0:55

Welcome to my

0:55

podcast In Search of Excellence,

3:38

our quest for greatness to be

3:38

the very best we can be to

3:42

learn, educate and motivate

3:42

ourselves to live up to our

3:45

highest potential. It's about

3:45

planning for excellence which

3:49

requires incredibly hard work,

3:49

dedication and perseverance.

3:53

Achieving Excellence is our

3:53

goal. And it's never easy to do.

3:56

We all have different

3:56

backgrounds, personalities, and

3:58

surroundings. We all have

3:58

different routes on how we hope

4:01

and want to get there. Today is

4:01

my friend, the incredible Sam

4:05

Zell. Sam is the chairman of

4:05

equity group investments a

4:09

private investment firm he

4:09

founded more than 50 years ago.

4:12

He's the chairman of five public

4:12

companies and the New York Stock

4:15

Exchange equity residential,

4:15

which has a market

4:18

capitalization of $27 billion

4:18

equity lifestyle properties

4:22

which has a market cap of $12

4:22

billion equity Commonwealth,

4:26

which has a market value of $3.5

4:26

billion Covanta holding

4:31

corporation which has a market

4:31

value of $1.8 billion equity

4:35

distribution Acquisition Corp,

4:35

which is a SPAC which has a

4:38

value of $513 million. He was

4:38

also the founder and chairman of

4:42

equity office, the largest

4:42

office REIT in the country until

4:46

its sale in 2007. For $39

4:46

billion. He's considered one of

4:51

the grandfather's of the modern

4:51

real estate investing industry

4:55

was recognized by Forbes as one

4:55

of the greatest living business

4:59

minds. He's a self made

4:59

billionaire with a net worth of

5:02

more than $5 billion, who has

5:02

been on the Forbes 400 Since it

5:06

started in 1982. Sam is also an

5:06

active philanthropist with a

5:11

focus on entrepreneurial

5:11

education among many other

5:14

organizations who have been the

5:14

recipients of his generous

5:17

gifts. He founded the Zell Lurie

5:17

Institute for Entrepreneurship

5:21

Studies at the University of

5:21

Michigan's Ross business school,

5:24

and he's given more than $150

5:24

million to the greatest

5:27

university on Earth, the

5:27

University of Michigan. He

5:31

founded this Hal Fellows Program

5:31

at Northwestern University's

5:35

Kellogg School of Management. He

5:35

started his Ellery, real estate

5:38

Center at Wharton, and the Zell

5:38

Entrepreneurship Center at her

5:42

salon, Israel, among many

5:42

others. He's the author of a

5:46

book called Am I being too

5:46

subtle, which is behind me, an

5:50

amazing book, whose last chapter

5:50

is titled go for greatness,

5:54

which is one of the main reasons

5:54

why I started my podcast, Sam

5:58

and I have been friends for 22

5:58

years. And I'm honored to have

6:02

as my guest today, Sam, Welcome

6:02

to In Search of Excellence.

6:05

My pleasure, Randy, it

6:05

was a very long winded

6:08

introduction. But I'm glad went

6:08

through it.

6:11

Okay. You've

6:11

done a lot of great things. And

6:14

I want readers to have some

6:14

background in terms of all of

6:17

your incredible accomplishments.

6:17

Let's start with family. From

6:21

the moment we're born, our family helped shape our personality and values and the

6:23

preparation for our future. Your

6:27

parents were Jewish immigrants

6:27

from Poland, who left the Nazis

6:32

before they invaded. And they

6:32

had a very long trip that took

6:34

many stops before they arrived

6:34

by ship and Seattle. In May of

6:38

1941, your dad was 36, your mom

6:38

was 33. They had little money

6:43

and they didn't speak English,

6:43

can you tell us more about their

6:45

journey, what they were like

6:45

what kind of values they

6:48

instilled in you. And let's

6:48

start with the 12 hour span

6:52

after they arrived?

6:54

Well, you know, maybe

6:54

one of the best ways to describe

6:59

their unique characteristics was

6:59

the fact that, you know, they

7:04

landed at 6am May 16 1941. My

7:04

mother was pregnant with me, I

7:13

had a little I had an older

7:13

sister. And at 6pm. That night,

7:19

they went to their first English

7:19

school, and in rapidly learned

7:26

how to speak English and learn

7:26

how to be. And we're very proud

7:31

of being citizens of the United

7:31

States. More than anything that

7:37

really talks about conviction,

7:37

my parents lived on the German

7:45

Polish border. And my father had

7:45

meant taking the steps necessary

7:52

earlier, to provide for the

7:52

ability to escape, since he felt

7:58

that leaving Poland was going to

7:58

be the only way to survive.

8:04

Unfortunately, he tried to, you

8:04

know, convince other members of

8:08

his family or her family to join

8:08

them. I think they were probably

8:13

viewed as, you know, young,

8:13

crazy kids, and, you know, and

8:18

didn't understand that what

8:18

stability was, unfortunately,

8:22

everybody, with the exception of

8:22

two who stayed, didn't make it.

8:27

So that was kind of the you

8:27

know, the way it started in now.

8:32

It took them 18 months to go

8:32

from, you know, Serbia Chien,

8:38

Poland to Seattle, in the United

8:38

States. It was over that was

8:44

across Poland, into Lithuania,

8:44

to Moscow across the rest of

8:52

Russia, 11 days and 11 nights on

8:52

the Trans Siberian Express. And

8:57

then into Japan along the way.

8:57

Lots of stories, lots of

9:03

examples of my mother saying

9:03

that my father, you know,

9:06

Bernard enough already, why

9:06

don't we stop here. And he was

9:11

determined to make it all the

9:11

way and so there was never any

9:17

option of stopping. And it took

9:17

a lot of, you know, acrobatics,

9:23

and and they were the

9:23

beneficiaries of a Japanese

9:29

Council in Cognos, which is part

9:29

of Lithuania, who signed transit

9:34

visas. They allowed him and

9:34

another 2000 some odd Jews that

9:41

were basically stateless

9:41

immigrants to get across Russia

9:47

and get out of get out of harm's

9:47

way. And most of them ended up

9:54

spending the war in Shanghai,

9:54

which is where the Japanese

9:59

deported him to Whew. But of

9:59

course, they survived, versus

10:02

the many millions that didn't

10:02

make it. So with that, kind of a

10:09

background of my life, and, you

10:09

know, I remember is a four year

10:13

old or a five year old, you

10:13

know, sitting it up at a, at a

10:18

Passover Seder table, when, you

10:18

know, they wouldn't be in the

10:22

mood to tell stories, and they

10:22

told the stories of that trip

10:26

and their experiences. And, you

10:26

know, and how they felt about,

10:31

you know, being Americans, and

10:31

being part of America, built in

10:38

me, a whole deep layer of

10:38

patriotism in the love of this

10:45

country.

10:47

And what kind of

10:47

values did your parents still

10:51

have you? What did your dad do

10:51

for a living? And did you watch

10:56

what he was doing and want to be

10:56

like your dad? And what kind of

11:00

qualities did he have that you

11:00

wanted to emulate?

11:04

Well, in Poland, he

11:04

was a green trader, and a very,

11:11

very successful one, which, by

11:11

the way, probably ended up

11:15

saving the family's life because

11:15

he was much more sophisticated

11:21

than most of the people who

11:21

lived around him. And he was

11:26

much more connected to World

11:26

News and knew a great deal more,

11:30

but what was going on in Germany

11:30

at the time, so that the job

11:37

will lead to a level of

11:37

knowledge and sophistication.

11:40

That certainly contributed to

11:40

the steps that he took to go

11:46

from there. Once he got to the

11:46

United States, he ended up in

11:51

Chicago, because this was the

11:51

center of the grain business in

11:56

the United States. And one of

11:56

his biggest customers in Europe,

12:00

was Quaker Oats. And Quaker, the

12:00

whoever the Quaker

12:05

representative was in in Europe,

12:05

just loved my father, and would

12:10

frequently say, you know, if

12:10

only we had people that we could

12:14

hire like you to work for us, it

12:14

would really be terrific. So we

12:18

went to QuickBooks to get a job,

12:18

and they wouldn't hire him

12:22

because he didn't have a college

12:22

education. So he became kind of

12:26

an independent Millers

12:26

representative for a year or

12:31

two, and then became a wholesale

12:31

jeweler. And, uh, yeah, and he,

12:38

you know, in those days,

12:38

wholesale jewelry were much more

12:43

entrepreneurs and, and, in

12:43

effect, they, they they operated

12:49

their businesses, and

12:49

distributed that, you know,

12:55

among, you know, 11 or 12 states

12:55

and, and then he eventually

12:59

became a representative for a

12:59

watchman company, and basically

13:03

did the same thing. He was a

13:03

very, very unusual man is just

13:12

as an example, you know, despite

13:12

his I was obviously a recent

13:18

immigrant and spoke with an

13:18

accent. And, and yet, you know,

13:25

this watchmen company he worked

13:25

for was never able to get into

13:28

Sears, I was never able to get

13:28

into JC Penney, my father, you

13:34

know, accomplish both of those

13:34

objectives. So he was very

13:38

persuasive, very smart. And, you

13:38

know, he had an extraordinary

13:45

level of self confidence. I

13:45

suppose you could say that,

13:49

that, you know, at age 34, when

13:49

he made the decision to leave

13:54

Poland, you know, very few 34

13:54

year olds ever make a life and

14:00

death decision. And it becomes

14:00

very difficult if you make a

14:06

life does that decision? Can

14:06

You're right. I don't think you

14:11

ever thought he was wrong again.

14:11

At least that's the perspective

14:15

from his father from his son.

14:15

But, you know, they set examples

14:20

for me, you know, they emphasize

14:20

how lucky I was to be in the

14:26

United States, that the streets

14:26

were paved with gold. But his

14:32

definition of pay with gold

14:32

meant freedom meant the ability

14:39

to, you know, Excel to test your

14:39

limits to do whatever you could.

14:45

And so, I grew up in that kind

14:45

of an environment. It was also

14:50

an environment that that, you

14:50

know, encouraged me to, you

14:55

know, be humble and and not get

14:55

The out there, quote unquote,

15:02

and, you know, and to a large

15:02

extent, you know, despite all of

15:08

the different things I've done,

15:08

I think that I've made a point

15:13

of not being a quote unquote, a

15:13

public figure that, you know, in

15:20

effect, we don't dictates to

15:20

society in any way. You know, my

15:27

my feelings are that I believe

15:27

very strongly in what I believe

15:31

in. I believe in consistency, as

15:31

you mentioned, you know, I wrote

15:37

a book, and I titled better my

15:37

being too subtle. And that, in

15:44

many respects, that's as good a

15:44

description of me as I could

15:48

think of, because I'm not known

15:48

for my subtlety. But I've always

15:54

really wanted no one to ever

15:54

leave a meeting with me, they

15:59

may not agree with me. They may

15:59

not like what I had to say. But

16:04

they couldn't possibly say, What

16:04

do you think he meant by that?

16:09

And so that's created a long

16:09

history and a long business

16:15

community that I've created,

16:15

where those kinds of standards

16:21

are prevalent.

16:23

What were you

16:23

like, as a kid? Were you one of

16:26

these popular kids? Were you a

16:26

leader? Did you have things you

16:30

love to do for fun? And then, as

16:30

part of we can weave into where

16:36

Playboy played a factor in your

16:36

childhood?

16:40

Well, I was I was a

16:40

different kid. I mean, going

16:48

back to my father, you know, my

16:48

father's attitude was, you know,

16:53

and as often expressed to me,

16:53

you know, you're different, you

16:59

know, and I'd say, Well, I want

16:59

to go out and play again. And he

17:02

says, Why don't you go sit and

17:02

read a book, you know, you're

17:05

different. I remember as a, you

17:05

know, as a teenager, you know,

17:11

going to a high school

17:11

basketball game. And, and that

17:15

was like, on a Friday night, and

17:15

a week later, I wanted to go to

17:19

another basketball game. And my

17:19

father said, if you would you

17:22

already went to a basketball

17:22

game once, why would you want to

17:25

ever go to more than one

17:25

basketball game, when you could

17:29

be studying or when you could be

17:29

doing something, quote, unquote,

17:33

productive. So I always,

17:33

although I didn't necessarily

17:38

agree with my father's views,

17:38

and everything, I always was

17:42

very, very aware of the fact

17:42

that I live in that I came from

17:47

a different household, that the

17:47

environment was different, that

17:52

the expectations of me were very

17:52

different. I mean, I have, I

17:57

know, numerous friends and, but

17:57

their parents didn't, didn't

18:05

lean on them in any way, shape,

18:05

or form, similar to the

18:10

experience that I had. But

18:10

obviously, it gave me

18:15

discipline, it gave me a lot of

18:15

self confidence. They were my

18:20

parents were very relaxed, you

18:20

know, as opposed to today's

18:26

parents. You know, if I was gone

18:26

for six or seven hours, you

18:32

know, that was normal. And I was

18:32

very curious. And I remember

18:38

when I was like, 10 years old,

18:38

I, you know, for a nickel, I was

18:43

able to get on the subway

18:43

system. And I rode all day long

18:50

on the same nickel. Because I

18:50

knew where I could transfer and

18:55

we know and would therefore not

18:55

incur another, another fair, but

19:00

I was curious. I wanted to see

19:00

to see everything. And in the

19:05

same way as you as you, as you,

19:05

you mentioned, you know, when I

19:10

was 12 years old, and in sixth

19:10

grade, my parents moved from the

19:16

city to the suburbs. And I had

19:16

been enrolled in Hebrew school

19:22

when I was five. So by the time

19:22

I was 12, I had a much more

19:28

extensive than average

19:28

education. And so the only way I

19:35

could continue my education was

19:35

by going back into the city

19:40

every day after school, and

19:40

going to a Hebrew word with

19:46

color, you Shiva on the north

19:46

side of Chicago. And so

19:50

literally every Monday, Tuesday,

19:50

Wednesday, Thursday and Sunday

19:53

morning, I got on the train and

19:53

went by myself and and my

19:59

parents never Right never, never

19:59

crossed their mind that there

20:03

was anything dangerous about a

20:03

12 year old boy being, you know,

20:08

totally loose in a major city.

20:08

But as a result, again, my

20:12

levels of curiosity, were an

20:12

ending at that age in

20:17

particular. And I, one of the

20:17

things that I discovered that

20:21

was really extraordinary was

20:21

that there were magazine stands,

20:26

you know, usually under the old

20:26

tracks, and that they sold

20:30

magazines that they didn't sell

20:30

it every other magazine trail

20:35

store. And you know, and they

20:35

were, you know, girlie magazines

20:40

and stuff like that. And then in

20:40

1953, Hugh Hefner published

20:44

something called Playboy, which

20:44

was really the first quote

20:49

unquote, girly magazine, that

20:49

was really, you know, well done.

20:55

And so I bought it, it cost 50

20:55

cents. And I read it on the way

21:00

home on the train. And then I

21:00

showed it to a friend of mine.

21:05

And a friend of mine was, and

21:05

this is the kind of magazine

21:08

then in those days, wasn't sold

21:08

in the suburbs. It was limited

21:14

to those under the tracks,

21:14

magazine store. So I showed it

21:20

to a friend of mine, and he was

21:20

in thrall, and said, Geez, you

21:26

know, can I buy it? And I said,

21:26

Sure. And he said, I watched

21:30

him, I said, I don't know $3. He

21:30

said, great. So he paid me $3

21:36

For something that I paid 50

21:36

cents for, and PSA gotten to

21:41

read first. And maybe for the

21:41

first time in my life, I really

21:47

understood supply and demand.

21:47

You know, they knew there was an

21:52

unlimited demand for that

21:52

product. And so I started quote,

21:57

unquote, importing Playboy from

21:57

our friends. But that was one of

22:03

a number of, you know,

22:03

entrepreneurial endeavors that I

22:08

pursued, when during the period

22:08

I grew up,

22:12

you've made a

22:12

career out of saying things that

22:16

other people can't see, when you

22:16

were young, did you realize you

22:20

saw things differently than

22:20

other people,

22:23

I ranked, I will, I

22:23

recognized for sure that I saw

22:27

things differently. I didn't

22:27

frankly, understand what it

22:32

meant. In other words, you know,

22:32

as I've gotten grayer and older,

22:37

I've come to understand that,

22:37

for whatever reasons, I am

22:44

different, and I see things

22:44

differently. And my perspective

22:48

is different. You know, you

22:48

asked me whether I was, you

22:52

know, part of the popular group,

22:52

I was never able to be part of

22:56

the popular group, because I

22:56

couldn't possibly adjust my

23:00

thinking to the common, the

23:00

common participant. And, and so

23:07

I was constantly challenged by

23:07

my own level of thinking, that

23:14

made me act differently in and

23:14

created environments. That, you

23:20

know, later on in life turned

23:20

out to be extraordinarily

23:23

productive, and, and profitable.

23:23

But when I was a young kid, all

23:28

I knew was, I was different.

23:28

And, frankly, that was, you

23:33

know, something I discovered

23:33

later on in life. It was also,

23:37

at times quite lonely. Just as

23:37

you know, 50 years later, you

23:44

know, when I was, you know,

23:44

buying up distressed real estate

23:47

in the early 90s. And that, and,

23:47

you know, one day I was, you

23:53

know, standing at the wheel was

23:53

in the lobby of the urban Trust

23:58

Bank in New York, and I had just

23:58

negotiated the purchase of a

24:01

building that was in that they

24:01

had foreclosed upon. And I

24:06

stopped and I kind of looked

24:06

over my shoulder and I said, how

24:11

come everybody else is doing

24:11

what I'm doing? Maybe I'm wrong.

24:19

How come although I'll come on

24:19

in, there's lots of smart

24:22

people. There's lots of people

24:22

with money, how come I'm doing

24:27

this time, literally doing it

24:27

alone, just as I did in the, in

24:32

the mid 70s. Until all of a

24:32

sudden, I wasn't alone. But

24:38

there's a serious period of

24:38

loneliness. When you know, the

24:44

what, when when when common, no

24:44

viewpoints. You know, just

24:53

don't, don't work with you and

24:53

you you operate off your own.

24:58

You're on your own ledger.

25:01

When we talk about excellence, we're talking about our drive to be the best

25:02

we can be or whatever we're

25:05

doing. How old? Were you? Were

25:05

you really made a conscious

25:09

effort to be the best at what

25:09

you did? And when you did? Was

25:14

there a certain way you went about it?

25:20

I don't. I don't think

25:20

that there was a certain way

25:26

about it, per se. I think that I

25:26

was driven by the desire to feel

25:37

fulfilled. When I was a kid, I

25:37

had a very close friend, and he

25:45

and I were laying in the living

25:45

room floor one day, maybe we

25:50

were 17. And he looked at me,

25:50

and he said, What makes you the

25:56

way you are? So I obviously was

25:56

probably driven at that point,

26:00

too. And I looked at him and I

26:00

said, you know, I think that,

26:08

you know, every one of us is

26:08

born with certain traits and

26:13

skills and abilities. And, and

26:13

I've always felt that my

26:19

obligation is to maximize those

26:19

talents that I've been given

26:25

whatever they may be, and, and

26:25

that's driven me more than

26:31

anybody else. You just said, you

26:31

know, that's an obligation to

26:34

society.

26:38

When we're

26:38

trying to improve, I think one

26:41

way to do that is to work with

26:41

people, better we are if you're

26:44

a basketball player, you don't

26:44

want to be the best player on

26:47

the team, especially as you're

26:47

making your way up. You want to

26:50

work with play with people

26:50

better when I came to Sun

26:53

America, I was 27. And I was the

26:53

junior guy in the senior team.

26:58

And what really made an impact

26:58

on my life and my professional

27:01

life, was working with an

27:01

incredible group of people,

27:06

including one senior person, Jim

27:06

Velarde has gone off to create

27:09

his own real estate company.

27:09

He's become a billionaire Jay

27:13

wind trab, who was one of my two

27:13

bosses, now CEO at Oak Tree. Did

27:20

you work with more experienced

27:20

people, especially when you're

27:25

younger? And we're going to talk

27:25

about your career and some of

27:28

the stepping stones in the

27:28

beginnings? But have you worked

27:31

with people even in the in your

27:31

work life that made you better?

28:28

Well, I think that

28:28

that depends that you? The

28:32

answer, of course, is yes. But I

28:32

think the answer is adjusted

28:38

accordingly. As you mentioned

28:38

that my work life per se, has

28:45

been quite different than most

28:45

people who had jobs. You know, I

28:51

went to law school, I graduated

28:51

from law school, I actually even

28:55

did reasonably well, in law

28:55

school, I had a hell of a time

28:59

getting a job, primarily because

28:59

I told them what I did while I

29:04

was in law school, and nobody

29:04

couldn't believe that I'd want

29:08

to be a lawyer. And they were

29:08

right, but I didn't know it. And

29:13

so I only really worked for

29:13

anybody else. For four days, I

29:18

only worked with a quote, group

29:18

of people that didn't report to

29:23

me for four days. So as opposed

29:23

to your experience, I never got

29:29

to work with the kinds of people

29:29

that you, you know, had those

29:34

kinds of enormous influences on

29:34

you. But instead, what ended up

29:39

for me being the case, since

29:39

almost from the very first

29:44

moments that I left the

29:44

theoretical practice of law, I

29:49

was always raising money for

29:49

various kinds of Real Estate

29:54

projects. And I, as a result, I

29:54

met fascinating men and women

30:02

who did all kinds of things, you

30:02

made all kinds of lots of money

30:08

and needed, you know,

30:08

opportunities to invest. And,

30:13

you know, and I was apparently a

30:13

very good salesman, because, you

30:19

know, except for the very first

30:19

deal I ever did, you know,

30:23

people really stood in line to

30:23

mess with me. So, but but those

30:29

people were Vassy were fabulous

30:29

people. I mean, they were, they

30:34

were the excellence generation,

30:34

you know of their generations,

30:39

as reflected by economically how

30:39

they did and, and the breadth of

30:44

what they did. Is was enormous

30:44

and so it it for sure. kindled

30:51

all my curiosity They encouraged

30:51

me for

31:02

Sam use you

31:02

froze on your end. We lost you

31:07

there. Okay, you're back. Yeah,

31:07

you're back.

31:11

Okay. Do you know where I froze?

31:14

You froze toward

31:14

the end of we're asking the

31:19

question did you work with

31:19

people that made you better? You

31:23

were saying that you raised a

31:23

lot of money from people you

31:27

never worked for people before.

31:27

But you're, you're pretty much

31:30

finished with the answer was

31:30

kind of a tail end of that.

31:34

Okay. Okay. Let's talk about

31:34

education and its importance,

31:40

incredible importance in all of

31:40

our lives. And what we do. Is

31:44

education, the first cornerstone

31:44

to our future success.

31:49

Well, let's, let's say

31:49

that education is the minimum

31:53

requirement. In other words, I

31:53

can't imagine how anybody would

32:00

survive and in this world, and

32:00

now we're talking about 2021,

32:06

but you know, even think about

32:06

1951, or, or anything in

32:11

between, education has always

32:11

been really critical. And

32:15

there's very little doubt that

32:15

my education contributed to my

32:20

ability to make the right

32:20

decisions.

32:24

You went to the

32:24

University of Michigan, which

32:26

I've already said, and we both

32:26

know is the greatest school on

32:28

Earth. Absolutely did. You did

32:28

well there and that you went to

32:33

law school, as you mentioned,

32:33

for 99.999% of people, they go

32:39

to college or grad school before

32:39

they enter the real world and

32:42

start their careers. I like so

32:42

much of your career and your

32:46

DNA, you were the point 000 1%,

32:46

who didn't go that route, you

32:51

got into real estate, your

32:51

junior year by managing a 15

32:54

unit building, and return for

32:54

free room and board. And then

32:57

you kept going you are managing

32:57

the owners, and other properties

33:01

as well. And this is crazy. But

33:01

by the time you graduated, that

33:06

venture was netting $150,000,

33:06

which in today's dollars is 1.2

33:11

million. Then you met Robert

33:11

Lurie, your fraternity brother

33:14

in a pie who became your

33:14

partner, by the time you

33:18

graduated law school in 1966.

33:18

The two of you manage a total of

33:22

4000 apartments and personally

33:22

owned more than 100 buildings.

33:29

That's just insane. Can you give

33:29

us more insight into how that

33:33

happened? And was that some kind

33:33

of a master plan?

33:38

No, matter of fact, it

33:38

was anything but a master plan.

33:45

You know, somebody once asked

33:45

me, you know, how would I best

33:49

describe, you know, who I am?

33:49

And what I do? And? And the

33:53

answer is that I consider myself

33:53

a professional opportunist. And

33:58

so when we took over that first

33:58

50 unit building, and we worked

34:04

hard, and we learned a lot, when

34:04

the second building was offered

34:10

to us, it was just a natural and

34:10

wouldn't even, you know, one

34:15

Newman a difficult choice. And

34:15

then when the third building was

34:19

offered to us, you know, Laurie

34:19

was the guy we hired to run the

34:25

third building, and that

34:25

eventually, we, you know, ran a

34:29

whole bunch of other buildings

34:29

and then started buying

34:32

buildings and, and just all

34:32

became well, why not? I mean,

34:38

you know, I spent a couple of

34:38

years acquiring a square block

34:43

and in Arbor, Michigan, and you

34:43

know, and it basically started

34:48

out with a friend of mine who

34:48

was in law school who had

34:51

graduated, and he had some kind

34:51

of a gastronomical problem. And

34:56

so when he became a freshman at

34:56

Michigan, his father bought him

35:00

a house. And he rented out the

35:00

other rooms to other people,

35:05

and, and was able to cook his

35:05

own food. Well, the layman

35:10

eventually graduated from law

35:10

school and, and he called me one

35:14

night and he said somebody

35:14

wanted to buy the building the

35:18

the house, and what did I think?

35:18

And I said, I don't know if so

35:23

I'll go look at it. And I call

35:23

you back tomorrow and tell you

35:26

what I think. And I basically

35:26

called him back and said, you

35:29

know, we, my partners, and I

35:29

would buy it from you. He said

35:34

fine, so I we paid him a little

35:34

more than what he was offered.

35:38

And that was the first of those

35:38

that square block and so then we

35:42

own the corner. And I said to to

35:42

to local real estate guys who

35:47

want that partners. Geez, maybe

35:47

it'd be worth more if we owned

35:51

the one Next Door. So I mean,

35:51

what bought the one next door?

35:56

And then once we own those two,

35:56

then it began. Next question is

36:01

maybe we'd be be worth more if

36:01

we bought another one, the one

36:04

next door. And so literally, I

36:04

became the king of the street.

36:09

As I went from house to house to

36:09

house and literally buying up

36:14

by, you know what a mile, it

36:14

openly turned out to be like a

36:18

half a block or three quarters

36:18

of a block. And but it was, it

36:21

was quite an experience.

36:24

You already mentioned you went to law school, you did well there, then

36:26

you're looking for a job after

36:30

you graduate, despite having

36:30

made a tremendous amount of

36:34

money as an undergrad. And in

36:34

law school, you were wealthy by

36:40

the time you graduated, and if

36:40

you look at the average worker,

36:48

you are extremely wealthy. And

36:48

then you're trying to get a law

36:51

school job. And you mentioned

36:51

you had a hard time. So how many

36:54

job interviews did you have? And

36:54

how did you land the last one?

36:57

And what did that partner tell

36:57

you? Because you did set a world

37:01

record for how long you were there?

37:04

Yeah, I'm sure that

37:04

Well, I think I think I struck

37:10

out in 43 different attempts, I

37:10

was at 43, interview 43

37:19

interviews with 43 different

37:19

firms. And the net result was

37:25

that I got not one single job

37:25

offer. I had one kind of a funny

37:30

experience, where toward the end

37:30

of this was really a horrible

37:34

experience, as you may you could

37:34

imagine. You know, I got into

37:40

the first interview, and I got a

37:40

second interview. And then I got

37:43

an interview with the boss, you

37:43

know, the guy whose name was on

37:46

the door. And so I went in, and

37:46

he was a wood panel, the

37:53

lawyer's office, and he was on

37:53

the phone. So he told me to sit

37:57

down and I nodded his head and

37:57

he got off the phone, he got up

38:02

because the daughter was off. So

38:02

he said, Tell me about your

38:05

deals. I said tell you about my

38:05

deals, I want a job. He says,

38:10

Oh, we would never hire you.

38:10

You'd be here three months, and

38:15

you'd be off. And I said, What

38:15

about Perry Mason, and he just

38:21

laughed at me, he said you what

38:21

you don't understand is that

38:25

what you've done? Is not what

38:25

anybody else could do. What you

38:30

know, it's a lot more guys who

38:30

could draft contracts that could

38:34

compete with me, as opposed to

38:34

what you've done. And I didn't

38:39

realize it, but he was right.

38:39

And the job I did get was with a

38:44

very small law firm. That was

38:44

kind of a half rocks firm, half

38:50

real estate developer. And so

38:50

they thought that, you know,

38:54

that I would fit and, you know,

38:54

and, and from the firm's

38:58

perspective, I think they paid

38:58

me $5,600 A week in 1966. And

39:06

that, and you know, and I was

39:06

there for four days and, and

39:11

drafted a contract and, and came

39:11

to a relatively quick resolution

39:16

revenue resolution that this

39:16

just wasn't my cup of tea. And I

39:20

went in to see the senior

39:20

partner on Friday morning, and I

39:24

said, I just don't think this is

39:24

a good use of my time. And he

39:29

was stunned that he just looked

39:29

at me and he says, you quitting?

39:34

I said, Yeah. And he said, What

39:34

are you gonna do? I said, Well,

39:37

I'm just gonna go back to doing

39:37

deals like I did, you know,

39:41

right before I got this job. And

39:41

he said, Well, why don't you

39:46

just stay here? And we'll do the

39:46

legal work. And we'll invest in

39:49

your deals. So I said, Sure. So

39:49

that's what happened. So I

39:55

stayed with no state office with

39:55

a law firm. They did the legal

39:59

work, and I did the deals. They

39:59

and many, some of some of their

40:04

other clients put up money to go

40:04

along with, you know, what we

40:08

need to make it work. And that

40:08

work was was just fine until

40:14

about maybe a year into it. You

40:14

know, I was fortunately very

40:19

successful. And the disparity

40:19

between what I was earning and

40:25

what everybody else in the firm

40:25

was earning became much too

40:29

great. And so I in effect, went

40:29

out and became independent.

40:36

20 years ago, a

40:36

tech billionaire named Peter

40:39

Thiel, one of the founders of

40:39

PayPal, the first outside

40:42

investor in Facebook, launched a

40:42

program that awards $100,000 to

40:47

promising young entrepreneurs

40:47

under 23 years old, are willing

40:52

to drop out of college and turn

40:52

their ideas into businesses,

40:56

it's had very mixed results.

40:56

What do you think about that

40:59

plan?

41:05

I know Peter, and I'm

41:05

familiar with the program, I

41:10

think I'm pretty critical of it.

41:10

Because they think it's, it's

41:15

waving the flag of money. And

41:15

maybe, you know, maybe encourage

41:22

you somebody to make a bad life

41:22

decision, and in, you know,

41:27

alter their educational process

41:27

to pursue something like that.

41:32

So that'd be my my observations.

41:32

You know, clearly, I think the

41:38

idea of encouraging people to

41:38

pursue entrepreneurial

41:44

objectives is I'm very much in

41:44

favor of that. But but not at

41:50

not at the price of, of

41:50

disturbing education and raising

41:54

the risk that you may not, you

41:54

may not return to it. And, you

41:59

know, and so that'd be my

41:59

viewpoint.

42:03

I'll just digress here, I have a scholarship at University of

42:05

Michigan, it's a full ride for

42:09

student from Michigan interested

42:09

in business. And I'm not going

42:13

to mention his name, obviously.

42:13

But we get he gets a

42:17

scholarship, I don't hear from

42:17

him. And then next year, I call

42:21

the university Hey, what's up

42:21

with this kid? And they said he

42:24

didn't enroll in college. And I

42:24

said, What are you talking

42:28

about? Did you try to find them?

42:28

He said, Yeah, we tried to find

42:31

them, and we couldn't get ahold

42:31

of them. So I go on LinkedIn,

42:33

and I find them in 30 seconds,

42:33

and I call the guy and he is

42:38

dropped out of college. To work

42:38

in New York City. He's from Las

42:43

Vegas comes from a very

42:43

underprivileged background. He's

42:47

in New York City making $40,000

42:47

a year to join a startup that

42:51

was funded by Excel ventures,

42:51

they had raised something like

42:54

$3 million to be the chief of

42:54

staff. I begged the guy to go

42:58

back to school I had Brad

42:58

Keywell call on my had a bunch

43:01

of friends call them. And he

43:01

never went back to Michigan. It

43:05

was it was unfortunate, the

43:05

company failed. Last time I

43:08

checked, he had gone to City

43:08

College and he had dropped out

43:12

of school, it can be tempting to

43:12

do things that are just

43:17

craziness. So one of the goals

43:17

of In Search of Excellence is to

43:23

encourage people to pursue their

43:23

passions on their path to

43:26

realizing their dreams. And for

43:26

Manny, as we talked about, that

43:30

means starting your own business

43:30

being an entrepreneur. But the

43:34

stats show that 75% of new

43:34

businesses fail after 10 years.

43:37

And there's a lot of people

43:37

listening to this, and watching

43:40

this who are thinking, I got to

43:40

start my own company, I want to

43:43

do it. I'm afraid to do it. And

43:43

they're planning for it. But

43:47

given the low success rate,

43:47

should that put a damper on

43:51

being an entrepreneur?

43:53

Why? Well, I certainly

43:53

think it should be taken into

43:58

consideration. You know, when

43:58

you talk about an entrepreneur,

44:04

you know, one of the things you

44:04

talk about is the fact that to

44:08

an entrepreneur, the word

44:08

failure doesn't exist. Maybe it

44:14

didn't work out, but you get up

44:14

off your ass. And you start

44:19

again, I think that the biggest

44:19

risk is not, you know, reaching

44:25

out and failing. It's not being

44:25

realistic about when to say no

44:32

go so that you make a commitment

44:32

to pursue an idea. And it works

44:40

out or doesn't work out within a

44:40

very specified period of time.

44:46

You don't run the risk of you

44:46

know, find yourself 10 years

44:51

later, with a startup that

44:51

didn't work. And most productive

44:56

years of your business career

44:56

are behind you.

45:02

Some people are

45:02

born with the entrepreneur gene,

45:05

some people are not born with

45:05

it. For those that aren't born

45:09

with it, can you learn how to

45:09

become an entrepreneur?

45:15

You know, it's that's

45:15

maybe the 60 vote our question

45:19

that we've spent a fortune and

45:19

many years, you know, trying to

45:23

find out. You know, maybe you

45:23

get a start by defining what it

45:29

is an entrepreneur. It's, it's

45:29

because it's a it's a big

45:34

psychological scenario. It's a

45:34

high level of self confidence.

45:42

It's an ability to absorb

45:42

rejection. It's an ability to

45:49

shut off the noise and I can

45:49

recognize that conventional

45:56

wisdom is not necessarily the

45:56

answer to this to the problem.

46:02

Ah, you take all those things

46:02

in, you end up with different

46:07

kinds of entrepreneurs. I mean,

46:07

we ran a program that we ended

46:12

up with the University of

46:12

Michigan where we ran a

46:15

nationwide contest to design the

46:15

syllabus in entrepreneurship.

46:24

And this is an this resulted

46:24

from me sitting with the dean of

46:29

the business school in 1979. And

46:29

reading his curricula. And I

46:36

looked at him and I said, How

46:36

could the word entrepreneur not

46:40

exist in your entire curriculum,

46:40

with all these courses that

46:45

you're putting out? The word

46:45

entrepreneur doesn't even exist.

46:50

So we ran this contest, open to

46:50

any, any academic, to basically

46:56

design a course. And the first

46:56

winner was a woman. And the

47:05

woman taught music at Wayne

47:05

State University. And her

47:11

specialty was composition in,

47:11

she basically taught the course,

47:18

as in showing that in order to

47:18

be an effective composer, you

47:23

have to be able to bring

47:23

together a whole bunch of ideas,

47:26

you need to get focus, you need

47:26

to make it happen, you need to

47:30

be driven. But How different is

47:30

it to compose a piece as it is

47:36

to start a business. And maybe

47:36

it isn't very different. So it

47:41

was very interesting. That was

47:41

the first winner.

47:44

In the late 60s,

47:44

early 70s, you notice the trend

47:49

that some other people were in

47:49

seeing you took advantage of it.

47:54

Jimmy Carter helped you out

47:54

there a little bit with

47:56

inflation. And then you wrote an

47:56

eight page paper, which you can

48:01

still find online for those of

48:01

you want to read it. It's a

48:04

fascinating read. It's a

48:04

technical read. But it's

48:07

fascinating. And it was titled

48:07

The grave dancer. And you met

48:13

one thing, it's sometimes been

48:13

interpreted as something else.

48:16

Can you talk about? The term and

48:16

what you saw in what you did?

48:20

Yeah. Excuse me. You

48:20

know, in in early 70, roughly

48:29

66, right out of law school, to

48:29

73, I was operating under the

48:36

thesis that, that the real

48:36

estate investment world was

48:43

divided between the, quote major

48:43

cities and the rest of the

48:49

country. And that, whereas an

48:49

investor might take a 4% return

48:56

to invest in Chicago, he

48:56

couldn't even imagine taking any

49:02

return two or three times it to

49:02

go to in Arbor, Michigan, or

49:07

some, you know, little town, I

49:07

decided that that's where the

49:11

opportunity was. And so that's

49:11

what I did. And, and I watched

49:17

it all happen. And I remember

49:17

vividly that I had purchased an

49:22

apartment project in Orlando,

49:22

Florida, was beautiful and fully

49:26

occupied, and not. And then in

49:26

the course of roughly a year and

49:33

a half, maybe two years. All

49:33

around it were quote unquote,

49:39

new projects being constructed.

49:39

And occupancy went from 100% to

49:46

68. And that's when I said, Oh

49:46

my God, you know, they're going

49:52

to oversupply the whole country.

49:52

And then I need to stop making

49:58

investments, building distressed

49:58

property management company, and

50:03

then begin buying distressed

50:03

assets. And that's what I did.

50:10

And, you know, all I can say is

50:10

that during that period of time,

50:17

I ended up where I've toward the

50:17

end of it, I ended up going to

50:22

an NYU conference to hear guy I

50:22

can't remember his name right

50:30

now but Zack and Darth

50:30

unfortunately, secondary was too

50:36

old to to make a presentation at

50:36

that time. But somebody came to

50:42

me and said, You've been buying

50:42

a policy distressed property.

50:47

Would you be willing to write a

50:47

piece for NYU? Real Estate read

50:52

You describe it. So I sat down

50:52

and I started to put together

50:57

had never written an article for

50:57

publication before, and tried to

51:03

put together the elements of

51:03

what was involved in, in buying

51:08

distressed assets. And I got to

51:08

the end of it, and then I start

51:13

thinking about the name that I

51:13

should put on it. And, and then

51:18

I kind of referred to the end,

51:18

the last thing I said, which

51:22

was, you know, you really needed

51:22

to be careful, because you,

51:27

you're really dancing around a

51:27

lot of opportunity. But if

51:31

you're not careful, you can fall

51:31

in the pit. And that led me to

51:36

think about a grave and grave

51:36

dancer. And so that was the name

51:40

of the article.

51:43

Let's switch

51:43

gears on our path to success, as

51:46

we've talked about already, we

51:46

have challenges and failures

51:49

along the way. And if we're

51:49

going to achieve excellence, we

51:53

need to overcome them to achieve

51:53

our goals. And I want to talk

51:56

about the Chicago Tribune deal,

51:56

which was a very high profile

52:00

investment, especially because

52:00

we live in Chicago and it didn't

52:03

go so well. In late 2007, he

52:03

bought a controlling share in

52:08

the Tribune Company for 315

52:08

million. You beat out bids from

52:12

Ron Burkle, and my former boss,

52:12

Eli Brode. The deal included the

52:17

Chicago Tribune and the LA

52:17

Times, bunch of other newspapers

52:20

Newsday, the Chicago Cubs at 25%

52:20

stake and Comcast SportsNet,

52:26

Chicago. A year later, the

52:26

company files for bankruptcy, it

52:30

is 7.6 billion in assets 13

52:30

billion in debt. At the time, it

52:35

was the largest bankruptcy in

52:35

the history of American media.

52:39

What went wrong here? And as

52:39

part of that, can you talk about

52:43

how you evaluate risk, and how

52:43

what you do with risk can also

52:48

be a huge part of our success?

52:51

Well, first of all,

52:51

unfortunately, we signed that

52:59

deal in April, the Federal

52:59

Communications Commission

53:04

withheld their approval until

53:04

December. So during that period

53:11

of time, there was a significant

53:11

erosion in the business. But we

53:18

were unable to do anything about

53:18

it. When we took over and we did

53:23

our we did our due diligence, we

53:23

ran a we did a model that

53:31

assumed a 6% regression in

53:31

revenue from print ads. So we

53:40

were aware of the fact that the

53:40

print ad business was was

53:44

starting to become subject to

53:44

the internet competition.

53:50

Anyway, we took over January 1,

53:50

give or take 1988 2008. And in

54:02

the first 30 days, print revenue

54:02

dropped 30%. I would tell you

54:10

that and that stayed that way

54:10

all year. When you talk about

54:17

industry like media, a revenue

54:17

drop of 30% is not salvageable.

54:25

And, and so consequently, we

54:25

ended up losing the property and

54:32

losing the deal. And I learned

54:32

No, like you do from everything

54:37

you do. You learn from it. You

54:37

know, what I learned from it was

54:42

that I really thought that the

54:42

decision to buy it, assuming

54:49

that my projections of what was

54:49

going to happen, were reasonably

54:54

right. I still think was a good

54:54

decision at the time. You know,

55:01

and I looked at it and it's a

55:01

real estate deal. And we got the

55:05

real estate, we got the we got

55:05

all these different newspapers.

55:09

We had valuations on the sale of

55:09

each part of the tribune that we

55:15

were getting. We created a very

55:15

tax attractive methodology for

55:20

ownership. But probably the most

55:20

important thing we did is we

55:26

lost $350 million. We, in

55:26

effect, established that as the

55:33

risk amount. We were willing to

55:33

risk to do the deal. So that we

55:40

lost, but we're able to talk

55:40

about it afterwards and

55:44

continue. I think I learned that

55:44

you know, being able to

55:49

understand not only what the

55:49

risk is, but limit the risk to a

55:55

level you could handle and allow

55:55

yourself to, in effect pursue

56:00

opportunity thereafter. So it

56:00

was probably when not probably

56:05

from a, from an economic point

56:05

of view, it was for sure we're

56:09

still I've ever done in my life.

56:09

I've never lost $350 million

56:14

before. But I probably, you

56:14

know, grew off of the

56:20

experience. And, and certainly

56:20

appreciative of my own level of

56:26

discipline to avoid, you know,

56:26

getting myself in unknown

56:32

indeterminate loss versus a

56:32

fixed amount.

56:37

You complete

56:37

this sentence for me. If during

56:41

your career, you correctly

56:41

assess the risks, and the

56:43

likelihood of you excelling is.

56:54

Sam, can you hear me? Yes. Okay.

56:54

Did you hear the question?

56:59

I think the question

56:59

is, you know, you really asked

57:02

me, what percentage of the deals

57:02

I did do they think when I did

57:07

them was going to succeed?

57:11

Well, the, the

57:11

question. Sure. Okay, well,

57:15

we'll answer that. Well, let's

57:15

go back to the specific

57:18

question. Would you complete the

57:18

sentence, if during your career,

57:24

you correctly assess the risks,

57:24

the likelihood of you excelling

57:28

is blank?

57:32

At present?

57:36

The 20% is

57:36

factors that are uncontrollable

57:41

to you. outside influences.

57:44

Yeah, or mistakes. I

57:44

mean, you gotta recognize the

57:49

fact that, you know, you know,

57:49

if you're right at present at

57:53

the time, you're, you know,

57:53

remember we pay guys to play

57:57

baseball $25 million a year to

57:57

be right, one to three times.

58:02

I'm already telling you, my goal

58:02

is 80. And so, you know, there

58:08

are mistakes, things out of my

58:08

control. You know, remember, we

58:16

lost one company that September

58:16

11? No way I can predict number

58:21

11. But, you know, it happened.

58:26

We talk about

58:26

rejection. We've talked about it

58:29

a little bit before. But

58:29

overcoming it is very important

58:33

to be successful in your career

58:33

as an entrepreneur. Can you just

58:37

talk about how hairspray played

58:37

a role in your success?

58:42

Well, this summer, I

58:42

don't know, the summer before I

58:48

see you you're in college. I

58:48

spend as a traveling salesman,

58:55

for Helene Curtis industries.

58:55

And I was selling stop and suave

59:01

shampoo and Aaron whole bunch of

59:01

stuff. And, as you might

59:08

suspect, the the, the customers

59:08

that gave me to call on were

59:14

customers that really weren't

59:14

called on or taken care of by

59:19

the guys who made a living doing

59:19

this. And so I got I mean, I, I,

59:27

I had one lady pick up my

59:27

briefcase, and then pick me up,

59:32

she weighed about 100 pounds,

59:32

and just threw me out on the

59:35

street when I told her what I

59:35

wanted. And I sold it. I spent,

59:40

you know, more than one day in

59:40

the basement of a drugstore,

59:46

taking back a whole bunch stuff

59:46

that had been sold to them by

59:50

the last, you know, salesman

59:50

that had called them. And then

59:55

sure them this product was

59:55

terrific. And instead it ended

59:58

up being on a shelf downstairs.

59:58

So I saw a lot of rejection. I

1:00:05

you know, I finally, you know,

1:00:05

finally it got to the point

1:00:08

where I would walk in and say I

1:00:08

am fooling Curtis. And the guy

1:00:15

says so what? And, and I say

1:00:15

well, it keeps me off the

1:00:20

street. But you know, just you

1:00:20

know, and then all of a sudden,

1:00:25

the guy you know who really

1:00:25

needs another salesman to talk

1:00:29

to, like he needs a hole in the

1:00:29

head says when I get it's kitty

1:00:33

funny and I'll talk to him and

1:00:33

and eventually I made progress

1:00:37

and was able to, you know, was

1:00:37

able to execute sales that were

1:00:43

totally unexpected by the company.

1:00:47

Let's talk about

1:00:47

investment trends. Every few

1:00:51

years. There's always Something

1:00:51

new, the latest and greatest.

1:00:55

And I want to start out by

1:00:55

talking about the annual gift

1:00:59

you sent out to around 650 or

1:00:59

your friends and associates.

1:01:03

Their individually numbered,

1:01:03

custom made bronze statues,

1:01:07

music boxes that reflect your

1:01:07

public thinking and predictions

1:01:10

for the upcoming year. You sent

1:01:10

me one in 1999 and I had a naked

1:01:15

man standing on a stack of Wall

1:01:15

Street Journal's and it

1:01:18

predicted a catastrophic

1:01:18

collapse of technology companies

1:01:22

under the title The emperor has

1:01:22

no clothes. The man is wrapped

1:01:26

in a ribbon and the ribbon has

1:01:26

ticker symbols of the high

1:01:30

flying tech companies at the

1:01:30

time. Web and E toys Dr. Koop

1:01:34

and others not occupy. So thank

1:01:34

you for that one. And you hit a

1:01:39

button on the back of the statue

1:01:39

and a recording comes down with

1:01:42

your voice for an introduction

1:01:42

as to what comes next. And you

1:01:45

say new technology will change

1:01:45

our lives but it will not change

1:01:49

the basic laws of economics.

1:01:49

Then the music to the Paul Simon

1:01:54

song 50 ways to leave your lover

1:01:54

comes on and there's a guy who

1:01:58

sounds exactly like Paul Simon

1:01:58

who sings a parody 50 ways to

1:02:02

make a billion this was two

1:02:02

years before the.com crash. And

1:02:06

as you predicted, all those

1:02:06

companies went bankrupt or were

1:02:09

sold for pennies on the dollar.

1:02:09

Now we're seeing the latest fads

1:02:14

and investment trends. You got

1:02:14

Bitcoin, cryptocurrency, the

1:02:19

Gamestop phenomenon and the very

1:02:19

latest and FTS, non fungible

1:02:24

tokens were three weeks ago, a

1:02:24

JPG file made by a guy named

1:02:28

Mike Winckelmann. This guy's a

1:02:28

graphic designer turns digital

1:02:32

artists who's known as people or

1:02:32

people crap, and a digital

1:02:38

picture he made so that a

1:02:38

Christie's online auction for

1:02:41

$69.3 million. That's a JPG

1:02:41

file, not a Warhol, you can hang

1:02:47

on your wall. It's an NFT frenzy

1:02:47

out there, and the best venture

1:02:53

capital firms in the world are

1:02:53

backing them and guys like Mark

1:02:56

Cuban, who's calling them this,

1:02:56

the next big thing? What are

1:03:00

your thoughts on all of this?

1:03:03

I'm too old. I don't

1:03:03

understand him. I think we, you

1:03:11

know, I'm old enough to remember

1:03:11

pet rocks. And I think what

1:03:18

you're describing are, you know,

1:03:18

extreme example. You know, we we

1:03:24

as a culture of our is human

1:03:24

beings, you know, played the

1:03:30

South Sea bubble. And we've been

1:03:30

involved in lots of different

1:03:35

trends. And that's some of the

1:03:35

stuff you're describing. You

1:03:41

know, I, you know, I think, you

1:03:41

know, there is role for crypto

1:03:46

and there is a role for, you

1:03:46

know, similar, you know,

1:03:50

possibilities. But generally

1:03:50

speaking, I think people are

1:03:57

responding to fads, as opposed

1:03:57

to make intelligent decisions.

1:04:04

I want to switch

1:04:04

gears and talk about mentoring

1:04:07

and role models and their

1:04:07

importance in our success. As

1:04:12

part of that. I want to talk

1:04:12

about the first chapter of your

1:04:15

book and the first time you and

1:04:15

I met. The first chapter is

1:04:19

called an impossible life. And

1:04:19

the central theme of the book is

1:04:22

that anything is possible.

1:04:22

That's actually been my motto

1:04:25

for last 20 years since I went

1:04:25

public. It's on my Instagram

1:04:28

page. It's what I preach to my

1:04:28

interns and my mentees and in my

1:04:31

public speaking engagements. And

1:04:31

I want to share a story about

1:04:36

which leads up to our first

1:04:36

meeting, I had a lot of

1:04:38

struggles when I was younger. I

1:04:38

was bullied because I stuttered

1:04:44

kids would make fun of me. I did

1:04:44

not have a lot of confidence,

1:04:49

but I always did well in school

1:04:49

at Michigan. I graduated the top

1:04:53

1% of my class with honors from

1:04:53

Northwestern law school. But I

1:04:58

always wanted to be an

1:04:58

entrepreneur. So I took $400 In

1:05:00

my Bar Mitzvah money. I made 100

1:05:00

T shirts and went door to door

1:05:04

and the dorms I get kicked out

1:05:04

to go on the other door. It was

1:05:07

much harder to start a company

1:05:07

in those days than it is today.

1:05:11

There were only a few of us

1:05:11

doing it. Me, Jeff Blau, Brad

1:05:17

Keywell, and two others. It's a

1:05:17

small world. Brad is one of your

1:05:21

protege is the founder of for

1:05:21

public companies is a

1:05:25

billionaire. Jeff Blau isn't far

1:05:25

behind is the CEO of the related

1:05:29

companies, which is the largest

1:05:29

developer in the world, and I

1:05:33

get to Michigan. I'm looking

1:05:33

around. And I see the name as

1:05:37

hell everywhere and I'm

1:05:37

wondering who is this guy? So I

1:05:40

looked you up. I read about your

1:05:40

background. I said to myself,

1:05:43

I'd love to meet that guy one

1:05:43

day. And be like that guy one

1:05:48

day. So fast forward a few

1:05:48

years. I'm 31 years old when I

1:05:51

come I goes Publix and a

1:05:51

reporter from the Detroit Free

1:05:55

Press named Jerome the van calls

1:05:55

me up out of the blue one day

1:05:58

and says he wants to do a story

1:05:58

about a kid from Detroit from

1:06:01

modest means to strike the big

1:06:01

and technology. And I didn't

1:06:05

want to do the story. I didn't

1:06:05

know what people were going to

1:06:09

talk about. I thought they're

1:06:09

going to focus on the money. But

1:06:11

my old boss, Eli Broad,

1:06:11

convinced me to do it. Because

1:06:15

if I corroborated I can help

1:06:15

influence the outcome of the

1:06:18

story. So the piece comes out,

1:06:18

and it's incredibly flattering.

1:06:22

And later that night, drone

1:06:22

calls me. It's 7pm in LA 10pm in

1:06:29

Detroit, I tell him, I love it.

1:06:29

I think that we talked for a few

1:06:33

minutes about many things. Then

1:06:33

we get to talk about Michigan,

1:06:38

where I just been invited to

1:06:38

join the undergraduate board. He

1:06:40

asked me if I knew you, I said,

1:06:40

No. He asked if I want to meet

1:06:43

you. So I said, Yes. He said,

1:06:43

he's gonna call you right then

1:06:47

and there and you call me back.

1:06:47

I'm thinking, There's no way a

1:06:51

reporter No, Sam Zell that way

1:06:51

to be calling you at that hour.

1:06:55

And I'm thinking there's no way

1:06:55

even if he did that, you're

1:06:57

gonna pick up the phone. So sure

1:06:57

enough, he calls me back five

1:07:01

minutes later, and it gives me

1:07:01

your number. And I said, I

1:07:04

should call you now. I'm

1:07:04

thinking Wow. Nervously and you

1:07:07

invited me it's I call you pick

1:07:07

up the phone, he invited me to

1:07:11

your house in Malibu two days

1:07:11

later, on the Friday afternoon.

1:07:14

I had just bought a Porsche 911.

1:07:14

This is the car. It's my dream

1:07:19

car used to go in the Porsche

1:07:19

dealership. Once or twice a

1:07:22

year, I'd sit in the car and

1:07:22

tell myself one day I'm going to

1:07:25

own one of these. And there I am

1:07:25

driving along PCH, top down

1:07:30

radio was blasting, on my way to

1:07:30

meet you. I'm a founder of a

1:07:34

successful public company, I've

1:07:34

made a good amount of money, I'm

1:07:38

fake, I can't believe where I'm

1:07:38

going sit down. With Sam Zell

1:07:42

one of my business idols as

1:07:42

living my dream, telling myself

1:07:50

that anything is possible. We

1:07:50

sat for three hours talking

1:07:56

about business life,

1:07:56

responsibilities of being

1:08:02

wealthy, and giving back. So as

1:08:02

we plan, so thank you for all

1:08:10

that. As we plan for our future

1:08:10

success and our search for

1:08:15

excellence, I want to talk about

1:08:15

the importance of others. To

1:08:19

help teach guide encouraged us

1:08:19

to achieve our goals. I know

1:08:22

your dad was one of your

1:08:22

mentors. Bucky, tell us about

1:08:25

Jay Pritzker, how did you meet

1:08:25

him? What influence did he have

1:08:28

on you? It's not only a business

1:08:28

person, as a businessman, but a

1:08:33

person as well.

1:08:36

Well, Jay was one of

1:08:36

those investors that I got to

1:08:42

know as a result of, you know,

1:08:42

Hawking my concepts and ideas. I

1:08:50

found him extraordinarily

1:08:50

challenging and extraordinarily

1:08:55

interesting. And I think the

1:08:55

smartest business head I've ever

1:09:02

encountered, and I used to sit

1:09:02

at his desk, and I spend the

1:09:09

whole day there, he make deals

1:09:09

and talk on the phone, and we

1:09:13

talk in between, and he had an

1:09:13

enormous impact on my evolution,

1:09:20

and I learned a lot and maybe,

1:09:20

you know, if I had, if I had to

1:09:25

identify one characteristics

1:09:25

that I took from that

1:09:30

relationship, that was the

1:09:30

characteristic of make it

1:09:33

simple. That, in effect, if

1:09:33

you're going to succeed, you've

1:09:41

got to be able to have a plan

1:09:41

that has a simple execution,

1:09:47

that the risk of execution is

1:09:47

the most underrated risk, one

1:09:55

can have. And yet the story of

1:09:55

people not understanding that is

1:10:03

Legion. So that was, you know,

1:10:03

probably the best mentor

1:10:07

experience in my life. And, you

1:10:07

know, we, you know, Jay died.

1:10:16

You know, I don't know, maybe,

1:10:16

you know, 20 years ago, but for

1:10:21

a period of 25 years, I

1:10:21

interfaced with him and worked

1:10:26

with him. And I think, you know,

1:10:26

I was very lucky to have learned

1:10:33

at his desktop.

1:10:37

I love meeting

1:10:37

successful people to this day.

1:10:41

It's one of my most enjoyable

1:10:41

things I love learning. JB

1:10:45

Pritzker was my classmate in law

1:10:45

school, and he invited me to

1:10:50

come speak at the law school

1:10:50

about the Trans Union. case a

1:10:52

Supreme Court case regarding the

1:10:52

business judgment rule, which

1:10:56

held that directors of a public

1:10:56

company had exercised reasonable

1:11:00

prudence in making a decision or

1:11:00

if they didn't, they'd be held

1:11:06

personally liable for decisions.

1:11:06

In that case, Jay comes and

1:11:10

speaks. I came to class in a

1:11:10

suit. And as he walked out of

1:11:17

the building, I followed him out

1:11:17

of the building. And I said,

1:11:19

Excuse me, Mr. Pritzker. I'm

1:11:19

Randy Kaplan. Nice to meet you.

1:11:23

I'd love to sit down for a cup

1:11:23

of coffee. He said, let's take a

1:11:28

walk. So walk back to his

1:11:28

apartment on Lakeshore drive.

1:11:32

It's a 20 minute walk, when it's

1:11:32

his apartment for a half hour

1:11:36

drove me back to law school, in

1:11:36

a Ford Tempo with am radio only,

1:11:41

by the way. And that was a huge,

1:11:41

huge moment for me. Later on. I

1:11:45

asked JB, can I meet Robert

1:11:45

Pritzker, his brother, so JB

1:11:51

sets up a dinner, California

1:11:51

Pizza Kitchen across from the

1:11:57

east bank club. I'm all nervous.

1:11:57

And I'm sitting there. And they

1:12:03

come. And I got to ask him every

1:12:03

deal of the origins of what

1:12:12

became the Marmon group, and the

1:12:12

first company, his father's, you

1:12:17

know, as a successful lawyer,

1:12:17

and then he started buying

1:12:19

companies, the first company

1:12:19

they bought was a paint company

1:12:22

for $6 million. And for me to

1:12:22

meet these people, it made a

1:12:27

huge impact on me, and I love,

1:12:27

love learning from people who

1:12:33

are successful, it motivates me.

1:12:33

And that's one of the goals of

1:12:36

this podcast, too. Let's talk

1:12:36

about the culture at your

1:12:42

company. In 50 years, you've

1:12:42

only had one senior person leave

1:12:48

and being recruited away. And

1:12:48

this guy came back in six

1:12:52

months, that has to be another

1:12:52

one of your world records. It

1:12:55

says a tremendous about it says

1:12:55

a tremendous amount about you,

1:13:00

what goes into creating a

1:13:00

culture? And how important is it

1:13:03

to your success?

1:13:05

Well, I'm a great

1:13:05

believer in culture. That's part

1:13:10

of the reason I think this work

1:13:10

from home concept is like that

1:13:16

rocks. I think we need to be

1:13:16

together, I think that it's very

1:13:21

important. My definition of

1:13:21

culture is the enemy is without

1:13:28

Abe Lincoln might have succeeded

1:13:28

with a Team of Rivals. I don't

1:13:33

think I want a Team of Rivals. I

1:13:33

want a team of people who work

1:13:37

together and take on outside

1:13:37

challenges. I operate my my

1:13:44

world on on the very simple

1:13:44

thesis. And that is access and

1:13:52

lack of hierarchy. And the guy

1:13:52

who left and came back, I asked

1:13:57

him after he came back why he

1:13:57

came back, he was making more

1:14:00

money and had a better title.

1:14:00

And he said it's very simple. He

1:14:05

said, When I worked for UCM, I'd

1:14:05

sit there and work on a problem.

1:14:08

And if I didn't know the answer,

1:14:08

or if I had a question, I'd walk

1:14:12

down the hall and get the answer

1:14:12

to the question. Now I write a

1:14:16

memo and wait two weeks to find

1:14:16

out the answer. So I think that,

1:14:22

you know, creating that kind of

1:14:22

a culture, creating an

1:14:27

environment where everybody

1:14:27

talks to everybody else, and

1:14:30

everybody add support to

1:14:30

everybody else. And we're all in

1:14:35

it together. And from the very

1:14:35

beginning, I've created a

1:14:38

scenario where people, you know,

1:14:38

participate in the vestments we

1:14:44

make. So we have, you know,

1:14:44

continued alignment of interest.

1:14:49

And I think that is a major

1:14:49

contributor to be successful

1:14:53

operation.

1:14:54

I'm also going to mention there, you're accessible to people who are not

1:14:56

at your company. I call your

1:15:00

office a couple of times a year.

1:15:00

I'm coming to Chicago, can we

1:15:03

get together? If you're there?

1:15:03

It's for sure. Yes. And I'm not

1:15:07

calling for you. And you pick up

1:15:07

the phone. Hey, Randy, what's

1:15:10

up, which is always great to

1:15:10

hear your voice. I want to talk

1:15:15

about fun. It's an important

1:15:15

part of all of our success. It's

1:15:18

a huge part of your life. You

1:15:18

have Zell's angels you take a

1:15:24

motor sip of micro Moke

1:15:24

motorcycle trip each year with

1:15:28

some of your friends in a 1985

1:15:28

You did a Wolf of Wall Street

1:15:32

Journal interview and you told

1:15:32

them if it ain't fun, we don't

1:15:35

do it. Next day you come to

1:15:35

work, and the office all has t

1:15:39

shirts work that's a fit and

1:15:39

fun. We don't do it. So let's

1:15:44

talk about enjoyment and being

1:15:44

good yourself when we need to

1:15:47

talk about your birthday

1:15:47

parties. The best way I can

1:15:50

explain them is that I can have

1:15:50

to explain now?

1:15:54

Well, I think the

1:15:54

standard is very simple. That

1:15:58

night, I get up and I welcome

1:15:58

everybody. And I say to

1:16:01

everybody, the standard of this

1:16:01

evening is not being able to

1:16:06

describe it tomorrow morning.

1:16:06

And we assemble a very people,

1:16:13

we do it every two or three

1:16:13

years, we try and get, you know,

1:16:18

pretty outstanding entertainment

1:16:18

that turns it into a private

1:16:23

concert. And it's worked out to

1:16:23

be a lot of fun. And we've had

1:16:27

some wonderful entertainers and

1:16:27

some wonderfully nice. But, you

1:16:33

know, I think that, you know,

1:16:33

saying this, using the sentence

1:16:37

of any fun we don't do it is

1:16:37

really what it's all about. I

1:16:42

think that I've always been

1:16:42

interested in I mean, I do a lot

1:16:47

of traveling in the air 1000

1:16:47

hours a year, I've been almost

1:16:55

everywhere in the world and some

1:16:55

of the terrific, some of it not.

1:17:01

But I think that's part of my

1:17:01

own, satisfying my own sense of

1:17:05

curiosity. And, to me, that's a

1:17:05

lot of fun. And I get to have a

1:17:10

lot of fun out of meeting

1:17:10

interesting and challenging

1:17:14

people from different societies

1:17:14

and in kind of understanding how

1:17:19

they're responding to the impact

1:17:19

of what's going on.

1:17:24

The party itself

1:17:24

is incredible. You've had Elton

1:17:27

John, twice, Fleetwood Mac, the

1:17:27

Eagles, Eric Clapton played the

1:17:31

last one. And the fun starts

1:17:31

with the invitation, which is a

1:17:36

T shirt that contains clues as

1:17:36

to who is playing that night? Do

1:17:43

you come up with the clues

1:17:43

because most people are never

1:17:47

gonna guess in a million years

1:17:47

who's playing

1:17:50

sometimes. Sometimes,

1:17:50

it's done by the guy who handles

1:17:56

putting the evening together.

1:17:56

But the whole idea is, you know,

1:18:00

to make to turn it into a super,

1:18:00

super great evening. The T

1:18:06

shirts are designed to make

1:18:06

everybody look the same. So that

1:18:12

we don't have people going out

1:18:12

of their way to dress up or, you

1:18:16

know, create special costumes

1:18:16

during everybody, weren't you

1:18:20

the entry, the end, the ticket

1:18:20

entry is is the t shirt. And

1:18:26

then they have a souvenir for

1:18:26

the experience.

1:18:32

Everybody

1:18:32

listening and watching today

1:18:35

wants to hear the answer to this

1:18:35

question. What are the elements

1:18:40

of success?

1:18:43

What are the elements

1:18:43

of success? I think they start

1:18:48

probably with the 11th

1:18:48

commandment, which is Thou shalt

1:18:51

not take myself seriously. I

1:18:51

think that if you're really

1:18:56

successful, you have a humility

1:18:56

and understanding why you're

1:19:03

successful. It didn't happen

1:19:03

because lightning hits deck or

1:19:10

something like that. It's having

1:19:10

the ambition, having the energy,

1:19:16

having the curiosity, having the

1:19:16

interest. And, and having the

1:19:23

self confidence to execute on

1:19:23

what you learned. And I

1:19:30

beginning to be a super

1:19:30

observer. You know, I mean, not,

1:19:36

you know, in the Super observer,

1:19:36

lots of different things. You

1:19:41

know, one of the most

1:19:41

interesting things that I've

1:19:44

learned was, you know, between

1:19:44

1990 and 2000, there was a

1:19:51

demographic change in our

1:19:51

country. And we delayed the we

1:19:56

basically, society, delayed

1:19:56

marriage, changed the way we

1:20:02

live, changed the amount of

1:20:02

disposable income, changed some

1:20:06

of the ways we invested, being

1:20:06

curious, recognizing

1:20:10

opportunities, identifying and

1:20:10

then executing. That's the

1:20:17

definition of success. And then,

1:20:17

in the end, I think you're going

1:20:22

to make a difference. In other

1:20:22

words, I think, you know, you

1:20:27

know, everybody needs to be

1:20:27

concerned about their legacy.

1:20:33

And I think their legacy has to

1:20:33

be, you know, things they've

1:20:38

achieved. I don't think putting

1:20:38

your name on a building is

1:20:42

legacy. I think creating a

1:20:42

program that perpetuates itself

1:20:47

and, and adds people to the

1:20:47

definition of learners. It is

1:20:52

joules? Is the answer. You know,

1:20:52

and things of that nature.

1:20:59

You lead me

1:20:59

right into my next question,

1:21:02

talking about philanthropy

1:21:02

legacy, you and Helen are two of

1:21:06

the most generous

1:21:06

philanthropists of our time. I'd

1:21:10

love to know where your desire

1:21:10

to help comes from, and at what

1:21:16

age did you start giving back,

1:21:16

you don't have to be wealthy to

1:21:19

start giving back. And as a

1:21:19

follow up to that you've done so

1:21:23

much for so many people given

1:21:23

away hundreds and hundreds of

1:21:28

millions of dollars. Do you ever

1:21:28

sit back and think about Gosh,

1:21:33

think about all of the not

1:21:33

hundreds of 1000s life, but the

1:21:37

millions of lives you've

1:21:37

improved in a very material way.

1:21:44

And go back to your

1:21:44

definition of success suggests

1:21:48

that you don't sit around

1:21:48

thinking about that. I think

1:21:53

you, you know you, you look for

1:21:53

opportunities, you look for ways

1:21:57

to make a difference, and

1:21:57

execute accordingly. And I think

1:22:04

that if you do that, then by

1:22:04

definition, you've improved the

1:22:11

lives of others, you've created

1:22:11

opportunity for others. And that

1:22:18

you knew left a mark on society.

1:22:18

We, you know, we've done a lot

1:22:26

of charitable work with a lot of

1:22:26

work and education, we've done a

1:22:30

lot of work in the medical

1:22:30

health, you know, medical arena.

1:22:36

And most of the time, I'd say,

1:22:36

you know, very little of it is,

1:22:42

quote, a check to the American

1:22:42

Cancer Society. That doesn't cut

1:22:47

it, it would cut it is when you

1:22:47

do something that you're

1:22:52

involved in. So when I do

1:22:52

something like the University of

1:22:56

Michigan Entrepreneurial Center,

1:22:56

I go to all the meetings, I

1:23:01

participate in the same manner,

1:23:01

in other things that we do.

1:23:07

Ellen's created a writing

1:23:07

program with the University of

1:23:09

Michigan, goes up there and

1:23:09

spends the day and talks to the

1:23:13

kids. And I think that's

1:23:13

marvelous, but they need, you

1:23:17

know, they need idols, and they

1:23:17

need people they can look up to

1:23:22

and, and that's part of the

1:23:22

process. So it's more than just

1:23:26

writing a check. It's

1:23:26

identifying how you can make a

1:23:30

difference how long it's been

1:23:30

head of the Chicago Symphony

1:23:32

Orchestra for the last six years

1:23:32

to dramatically change the

1:23:38

organization. Isn't that

1:23:38

terrific? I mean, yeah, that's

1:23:42

what that's what makes him

1:23:42

great. And that's what we should

1:23:44

do.

1:23:47

What impact do

1:23:47

you want to have on the world?

1:23:55

I, I don't think that

1:23:55

I think like that. I think that

1:24:04

I think that I think that, you

1:24:04

know, that the people I've met

1:24:08

the people who read my my book,

1:24:08

people have a perception of me,

1:24:14

you know, have a perception of

1:24:14

someone who, you know, goes

1:24:19

along and, and participates and

1:24:19

tries to make a difference and

1:24:24

tries to do the right thing and

1:24:24

tries to be a person of his

1:24:27

word. You know, these are all

1:24:27

you know, all simple, simple

1:24:32

concepts are not, you know, non

1:24:32

esoteric scenarios. You know, I

1:24:38

don't need to build a monument

1:24:38

and I don't want to build my

1:24:42

image. But I want to help a lot

1:24:42

of people get there.

1:24:48

Before we sign

1:24:48

off today, do you have any other

1:24:51

advice to those listening or

1:24:51

watching about how to achieve

1:24:55

excellence and go about

1:24:55

achieving our dreams?

1:24:59

I would probably end

1:24:59

by saying that. I think that

1:25:06

people need to understand that

1:25:06

unless you're going to design

1:25:12

rocket engines, or unless you're

1:25:12

going to do esoteric biotech.

1:25:20

You need a above average IQ,

1:25:20

that's maybe 120 or something

1:25:27

like that. And then the

1:25:27

difference beyond that becomes

1:25:33

motivation. Becomes discipline

1:25:33

becomes how you handle yourself

1:25:39

that I think our society puts

1:25:39

too much emphasis on IQ and not

1:25:45

an election, not empathy, not

1:25:45

enough emphasis on EQ and having

1:25:50

EQ is really The answer going

1:25:50

forward.

1:25:56

Sammy made a

1:25:56

huge difference in my life as a

1:25:59

role model as a friend. I'm

1:25:59

super grateful for that. And I

1:26:03

thank you for sharing your story

1:26:05

today. My pleasure.

1:26:05

Bye bye. Thank you.

1:26:08

Thanks, Sam.