I don't think you have to listen to the Quentin 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 because you're going to see so much
similarities and 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 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 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 Lans ideas that show up in Steve Jobs companies and
products. It's just like Sam Walton's ideas showing up in Jeff Bezos companies and products.
It's just like Henry Singleton's ideas showing up in how Warren Buffett and Charlie Munger built
Berkshire Hathaway. Charlie Munger said Henry Singleton was the smartest person that he ever met.
Warren Buffett said it was a crime that business schools didn't study him. And so I go back and
start reading about Henry Singleton and he realized, oh wow, these ideas that I was attributing to
Munger Buffett actually originated with Singleton. And that is a main theme that reappears over and
over again for anybody that gets to the top of their profession. Anybody who becomes great at what
they do is seeped. They are all seeped in the history of their industry. They talk about these ideas
over and over again. They don't just read a book one time. They don't just watch a movie one time.
They don't just have one conversation. They do it over and over and over again. That is why if you
haven't done so already, I highly recommend that you subscribe to Founders Notes. For six years,
I've been cataloging all of my notes, all of my highlights for every single book that I've
read for the podcast. And it blew my mind because that's exactly what Quentin Tarantino did. He would
keep scrapbooks, make notes, and he actually kept files and on index cards of every single movie
and what he 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 read now by signing up for Founders Notes. When you get a subscription, you get access to all
my notes on my highlights, transcripts for every single episode. You can search by keyword by person
by subject. It's this giant database of the collective knowledge of history's greatest
such a nurse. You can also read all of my notes and highlights by book. You can have all of my
notes and highlights presented to you in a random order on the highlights feed. I've been searching
by keyword. I've been rereading my highlights by book and I've been rereading my highlights in
random order on the highlight feed for years. I built this tool for me for I had this for half a
decade before anybody else had access to it. I literally could not make the podcast without this
tool. And now I've added a new feature that I'm super excited about that may have made it a thousand
times more valuable. It's actually called Sage. It is the Founders Notes AI. And the name actually
came because there's a bunch of existing founder notes subscribers that were beta testing this
feature for me. And one of them emailed me because he heard some of the names. I was like, I
said, this feature is incredible, but I can't figure out what to name it. And he said that none of the
names were good enough because they don't actually describe what the feature does. And he said,
you should call it Sage. And he sent me the definition of Sage. Sage is a profoundly wise person
that is often looked to for guidance and advice. And that's exactly what Sage does. It's like search
on steroids. You can ask it a question. And it'll search every single note, every single highlight,
every single transcript, meaning every single word I've ever uttered on this podcast. And it'll
start making connections. It's been making connections that I've even missed. And so I mentioned last
week after I re-listen to the Steven Spielberg episode, I was asking Sage. It was like, give me
one of the most important ideas to learn from Steven Spielberg. And within 20 to 30 seconds,
it gives me this outline of the top nine. What it feels is the top nine most important lessons
from Steven Spielberg. Now, the interesting part is if you press on expand, it actually tells you
what it's search to come up with the answer. So you could just read the outline. Or if you choose
so you can go deeper and see what it actually fetch and what it's searched to come up with the answer.
And of course, it's going to search the Steven Spielberg episode because I'd done the episode
for years ago. But what is fastening is also included ideas when I mentioned Steven Spielberg on a
Steve Jobs episode, when I mentioned Spielberg on the Christopher Nolan in the James Cameron episode.
It pulled an idea from Spielberg that I mentioned an episode on Pixar. It's 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 of, there's people who have listened
to hundreds of hours listening to this podcast. Founders notes and sage in particular is the tool
that I hope you can dance and clarify the collective knowledge of history's greatest founders. So
then you can use their ideas in your work, just like Bezos used Walton's ideas, just like Jobs use
lands ideas, just like Spielberg and Tarantino and Lucas used past filmmakers and everything they
read all the ideas they derive from that in their work. I highly recommend getting a subscription.
And you can do that by going to founders notes dot com that is founders with an S just like the
podcast founders notes dot com. I also leave a link down below in the show notes. I appreciate the
support and I hope you enjoy this episode on George Lucas. George Lucas on apologetically invested
in what he believed in the most 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, the small town 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 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 said George 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 his lengthy career in two single syllable words. His answer?
I tried. That was an excerpt from the book I'm going to talk to you about today which is George
Lucas a life and is written by Brian J. Jones. Brian J. Jones writes excellent biographies. He wrote
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, it was episode 35.
And there's some ideas in it that I've never forgotten that sentence where it's like 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 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. You see this a lot not only with with founder biographies that you and I talk about
but especially with the film maker biographies. Tarantino talks about this Christopher Nolan talks
about this James Cameron talks about this Steven Spielberg talks about this. You'll see 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 impact that those movies would
have on the world. And then of course the influence and control had over the building of his business.
And thinking about how difficult this movie was to make is fascinating think about but what I'm
really interested is how 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
he felt he had already lost control of his film. The executives at 20th century Fox had nickel and
dined him every step of the way. They would deny them him the money that he needed to ensure that
everything worked. The people at Fox were also 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 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 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 no money. But we had to make this work. The problem is nothing really worked as we
wanted Lucas vowed he would never see control over his film to executives at the studios again.
And something he would repeat over and over again is like what do they actually know about
filmmaking they've never made a film. But they would come down and talk to him and tell him this
is how you should make the movie. And he says they decided they know more about making movies than
directors. And here's the problem you can't fight them because they've got the money. And so Lucas
vowed one thing if Star Wars worked out one thing 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 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 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 us
you and I a better understanding of just really why he ran the business the way he did. He was the
sole shareholder. The only shareholder in Lucasfilm when he sells it to Disney for over four billion
dollars. And he's got this, I would say juvenile delinquent streak in him since he was a very young boy.
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 his dad is actually George Lucas Sr. And so George Lucas Jr. describes his dad as a very old
fashion 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 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 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 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 brother
figures, but also through books. He was never very good in school, but he loved to read.
I got to this section of the book and it reminded me of I saw this interview that's that's
pretty incredible. All the way back in 2012. It's with Elon Musk. He's being interviewed by this
guy named Kevin Rose. I will grab the link from YouTube and put in the show notes in case you
want to watch it. I highly recommend you do because it's the early, it takes place on like the
Tesla, the factory floor of Tesla back when I think they only had one model in production. It was
like the early model S was in production. But Kevin was asking Elon is like, well, you're trying to
figure like, how did you do all this? Like you emigrated from Canada. You didn't have a lot of money.
You moved to California. You started your first company when you were just in your early 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 desire and like my dedication 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 and historical context. And you see that
with a very young George Lucas 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 and reflecting on this time in his life. 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, it gets to the top of
their profession. Lucas references and uses that learning from history as a form of leverage. He'll
talk about, I watched this interview with him in Christopher Nolan that took place probably a decade
ago. And in that, Lucas is just talking about the fact that all this reading and studying of
history that he was doing as a kid, 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
is, this was hilarious. You know, he's going to have what fictional characters can 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 in Duck Tales when I was a kid. I didn't even know that it was
around when Lucas was a kid. And so listen to the 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 conniving capitalist
ways. Work smarter, not harder was Scrooge's motto. And yet his stories were full full of inventive
schemes that more often than not made him richer and even more successful. In Scrooge's world, hard work
paid off, but so did cleverness and a desire to do something in a way no one had ever thought of
before. Think of it. Come on. Think that think about the life and career of George Lucas,
that desire to do something in a way that no one had ever thought of before. That is exactly Lucas's
approach to the filmmaking industry. Remember moviemaking 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 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 real, right? There was not
the computer graphics weren't there, the special effects were there. So he's like, what's the solution?
I'm going to start my own company. I have to create the technology that I want to see in the world
just so I can make the movies look how I want them to look. And so he found 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 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 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 other people to believe
in their own ideas, not trying to force everyone into one form, which is I think exactly how he
described what his dad was trying to do to him. His dad was trying to make another him. And George
was like, but I'm not the same as you. I want to live life on my terms. The lessons Lucas learned
from Uncle Scrooge would shape the kind of businessman he would become in the future, conservative and
driven, believing strongly in his own vision and pursuing it aggressively. Let's go back to more of
his juvenile delinquent ways. As his grades 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 entrepreneurs comes from Iván Chenard, who is the founder of Categonia. 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 be a loser. Lucas thought his father's lack of interest in him was typical
and it was probably understandable. I was a hell-raiser 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 at school. It doesn't
really have a direction in what he wants to do in life yet. And so he goes and briefly works for
his dad at the stationary store. This 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 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 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 shit, but to actually buy your own freedom. And that's exactly what he uses his money for.
So he is, it's almost like 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
fiscally conservative with the way he runs his business. And that fiscal conservatism actually
breaks up. He has like co-founder breakups with Francis Ford Copolo because Copolo was essentially
the exact opposite. George Lucas was always very, very concerned about protecting his downside because
all he wanted to do is never jeopardize anything. 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 former control and that control to make sure that no one else can ever, ever
tell him what to do. And so he gets to college. He's like, I have no idea what I want to do. So he
just goes to like a little junior college, a little community college. And then he realizes he knew
he's like, listen, I'm not stupid. Remember the Tarantino episode? I don't know if I should back up.
Why am I doing like Lucas right now? I think if you listened to, relist into the Spielberg episode,
I just republished a couple days ago and then Tarantino, I think this line through what I'm doing
right now, Tarantino studied, they're about 10, they came about at 10 to 15 years before he did.
Tarantino studied Spielberg and Lucas, all the movie brats which walk into like the rest of these
guys, essentially like these filmmaking geniuses that all met in the early 20s. 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's
the next episode. I'm reading this 700 page biography of him now. So it's taken me a long time.
This book that I have in my hand is a monster. Over 500 pages, I have the hardcover version.
And until we over 30 hours to read and research and really think about before I sat down and
talked to you today. So the connection to what is happening in Lucas's life is very similar to
Tarantinos, you know, not great in school, but clearly not dumb. He just doesn't like other people
telling him what he should study. Tarantino is the same way. So he gets to junior college and now,
you know, college is the first time we 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, where do I transfer and when I'm going to study?
And 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 1950s super
conservative American businessman. He's like, there's no way in hell that my son, like I'm,
you're going to go to art school. There's no way in hell I'm paying for it. And he told his son,
like there's no way you're 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 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
Tarantino last week in his book would talk about the movie brass. He said they love movies. They
dreamed of movies and they even received degrees and 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 film school to call it cinematic cinematography school. It's
like, what the hell is this? And he says, 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. Then he was impressed that his son got accepted into USC. And he didn't understand.
They said, you know, the school cinema cinematography, he didn't understand that it was his way
of getting to a form of art school. And so his dad agrees to help him out, pay his tuition,
and help him get housing. And the reason I say that decision change is a 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 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 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 who's
in the car. He had all the other interest. And he's like, oh, wait, this is it. I was sort of
floundering for something. And when I finally discovered film, I really fell madly in love with it.
I ate it. I slept at 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 were as fast as I was. I just,
I'm going to put this 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 Steven
Spielberg describes. He uses the exact same language. This is what Spielberg said.
Making movies grows on you. You can't shake it. I like directing above all. All I know for sure
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. Spielberg's
part of that, even though he didn't go to USC, you're talking about a group of super talented filmmakers.
A lot of them come out to California, even though they call it the USC Mafia. Some of them like
Martin Scorsese, see Oliver Stone. They went to NYU, Brian DiPombo, into Columbia,
Francis Ford Coppola's at UCLA, Spielberg's on the lot, getting his own curriculum. I think at
Universal or, yeah, it was at Universal. Lucas would be one of a group of highly motivated and
young filmmakers. They were all friends who would have a lasting 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.
Even if they don't look at themselves as competitors, 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, unless you already know somebody in 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, Scorsese, Dupam, Coppola, Lucas, they are on the margin. The center
is controlled by these old school conservative studios that are locking all these young people
out. It was very, it was unheard of to have a director in their 20s. And yet this network that
they're building in the talent that 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 because when I
had dinner with Charlie Munger, this is the advice that he gave us. I'll get there in one second. So it
talks about they refer to themselves as the mafia, right? That would end up being a more appropriate
designation as they were all regularly higher, fire and conspire with one another on countless
projects over the next five decades, putting together a kind of system of their own. Munger talked
about the importance. You didn't use the word relationships from the world. That's the maximum
that I put on it. But he talked about as exactly what him and Buffett did. I think he was 35 when
he met Buffett. Buffett was what, 2829, something like that. He talked over and over again, the importance
of the advice he gave us is like, you have to develop relationships with people. He's like,
they were still doing deals. He's something like a camera. Exactly. I put it. I have to go back and
read my notes or listen to the 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 the third,
their 20s, 30s and 40s and they would do business and do deals for the rest of their lives.
Many of the people that Charlie was referring to because Charlie was 99 when I met him were 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 link went. And so now he's in film school. And you know,
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, it must be filmed in black and white.
Must be this, you must, this story must look like 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 on-screen credit.
This was no student assignment. It was a short film by George Lucas. That is the big letters.
That's what he put on this movie that he's making. Lucas had chosen to set his film to music and
open defiance of his professor's instructions. And so the movie he made is called Look at Life.
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 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 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
parting. I'd be working all day and all night living on chocolate bars and coffee, said Lucas.
It was a great life. I had enthusiasm, enthusiasm. And I was too busy to get into drugs.
Movies were his addiction. We were passionate about movies. We were always scrambling to get our
next fix. Listen to how they're describing this. This is how he knew, this 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 wasn't really a big fan of collaborators. He wanted subordinates. 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 kind of a really bad on set.
Didn't know how to deal with humans. He's super shy. Wouldn't talk. Wouldn't give instructions.
And yet he said like he really made films in the editing room. He's just by himself editing.
And so I almost think like he was born now. He's going to especially with all these new technologies.
Basically, you have one person like filmmakers because they're going to use all this technology.
I think that's how George would have preferred. And you see this from very early age because he's
getting all 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 he was saddled
crew members who could not keep up with him. He's also super, super competitive. Later on in the book,
it says something like Francis Ford Coppola responds back because a few times Lucas says,
I'm retired. Never making movies again. He does this a few times. And Coppola is like, he'll be back.
And they're like, why do you think he's going to be back? It's like because George loves and
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 the mustard, they shouldn't have been there.
And then he also has some talents, obviously, everybody else. It was clear that he was one of USC's
most dexterious editors. Lucas worked quickly and without complaint. He'd cover up any defects,
shortages, or missing shots in the editing room. And that's not an exaggeration. 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 Kammel episodes. But you know, he started Pixar. He's the one that had that
hired Ed Kammel. He's the one that sold Pixar to Steve Jobs when George Lucas is going through a
divorce, which also goes into a lot of detail in the book, which I won't cover. But this idea of
being able to kind of sit at a computer and make a movie, you know, I think if he could have done
that if he was alive now, that's what he would do because a typical movie that he would make,
like his first movie, he shot for three days. Man, you know, he's on set for three days.
But then he edited for 10 weeks. His favorite part about the movie making process. He hated writing,
which we'll get into. 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 you want to do. He wanted to be alone in the
editing room. But we're not there yet. We're still in film school. This is more juvenile delinquent
behavior. Listen to what he's breaking into. This is hilarious. So he says the rules were of no
concern to him. I broke them all. He said whenever I broke the rules, I made a good film so there
wasn't much that the faculty could do about it. George Lucas was very resourceful. He always
would find a way to get what he needed in terms of equipment and bodies to pit together a crew.
Like sometimes when you film like when you film Star Wars and London later on, they have these
like really strict rules for the London like film union. You know, it's like you said you have to start
830. There has to be a T. I'm not even joking about this. You have to start at 830. Then you have
to break for T at 10 p.m. or 10 a.m. And then you have to break for an hour lunch at one o'clock.
And then you need another T break at four o'clock. And then you can't work past six. 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 expensive camera, but they would also break into
facilities. It says Lucas didn't want to limit his use of the equipment to the building's regular
hours either, which shimmy up the drain spout cross over the roof, jump into the patio and break
into the editing rooms so we could work all weekend. And this idea that you use juvenile delinquent
actions to actually be more productive. One of my favorite stories from history about this is Edwin
Lann. He's trying to do all these experiments doesn't have the money for the equipment he needs. So
him and his future wife, they actually break into I can't I think it was NYU might have been
Columbia, but they break into university and then all night they're just illegally using their
science experiments are scientific equipment to make experience experiments rather. And this 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, Lann's first company is called Lann Wheelwright if I remember
correctly. And Lann had had won a bunch of awards. He was like pretty well known, well known
scientist by the time he's like 19. And so he gets recruited to all these other, he's running his
company, but he's getting recruited to all these other companies. Maybe they could like bias
company or convince him to come over. And I remember there's a conversation that takes place with
Lann and his co-founders co-founders concerned because his co-founders more like the money guy.
His co-founders concerned that he's going to leave. And Lann goes they start work at you know,
nine and at five and they don't work weekends. And so his co-founders like, yeah, I know are you
going to go, are you going to leave and go work with him? And Lann's response response goes,
of course not. How would I get anything done? Yes, you see George Lucas is like, wait a minute,
you gave us this assignment to make this film. We don't have the right cameras so I'll just
break in and take that. And then I can't edit on the weekends or at night or you're absurd.
So this is a guy. Now this is also also causes a severe health problems when he's older.
When he's doing Star Wars, he's working like 20 hours a day. This caught in that like I'm
chuckling because he's just like he had these tendencies from a very early age. But you know,
winds up, he winds up getting divorced because of this. He winds up having health problems because
of this. I think he burned out you know, a few years before he might have directed more movies
than had a longer career if he worked on consistency over intensity. But he in terms of optimizing
or consistency or intensity, he went full throttle on 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
concept. You see it over and over again, because even if you graduate film school this time,
there's no there's no mainstream 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 being able to learn. He winds like this this grant
to spend some time on an actual like big budget movie studio set. And that's really important
because that's where he's going to meet Francis Ford Coppola. But before I get to that,
I just want to point out like this is kind of hilarious. And I feel the exact same way that he does.
And if you're listening to this, you probably do too. And at the beginning, 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 to he's like, I'll be a cameraman or an editor. And
he gets a job working on that. And he's like, I these people are bossing me around like.
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 could they'd annoyed him. And he says at
this point, I was really wanted to be an editor and a cameraman. And then the course of doing this,
I asked, well, maybe I want to be a director. And you know how he figured out what he wanted to be
a director? Because he figured out who is the person on the movie set that no one else can tell what
to do. 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 jobs. He again, he's got
these workaholic the whole his entire life. Something that his wife, you know,
causes the breakup of their marriage. So he definitely pays a price for this. But at this point,
he makes this like short movie. He's eventually going to turn it to a longer movie called THX 1138.
But this is a shorter version of it. And his I want to talk about this because
he winds up winning a bunch of awards and and people go like people watching it. I really think it's
incredible. And one person in the audience was his dad. And I think this is a very important part
in their relationship. He says he could appreciate that his son had found his calling. His son had
earned the respect of his peers. Now I had been against this thing of his going to the cinema
cinema school from day one. But we guessed he had finally found his niche. 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 us like a grant from Columbia Pictures
where student 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 Ford Coppola. Now this is really important because
this is what I meant is it's really hard to is 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 and second movie American graffiti
and his third and fourth Star Wars and then return to the Jedi, not return to the Jedi Empire Strikes
Back. I think it's the second one. But this idea where it's like he'll bet everything he has if
he thinks that bet is successful and will buy his 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 to
bring around such opulence. Zillions of dollars being spent every five minutes on this huge unwieldy
thing Lucas said it was mind bogging because we've been making films for $300 and we saw this is
an incredible waste. That was the worst of Hollywood. So this relentless resourcefulness that he's
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 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 for Coppola is like five six years older than all the other movie brats and
he's the one. It's like you know how people like the first time you can run people thought you'll
never be able to run a four minute humans can't run a four minute mile 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 Coppola notices this like 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 his head said nope not yet and this is how I met George Lucas Francis Ford Coppola said.
Now him and Francis are going to want to be very good friends right from the moment that they meet
go back to this advice that Charlie Munger gave right develop relationships relationships from
the world Lucas is 23 when he meets Coppola Coppola 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 28 year old director in the
in doing a major movie studio you have to be an independent filmmaker to do that and so Coppola
inspires not just Lucas he inspires Steven Spielberg too I want to read this paragraph to you
Coppola actually succeeded in getting his hand on the door knob and flinging open the door
and suddenly there was a crack a light and you could see that one of us a film student without any
connections had put one foot in front of the other and actually made the transition from being a film
student to being somebody who made a feature film sponsored by one of the studios to Steven Spielberg
Coppola 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 Coppola prove to Spielberg and Lucas
said hey this is possible but the influence that Coppola had on Lucas too is like listen you have
to learn to write at this time and you'll see Lucas make this mistake a few times he tries to
outsource the writing and Coppola was saying hey that 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 one's
going to take you seriously unless you write and that wanted to be 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 his company you know 30 40 years into the future to Disney for many many
billions of dollars and it's also one that that that Coppola was you know older slightly older but
also like really showing hey we can young filmmakers can have a chance or like we can get in here
and do this but it's also he's one of the most charismatic people ever lived I did an episode
on Coppola a 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 Coppola is 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 Coppola was magnetic
so I told you about Lucas meeting Coppola right I have not told you about this friendship this might
even be more important arguably it is more important to the his career their friendship that he has
with Steven Spielberg which is exactly why I published that episode last week and I think it again
to Tarantino to Spielberg to Lucas and then Disney next week I think it'll be like a to these
will all tie together but he goes a young 21 year old Steven Spielberg goes to just the screening and
they don't tell you what you're going to watch before him and he sees this student film and that
student film was this THX 1138 and this is Spielberg's response he says I couldn't believe it was a
student field film I was awestruck my first impression was I hate you I hate that guy man he's so
much better than I am afterwards Spielberg headed backstage where he found Lucas with Coppola Spielberg
remember remember the moment 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 is like there's people going to see a
Spielberg movie has no like him being successful does not it's not it's all positive some it's not
zero some they can go see jaws and then next year they'll go see Star Wars and so there's obviously
some kind of inherent competitiveness but they really thought of each other as more collaborators
and Spielberg said multiple times that George Lucas inspired him it said at the time of his first
encounter with Lucas in early 1968 Spielberg's filmmaking was still more aspiring than actual
and Spielberg talked about this like no longer did his role models have to be these older in
many 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 was around this time that Lucas finds
his inspiration and his blueprint is going to be blueprint for both him and Coppola as well
and he's around the same age slightly older and it's this guy named John Cordy so
Lucas is invited he sits on a panel he goes to a conference sits on a panel with other filmmakers
who made books into movies 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 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
his panel and he starts going into the details of his filmmaking and Lucas is like oh wow this is
this is our blueprint and so it says John had been running his own filmmaking facility out of a barn
in a small ocean town just north of San Francisco he had privately raised a hundred thousand
dollars for this movie that he was premiering by hitting up friends colleagues and even his actors
for money he shot the movie locally and then edited on his own equipment at the films premiere it
received a lengthy standing ovation and Hollywood executives fell over themselves scrambling to
distribute and recruit Cordy but Cordy was having none of it from what I saw of Hollywood they can
keep it he said I would rather work for myself in Hollywood you have a producer breathing down your
neck I am happier working with less money the risk of failure is far less we can complete a film
and maybe a year getting the results we want as the end of John Cordy describing how he does it
it was a speech that either Francis for Copa it could have came out of Francis's mouth
could have came out of George Lucas's mouth but he's the one that they had this idea in their mind
but then they see something is 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 for Copa
with me and so what they show up to is Cordy lives in the house on the property he also has a barn
that barn serves as this like movie making studio this is exactly what I mean Lucas is going to do
it on a bigger scale they're about Lucas and Copa are about to found a company that tries to do
this and then that that company's going to fail but Lucas does the sky walker ranch where it's
like there's no movie studio there but you can edit you can do everything else that you need to do
and they what they realize like oh this is exactly like this is our future this is what we're going to
do and so shortly after this they find another blueprint so Copa actually flies to Denmark to visit
another independent film company it's his Danish filmmakers names Morgan Scott Hansen and keep
him mind I need to back this up because it's so important Lucas is 24 years old he's 24 years old
when this is happening Copa 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 state of the art equipment come on this is sky walker ranch
15 16 years before Lucas has the money to do exactly this and so Copa tours Morgan Scott Hansen's
facility loves this like I'm going to do the exact same thing and then on the way out Morgan gives
him a like a gift and 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 Zoe trope and it's
actually Greek meaning life movement and Copa love the word and the description so much that's
the that's what they're going to name Copa decides the name the company he's about to start with
George Lucas Zoe trope and so he tells Lucas like this is exactly what we need to do we need to get a
big old house like a kind of like a frat house right and in that frat 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 Zoe trope is actually the full name the Hollywood studios like no you can't make movies
up there you have to do it here but Lucas is very stubborn he's very persistent he's also willing
to take risks but he's like I love San Francisco I don't want to live in Hollywood 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 they in some ways they have perfect timing because you have to ride away if go back to
the episode you said I'm portraying a summoner Charlie Munger surfing model is so important you
know analyze extreme success and you always ask them something like they had to surf a wave what
wave are they surfing and the studios actually figure out at this exact same time that Copeland
Lucas they would have never got the money if this didn't happen this is why I'm telling you
at the exact same time they realize oh like if you the studios figuring out it's like if we can
just hire a young talent making independent films can actually print money because they make
they make films for almost nothing and some of these these are like power law outcomes and so what
I mean there's a 1969 remember they start this they 1968 they're like we're gonna do this they
bang on doors Holly was like screw yourself so we're not giving you any money the next year the film
easy writer comes out okay so it is written by a 32 written directed by a 32 year old or 33 year
old Dennis Hopper it was not made in Hollywood it was made on a shoe string budget they raised
$350,000 why is that important 350,000 dollars to release the dateers the film makes 60 million
easy writer goes on to be one of the most profitable films ever made and so the studio executive
see that they're like oh shit and this is what they said the studio smelled money why invest
millions bankrolling production of an enormous film on a studio back lot you could simply
distribute independently produced films suddenly independent films and independent filmmakers
was exactly with Lucas and Copolo want to be right made by young directors were in demand the studio
wanted young talent I just said that's Charlie Marrow talks about the surfing surfing the wave
listen to the words that they use to describe this easy writer had created a tsunami
of independent enthusiasm Copolo decided to ride the wave right into the offices of Warner Brothers come
on that fit together so perfectly there so goes to Warner Brothers he's this is Copolo is like
yeah sometimes I think you might need a guy like this because not like I'm gonna make one movie
he's like listen you front us a bunch of money uh we're gonna bring you a finished film just like
easy writer did we're not gonna do this once we're gonna we have seven films we want to make
with you guys now here's the problem Copolo probably shot too big and even if he didn't shoot too big
he definitely 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 gonna cause them to go bankrupt uh almost go bankrupt the minute that Warner Brothers
did not like what they were doing have lost faith in the project whatever the case is they could
call in the loan and Copolo and Lucas would have to pay back everything and in true Copolo fashion
he was like oh that he's very confident that was never gonna happen so now he's got a bunch of money
and he's saying all these crazy things like my company's gonna be worth 10 million dollars you know
in a couple years and it's gonna do all this stuff but here's the weird thing they took a bunch of
money and he just invest in things this is like the un Lucas and you know Lucas is technically his
partner but he's definitely the subordinate partner in this arrangement and so Copolo spends all
this money in the reception area he said he buys an antique pool table and a really expensive express
somekir and all this other stuff and one it reminded me when 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 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 readers
are your newspaper they don't only care what's in the newspaper they don't care like you're
investing in things that are not important to customer you know the movie equivalent of that is
all that matters what you put up on the screen your antique pool table your expensive super luxury
or architectural design doesn't do anything for your customers like what are you doing
we saw this again but 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 Claude Shannon a long time ago maybe episode 94 something like that and me and Jimmy
to become friends since I cover those books and he's next book there there's this book called I
also covered a long time ago it's called Steve Jobs in the next big thing and it's on the 13 years
this is what I call Bizarro Steve Jobs the time the 13 years between he was kicked out of Apple and
then he returns and it's really about the founding of next and the reason I call Bizarro Steve Jobs
is because he's arguably the greatest entrepreneur ever and yet in this 10 to 13 year period you see
this incredibly gifted entrepreneur just making one bad decision after another it's what I mean
oh Jimmy I can talk about this publicly now I asked him Jimmy's his next book he's writing a book
on this time period and Jimmy's a fanatical researcher he's been sending me like he's in these
these archives it's just incredible what's gonna 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 in the
next big thing there was a line in that book that blew my mind that reminds me of what
Christopher Copeland is doing here it's like what are you doing you're putting an emphasis on things
that are not important and what I mean by that Steve Jobs one of the ninth employee if I remember
correctly ninth or tenth employee at next was an interior designer for the office that's absurd
that is not that is that is that is Bizarro Steve Jobs Steve Jobs made phenomenal decisions that is
a bad decision this idea of putting a bunch of money into things that don't affect what actually
would actually the customer experience makes no sense and yet you see this oh it's a mistake that
people make over and over and over again nothing I do they buy a bunch of expensive equipment which
maybe they need yes okay but then they said 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 gonna happen most of that equipment winds up being lost or stolen and then
Copeland also has ideas like hey you know what we need we need 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 her just just make great films that people love
so much that they pay money to see and they tell their friends to go see that's that's all you
have to do and so this fight right now like Copeland Lucas start fighting immediately because this
is this is a bad co-founder match because Lucas is saying he described Lucas in very plain language
so you 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 where we can finance our pictures make them our way release them
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
he wanted to buy his freedom he never won he won a 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 I would recommend reading this book is because it goes
into great detail of how he actually accomplished that now I'm going to talk a little bit about that
but I do want what is fastening that not all the ideas they were having you know they're young
entrepreneurs never don't have experience don't really know what they're doing the movies they're
going to make are going to flop but what's fastening is like they they still had an insight into
the future and so it says both Coppola and Lucas predicted a bold high tech future remember this is
1969 1970 maybe and they said movies will eventually sold like soup what does that mean you'll be
able to buy it in cartridges for three dollars and play it as you would a record you know music record
at home he's predicting you know VHS tapes then DVDs then Blu-ray and now streaming and so the first
movie that American Zoe trope is going to make is this movie THX1138 really is a look Lucas making
a film about himself because the main idea it's like science fiction kind of weird so he kind of
like 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 for the
first time I remember this line from you know reading this book for the first time seven years ago 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 stuff that stuck out to me
people would give anything to quit their jobs all they have to do is do it their people
encages with open doors at its core THX1138 was about refusing to accept the status quo it's about
a hero who lives in an ant hill and dares to go outside this issue of leaving a safe environment
and going out into the 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 THX1138 the studio hates it they hate it so much this is so bad now
this is I guess it's 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 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're in the middle of it you have no idea the impact that you're potentially having and a
lot of people quit before they even get to realize that and so because the studio is like this is
freaking terrible the deals off give us our 300 grand back they're now in debt the company's
hemorrhaging cash Coppola has no money at all he's desperate for money and so 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 they're talking about year and a half and the company is gone and it's an offer
he couldn't refuse because it comes from Paramount Pictures and they're saying hey we're going to
make an action film based on one of the biggest books of 1969 which was written by this guy named
Mario Puzzo and that book is a sprawling gangster novel called 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 over again I think is really good stay small be the best don't lose any money
stay small be the best don't lose any money so he's talking to Coppola is like what the hell you
thought like you have you have no money they're offering to pay you a bunch of money to direct a
film you have to do it I don't think you have any choice is the advice that he gave his friend Coppola
were in debt and you have to get a job and so reluctantly Coppola agrees to direct Godfather he
gets $75,000 to direct and he's going to get 6% of any profits the film makes and so on the way
out the door the studio owns because they lent 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
in-house editor and Lucas that he listen away says here so they they went up cutting another four minutes
from Lucas's final cut and this induces Lucas into a state of rage 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
movies that we're going to Lucas had no patience with executives who argued that they'd only cut
four 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 this sounds like the end of
the world is the worst thing that ever happened they cut my film our companies over but it winded
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 the Disney and he talks about like why they had to have a co-founder
break up 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 is always tight with a dollar and Copola would continue to spend money recklessly
Lucas had made up his mind to break away from Copola and to make it on his own determined to
control his own projects no studio he vowed whatever force him to compromise his vision again
this led 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 loan employees were him and
Marcia Marcia is his wife so even though they broke up his co-founders their still friends and
Copola actually gives him some good advice because THX is just this weird abstract they they
called 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 is like stopping so weird you need to do something human you need
to do something that makes money because if not you're you're gonna your career is over before it
begins and so the the advice that Copola gave him was like you should just write something that has
to do with your own life and 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
best return on investments of every movie ever ever ever made and it's called American graffiti
and so at the time he grows up at this little town in California they do this thing called cruising
so on Fridays that are nights it's like little town they would soup up these cars and they would
just drive slowly down one block then turn around and do it all over again and he just crews 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 last year of high school transitioning in like you know everybody knows that
experience it's like your entire life's gonna change you have no idea what's gonna happen so
that's what he's gonna 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 considered damage goods
and he's struggling to get any kind of money for to write the script and then once you write
the script then he's gonna 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 trying to make your first film that's the easy one to get
because nobody knows whether you can make a film or not after you've done that then you have a heck
of a difficult time getting to your second film off the ground they look at your first film and they
say oh no we don't want any more of that and so Lucas goes back to doing what what he was doing
he's like knocking on doors trying to figure somebody just give me a little bit of money so I can
write this script now this is hilarious he eventually he fails a few times then he gets to the
president of united artists this guy's got the perfect name for his job his name's picker David
picker he's literally having to pick screenwriters and filmmakers look what's going on here
and so he's like he's telling about this and he's like I 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 gonna make the mistake
because he hates writing he gives all that money to a screenwriter in the screenplay 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 graffiti let's let's do a
deal on that do you have anything else and Lucas is like actually I do members him sitting back in
his room meeting chocolate bars and drinking coffee and getting diabetes which he definitely got
diabetes at a young age he was drawing a little star suit troopers so pickers like hey what
else you got and Lucas told picker about his idea for this unnamed space opera fantasy film great
said picker will make a deal in this too and that Lucas said was really the birth of Star Wars it
was the only this is fascinating 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 personally
find most fascinating about Lucas other than his and his desire to innovate his invention to be
vertically integrated to control everything these are things obviously you know person identified
with and I think a lot of entrepreneurs do but he there's just parts of your job doesn't like we
get to we're unbelievably lucky to be entrepreneurs I think of what Sam Walton said in his autobiography
says the great thing about entrepreneurship is you get to spend your time building something you enjoy
most people don't get to do this they're stuck in jobs they hate I had the time of my life
but even with that there has to be something that Sam didn't like doing and Lucas's version of that
is like he hates writing and so he blows all the money he has no money he is poor he's got no money
he's gonna go into debt in a minute and so he writes he says my intense desire to get a writer
head backfire on me and I ended up with an unusable script and no money and so this is what he's
gonna do he calls it bleeding 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 gonna have to do this myself until over the next three
so the next three week period he writes from eight in the morning until eight at night seven days a
week he calls us bleeding on the page he also is humiliated because now he's got no money
Coppola's got a bunch of money because of Godfather so he goes to Coppola and
George Lucas Sr. He's got to go to his dad his dad that told him don't do this you'll never make
any money you'll be a bum and he's almost 30 and it's like I need money dad you have to
that can you loan me money so I can do this movie and this is the insane thing it's so hard to
comprehend and I don't even know how many people would make this decision because he's somehow
maintains this focus on getting his own project done through the struggle okay so he's got he's
writing the script is done now he needs money to make the movie he's going around no one wants to
give him money to make the movie movie but they were interested in him as a director just not
directing his own screenplay think about this he's got no money he's in debt to his dad and
Francis for Coppola they're offering him a hundred thousand dollars to direct a film he thinks
the film is shit he hates it he's like these 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 dire financial straights he's already married okay that's a very dark period
for me we were in dire financial straights I turned the movies down at my bleakest point when I was
in debt to my parents in debt to Francis for Coppola in debt to my agent I was so far in debt I
thought I'd never get out it took years to get from my first film to my second film banging on
doors trying to get people to give me a chance writing struggling with no money in the bank
getting little part time jobs eking out a living trying to stay alive and pushing a script
that nobody wanted a script that nobody wants to go into give the person that finally finally
finances the film one of the greatest return on investments in movie history think about that
so this guy at Universal's got named Ned Tannen finally gives him a shot but Tannen produces
films that are usually only budgeted they're small scale films you know million dollars are less
is usually what Tannen can do and even though this is incredible so even though Lucas doesn't have
any other options no one else is willing to finance this you see that his desire remember how
they 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 you could have asked for a big director fees 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 that it is a big if that American
group feed he could ever turn a profit he draws 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 after problem after problem after problem I'm going to
read just a highlight of this from American graffiti and then I'm going to tell you one of my favorite
ideas have ever come across says despite the agreement he had negotiated with the town under which
he could pay $300 night to film on fourth street local businesses were already complaining about
closing the street when Lucas and his crew arrived they learned that a local council had withdrawn
permission for him to film and would not permit uh to clear or control traffic Lucas 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 and man was
run over by a car then we had a five alarm fire that was a typical night so Tern Tino 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 we now each on my eight years
ago probably it's called setting the table it's excellent and he tells a story that I've never
forgotten and so he's at dinner with Stanley Marcus who is part of the Neiman Marcus family the
family the controls named Marcus he's a wiser older man probably I guess 40 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 he says opening this new restaurant might be the worst mistake
I've ever made Stanley set his martini down look 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 remain with me throughout the night I repeated them over and
over to myself and it led to a turning point in the way I approached my business Stanley's lesson
reminded me of something that my grandfather had always told me he said the definition of
business is problems his philosophy came down to a simple fact of business success lies not in
the elimination of problems but in the art of creative profitable problems solving the best
companies are those that distinguish themselves by solving problems most effectively I tried to
reduce that idea with it first of all that line right there the road to success is paved with
mistakes well handled that's just straight up wisdom from an older well-schooled entrepreneur
with this idea that definition of business is problems right success not lies not in the
elimination of problems within the art of creative problem profitable problem solving what I say
is it's like the way I condense that down so I can remember myself business is problems therefore
the best companies are just effective problem solving machines the best directors are just
effective problem solving machines and so after this grueling schedule he finally finishes the
movie and what he says here this is what I meant like if you could dial the the balance between
consistency and intensity I think he's way too far in the intense level and maybe that's what he
wanted to look like for some of my business right but I think for a long career you have to have
more of a balance between consistency and intensity and so he says Lucas was glad that it was over you
couldn't pay me enough money to go through what you have to go through to make a movie he said it's
excruciating it's horrible you get physically sick I get a very bad cough and cold whatever I direct
you feel terrible there's an immense amount of pressure and emotional pain but I do it anyway
and I really love to do it it's like climbing a mountain and what is fascinating is he starts to
preview the movie the audience is love it and the studio execs can this is so nuts to me the studio
executives can be in a theater full of cheering potential fans and customers right and they're like
this movie isn't good enough we're not going to release it maybe we'll put on TV they're just like
completely jerking around and screwing them over and he's obviously depressed and he's like this is
where he's like I'm going to be an independent filmmaker I'm going to control the money he hates these
people and then they edit his film again and they take out another four minutes just like they did in
thx and this is the importance of just having good relationships and good friends that truly care
about you too because they're out of screening Lucas is there copulas there the studio executives are
there and the crowd loves it in the but after in like the lobby the executives like bitching at
George Lucas and copula is just he comes to the defense is like are you ready or mine did you not
hear them and he pulls 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 copula's forcefulness kind of calls their bluff they wind up releasing
the movie the movies a smash hit listen to this though so it has this great review in the New York
Times they called American graffiti work of art now this was very fascinating because this is the way
I thought when you read about George Lucas the way I think of him 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 didn't
really like the fact that people called it a work of art my thing about art is that I don't like the
word art because it means pretension and bullshit 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 American graffiti successful because it
came entirely from my head it was my concept and that's the only way I can work and it prints
money keep in mind American graffiti is released in 1973 so these are 1973 dollars I'm about to
tell you American graffiti cost a million dollars and it earned at the box office 55 million
making it one of cinema's most profitable returns on investment ever Lucas earned nearly four
million dollars after taxes and as he had vowed to his father more than a decade before
Lucas was a 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
and the title which is called in the center of the treatments 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 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 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 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 three 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 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 an office studio library kind of thing and he's like I'm going to go upstairs
at nine o'clock I can only do one thing I can look at the wall or I can write but I can't do
anything else and from nine to five eight hours a day listen to how he describes this I says I would
sit on my desk for eight hours a day no matter what happens even if I didn't write anything it's a
terrible way to live but I do it I sit down and I do it I can't get out of my chair until five o'clock
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 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 you know eat his chocolate bars and listen to music but most days no words are
written at all and then he would just go downstairs and he glare an anger at the TV he need a TV
dinner and he would just be pissed off staring and watching the news another idea the thing is
useful is he's having a problem right they think about the you know the a lot of the scenes in
Star Wars it's action he's got an idea in his head but he's reading on the paper it doesn't seem
it's like not matching up so I thought this was a fascinating he makes kind of a demo of sorts if you
read the book creative selection it's episode 281 I read that book like four or five times and
he'd be building a product I think should read it it's this programmer that worked at Apple
under Steve Jobs named Ken Koseyenda and sees me and things like hey we need to make demos like
that that's how we're gonna push these ideas forward not presentations I want to actually see it
and so George is like trying to explain his idea himself and to others so he's like I need a demo
and so this is this demo that he makes for Star Wars and so he says one of the key visions I had
of the film when I started was 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 go to the television and he'd start taping old war
movies and it's specifically footage of airplanes like you know dog fights with airplanes 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 about eight minutes long and the description of this real is
fascinating 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 of his film empire so now he has something that he can show now he needs to
go and raise the money for the movie now this is fascinating we you and I've talked about this
over and over again already Lucas desires control above all else and he still stuck to that idea
even though Fox was the only studio who said yes to Star Wars think about this or you know arguably
the most successful movie franchise in history and only one foc only one studio said yes and so even
though he's negotiating with the only interested part party one he there's certain things in his
contract that he demands right and so he wants as much control over the final edit of his film as
possible and he even says like I'm not willing to listen to other people's ideas I want everything
to be my way that's an exact quote from George Lucas and so I would argue this is his most important
what's about to take place here this is the most important decision ever so he starts to go
to go to the Fox and this is what George Lucas says about this Fox dot I was going to come back and
demand millions of dollars and all these gross points for called 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 in a contract it's really
weird that he didn't 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 this show called Davy Crockett they sold like 300 million dollars in a year of like those
Davy 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 gonna make three to five times it says three times the amount
on toys Lucas makes three times the amount of toys as he does on the films and the films 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 what was nor apart for the course
that this is if you have a smash hit then your director fee you know she go from whatever 50,000
she could go to a million could go to two million what are the cases he would also insist the
Star Wars be produced by Lucasfilm 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 he wants the merchandise rights Fox was willing to sign over the sequel 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 just negotiated for himself
a billion dollar clause decades later Fox executives would shake their heads and 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 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 did you do
the solution sometimes to a problem is to fought to found your own company to solve that problem the
solution to this problem he's having 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 set up his
own shop with his own people industrial light and magic would then be an official subsidiary of
Lucasfilm born of necessity seated with his own money and feeding off Lucas's need to control
every aspect of the production industrial light magic would stand as one of the cornerstones of
Lucasfilm's empire an investment that would set him well on the way to becoming a multi-billionaire
and then this is a quote I shared earlier which one of my favorite quotes in the book how many people
think the solution to gaining quality control improving fiscal responsibility and stimulating
technological innovation is to start their own special effects company Ron Howard said
admiringly but that's what he did you and I have already talked about the fact that this guy is
stubborn he's persistent he's bullheaded and you have to be why is that so important people thought
he's like making this like little kids movies this is like he's kind of getting depressed but he's
still persevering because his friends advice he says Lucas saw Star Wars as his response to a weary
world in need of new heroes and mythologies his friends said it was a juvenile exercise unworthy of
his talent they said George you should be making more of an artistic statement yeah that's a good
way to go out of business what are you talking about he did that with THX 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 editors for Martin Square Sacy and she wanted her husband to make movies like
Martin Square Sacy did but I think this idea it's one of the most important ideas I've learned
in the last like year year and a half it's like you have to believe that your own opinion about what
you're working on is greater than everybody else's opinion around you none of this works if you can't
trust your own judgment and so another important thing this is really the power of deadlines because he's
been working on the script for three years and he has to shoot the movie now and he 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 it and I never fully resolved it it's very hard stumbling
across the desert picking up rocks and not knowing what I'm looking for and knowing the rock I've
got is not the rock I'm looking for I kept simplifying it I kept having people read it and I kept
trying to get more of a cohesive story but I'm still not very happy with the script I never have been
I have never arrived in 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 entire book I might cover so I I think you already know this but when I read all
these biographies when I'm done I go through the bibliography and I find a bunch of new sources to
read more books on in the future and turn into more episodes and so I found one two three four
new books from this bibliography and one of them is just about how got 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 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 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 nearly
killing them this is what I mentioned eras 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 friends Steven Spielberg who's working on the movie
Close Encounters of the Third Kind and he brings with him like this booklet of all these like black
and white pictures that from the set and Spielberg's going through this and he thought it was amazing
but the reason I bring this up to you is because Spielberg tells us what George was thinking
at this time he says George was so depressed he didn't like anything he didn't like the lighting
he didn't like what the cameraman was doing he was very very upset he was saying I got myself
into a mess that I'll never really get myself out of he was in a 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 diagnose him with hypertension
and exhaustion so after that it's like I'm 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 down first and it
wasn't until I read that section I went back and looked I thought he directed all the Star Wars
movies this is the last movie he directs for 22 years until star episode one the Phantom S
Phantom Menace so Star Wars comes out in 1977 he's a director and then he stops doing it
just he comes an executive producer he bank rolls it he writes the stories picks the the the directors
but but he really meant it like he hated directing and so he finally finishes the film or is a
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 relic into Tarantino and I thought
it was really really good so much and I can kind of tell because you get a lot of responses and like
the text messages that I was getting from like the hit a note like people really really liked it
and I was like I'm not and then I looked at the outline for the second Tarantino episode I was
making and I may be we'll do in the future but I was like man if I do this right like it's going
to pale in comparison to the Tarantino episode so I shelved it for now but in that source material
some of the research I was doing come across this conversation where Tarantino you know reservoir
dogs was a hit but it wasn't like a smash commercial hit and so he nothing like what pulp fiction is
going to be and so he actually screens Tarantino screens pulp fiction before it's released to a
bunch of director friends and everybody hates it except one person all of his director friends
one of his director friends he tells a funny story it was like okay I gotta have a real serious
conversation with my friend Quentin like this he's got to change it this isn't good enough he's
like I'll wait till he gets back from can I think cans film festivals how you pronounce it
or Khan 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
pulp fiction wins all the awards there it's like okay I guess I'll have to say anything but this
why this idea where even you're 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 the sucks
think about how the hell you gonna see pulp fiction and think it sucks and one was like super
supportive the 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 Scorsese from everyone
correctly she burst into tears she's certain that it's a disaster Brian DiPama is just lighting
into him he goes what is all this force shit 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 room who was
impressed I loved it because I love the story and the characters 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 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 dollars while we're re wrong Spielberg said why it's
not gonna make 50 or 60 million the budget for the original Star Wars was $11 million at the box
office alone it brought in 775 million think about funding a business all you took to build that
business was 11 million and yet that business makes 775 million just at the box office to think
about all the money it's made since then probably four times five times that amount alone just from
that one movie between merchandise and rides everything else that reaction from a movie where all
these other talented people all the other people in the room besides Spielberg said this is trash
so much so that some people were crying and how bad it was and so before I move on to his biggest
bet which is hey I'm gonna control the funding for the Empire Strikes Back this is he's gonna make
a hundred million dollars on this bet that he's about to make on himself 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 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 series before the
movie comes out so they published 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 that three
months four months later they had already sold out of its initial print run of 125,000 copies
and the movie wasn't available to see for another three 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 seeds several months before the movies actually available so it says
by the spring of 1977 enthusiasm for Star Wars was like a pot roiling to a slow boil in the lid
was about to blow off okay so now we get to I would say probably the craziest and most important time
in the entire book in this entire life because it's going to set up the future success
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 Fox the studio all the day was financed the film and they get 60% of the profits and he said
they're getting 60 the way Lucas looked at it's like they're getting 60% for doing absolutely nothing
he's like well what do you mean they 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 says steak I have to actually go out and make the movie and so
when he's having these conversations with other people at Fox even people he likes like an executive
there named Alan Ladd he's like well what the hell are you doing and Laz responsible like well I
provided the money and George said to him was very fast saying the way he had brain works he goes you
didn't provide the money you go to a bank with a letter of credit and they supply the money and then
you get 50% of the movie this is such an important distinction he makes her George looked at it like
a 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 sequel Lucas
matter of factly informed the studio that he would be financing the film himself using his profits
from Star Wars as collateral for a bank loan so this time around the last time around the studio has
got 60% of the money this time he's like hey I'm getting 77.5% and you can get 22.5% and they take
the deal because of course you want to be involved think about like even if you own less of Star Wars
near the Fox Fox has a bunch of other movies so there's going to be millions of people going to watch
Star Wars 2 and at the very beginning he sees a huge logo the Fox logo it's like advertising for them
and then I loved with away Spielberg you know he saw this coming he's like Spielberg wasn't at all
surprised by the way Lucas was playing hardball he says if you're an executive and you're going into
business with George Lucas you are no longer in the 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 million dollars off of 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 1 Spielberg is working on sci-fi that's
close encounters of the third uh close encounters of the third time 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 time Lucas gave Spielberg 2.5% of Star Wars and it says this
2.5% would earn Spielberg more than 40 million dollars over the next four decades
and so this idea about using his assets as collateral to a bank loan it's exactly what Fox was doing
with their just a bigger company so he's going to use the money he made from Star Wars and then he
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
sequel one action figure at a time he used the substantial profits from the film themselves but
also tapped into the revenues from an almost endless stream of Star Wars merchandise
at the same time he's looking for a place where he can actually house all of his studios and
build this vision that he's had you know they he's 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 didn't I had forgotten that Lucas never
lived at Skywalker Ranch it was just where he worked out of and so he's like I want you know a lot
of property I want it to be a house I want it to be in the middle nowhere and I want to fill it with
the most advanced technology where we could sit see the trees and make movies so he buys the first
1700 acres right now as he's building making the sequel and that eventually he buys a bunch of
surrounding properties and and builds 5,000 our owns 5,000 acres and so the way to think about what he's
doing he's literally betting the Skywalker Ranch on the sequel he's either going for complete
freedom or bankruptcy is putting everything he has into this and everybody around him is saying hey
don't do this give up more points take more money like this is nuts and so it says even those who
knew Lucas were a gas at his bull headed determination to finance the entire film himself independence
was one thing bankruptcy was another but those people were missing the point Lucas wasn't paying for
a movie he was buying his own creative freedom he realized that this is an opportunity he had to
pound so he said it's the perfect opportunity to become independent of the Hollywood system there
would be no studio executives staring over a shoulder in 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 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 move give them the movie because I'd have to give
them all the rights backs meaning if he had to get money from them I had to keep the picture going
somehow get people to work without pay hope to hell that whatever they asked for didn't involve
me having to go back and renegotiate with Fox as always with Lucas it was always a question of
control I wanted my independence so badly he said but at the same time he 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 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 and you
were getting earlier I just need you to do one thing so he says eventually he agreed to give a
few points to Fox in order to have the studio guarantee a new loan from the first national bank of
Boston but even with this agreement Lucasfilm remained the main guarantor of 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 entire story
in two sentences the Empire strikes back opened in May of 1980 and 126 theaters and broke attendance
records and 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 the movie was going to have to do much more than break even he didn't have
worried it became the third most successful movie of all time and George Lucas would pocket more
than a hundred million dollars in profits Lucas had literally bet the ranch Skywalker ranch and one
and that is where I'll leave it for the full story highly recommend reading the book the book is
excellent there's so much more in it like I said this thing is massive the hardcover is over 500
pages if you want the full story how they recommend reading the book if you buy the book using the
length it's in the show notes on your podcast player you'll be supporting the podcast at the same
time that is three hundred and forty five books down one thousand ago and I'll talk to you again soon
okay so what you're about to hear is this question I was asked a few months ago I actually recorded
this a few months ago they asked how did history greatest entrepreneurs think about hiring
at all the answers people think I have a better memory than I then actually do you know if people
say oh David you have a great memory my wife 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 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 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 its successful company and you want an easy way to
reference the ideas of history greatest entrepreneurs in a searchable database that you can go through
at your convenience anytime you want then you go to founders notes dot 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 company 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 their
Steve Jobs is one of them this is you know right I think even before he came back to Apple and
they were talking about well yeah we know it's important to hire but in a typical startup a manager
or a founder may not always have time to spend recruiting other people and I first read this
this Steve's answer to this you know I don't know two years ago and I never forgot it I think it's
excellent I think it sets up why this question is so important and you should really be spending
existing the early days like basically all your time doing this in a typical startup manager may
not always have the time to spend recruiting other people then Steve comes in I disagree totally
I think it's the most important job assume you're by yourself in a startup and you want a partner
you take a lot of time finding a partner right he would be half of your company I'm 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 a fourth of your company or a fifth of your company when
you're in a startup the first ten people will determine whether the company succeeds or not 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 of the ten we're not so great why would you start a company where 30% of your people
are not so great a small company depends on great people much more than a big company does okay so
to answer this question the advantage that that I have making founders and that you have as a
bi-active listing to founders is not only that I've read you know 300 some biographies of entrepreneurs
now but I have all of my notes and highlights stored in my read wise app and that means I can search
for any topic I can look at the past highlights of books or I can search for keywords so what I did is
first of all like what I've started to do with these AMA questions is I read them decide which one
I'm going to do next and then think about it for a few days I don't put it I just literally that
I know that's the next question just let my brain work on it in the background for a few days
and then I'll go through and start searching all my notes and so that's what I did here and so there's
a bunch of you know I don't have I might have like ten or fifteen different founders talking about
hiring the first idea is the most obvious but I think probably works best when you're already
established so Steve Jobs is talking about hey you know great way 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 that's in a reputation maybe you don't
have resources maybe your company's rather new or not as well known David Ogubi I just did
confessions of an advertising man couple episodes ago I think 306 or something like that through
07 and he did the same thing but he's David Ogubi at that point so he would find he'd go through
magazines find great advertising great copywriting and he'd write the personal letter and then set up
a phone call and he says he wouldn't he was so well known and you know he's one of the best in his
field that he wouldn't even have to offer a job just the conversation then the person would the
he'd want to hire the person never mention it and the person would apply to him
and so again I think if you can do that then of course it's straightforward fine for somebody
that's 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 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 them and then getting convincing
them to work on things and that usually works especially with people like younger people early
on the 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 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 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 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 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 his partners of standard oil he essentially built a company
an executive team of founders of cuz because he was buying up all their companies so it's very rare
but there's a line from tight and I want to read to you taking for granted the growth of his empire
he hired talented people as found not as needed and then I found another idea in the hiring like
the actual interview process so there's this kind of vany verbush I did two episodes on them I think
it's 270 and 271 he is the most important American ever in history in terms of connecting the
scientific field private enterprise and the government the most important person to keep alive for
the American War effort was FDR the second one was vany verbush vany verbush is like the force gump
of this historical period he is involved in everything from the Manhattan project to discovering like a
young called 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 are reading about American business history
during World War II and post World War II you are going to come across the name vany verbush 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 he's talking
about his organization he's running called amrade at amrade 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 in somewhat embarrassing so I discussed with him a technical point on which I
was then genuinely puzzled the next day he came in with a with a neat solution and I hired him at once
here's another idea this is from Nolan Bushnell Nolan Bushnell's the founder of Atari founder
of Chuck E. She's and Steve Jobs 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 one of the best ways his whole
thing was he wanted to build all of his companies laid on a foundation of creative people so that's
what he's looking for he's like I need creative people one of the best ways to find creative people
is to ask a simple question what books do you like I've never met a creative person in my life that
didn't respond with enthusiasm to a question about reading habits actually which 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 and passionate read people who are apathetic in a different
don't I remember one that that's such a great line and I obviously agree with that I remember one
I'm going to read it again a blatant but often accurate generalization people who are curious
and passionate read people who are apathetic and indifferent don't 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 two I didn't know how someone in her late 20s found
that's 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 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 you see what I mean like we start with Steve Jobs saying this is the most important thing
that you your roles the leader of the company the founders to 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
took the time and I had like the foresight to like hey I should really organize my thoughts and
notes because there's no way I would have remembered all this without being being able to search my
read wise right but you have Rockefeller saying this is what's important to me you have bush saying
this is how I hire now you have Nolan Bushnell saying well here's another weird thing that I learned
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 Bayzos Peter Teal this just pops up over and over again
they talk about the importance of trying to find people that are better than you the the hiring bar
constantly has to increase now obviously the larger the company gets that's impossible Steve Jobs has
this great quote where he's like you know Pixar was the first time I see I saw an entire team
a tire company of a players but they had 400 players they had 400 team members he's like at the time
Apple 3000 seconds impossible to have 3000 a player so there is some number 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 a 400 I guess you I mean I'll take Steve's word for it on
there and Pixar definitely produce great products but it's probably a lot lower than that as well
so Warren Buffett would tell you to use David Ogleby'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 founder maybe directly next to the product right above the product
actually because those people building your product we subscribe to the philosophy of Ogleby and
others founding genius David Ogleby this is what Ogleby said if each of us hires people who are
small smaller than we are we should become a company of drawers but if each of us hires people
who are bigger than we are we should become a company of giants David or Jeff Bezos rather
use a variation of Ogleby's idea to Jeff used to say in Amazon every time we hire someone he or
she should raise the bar for the next hire so that the overall talent pool is always improving
they talk about this idea in Amazon where the the future hires that we do should be so good
that if you had applied for the job you already have an Amazon you wouldn't get in that's a very
interesting idea take your time with recruiting take your time with hiring this is great book
on the history of PayPal it's written actually I recently become friends with the authors name
Jimmy Sony and this is in his book the most fascinating thing that I found was that PayPal prioritize
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 he spent six years researching the book
I always tease him because like you took a long run a book then 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 prioritize speed over everything else except in one area
recruiting max selection kept the bar for talent exceedingly high even if that came at the
expense of speedy sat staffing max kept repeating a's higher a's b's higher c's so the first b you
hire takes the whole company down let's read that again a players hire a players b players higher c
players so the first b player you hire takes the whole company down additionally the team the
company leaders mandated that all prospects here's another idea for you all prospects must meet
every single member of the team now the next one is the most bizarre it makes sense if you study I
did this three part on Larry Ellison three parts here is in Larry Ellison I should read those books
again because of the podcast like 50 times bigger then then when I publish those 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 of my eyes I don't know why I'm laughing okay okay
this is okay because this is you read about Larry Ellison and 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 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 and said I don't know if you got the smartest
people that way but you definitely got the most arrogant Ellison's and this is what the personality
the founder is largely the culture of the company Apple is Steve Jobs Apple is just Steve Jobs
and 10,000 lives right I was just texting a founder friend of mine he was just a podcast actually
met him through the podcast and he's going through this like 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 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 your life's
mission unless you do you figure out who you are Ellison knew who he was Ellison swaggering
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 easy sharp the founder of four seasons
actually could figured out that in his business which was hotels right that hiring could at 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 red biographies they all read biographies of people that came before them and took ideas from
them easy sharp is trying to build four seasons what do you think he did he picked up a biography of
Caesar Ritz the guy that it risk Carlton's named after the great arguably the greatest hotel
the air of all time and when he realized oh shit Ritz he he says a remembering that Caesar 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 Escaffier
what Caesar Ritz was to hotel to building hotels August Escaffier 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 get that
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 biopartic that more people staying at hotel so hiring as a form
of distribution this is fascinating as a fascinating idea okay here's a problem you can identify
great people right maybe they even want to come work like if I identified them you've sold them
hey this is what this is our mission this is what we're doing and yet humans have complicated
lives they have spouses they have kids they have a reason maybe they can't move across the country
to work for you even though they want to so there's a problem solving element that you see in these
books on you have to solve like you've already identified the person you've recruited them they
can't go for some other reason okay well the great founders are not going to take no for an answer
I read in in this book called liftoff which is about the first six years of SpaceX this is what
Elon musted they had anticipated his friends issue having convinced must they needed to bring this
bringing a 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 cuz that's for SpaceX's that's
time there these were solvable problems and Elon's better at solving problems than almost anyone else
must therefore came into his job interview prepared about halfway through must 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
works for Google well I just talked to Larry and they're going to transfer your wife down to LA so
what are you going to do now to solve this problem must could call his friend Larry page the co-founder
of Google the engineer sat and stunned silence for a moment but 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 or
you're going to promote one within or from without you know that's dependent on you depending on
what's going on I do think this is interesting though this is a guy named lushwob who built this
this really valuable chain of like tire companies in the Pacific Northwest I actually found out
about him because Charlie mongers like hey you should read this biography he said it in he didn't say
to me personally he said it to in like one of the birchshar meetings that to study lushwob had one
of the most one of the smartest financial incentive structures or any company that that Charlie
monger had come across so this is what lushwob 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'd like to train his
own executives and so he says in our 34 years of business we have never hired a manager from the
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 best in a players there a players don't like to be my
commandage and so this came in Larry Miller's autobiography called driven he owns like he owned like
93 companies all throughout utl card dealerships movie theaters all kinds of crazy stuff but he also
owned the the NBA team Utah jazz and what was fascinating is he's trying to recruit Jerry Sloan
as the coach at the point 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 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 slash business here's another idea
from Thomas Ellett Edison that I think is fascinating really 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 hireable and Edison wasn't Edison 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 to note
I left myself was develop skills that you can't hire for capitalism rewards things that are both
rare and valuable as they laud are would give you advice that you need to hire people online with
your thinking and values hire the best people this is vital hire people who think as you do and
treat them well in our business they are top 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 who are as a person at a core
and so I think there is an art to the building of your business and the reason to use the word art I
don't mean in like a hoidi toidi you know pretentious manner that's not me at all I don't even care
about I don't art at all really I mean that you're making decisions not just based on economics like
there are non economic important decisions based on how you're building your business like you
could probably make more money doing a decision a but decision a goes against who you are as a person
or you just don't like it or it's just not as elegant or beautiful and so therefore you don't do
it so that's what I mean about you know hire people who think as you do you do and what for whatever
reason when I read essay law or say that I was like okay that there's like this art to what she's
doing one thing that's gonna be helpful in recruiting this comes for Peter Teal I think this is
the book zero to one understand that most companies don't even differentiate their pitches to
potential recruits and to hiring so therefore like they're just gonna buy as a byproduct of that
you're gonna wind up with a lower overall talent base and so he says what's wrong with valuable
stock smart people are pressing problems nothing but every company makes this these claims so they
won't hope you stand out general and undifferentiated pitches to join your company don't see anything
about why a recruits should join your company instead of money instead of many others so that
idea of like your pitch your actual he would tell you you're you shouldn't be building
an undifferentiated commodity business but even above and beyond that like you're the mission
that you're trying to engage everybody to join you in that pitch that sale sale you're trying to
make to potential recruits 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 anything else uh another quote from Nolan Bushnell
higher 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 to separate Steve Jobs from the massive employees
it was his passionate enthusiasm Steve had one full at one speed full blast this was the primary
reason we hired him and one thing all these founders have a common is that he 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 3000 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
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 single person the company hired
through the first 3000 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 should be a large part of how he's spending time and now we'll
close with what you do after what 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 equally talented people and their work is bigger than they are the feeling that their work
will have a tremendous influence and it's part of a strong clear vision so that is the end to
that 20 minute mini episode I just relic into the whole thing and it really does I think it's a
perfect explanation and illustration of why I think founders notes is so valuable because some of
those books I haven't read in five six years and just the ability to have a searchable database of
all these these ideas like this collected knowledge of some of his greatest entrepreneurs to reference
and then contextually apply to our own businesses it's nothing short of like it's magic that's
the really the way I think about it I think it's a massive superpower gives me a massive superpower
I couldn't 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 the description and you can do that by going to founders notes dot com
