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I don't think you have to listen to the Quenton Tarantino episode or 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
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because you're going to see so much similarities in how they approach their work I talked about last week how Spielberg would watch and rewatch movies that he loved decades later entire scenes from those movies would appear in his own movies Tarantino did the exact
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same thing George Lucas talks about doing this you're going to 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
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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 L's ideas that show up in Steve Jobs companies and products it's just like
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Sam Walton's ideas showing up in Jeff bezos's companies and products it's just like Henry Singleton's ideas showing up in how Warren Buffett and Charlie Munger built birkshire hathway Charlie Munger said Henry Singleton was the smartest person he ever met Warren Buffett said
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it was a crime that Business Schools didn't study him 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
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and over again for anybody that gets to the top of their profession anybody who becomes great and what they do is seeped they are all seeped in the history of their industry they talk about these ideas over and over again they don't just read a book one time they don't
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just watch a movie one time they don't just have one conversation they do it over and over and over again 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
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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 Quenton Tarantino did he would keep scrapbooks make notes and he actually kept files and on index cards of every single movie and what he
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wanted to remember about the movie 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
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have all 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
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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 fromi
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Berg 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 tens of hours dozens of hours you know I have hundreds there's people have listened to hundreds
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jobs use Lan's ideas just like Spielberg and Tarantino and Lucas used past filmmakers and everything they read all the ideas they they derived from that in their work I highly recommend getting a subscription and you can do that by going to Founders notes.com that is
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Founders with an S just like the podcast Founders notes.com I'll 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
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himself as a result 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 or micromanaging the process George Lucas
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the smalltown son of the owner of a stationary store had said no to the family business and then built a cinematic Empire based on his own uncompromising vision of the film industry not as it was but as he thought it should be much of that Vision lay in
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the possibilities presented by new technology 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 set George
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Lucas is the Thomas Edison of the modern film industry but George Lucas knew what he had done he knew his place and he seemed comfortable with it when asked by interviewer Charlie Rose what he thought the first line of his obituary might say Lucas gave perhaps the best summation of
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his lengthy career in two single syllable words his answer I tried that was an excert from the book 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
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this one I read his biography on Dr Seuss which was excellent and he also wrote an incredible biography on Jim Henson so I originally read this book like seven years ago was episode 35 and there's some ideas in it that I've never forgotten that sentence where it's like
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you know he 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 of his Empire if you will so
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I want to go to the beginning which is really fascinating because the book is going to talk a lot about his childhood but it doesn't start there it opens up right in the middle of him Shooting Star Wars and I think his Despair and depression and struggle that's going on
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uh you see this a lot not only with with founder biographies that you and I talk about but especially with the filmmaker bi biographies Tarantino talks about this Christopher Nolan talks about this James Cameron talks about this Steven Spielberg talks about this you'll see
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this in George Lucas it is very hard to understand at the time you're doing something how it's actually going to 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
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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
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this experience influences this intense desire for control and Independence that is the main theme of Lucas's 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
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he felt he had already lost control of his film the executives at 20th Century Fox had nickel and dimed him every step of the way they would deny him the money that he needed to ensure that everything worked the people at Fox were also
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skeptical 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 films was a dead genre the difference was you needed the right people to show up and those people happen to be George Lucas and his
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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 we had to build this and we had to build it with
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no money but we had to make this work the problem is nothing really worked as we wanted Lucas vowed he would never seed 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
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film making they've never made a film 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 and here's the problem you can't fight them because
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they've got the money and so Lucas vowed one thing if Star Wars worked out one thing 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 everything was screwed up I was
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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 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
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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 so I want to touch on a few things in his childhood because I think it would give
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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 Lucas film when he send sells it to Disney for over $4 billion and he's got this I would say juvenile delinquent
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streak in him since he was a very young boy a lot of this came out of this kind of budding heads or fighting that he would have with his father because Lucas is kind of like a hippie or a rebel and his dad's the exact opposite of that so
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his dad is actually George Lucas senior and so George Lucas Jr 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 and Lucas said later in interviews that he
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was he would remember being very very angry at his father for most of his childhood and I think the main reason of that is because his dad was intent on controlling him it's something else that Lucas never had that he looked for his entire life he really talks about the
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importance of mentorship but he never had an older brother and so throughout his entire career you see him trying to attach himself 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
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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 was not only for like older
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brother uh figures but also through books he was never very good in school but he loved to read uh I got to this section of the book and it reminded me of I saw this interview that's that that's pretty incredible all the way back in 2012 uh it's with Elon Musk and
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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 because it's early it takes place on like the Tesa the factory floor of Tesla back when I think they
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only had one model in production it was like the early uh Model S was in production but Kevin was asking Elon I like well trying to figure out like how did you do all this like you immigrated from Canada you didn't have a lot of money you moved to to California you
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started your first company when you were just in your early 20s and he was like well how did you learn how to start a company did you read 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
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desire and like my dedication to to making this podcast and because Elon said no I didn't read business books I read biographies and autobiographies I thought they were helpful and then he went on to say that this was a way to develop mentors in a historical context
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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 was a series of biographies written for young readers
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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
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that gets to the top of their profession luk references and uses that learning from history as a form of Leverage he'll talk about I watch 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
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that all this reading and studying of history that he was doing as a kid influenced 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 get this was hilarious you know
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who's going to What fictional character is going to 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
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around when Lucas was a kid and so listen to the the the lessons he draws from watching you know Scrooge McDuck which is the the money hoarding Globe trotting Uncle of Donald Duck right and so it says Lucas was fascinated not only by Scrooge's exploits but also by his
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conniving capitalist Ways work smarter not harder was Scrooge's motto and yet his stories were 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
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something in a way no one had ever thought of before think of come on think 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 filmm industry
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remember movie making 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 of our industry you know what I wasn't even thinking about going here I was going to
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talk to you about this later but I'm going to 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 they talked about the fact that he was so dissatisfied with that he could not make the vision in his head
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real right that there was not 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
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how I want them to look and so he founds this company called industrial Light and Magic which absolutely dominates 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
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like that and he I think he summarizes it better than I ever could 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
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Howard said admiringly but that's what George did 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
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other people to believe in their own ideas not trying to force everyone into one form which is I think exactly how he describe what his dad was trying to do to him his dad was trying to make another him and George is like but I'm not the same as you I want to live life
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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
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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 one of my favorite lines ever describing founder mentality and and entrepreneurs comes from Ivon shinard
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who is the founder of Patagonia he says if you want to understand the entrepreneur study the juvenile delinquent the delinquent is saying with his actions this sucks I'm going to do my own thing his grades were so bad his dad was convinced that he was going to
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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 he's not doing well
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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 station Ary store this he doesn't last long he quits and then him and his dad get back into this argument and so this is Lucas's description of
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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 as a matter of fact I'm going to be a
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millionaire before I'm 30 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 but to actually buy your own freedom and that's exactly what he uses his money
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for so he is it it's almost like a a contrast in in bedded in one person because he will bet literally the house which he does multiple times on the success of one movie but he's unbelievably FIS fiscally conservative uh with the way he runs his business and that fiscal conservativism
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actually breaks up he has like co-founder breakups with Francis for Copo because Copo was the essentially the exact opposite George Lucas was always very very concerned about protecting his downside because all he wanted to do is never jeopardize
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anything that that would cause him to relinquish his freedom over what he worked on you could think of George Lucas's constant invention and vertical integration as just a way another form of control and that control to make sure that no one else can ever ever tell him
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what to do and so he gets to college he's like I have no idea what I'm going to 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
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know if I I should back up why am I doing like Lucas right now uh I think if you listen to relisten to the Spielberg episode I just republished a couple days ago and then Tarantino I think this line through what I'm doing right now
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Tarantino studied they're about 10 they came about 10 to 15 years before he did uh Tarantino studied Spielberg and Lucas he all the movie brats which I'll get into like the rest of these guys there essentially like these filmmaking Geniuses that all met in the early 20s
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and in many cases they're 70 80 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 Walt Disney is the next episode I'm reading the 700 Page biography of him
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now so it's taking me a long time this book that I have in my hand is a monster over 500 pages I have the hard cover version and it took me over 30 hours to to read and research and really think about before I sat down and talk to you uh today so the connection to what's
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happening in Lucas's life is very similar to Tarantino's you know not great in school 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 is the
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first time he can actually pick his classes and so once he's in control of his own curriculum he becomes a phenomenal student and so once it's time to be done with Junior College he's got to figure out like what do I where do I transfer what am I going to study and
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this conversation with his dad actually changes the trajectory of his life forever because Lucas is like I'm going to go to Art School his dad's like this old school 1950 super conservative American businessman he's like there's no way in hell that my
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son like I'm you're going to go to art school there's no way hell I'm paying for it and he told his son like there's no way you're going to make money you can't do that and so one of Lucas's friends says hey why don't you if you're not going to go to art school take a
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look at USC University of Southern California has this new cinematography school and keep in mind this is the mid 1960s 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
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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 they didn't even call it film school
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they call it cinemat cinematography school it's 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
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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
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tuition um and help him get housing and the reason I say that decision changed the trajectory of George Lucas's life is because that's when he meets essentially just a collection of filmmakers who are all obsessed with movies they're all young and they wind up helping each
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other for decades it's almost like the Island of Misfit Toys because before this it says for many of them it was the first time they had a click of their own a gathering place where they could talk about their interest movies without eye
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rolling from 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 these other uh interest and he's like oh wait this is it I was sort of floundering for
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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's fascinating I just I'm going to put this
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book down picking up the Steven Spielberg book that I republished last week right that book is 25 years old maybe this book is 25 years old listen to how Steph Spielberg describes he uses the exact same language this is what Spielberg said making movies grows on
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you you can't shake it I like directing above all all I know for sure is I've gone too far to back out now there is no going back they both discovered what they're going to do now this is the fascinating part because this turns into the USC Mafia
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Spielberg's part of that even though he didn't go to USC you're talking about a group of super talented filmmakers and a lot of them come out to um California even though they called the USC Mafia uh you some of them like uh Martin scors Oliver Stone they went to NYU Brian
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deama went to Columbia Francis Ford cop is at UCLA Spielberg's on the lot getting his own curriculum I think Universal or yeah say Universal Lucas to be one of one of a group of highly motivated and young filmmakers they were all friends who would have a lasting
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impact on film and culture 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 and even if you're they don't look at themselves as
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competitors they 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 at this point in history unless you're part of a union uh unless you already know somebody in
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the industry you're not breaking in even 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 scorsi DePalma Copa Lucas they
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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 20s and yet this network that they're building and the talent that
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they have for their craft like those on the margins often come to control the center they become the center now this is really fascinating cuz when I had dinner with Charlie Monger this is the advice that he gave us I'll get there in one second so it talks about they refer
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to themselves as the mafia right 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 Monger talked about
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the importance he didn't use the word relationships around the world that's the maximum that I put on it but he talked about that's exactly what him and Buffett did I think he was 35 when he met Buffett Buffett was what 28 29 something like that he talked over and
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over again the importance of the advice he gave us is like you have to develop relationships with with people he's like they were still doing deals he's something something like I can't remember exactly how I put I have to go back and read my notes or listen to the
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episode again I think it's episode 295 if you haven't listened to it yet but he talked about the fact that they would meet people you know in their third their 20s 30s and 40s and they would do business and do deals for the rest of
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their lives many of the people that he was that Charlie was referring to because Charlie was 99 when I met him 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 the linqu
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and so now he's in film school and you know the the film professors are like okay we're going to practice making films and they give you like this sheet of instructions and it must be you know film must be filmed in black and white must be this you must the story must
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look this way it must not go over you know this length and George Lucas is like I don't give a damn about your instructions I'm going to do what I want Lucas made his intentions immediately clear with his first onscreen credit this was no Student Assignment it was a
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short film by George Lucas that is the in big letters that's what he put on this movie that he's making 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 light
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even 50 years later look at life is an impressive debut aggressive political and utterly confident as soon as I made my first film I thought hey I'm good at this I know how to do this from then on I never questioned it Lucas said and right from the rip he is completely
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obsessed he preferred shutting himself in his top floor bedroom sitting at the drawing board 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
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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 Little Star Troopers but for Lucas that was better than party I'd be working all day and
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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 were his addiction we were passionate about movies we were always scrambling to get our next fix listen to how they're
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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 and then here's a glimpse of something that he's going to have problems with his entire life he
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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 he was born at the wrong time because it even says like he's really he's kind of really bad on set didn't
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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 editing and so I I almost think like if he was born now he's gonna especially with all these new
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technologies basically going have one person like filmmakers because they're going to use all this technology I think that's how George would have uh would have preferred and you see this from a very early age because he's getting all
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these assignments when he's in film school and you know they're going to 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
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he was saddled with crew members who could not keep up with him he's also super super competitive later on in the book it says something like uh Francis for Copa responds back because a few times Lucas says I'm retired never making movies again he does this a few
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times and Copa is like he'll be back and they're like why do you think he's gonna be back it's like cuz George loves winning too much and so young George says 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
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the mustard they shouldn't have been there and then he also has some talents obvious everybody he also was 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 in the
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editing room and that's not an exaggeration I it is funny I'm not even going to talk about it because this book's gigantic and I've covered it on other like Steve Jobs and Ed CMO episodes but you know he started Pixar he's the one that had that hired at Cal
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he's the one that sold Pixar 2 to Steve Jobs when George Lucas is going through a divorce which also goes into a lot of detail in the book uh which it 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
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done that if he was alive now that's what he would do because a typical movie that he would make like his first movie he shot for 3 days I mean you know he's on set for 3 days but then he edited for 10 weeks his favorite part about the
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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 love that's all he wanted to do he wanted to be alone in the editing room but we're not there yet we're still
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in film school this is more juvenile delinquent Behavior listen what he's breaking into this is hilarious so he says uh the 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
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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 like when you film star wars in London later on they have these like really
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strict rules for the London like film Union you know it's like you you have to start at 8:30 there has to be a t I'm not even joking about this you have to start at 8:30 then you have to break for tea at 10 p.m. or 10: a.m. and then you
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have to break for an hour lunch at 1:00 and then you need another tea break at 4:00 and then you can't work past 6 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 materials that they needed like an
30:25
expensive camera but they would also break into facility 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 Pao and break into the editing rooms so we could
30:38
work all weekend and this idea that you use 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 so him and
30:52
his future wife they actually like break into I can't I think it was NYU might have been Columbia but they break into un and then all night they just illegally using their science experiments or scientific equipment to to make experience experiments rather and this
31:06
idea where Lucas is like what the hell you guys don't work weekends this is absurd in the early days way before it turns into Polaroid land's first companies called land wheel rate if I remember correctly and land had won a bunch of awards he was like pretty
31:20
well-known uh wellknown Scientist by the time he's like 19 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
31:34
conversation that takes place with land and his co-founders co-founder is concerned because his co-founder is more like the money guy his co-founder is concerned that he's going to leave and land goes they start work at you know 9: they end at 5: and they don't work
31:46
weekends and so his co-founder's like yeah I know are you going to go are you going to leave and go work with them and L's response response goes of course not how would I get anything done so you see George Lucas like wait a minute you you
31:58
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 are you absurd so this is a guy now this this Al also causes a severe health problems when he's older
32:14
he when he's doing Star Wars he's working like 20 hours a day this C like I'm I'm chuckling because he's just like he had these Tendencies from a very early age uh but you know winds up he winds up getting divorced because of this he winds up having health problems
32:28
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 in terms of optimizing over consistency your intensity he went Full Throttle on
32:42
intensity and so he's going to graduate film school again I said like those on the margins often control the center is such an important uh concept you see it over and over again because even if you when you graduate film school this time there there's no there's no mainstream
32:55
movie studios hiring you and so he starts working for the US government making like these propaganda films for them during Vietnam making his own little movies on the side he's going to wind up uh being able to learn he wins like this this grant to spend some time
33:11
on uh an actual like big budget movie studio set and that's really important because that's where he's going to meet Francis Ford Copa but before I get to that I just want to point out like this is kind of hilarious and I feel exact same way that he does and if you're
33:25
listening to this should probably do too and at the beginning he 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 and he wanted he's like I'll be a
33:37
cameraman or an editor and he gets a job working on that and he's like I these people are bossing me around like 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 which shots I couldn't it
33:54
annoyed him 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 wanted to be a director and you know how he figured out why he wanted to be a director because he figured out who is
34:07
the person on the movie set that no one else can tell what to do 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 J two jobs again
34:19
he's got he's a workaholic the whole his entire life something that his wife you know causes the break up of their marriage so he definitely pays a price for this but uh at this point he makes this like short movie he's eventually going to turn it into a longer movie uh
34:33
called THX 1138 but this is the shorter version of it and his I want to talk about this because 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
34:49
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 C Cinema school from day one but we guessed he had finally found
35:02
his niche 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 a like a grant from Columbia pictures where student
35:20
filmmakers can come watch a real like film like a big budget uh mainstream movie studio film take place right and the second part is he gets to Shadow the director which is going to be Francis for Copa now this is really important because this is what I meant is it's
35:35
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 George Lucas has with being full risk on which he's forced to do on his first movie American his second movie American Graffiti and
35:51
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 if he thinks that bet is successful and it'll buy his
36:03
creative freedom 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 have been around such opulence
36:15
zillions of dollars being spent every five minutes on this huge unwieldly thing Lucas said it was mindboggling because we've been making films for $300 and we saw this as an incredible waste that was the worst of Hollywood so this Relentless resourcefulness that he's
36:31
always going to have like I'm going to 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 like these are Miniature businesses and viewed through that the financial performance of his
36:44
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 Ford Copa is like 56 years older than all the other movie brats and he's the one it's like you know how people like the first time
36:56
you can run people you'll never be able to run a four minute humans can't run a four-minute mile 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 Copa notices this like
37:08
skinny young man beard glasses sitting there with his arms folded not saying a word and so he walks up they tell him oh that's a student Observer from USC so he walks up to Lucas and he goes hey do you see anything interesting and Lucas shook
37:22
his head and said nope not yet and this is how I met George Lucas Francis Ford Copa said now him and Francis are going to 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
37:37
relationships around the world Lucas is 23 when he meets Copa Copa is Copa is 28 they're going to be making movies doing deals starting companies breaking up fighting for decades right but it's really important because at that time there is no young directors there's no
37:52
28-year-old director in the in doing a major movie studio you have to be an independent filmmaker to do that and so Copa inspires not just Lucas he inspires Steven Spielberg too I want to read this paragraph to you Copa actually succeeded
38:04
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
38:17
to being somebody who made a feature film sponsored by one of the studios to Steven Spielberg Copa was a shining star Spielberg said Francis was the first inspiration to a lot of young filmmakers because he broke through before many others so not only did copala prove to
38:34
Spielberg and Lucas said hey this is possible but the influence that Koba 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
38:46
and Copa was saying hey 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 and so he would repeat to Lucas over and over again like if no
39:02
one's going to 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 his entire Empire the reason he was able to sell the the his company you know 30 40 years into
39:17
the future to Disney for many many billions of dollars and it's also one that that that Copo 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
39:32
the most charismatic people that ever lived I did an episode on Copa long time ago I'll link it down below and everybody 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 cop's
39:46
just 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 cop was magnetic so I told you about Lucas meeting Copa right I have not told you about this friendship this might even be
40:05
more important arguably it is more important to the his career 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
40:18
think it there'll be like uh these will all tie together but he goes a young 21-year-old Steph spiber goes to just this screening and they don't tell you what you're going to watch beforehand and he sees this student film and that student film was this THX 1138 and this
40:35
is Spielberg's response he says I couldn't believe it was a student F film I was a struck 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 Copa Spielberg REM
40:50
remembered the moment uh warmly and vividly George was really a friendly guy we shook hands and became friends from that moment on and so I'm going to pause there when he says they I hate that guy they both have extremely mature perspectives on this he's just like
41:04
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
41:15
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 his first encounter with Lucas in early 1968 Spielberg's film making was still more
41:27
inspiring than actual and Spielberg talked about this like no longer did his Role Models have to be these older in many case deceased filmmakers they're actually someone his own age someone I could actually get to know compete with and draw inspiration from and then it
41:41
was around this time that Lucas finds his inspiration and his blueprint is going to be a blueprint for both him and Copa as well and he's around the same age slightly older and it's this guy named John Cy so Lucas is invited he sits on a panel he goes to a conference
41:56
SS sits on a panel with other filmmakers who made books into movies and one of the guys sitting next to him on this panel is a 31- year-old so slightly older and he was an independent filmmaker who also lived in Northern California at this time Lucas is in La
42:12
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 John is sitting on this panel and he starts going into the details of his film making and Lucas is like oh wow
42:27
this is this is our blueprint and so it says John had been running his own film making facility out of a barn in a small ocean town just North of San Francisco he had privately raised $100,000 for this movie that he was premiering by hitting up friends colleagues and even
42:42
his 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 CI but Cy was having none of
42:57
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
43:11
we want that's the end of John Cy describing how he does it it was a speech that either Francis for coplet could have came out of francis's mouth could have came out of George Lucas's mouth but he's the one they had this idea in their mind but then they see
43:24
something it's like oh that's not just an idea this guy's actually doing it and so Lucas asks like can I come visit your setup and I'm going to bring Francis Ford Copo with me and so what they show up to is Cy lives in a house on the property he also has a barn that
43:38
Barn serves as this like movie making Studio this is exactly what I mean Lucas is going to do it on a bigger scale they're about Lucas and copel are about to found a company that tries to do this and then that that company's going to fail but Lucas does this with Skywalker
43:51
Ranch uh where it's like there's no you movie studio there but you can edit you can do everything else that you need to do and they what they realized like oh this is exactly like this is our future this is what we're going to do and so
44:02
shortly after this they find another blueprint so Copa actually flies to Denmark to visit another independent film company it his Danish filmmaker his name is Morgan Scott Hansen and keep in mind I need to back this up because it's so important Lucas is 24 years old he's
44:17
24 years old when this is happened and cop is 29 okay so Scott Hansen is in Denmark he's not in San Francisco he's in Denmark 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
44:31
state-of-the-art equipment come on this is Skywalker Ranch 15 16 years before Lucas has the money to do exactly this and so Copa tours Morgan Scott Hansen's facility love say he like I'm going to do the exact same thing and then on the way out Morgan gives him a uh like a gift and
44:51
it's this 19th 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 Zoey Trope and it's actually Greek meaning life movement and Copa love the word and the description so much that's
45:07
the that's what they're going to name Copa decides to name the company he's about to start with George Lucas Zoey Trope and so he tells Lucas like this is exactly what we need to do we need to get a big old house like kind of like a a frat house right and in that frat
45:20
house we're going to make movies there's only one problem they don't have any money so they have to go to the studios to ask for money and at the beginning as they're trying to do a deal or fundraise for what they're going to call American
45:32
Zoey Trope is actually the full name the 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 risk but he's like I love San Francisco I don't want to live in
45:44
Hollywood and so I'm just going to 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 you have to ride a wave go back to the episode I just said on P Charlie domac Charlie munger's
45:59
surfing model is so important he'll analyze extreme success and he always ask 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 that copela and Lucas they would have never got the money if
46:13
this didn't happen this is why I'm telling you at the exact same time they realized oh like if you the studio is figuring out like if we can just hire young Talent making Independent films can actually print money because they make they make films from almost nothing
46:27
and some of these these are like power law outcomes and so what do I mean there's in 1969 remember they started this in 1968 they're like we're going to do this they bang on Doris Hollywood's like screw yourselves we're not giving you any money the next year the film
46:41
Easy Rider comes out okay so it is written by a 32 written and directed by a 32-year-old or 33-year-old Dennis Hopper it was not made in Hollywood it was made on a Sho string budget they raised $350,000 why is that important3 $50,000
46:57
to release in theaters the film makes 60 million Easy Rider goes on to be one of the most profitable films ever made and so the studio Executives see that and they're like oh and this is what they said the studio smelled money why invest Millions bankrolling production
47:13
of an enormous film on a studio Backlot but you could simply distribute independently produced films suddenly Independent films and independent filmmakers was exactly what Lucas and Copo Want to Be Right made by Young directors were in demand the studio
47:28
wanted young talent I just said that Charlie Marr talks about this surfing surfing the wave listen to the words that they use to describe this Easy Rider had created a tsunami of independent enthusiasm kopa decided to ride the wave right into the offices of
47:45
Warner Brothers come on that fit together so perfectly there so goes to Warner Brothers he's this is copal is like you sometimes I think you might need a guy like this cuz not like Hey we're going to make one movie he's like listen you front us a bunch of money uh
47:59
we're going to bring you a finished film just like Easy Rider did we're not going to do this once we're going to we have seven films we want to make uh with you guys now here's the problem Copa probably shot too big and even if he didn't shoot too big he definitely
48:12
signed a bad deal because the executives gave them money not as an investment they the scripts aren't being optioned they gave them a loan and they said in the contract this is this is going to cause them to go Bank or almost go bankrupt the minute that
48:29
Warner Brothers did not like what they were doing had lost faith in the project whatever the case is they could call in the loan and Copa and Lucas would have to pay back everything and in true Copa fashion he was like oh that he's very confident that was never going to happen
48:44
so now he's got a bunch of money and he's saying all these crazy things like my company's going to be worth $10 million you know in a couple years and it's going to do all this stuff but here's the weird thing they took a bunch of money and he just invests in things
48:56
this is like the UN luucas and you know Lucas is technically his partner but he's definitely the subordinate partner in this Arrangement and so C Copa spends all this money in the reception area he said he buys an antique pool table and a
49:09
really expensive espresso maker and all this other stuff and one it reminded me when um there's a great anecdote when Charlie Munger and Buffett I think they're buying like the Buffalo Evening News I can't remember which one they're buying a newspaper and they're touring
49:22
it and Charlie Munger is 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 care what's in the newspaper they don't care like you're investing in things that are not
49:38
important to your customer you know 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 architectural design doesn't do anything for your customers like what are you doing uh we saw this
49:51
again I I can now talk about this publicly but my friend Jimmy Sony is the author of this book called the founders I think I covered it back on episode 234 and I also covered his biography of Claud Channon a long time ago maybe episode 94 something like that and uh me
50:05
and Jimmy become friends since I covered those books and his 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 and it's on the 13 years this what I call Bizarro Steve Jobs the time the 13 years
50:19
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 Bizarro Steve Jobs is because he's arguably the greatest entrepreneur ever and yet in this 10 to 13e period you see
50:30
this incredibly gifted entrepreneur just make one bad decision after another and so what do I mean oh 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
50:45
me like he's in these these archives it's just incredible what's going to come out anyways reading that book which is you know published a long time ago the next I think it's by Randall Strauss Steve Jobs the next big thing there was a line in that book that blew my mind
50:58
that reminds me of what Franc for Copa is doing here it's like what are you doing you're putting an emphasis on things that are not important and what do I mean by that Steve Jobs one of the the ninth employee if I remember correctly ninth or 10th employee at next
51:13
was an interior designer for the office that's absurd that that is not that is and that is bizarre Steve Jobs Steve Jobs made phenomenal decisions that is a bad decision um this idea of putting a bunch of money into things that don't
51:27
don't affect what actually what actually the customer experience makes no sense and yet you see this over it's a 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
51:39
they decide hey 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 our movies what do you think is going to happen most of that equipment winds up being lost or stolen and then Copa also
51:55
has ideas like hey you know we need we need uh our own airport we need a fleet of helicopters he doesn't have the money to buy this yet but that's where his eye is like that has nothing to do with what you're trying to do here is just make
52:05
great films that people love so much that they pay money to see and they tell their friends to go see it that's that's all you have to do and so this fight right now like copela and Lucas start fighting immediately because this is this is a bad co-founder match because
52:19
Lucas's thing he Des Lucas in very plain language like he's very easy to interface with because he tells you what's important to him when he's in his 20s and it's still important to when he's in the 70s right and so he says what we're striving for is total freedom
52:30
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 that is why Lucas wanted to make as much money as possible
52:44
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 that's all you need to know about Lucas and the reason
52:54
I would recommend reading this book is it goes into great detail of how he actually accomplished that now I'm going to talk a little bit about that but I I do want what is fascinating is that not all the ideas they were having you know they're young uh entrepreneurs never
53:07
don't have experience don't really know what they're doing the the movies they're going to make are going to flop but what's fascinating is like they they still had an insight into the future and so it says uh both Copa and Lucas predicted a bold high-tech future
53:19
remember this is 1969 1970 maybe and they said movies will eventually be sold like soup what does that mean you'll be able to buy in cartridges for $3 and play it as you would a record you know m music record at home he's predicting you
53:34
know VHS tapes then DVDs then Blu-ray and now streaming and so the first movie that American Zoey Trope is going to make is this movie THX 1138 really is a Luke Luke is making a film about because the main uh idea it's like science fiction kind of weird so he kind of like
53:55
hides that but essentially just you should reject the status quo and you pursue freedom and so he's talking about the idea behind the movie and one sentence here just stuck with me from the first time I remember this line from you know reading this book for the first
54:08
time seven years ago uh so he says 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 1138 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
54:40
unknown would be an underlying premise of his first three films THX American Graffiti and Star Wars he is really making a film about himself reject the status quo and pursue freedom and the problem is that thx1 38 uh the studio hates it they hate it so much this is so
55:01
bad now this is I guess is important there's two things are going to happen I want to 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 that it literally causes the collapse of his company and the
55:14
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 we in the the middle of it
55:26
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 is like this is freaking terrible the deal's off give us our 300 Grand back they're now
55:38
in debt the company's hemorrhaging cash Copa has no money at all he's desperate for money and so he gets an offer right he only wanted to do his own films he gets an offer in the summer of 1970 so this happens really fast they you're talking about a year and a half and the
55:53
company's gone um and it's an offer he could refuse because it comes from Paramount Pictures and they're saying hey we're going to make a an action film based on one of the biggest books of 1969 which was written by this guy named Mario PUO and that book is a sprawling
56:08
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 is like his whole thing is like you have to stay in the black Lucas has a mantra that he repeats over and
56:22
over again I think is really good stay small be the best don't lose any stay small be the best don't lose any money so he's talking to cop's like what the hell are you like you you have no money they're offering to pay you a bunch of money to direct a film you have to do it
56:36
I don't think you have any choice is the advice that he gave his friend Copa we're in debt and you have to get a job and so reluctantly Copa agrees to direct Godfather he gets $75,000 to direct it and and he's going to get 6% of any profits the film makes
56:52
and so on the way out the door the studio owns because they l them the money they own THX 1138 they can do whatever they want with it they didn't like the editing job that Lucas did so they give it to their own hin house editor and Lucas thought listen to what
57:07
he says here so they they wind up cutting another four minutes from Lucas's Final Cut and this induces Lucas into a state of Rage 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
57:19
so we're going to Lucas had no patience with Executives who argued that they had only cut 4 minutes from a 90-minute film they were cutting the fingers off my baby he said Lucas wouldn't trust the studios again ever and again at the time
57:34
this sounds like the end of the world it's the worst thing that ever happened they cut my film our company's over but it winds up being one of the best things ever happened to him because this is the founding of Lucas film the exact company he's going to sell to Disney and he
57:47
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
58:01
tight with a dollar and Copa would continue to spend money recklessly Lucas had made up his mind to break away from Copa 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
58:15
him to forming his own company in 1971 Lucas officially opened Lucas film this independent production company would be run out of his little house and its lone employees were him and Martia Maria is his wife so even though they broke up as
58:30
co-founders they're still friends and Copa actually gives him some good advice because THX is just this weird abstract they called uh Lucas at the time a cold weird director so it's not he's just like what are you doing with all this like strange abstract stuff he's like
58:44
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 going to your career is over before it begins and so the the advice that Copa 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 going to be one of the most profitable uh best return on investments of every movie movie ever ever ever made and it's
59:09
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 they would soup up these cars and they would just Drive slowly down one block then
59:21
turn around and do it all over again they 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 in like you know everybody knows that experience
59:32
it's like your entire life's going to change you have no idea what's going to happen so that's what he's going to make a movie on here's the problem no one wanted to give him money and this was fascinating didn't even think about this because he's got no money he's
59:43
considered damaged goods and he's struggling to get any kind of money for to to write the script and then once he writes the script then he's got to make the movie and he talks about the predicament that he's in he says listen the easiest job you'll ever get he's
59:55
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
1:00:05
first film and they say oh no 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
1:00:19
fails a few times then he gets to the president of United Artist this guy's got the perfect name for his job 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
1:00:35
want to write I need money and I want to write American Graffiti and picker says yes on May 14th which is also Lucas's birthday he had just turned 27 years old he gives him like $10,000 to write the script but Lucas is going to make the mistake because he
1:00:52
hates writing and he gives all that money to a screenwriter and then screen play sucks so he's got to do it himself anyways but what was fascinating about this is in this meeting with David picker okay is the birth of Star Wars so he's like okay I'll take American
1:01:07
Graffiti let's let's do a deal on that do you have anything else and Lucas is like actually I do remember 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 drawing a little
1:01:21
Starship Troopers so picker is 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 and that Lucas said was really the birth of Star Wars it was the only this is fascinating
1:01:38
think 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 it became an obligation then I get to get to one of the most fascinating things what I
1:01:51
personally find Most Fascinating about Lucas other than his 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
1:02:04
parts of your job does like we get to we're unbelievably lucky to be entrepreneurs 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
1:02:15
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 Lucas's version of that like I he hates writing and so he he blows all the money he has
1:02:30
no money he is poor he's got no money he's going to go into debt in a minute and so he he says my intense desire to get a writer had backfired on me and I ended up with an unusable unusable script and no money and so this is what he's going to do he he calls it bleeding
1:02:46
on the page he says that line I don't even know 10 times in this book and so he's like okay forget it I'm going to have to do this myself and so over the next three the next three week period he writes from 8 in the morning until 8 at
1:02:58
night 7 days a week he calls us bleeding on the page he also is humiliated because now he's got no money copela has got a bunch of money because Godfather so he goes to Copa and George Lucas Senor he's got to go to his dad his dad that told him don't do this you'll never
1:03:16
make any money you'll be a bum and he's almost 30 and he's like I H I need money dad you have to 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
1:03:33
because he somehow maintains this focus on getting his own project done through the struggle okay so he's got he's writing script is done now he needs money to to make the movie he's going around no one wants to give him money to make the m movie but they were
1:03:48
interested in him as a director just not directing his own screenplay think about this he's got no money he's in debt to his dad and Francis forla they're offering him a $100,000 to direct a film he thinks the film is he hates it he's like these
1:04:02
are terrible projects and he says no 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 we were in dire
1:04:21
dire Financial Straits he's already married okay that was a very dark period for me we were in dire Financial interest rates I turned the movies down at my bleakest point when I was in debt to my parents in debt to Francis Ford Copa in debt to my agent I was so far in
1:04:34
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 writing struggling with no money in the bank getting little part-time jobs eing out a living trying to stay alive and pushing
1:04:53
a script that nobody wanted a script that nobody wants it's going to give the person that fin finally finances the film one of the greatest return on investments in movie history think about that so this guy at Universal guy named Ned tannan finally
1:05:08
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 tannning can do and even though this is incredible toe even though Lucas doesn't have any other options no one else is
1:05:23
willing to finance this 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 100 he could have asked for a big
1:05:35
director fee he's like no no I want a less director fee I will cut my director fee in half I want $50,000 I will not only direct it I will write it for that fee there's no extra money for that but I want 40% of the profits if there are any profits and at this time he's doing
1:05:50
that it is a big if that American Graffiti could ever turn a profit George Lucas before this has never had a successful film he's just had a flop and so through this entire book there's huge chunks of the book that I think you should read because it's just problem
1:06:05
after problem after problem after problem I'm going to read just a highlight of this from American Graffiti and then I'm want to tell you one of my favorite ideas I've ever come across says despite the agreement he had negotiated with the town under which he
1:06:17
could pay $300 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 the local Council had withdrawn permission for him to F and would not permit uh to clear or control
1:06:28
traffic LC has made the most of the evening anyway rapidly shooting his way through 19 setups and scrambling to find a new location then we had a focus problem in the camera and the assistant camera man was run over by a car then we had a five alarm fire that was a typical
1:06:42
night 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 restaurant tour a long time ago now you're talking about years ago probably it's called setting the
1:06:56
table it's excellent 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 that controls Neiman Marcus he's a wiser older man probably I would guess 40
1:07:12
years older than Danny is at this point I think Danny's in his like mid 20s maybe late 20s at this point and so he's they're having this conversation and he says opening this new restaurant might be the worst mistake I've ever made Stanley said set his Martini down looked
1:07:27
me in the eye and said so you made a mistake you need to understand something important and listen to me carefully the road to success is paved with mistakes well handled his words remained with me throughout the night I repeated them over and over to myself and it led to a
1:07:42
turning point in the way I approached my business Stanley's lesson reminded me of something that my grandfather had always told me 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
1:07:58
problems but in the art of creative profitable problem solving the best companies are those that distinguish themselves by solving problems most effectively I try to reduce that idea first of all that line right there the road to success is paved with mistakes
1:08:14
well handled that's just straight up wisdom from an older well-schooled uh entrepreneur with this idea that the definition of business is problems right success not lies not in the elimination of problems but in the art creative problem profitable problem solving what
1:08:27
I say is is like the the way I condense that down so I can remember it myself business is problems therefore the best companies are just effective problemsolving machines the best directors are just effective problemsolving machines and so
1:08:41
after this grueling schedule he finally finishes the movie and what he says here this is what I meant is like if you could dial the balance between consistency and intensity I think he's way too far in the intense level and maybe that's what way he wanted to live
1:08:53
his life it's not 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
1:09:05
make a movie he said it's excruciating it's horrible 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
1:09:19
mountain and what is fascinating is he starts to preview the movie The audiences love it and the studio ex 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
1:09:34
good enough we're not going to release it maybe we'll put on TV they're just like completely jerking him around and screwing him 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
1:09:45
he hates these people and then they edit his film again and they take out another four minutes just like they did in THX and this is the importance of just having good relationships and good friends that truly care about you too because the out a screening Lucas is
1:09:56
there copel is there the stud executives are there and the crowd loves it in the but after in like the lobby the executiv is like bitching at George Lucas and copela is just he he comes to the defense he's like are you out of your mind did you not hear them and he pulls
1:10:11
out his checkbook he's like how much 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 you have a hit on your hands cop's forcefulness kind of calls
1:10:21
their Bluff they wind up releasing the movie the movie is a Smash Hit listen to this though 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
1:10:33
Lucas the way I think of him as I think of him 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 called it a work of art my thing about art is
1:10:42
that I don't like the word art because it means pretention and 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 I know how good I am he said
1:10:58
American Graffiti is successful because it came entirely from my head it was my concept and that's the only way I can work and it prints money keep in mind American Graffiti is released in 1973 so these are $1 19973 I'm about to tell you American
1:11:15
Graffiti cost a million dollar and it earned at the box office 55 million making it one of Cinema's most profitable Returns on investment ever Lucas earned nearly $4 million after taxes and as he had vowed to his father more than a decade before Lucas was a
1:11:33
millionaire before the age of 30 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 he's got a couple million in the bank and he's got a two-page treatment on handwritten notebook paper
1:11:49
and the title which is scrolled on the center of the treatment's cover page is the Star Wars 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 rate the Star Wars and he's
1:12:03
going to bleed on the page there's an entire chapter about this it's called bleeding on the page because George says over and over again like in the book I I forgot I lost track of how many times he says this he's like he does not believe that he had a natural talent for writing
1:12:17
and so he calls the process awful he hates it but he makes himself do this listen to this so it's going to take him 3 years to write like the first version of Star Wars but the way he does this is fascinating so he's like okay I'm going
1:12:34
to 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 go upstairs at 9:00 I can only do one thing I can look at the wall or I
1:12:51
can write but I can't do anything else and from 9 to 5 8 hours a day listen to how he describes this he says I would sit at my desk for 8 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
1:13:04
I can't get out of my chair until 5:00 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 and you mark
1:13:20
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 chocolate bars and listen to music but most days no words are written at all
1:13:35
and then he would just go downstairs and he'd glare in Anger at the TV he'd eat a TV dinner and he would just be pissed off staring and watching the news another idea I think is useful is he's having a problem right like think about the you know the a lot of the
1:13:52
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 281 I've read
1:14:06
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 Kenda and she's main thing is like hey uh we need to make demos like that that's how we're going to push these
1:14:18
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
1:14:30
Visions I had of the film when I started was a of a dog fight in space with spaceships two spaceships flying through space shooting each other that was my original idea but trying to get the dog fight in my head on paper was difficult and so what he would do is he'd go to
1:14:44
the television and he'd start taping old war movies and specifically footage of airplanes like you know dog fights with airplanes and he taped 20 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
1:15:02
about 8 minutes long and the description of this reel is fascinating it says while he didn't yet yet know the Reel of dog fighting would be one of the most important bits of film he would ever put together the wet concrete that he would pour into the mold for the Cornerstone
1:15:17
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 f fting we you and I talked about this over and over again already Lucas desires control above all else and he still stuck to that idea even though
1:15:32
Fox was the only Studio who said yes to Star Wars think about this you know arguably the most successful movie franchise in history and only one F only one Studio said yes and so even though he's negotiating with the only interested part party one there's
1:15:48
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
1:15:59
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
1:16:10
back and demand millions of dollars and all these gross points recall Lucas 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 underbrush
1:16:22
in a contract and it's really weird that they didn't know understand at this point how important merchandise rights were because if you remember I've done a bunch of episodes on Walt Disney before and they were even surprised they did
1:16:32
this show called daav Crockett they sold like $300 million in a year of like those Dave Crockett like hats and that was you know two decades before what's going on here so for Fox is just give them away they're going to make three to five time it says three
1:16:47
times the amount on toys Lucas makes three times the amount of toys as he does on the films and the films they make billions and billions of dollars it's insane so he's like okay I want you know the merchandise and I want the sequel rights I'm not going to charge you more money
1:17:00
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 50,000 should could go to a million could go to 2 million whatever the case is he would also insist that Star Wars be produced by Lucas film
1:17:13
thereby ensuring that he could keep an eye on the bottom line and that any expenses build against the film were really his 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
1:17:29
he wants the merchandise rights Fox was willing to sign over the squel merchandising rights mainly because they'd gotten the director of American Graffiti so cheaply and no one not even Lucas appreciated that by securing Sequel and Merchandising rights he had
1:17:43
just negotiated for himself a billion doll 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 the special effects there's no technology at the time so what does he do the solution sometimes to a problem is to F to found your own company to solve that problem the solution to this problem he's having
1:18:12
now is the founding of industrial Light and Magic so it says 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 to set up his
1:18:25
own shop with his own people industrial Light and Magic would then be an official subsidiary of Lucas film born of necessity seeded with his own money and feeding off Lucas's need to control every aspect of the production Industrial light magic would stand as
1:18:41
one of the cornerstones of Lucas film's Empire an investment that would set him well on the way to becoming a multi-billionaire and then this is a quote I shared earlier which is one of my favorite quotes in the book how many people think the solution to gaining
1:18:53
quality control improving FAL responsibility and stimulating technological innovation is to start their own special effects company Ron Howard said admiringly but that's what he did you and I have already talked about the fact that this guy is stubborn
1:19:07
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 kind of getting depressed but he's still persevering because his friend's advice he says Lucas saw Star Wars as
1:19:22
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 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
1:19:36
about he did that with THX 1138 how did that go people were telling me that I should have made Apocalypse Now George Lucas said they should 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
1:19:50
editors for Martin scorsi and she wanted her husband to make movies like Martin scorsi did but I think this idea it's one of the the most important ideas I've learned in the last like year year and a half it's like you have to believe that
1:20:00
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 because he's been working on the script
1:20:14
for three years and he he has to shoot the movie now and he that 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 I didn't really know where to go with and I've never fully resolved it
1:20:25
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
1:20:37
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 to shoot the film I would doubtless still be rewriting it now the power of deadlines and again there's an
1:20:51
entire book I might cover so I I 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 a bunch of new sources to to read more books on in the future and turn into more episodes and so I found one two
1:21:06
three four uh new books from this bibliography and one of them is just about how gut-wrenching and difficult making Star Wars was I think maybe reading that book and and doing entire episode on it would be fascinating but I can give you a brief synopsis here from
1:21:23
day one Star Wars would be problem plague production that would blow through its budget 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
1:21:36
altogether I forgot how impossible making movies really is Lucas wrote I get so depressed but I guess I'll get through it somehow 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 Star Wars is
1:21:51
nearly killing him this is what I mentioned ear he's working 20 hours a day on it and he's so deep into it he goes decides to fly down to Alabama to visit his friend Stephen Spielberg who's working on the movie Close Encounters of the
1:22:04
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 but the reason I bring this up to you is because Spielberg tells us what George was
1:22:19
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 doing he was very very upset he was saying I got myself into a mess that I'll never really get myself out of he was in a
1:22:31
state of near despondency so much so that he's rushed to the hospital he feels sharp pains in his chest he was afraid that he was having a heart attack so he gets checked into a hospital they diagnos him with hypertension and exhaustion so after that he's like I'm
1:22:44
never doing this again but he had no intention of relinquishing control over the film even if it killed him he's got to get this done first and it wasn't until I read that section I went back and looked I thought directed all the Star Wars movies this is the last movie
1:22:57
he directs for 22 years until Star Episode 1 the Phantom men Phantom Menace so Star Wars comes out in 1977 he's a director and then he stops doing that just he becomes an executive producer he bankrolls it he writes the stories picks the the the the the directors but but he
1:23:15
really meant it like he hated directing and so he finally finishes the film or is it's almost done and this is fascinating because this happens to I mentioned I was going to do another episode on Tarantino at the end of the Tarantino episode but I relistened to
1:23:29
Tarantino and I thought it was really really good so much and I could kind of 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
1:23:42
for the second tarano episode I was making and I maybe we'll do in the future but I was like man if I do this right like it's gonna pay on comparison to to the Tarantino episode so I sheld it for now but in that Source material some of the research I was doing I come
1:23:57
across this conversation where Tarantino you know Reser dogs was a hit but it wasn't like a smash commercial hit and so he nothing like what P fiction is going to be and so he actually screens Tarantino screens P fiction before it's released to bunch of director friends
1:24:13
and everybody hates it except one person all of his director friends one of his director friends he tells a funny story he was like okay uh I got to have a real serious conversation with my friend Quenton like this he's got to change it
1:24:24
this isn't good enough he's like I'll wait till he gets back from can I think can's Film Festival is how you pronounce it or KH I don't know how to say it but uh he's like I'm gonna wait till it you know gets back and then pul fiction wins
1:24:36
all the awards there so he's like okay I guess not to say anything but this this idea where even your really gifted friends may not 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
1:24:50
how the hell you going to see Pulp Fiction and think it sucks and one was like super supportive same thing happens here 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 scor Stacey if remember
1:25:06
correctly she bursts into tears she's certain that it's a disaster Brian deama is just lighting into him he goes what is all this Force like you know the force will be with you screaming at him they go to dinner he's still Railing at it and yet there was one person in the
1:25:19
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 an executive from fox called Spielberg we all need friends like this called
1:25:33
Spielberg to ask what he thought about what he had seen Spielberg told the executive that he thought he had a hit on his hands one that it would eventually make 50 or $60 million while were we wrong Spielberg said why it's not going to make 50 or 60 million the
1:25:49
budget for the original Star Wars was $1 million at the box office alone it brought in 775 million think about funding a business all you took to build that business was 11 million and yet that business makes 775 million just at the box office to
1:26:07
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 that reaction from a movie where all these other talented people all the other people in the room
1:26:21
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 going to control the funding for The Empire Strikes Back this is he's going to make a100 million on this bet that he's about
1:26:38
to make on himself 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 is they they correctly identified like who is the natural audience for Star Wars right and
1:26:53
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 adaption
1:27:09
series before the movie comes out so they publish like a novelization of Lucas's script they publish it November 1976 the that's before there was even a trailer by February 1977 so you're talking about is that 3 months 4 months later they had already sold out of its
1:27:27
initial print run of 125,000 copies and the movie wasn't available to see for another 3 months 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
1:27:45
seeds several months before the movie is actually available so it says by the spring of 1977 enthusiasm for Star Wars was like a pot oiling to a slow boil 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
1:28:02
entire book in his entire life because it's going to 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 $11 million budget 775 million at the box office but
1:28:17
Fox the studio all they did was Finance the film and they get 60% of the profits and he said they're getting 60 the way Lucas looked at it he's like they're getting 60% for doing absolutely nothing and he's like well what do you mean they
1:28:30
didn't do anything 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 in this my whole career is at stake I have to actually go out
1:28:40
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 lad he's like well what the hell are you doing and lad's response is like well I provided the money and George said to
1:28:52
him was very fascinating the way his brain works 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 50% of the movie this is such an important distinction he makes here George looked at it like a
1:29:03
businessman saying wait a minute the studios borrowed money then they take a 35% distribution fee off the top this is crazy why don't we just go borrow the money ourselves and he said some of the bravest and our most Reckless Acts were not aesthetic but Financial for the
1:29:19
sequel Lucas matter of factly informed the studio that he would financing the film himself using his profits from Star Wars as collateral for a bank loan so this time around the last time around the studios got 60% of the money this time he's like hey I'm getting
1:29:36
77.5% and you can get 22.5% and they take the deal because of course you you want to be involved think about it like even if you own less of Star Wars and you're the fox fox has a bunch of other movies so there's going to be millions of people going to watch
1:29:49
Star Wars 2 and at the very beginning you see this huge logo the Fox logo it's like advertising for them and then I loved the way Spielberg you know he saw this coming he's like uh Spielberg wasn't at all surprised by the way Lucas was playing hard ball he says if you're
1:30:03
an executive and you're going into business with George Lucas you are no longer in the 20th Century Fox Business you're in the George Lucas business and George is going to call every shot and then another mind-blowing fact do you know that Spielberg made over $40
1:30:16
million off the original Star Wars they're actually they had a bet so they're really they again they don't know what's going to be successful before it happens so George Lucas is working on sci-fi that's Star Wars one Spielberg is working on sci-fi that's
1:30:29
Close Encounters of the Third uh Close Encounters of the Third Kind and so they're like okay let's bet who's going to be more successful and let's just trade points and so Spielberg gave Lucas 2.5% of Close Encounters of the Third Kind Lucas gave Spielberg 2.5% of Star
1:30:45
Wars and it says this 25.5% would earn Spielberg more than $40 million over the next four decades GES and so this idea about using his assets as collateral to a bank loan it's exactly what Fox was doing but they're just a bigger company so he's going to
1:31:01
use the money he made from Star Wars and then remember he owns all the merchandising rights this is nuts just in 1978 alone George Lucas sells 40 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
1:31:19
a time he used the substantial profits from the film themselves but also tapped into to the revenues from an almost 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
1:31:33
build this Vision that he's had you know that he was working on when he was in his early 20s 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 I I I didn't I had
1:31:47
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 want to fill it with the most advanced technology where we
1:31:59
could sit see the trees and make movies so he buys the first 1,700 Acres right now as he's building uh making the sequel and that eventually uh he buys a bunch of surrounding properties and and builds 5,000 or or owns 5,000 acres and
1:32:13
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
1:32:25
points take more money like this is nuts and so it says even those who knew Lucas were a gas 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
1:32:40
paying for a movie 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 Mich shoulder in
1:32:54
the editing room no Executives forcing him to make arbitrary changes that is the part that I wanted to avoid he said 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
1:33:12
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 give them the movie because I'd have to give them all the rates backs meaning if uh he had to get money from them I had to keep the picture going somehow
1:33:25
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 Independence so badly he said but at the same time he
1:33:38
has this loan from Bank of America and they see his weekly expenses and his costs are ballooning for the sequel his weekly payroll loan was a million dollars a week and they're threatening to pull the loan and call the loan and shut down the operation which is nuts
1:33:54
considering how big Star Wars winds up becoming 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
1:34:04
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 from the First National Bank of Boston but even with this agreement lucasfilm remained the main guarantor of
1:34:19
the loan and if this movie didn't turn a profit highly likely that his business was going to go under 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
1:34:35
1980 in 126 theaters and broke attendance records in 125 of them no other Studio opened a single movie against it the movie was going to have to make 57 million just for Lucas to break even and to build Skywalker Ranch into the kind of complex he envisioned
1:34:52
the movie was going to 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 00 million in profits Lucas had literally bet the ranch Skywalker Ranch and
1:35:08
won 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 hard cover is over 500 pages if you want the full story highly recommend reading the book if you
1:35:21
buy the book using the link that's in the show notes on your podast player you'll be supporting the podcast at the same time that is 345 books down 1,000 AO and I'll talk to you again soon okay so what you're about to hear is this question I was asked a
1:35:33
few months ago I actually recorded this a few months ago they asked how did History's Greatest entrepreneurs think about hiring all the answers people think I have a better memory than I than I actually do you know if people say oh David you have a great memory my wife
1:35:46
would laugh at that I forget things all the time it's not to have a good memory it's I reread things over and over and over again every every single answer every single reference you're about to hear in this 20 minute mini episode came from me searching all of my notes and
1:36:01
highlights that option is now available to you if you like what you hear if you think it's valuable if you're already running a successful company and you want an easy way to reference the ideas of History's Greatest entrepreneurs in a
1:36:13
searchable database that you can go through at your convenience anytime you want then you can go to Founders notes.com and sign up I want to start out first with why this is so important there's actually this book that came out in like 1997 it's a called in the
1:36:28
company of giants I think it's episode 208 of Founders it's two Stanford MBA students if I remember correctly and they're interviewing a bunch of technology company Founders and in there Steve Jobs is one of them this is you know right I think even before he came
1:36:42
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 recruiting other people and I I first read this this Steve's answer to this you know I don't know two years
1:36:58
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 early days like basically all your time doing this uh in a typical startup manager may
1:37:10
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
1:37:22
company I'm going to pause there this idea of looking at each new hire as a percentage of the company is genius why should you take any less time finding a third or fourth of your company or a fifth of your company when you're in a startup the first 10 people will
1:37:39
determine whether the company succeeds or not each is 10% of the company so why wouldn't you take as much time as necessary to find all a players if three three out of the 10 uh were not so great why would you start a company where 30% of your people are not so great a small
1:37:59
company depends on great people much more than a big company does okay so 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
1:38:13
you know 300 something biographies of entrepreneurs now but I have all of my notes and highlights stored in my readwise app and that means I can search for any topic I can look at the past highight of books or I could search for keywords so what I did is first of all
1:38:27
like what I've started to do with these AMA um questions is I read them decide which ones I'm going to do next and then think about it for a few days I don't put any just literally that that I know that's the next question just let my brain work on it in the background for a
1:38:40
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 10 or 15 different Founders talking about hiring the first idea is the most obvious but I think probably
1:38:54
works best when you're already established so Steve Jobs is talking about hey you know great way to to hire is just find great work and find the people that did that and then try to hire them when you're Steve Jobs that's a lot easier right than if you're just somebody doesn't have
1:39:12
reputation maybe you don't have resources maybe your company's rather new or not as well known David ogy I just did confessions of an advertising man a couple episodes ago I think 306 or something like that 307 and he did the same thing but he's David
1:39:26
olvy at that point so he would find he'd go through magazines find great advertising great copywriting and he'd write the person a letter and then set up a phone call and he says he wouldn't he was so wellknown and you know he's one of the best in his field that he
1:39:41
wouldn't even have to offer a job just the conversation then the person would the he would 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
1:39:57
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 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 cold dming
1:40:09
them and then getting convincing them to work on things and that usually works especially with people like younger people earlier in their career there's a bunch of different ways to think about this in a bunch of different ways to prioritize so the first thing that that
1:40:21
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 you know table Stakes that you're intelligent and you're driven and you're hardworking right we don't even have like if you're
1:40:35
listening to this you already know that but he prioritized hiring people with social skills and so this is what he said the ability to deal with people is as purchasable a commodity as sugar or coffee and I pay for I pay more for that
1:40:50
ability than any other under the sun there's the two the second part to this though and this is also works well if you have access to more resources he Rockefeller would hire people as he found as he found talented people not as he needed them it's not like okay
1:41:05
standard oil has six open spots let's go find six candidates right he'd come across what he considered a talented person he didn't even matter if he didn't know what they were going to do he's like I'm just going to stack his team and if you really think about the
1:41:18
his Partners at SED orial he essentially built a company an executive team of founders of because he was buying up all their companies so it's very rare but um there's a line from Titan I want to read to taking for granted the growth of his Empire he hired talented people as found
1:41:35
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 I did two episodes on him I think it's 270 and 271 he is the most important American ever uh in history uh in terms of connecting the
1:41:53
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 Bush van bush is like the Forest Gump of this historical period he is involved in everything from the Manhattan Project to
1:42:07
discovering like a young Claude Shannon to building a mechanical computer like this guy literally has done he's just he pops up in these books over and over again if you were reading about American Business history during World War II and
1:42:19
post World War II you are going to come across the name vanever Bush over and over again I read his fantastic autobiography called pieces of the action and I came across this weird highlight and so this is his brilliant and unusual job interview process and so
1:42:33
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 an interview of that sort is always likely to be on on an artificial basis and somewhat embarrassing so I
1:42:48
discussed with him a technical point on which I was then genuinely puzzled the next day he came in with a with a neat solution and I hired him at once here's another idea this is from Nolan Bushnell Nolan Bushnell is the founder of Atari founder of Chuck-E-Cheese and Steve Jobs
1:43:03
Mentor he hired Steve Jobs when Steve Jobs was like 19 at Atari he would ask people their reading habits in interviews this is why uh one of the best ways his whole thing was he wanted to build a all of his companies laid on a foundation of creative people so
1:43:19
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 never met a creative person in my life that didn't respond with enthusiasm to a question about reading habits actually
1:43:30
which 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 say books on bird watching a blatant but often accurate generalization people who are curious
1:43:43
and passionate read people who are apathetic and indiff don't I remember 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
1:43:59
are apathetic and indifferent don't I remember one particular woman who during an interview told me that she had read every book that I had read so I started mentioning books I hadn't read and she had read those too I didn't know how
1:44:10
someone in her late 20s found 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 this is why this is why I'm reading this whole section to you a
1:44:23
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 we start with Steve Jobs saying this is the most important thing that
1:44:38
you your rle as the leader the company the founders do right and you are and 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 organize my
1:44:51
thoughts and notes because there's no way way I would have remembered all this without being being able to search my readwise right but you have Rockefeller saying this is what's important to me you have Bush saying this is how I hire
1:45:01
now you have Nolan Bush now saying well here's another weird thing that I learned um let me go through 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 teal this just pops up over and over
1:45:16
again 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
1:45:29
the first time I see I saw an entire team entire company of eight players but they had 400 player they had 400 team members he's like at the time Apple had 3,000 it's like it's impossible to have 3,000 a players so there is some number
1:45:44
that your company May grow to where it's just you're just not you're not going to have thousands of a players in my argument I don't even know if you get have 400 I guess you I mean I'll take Steve's word for it on there and Pixar definitely produce great products but
1:45:55
it's probably a lot lower than that as well so Warren Buffett would tell you to use David ol's hiring philosophy and so Warren said Charlie and I know that the right players will make almost any team manager look good again that is why it's the most important function of the
1:46:10
founder maybe directly next to the product or right above the product actually because those are people building your product we subscribe to the philosophy of ogy and M's founding genius David Oggy this is what ogy said if each of us hires people who are small
1:46:22
smaller than we are we should become a company of dwarfs but if each of us hires people who are bigger than we are we shall become a company of giants David or Jeff Bezos rather used A variation of AG's idea too Jeff used to say in Amazon every time we hire someone
1:46:38
he or she should raise the bar for the next higher 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
1:46:55
get in that's a very interesting idea take your time with recruiting take your time with hiring there's this great book on the history of PayPal it's written by actually I've recently become friends with the author his name is Jimmy Sony um and this is in his book The the most
1:47:11
fascinating thing that I found was that PayPal prioritized speed so from the time they they're founded to the time they sell to eBay it's like four years Jimmy spent more time researching the book than for he spent six years researching the
1:47:24
book I always tease him because like you took longer on a book than they took to start and sell their company it just speaks to like the quality he's trying to do but that as a byproduct of that like obviously they move fast but they
1:47:35
prioritize speed over everything else except in one area recruiting Max lechin kept a 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 hire C's so the first B you hire takes the whole company down
1:47:52
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
1:48:07
member of the team now the next one is the most bizarre it makes sense if you study I did this three-part on Larry Ellison three-part series on Larry Ellison I should read those books again because the podcast is like 50 times bigger than than when I uh publish those
1:48:22
episodes and he's just he's just crazy so he would hire based on the confidence the self-confidence level of the candidate listen to this I have tears in my eyes I don't know why I'm laughing okay this just so because this is you read about Larry Ellison and
1:48:41
he's one of these people it's like really easy to interface with because you just you just know exactly who he is and what's important to him that's why I think it's so funny Ellison insisted that his recruiters hire only the finest and cockiest new college graduates when
1:48:56
they were recruiting from universities they'd ask people are you the smartest person you know and if they said yes they would hire them if they said no they would say who is and they would go hire that guy instead I don't know if you got the smartest people that way but
1:49:09
you definitely got the most arrogant Ellison and this is why the personality of the founder is largely the culture of the company Apple is Steve Jobs Apple's just Steve Jobs with 10,000 lives right I was just texting a a Founder friend of
1:49:21
mine uh he listen to the podcast I actually met him through the podcast and he's going through this like uh process of self-discovery like he's already started a bunch of companies are really successful but he's like I think I'm more of this type of founder than the
1:49:33
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 and you can't get to your life's mission unless you you figured out who you are Ellison knew who he was Ellison's swaggering
1:49:45
combative style became a part of the company's identity this arrogant culture had a lot to do with oracle's success here's another odd idea for you Izzy sharp the founder of Four Seasons actually could figure it out that in his business which was hotels right that
1:49:59
hiring could hiring the right person could actually be a form of distribution for his hotel he gave me the idea because of what what do we know what do you and I know in our bones that History's Greatest Founders All read biographies they all read biographies of
1:50:13
people that came before them and took ideas from them Izzy sharp is trying to build Four Seasons what do you think he did he picked up a biography of Cesar Ritz the guy that Ritz Carlton's name after the great arguably the greatest Hotel year of all time and when he
1:50:26
realized oh Ritz he 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 escoffier what Caesar Ritz
1:50:41
was to hotel to building hotels August escaf was to French cooking and so what happened is you partner with world famous chefs people come into your restaurant that's in the hotel because the world famous chef and now they know about your hotel that leads to more G
1:50:54
that me 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 that more people staying at the hotel so hiring as a form of distribution this is fascinating that is a fascinating idea
1:51:08
okay here's a problem you can identify great people right maybe they even want to come work like you've identified them you've sold them hey this is what this is our mission this is what we're we're doing and yet humans have complicated
1:51:22
lives they have spouses they have kids they have a reason maybe they can't move across the country to work for you even though they want to so there's a problem solving element that you see in these books on you have to solve like you've already identified the person you've
1:51:38
recruited them they can't go for some other reason okay well the great Founders are not going to take no for an answer I read in um in this book called liftoff which is about the first six years of SpaceX this is what Elon must did they had an anticipated his friends
1:51:52
issue having convinced musk 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 she would need one in Los Angeles right CU that's where SpaceX is at the time there these were
1:52:05
solvable problems and elon's better at solving problems than almost anyone else mus therefore came into his job interview prepared about halfway through mus told the guy that he wants to hire so I heard you don't want to move to LA and one of the reasons is that your wife
1:52:19
works for Google well I just talked to Larry and they're going to transfer your wife down down to La so what are you going to do now to solve this problem musk had called his friend Larry Page the co-founder of Google the engineer sat and stunned silence for a moment but
1:52:31
then he replied given all that he would come to work at SpaceX that's really smart there is another idea when you're promoting are you going to promote from within or from without you know that's dependent on you depending on what's going on I do think this is interesting
1:52:47
though there's this guy named Les Schwab who built this this really uh valuable chain of uh like tire companies in the Pacific Northwest I actually found out about him because Charlie Monger is like hey you should read this biography he
1:52:59
said it in um he didn't say it to me personally he said it to uh in like one of the Burkshire meetings that to study lesw had one of the most uh one of the smartest uh Financial incentive structures of any company that that Charlie Monger had come across so this
1:53:14
is what Les Schwab did he did not want to hire from he didn't want to hire other people from other companies because they might come with bad habits he liked to train his own Executives and so he says in our 34 years of business we have never hired a manager from the
1:53:26
outside every single one of our more than 250 managers and assistant managers started at the bottom changing tires they have all earned their management job by working up and then another thing if you're going to hire the best of the
1:53:39
best in a players they a players don't like to be micromanaged um and so this came in Larry Miller's autobiography called driven he owns like he owned like 93 companies all throughout Utah car dealerships movie theaters all kinds of crazy stuff but he also owned the the
1:53:54
the NBA team Utah Jazz and what was fascinating is he's trying to recruit Jerry Sloan as the coach at the 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 in business
1:54:07
right that's what you're hiring me for one of the best things we had ever done was hire Jerry Sloan as coach at the time he said I'm only going to ask you for one thing if I get fired let me get fired for my own decisions if you hire me let me run the team SL business
1:54:21
here's another aide from Thomas Edison that I think is fascinating really I the way I think about a Founder is like you're developing skills that you can't hire for you you're going to hire for everything else but you shouldn't be hirable and Edison wasn't Edison
1:54:38
expressing his views on the preeminent role of Applied scientists which that's what he considered himself coined the expression I can hire mathematicians but they can't hire me and so when I read that paragraph for the first time the note I left myself was develop skills
1:54:51
that you can't hire hire for capitalism rewards things that are both rare and valuable uh Estee Lauder would give you advice that you need to hire people align with your thinking and values hire the best people this is vital hire people who think as you do and treat
1:55:04
them well in our business they are top a top priority so this idea is like that seems kind of weird like hire people who think like you there's obviously not one right way to build a business I think that your business should be an expression of your personality and who
1:55:18
you are who are as a person at the core and so I think there is an art to the building of your business and the reason I use the word art I don't mean in like a hoyy toyy you know pretentious manner that's not me at all I don't even care
1:55:32
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 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
1:55:48
goes against who you are as a person or you just don't like it or it's just not as elegant are beautiful and so therefore you don't do it so that's what I mean about you know higher people who think as you you do and what for whatever reason when I read saay La say
1:56:00
that I was like okay that there's like this art to what she's doing one thing that's going to be help recruiting uh this comes from Peter teal I think this is the book 0o to one understand that most companies don't even differentiate
1:56:12
their pitches to potential recruits and hiring so therefore like they're just going to by as a byproduct of that you're going to wind up with a lower overall Talent base and so he says what's wrong with value stock smart people are pressing problems nothing but
1:56:25
every company makes this these claims so they won't help you stand out General and undifferentiated pitches to join your company don't say anything about why a recruit should join your company instead of money instead of many others so that idea of like your pitch your
1:56:40
actual he would tell you you're you shouldn't be building undifferentiated commodity business but 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 s sale you're trying to make to
1:56:53
potential recruit should be differentiated should not if that person's applying to five other jobs there should not be like it's like they may not like your mission they may not like your pitch but they shouldn't be able to compare it to anything else uh
1:57:03
another quote from Nolan Bushnell hire for passion and intensity that's what he would do or that's what he did when he found Steve Jobs if there was a single characteristic that separates Steve Jobs from the mass of employees it was his passionate enthusiasm Steve had one full
1:57:18
one speed full blast this was the primary reason we hired him and one thing all these Founders have in common is that they know how important hiring is and when something's important you do it yourself this is again Elon Musk on hiring he interviewed the first 3,000
1:57:33
employees at SpaceX that's how important it was one of musk's most valuable skills was his ability to determine whether someone would fit his mold his people had to be brilliant they had to be hardworking and there could be No Nonsense there are a ton of phonies out
1:57:45
there and not many who are the real deal must said of his approach to interviewing Engineers I can usually tell within 15 minutes and I can sure I can for sure tell within a few days of working with them musk made hiring a priority he personally met with every
1:57:57
single person the company hired through the first 3,000 employees it required late nights and weekends but he felt it was important to get the right people for his company and then the close on this we started with Steve Jobs telling us why it was so important and why it
1:58:11
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 what he says it's not just recruiting after recruiting it's building an environment that makes people feel they are surrounded by
1:58:23
equally talented people and their work is bigger than they are the feeling that their work will have a tremendous influence and is part of a strong Clear Vision so that is the end to that 20 minute mini episode I just relisten to the whole thing and it it really does I
1:58:40
think it's a perfect explanation and illustration of why I think Founders notes is so valuable because that some of those books I haven't read in five six years and just the ability to have a searchable datab B of all this these ideas like this collected knowledge of
1:58:56
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 gives me a massive superpower
1:59:06
I couldn't have make the podcast without it I also think if you have access to it it will 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.com