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as it turned out the main character of this story had a structure to his life he might not care to acknowledge it but it was there all the same it was the structure of an old-fashioned adventure story his mere presence on a scene
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inspired the question that propels every adventure story forward what will happen next I had no idea and neither did he why Jim Clark was so worthy of study was another matter for now I'll just say that the quirks in the man's character
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sent the most fantastic ripples through the world around him often starting with the best intentions or no intentions at all he turned people's lives upside down and subjected them to the most vicious force a human being can be subjected to
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change oddly enough he was forever claiming that what he really wanted to do was put up his feet and relax he could not do this for more than a minute once he put up his feet his mind would Spin and his face would turn red and he would be disturbed all over again he
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thought of something or someone in the world that needed to be changed for all I knew Clark would be remembered chiefly as the guy who created Netscape and triggered the internet boom which in turn triggered one of the most astonishing grab fests in the history of
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capitalism maybe somewhere in a footnote it would be mentioned that he came from nothing grew up poor dropped out of high school and made himself3 or4 billion that is an excerpt from the book that I reread and the one I'm going to
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talk to you about today which is the new new thing a Silicon Valley story and is written by Michael Lewis I first read the book for episode 23 which came out 4 and a half years ago and the reason I wanted to revisit this
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book is one it's a fantastic book Michael Lewis is an amazing writer but Jim Clark is also a very unusual character compared to the other people that you and I study he is the first person in history to found three separate billion doll technology
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companies and so I actually want to start at the end of the book which is an overview of Jim Clark's early life and I think knowing this upfront will make it easier for you to understand who Jim Clark was and why he made the decisions
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he made and so it says on the rare occasions Clark visits plan View Texas he lands at the airfield on the outskirts of town has lunch with his mother and then flies off to someplace else as quickly as he can he seldom drives into town and never visits home
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he has never seen the house his mother bought with the stock options that he gave her and so the author Michael Lewis is driving into plan View Texas and he's interviewing Jim's mom Hazel and his sister Sue so his mom said that most of
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what she knows about her son's luscious career she knew from having read it in magazines she has difficulty squaring the boy she raised with the man she read about remember it started the podcast with hey he dropped out of high school
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and he winds up making himself three or4 billion dollar so says she has difficulty squaring the boy she raised with the man she read about she has no Advanced Theory to why Clark became who he became in the middle of this
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conversation they're having the phone rings and his sister picks up and she goes no we're not investing right now no no I said we're not investing and then she hangs up the phone and Michael's like what's going on and she returns and
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she says she explained that the shares in Netscape that Clark had given them meaning the family the his sister and his his mom right had made them rich and I'm going to pause right there because I want to you the note I left myself before I read the rest of this
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paragraph to you I go it is worth remembering that your drive that fire in the belly that you have benefits other people as well so why would I say that at this point because she just said hey we get a bunch of calls now people know
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that we're rich because of the stock options that Clark gave us right and she said you have to understand she said that when this happened meaning that when we got the stock options we were poor I was ready to cook the cat I assumed this is now Michael speaking I
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assumed this was a joke and I laughed I assumed wrong she had in fact been ready to cook the cat the Netscape IPO had saved at least one life so then Jim's mom is telling Michael her life story I'm just going to pull out a couple
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parts and it has to do with the fact that Jim's dad was a giant piece of [ __ ] who beat up his mom and so it says the most in of the story concerned Clark's father who apparently drank all day and beat Hazel up all night Hazel put up
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with the routine for years until she finally divorced him she divorced uh him when Jim was 14 so you think okay this guy's horrible he's a drunk he's a loser he's beating up on this woman at least that you know he she divorced him she
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got away from him no the guy would hang out and follow her around and then he would sabotage her car and this happened multiple times and think about this crazy story I'm about to tell you he's putting his b he's got a baby daughter
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in the car that he's sabotaging he's putting her life at risk so he had open he had put in steel shavings into a transmission so the man at the auto shop helped her clean them out thinking they'd fix the problem Hazel set out with her baby daughter Sue to visit
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friends on the road the car broke down he had put sand in the oil fixing this cost Hazel's two month two months of pay she's not making a lot of money and then Jim does something about this that night she told her son what had happened Clark had just turned
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16 Jim got up and left the house his mother said and went to find his father when he came back he was crying I never knew what happened his mom said but I tell you what his sister said after that my father never bothered my mother
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again these are the parts of the story where I get induced into a state of Rage if you're an adult and you want to destroy your life because you want to be be an alcoholic then go do it don't mess with kids I hate that people do this okay so
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now we get into the next part this is really an illustration of just how dire their circumstances were and that just that's like the behavior of his father makes it even worse so Michael brings up to his mom he's like when I visited uh
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Jim's house in in California like he's not a nostalgic guy but he had like a tuba why is this tuba here and so he says I turned uh to Hazel and and I mentioned that she also remembered the tuba uh the instrument was propped up in
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the corner of Clark's guest bedroom and had struck me as odd it was the only artifact of his past that he thought was worthy of display and it says the tube had come a surprised to Hazel as well one day Jim came home from school with
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it she said so why did he select a tuba right Hazel supported a family of four on $225 a month that she took home from the hospital where she worked as a doctor's assistant after she had had paid the bills she had $5 a month to spend on
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groceries Clark was obviously well aware of their situation from an early age and this part kills me but you really he's you understand his insane amount of drive he has a part where I'm going to get to it's probably the most powerful paragraph in the book he's 38
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years old he is drinking he feels he he's a self-described loser he's a college professor so I don't think many people on the outside would describe him as a loser but he just snaps and he just has this maniacal drive to accomplish something
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it's I'll get to it it's one of the my favorite parts of any book that I've ever read but you go back and you think about it it's like you have $5 a month to spend on groceries you're embarrassed by your family's poverty due to complete
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bad luck your father you're the son your father's a loser and it says he had chosen to play the tuba because the tuba was the one instrument supplied to the pupil by the school free of charge if you wanted to play a flute a trumpet a
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trombone you had to buy your own instrument he had to play the tuba cuz that's the only one that was free not long after he'd come home in tears from what he turned from what turned out to be the final meeting with his father right that happened when he's
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16 Clark quit playing the tuba soon after he was expelled from school and left town he would turn up every now and again and one time not long after he' left he came home talking about nothing but computers no one in plain view had
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even seen a computer except in the movies said his mom another time he came home with financial ambition when Jim came home from the Navy his mom said he told his uncle that someday he was going to make $50,000 a year his sister hooted
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and clapped he's done a bit better than that his mother continued I remember him telling me when he came back from the Navy mama I'm going to show plane view and this is just one of the things that makes this this story so fascinating so
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how do you go from high school dropout being expelled from school which I'm going to get into right now to being the first person in history to found three separate billion dollar companies so I'm going to go to this conversation that
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Michael Lewis and Jim Clark are having at his house about his early life and so it says there was a clipping from a local newspaper in plan View Texas where Clark had grown up the paper wanted to let the Town people know that one of
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their own had gone to California and created a big company called silicon Graphics it was a local boy makes good story and made light of Clark's Boyhood failure it mentioned that he had been expelled from the local public high school the offense that got Clark tossed
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out of school was for telling the English teacher to go to hell before that he had exploded a small bomb on a school bus smuggled a skunk inside a horn case into the school dance and set off a string of firecrackers inside another student's Locker
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so Michael's trying to piece all this together he pull something out of the box that he's going through he says the next clue was a photograph of clerk in 1970 having just received his master's degree in physics on his way to a PhD
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program and this is just a Fant this is just a great writing and it really makes this story really really curious right in under eight years this person who was considered unfit to graduate from public high school in plan View Texas had
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earned himself a PhD in computer science so how does this happen the story was more remarkable than that his father abandoned the family his mother should have taken welfare but it never occurred to her when I asked him about the
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article in the plain view paper all he said was I grew up in black and white I thought the whole world was [ __ ] and I was sitting in the middle of it so once he gets kicked out of school his only option he's like okay I'll just go to
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the Navy uh at the age of 17 Clark asked his mother to sign a piece of paper that permitted him to join the Navy and this is a hilarious story of the first time Jim Clark ever heard of a computer when he gets into the Navy he's going through like the all these tests
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they make you take and it says he had never seen a multiple choice test before and he didn't know how to take one to most of the questions several different answers struck him at least partially correct instead of picking the one that
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seemed the most correct he just circled them all the Navy assumed that he knew that circling more than one answer fooled the computer that graded the test thus this is this is a an example of why Michael Lewis is such a great writer
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thus the first time Jim Clark had ever heard of computers when was when he was accused of trying to fool one into thinking he was smarter than he was so then he has to take a math test and this is where he realizes oh I'm actually
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gifted in math I didn't even know that he took his first math test and scored the highest grade in the class he was unaware that he had any particular aptitude for Math and didn't quite believe the result neither did anyone
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else the Navy gave him another test same result and what the instructor does here changes his life the instructor told him that it had been a long time since he'd seen someone so naturally gifted in mathema atics he suggested that Clark
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enroll in night classes at tlane University with a view of getting a college degree after he finished his Tour of Duty within eight years Clark had his college degree plus a master's in physics plus a PhD in computer science and this is the first time they
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mentioned what I feel is a main theme if you read the book and I highly recommend you do because not only is Jim Clark an interesting character but it is a a period piece of what was it like to be in Silicon Valley in the late 90s and
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early 2000s and the the main theme is success as a form of Revenge he learned that his desire for Revenge could lead to success he was propelled in the classroom by his anger about the humiliation that he had suffered thus success for him became a
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form of Revenge so he's accomplished a ton in 8 years but he's still a turbulent personality when I think of Jim Clark I think of what the founder of Patagonia said Evan chanard says if you want to understand that the entrepreneur
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study the juvenile delinquent the delinquent is saying with his AC this sucks I'm going to do my own thing Jim had a turbulent early career between 1970 and 1978 he had been married at least twice uh moved back and forth across the country at least three times
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and held at least four different jobs he was fired for insubordination at which point a wife and not his first left him he tried to explain this extraordinary leap in his career from 38-year-old unsuccessful college professor to
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founder of a multi-billion dollar Corporation and this is the most powerful paragraph in the entire book one day I was sitting at home and I remember having the conscious thought you can dig this hole as deep as you want to dig it I remember
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thinking my God I'm going to spend the rest of my life in this [ __ ] hole you reach these points in life where you say [ __ ] I've reached some sort of dead end here and you descend into chaos all those years you thought you were
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achieving something and you achieved nothing I was 38 years old I had just been fired my second wife had just left me I had somehow [ __ ] up I developed this maniacal passion for wanting to achieve something the result of this self-imposed psychology surprised even
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Clark he insists that the transformation occurred overnight and that he cannot really explain it okay so let's go into Jim's philosophy it's this is going to remind you I just did this two-part series on Van Bush if you haven't listen to those episodes
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they're extremely important to listen to Jim's um I don't know if they're the exact same but Jim's whole thing or Van's whole thing is like hey Engineers are the engine of capitalism and they should be rewarded as such Jim would
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agree with that statement we're going to get into this idea it's like a variation of this thing called new new growth Theory but the way Michael tells the story is absolutely fantastic he says I couldn't have been more than a few hours
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after the last guest stumbled out of his front gate that Clark called me and made this suggestion I'm going up in the helicopter he said do you want to come his voice was deep and thick and unsteady apparently he hadn't slept it
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was just before 8: in the morning on the 5th of July he had spent the last 3 hours writing code and the 7 hours before that drinking with 70 of his favorite Engineers who worked for the companies he created and then more or less abandoned and then before they get
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into this discussion on New Growth Theory they go into just what a crazy economic time this was and here's an example of that he says he didn't need to show how much money he had the number was in the newspaper every day it was
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public knowledge that Jim Clark owned 16 million shares in Netscape and that Netscape at this at the time they meeting on July 5th 1998 was trading at $25 a share that was $400 million and that was 650 million less than Clark had
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been worth two years ago and for that matter $3 billion less than he would be worth 9 months from now the number was always changing so think about 400 million on this specific day 2 years earlier it had been a billion 9 months
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from where we are in the story he's going to be worth $3 billion so then they start talking about this book that came out in 1929 uh written by this guy named Vin is his last name it's called the engineers in the price system and this is what I
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mean about why I think Jim Clark and Bush and vanie Bush have similar thoughts like similar philosophies on this uh so it says back in 1929 or 1921 this author had predicted that Engineers would one day rule the US economy he argued that since the economy was
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premised on technology and the engineers were the only ones who actually understood how the technology worked that they would inevitably use their Superior knowledge to seize power from the financers and the captains of industry Jim was particularly keen on
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the idea of the engineer grabbing power from the finance year that is happening right now he said right here in the valley the power is Shifting to the engine Engineers who create the companies Clark thought that was as it
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should be Engineers are the ones that created the wealth that's a theory from the 1920s they're discussing then they're talking about this Theory uh that came about from an e an economist in the 1980s this is New Growth New Growth Theory new growth Theory argued
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that wealth came from the human imagination wealth was having entirely new things growth is just another word for change the metaphor that RoR this is the guy that made that wrote New Growth Theory the metaphor that RoR used was
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that of a well stock kitchen waiting for a brilliant Chef to exploit it so I'm going to read this entire paragraph to you just keep in mind I'll tell you what Lewis is doing here he's essentially saying hey the chefs that create wealth
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Jim Clark is one of those okay so it says the metaphor the rumor used was that of a well stock kitchen waiting for a brilliant Chef to exploit it everyone in the kitchen starts with more or less the same ingredients but not everyone
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produces good food and only a few a very few people who wander into the kitchen find entirely new ways to combine old old ingredients into delightfully tasty new recipes these people were the wealth creators their recipes were wealth electricity the transistor the
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microprocessor the personal computer the internet it followed from the theory the reason I'm reading this to you I know this a little a little bit long is because this is he's telling us how Jim thinks about these things I think that's
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really important it followed from the theory that any society that wanted to become richer would encourage the traits however bizarre that led people to create new recipes piece a certain tolerance for non-conformism is really
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critical to the process the prime mover of wealth was the geek holed up in his basement all weekend discovering new things to do with his computer he was Jim Clark and then it goes into a little bit about the history of Silicon Valley
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which is really interesting I've done you know dozens of podcasts on that but what was fascinating is how the point that the author is making here is that Jim is one of the very few people that that jump from part one of silicon valy
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history into part two and so it says unlike just about everyone else's age 54 at the time uh this book has being written Clark had made the leap from part one to part two of the Silicon Valley Story part one had been about engineers building machines cheaper
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faster and better part two of the Silicon Valley story was when the engineers had figured out that they didn't need to build new computers to get rich they just had to cook up new things for the computers to do so silicon Graphics made actual physical
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Hardware their first product was 3D graphic computer workstations Jim's new company the the one he's working on at this point in the story his uh co-founder is actually Mark andreon is software it's Netscape and so that's the
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point that Michael Lewis is making here it's like hey uh part two it's the engineers figured out that he didn't need to build new computers to get rich they just had to cook up new things for the computers to do the notion of what this is this is so important because it was true back then it's even more true today and I double underline this one sentence the notion of what constituted useful work had brought one of my favorite lines I think about
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over and over again it comes from the almanac of Nal ravaan that book that I covered back on episode 191 and nval says the internet has massively broadened the possible space of careers and most people haven't figured this out
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yet that is a book that came out and a statement that was said you know in the last few years this book that I'm holding my hand is over 20 years old it says the notion of what constituted useful work had brought in all across Silicon Valley you found Office
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Buildings Cran with young techno Geeks cooking up recipes that they hope would turn the economy on its ear the role model for this activity was Jim Clark and then the book goes into how Jim actually approaches his work and his
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life and so it made me think of this fantastic quote that says a master in The Art of Living draws no sharp distinction between his work and his play his labor and his leisure his mind and his body his education and his Recreation he hardly knows which is
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which he simply pursues his vision of Excellence through whatever he's doing and leaves others to determine whether he is working or playing to himself he always appears to be doing both as a fantastic quote and it says he left
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himself open to accident if nothing surprising or interesting was happening to him he moved on until the situation corrected itself this was as true for his work as his leisure indeed it was hard to say whether the where the work stopped and the Leisure began they
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formed a seamless disturbing pattern of motion and change impatience might be a social Vice but to Clark It was a commercial virtue that's fantastic writing a again impatience might be a social Vice but to Clark It was a commercial virtue why he said if
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everyone was patient there'd be no new companies and they describe this process in which Clark gets his ideas multiple times throughout the book as groping Clark never used the words and phrases that we have come to expect from the
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technology types who pretend to see the future that sort of grand talk struck him as perfect [ __ ] in all the time I spent with him I never once heard him refer to his ability to see the future he couldn't see it and that's why he had
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to grope for it he would be seized by some overwhelming enthusiasm and he would be off and running down some long dark tunnel leading God knew where with him enthusiasm was a physical event so I want to skip ahead to this idea where he
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snaps 30 years old he's like I got to accomplish something we already know he's very gifted with computer is very gifted at math there's a line in the book I don't know if it's true or not but they said Jim invented 3D he
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definitely invented this thing called a geometry engine and what this did it allowed computers to process three-dimensional graphics he said this was just obvious because he says Jim's logic was that the world was three-dimension threedimensional and so
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the computer world would have to be two so uh Clark's bid for power and money began at silicon Graphics the company he founded with several of his Stanford Graduate students and at the very beginning no one thought it was valuable
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a lot of people who should have seen the importance of Clark's geometry engine thought it was a useless to toy so they go and try to sell it to people to like large corporations to people that are designing cars or airplanes and it was
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funny that I'm skipping over a bunch of that part part I just want to point point out who were the first people to get it I've done podcasts on both of these people George Lucas Founders number 35 and Steven Spielberg Founders
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number 209 the Hollywood people were shrewder about the possibilities and it wasn't long before Steven Spielberg and George Lucas were banging on Clark's door and asking to be his first customers the Silicon graphics workstation made it possible made
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possible a lot of new special effects and so everything that's happening is happening before the conversation that Michael Lewis and Jim Clark are having about hey Engineers are creating the wealth they should be the ones that make
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all the money and the reason for that is silicon Graphics a lot of people saying I'm about to read this paragraph that hey they had a large collection of talent they also had the smallest number of millionaires created from a public company because all the money went to
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the finance SE and that's why that's a main theme of the book Jim like is constantly trying to find ways to eliminate anybody that's not doing the actual work before long Jim Clark's new company exerted a gravitational force on
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the technical mind when you ask people who dealt with silicon Graphics or who work for silicon Graphics or who brought who are purchase machines from Silicon Graphics or who simply observe silicon Graphics from afar they all say the same
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thing about it it was the smartest groups of group of Engineers I've ever seen in one place and so then it goes into how he saw these the fact that he was giving up Equity that he was creating the fewest millionaires that he saw these as all problems that he would
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fix with future companies and so this is everything I'm reading to uh this is spread out over multiple Pages this is the main theme of the book the fact that Clark thought there was this deep Injustice and that Engineers should be
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the ones that get rich so it says Clark had invented the technology bet his career on it and he had been right he had attracted the most talented engineers and they in turn created the most talented computers but as a group Clark began to complain they had
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precious little to show for it the Lion Share of the equity and the power had been taken by others financiers and managers who owned huge chunks of silicon Graphics it did not take long for Clark to become deeply irritated by
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the rules of American capitalism in his opinion the game was rigged so that the people who really mattered got the shaft he believed in his bones that the people who mattered were the brilliant Engineers the chefs who cooked up the new
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recipes and so before this Clark had no experience starting a company and he felt one of the Venture capitalists took advantage of his inexperience he wind up selling 40% of silicon graphics for $800,000 to this guy named Glenn Mueller so Mueller was running this thing called
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the Mayfield fund they wind up it says the Mayfield fund wind up ended up making $400 million on its investment in Silicon graphics and so it says Clark had trusted him meaning Mueller he would never do that again with venture
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capitalist and he never forgave Mueller for exploiting his ignorance there there is a crazy story that happens later in the book where Clark and Mueller on the phone Mueller wants to invest in Clark's new company Clark obviously tells him to
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go to hell and Mueller shoots himself in the head so the book goes into all kinds of detail about the conflict within this organization uh Jim is a misfit a troublemaker he is not they call him the disorganization man meaning he's not
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going to act like business like what people at the time thought businessmen should act like so there's this huge fight between Clark and the rest of the board they're like we're going to bring in a professional CEO they bring in this guy named McCracken and I'll get into
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the environment that McCracken creates in which Jim cannot and will not participate in so he winds up just leaving the company and his solution every time or almost every time is all right the solution is we need to start
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another company but before I get there I just want to point out what was the company like before professional quotequote quote unquote professional management came in and it's this quote that came that I read read one time about Steve Jobs and it says he remade
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or he made and remade Apple in his own image apple is Steve Jobs with 10,000 lives this is something that appears over and over again the leader the founder of the company the leader of the company they embibe they put into the
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company the personality uh it says uh one way of viewing silicon Graphics in the mid1 1980s is if an extraordinary willful human being with great technical aptitude is permitted to create a large business organization how will that
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organization behave by 1984 everyone understood that it would behave like Jim Clark which is to say that it would behave as no big successful American company had ever behaved it would be a loose collection of argumentative
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brilliant bullheaded Engineers who might or might not make money but almost certainly would build something wonderful I want to read that part one more time because I think this is very interesting it's a collection of loose argum argument sensitive brilliant
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bullheaded Engineers who might or might not make money but most certainly would build something wonderful and so from the board of directors the people that own accting the company you can see their perspective they're like hey we
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got great technology we're not making any money we're going to keep the great technology we don't necessarily have to improve the Great technology we're going to put this put this layer of people that actually know how to run a business
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and the result is they wind up making a lot of money for a short amount of time until there's they get disrupted but the point of this is like you see both sides if you're the founder you're not going to want to work in this environment you
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made a drastic mistake uh in the sense that you gave up way too much equity and you gave up way too much control and then you're surprised the people with the money and the equity and the control get to tell you what to do this is why
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you and I I feel talk about this a lot where I really do believe that a lot of people think entrepreneurs are in it for the money and I think if you ask them the control the independence and the control is worth a lot more than the money and the kind of yui ego that are
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associated with Founders and entrepreneurs they're probably think hey if I have Independence on the control I'll get the money anyways uh so it says McCracken brought in layer upon layer of people more like him uh indirect managerial
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diplomatic polit politically minded these people could never build the machines of the future but they could sell the machines of the present that is a great line so Jim and his crew they're building the machines of the Future these quote unquote professional managers can sell the machines of the present and they did this very well for the next six year silicon Graphics was perhaps the most successful company in Silicon Valley the annual revenue
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swelled from a few million to billions at the same time McCracken dealt Clark out of his own business and so this is when Jim is looking for something new he realizes hey we have these expensive workstations they are fantastic but
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there's this parallel Revolution happening in personal Computing and I think the important Point here is not to give you like history of silicon Graphics but the I what's behind Jim's idea because that could be applicable and useful today and so he knew he's
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like they he he might not be calling it in the innovator's Dilemma but he knew that it happens and so he has the idea and the willingness to avoid the innovators dilemma and so it says Moore's law came with a social coraly
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high tech could not remain high tech for long right now they are high-tech that's why and they're making the transition right to the personal Computing Revolution you might be the smartest engineer in the valley and you might have built the most sophisticated
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computer but it was only a matter of time before some schlep with a PC wrote a program that let him do everything you could do at a fraction of the cost and so then he gets into this idea of like how do we avoid being disrupted Clark
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thought that silicon silicon Graphics had to cannibalize itself for a technology company to succeed he argued it needed always to be looking to destroy itself if it didn't somebody else would it is the hardest thing to do in business Jim would say even creating
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a lowcost product runs against the grain because lowcost products undercut the high cost most profitable products everyone in a this is he's just describing human nature right this is why this this occurs over and over again or part of one of the reasons it occurs
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over and over again everyone in a successful company from the CEO on down has a stake in whatever the company is currently selling he's describing what's taking place in his career right it does not naturally occur to anyone to find a
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way to undermine that product Clark thought he knew how to become the agent of his own creative destruction and he was prepared to do the deed he wanted silicon Graphics to operate in the same self-c corrosive spirit and you can
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imagine what happens if you try to go and you look at it from McCracken the guy running the company right it's like I'm not going to listen to gym like you guys had made this great invention but you weren't making any money I come in
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here I take you from Millions to billions and now you're telling me I have to undercut all these profits that I'm making because of these cheaper inexpensive computers so McCracken obviously doesn't agree Jim winds up just essentially like retiring on the
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job which I'm going to get to um right now but there is I don't think I have the Highlight but I remember reading it they go over the revenue so sure yeah he he jumps in brings it up but then it gets to a peak and then it just drops
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off just like Jim said it was going to so what I found interesting was that the fact that Jim wasn't happy with his company caused him to search for a distraction this happened in the life of Walt Disney in between the problems with
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his Animation studio and him finding a new outlet for uh his creative output which is winds up being Disneyland and his obsession with amusement parks he would stay at home and he and and he built like this giant train that he would actually get on and ride and it
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was in his backyard and people would come over and they're like this is the the world's greatest innovator in animation and I can't get him to come to the studio all he wants to play he's like all he wants to do is play with a
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train all day long Jim's doing the same thing with toy helicopters in the middle of a weekday when the neighbors were all at work Jim would take out his helicopter kit and fly soon enough Clark had become obsessed with his little
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Choppers he would put them together in the garage then take them out and fly them around the neighborhood his wife would come out of the garage and see this 47-year-old man bent over the ground piecing together a toy designed for a small boy he would stand out there
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for hours in the middle of the day in the middle of the week executing takeoffs and landings of these giant toy helicopters So eventually he makes his departure from silicone Graphics formal this is again I I just think there's
33:23
like a handful of themes throughout this entire book that are just you see it in different points of his life and it's this idea that he really does use Revenge as motivation which I think is he's not alone in by the way um but he's
33:35
okay my solution is I'm going to make myself very rich I'm going to get out of this company I'm going to start a new company I'm not going to make the same mistakes I did with the last company so says Jim Clark was gone he'd up and left
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the company he created and said he was going to start another publicly he said he was leaving on the best terms privately he told friends that he was going to show [ __ ] Ed McCracken that it was he and not McCracken who had been
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responsible for the success of silicon Graphics he told the engineers who had helped him create silicon Graphics that he was going to get rich I'm going to make $100 million he said if I do this next thing and I do not make $100 million it'll be a failure I will be a
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failure so as he's searching what to do he's introduced to a 22-year-old mark andreon and something that Mark tells Jim makes Jim realize okay this is the opportunity I was looking for uh Mark had mentioned again that 25 million people were Now using the internet and
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that their numbers had been doubling every year uh clar recalls I thought Jesus those are big numbers I've never been in a business with those kind of big numbers eventually you were talking about all the people on Earth all of the
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sudden it was clear to me when I looked at the internet I was looking at the personal computer in 1985 Clark says it was a slow clunky technology but people were using it and it would get faster I realized that this was the thing I had
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been groping there's that word again I had been groping for and so this is the beginning of Netscape this is also beginning of this crazy economic time in American history that again Jim's a fascinating character there's two
35:04
reasons to pick up this book to get to know Jim I think he's just going to change the way just he's got his own very unique way of doing life let's just put it that way and then also for this it is like a Time piece it's like what
35:16
was happening in this in this one sector of the economy at this point in American history and it's just fascinating and one of the fascinating things is that Netscape goes I think it's 18 months after it was created it becomes public I
35:31
need to get there first this is what I mentioned earlier how C the story is just so wild uh so it says throughout March 1994 Müller had called Clark repeatedly and pleaded with him to be led in on Netscape he apologized for the way he had treated Clark at silicon
35:43
Graphics uh obviously Clark is not going to let him do this on April 1st Clark told mu Mueller for the last time that he would not be permitted to invest in Netscape he pleaded with Clark one last time and Clark rebuffed him 3 days later
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later the day Netscape was incorporated Mueller picked up a gun and shot himself through the head and before the book goes into Netscape going uh public in record time this is just fantastic writing the genealogy chart of Silicon
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Valley companies that decorated the walls of every office was a cheery face on a violent truth the new companies often put the old ones out of business the young were forever eating the old in this drama technology played a very
36:25
clear role it was the the murder weapon now there's a famous quote from Don Valentine who's the founder of Sequoia and he says The Art of Storytelling is critically important most of the entrepreneurs who come to us cannot tell a story learning to tell a
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story is critically important because that's how the money works the money flows as a function of the stories I feel Jim was a fantastic Storyteller 6 months after he found a Netscape Clark agitated for the company to go public
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Jim was pressing for us to go public way before anyone else recalls Mark and Jason 18 months after Netscape was created Netscape sold shares of itself to the public uh those shares Rose from $12 a piece to on the first day of training
37:06
those shares Rose from $12 a piece to $48 3 months later it was $140 a share there was only one explanation for its success this is how I'm trying to tie all this together this is what Clark said people started drinking my Kool-Aid another way to think about that
37:21
is what Steve Jobs said the Storyteller is the most powerful person in the world this is the difference though this time Jim Clark had the power and he kept the power and you see that in who got rich off this IPO anyone who bothered to read
37:34
the prospectus discovered a curious fact the venture capitalist and the new CEO this guy named Jim barkdale own a few M million shares each in the end they made hundreds of millions of dollars from ncape uh and they had no reason to
37:45
complain but the young Engineers whom Clark had pulled together to create the company also became Rich Clark made certain that Mark and dreon did not suffer the same fate at the hands of the venture capitalist as he himself had 12
37:58
years before after the IPO andreon was 24 and worth $80 million Clark also made sure that by by that by far the biggest stake in the company belonged to himself Clark became the Valley's newest billionaire Jim Clark was 51 years old
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so I want to pause there because as I'm reading this it made me think I read Mark Mark andreon used to be a prolific blogger um you can go to his site for free if you just go to show notes on episode 50 you can download a 200 Page
38:30
blog Archive of Mark's great uh some of his best posts I did a podcast on that years ago I have no idea you can never predict like how people react to things I get messages every week about people discovering that podcast now and listening to it and seem to really like
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it it makes me think I should reread it and do another podcast on it but something that Mark said in that blog post was it was talking about like it's obviously positioning for Founders and he's like listen recruiting is one of
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the most important things you you have to do to ensure the your the success of your company but it's also one of the most difficult and he talks about even Jim Clark had a problem with this because once Netscape uh goes public there's other Engineers that that were
39:10
offered the job by Jim Clark but said no and they wind up taking they're in the book as well they wind up taking more risks later on after this happened because they're like hey we were The A Team we all said no Jim built this
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company with a B team we are making 880,000 a year these guys are making millions how did this happen and you know who knows who's A or B like these are just personal opinions but the point being uh why I'm telling this because you tie bit this back to just how
39:38
difficult it is to recruit truly great talent and so Mark is writing in his blog and he says as a founder of a startup trying to hire a team you'll run into this again and again when Jim Clark decided to start a new company in 1994 I
39:49
was one about I was one of about a dozen people at various Silicon Valley companies he was talking to about join joining him and what became Netscape I was the only one who went all the way to saying yes so think about that uh he's
40:03
talking to at least a dozen people he's recruiting I'm the only one one out of 12 11 people said no no no I'm not going to do this right so it says I was the only one who went all the way to saying yes largely because I was 22 and had no
40:16
reason not to do it the rest flinched and didn't do it and this was Jim Clark a legend in the industry who was coming off of the most successful company in Silicon Valley silicon Graphics Incorporated how easy do you think it's going to be for you so I'm skipping way
40:34
ahead if you buy the book and read the book uh I would say like maybe 30 40% of the book is this idea probably 30% of the book is this this transatlantic sailing Expedition that Michael Lewis and Jim Clark are on together main part
40:48
of the book is the fact that Jim did a lot some of the some of the stuff he did was to get public fast so he could buy this giant sailboat and then he wants to make it's like one of the world's largest sailboats but also he wanted to
41:00
make it like completely automated and computerized and so Michaels on this crazy trip across the Atlantic with them which is interesting but a lot of that's omitted because it's kind of outside the scope of the discussions that you and I
41:11
usually have right but I just want to point in or put in rather uh just this again it goes back to the same theme that there is really no distinction between work and play for for Jim Clark and then he figured okay what what's the
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role that I want to play and let let me make sure I Divi design my environment so I'm always playing that role to the Casual Observer uh no casual Observer could say when Clark was working when he was playing this was because to Clark's
41:33
way of thinking the big distinction wasn't between work and play but between creating new technology for money and creating new technology for pleasure in part it was because there was no distinction at all so he's going to
41:45
leave Netscape he's now he's going to go found his third billion dollar technology company but it's really about the role and making sure you're designing the job that you want what's the point of being an entrepreneur if you don't do that uh Having learned now
41:57
he's finished with Netscape Having learned from silicone Graphics that he did not really belong inside a large organization he designed all future large organizations without a place for himself inside of it he kept the title
42:09
of chairman and sat on the board and held on to most of his shares but really he didn't do much but attend a few meetings and Trouble the company's new chief executive with his various premonitions about what was going to happen next so after Netscape he has this idea
42:24
where he's going to work in he's going to re use the internet to revolutionize use the internet software I should say to revolutionize the healthcare industry he's going to start this company called healtheon I think at one point in the
42:35
public market it's crazy there's a story in the book where they try to take it to IPO no one wants to do it five months later it comes out at an insane number and I think goes all the way up to like 15 or 16 billion dollar in market cap
42:47
and had I think nothing but losses and that's another reason I think the book is interesting to read because you have all these economic data points that just seem seem unusual I guess is the way to put that this is one example of this
43:00
because because so many people Jim Clark being one of them just make an unbelievable amount of money in a rapid time this is an example of that uh before Netscape went public a lot of venture capitalists had thought that John door uh and his firm Kleiner
43:13
Perkins had been mad to agree to Clark's terms Clark had charged him three times the going rate for startup capital and in the end that didn't make a difference at all JN had cleared $500 million in8 18 months or 30 times his his original
43:30
investment so on this next company one of the co-founders I think he's a co-founder I'm pretty sure he's a co-founder of hethon this engineer named paven he makes or paven maybe he makes the point I'm just going to read what he
43:41
said because what's fascinating is if you read about Steve Jobs he says this at the beginning of his career the middle of his career and the end of the career and he talks about the fact that they're in the technology industry and I
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think there's a lot of other things like this I would argue maybe Literature Like authors are definitely like this movies I would argue that podcasts are the same thing but that for most things in life the range between this is Steve talking
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for the most things in life the range between the best in the average is 30% or so the best airplane flight the best meal they may be 30% better than your average one what I saw with wnc was somebody who was 50 times better than the average
44:16
engineer in fact yesterday let me pull it up I was rereading my uh highlights from that book in the company of giants uh that's Founders episode 208 if you haven't listened to it yet I highly recommend you listen to it after this
44:28
one and there's something in this book that I thought was interesting because that book is uh is published in 1997 it's two Stanford MBA students who are interviewing 16 technology company Founders uh Bill Gates Steve Jobs all these people on there and Steve says
44:43
something in that book that is very similar again to what uh the other quote I just read to you and what I'm about to read to you in this book and he says You must find Extraordinary People in in the field that I was interested in I noticed
44:54
that this is Steve talking I noticed that dynamic range between what an average person could accomplish and what the best person could accomplish was 50 or 100 to one given that you are well advised to go after the cream of the
45:05
cream that is what I that is what we have done you can uh you can then build a team that pursues A+ players and he says why why is this important one of the greatest quotes he ever said a small team of A+ players can run circles around a giant team of B and C players
45:22
and so Jim's co-founder says the same thing paven or maybe pen uh often said the difference between a great software guy and an okay software guy is huge a great software guy is worth 10 times an okay software guy software was not like
45:35
Hardware software was more like art and so this is what I was referencing earlier there you have this huge like there's a huge obviously bubble right before it pops there's some there's like a pause um that happens and so this is where they try they're like
45:51
hey we had we we took netgate from zero to 18 uh to public company 18 months that's try to do the same thing with hethon the market says no no no no chill out 5 months later it's a very successful IPO but in between those two
46:03
events Jim did something extraordinary where he's like okay the IPO is canceled the company needs $40 million to keep going and so he has this idea where you uh he has this metaphor of pigs and chickens which I'm going to describe to
46:16
you in a minute and so because at this point no one wants to put up the money he's like okay fine I'll take I'm going to get do the entire 40 million myself get out of the way way and then when he does that all of a sudden they're like
46:28
oh wait what does he know that we don't okay we're going to get in on it so he says the only thing I can do is start him his role in the valley was suddenly clear he was the author of the story he was the man with the nerve to invent the
46:38
Tale in which all the characters uh agreed to play the role assigned to them and if he was going to retain his privilege of telling stories he had to make sure that the stories had Happy Endings if that meant supplying $40 million more to Health on than so be it
46:52
Clark's willingness to take risks others shunned was the source of his financial power Clark's faith in his new Enterprise was actually faith in his own imagination as the new Enterprise was merely an extension of that imagination
47:06
the power of that Faith was transforming one moment the financiers were wondering allowed where their $40 million was going to come from the next moment they were trying to prevent Clark from supplying the full amount and acquiring
47:19
for himself an even larger stake in the company in the end the bankers and the venture capitalist agreed to let Clark give 20 of the $40 million and they supplied the rest and so what he did is he turned chickens into pigs and this is
47:34
what he said Clark this is one of my favorite things I remember this from four and a half years ago when I read the book The First Time Clark likeed to say that human beings when they took risks fell into one of two types pigs or chickens the difference between these
47:48
two kinds of people he'd say is the difference between the Pig and the chicken in the ham and eggs breakfast the chicken is interested the pig is committed the pig gave his life chicken just laid an egg right the chicken is
48:03
interested the pig is committed if you're going to do anything worth doing you need a lot of pigs just one more example of the crazy swings and wealth that was occurring at this time uh Clark reached for a cal calculator AOL American online had
48:19
agreed to uh acquire Netscape AOL had agreed to swap 045 of its own shares for each outstanding share of Netscape Clark owned 14.2 million shares of Netscape he punched 45 times 14.2 million into the calculator which means that he owned 6.3
48:37
million AOL shares he multiplied 6.3 Million by $174.00 $1.1 billion was the result they find this out the day they come back from that transatlantic uh ship Expedition they were doing in our 10 days at Sea the value of his Holdings had nearly tripled
48:58
and his response here was fantastic this is fantasy land he said putting his calculator away and just two paragraphs for you real quick again this idea that the internet has massively broaden the possible space of careers and most
49:11
people haven't figured this out yet and the fact that there's always New Opportunities the internet created many opportunities for people like Clark Outsiders troublemakers to think thoughts that would turn entire Industries on their heads
49:26
and this is the part about there always being New Opportunities once we admit that there is room for newness that there are vastly more conceivable possibilities than realized outcomes that's fantastic more possibilities than realized outcomes vastly more
49:39
conceivable possibilities than realized outcomes we must confront the fact that there is no special logic behind the world we inhabit no particular justification for why things are the way they are and I want to close on this I'm
49:54
going to read my note first let's get this idea deep into our mind it will never be enough and this is what I mean by that one evening as we sat in his kitchen I reminded Clark that he had said that once he became a real after tax
50:09
billionaire he'd retire he said without missing a beat I just want to make more money than Larry Ellison then I'll stop I pointed out that he had never before mentioned this ambition I don't know why he said but once I have more money than
50:22
Larry Ellison I'll be satisfied so then I asked him what happens after you have more than Larry Ellison would you want to have more money than say Bill Gates oh no Clark said that'll never happen a few minutes later he came clean you know
50:37
he said just for one moment I would kind of like to have the most just for one tiny moment it was one of those tiny moments when it was good to have a record of our conversations just a few months before when he was worth a mere
50:49
$600 million Clark had said I just want to have a billion dollars after taxes and then I'll be sa Saied back further before he started Netscape he had told Mark Gman one of the young Engineers who had helped him create silicon Graphics
51:03
something similar Jim came into my office just before he left to start Netscape and said I'd really like to have a $100 million back even further before he started silicon Graphics he told Tom Davis that what he really wanted was to have $10 million the
51:19
numbers they keep moving why do people perpetually create for themselves the conditions for their own dissatisfaction Clark played these little tricks on himself so that he would have an excuse to keep running as fast as he could it
51:34
was the same way with his resentments he treated those who had done him wrong in much the same way he treated those he did not like who had more money than he did they were all motives he needed people or places to doubt him so that he could prove them
51:51
wrong the reasons he couldn't stop were ultimately unknowable but I assume that the best and most lasting motive for wanting to change the way things are is to be unhappy with the way things are people who are unhappy with the way
52:06
things are tend to remain unhappy even after they have changed them the nature of their unhappiness is such that change does not slake it the difference with Clark is that he continued to believe in the endless possibilities of change
52:26
even after he experienced its limitations and that is where I'll leave it for the full story highly recommend buying the book it's a fantastic read if you buy the book using the link that's in the show notes in the podcast player
52:40
you'll be supporting the podcast at the same time if you want to use the same app that I use to store and remind myself of past highlights I use this app called readwise readwise has been reminding and recommending highlights from this book for me four years you
52:56
could try it for free for 60 days it's readwise doio Founders that is 274 books down 1,000 AO and I'll talk to you again soon okay so real quick in case that you want to get access to my version of readwise which is called Founders
53:12
notes.com you go to Founders notes.com to sign up that's founders with an S just like the podcast so Founders notes.com so when you sign up and you get access I'm going to tell you how what what are the features that I use the most and so at the very top is the
53:26
main feature the one I use but every day and it says search highlights and there's a search bar and very simply I just search by whatever keyword I'm thinking about so it could be about hiring about marketing about Obsession uh could be about a specific
53:39
entrepreneur like Rockefeller whatever I happen to be thinking about or whatever problem I need to solve at the at the time so like the greatest example and I actually made like a 30 minute like short AMA about this it was asked like
53:49
how do History's Greatest Founders think about hiring and so if you type hiring in that box you'll see what what did Jeff Bezos say about it what did Thomas Edison say about it what did the people that founded Paypal say about it what
54:00
did Estee Lauder say about it and on and on and on and so I think that's pretty self-explanatory again this is a product for people already running successful companies I think I don't have to elaborate you already know what the
54:10
value of that would be so the highlights feed is uh the searching excuse me searching the highlights is what I use the most now the thing I use the second most is called the Highlights feed and the highlights feed I'm loading it right
54:20
now essentially it's just like these little almost like tweet sized highlights from all different books and so it is completely randomized and it's almost like you have History's Greatest entrepreneurs speaking to and then just
54:31
read through them and see what thoughts respond so like the first thing that came up was actually uh it's actually a highlight from one of Warren Buffett shareholder letters he's talking about diversification and its relation to risk
54:40
the next highlight is a quote from Ed KML the founder of Pixar talking about he didn't even realize at the beginning of his company how poor the communication was and that there was things going on in his company that that his the people his employees were not
54:50
telling him and his thoughts on how to fix that then there's a quote from a book that I read like six years ago and it's actually the the biography of alib Baba and he's talking about the importance of listening and that poor
55:00
listeners actually have second rate negotiation skills and so that is the second most used feature for me personally this might be different for you third feature books you have a list of all the books that are in there I think right now says I have 307 books in
55:12
here I still have a bunch I need to put in and then that that's very simple like I just went through the reason I reposted the Mike Bloomberg episode for example is because I've been rereading the highlights and so I went back if I
55:22
don't have time to reread the book which I will in the future but I just read through I think I have like 44 uh highlights of Bloomberg's autobiography here and you read through them and you there's just so many ideas and this is happening like 15 minutes it's
55:33
absolutely incredible so that's self-explanatory you can search my book The Last feature that I use the most is the favorites feature you know I have 20,000 highlights it's there's a ton of information in here and so what I'll do
55:44
is as I go back through the highlights and I've done this forever and that's why this number will always go up I have 839 favorites now but you know if you're listening to this months from now it's it's going to be higher and whether it's
55:55
through searching whether it's through rereading the the highlights on a specific book or through the highlights feed which is the random um just showing me like the random highlights that I've done if there's something like damn that's a good one I really want to
56:08
remember that and so I I highlight it right I favored it and then now that goes into the favorites feed so then I have an even more like specialized feed of ideas and highlights from different books all on one page so again need to
56:22
re reiterate I think if you are like me and there's a good chance that you're if you're listening to this you're like me if you're like me you're already running a successful company I think it's a it's a no-brainer I would at least test it
56:33
out for a year there's a chance that you don't like it I not going to share that opinion with you because like I said before I listen to it or not listen to it I use it every day and I think what I what this is going to be good for and
56:46
what I hope to do is like man like for a Founder to just have a browser this this notebook sitting in a browser that they can tap into anytime I think that's going to be very valuable and I can say that because it's been very valuable for
56:58
me so hopefully that makes sense if you want to test it out it is Founders notes.com again Founders notes.com and I also leave a link down in the show notes if you want to grab the link from the podcast the show notes on your podcast player founders notes.com