#427 How Raymond Plank Built a $50 Billion Oil Company

0:00 The capacity of the human mind for learning and personal growth greatly exceeds that which I would have deemed plausible in my early years. The purpose of this memoir is to open the window of my life. In the hope that readers may find parts useful in achieving a fuller measure of their own capacities. to attain worthy goals on behalf of self and others. In the certain belief that happiness and understanding uplift the human spirit.

0:23 contributing to the base For a full and happy life. I look back to the years of my life from the vantage point of now being in my ninetiet year. I look back in order to see forward. Hindsight informed me of several primary individual lifetime learnings which might be useful to others.

0:41 Especially those who desire to expand the remarkable individual capacities granted us when we seek beyond self. the greater common good. My values have been influenced by a few cornerstones. First, at perhaps the age of ten, when I was on a walk with my dad. He dropped my hand.

0:59 Put his arm around my shoulder and noted. Sun. Over my life I've found it very useful. To try to make a very small difference. On behalf of others.

1:10 He concluded with Mother will be calling us to dinner, time to get back. We never again discuss the topic. Still fresh and off recurring in my mind now. Nearly eighty years later.

1:23 The second cornerstone Was that of this postcard that my mother had written just prior to her death. At age forty seven. When I was just fifteen years old. She wrote.

1:34 My son. The fiftin's my life. which you have shared have been such glorious once. How I have loved them. You are so fine and unselfish.

1:45 You have given me such love and consideration. I have known no joy which could equal that. Of your companionship. My pride in you will go on through the years. If you keep your head up.

1:58 And your courage and faith. Hi. Mother died of a blood clot. Following a routine

2:05 appendectomy only hours before I was to drive my father to the hospital and bring her home. She wrote that postcard. a few days before she died. With the clarity of hindsight, I see that these cornerstones had much to do with the career path that I pursued. I chose To be self employed.

2:25 rather than working for a large company. I wanted A smaller riskier initiative. Apache corporation had a very modest beginning.

2:34 found it with just two hundred and fifty thousand dollars in nineteen fifty four. By mid two thousand eight. That two hundred and fifty thousand dollars had become Fifty. billion.

2:45 Teddy Roosevelt once opined it is better to have lived one hour of glorious than never to have lived at all. You be the judge. Let the tale begin. So that was from the introduction from the book I'm gonna talk about today, which is A Small Difference, and it was written by Raymond Plank.

3:02 So this is a very unusual book. Uh, first of all, it reads like a diary, and I'll get to that in one second. The fact that this guy kept a daily diary for sixty years. Uh what I wanna do what's so fascinating about this is Originally I was gonna tell the story of Apache Corporation. But

3:18 When I was going through all my notes and highlights for the past few days, I was like, you know what, what's actually interesting is the fact that he's ninety years old. He has seven decades of entrepreneurial experience in this book. And What I found most interesting is not the the st the s the company history. of the company he founded.

3:34 But essentially he has like all these ideas and maxims and basically sayings and beliefs That he's accumulated. And such he just extols his philosophy, almost like you're reading a diary in this book. And so he goes into this natural entrepreneurial bent that he had when he was a child. He's growing up on a farm. He says farm life and responsibilities were the outcropping of a strong work ethic. Life was structured and privileges were earned rather than assumed.

3:58 And so one of the first businesses he had was selling eggs. Selling eggs gave me some early marketing and sales experience. How fortunate I was to grow up in the country and comprehend self-sufficiency and innovation as building blocks towards independence. Uh, so I think he's like ten or twelve when he starts that egg selling business. Says by high school I was sawing down trees And with a physical salt. There's no power saws back then. Stacking, selling, and storing firewood. And then as he's s sawing down trees, he sees another adjacent opportunity where he's like, Oh

4:28 Some of these trees produce sap. We should actually Uh extract the sap from the trees. Boil that boil them down and then make gallons of syrup and then sell that as well. And so by the time he's in high school, he's got this thriving

4:40 Syrup business. And he's raising chickens and selling eggs. And so he's selling this to local grocery stores. and to the meat markets around Minneapolis. Where he lives.

4:50 Then he talks a lot about the relationship with his father, which he talked about in the introduction. He says that was grounded in dad's values of integrity, a strong work ethic, and the desire to be successful. My father praised and was very enthusiastic over my entrepreneurial endeavors. There's also a financial conservatism that runs throughout this entire book and part of that has to do with the fact that he saw his dad lose most of his net worth in the Great Depression. My family did not escape the Great Depression. I recall dad coming home from the office one night and announcing that his net worth had been wiped out. Yeah, we had food, much of that we raised ourselves, clothing, and a mortgage free home.

5:27 He was fortunate to have credit and credibility as an honest and able businessman, and he was scrupulous about paying his bills. And so it is during the Great Depression that his mother dies. One never forgets the death of a parent. Mother had gone to the hospital for a routine procedure. I was to drive dad to the hospital the Saturday morning when we could pick her up and return home. At three AM I was awakened by the phone.

5:47 May I speak to Mr Plank? This is North Western hospital calling. I called Dad, who was asleep in the master bedroom above me. As he hastened to the phone, I heard him scream Oh no, mother was dead at forty seven from a blood clot. For six months.

6:01 I was unable to write in my diary. I questioned why God would let this happen. There's actually an interesting historical parallel here. So Teddy Roosevelt's wife and mother died on the same day. And he also had this habit. this daily habit of writing in a diary.

6:16 And the night that his mother and wife die in his diary, uh Teddy Rosewell draws a big X And he writes The light has gone out of my life. Before we get back into this, I want to tell you about the presenting sponsor of this podcast, Ramp. I have been reading a lot about SpaceX lately. SpaceX is one of the most valuable businesses in the world.

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7:21 Many of the top founders and CEOs that I know. Run their business on ramp, I run my business on ramp, and you should too. Go to ramp dot com today. To learn how to help your business, save time, save money, and grow revenue. That is ramp.com. And so Raymond is in his early twenties. when the beginning of World War Two starts to happen. And he's actually a a fighter pilot.

7:43 And he's gonna talk a lot about that in the book. What there's one paragraph I want to read to you though, because I think There's something that this guy has like an overactive, almost like zest for life. And part of it I think has to do with the fact that in his early twenties he saw a lot of his

7:57 friends die and not return from combat. And so he says at age twenty two, I'd be flying a four engine bomber responsible for the well being of a crew of ten and helping kill the Japanese who sought to kill us. There's a lot of my notes in the book. Where I'm comparing Raymond to Rockefeller. And

8:15 There's when you read biographies of Rockefeller, something that appears over and over again is the fact that Rockefeller was low key, but he was relentless. So he might not tell you what he's thinking. Uh you sh sh very rarely show any Uh Emotion.

8:28 But When he was when he wanted something to happen, he would just constantly attack that problem or seize that opportunity until it actually happened. And the the one example I would have here is where

8:39 There's this great line in Rockefeller's autobiography. Where he talked about the difficulty of raising money in Cleveland in the early days of his oil company, and he'd just constantly get turned down by all the bank presidents. And he says, What if the bank refused to make me a loan? That was nothing. That made no difference to me. It simply meant that I must look elsewhere until I got what I wanted. Raymond has that same set of attributes. He si you see it in his professional life. He is this guy's definitely hardcore.

9:06 Uh and I would say, you know, w relentless. But what what was funny is you also see it in his dating life. And so he meets this woman named Elizabeth McCabe. And he didn't g he They didn't exchange information, but he's like, I need to date this woman. And so he looks up

9:21 Every single McCabe. that lived in the mini in Minneapolis goes to the phone directory and winds up having to call two dozen different McCabe's. Before finding The one. That

9:33 the ho the house that was the girl that he wanted to date. And he says we dated a few times and any interest I had in other girls promptly vanished. And so unfortunately that relationship doesn't last very long because he is shipped off to fight in the war. Of the forty missions I flew, our squadron was shot up. On nineteen of them. And so he writes a lot about the importance of Courage.

9:54 And the obviously the courage. is not in the absence of fear. But it only counts if you're actually afraid. And I think the the the trials and the tribulations that he went through when he was a young man in his early twenties made the business and the risk taking that he was doing later on in life seem, you know, in inconsequential Um

10:13 Like by comparison. They in fact th the they they wrote uh they wrote a series of company histories for the Apache Corporation and the very first one Which covers the very first few years of the company. They t they decided to title that book, Journey into Risk Country. So if you go back to what he was saying at the beginning of the book, where he's like, Well You know. working for a big company.

10:31 Or working for any company really, but definitely big companies not for me. I wanted a riskier it like I wanted to be in business for myself. I wanted to be on a trainer and I wanted to take risk. And I think a lot of this is tied to what he was experiencing, seeing all his friends die. Getting shot up. You know, fighting the Japanese. And so there's just a couple quotes that he has from uh that he chose to write down in his diary.

10:52 all through like the early nineteen forties. So he says for example, without courage, all virtue It's fragile. And then he quotes uh w Winston Churchill says courage is what Winston Churchill called the first of human qualities because it guarantees all of the others. And so when he survives to the end of The war.

11:10 He gets discharged from the army and now he's thinking he's like okay, I'm a young man, what do I actually want to do with my life? And the way you described this is very fascinating to me, he says it was for the first time in my life I was in charge of my personal destiny. And this is when he says, I want to build a business. I sought a career in which I would be part of starting a business. I was confident that working in a large company was not my cup of tea.

11:34 And he knew he had to act fast. This is another Rockefeller quote where Rockefeller's describing the opportunity he sees in oil. to his partners in other days in the oil industry. And it's really about the importance of seizing opportunity now. Rockefeller wrote, We have an opportunity now to expand, which may not last long. Raymond thought the same thing. He thought they that the America was prime for this massive economic boom. Which in hindsight we knew uh we obviously know he was correct, but at the time other people thought the opposite. So he says I believed immense job creation would be driven from the expanding roots of technological innovations and deferred availability of goods and services.

12:06 I argued that both the depression and the war had contributed to vast market potential. And the precursor to the Apache Corporation is actually gonna come from a very simple idea. Well, I believe that there's gonna be a massive expansion of jobs, there's gonna be a massive expansion of new businesses created, every single new business is gonna need tax and accounting services. So they start something, a very simple tax and accounting service. to serve small businesses is called the North West Business Service. And one way they got initial distribution is by joining these like uh leagues of professional these uh professional organizations. So one of them is called this one two club.

12:42 And this one two club had a very interesting set of rules. So it says for uh the one two club meetings, the rules were that the club had to limit one member from each type of business. So you could have One bank. One accounting firm, which was him, one employment agency. One securities broker, one building contractor.

12:58 one insurance agency, one life insurance, one mortgage company, manufacturing, so on and so forth. Each was pledged to and delivered business. Prospects. And so as he's being exposed to all these different type of businesses, he's doing all these tax and uh bookkeeping services for these different businesses. This is where he gets this idea.

13:16 that hey, there might be this opportunity in oil wells. And so he does a great job of describing how unexpected this opportunity was. He says Little did I know that what had started with accounting and tax work associated with Minneapolis oil investors would lead to the formation of Apache Corporation. And then he talks about the conditions that were present at this time in history which led to this insight he's gonna have. There had been little drilling in the United States during each of the wars, World War One and World War Two, and our American resources were being rapidly depleted. Post-war, our government was quick to incentivise the domestic search through tax incentives. So the government wants more domestic oil drilling after World War II. Washington had also committed to paying down our then immense war debts, which meant substantial increases in graduated income taxes. The top tax rate would exceed ninety percent of gross income following World War two.

14:05 This combination of tax rates on one hand and drilling and production tax incentives on the other encouraged highly taxed individuals To invest in the search For oil and gas, that is the most important part of this entire section. It did not take much time or brain power to expand.

14:24 Through our contacts in oil and gas. We provided oil and gas investor groups accounting and tax services. We saw it as our responsibility to understand the basis for change and growth. Of our served market. To this end, I did a lot of inquiring and learning, and when we recognize charges out of line with costs of drilling,

14:44 Completing wells or acquiring and holding acreage for investors. I check directly with oil field service providers. And so what he's gonna notice here is that the investors are getting ripped off. I personally uncovered kickback checks. The were fattening the purses of unscrupulous promoters. I reported these findings to a group of investors and their response was instant.

15:04 And unanimous. You must take over and manage our асет. And these were substantial assets. The problem was we knew nothing about either finding oil or completing and producing wells. We did not

15:18 Feeling. Qualified. And I love his response here. We did not feel qualified. We proceeded nonetheless. So in nineteen fifty four, this is when he founds the Apache Corporation with two hundred and fifty thousand dollars, which we talked about at the very beginning. very humble beginnings. They start with just a handful of employees.

15:33 They hire geologists. They hire an executive assistant and they hire a landman. And so there's two tenants of his business that are present at the very beginning that stay with him throughout his entire career. One is this idea that we can do More with less than the other guys can. And so there's a this frequently plagiarized phrase and repeated phrase that Apache says, How good is our latest discovery?

15:54 It's better than it is. And gives you an insight into how they think about this. And then The second tenant is that they were extremely Cost conscious.

16:04 They watched and controlled their costs. He says we were very sensitive. to redundancy of costs. And so he's talking about making sure that every single expenditure was the lowest it could be and that it was actually a good like investment for the company. D this th this goes on for several pages, but uh what I would say is like the way I would summarise what he's saying at this point in his career, it's like, you know, we're very sensitive to done to costs. We keep an eye on every single dollar.

16:26 Sam's a Murray, the fish that ate the whale. uh from the the biography of his is called The Fish Ate the Whale. He has a line in there That Talked about the opening that he saw. in the creation of his business where he is, you know, g going to get into the fruit business, which at the time were some of the biggest businesses in the world.

16:42 and I'm you know, this this Russian immigrant kid and I'm gonna compete with some of the biggest uh industries in the world. And he says, I can be fast where others have been slow. I can hustle where others have been satisfied with the easy pickings of the trade. He Raymond Plank saw a lot of waste in his industry, just like Rockefeller did. You know, a hundred years previously. And so this idea I can hustle where others have been satisfied with the easy pickings of the trade.

17:08 And so the first and most important product of the Apache corporation is actually a tax efficient investment vehicle for very rich people. So it's occurred to me that Apache had at hand an exceptional investment vehicle for clients with substantial income in the highest income bracket. So this is gonna go on For multiple pages. very detailed in in case you w you want to buy the book and read it. I'm gonna give you a quick overview. And so this is gonna describe an actual example used in the book with the numbers. So Apache's not just selling oil prospects. Okay, this is a tax efficient investment. That is what their main product is.

17:40 So wealthy investors are looking for legal ways to reduce their taxes. Oil and gas investments had unusually generous tax benefits because the government wanted to encourage domestic energy production. all of the loopholes that that he finds, they will eventually close. That's why he's the he has to constantly essentially reinvent the company over and over again. But I want to describe what he was doing at the very beginning. So Apache package its drilling opportunity, so investors receive both the chance to make money if oil was found and very large tax deductions immediately. So the example that he gives in the book, he says, Okay, suppose an investor buys into one of Apache's drilling programs and they invest two hundred thousand dollars. That Uh rich investor.

18:18 would get an immediate tax deduction. of eighty percent of the investment. So they invest two hundred grand, they deduct one hundred and sixty thousand. All of their investors are in very high tax bracket brackets at the time, which are o above ninety percent. So ninety percent of the one sixty is a hundred and forty four thousand.

18:35 So although he wrote a$200,000 check, the IRS effectively paid much of the cost through reduced taxes. After accounting for taxes, Plank then would calculate that investment really cost them only about fifty six thousand dollars out of pocket. Now it continues to get even more interesting. Now assume that Apache discovers enough oil that investment doubles. That investor receives another two hundred grand. Normally that would be all taxable.

18:56 But oil royalties had another benefit. They had a depletions allowance. Congress allowed owners of oil producing properties to treat part of their income as a return of the oil being depleted underground. So instead of taxing all of the royalty income at the time you could deduct twenty seven point five percent could be excluded. through the percentage depletions allowance. I know this is getting really confusing, but it'll get simple here. So you really receive two hundred thousand dollars. The tax free portion of that is fifty five thousand.

19:26 So only the remaining one hundred and forty five thousand dollars is taxed. So investors not only received huge deductions up front, they also paid less tax on future production. That is interesting for investors, but I would argue more interesting for Plank and his partners. It solved a financing problem. Apache was a young company without much capital. Instead of borrowing huge sums from banks, Plank attracted wealthy investors by saying, in effect, Even if the wells are only moderately successful, the tax benefits alone dramatically reduce your downside. And if we discover oil, you also share in the upside, that it made it much easier for him to raise millions of dollars to then acquire leases and drill.

20:01 Wells. Now that leads us to one of the most important ideas in the book. What are you the best in the world at? So he says when we founded Apache, my knowledge of the technical aspects of the oil and gas business was virtually non existent, while my financial and tax related knowledge may have had few competitive Pierce, he saw this opportunity because he was the only one in the oil and gas industry with his finance and tax related knowledge. And then you realize, hey, I can learn Oil and gas. And he does that by hiring people with the domain knowledge that he needs and then just hanging out with them.

20:31 He says, These men were my companions on field visits, while geology and engineering filled our conversations. I was learning more by osmosis and interest. So at this point in his career, he has an earned secret and an etch. The problem is he picked the wrong co founder. So there is there's some insane stories about the co founder conflict. And really he he he has fights with all kinds of people that uh he's gonna be doing business with over the multiple decades. I think you know it's very, very common. But this one is very fascinating. And it talks about

20:58 uh this this what he calls a schism began to widen between Truman Anderson and myself. The arguments between us became louder and our staff would cower as we threw a waste basket. Or smashed an ashtray. The differences between Truman and me ran deep.

21:14 And he's a great way to describe this. He says values are not created equal. Truman and I differed on a fundamental basis. My time horizons for Apache were long term. Truman was impatient in his personal drive to become a high roller. Values are not created equal. I wanted to build the business. Truman wanted to build his personal fortune and fame. And so they're actually in a war. to

21:36 See who's gonna wrestle control of the company. And this is nuts. His co-founder actually spies on him. This is gonna cause his co-founder getting kicked out of the company. While seeking to rid Apache of me, Truman made a watergate type blunder. He bugged our offices

21:52 And our board and conference rooms, and so he attributes these mistakes. to Truman's out of control ego. He'll talk about uh the the detriment to out of control ego multiple times throughout the book. He talks about it in the early days, the middle of the book where we are now and at the very end. He said the lesson from all this dealing with his co founder, he says, What was the lesson? Ego can quickly outstrip one's competence and fat heads get flatten. So he is taking control of the company. Truman is kicked out. It's a very rough time.

22:18 There's all these you know ups and downs and the Apache Corporation, as you can imagine, any company that's gonna last for fifty years is. But he does something really smart here. This is a really great idea that he started during tough times and then kept Doing it. Even when times were great. He would just write these daily reports of what he was up to for so the board was never surprised. He essentially just overcommunicated. For a period of several months, I wrote a daily report on my activities that contributed to the basis for confidence and support from the board and was a practice well worth maintaining.

22:46 Between board meetings. And then at the end of the chapter he has two examples of I consider him a very hardcore entrepreneur. He says as for Truman Anderson He started a car march business that quickly fell from grace. He went broke and disappeared from the area, selling his fortress like estate and moving with his new wife to Denver. Then he moved to California.

23:04 He put together oil deals, bringing a son into the business, and that business sank. Truman had a heart attack and died. And I missed his funeral. So Plank definitely holds a grudge and then there's a great picture. in the book that also speaks to how hardcore he is.

23:18 And And the the the sentence under the picture is I kept competitors annual reports on the wall behind my desk. The better to study them. And he literally has them pinned to the wall behind his desk. And before we get back into this, I wanna tell you about app loving. One of my all time favorite quotes is from the book Zero to One. In that book, Peter Teal writes, he says the single most powerful pattern I have noticed

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25:33 Founders. And so then here's a piece of advice for us, get the plane. So he winds up buying a small plane, he's obviously can pilot himself. But he has this there's so many examples in the book where the fact that he could just find himself anywhere They would be working on a deal or going to a meeting and be like, Hey, can you be here in two hours? Yep, you would just drive to the airport.

25:50 Hop in his plane, get there. He says getting the plane was a life changing event, and then it goes back to just being very protective. of company assets and watching the costs. He says my arrangement with Apache was that I would charge the company the equivalent of commercial airfare. And so one thing he's constantly fighting against throughout the entire book is the cyclical nature of the oil and gas industry. So in the nineteen late nineteen fifties to early nineteen sixties, He essentially changes Apache into this like diversified conglomerate. And he talks about why. He says in the late nineteen fifties when Oklahoma and Texas oil allowables were cut by up to ninety percent, so were our revenues.

26:23 Our offensive strategy was to acquire in exchange for shares of our stock, because they were already a public company this time. Successful entrepreneurial driven businesses which we could grow. This would allow us to find revenues that would bridge the gap. And fix the cyclical downturn in the oil and gas business. So they wind up over the next ten years or so, they wind up uh eventually acquiring fifty eight different businesses. And it's wild

26:48 it wasn't like they were just uh they were acquiring in like a one specific area. They went up owning businesses in agriculture, plastics, telephones, steel, auto parts, ranching, utilities, lumber, it just goes on and on. They were definitely uh individual opportunity driven. And then he talks about how he would manage all of these Separate businesses. uh in this conglomerate that he's going to wind up and then unwind and wind up selling these businesses and then going full fledged into just a normal oil and gas company later on. In Apache subsequent diversification, we did more things right than wrong. In the businesses we acquired, we avoided the major error of the error's conglomerates. Very common To build conglomerates in the nineteen sixties, by the way.

27:26 Many of those upon acquiring smaller businesses too frequently superimposed large company practices and corporate overheads on frustrated former owners accustomed to s successfully running their own operations. So they would buy the company. They would centralize Uh, they would give them direction, centralized capital allocation um decisions over a certain amount, and then basically leave them to run their own companies. And so then there's just some crazy stories in the book. So at the time they're building up They're built they're buying a bunch of these telephone companies. So it says the consolidation of the telephone franchise has continued, and by nineteen sixty six, Apache telephone holdings had grown to twelve telephone companies. His idea is buy all these small telephone companies.

28:04 Put them into one group and then sell them to a larger telephone company. And so he is pitching this company's CO, the company's called Continental Telephone, and he's has a deal on the table with the CO, this guy named Phil Lucier. And so he says, Phil and I agree on price and terms. And this is one of the craziest things that ever happens in the book. There's like a mafia style hit. on Continental Telephones CO.

28:26 So Phil and I agree on pricing terms. Unfortunately, Phil was blown up. In a Saint Louis restaurant parking lot. When he turned his ignition key after lunch. The cause and perpetrators were never determined, and the carbom appears to have targeted the wrong man. So one of the most interesting things about this book and his life story is the fact that he would just reverse course

28:47 As soon as the conditions changed. So he says in uh in this is happening in the nineteen seventies He says that we wanted to then transition from a mini conglomerate towards our long range target of becoming an independent oil and gas. Company. So

29:02 Many COs would have stayed diversified. Forever. Plank didn't When opportunities and oil improved, he actually sold virtually everything and then returned Apache to being a focused energy company. And so something you see throughout the six decades of his career is the fact that he just wasn't emotionally attached. to prior decisions.

29:21 When the conditions change, he would change with them. And it's really incredible that he made that decision when he did, because almost four decades later, he was still reaping the benefits of that. So in two thousand eleven, he gets this report. And it's on all these oil wells in this land that he bought for Apache. from between the years of nineteen seventy to nineteen seventy seven. And they thought they had, you know, reaped everything that they could out of this. But

29:44 Other people this is something you see over and over again in the history of entrepreneurship, other people are Someone else will invent technology. If you just stay in the game long enough to get lucky And you take a long term view. Somebody else will come along. and invent technology that makes your assets more valuable. So other people were

30:02 Inventing drilling techniques, right? Outside of Apache, they made Apache's Wells. That they had For forty years. Then

30:10 Start drilling and yielding. Great results. My two favorite examples of this is if you read Rockefeller's autobiography, which I already mentioned earlier, is the fact that, you know, he he in his autobiography, I think he's like seventy or eight years old, he talks about, yeah, I had a great chat today with this young man who I really admire. And it's like Henry Ford came down to Florida, if I remember correctly, and is hanging out with Rockefeller for the day. It's like yeah, I wonder why Rockefeller admires him so much. Remember when Henry Four when Rockefeller retired from Senate oil, he retained his his interest, his equity interest in the company, right? That was before the mass production of the automobile. Before

30:46 Ford came along fifteen years later and was the first person in history to figure out how to mass reduce The automobile, which greatly increased the demand for oil, which obviously Rockefellers still own the interest in. It's like, Oh yeah, I love this guy. Yeah, no shit that you love this guy. And then another example of this. Is um Ra uh Steve Jobs was was studying the animation industry when he was trying to build Pixar. And what he realized was the vast value of

31:12 Disney's film library. And the fact that you know, decades after Disney had died, decades after these movies had been made, when somebody invented the VHS tape, and then again with the D V D, and then again with the streaming services after that. Uh he said something like I think in the biography of um of Steve Jobs or something like you know

31:30 Snow White came out forty years ago and it just dropped two hundred and fifty Uh million. to Disney's bottom line. They'd taken Snow White from the vault.

31:43 put it on VHS or put it on DVD, then released it, and that two hundred and fifty million revenue was basically all profit. Again. If you stay in the game long enough to get lucky, someone else will then come along and invent technology that make your assets more valuable. I love that idea. Then he's just got a great a bunch of great maxims, which I think, again, is probably my favorite part of the book. I think I've already pe maybe said that a few times to you. But just I I felt like You could almost do an entire episode or maybe just read the book and and just pull out, you know

32:09 15 or 20 sentences where you just have this like wise 90-year-old man just trying to talk to you about stuff. And he says, Learning moves up the fulfillment scale in direct proportion. to its transference by achieving. Something that was also surprising in the book was he talked about that he felt he was learning more. Uh and learning faster. In his you know, nine ninth decade than he did ever in his life.

32:31 Here's another uh great little maxim that he talks about. I remain fond of the observation that those who lack self respect are unlikely to enjoy The respect. Of others. Here's a piece of advice on how to persuade people inside and outside of your company. I found that sprinkling my delivery with analogies carried my positions a long way.

32:49 That approach together with delivering a talk without the benefit of a script has served me increasingly well over the decades On subjects too numerous to note. Another great observation, most markets in my experience rarely pause and stabilize where rationality might suggest that they should. He's also very Honest and open. I think he was

33:09 Married three times, had a bunch of kids, and essentially he talks about the fact that he did choose work over family. He says one trade off in my pursuits was my family who needed and warranted more of my time, love, attention, and support. I had time enough to say no, but While short changing a fine wonderful wife and mother. With our own discords. Washing over the lives of our children.

33:30 who have in aggregate done very well given their dad's shortcomings. At the same time, I'm not the type of person ruefully to reminisce and think if only I had done this and had done that. For life is to live. Learn and grow. A recipe that for me is a full splendid meal.

33:48 And at the core. Of personal Happiness. He has more maxims a few pages later. One who thinks solely of self is soon forgotten. Those who care about others live on.

33:58 And there's another thing that he has in common to Rockefeller. He says during the early formative years of a new program at my initiative, I would carry the startup costs personally until the program had taken roots as an example. in one of Rockfoe's biographies where he wants to invest like three million in something. And they're at a partner meeting. And No one can agree.

34:16 And so Rockfellow says, Hey, you know what? I'm gonna put this three million out personally. If it works out, standard oil can Pay me back? And we can, you know, keep the assets in the company. And if not, I'll just take the loss. And at his offering of doing that when his partners heard that they're like, Well, if you can go in and you can take the risk, then we're gonna come in with you. And so you see a very similar uh idea that Plank is using here.

34:36 Talked about a little bit about this this counter position strategy they had. It's like hey We're gonna buy these smaller wells from major oil companies. Uh we like them. The the infrastructure's already there. They haven't been invested in because the incentives for the major oil companies are to go after these, you know, power law level discoveries.

34:54 And so we actually think like we can do a just a better job than they care, uh than they can about these little wells. I I th one of my favorite ideas uh from Ray Crock, the founder of McDonald, in his autobiography He was talking about like why was he so successful compared to the other fast food restaurants that are so s uh selling hamburgers too? And he says, Well, we take the hamburger more seriously than they do. And you see a little bit of that here. So he says our new incarnation required that we achieve a substantially greater level of critical mass to operate as an oil company dependent on internally generated cash flow from wells we owned and operated from our own account.

35:26 That decision shifted our primary focus from drilling to the acquisition of assets. with upside potential via acquire and exploit. Tactics. So you might be asking, well, why would the majors, why wouldn't the majors just do it themselves? Why would they actually sell to Apache? And he talks about that here. Uh, we were able to purchase from larger oil companies as the major integrated oil companies would be willing to sell as they sought cost reduction.

35:49 and cash redeployment in their quest. For larger reserves. Once large international companies to develop their fields, some focus increasing attention on new virgin opportunities in a worldwide portfolio. Concurrently to reduce their costs as fields deplete, they limit exploration expenditures. So they there's like we're gonna invest, we're gonna take that oil, that small oil, that you're not reinvesting, we're gonna take it more seriously. And then he was asked by a reporter, like,'cause he does a bunch of deals with Shell and Mobile and Texaco and all these other companies. And he was asked why were we expected to make good money on older Texaco properties that had been producing for years?

36:25 And he replied, Well We're a bit like pigs following cows through a cornfield. The scraps are pretty good for a company with our particular strategy. And so I think that desire to want to be counterpositioned, to want to look at what everybody else is doing and say, Hey, I have to do things differently, I want to do things my own way, I think it was there present probably since he was born. It's something you see throughout his entire career. In fact, he has a maximum he says later in the book that beaten path are for beaten men. And so he says and looking back on the decades, remember he's ninety years old when he's writing these words.

36:53 And looking back on the decades, I'm surprised to realize that what I did not know has been a tremendous advantage. versus a liability. I had not fallen victim to how others learned. New and practiced. We were able to develop

37:07 The Apache way. After all. Beaten paths are for beaten Men. And then at the very end of the book, there's a short letter from one of his sons that talks about what he learned from his father.

37:19 He says passion for all endeavors. Passion for high moral standards and integrity. Passion for life. compassion for the individual. Be it prince or pauper.

37:28 To treat with respect and equality. to challenge and encourage each individual to become more fulfilled. And often providing a means to do so. Compassion for humanity. To create opportunity for those not yet born.

37:40 To offer a better life. In a better world. To make A small Difference.

37:47 And that is where I'll leave it. That is four hundred and twenty seven books down, one thousand to go. And I'll talk to you again soon.

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