we're gonna make movies. There's only one problem. They don't have any money. So they have to go to the studios.

45:27 To ask for money. And at the beginning, as they're trying to do a deal or fundraise for what they're gonna call American Zoe Trope, is actually the full name. No, the Hollywood Studios is like no, you can't make movies up there, you have to do it here. But Lucas is very stubborn, he's very persistent. He's also willing to take risks, but he's like, I love San Francisco. I don't want to live in Hollywood.

45:45 And so I'm just gonna keep knocking on doors until I find the money. Now they have Something happens that You know you The they in some ways they have perfect timing because that you have to ride a wave. Go back to the episode you just said on Parchice Dominac. Charlie Munger's surfing model is so important. He'll analyze

46:01 Extreme success. And he always asked himself, he's like, they had to surf a wave. What wave are they surfing? And the studios actually figure out At this exact same time. Yeah, Coblin and Lucas. They would have never got the money if this didn't happen. This is why I'm telling you.

46:15 At the exact same time they realized, Oh, like if you The studio's figuring out like if we can just hire young talent making independent films. Can actually print money. Because They make they make films for almost nothing. And some of these these are like power law outcomes.

46:30 And so what I mean. There's a nineteen sixty nine. Remember they start this the in nineteen sixty eight, they're like, We're gonna do this. They bang on doors. Holly was like Screw yourselves, we're not giving you any money. The next year.

46:40 the film Easy Writer comes out. Okay. So it is written by a thirty two written and directed by a thirty two year old or thirty three year old Dennis Hopper. It was not made in Hollywood. It was made on a shoestring budget. They raised three hundred and fifty Thousand dollars. Why is that important? Three hundred and fifty thousand dollars is released in theaters, the film makes sixty million. Easy Rider goes on to be one of the most profitable films ever made.

47:05 And so the studio executives see that and they're like, Oh shit. And this is what they said. The studio smelled money. Why invest millions bankrolling production of an enormous film on a studio backlot? But you can simply distribute independently produced films. Suddenly independent films and independent filmmakers is exactly what Lucas and Coppola

47:24 Want to be, right? made by young directors were in demand. The studio wanted young talent. I just said that Charlie Margar talks about the surfing, surfing the wave. Listen to the words that they use to describe this. Easy Rider had created a tsunami. of independent enthusiasm. Coppola decided to ride the wave.

47:44 right into the offices of Warner Brothers. Come on. That fit together so perfectly there. So goes to Warner Brothers. This is Coopola's like

47:53 Well, I sometimes I think you might need a guy like this. 'Cause it's not like hey we're gonna make one movie. He's like, listen. You front us a bunch of money. Uh, we're gonna bring you a finished film just like Easy Writer did. We're not gonna do this once. We're gonna we're we have seven films we wanna make.

48:05 Uh with you guys. Now here's the problem. Coppa probably shot Too big. And even if he didn't shoot too big, he definitely signed a bad deal.

48:13 Because The executives gave them money. Not as an investment. They

48:20 The scripts aren't being optioned. They gave him a loan. And they said in the contract this is this is gonna cause them to go bankrupt. Uh or almost go bankrupt. The minute that Warner Brothers

48:31 Did not like what they were doing, had lost faith in the project, whatever the case is, they could call in the loan and Coppola and Lucas. Would have to pay back everything. And in true Coppola fashion, he was like, Oh, that he was very confident that was never gonna happen. So now he's got a bunch of money. And He's saying all these crazy things like my company's gonna be worth ten million dollars, you know, in a couple of years and it's gonna do all this stuff.

48:53 But here's the weird thing. They took a bunch of money. And he just invests in things. This is like the on Lucas. And you know, Lucas is technically his partner, but he's definitely the subordinate partner in this arrangement. And so Coop Co Coppola spends all this money in the reception area. He sa he buys an antique pool table and a really expensive expresso maker and all this other stuff.

49:12 And One, it reminded me when um there's a great anecdote when Charlie Munger and Buffett. I think they're buying like the Bull Buffalo Evening News. I can't remember which one. They're buying a newspaper and they're touring it. And

49:24 Charlie Munger's like disgusted. At the opulence. And he says, Why does a newspaper need a palace to publish in? And his point was like the the readers of your newspaper, they don't only care what's in the newspaper. They don't care. Like you you're investing in things that are not important to your customer.

49:39 You know, a the movie equivalent of that is all that matters is what you put up on the screen. Your antique pool table, your expensive super luxury or architectural design doesn't do anything for your customers. Like what are you doing? Uh we saw this again. But I th I can now talk about this publicly.

49:54 But my friend Jimmy Sony is the author of this book called The Founders. I think I covered it back on episode two thirty four, and I also covered his biography of Claude Shannon a long time ago, maybe episode ninety four, something like that. And uh me and Jimmy have become friends since I cover those books. And he's next book. There there's this book called uh I also covered a long time ago. It's called Steve Jobs and the next big thing.

50:15 And it's on the thirteen years, this is what I call bizarro Steve Jobs, the time the thirteen years between he was kicked out of Apple and then he returns. And it's really about the founding of next and The reason I call up is R O C jobs is because he's Arguably the greatest entrepreneur ever. And yet in this ten to thirteen year period, you see this incredibly gifted entrepreneur just making one bad decision after another. And so what do I mean?

50:35 Oh, uh Jimmy, I can talk about this publicly. Uh now, I asked him. uh Jimmy's his next book, he's writing a a book on this time period. And Jimmy's a fanatical. researcher. He's been sending me he's in these these archives. It's just incredible.

50:48 What's gonna come out? Anyways. Reading that book, which was you know, published a long time ago. The next uh I think it's by Randall Strauss. C jobs is the next big thing. There's a line in that book that blew my mind that reminds me of what France Four Coppola is doing here. It's like, what are you doing? You're putting an emphasis on things that are not important.

51:04 And What do I mean by that? Steve Jobs. One of the the ninth employee, if I remember correctly. Ninth or tenth employee. At next.

51:13 was an interior designer for the office. That's absurd. That that is not that is the and that is bizarre, Steve Jobs. Steve Jobs made phenomenal decisions. That is a bad decision. Um this idea of

51:25 putting a bunch of money into things that don't affect would actually would actually the customer experience makes no sense and yet you see this over it's a mistake that people make over and over and over again. Another thing they do. They buy a bunch of expensive equipment, which maybe they need. Yes. Okay. But then decide hey

51:40 There it's not just for us. Any filmmaker in San Francisco can come by And rent this very expensive equipment that we need to make. Or movies. What do you think's gonna happen? Most of that equipment

51:52 Winds up being lost or stolen. And then Coppola also has ideas like hey You know what we need? We need uh our own airport. We need a fleet of helicopters. He doesn't have the money to buy the ship, but that's where his eye is like that has nothing to do. With what you're trying to do, or just make great films that people love so much that they pay money to see and they tell their friends to go see. That's that's all you have to do.

52:11 And so this fight right now, like Copel and Lucas start fighting. Immediately because this is a this is a bad co founder match. Because Lucas's thing he described Lucas in very plain language to you like He's very easy to interface with because He tells you what's important to him when he's in his twenties and it's still important to him when he's in his seventies, right?

52:28 And so he says what we're striving for is total freedom. Where we can finance our pictures, make them our way, release them Uh where we want them released. and be completely free to express ourselves. You have to have the money in order to have the power to be free.

52:41 That is why Lucas wanted to make as much money as possible. He wanted to buy his freedom. He never wanted he wanted complete control, and he never wanted people to decide. what he should be working on or to tell him what to do. That's it. That's it that's all you need to know about Lucas. And the reason I would recommend reading this book is because it goes into great detail of how he actually accomplished that. Now I'm gonna talk a little bit about that, but I I do want what is fascinating is that uh not all the ideas they were having, uh, you know, they're young. uh entrepreneurs never don't have experience, don't really know what they're doing.

53:10 the the movies they're gonna make are gonna flop, but What's fascinating is like they they still had an insight into the future. And so it says, uh both Coppola and Lucas predicted a bold high tech future. Remember this is nineteen sixty nine, nineteen seventy, maybe? And they said movies will eventually be sold like soup. What does that mean? You'll be able to buy it in cartridges for three dollars and play it as you would a record. you know, the mus music record at home.

53:33 He's predicting, you know, VHS tapes, then DVDs, then Blu ray, and now streaming. And so the first movie that American Zoe Trope is going to make is This movie THX eleven thirty eight. Really is a m Luke. Luke is making a film about himself.

53:51 Because the main uh idea. It's like science fiction kinda weird. So he kinda like hides that, but It's essentially just you should reject the status quo in your pursuit of freedom. And if somebody's talking about the idea behind the movie and one sentence here just w stuck with me from the first time. I I remember this

54:06 uh line from you know reading his book for the first time seven years ago. Uh so he says th this movie is the importance of self and being able to step out of whatever you're in and move forward. Rather than being stuck in your little rut. This is the sentence stuck out to me. People would give anything. To quit their jobs.

54:22 All they have to do is do it. They're people in cages with open doors. At its core, THX eleven thirty eight was about refusing to accept the status quo. It's about a hero. Who lives in an anthill and dares to go outside. This issue of leaving a safe environment and going out into the unknown.

54:41 Would be an underlying premise of his first three films, THX, Americiti, and Star Wars. He is really making a film about himself. Reject the status quo and pursue freedom. And the problem is that THX eleven thirty eight Uh the studio hates it.

54:59 They hate it so much. This is so bad. Yeah. This is I guess is important. There's two things are gonna happen. I wanna talk to you about the Godfather. And I want to talk to you about the fact that George Lucas's first movie is so terrible.

55:11 That it literally causes the collapse of his company and the cancellation of his deal. And yet as a direct result of this, it also leads to the next thing and his desire for control, which is Star Wars. Goes back to what Tarantino said, what Spielberg said. You know, a lot of entrepreneurs say the same thing when you're in the middle of it. You have no idea the impact that you're potentially having. And a lot of people quit before they even get to realize that. And so because the studio's like this is freaking terrible.

55:35 The deal's off. Give us our three hundred grand back. They're now in debt. The company's Hemorrhaging cash. Coppola has no money at all. He's desperate for money. And so

55:45 He gets an offer, right? He only wanted to do his own films. He gets an offer. in the summer of nineteen seventy. So this happens really fast. They they the you're talking about a year and a half and the company's gone. Um, and it's an offer he couldn't refuse. Because it comes from Paramount Pictures. And they're saying, Hey, we're gonna make uh an action film.

56:02 based on one of the biggest books of nineteen sixty nine, which was written by this guy named Mario Puso. And that book is a sprawling gangster novel called The Godfather. And so he goes to Lucas, he's like, They offer me this Italian gangster movie. Does not want to do it. He's like, Should I do it? And Lucas

56:18 His like h his whole thing is like you have to stay in the black. Lucas has a mantra that he repeats over and over again, I think is really good. Stay small, be the best, don't lose any money. Stay small, be the best, don't lose any money. So He's talking to Copley's like what the hell are you talking like you ha you have no money. They're offering to pay you a bunch of money. To direct a film, you have to do it. I don't think you have any choice. Is the advice

56:39 that he gave his friend Coppola. We're in debt and you have to get a job. And so reluctantly Coppola agrees To direct Godfather. He gets seventy five thousand dollars to direct and and he's gonna get six percent of any profits the film makes. And so on the way out the door, the studio owns Because they they lent them the money. They own THX eleven thirty eight.

56:59 They can do whatever they want with it. They didn't like the editing job that Lucas did, so they give uh to their own Hin House editor. And Lucas. Listen to what he says here. So they they went up cutting another four minutes from Lucas's final cut. And this induces Lucas into a state of rage.

57:13 He says there's no point for them to do it other than exercise some power. Their attitude was that we can screw around with your movie, so we're going to. Lucas had no patience with executives who argued that they'd only cut four minutes from a ninety minute film. They were cutting the fingers off my baby, he said.

57:29 Lucas wouldn't trust the studios Again. Ever. And again, at the time, this sounds like the end of the world. This is the worst thing that ever happened. They cut.

57:38 My film our company's over, but it wind up being one of the best things ever happened to him because this is the founding of Lucasfilm, the exact company he's gonna sell to Disney. And he talks about like why they had to have a co-founder breakup because it really was sparked by the different management styles and their attitudes towards money. Lucas says, I'm very cautious. I don't borrow money. I'm very protective of the things that I build. Lucas was always tight with a dollar and Coppola would continue to spend money recklessly.

58:05 Lucas had made up his mind to break away from Coppola and to make it on his own. Determined to control his own projects, no studio he vowed. would ever force him to compromise his vision again. This led him to forming his own company in nineteen seventy one. Lucas officially opened Lucasfilm.

58:20 This independent production company would be run out of his little house. And its lone employees were him and Marcia. Marcia is his Wife. So even though they broke up as co founders, they're still friends, and Coppola actually gives him some good advice because THX is just this weird abstract they they called uh Lucas at the time a cold weird director.

58:41 So it's not he's just like what are you doing with all this like strange abstract stuff? He's like stop being so weird. You need to do something human. You need to do something that makes money because if not, you're you're gonna your career's over before it begins. And so the the advice that Coca-La gave him was like you should just write something that has to do

58:56 With your own life. An experience you know well, something that, you know, is more positive. And so Lucas has this idea to make this movie that's gonna be one of the most profitable uh best return on investments of every movie movie ever ever ever made. And it's called American Graffiti. And so at the time, he grows up at this little town in California. They do this thing called cruising. So on Friday and Saturday nights, it's just like little town.

59:16 They would soup up these cars. And they would just drive slowly down one block. Then turn around and do it all over again. And you just cruise over and over again. And so he's like, Well, since I spent my youth doing this, it's like a coming of age film. About, you know, your last year of high school transitioning and like you know, everybody knows that experience. It's like your li entire life's gonna change. You have no idea what's gonna happen. So that's what he's gonna make a movie on.

59:36 Here's the problem. no one wanted to give'em money. And this was fascinating. Didn't even think about this because He's got no money. He's considered damaged goods. And he's struggling to get any kind of money for to t to write the script. And then once he writes the script, then he's gotta make the movie. And he talks about the predicament that he's in. He says, Listen, the easiest job you'll ever get

59:55 He's trying to make your first film. That's the easy one to get because nobody knows whether you can make a film or not. After you've done that. Then you have a heck of a difficult time getting to your second film off the ground. They look at your first film and they say, Oh

1:00:06 No. We don't want any more of that. And so Lucas goes back to doing what what he was doing. He's like knocking on doors, trying to figure somebody just give me a little bit of money so I can write this script. Now this is hilarious. He eventually he fails a few times. Then he gets to the president of United Artists. This guy's got the perfect name for his job.

1:00:25 His name's Picker. David Picker. He's literally having to pick screenwriters and filmmakers. Like what's going on here? And so he's like he's telling about this. And he's like, I wanna write I need money.

1:00:37 And I wanna write American graffiti. And Picker says yes on May fourteenth, which is also Lucas's birthday. He had just turned twenty seven years old. He gives them like$10,000. To write the script. But Lucas is gonna make a mistake'cause he hates writing.

1:00:53 He gives all that money to a screenwriter and the screenplay sucks, so he's gotta do it himself anyways. But What was fascinating about this is in this meeting with David Picker. Okay.

1:01:04 Is the birth of Star Wars. So He's like, Okay, I'll take American graffiti. Let's let's do a deal on that. Do you have anything else? And Lucas is like actually I do memor him sitting back in his room eating chocolate bars and drinking coffee and getting diabetes, which he definitely got diabetes at a young age. He was

1:01:20 Drawing a little star suit troopers, so Picker's like, hey, what else you got? And Lucas told Picker. About his idea. For this unnamed space opera fantasy film. Great, said Picker. We'll make a deal on this too.

1:01:33 And that, Lucas said. was really the birth of Star Wars. It was the only This is fascinating. Th think about how he says this, right? It's the birth of Star Wars. It goes from a notion to an obligation. It was only a notion up to then. At that point

1:01:46 It became an obligation. Then I gotta get to one of the most fascinating things, what I personally find most fascinating about Lucas. other than his in his desire to innovate, his invention, to be vertically integrated, to control everything. These are things obviously you know personally identify with, and I think a lot of entrepreneurs do. But He there's just parts of your job. Does it like we get to we're unbelievably lucky to be entrepreneurs.

1:02:09 I think of what Sam Walton said in his autobiography. He says the great thing about entrepreneurship is you get to spend your time building something you enjoy. Most people don't get to do this. They're stuck in jobs they hate. I had the time of my life. But even with that, there has to be something that Sam didn't like doing. And in Lucas's version of that, it's like I

1:02:26 He hates writing. And so he he blows all the money. He has no money. He is poor. He's got no money. He's gonna go into debt in a minute.

1:02:35 And so he w He says my intense desire to get a writer had backfired on me. And I ended up with an unusable s unusable script and no money. And so this is what he's gonna do. He he calls it bleeding on the page. He says that line I don't even know, ten times in this book. And so he's like, Okay, forget it. I'm gonna have to do this myself.

1:02:53 And so over the next three to the the next three week period. He writes from eight in the morning until eight at night, seven days a week. He calls bleeding on the page. He also is humiliated because now He's got no money. Coppola's got a bunch of money because of Godfather. So he goes to Coppola and George Lucas Senior.

1:03:12 He's gotta go to his dad. His dad that told him Don't do this, you'll never make any money, you'll be a bomb. And Almost thirty. And

1:03:21 It's like I ha I need money, Dad. You have to the can you loan me money so I can do this movie? And this is the insane thing. It's so hard to comprehend and I don't even know how many people would make this decision because he somehow maintains this focus on getting his own project done through the struggle, okay?

1:03:39 So He's got he's writing the the script is done. Now he needs money to make the movie. He's going around. No one wants to give him money to make the movie movie. But they were interested in him as a director, just not directing his own screenplay. Think about this, he's got no money, he's a debt to his dad and Francis Varcopla. They're offering him a hundred thousand dollars.

1:03:57 To direct A film. He thinks the film is shit. He hates it. He's like, these are terrible projects. And He says no.

1:04:06 And this is interesting. Why? He's like if graffiti sells, I can't be in the middle of another project for someone else. So he had to turn down every offer. Listen to what he says about this. That was a very dark period for me.

1:04:20 We were in diar dire financial straits. He's already married, okay? It was a very dark period for me. We were in dire financial straits. I turned the movies down at my bleakest point. When I was a debt to my parents. In debt to Francis Ford Copalet. In debt to my agent.

1:04:33 I was so far in debt, I thought I'd never get out. It took years. to get from my first film to my second film. Banging on doors. trying to get people to give me a chance.

1:04:44 Writing. struggling with no money in the bank. Getting little part time jobs, eking out a living, trying to stay alive. And pushing a script. That nobody wanted.

1:04:56 A script that nobody wants, it's going to give The person that finance finally finances the film. One of the greatest return on investments. in movie history. Think about that.

1:05:06 So this guy at Universal, this guy named Ned Tannin, finally gives him a shot. But Tannan produces films that are usually only budgeted. These are small scale films. you know, million dollars or less is usually what Tannin can do. And even though this is incredible, Tom. Even though Lucas doesn't have any other options. No one else is willing to finance this.

1:05:24 You see that his desire remember how this started. George Lucas unapologetically invests in what he believes in most himself. He bets on himself here. He could have been paid. You know, a hundred you could have asked for a big director fee. He's like, No.

1:05:36 I want a less director fee. I will cut my director fee in half. I want fifty thousand dollars. I will not only direct it, I will write it for that fee. Just no extra money for that. But

1:05:46 I want forty percent of the profits if there are any profits. And at this time he's doing that. It is a big if. that American graffiti could ever turn a profit. He d George Lucas before this has never had a successful film. He's just had A flop.

1:05:58 And so through this entire book There's huge chunks of the book that I think you should read because it's just problem after problem after problem after problem I'm gonna read just a highlight of this. from American graffiti and then I want to tell you one of my favorite ideas I've ever come across.

1:06:14 says despite the agreement he had negotiated with the town under which he could pay three hundred dollars a night to film on Fourth Street, local businesses were already complaining about closing the street. When Lucas and his crew arrived, they learned that a local council had withdrawn permission for him to film and would not permit. uh to clear or control traffic. Luke has made the most of the evening anyway, rapidly shooting his way through nineteen setups. and scrambling to find a new location. Then we had a focus problem on the camera and the assistant cameraman was run over by a car. Then we had a five alarm fire. That was a typical night.

1:06:42 So Tarantino in his book, he says the job of a director is to solve problems, right? Solve problems for your actors. And I read this book by Danny Meyer, the famous restaurantur, a long time ago. Be now you're talking about eight years ago, probably. It's called Setting the Table. It's excellent.

1:06:59 And he tells a story that I've never forgotten. And so he's at dinner with uh Stanley Marcus, who is part of the Neiman Marcus family, the family that uh that controls Neiman Marcus. He's a wiser older man. Probably I would guess forty years older than Danny is at this point. I think Danny's in his like Mid twenties, maybe late twenties at this point. And so he's

1:07:19 They're having this conversation and he says, Opening this new restaurant might be the worst mistake I've ever made. Stanley set his martini down. Looked me in the eye and said. So you made a mistake.

1:07:30 You need to understand something important and listen to me carefully. The road to success is paved with mistakes well handled. His words remain with me throughout the night. I repeated them over and over to myself. And it led to a turning point in the way I approached my business. Stanley's lesson reminded me of something that my grandfather had always told me.

1:07:50 He said the definition of business is problems. His philosophy came down to a simple fact of business. Success lies not in the elimination of problems, but in the art Of creative profitable problem solving the best companies.

1:08:04 Are those that distinguish themselves By solving problems most effectively. First of all, that line right there. The road to success is paved with mistakes well handled. That's just straight up wisdom.

1:08:17 Well schooled. uh entrepreneur. But this idea that the definition of business is problems, right? Success not lies not in the elimination of problems, but in the art of creative problem profitable problem solving. What I say is like the the way I condense that down so I can remember myself.

1:08:31 Business is problems, therefore the best companies are just effective problem solving machines. The best directors are just effective problem solving machines. And so after this grueling schedule. He finally finishes the movie and what he says here This is what I meant.

1:08:46 If you could dial the the the balance between consistency and intensity, I think he's way too far in the intense level. And maybe that's what he the way he wanted to live his life. It's none of my business, right? But I think for a long career you have to have more of a balance between consistency and intensity. And so he says, Lucas was glad that it was over. You couldn't pay me enough money to go through what You have to go through to make a movie, he said. It's excruciating. It's horrible.

1:09:07 You get physically sick. I get a very bad cough and cold whenever I direct. You feel terrible. There's an immense amount of pressure and emotional pain, but I do it anyway. And I really love to do it. It's like climbing a mountain. And what is fascinating is

1:09:22 He starts to preview the movie, the audiences love it. And the studio execs can this is so nuts to me. The studio executives can be in a theater full of cheering potential fans and customers, right? And they're like this movie isn't good enough.

1:09:34 We're not gonna release it. Maybe we'll put it on TV. They're just like completely jerking around and screwing'em over. And he's obviously depressed and he's like This is where he's like, I'm going to be an independent filmmaker. I'm going to control the money. He hates these people. And then they edit his film again. And they take out another four minutes, just like they did in TA Jacks. And this is the importance of just having good relationships and good friends that truly care about you too, because

1:09:55 They're out of screening, Lucas is there, Copel is there, the C executives are there. And the crowd loves it in the but after In like the lobby. The executive's like bitching at George Lucas and Coppola is just

1:10:07 Ah, he's he comes to the defense, like, Are you out of your mind? Did you not hear them? And he pulls out his checkbook. He's like, How much do you want for the movie? You don't want to put this out, sell it to me and I will invest my own money. And I will release this movie. You're s you have a hit on your hands. Copa's forcefulness kind of calls their bluff. They wind up releasing the movie. The movie's a smash hit. Listen to this, though.

1:10:25 So it has this great review in the New York Times. they called American graffiti a work of art. Now this was very fascinating because this is the way I thought When you read about George Lucas, the way I think of him is I think of him as as a craftsman. Turns out that's how he thinks of himself because he does a lot of this stuff himself. he he didn't really like the fact that people call it a work of art. My thing about art is that I don't like the word art because it means pretension and bullsh.

1:10:46 And I equate those two directly. I don't think of myself as an artist. I'm a craftsman. I don't make a work of art, I make a movie. And you can also see he's not modest by any means.

1:10:56 I know how good I am, he said. American graffiti successful because it came entirely from my head. It was my concept. And that's the only way I can work. And it prints.

1:11:07 Money. Keep in mind, Americiti is released in nineteen seventy three. So these are nineteen seventy three dollars, I'm about to tell you. American graffiti cost a million dollars. And it earned At the box office

1:11:19 Fifty five million. Making it one of Cinema's most profitable returns on investment ever. Lucas earned nearly four million dollars after taxes. and as he had vowed to his father more than a decade before, Lucus was a millionaire.

1:11:34 Before the age of thirty. He had done it. With two years to spare. And he's got to figure out what am I going to work on next. And he has at this point in his life

1:11:44 He's got a couple million in the bank. And he's got a two page treatment. On handwritten notebook paper. And the title, which is scrawled in the center of the treatments cover page, is The Star Wars.

1:11:55 Now one of the smartest things that George Lucas does is learns from his own mistakes. So he's not going to hire somebody to write the Star Wars. And he's going to bleed on the page. There's an entire chapter. About this. It's called bleeding on the beach. Because George says over and over again, like in the book, I I forgot l I lost track of how many times he says this. He's like

1:12:14 He does not believe. That he had a natural talent. For writing and so He calls the process awful. He hates it. But he makes himself

1:12:23 Do this. Listen to this. So it's gonna take him three years. To rate. Like the first version of Star Wars. But the way he does this is fascinating.

1:12:33 So he's like okay. I'm gonna treat the writing of Star Wars. It's going to be a full time job job. Okay. So he's still working out of his home. He's got Upstairs like a office, studio, library kind of thing. And he's like, I'm going to

1:12:46 Go upstairs. At nine o'clock. I can only do one thing. I can look at the wall or I can write, but I can't do anything else. And from nine to five, eight hours a day. Listen to how he describes this. Uh, he says I would sit at my desk for eight hours a day, no matter what happens, even if I didn't write anything. It's a terrible way to live, but I do it. I sit down and I do it. I can't get out of my chair until five o'clock.

1:13:07 It's like being in school. But it's the only way I can force myself to write. Then over his desk he would hang this giant like wall calendar to track his progress. And he's like, Okay. I have to write five pages every day.

1:13:19 And you mark a big X. Like a big X on the days where you write five pages. And here's the deal he made with himself. If I can finish my five pages a day early Then I can leave. So some days he gets to, you know, eat his

1:13:31 chocolate bars and listen to music. But most days no words are written at all. And then he would just go downstairs and he'd glare in anger at the TV. You need a T V dinner. Yeah.

1:13:41 And he would just be pissed off. Staring and watching the news. Another idea that I think is useful. Is he's having a problem Right. Like think about the the you know, the

1:13:52 A lot of the scenes in Star Wars, it's action. He's got an idea in his head. But he's reading on the paper. It doesn't seem It's like not matching up. So I thought this was fascinating. He makes kind of a demo of sorts. If you read The book Creative Selection. It's episode two eighty one. I've read that book like four or five times. Anybody building a product, I think, should read it. It's this programmer that worked at Apple under Steve Jobs named Ken Cosienda. And she's meaning is like, hey,

1:14:14 Uh, we need to make demos. Like that th that's how we're gonna push these ideas forward. Not presentations. I want to actually see it. And so George is like trying to explain his idea himself and to others. So he's like, I need a demo. And so this is this demo that he makes for Star Wars. And so he says one of the key visions I had of the film when I started was a of a dog fight in space with spaceships.

1:14:36 Two spaceships flying through space shooting each other. That was my original idea. But trying to get the dogfight in my head on paper was difficult. And so what he would do is he'd go to the television and he'd start taping old war movies. And it's specifically footage of airplanes like you know, dog fights with airplanes.

1:14:52 And he taped twenty hours Of these like scenes from random movies, right? He then transferred it to film. And then he would edit it down to a reel of about eight minutes long.

1:15:04 And the description of this reel is fascinating. It says Well he didn't yet Yet no. The reel of dog fighting would be one of the most important bits of film he would ever put together. The wet concrete

1:15:16 For the cornerstone of his film Empire. So now he has something that he can show. Now he needs to go and raise the money. For The movie. Now this is fascinating. We've you and I've talked about this over and over again already. Lucas desires control above all else.

1:15:29 And He still stuck to that idea, even though Fox was the only studio who said yes to Star Wars. Think about this. are you know, arguably the most successful Movie franchise in history. And only one f only one studio said yes.

1:15:44 And so even though he's negotiating with the only interested par party One, he there's certain things in his contract that he demands, right? And so he wants as much control over the final edit of his film as possible. And he even says, like, I'm not willing to listen to other people's ideas. I want everything to be my way. That's an exact quote from George Lucas. And so I would argue this is his most important what's about to take place here, this is his most important decision ever. So he starts negotiating with Fox, and this is what George Lucas says about this. Fox thought I was going to come back and demand millions of dollars and all these gross points for called Lucas.

1:16:13 I said I'll do it for the deal memo, but we haven't talked about things like merchandising rights and sequel rights. He would insist. That those particular clauses. Normally considered under brush in a contract. It's really weird that they didn't understand at this point.

1:16:26 How important. merchandise rates were because if you remember I've done a bunch of episodes on Walt Disney before. And they were even surprised. They did this show called Davy Crockett. They sold like three hundred million dollars in a year of like those Davy Crockett like hats.

1:16:39 And that was, you know, two decades before what's going on here. So for Fox to just give them away, they're gonna make Three to five tim it says three times the amount On toys. Lucas makes three times the amount of toys as he does on the films, and the films still make billions and billions of dollars. It's insane. So he's like, Okay, I want, you know, the merchandise.

1:16:58 And I want the sequel rights. I'm not gonna charge you more money. What was nor par for the course at this is if you have a smash hit, then your director fee, you know, should go from whatever, fifty thousand should Could go to a million, it could go to two million, whatever the case is. He would also insist that Star Wars be produced by Lucasfilm, thereby ensuring that he could keep an eye on the bottom line. And then any expenses billed against the film were really his.

1:17:20 I was very careful to say I don't want more money, Lucas said. I said I don't want anything financial, but I do want the rights to make the sequels and he wants the merchandise rights. Fox was willing to sign over the sequel on merchandising rights mainly because they'd gotten the director of American graffiti so cheaply. And no one, not even Lucas, appreciated it.

1:17:40 That by securing sequel and merchandising rights He had just negotiated for himself a billion dollar clause. Decades later, Fox executives would shake their heads in wonder. at Lucas's instincts and audacity. So let's go back to this idea that businesses problems and that the best companies are just effective problem solving machines.

1:18:00 He's got a problem. He's got an idea in his head. No one can make Special effects, there's no technology at the time. So what does he do? The solution sometimes to a problem is to find to found your own company to solve that problem. The solution to this problem that he's having now. is the founding of industrial light and magic. So it says.

1:18:16 Lucas would not merely have to produce the visual effects, he would have to develop the technology needed to shoot them in the first place. George was absolutely adamant that he wanted to set up his own shop with his own people. Industrial light and magic. would then be an official subsidiary of Lucasfilm. Born of necessity, seeded with his own money.

1:18:35 and feeding off Lucas' need to control every aspect of the production. Industrial light and magic. would stand as one of the cornerstones of Lucasfilm's empire. An investment That would set him well on the way to becoming a multi billionaire.

1:18:48 And then this is a quote I shared earlier, which one of my favorite quotes in the book. How many people think the solution to gaining quality control? Improving fiscal responsibility and stimulating technological innovation is to start their own special effects company. Ron Howard said admiringly. But that's what he did.

1:19:05 You and I have already talked about the fact that this guy is stubborn, he's persistent. He's bullheaded. And you have to be. Why is that so important? People thought he's like making this like little kids movies. This is like He he's kinda getting depressed, but he's still persevering.

1:19:18 Because his friends Advice. He says Lucas saw Star Wars as his response to a weary world in need of new heroes and mythologies. His friends Said it was a juvenile exercise unworthy of his talent.

1:19:31 They said, George, you should be making more of an artistic statement. Yeah, that's a good way to go out of business. What are you talking about? He did that with THX eleven thirty eight. How did that go? People were telling me that I should have made Apocalypse Now, George Lucas said. They should a they said I should be doing movies like Taxi Driver. His own wife. Was telling him that because she was one of the ed main editors for Martin Scorsese and she wanted her husband to make movies like Martin Scorsese did.

1:19:55 But I think this idea, it's one of the mo the most important ideas I've learned in the last like year, year and a half. It's like you have to believe that your own opinion. about what you're working on is greater than everybody else's opinion around you. None of this works if you can't trust your own judgment. And so another important thing, this is really the power of Deadlines.

1:20:12 Because He's been working on the script for three years. And he he has to shoot the movie now. And He the the the important part about having a deadline is like if that didn't happen, he'd probably still be working on the script now.

1:20:23 I didn't really know where to go with it and I've never fully resolved it. It's very hard stumbling across the desert, picking up rocks and not knowing what I'm looking for. And knowing the rock I've got is not the rock I'm looking for. I kept simplifying it. I kept having people read it. And I kept trying to get more of a cohesive story, but I'm still not very happy with the script. I never have been. I have never arrived at a degree of satisfaction where I thought the screenplay was perfect. If I hadn't been forced

1:20:45 To shoot the film. I would doubtless still be rewriting it now, the power of deadlines. And again There's an entire book I might cover. So I I uh I think you already know this, but when I read all these biographies, um When I'm done, I go through the bibliography and I find

1:21:01 A bunch of New sources to to read more books on in the future and turn them into more episodes? And so I found one, two, three, four Uh new books. from this bibliography and one of them is just about how

1:21:13 Got wrenching and difficult making Star Wars was. think maybe reading that book and and doing an entire episode on it would be fascinating. But I can give you a brief synopsis here. From day one, Star Wars would be problem plague production that would blow through its budget.

1:21:28 Mentally and physically exhaust. Lucas. And try the patience of executives at Fox. that this that this so much so that the studio very nearly pulled the plug on the film altogether. I forgot how impossible making movies really is, Lucas wrote. I get so depressed, but I guess I'll get through it somehow.

1:21:45 And another example of this idea, it's really hard to tell what you have when you're in the middle of it. He goes and visits St Star Wars is nearly killing him. This is what I mentioned earlier. He's working twenty hours a day on it. And he's so deep into it. He goes, decides to

1:21:59 fly down to Alabama to visit his friend Steven Spielberg, who's working on the movie Close Encounters of the Third Kind. And he brings with him like this booklet of all these like black and white pictures. That from the set. And Spielberg's going through this and he thought it was amazing.

1:22:15 But The reason I bring this up to you is because Spielberg tells us what George was thinking at this time. He says George was so depressed, he didn't like anything. He didn't like the lighting. He didn't like what the cameraman was doing. He was very, very upset. He was saying, I've got myself into a mess that I'll never really get myself out of. He was in a state of near despondency.

1:22:33 So much so that he's rushed to the hospital. He feels sharp pains in his chest. He was ha afraid that he was having a heart attack. So he gets checked into a hospital, they diagnose him with hypertension and exhaustion. So after that he's like I'm never doing this again, but

1:22:46 He had no intention of relinquishing control over the film, even if it killed him. He's gotta get this done first. And it wasn't until I read that section I went back and looked. I thought he directed all the Star Wars movies. This is the last movie he directs. for twenty two years until star episode one, the Phantom Mess ph Phantom Menace. So Star Wars comes out in nineteen seventy seven, he's a director.

1:23:07 And then he stops doing that. He just he becomes an executive producer. He bankrolls it, he writes the stories, picks the the uh the the directors, but uh but he really meant it. Like he hated directing. And so he finally finishes the film or but is a it's almost done. And

1:23:22 This is fascinating because this happens too I mentioned I was gonna do another episode on Tarantino at the end of the Tarantino episode. But I re-listened to Tarantino. And I thought it was really, really good. So much and I I could kinda tell because you get a lot of responses and like the text messages that I was getting from like hit a note. Like people really, really liked it. And I was like, I'm not. And then I looked at the outline for the second Terran episode I was making.

1:23:44 And I maybe we'll do in the future, but I was like, Man, if I do this right, like it's gonna pale in comparison to to the Tarantino episode. So I shelved it for now. But in that source material, some of the research I was doing. I come across This

1:23:58 conversation where Tarantino, you know, Reservoir Dogs was a hit, but it wasn't like a a smash commercial hit. And so he nothing like what Pulp Fiction's gonna be. And so he actually screens Tarantino screens Pulp Fiction before it's released to Uh a bunch of director friends. And everybody hates it except one person, all of his director friends.

1:24:16 One of his director friends, he tells a funny story, was like, Okay Uh, I gotta have a real serious conversation with my friend Quentin, like this m he's gotta change it. This isn't good enough. He's like I'll wait till he gets back from Cann. I think Cannes Film Festival is how you pronounce it. Or con? I don't know how to say it. But uh He's like my way to

1:24:33 You know, gets back and then Pulp Fiction wins all the awards there. So he's like, Okay, I guess I'll have to say that. But this wh this idea where Even your really gifted friends may not

1:24:43 understand the value of your idea. Where you know, you had let's say six director friends of Tarantino, five of them say this sucks. Think about how the hell you can see Pulp Fishing? And think it sucks. And one was like super supportive. Same thing happens here.

1:24:56 He goes and He screens Star Wars and his wife, who hadn't seen the film since the first cut, she was off, I think, uh editing for Scorsese, if I'm I remember correctly, she burst into tears. She's certain that it's a disaster. Brian De Palma. It's just lighting into him. He goes, What is all this force shit? Like, you know, the force will be with you. Screaming at him.

1:25:15 They go to dinner, he's still railing at it. And yet there was one person in the room who was impressed. I loved it. Because I love the story and the character, said Spielberg. I was probably the only one who liked it and I told George how much I loved it. That evening

1:25:28 An executive from Fox. Called Spielberg. We all need friends like this. Called Spielberg to ask. What he thought about what he had seen. Spielberg told the executive

1:25:38 That he thought he had a hit on his hands. One that it would eventually make fifty or sixty million dollars. Wow were we wrong? Spielberg said. Why? It's not gonna make 50 or 60 million. The budget for the original Star Wars was$11 million. At the box office alone, it brought in$775 million. Think about funding a business.

1:25:59 All you took to build that business was eleven million. And yet that business makes seven hundred and seventy five million. Just at the box office to think about all the money it's made since then. probably four times, five times that amount. Alone just from that one movie between merchandise and rides and everything else.

1:26:17 That reaction. From a movie where all these other talented people, all the other people in the room besides Spielberg said this is trash. So much so that some people were crying at how bad it was. And so before I move on to his biggest bet, which is hey, I'm gonna control the funding. for the Empire Strikes Back. This is he's gonna make a hundred million dollars on this bet that he's about to make on himself.

1:26:39 But I did think I'm a sucker for these Really interesting marketing distribution ideas. So something they did. Before The original Star Wars came out.

1:26:48 is they they correctly identify like who is the natural audience for Star Wars, right? And there was this huge subculture of science fiction and comic book fans, even if they weren't making a bunch of science fiction and comic book movies at the time. So they're like, Hey We should target these people. Let's do a novelization and a comic book.

1:27:07 Adaptation. Series? before the movie comes out. So they publish like a novelization of Lucas's script. They publish it in November nineteen seventy six.

1:27:18 The that's before there was even a trailer. By February nineteen seventy seven. So you're talking what is that three months, four months later? They had already sold out of its initial print run of a hundred and twenty five Thousand Copies. And the movie wasn't available to see for another three months.

1:27:35 In addition to this, they also had articles written in several of the largest sci fi magazines. Again Several months before there's like kind of like planting the seeds. Several months before the movie's actually available, so it says by the spring of nineteen seventy seven, enthusiasm. For Star Wars Was like a pot roiling to a slow boil.

1:27:56 And the lid was about to blow off. Okay, so now we get to I would say probably the craziest and most important time in the entire book in his entire life,'cause it's gonna set up the future success. uh for everything that comes after. So He's like I want to control as much. He was disgusted. that Star Wars is making all this money, like I said, eleven million dollar budget, seven hundred and seventy five million at the box office.

1:28:17 But Fox, the studio All they did was finance the film and they get sixty percent of the profits. And he said They're getting sixty the the way Lucas looked at it, it's like they're getting sixty percent For doing absolutely nothing. And he's like, Well What do you mean they they didn't do anything?

1:28:31 And he would compare and contrast what he did for the rest of like his share, right? He's like, I know what I'm doing for my percent. I put my heart and soul on this. My whole career's at stake. I have to actually go out and make the movie. And so when he's having these conversations with other people at Fox, even people he likes, like an executive there named Alan Ladd, he's like, Well, what the hell are you doing? And Laz response is like well I provided the money.

1:28:51 And George said to him, it was very fascinating the way his brain works. He goes, You didn't provide the money. You go to a bank with a letter of credit and they supply the money. And then you get fifty percent of the movie. This is such an important distinction he makes here. George looked at it like a businessman, saying, Wait a minute. The studios borrowed money, then they take a thirty five percent distribution fee off the top. This is crazy.

1:29:10 Why don't we just go borrow the money ourselves? And he said some of the bravest and our most reckless acts We're not aesthetic. But financial. For the sequel.

1:29:20 Lucas matter of factly informed the studio. That he would be financing the film himself. Using his profits from Star Wars. as collateral for a bank loan. So this time around, the the last time around the studio's got sixty percent of the money.

1:29:34 This time he's like, Hey, I'm getting seventy seven point five percent. And you can get twenty two point five percent. And they take the deal because of course you you want to be involved. Think about it, like e even if you own less of Star Wars and you're the Fox, Fox has a bunch of other movies. So

1:29:47 There's gonna be millions of people going to watch Star Wars two. And at the very beginning he sees a huge logo. The Fox logo. It's like advertising for them. And then I loved Willow Spielberg. You know, he saw this coming. He's like

1:29:59 Uh, Spielberg wasn't at all surprised by the way Lucas was playing hardball. He says, If you're an executive and you're going into business with George Lucas, you are no longer in the twentieth century Fox business. You're in the George Lucas business. And George is gonna call every shot. And then another mind blowing fact. D you know that Spielberg made over forty million dollars. Off the original Star Wars?

1:30:19 They're actually they had a bet. So they they're relieved they again, they don't know what's gonna be successful before it happens. So George Lucas is working on sci fi. That's Star Wars one. Spielberg's working on sci fi. That's close encounters of the third. Uh close encounters of the third kind. And so they're like, Okay, let's bet who's gonna be more successful.

1:30:36 And let's just trade points. And so Spielberg gave Lucas two point five percent Lucas gave Spooper two point five percent of Star Wars. And it says this two five point five percent.

1:30:49 Would earn Spielberg more than forty million dollars over the next four decades. And so this idea about using his assets as collateral to a bank loan It's exactly what Fox was doing with their just a bigger company. So he's going to use the money he made from Star Wars. And then remember, he owns. All the merchandising right rights. This is nuts.

1:31:08 Just in nineteen seventy eight alone. George Lucas sells forty million Star Wars figures. That's in a year. And so what he did. It says Lucas would finance the sequel one action figure at a time. He used the substantial profits from the film themselves, but also tapped into the revenues from an almost

1:31:25 Endless stream of Star Wars merchandise. At the same time, he's looking for a place where he can actually house all of his studios and build this vision that he's had, you know, that he was working on when he was in his early twenties. With Francis Ford Copeland. So this is the idea for Skywalker Ranch. And he has this idea, he's like, I want to live in a ranch house. Or work in a ranch house, rather.

1:31:45 I I I didn't I had forgotten that Lucas never lived at Skywalker Ranch. It was just where he worked out of And so he's like I want, you know A lot of property. I want it to be a house. I want it to be in the middle of nowhere. And I wanna fill it with the most advanced technology.

1:31:58 Where we could sit, see the trees, and make movies. So he buys the first seventeen hundred acres right now as he's building uh making the sequel that eventually uh he buys a bunch of surrounding properties and and builds five thousand or or owns five thousand acres. And so the way to think about what he's doing, he's literally betting the Skywalker Ranch on the sequel. He's either going for complete freedom or bankruptcy. He's putting everything he has into this. And everybody around him is saying, Hey, don't do this. Give up more points.

1:32:26 Take more money, like This is nuts. And so it says even those who knew Lucas were aghast at his bullheaded determination to finance the entire film himself. Independence was one thing, bankruptcy was another. But those people were missing the point. Lucas wasn't paying for a movie.

1:32:42 He was buying his own creative freedom. He realized that this was an opportunity he had to pounce on. He says it's the perfect opportunity to become independent of the Hollywood system. There would be no studio executives staring over my shoulder in the editing room, no executives forcing him. To make arbitrary changes. That is the part that I wanted to avoid, he said.

1:33:02 Everything I own, everything I have ever earned is wrapped up in the Empire Strikes Back, he said. If this is a flop, I will lose everything. He continues, All the money I made from Star Wars was committed to this film, plus more. But I didn't want to go to Fox and give them the mo give them the movie because I'd have to give them all the rights backs, meaning if uh he had to get money from them.

1:33:23 I had to keep the picture going somehow, get people to work without pay, hope to hell that whatever they asked for didn't involve me having to go back and renegotiate with Fox. As always with Lucas, it was always a question of control. I wanted my independent so badly, he said. But at the same time he has this loan from Bank of America. And they see his weekly expenses.

1:33:43 And his costs are ballooning. for the sequel. His weekly payroll alone was a million dollars a week and they're threatening to pull Alone. And call alone and shut down the operation, which is nuts considering how big Star Wars winds up becoming.

1:33:57 So he comes up with a unique solution to his problem. And he goes to Fox, he's like, Listen, I don't want any more money from you. But I will give you a couple more percentage points than you were getting earlier. I just need you to do one thing. So he says eventually he agreed to give a few points to Fox. In order to have the studio guarantee a new loan.

1:34:13 From the first national bank of Boston. But even with disagreement, Lucasfilm remained The main guarantor. of the loan and if this movie didn't turn a profit. highly likely that his business was gonna go under.

1:34:25 And so the good news was the bank didn't have to wait very long. for the outcome. Listen to this. This is an entire story in two sentences. The Empire Strikes Back opened in May of 1980 in 126 theaters and broke attendance records in 125 of them. No other studio opened a single movie against it.

1:34:45 The movie was gonna have to make fifty seven million just for Lucas to break even. And to build Skywalker Ranch into the kind of complex he envisioned. The movie was gonna have to do much more than break even. He needn't have worried. It became the third most successful movie of all time. And George Lucas would pocket more than a hundred million dollars in profits.

1:35:04 Lucas had literally bet the ranch, Skywalker Ranch. And one. And that is where I'll leave it for the full story. Highly recommend reading the book. The book is excellent. There's so much more in it. Like I said, this thing is massive. The hardcover He's over five hundred pages.

1:35:19 If you want the full story, I highly recommend reading the book. If you buy the book, using the link that's in the show notes on your podcast player, you'll be supporting the podcast at the same time. That is 345. Books down. One thousand ago? And I'll talk to you again soon. Okay, so what you're about to hear is this question I was asked a few months ago. I actually recorded this a few months ago.

1:35:36 They asked how did history's greatest entrepreneurs think about hiring all the answers. People think I have A better memory than I Then actually do. You know, if people say, Oh, you David, you have a great memory, my wife would laugh at that'cause I forget things all the time. It's not that I have a good memory, it's I reread things over and over and over again.

1:35:53 Every single answer. Every single reference you're about to hear in this twenty minute mini episode. Came from me searching. All of my notes and highlights. That option.

1:36:03 Is now available to you. If you like what you hear, if you think it's valuable, if you're already running a successful company. And you want an easy way to reference the ideas of history's greatest entrepreneurs in a searchable database. That you can go through at your convenience any time you want. You can go to founders notes.

1:36:19 dot com and sign up. I wanna start out first with Why this is so important. There's actually this book that came out in like nineteen ninety seven. It's uh called In the Company Giants. I think it's episode two oh eight of Founders. It's two Stanford NBA students, if I remember correctly.

1:36:34 and they're interviewing a bunch of technology company founders. And In there, Steve Jobs is one of'em. This is, you know, right be I think even before he came back to Apple. And they were talking about, Well, yeah, we know it's important to hire, but in a typical startup, a manager or a founder may not always have time to spend Recruit other people.

1:36:53 And St I I first read this this Steve's answer to this, you know, I don't know, two years ago, and I never forgot it. I think it's excellent. I think it sets up Why uh this question is so important and you should really be spending especially in the the early days like Basically all your time doing this.

1:37:08 Uh, in a typical startup manager may not always have the time to spend recruiting other people, then Steve jumps in. I disagree totally. I think it's the most important job. Assume you're by yourself in a startup and you want a partner. You take a lot of time finding a partner, right? He would be half of your company. I'm gonna pause there. This idea of looking at each new hire as a percentage of the company is genius.

1:37:29 Why should you take any less time finding a third or a fourth of your company or a fifth of your company. When you're in a startup. The first ten people will determine Whether the company succeeds or not.

1:37:42 Each is ten percent of the company. So why wouldn't you take as much time as necessary to find all a players? If three Three of the ten. Uh we're not so great.

1:37:54 Why would you start a company where thirty percent of your people are not so great? A small company Depends on great people. Much more than a big company. Does. Okay, so

1:38:04 To answer this question. The advantage that um That I have making founders and that you have as as a byproduct of listening to founders. is not only that I've read, you know, three hundred something biographies of entrepreneurs now, but I have all of my notes and highlights stored in my ReadWise app.

1:38:19 And that means I can search for any topic. I can look at the past highlights of books. Or I could search for keywords. So what I did is First o of all, like what I've started to do with these AMA um questions is I read them. decide which ones I'm gonna do next and then think about it for a few days. I don't put any I just literally that m that I know that's the next question.

1:38:37 Just let my brain work on it in the background for a few days. And then I'll go through. And start searching all my notes. And so that's what I did here. And so there's a bunch of you know, I don't have I may have like ten or fifteen different founders talking about hiring. The first idea is the most obvious, but I think

1:38:54 probably works best when you're already established. So Steve Jobs is talking about hey, you know, the great way to f to hire is Just fine great work. And find the people That did that and then try to hire them.

1:39:07 When you're Steve Jobs Yeah. That's a lot easier, right? Than if you're just somebody that doesn't have reputation, maybe don't have resources. maybe your company's rather w uh new or not as well known. David Ogie, I just did Confessions of an Advertising Man.

1:39:20 couple episodes ago, I think three oh six or something like that. Three oh seven. And He did the same thing. But he's David Ogy at that point. So he would find he'd go through magazines, find great advertising, great copyrighting. And he'd write the personal letter.

1:39:33 And then Set up a phone call. And he says he wouldn't he was so well known and you know, he's one of the best in his field. That he wouldn't even have to offer a job. Just the conversation, then the person would the the

1:39:46 he'd want to hire the person, never mention it, and the person would apply to him. Um, and so again, I think if you can do that Then of course it's Straightforward. Who find for somebody who does great work. Usually you can do this. I actually have a friend that I can't say who it is. He's doing this right now, actually.

1:40:02 Um I have a friend that's really good at doing this. He's finding people that do great stuff on the internet and then just cold Yeah. Called DMing them. And then Getting convincing them to work on things. And That usually works, especially with people like younger people earlier in their career.

1:40:16 There's a bunch of different ways to think about this and a bunch of different ways to prioritize. So The first thing that that c that came to mind that I found surprising is you read any biography on Rockefeller. And he had a couple ideas where He felt The optimization.

1:40:31 you know, table stakes that you're intelligent and you're driven and you're hard working, right? We don't even have like if you're listening to this, you already know that. But he prioritized hiring people. With social skills. And so this is what he said, the ability to deal with people is as purchasable as A commodity as sugar or coffee.

1:40:48 And I pay for I pay more for that ability than any other under the sun. There's a two the second part to this, though. And this is also works well if you have access to more resources. Rockefeller would hire people as he found.

1:41:02 As he found talented people, not as he needed them. It's not like okay, standard oil has Six open spots. Let's go find six candidates, right? He'd come across what he considered a talented person. It didn't even matter if he didn't know what they were gonna do. He's like, I'm just gonna stack his team. And if you really think about the the his partners of San It Oil He essentially built a company.

1:41:22 An executive team of Founders. Of course. 'Cause he was buying up all their companies. So it's very rare. But Um, there's a line from Titan I want to read to you. Taking for granted the growth of his empire.

1:41:32 He hired talented people as found. Not as needed. And then I found another idea. in the hiring, like the actual interview process. So there's this guy named Van Ever Bush.

1:41:43 I did two episodes on him, I think it's two seventy and two seventy one. He is the most important American ever. uh in history uh in in terms of Connecting the scientific field, private enterprise, and the government. The most important person to keep alive for the American war effort was FDR. The second one was Van Ever Bush. Van Ever Bush uh is like the force gump of this h historical period. He is involved in everything. From the Manhattan Project.

1:42:07 to discovering like a young Claude Shannon to building uh a mechanical computer, like this guy literally has done he's just uh he pops up in these books over and over again. If you were reading about American business history during World War Two and post World War II, you are going to come across the name Van Ever Bush over and over again. uh I read his fantastic autobiography called Pieces of the Action. And I came across this weird highlight.

1:42:29 And so this is his brilliant and unusual job interview process. And so he's talking about this organization he's running called Amrad. At Amrad, I hired a young physicist From Texas named CG Smith. The way I hired him is interesting.

1:42:42 An interview of that sort is always likely to be on on an artificial basis and somewhat embarrassing. So I discussed with him a technical point. on which I was then genuinely puzzled. The next day he came in with a sol uh with a neat solution.

1:42:56 And I hired him at once. Here's another idea. This is from Nolan Bushnell. Nolan Bushnell's the founder of Atari, founder of Chucky Cheese. And Steve Jobs mentor. He hired Steve Jobs when Steve Jobs was like nineteen at Atari. Hm. would ask people their reading habits in interviews. This is why.

1:43:12 Uh one of the best ways c his whole thing was he wanted to build a all of his companies w laid on a foundation of creative people. So that's what he's looking for. He's like, I need creative people. One of the best ways to find creative people is to ask a simple question, What books do you like? I've never met a creative person in my life that didn't respond with enthusiasm to a question about reading habits. Actually which

1:43:31 Books people read is not as important as the simple fact that they read it all. I've known many talented engineers who hated science fiction but loved See books on bird watching. a blatant but often accurate generalization. People who are curious and passionate read People who are apathetic and indifferent don't

1:43:47 I remember one that that's such a great line and I obviously agree with it. I remember one I'm going to read it again. A blatant but often Accurate generalization. People who are curious and passionate read people who are apathetic and indifferent don't.

1:44:01 I remember one particular woman who during an interview told me that she had read Every book that I had read. So I started mentioning books I hadn't read and she had read those too. I didn't know.

1:44:12 That time. This much time to read so much. But I was impressed I was so impressed that I hired her right there and assigned her to international marketing. Which was having problems.

1:44:20 This is why. This is why I'm reading this whole section to you. A job with a lot of moving parts. benefits from a brain that has a lot of moving parts. It wouldn't be possible to have read that many books. Without such a brain. So do you see what I mean? Like

1:44:34 Yeah. We start with Steve Jobs saying this is the most important thing that you your role as the leader of the company and the founder to do, right? And you are in It's so important to study and this is why I'm glad this this question exists and why I'm glad that I've I took the time and I had like the foresight to like, hey, I should really

1:44:51 Organized my thoughts and notes'cause there's no way I would have remembered all this. without being being able to search my read wise, right? But you have Rockefeller saying this is what's important to me. You have Bush saying this is how I hire.

1:45:01 Now you have Nolan Bush now. Saying, Well, here's another weird thing that I learned. Um, let me go through uh what Warren Buffett says about this. So this is about the quality. One thing that is consistent Whether it's Jobs, Buffett, Bezos. uh Peter Thiel. This just pops up over and over again.

1:45:17 they talk about the importance of trying to find people that that are better than you. the the hiring bar constantly has to increase. Now obviously the larger the company gets, that's impossible. Uh, Steve Jobs has this great quote. Where he's like, you know, Pixar was the first time I see I saw an entire team.

1:45:32 Entire company of A players. But they had four hundred players. They had four hundred Team members. He's like at the time Apple had three thousand. It's like it's impossible to have three thousand A players. So there is some Number

1:45:44 that your company may grow to, where it's just you're just not. You're not gonna have thousands of A players. In my argument, I don't even know if you get a four hundred. I guess you I mean I'll take Steve's word for it on there and Pixar definitely produce great products, but it's probably a lot lower than that as well. So Warren Buffett would tell you to use

1:46:00 David Ogies. Hiring philosophy. And so Warren said, Charlie and I know that the right players will make almost any team manager look good. Again, that is why it's the most important function of the founder.

1:46:11 maybe directly next to the product. Right about the product actually,'cause those are the people building your product. We subscribe to the philosophy of Ogie and Mather's founding genius, David Ogie. This is what Ogie said. If each of us hires people who are small smaller than we are We shall become a company of Dwarfs.

1:46:25 But if each of us hires people who are bigger than we are. We shall become a company of giants. David or Jeff Bezos rather, used a variation of Ogee's idea too. Jeff used to say in Amazon, every time we hire someone. He or she should raise the bar for the next hire.

1:46:41 So that the overall talent pool is always improving. They talk about this idea on Amazon. Where The the the future hires that we do should be so good. that if you had applied for the job you already have at Amazon, you wouldn't get in.

1:46:55 That's a very interesting idea. Take your time with recruiting. Take your time with hiring. There's this great book on the history of PayPal.

1:47:03 It's written actually I've I've recently become friends with the author. His name's Jimmy Sony. Um And this is in his book. The the most fascinating thing that I found was that PayPal prioritize speed. So from the time they're they're founded to the time they sell to eBay?

1:47:19 It's like four years. Jimmy spent more time researching the book than than for he spent six years researching the book. I always tease them'cause like you took longer on a book than they took to start and sell their company. It just speaks to like the quality he's trying to do. But tha as a byproduct of that, like obviously they move fast, but they prioritize speed over everything else except

1:47:37 In one area. Recruiting. Max Sludgeon kept the bar for talent exceedingly high, even if that came at the expense of speedy sa staffing. Max kept repeating. A's higher A's, B's higher C's.

1:47:49 So the first B You hire takes the whole company down. Let's read that again. A players hire A players, B players hire C players, so the first B player you hire takes the whole company down. Uh additionally, the team the company leaders mandated that all prospects here's another idea for you. All prospects must meet every single member of the team.

1:48:08 Now the next one is the most bizarre. It makes sense. If you study I did this three part on Larry Ellison, three part series on Larry Ellison. I should read those books again. 'Cause the the podcast is like fifty times bigger than than when I uh publish those episodes. And he's just crazy.

1:48:25 So he would hire Based On the confidence the self confidence level of of the candidate. Listen to this. I have tears in my eyes. I don't know why I'm laughing. Okay. This is just so this is

1:48:39 You read about Larry Ellison and he's one of these people it's like really easy to interface with. Yeah. You just know exactly who he is and what's important to him. That's why I think it's so funny.

1:48:49 Ellison insisted that his recruiters hire only the finest and cockiest New college graduates. When they were recruiting from universities, they'd ask people, Are you the smartest person you know? And if they said yes, they would hire them. If they said no.

1:49:04 They would say who is And they would go hire that guy instead. I don't know if you got the smartest people that way, but you definitely got the most arrogant. Ellison and this is why. What?

1:49:12 The personality of the founder is largely the culture of the company. Apple is Steve Jobs. Apple's just Steve Jowels with ten thousand lives. Right. I was just t texting a a founder friend of mine. Uh, he listens to the podcast. I actually met him through the podcast.

1:49:25 And he's going through this like uh process of self discovery. Like he's already started a bunch of companies that are really successful, but he's like I think I'm more of this type of founder than the other type of founder. And that's good that he's doing that because he's he's Hopefully his next mission is like his life's mission, you know?

1:49:39 And you can't get to your life's mission unless you d you figure out who you are. Ellison knew who he was. Ellison's swaggering combative style became a part of the company's identity. This arrogant culture had a lot to do with Oracle's success. Is another odd idea for you. Izzy Sharp, the founder of Four Seasons, actually could figure it out that in his business, which was hotels, right?

1:49:59 that hiring could hiring the right p person could actually be a form of distribution for his hotel. He gave me the idea. Because of what? What do we know? What do you and I know in our bones? That history's greatest founders all read biographies.

1:50:12 They all read biographies of people that came before them and took ideas from them. Izzy Sharp is trying to build four seasons. What do you think he did? He picked up a biography of Caesar Ritz. The guy that Rith Carlton is named after the great arguably the greatest hotelier of all time. And when he realized like oh shit. Rich.

1:50:29 He uh he says, uh, remembering that Cesar Ritz made his hotels world famous by hiring some of the foremost chefs, we decided to do something similar. So what is he talking about? Caesar Ritz. went out and partnered with August Escafier. What Cesar Ritz was ho to hotel to building hotels. August Escafier was to French cooking. And so what happened is you partner with world famous chefs. People come into your restaurant.

1:50:49 That's in the hotel. Because the world famous chef and now they know about your hotel that leads to more gat that means leads to more activity in your restaurant that you own, but also leads to more brand recognition of your hotel. And then by as a byproduct of that, more people staying at the hotel. So hiring as a form of distribution. This is fascinating. That is a fascinating idea. Okay, here's the problem.

1:51:09 You can Identify great people. Right. Maybe they even want to come work. Like you've identified them You've sold them, hey, uh this is what this is our mission, this is what we're sh we're doing.

1:51:20 And yet Humans have have complicated lives. They have spouses, they have kids, they have A reason maybe they can't move across the country. to work for you, even though they want to.

1:51:30 So There's a problem solving element that you see in these books. On you have to solve like you've already identified the person. You've recruited them. They can't go for some other reason. Okay. Well

1:51:41 the great founders are not gonna take an answer. I read in um in this book called Lift Off, which is about the first six years of SpaceX, this is what Elon Musk did. They had anticipated his friend's issue, having convinced Mus they needed to bring this brilliant young engineer from Turkey on board. It became a matter of solving the problem. His wife had a job in San Francisco.

1:52:00 She would need one in Los Angeles, right?'Cause that's where SpaceX is at the time. They're these were solvable problems and Elon's better at solving problems than almost anyone else. Must therefore came into his job interview prepared. About halfway through Mus told the guy. That he wants to hire.

1:52:16 So I heard you don't want to move to LA and one of the reasons is that your wife works for Google. Well, I just talked to Larry and they're gonna transfer your wife down to LA, so what are you gonna do now? To solve this problem. Musk had called his friend Larry Page, the co founder of Google. The engineer sat in stunned silence for a moment, but then he replied, Given all that

1:52:33 He would come to work at SpaceX. That's really smart. There is another idea When you're promoting. Are you gonna promote from within or from without? You know, that's

1:52:44 dependent on you, depending on what what's going on. I do think this is interesting though. There's a guy named Les Schwab. Who built this? this really uh valuable chain of uh t like tire companies in the Pacific Northwest. Actually found out about'em'cause Charlie Munger's like hey You should read this biography.

1:52:59 He didn't say it to me, personally. He said it too uh in like one of the Berkshire meetings. That Les Wab had one of the most m uh one of the smartest uh financial incentive structures or any company that that

1:53:13 Charlie Munker had come across. So this is what Les Schwab did. He did not want to hire from other people from other companies'cause they might come with bad habits. He liked to train his own Executives.

1:53:24 And so he says in our thirty four years of business we have never hired a manager from the outside. Every single one of our more than two hundred and fifty managers and assistant managers started at the bottom changing tires. They have all earned their management job by working up. And then another thing, if you're gonna hire the best of the best in A players.

1:53:41 They're eight players don't like to be micromanaged. Um and so this came in Larry Miller's autobiography. Driven. He owns like he owned like ninety three companies. All throughout Utah, car dealerships, movie theaters, all kinds of crazy stuff. But he also owns the the the MBAT in Utah Jazz.

1:53:56 And what was fascinating is he's trying to recruit Jerry Sloane as the coach at the pa at at the point, and Jerry Sloan would only take the job on one condition and I really like it. I really like this idea. If you hire me, let me run the team and business, right? That's what you're hiring me for. One of the best things we had ever done was hire Jerry Sone as coach. At the time he said, I'm only gonna ask you for one thing. If I get fired, let me get fired for my own decisions. If you hire me, let me run the team slash Business.

1:54:21 Here's another idea. From Thomas Elet. uh Edison that I think is fascinating. Really, th I th the way I think about a founder is like you're developing skills that you can't hire for.

1:54:32 you you're gonna hire for everything else. But you shouldn't be hireable. And Edison wasn't. Edison expressing his views on the preeminent role of applied scientists, which that's what he considered himself. Coin the expression I can hire mathematicians, but they can't hire me.

1:54:47 And so when I read that paragraph for the first time, the note I left myself was develop skills that you can't hire for. Capitalism rewards things that are both rare and valuable. Uh Estee Lauder would give you advice that you need to hire people aligned with your thinking and values. Hire the best people. This is vital. Hire people who think as you do and treat them well. In our business, they are top uh top priority. So this idea is like That seems kinda weird. Like hire people

1:55:11 Who think like You. There's obviously not one right way to build a business. I think the your business should be an expression of your personality and who you are who are as a person at the core. And so I think there is an Art.

1:55:23 To the building. Of your business. And the reason I use the word art, I don't mean in like a hoity toy, you know, pretentious manner. That's not me at all. I don't even care about I don't art at all, really. I mean that you're making decisions not just based on economics. Like there are non economic

1:55:41 important decisions based on how you're building your business. Like you could probably make more money doing a decision A. But decision A is goes against who you are as a person. Or you just don't like it or it's just not as elegant or beautiful. And so therefore you don't do it. So that's what I mean about you know, hire people who think it's you do. And what for whatever reason when I read Essay Lauder say that, I was like, Okay, that there's like this art to what she's doing.

1:56:03 one thing that's gonna be helpful in recruit. Uh, this comes from Peter Teel. I think this is the book Zero to One. understand that most companies their pitches to potential recruits into hiring. So therefore like they're just gonna buy as a byproduct of that, you're gonna w wind up with a lower overall talent base. And so he says, What's wrong with valuable stock smart people are pressing problems? Nothing.

1:56:25 But every company makes us these claims. So they won't help you stand out. General and undifferentiated pitches to join your company. Don't say anything about why a recruit should join your company instead of money of instead of many others. So that idea of like your pitch. Your actual He would tell you you're y you shouldn't be building a undifferentiated commodity business. But

1:56:45 even above and beyond that. Like you're the the the mission that you're trying to engage everybody to join you in. that pitch, that sale sale you're trying to make to potential recruit should be differentiated. It should not If that person's applying to five other jobs. There should not be like it's like They may not like your mission, they may not like your pitch, but they shouldn't be able to compare it to anything else.

1:57:03 Uh another quote from Nolan Bushnell. Higher for passion and intensity. That's what he would do. All right, that's what he did when he found Steve Jobs. If there was a single characteristic to separate Steve Jobs from the mass of employees, it was his passionate enthusiasm. Steve had one full uh one speed.

1:57:19 Full blast. This was the primary reason we hired him. And one thing all these founders have in common is that he know how important hiring is. And when something's important. You do it.

1:57:28 Yourself. This is again Elon Musk on hiring. He interviewed The first three thousand employees at SpaceX. That's how important it was. One of Musk's most valuable skills was his ability to determine whether someone would fit his mold.

1:57:40 His people had to be brilliant. They had to be hardworking and there could be no nonsense. There are a ton of phonies out there, and not many who are the real deal, Must said, of his approach to interviewing engineers. I can usually tell within fifteen minutes and I can sure I can for sure tell within a few days of working with them. Musk made hiring a priority. He personally met with every single person the company hired. through the first three thousand employees. It required late nights and weekends

1:58:03 But he felt it was important to get the right people for his company. And then the close on this we started with Steve Jobs telling us why it was so important and why it should be a large part of how you spend your time. And now we'll close with what you do after. What do you do after you hire the person? This is what he says. It's not just recruiting. After recruiting, it's building an environment that makes people feel they are surrounded by equally talented people.

1:58:25 And their work is bigger than they are. the feeling that their work will have a tremendous influence And it's part of a strong Clear. Vision

1:58:34 So that is the end to that twenty minute mini episode. I just re listened to the whole thing. And it it really does, I think it's a perfect explanation and illustration of why I think Founders Notes is so valuable,'cause that some of those books I haven't read. In five, six years. And just

1:58:49 the ability to have a searchable database of all this These ideas like this collected knowledge. of some of history's greatest entrepreneurs to reference and then contextually apply to our own businesses. It's nothing short of Like it's magic. That's really the way I think about it. I think it's a massive superpower. It gives me a massive superpower. I couldn't make the podcast without it.

1:59:08 I also think if you have access to it, it'll make your business better. And so if you're already running a successful business, I highly recommend that you invest in a subscription. And you can do that by going to founders notes dot com.

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