The History of Disruption

EPISODE 43

Disruptive innovation is not a recent development exclusive to Silicon Valley. Throughout modern history, we can track several gaming-changing inventions.

In this episode we’ll investigate some profound innovators who remain a mystery to most. We have chosen three innovators from science, entertainment and retail.

1. George Eastman - Kodak

2. Adolph Zukor - Paramount

3. Robert E. Wood - Sears

Join us for a special episode with guest author and entrepreneur Gary Hoover. Gary is among many things a business historian and author.

During the show, you'll enjoy Gary's encyclopaedic knowledge and inspiring stories as go deep into the history books. We’ll also discover some universal themes that transcend industry and generations. So get ready for a serious dose of curiosity, conviction and caring for staff.

TRANSCRIPT

Hello, and welcome to the moonshots podcast. It's episode 43. And it's a very special episode. I'm your cohost Mike Parsons. And as always, I'm joined by the man from Brooklyn, Chad. Oh, and how are you, Chad? I am very excited. We are welcoming a return turn guests to the moonshots and podcast here. And so I'm just going to go ahead and introduce them right away.

Some of you may remember him from our excellent episode where we. Broke down all of the wisdom from Fred Smith of FedEx. And, uh, please give a warm welcome to Gary Hoover, our return guests to, uh, talk about some very interesting unsung innovators of the 19th and 20th century. How are you Gary? I'm doing great.

And I'm glad to be with you guys today. Gary. It's so good to have you back on the show. We are. So how much positive feedback, uh, about the Fred Smith? Yeah. Episode and Chad and I, I have been busy doing our homework to dive into the world of these. Mysterious innovators, these innovators that we should probably know a whole lot more.

And what's really exciting is that we are going to open up the Gary Hoover database live on the show. And we're going to hear about, uh, what it takes to be a great entrepreneur. Uh, not only in this century, but previous ones and the crazy thing, Gary. Is that the themes are so universal, curiosity, courage, learning, reading, trial, and error testing, and just having amazing ambition.

It's remarkable how these themes not only transcend industries, but. They transcend time. So tell us who are the three unknown innovators that we're going to dive into and why are you so excited about these three characters? Uh, yeah. Well, let me step back a little bit. I've been writing biographies of great entrepreneurs of the past over, I guess the last year I've been studying them for about.

50 years, but through a think tank in Washington called the arch bridge Institute, we publish they're called American originals. And it's really about great Americans. Often they Rose from poverty, uh, or difficult circumstances and how they evolved over time. And they're little. Five to 7,000 word biographies that you can find on the arch bridge website and on my own website Hoover's world where all the other stuff Bi-Rite is.

But the reason I'm so passionate about studying these people and reading biographies is obviously, like you said, there's so much to be learned from them, but a lot of people think it's not relevant. But when you read the biography of one of these grades, it does several things for all my entrepreneur, friends, you learn a lot, you learn how they thought you realize they're human.

Yeah. They aren't just geniuses. You know, they weren't born that way. They didn't know anybody. It wasn't about. Who you knew, or how much money you had. It was about these things. Like you mentioned that ambition and curiosity, lifelong learning. And the other thing is for a potential entrepreneurial or really any business.

Manager leader. It's inspiring. You know, you read them, you also understand all the problems and you realize, well guys, should I thought I had probably what these people went through, men and women. We write about both of them. So I really believe, you know, I teach entrepreneurship and entrepreneurial thinking to big companies and I think it's just hard to beat.

Studying these people. And the other thing is about, okay, they're out of the past, uh, you know, lost in the midst of time and all that. But, uh, Chad took one of my courses and I'm sure he heard me say, there's nothing in business that matters. That's new. And certainly the techniques and technologies change all the time.

And some of the people we're going to talk about, they made those changes, drove those changes. Created the modern world. And so whether you advertise using billboards or use the Telegraph, the use of Facebook that changes all the time, perhaps faster than ever, although change incredible, uh, over the last 200 years.

Um, but the basics, the things that matter, these things like curiosity and ambition being imaginative, taking good care of your people that you work with. Those things have been around for a hundred, 200 years. And those are the most important things. And, and the ones often not taught in business schools where everybody's so busy learning techniques and tools, how to do spreadsheets, all of which matter.

But. So that's, you know, that's a preface to everything we're going to talk about today. Sounds, sounds great. And it is, it is quite amazing. Isn't it? Chad, the more that we're doing the show together, how universal the themes are becoming regardless of the century, regardless of the vertical, regardless of the person's upbringing, it seems like there are these very strong tenants.

To how to be a great entrepreneur and to how really, to create products that people love. Yeah. We've somehow managed to draw through lines from bill Belczyk. One of the most winning as head coaches in NFL football to lady Gaga. Uh, you know, uh, you know, one of the most popular performing artists, all the way to people like Yvon Chouinard from Patagonia, who really just wants to let his people go surfing, you know?

And, and, and they, they share so much in common. Uh, it's been really fun, but yeah, Gary, you left us hanging there and, and who we're going to, we'll be talking about today. And so I'm, I'm curious, you know, W w what industries and markets are we going to be exploring in and under whose watch? So the we're going to talk about three people, um, very diverse industries.

Uh, the first one was a guy named George Eastman and he really created amateur photography. He created modern photography. He created one of the greatest companies, the world's Havers has ever seen Eastman Kodak, which is now gone into decline. We'll talk about that too. And to me in the article I wrote, I called him the greatest tech Knology entrepreneur in American history.

And he's a person that any technology leader or entrepreneur. Could learn from, and even if they just did a few pages out of his book, they'd be way ahead. The second one person is guy named Adolf Zucker, or Zecker what you're listened to you. Z U K O R. And, uh, he's far less known than Eastman because of the Kodak company, but he really created the modern motion picture industry.

And which of course led to the movie industry into the TV industry and all the others. But he was a, an amazing man who was very bold, like the others. And the last person we're going to talk about is Robert Wood. And he, unlike the others, he didn't start the company. But he took over the biggest mail order company in the world.

Uh, the Amazon of its day called Sears Roebuck, which, uh, declared bankruptcy in October of 2018. So there is a complete arc from, uh, beginning to greatness, to a failure of one form or another. But what was the guy who joined the mail order company and converted the entire company to a chain of bricks and mortar retail stores.

He kept the catalog. But he layered over layered on top of that, uh, hundreds of retail stores and became the biggest, most profitable, greatest retailer on earth for several decades and was, uh, quite an amazing individual. So we're talking about certainly technology, hardware and software. If you count film as software creation, and we're talking about media, And how you entertain people that relates to sports and concerts and music, uh, all that today, TV and movies.

And we're talking about retailing, which of course is the fundamental business of Amazon and Walmart and a bunch of other very interesting companies today. So those are the three gentlemen that we're going to be chatting about. Sounds so exciting, Garrett. I mean, when I think about Sears, what I think we should mention about Robert he wood is he had a great career in the U S army prior to joining Sears.

He happened to just by the way, create one of the biggest insurance companies in the U S all state, which was born out of Sears. Kodak. I mean, you cannot begin to look. I mean, to fathom what Kodak did in sharing memories in capturing magical moments in life and paramount. Holy smoke at Ozuka in, in building paramount, uh, had an amazingly, had a huge work ethic.

But if you think about the impact, the cultural impact of the American film industry of which he is a pioneer. If you begin to think about the influence he's had in America and abroad, massive is absolutely massive. So three wildly successful, huge legacy, uh, innovators. I am super fired up. Chad, how are you feeling when, when you, when you think about these three guys, Chad, who do you think, you know, the least about.

Uh, I'm going to say Robert, he would, I, I know some about Sears, but not much about Robert Wood. And I've kind of heard that names and George Eastman before. And so I'm probably a lot, like many of our listeners who may not have heard any of that, these gentleman's names. Please go to moonshots.io, where you will find all of the links to Gary's series of articles that he's writing about these innovators and many more, um, as well as maybe some of the, uh, First source materials and books that Gary has gone to, to, to learn.

If, if you want to learn more about these gentlemen and even more, and yeah. You know, we're always looking for feedback and really appreciate all of your emails to hello@moonshots.io. And with that, we can get right into it and talk about mr. George Eastman. Uh, yeah, a lot of guy. Uh, so he was born in the 1850s, July, 1854.

And, uh, his father was a farmer in upstate New York and they also had a chain of business schools, um, where people learned accounting and typing and all that jazz. And might've been a little early for some typing, but, uh, he, his father died. And his mother had to take in boarders and they were struggling.

And George had siblings. They moved to Rochester from where they lived way out in the country. And, uh, so George has a teenager. He gets a job. He takes several jobs. He ends up in a pretty good position at a bank and he keeps getting raises and he's made assistant in charge and all this jazz. And then his boss, uh, retires or leaves, and George is the obvious guy to get the job, but he doesn't get it because a member of the board of directors had a relative and George, a man, he took that seriously and, and quit over it.

But in the interim, as a, as a young guy and he's saving up money, he wrote all his life. He wrote down, every penny took in, every penny spent and. Uh, he did bookkeeping. He kept the books literally. Literally. Yeah. Oh, he was a writer. He wrote 200,000 letters in his lifetime. Yeah. That's kind of the source for the, a really good biography of him that I read.

Uh, you can always find the sources for my. Uh, information at the ends of all my articles, uh, and they can all, you can always go to Hoover's world and click on contact me and send me an email. If anybody has additional questions, George has got some money to invest and the U S is down in Santo Domingo.

What's now the Dominican Republic and, uh, were building a, a port and a fork, whatever. And, uh, there was a land boom, and he said, well, maybe I'll go down there and look into investing in land. And one of his friends said, well, you should buy a camera and take pictures while you're down there. And so George bought a camera.

Uh, he never did go down there to visit, never did that investment. Uh, but he, uh, got interested in photography now, photography at that point. Was like a 50 pound Tamra, as big as a shoe box and a black tent in what you would do all the developing. And you had out of all these chemicals and you had to soak in a massive, massive tripod, right?

Didn't you have all that kind of stuff under the hood and over the photographers, you had to keep it all dark. Cause you had to take a glass plate. And coded with liquids, all the right chemicals to sensitize it and do it in the dark and then rush that big heavy plate. I think it weighed a pound into the camera, shoot the picture, uh, and is keep it all dark and, and then develop it, which was more processed.

It took all these chemicals. And so photography had been invented, but it was very difficult. And the only people doing it were professionals, people that were paid to take pictures and, you know, there's great pictures. I think it was Matthew Brady that took pictures in the civil war and all that. But so George got interested, but he said, man, this is a pain in the butt, you know?

And he started tinkering at home. He laid at Atlanta, rented a little room and playing around with it and he found out everything he could about it. He talked to every photography expert. He read all the magazines and journals and newspaper articles. And in one of them, he saw that in England, somebody had invented a dry plate process.

So he didn't have to have all the liquids, uh, or it didn't have to be wet when, when the camera, you still needed liquids to develop and all that. But he said, well, that's a good idea. And then he thought, well, you know, we need a machine that can make these dry plates. So he invented one, it was still a teenager went off.

I think he was 20 or 21. So still really young went to England to get patents on it. And his idea was he was going to sell the, um, Uh, patents in England and, and then use some money and keep working on photography while the British loved his idea and said, Oh yeah, we, I buy it. But they kept saying, we might, we might, we might.

And the money didn't come through. And he got frustrated with that. And that was, I got a little ahead of myself there. That was about the time he was still working at the bank. He was working at the bank till like five every day, and then working on photography till breakfast the next morning. That's incredible because.

What I understand is during this period, Gary Eastman spent three years in his mother's house, experimenting with the gelatin motions to, to get the product. Right. So tell us a little bit about like, how he actually made these. Big breakthroughs, because I think this isn't this really at the heart of his greatest innovation that he took this massively cumbersome or awkward process.

And just through trial and error and experimentation, you might even call it prototyping. He was able to vastly change photography, but he was not a photography expert at all. Well, he was probably the top photography expert by the time he was 23 or 24. But, um, yeah, so, uh, he kept making these machines and he started producing these, uh, uh, dry plates and selling them.

And then he started playing with the idea of roll film of, of a strip of some sort of substance and run it through the camera. And the idea had been invented sometime earlier, but nobody had figured out how to really make it work. He got obsessed. He finally came up with a breakthrough, came up, he sold a camera for, I think it was $25.

And then you'd send the roll of film in, cause it still took chemicals to develop and they develop it and send it back to you. And the roll of film was 10 bucks and he thought, Oh, this is going to be a big hit. And he showed it at all these festivals and fairs. And it was a hit there. He, okay. Now the professional photographers, but no, they, they, the old way they didn't want to change.

And he was really at a dead end and, and you're right about experimentation, trial and error on one thing, he had a problem with these plates. He was selling, they were fogging up. He gave all the customers your money back and then he did over 400 tries to get it right. And failed. And then, and then it went England where he was buying the gelatin from and found out they changed the cows that they killed to make the gelatin.

And that was the problem. It was like 40 years later, they discovered it was the cows. Weren't eating enough, sulfur, rich mustard. And his chemist later discovered that he didn't know why, but he knew to these other cows. And then we'll be fine. So he was just persistent, but anyway, he sitting there, he says, look, professional photographers.

Aren't taken up these, you know, roll film cameras and what am I going to do? You know, I'm all my money, all my dreams. He now had 25, 30, 40 employees making the dry plates and he knew he didn't want to stay in that because there were dozens of competitors. It was a tough business and he realized, Hey, the only hope.

Is to get photography into the hands of everybody, in fact, to make a camera so easy, even a child can take a picture and to keep on working on the roll film idea. And, uh, then he came up with a Kodak brownie. Sorry. So that sounds like he almost had like a bill Gates moment where remember when bill Gates said, Hey, I want to put a PC on every desk right.

In every home. So just tell us a little goat, take us back to that, the vision that you were talking about, because it seems like there was a big moment where he had Eastman had obviously I had some initial success, but then the resistance he felt in going from sort of. Uh, from a small, to a much, a larger mass market, he realized he had to go for a very bold vision.

Can you just, just tell us more about that moment and what, what spurred that, that inspiration for that vision? Well, I think it was just that dead end, you know, he, it wasn't selling, like he thought it would. It wasn't hitting all the professionals. So he, he really changed him a lot. They would call a B to C company.

I mean a B to B company to a, B to C company. And part of the magic was the word Kodak, which he invented. And the idea was that word can't be mispronounced in any language in the world. There is no word just like it in any language in the world. And it can't be misspelled anywhere, any way in the world.

And the hard pay appealed to him. And so in Eastman, we have a technologist, an inventor who was a brilliant marketer. And, and that's proven by many other things he did later on, but, and, and that so rare. I mean, you know, Steve jobs, Scott, that IBM got that, but HP and Microsoft and, uh, Dell, maybe our friends here locally in Texas, Um, most of those people are not really very good marketers.

Chad did, did you realize that behind the story of George Eastman was not only this huge breakthrough in terms of technology, but I had, no. I assumed that there was a mr. Kodak somewhere. Oh, yeah, I kind of did as well. I've, there's so much that I've already heard and we're only what he's a white, like 27, 28 ish at this point.

And Gary, so you kind of glossed over it, but like you described him as, as him becoming obsessed. And I think we can, all, all of us entrepreneurs can identify with that, inability to do anything other than, you know, focused on our business and making it succeed. But this kind of pivot that he makes that.

You know, from a B to B, to B, to B to C company, um, is really fascinating. And I'd be curious if, if there's any, you know, MBA students that are studying that as kind of a case study there probably isn't and maybe they should, but that's a fascinating. Like someone that doesn't have all of the sophisticated tools that we have today to understand market sentiment and focus groups and all of this, he just was going out there trying to sell something and the people were, were not buying.

And so he said, well, I have what I believe is a great invention. What can I do with it? And he just turns in and tries to sell it so different market and well, we all know kind of what happened, you know? Once we're all film got out there. How many trillions of feet of film do you think had been sold over the, you know, the other, the other thing was he worked really hard to get the price down because then he was in a mass market potential.

So that old brownie Kodak camera. Drop from a $25 down to, I think it was $5 for the camera. And to send your film off to Kodak habit developed and sent back to you, drop from $10 down to 15 cents. And this was all back around 1900 1890s, 1900 and Kodak. It showed up in a Gilbert and Sullivan musical. They made poems and songs about it.

People were called Kodak occurs and at their peak. As we moved to in the 20th century. Kodak at one point made 90% of all the film in the world they had even later, even into well into the 20th century, they had something like a 70% global market share and there were a good German and Japanese companies in it too.

And in my studies, I've never seen, I think, this safe to say. I've never seen a company achieve that high a market share in a physical product. In last, they had the government protection government saying, Oh, you gotta buy that kind of like the old 18. Yeah. For a company, do it on its own with global competitors, just shoe this year, greatness of his products and low prices.

And, and the other thing was that he created these great jobs. It was a Kodak had among the lowest turnovers and of any company in America. Through most of the 20th century, uh, they gave people giant bonus checks. Every spring equal about five weeks pay every employee he gave stock to the employees. Uh, the company was never unionized because, uh, unions couldn't make any headway that people were too happy at sands.

There was no problem for the unions to say, right, they're getting bonus tags every spring. And the other thing too, you mentioned about obsession. Cause there was no question. He was obsessed with all this. But if he read the biography, uh, he, he may have had the most diverse interest of any entrepreneur I've ever seen.

He was a automobile fanatic, a gardening fanatic, a music fanatic global traveler. He bicycled around Europe every year. He'd take weeks at a time off and leave the company to his trusted lieutenants and go on as Johns. He built a huge mansion. Uh, he became a huge philanthropist. He built a whole new campus for MIT up in Boston.

He really financed the university of Rochester. He created the best music school in America. He built a theater, a chamber of commerce building. And at the same time at all these things, including the Eastman Kodak company, he was the ultimate detail, man. He drew out the floor plan of every building. Both of the Kodak company and the university, everything before let the architects decorate it.

He was an expert on fireproofing buildings. He was a genius at gardening. He loved it, guns. And I mean, it's in my article. I think he had one, five hobbies, probably all of which he was really in. Wow. The guy did a lot. Tommy did everything but fall in love or if he fell in love, he never married. And, uh, died a bachelor.

I I'm struggling to see where he found time to sleep. Let alone have a, have a walk to have a wife, but to come back. Um, when you were talking about all the things he did for employees and staff, I instantly had memories of the HP way. You know, what, what. Yeah. What they did in, in yeah. We went away, but, um, tell us a little bit, yeah.

More about, it seems like he, he really put the needs of the people that worked for him. Tell us a little bit more about. Give us a sense of why he was so invested in that because he definitely was in an era. I mean, particularly the industrial age was famous for putting factory workers on the assembly line.

How did he buck that trend? And where did that. That, that care and empathy for his stuff. Well, you know, one thing I stepped back a little bit. He really maintained control of the company. He owned a huge share of this stock. Uh, he paid for paintings and things. He was really into art too. And he paid for paintings with stock, which made all these other people wealthy.

He had employees, one employee. It wasn't even a very top executive. Gave $25 million to the university of Rochester when he died, um, at, uh, one point. And this is even in the 1970s or eighties, uh, Eastman Kodak was the third, most valuable company on the stock market. So he had control of a company and he had great wealth.

And I think that gave, and it wasn't working for anybody, you know, he was working for himself. And so I think that gave him a lot of leeway, a lot of latitude, and he decided to share the wealth, whether that was through universities or helping his city. Or his own people and, and one reason in the gardening thing, well, all his factories, um, the giant Kodak park there in Rochester, New York, it was all gardens and beautiful.

And part of it was, he said, I need to make Rochester a better city to live in. If I'm going to attract the kind of people I need, you know, Rochester's get some snow and it's not New York city or, and, and, um, and so he, he attracted the best and, and he brought in great chemists. That's one reason he gave money to MIT.

He had hired so many people from there. Uh, even though he himself had almost no education except learn how to do bookkeeping and stuff. And self-educated. But no REL very little formal education, no high school diploma. I don't think. And, and if you study all these grades, they, they vary in how they treated people and really the conditions they were under.

Uh, when we get to would at Sears, he was very generous. And yet that was in retailing where you have hundreds of thousands of people. Kodak's, people were largely in Rochester. He had a very, very profitable business. They made their money on film. You know, they essentially like razors. They give the camera away and sell the film and, and they also, we haven't touched on it, but they pioneered in movie film in x-ray film, in Arielle photography, where in world war one, they had, uh, they taught the a U S military how to do aerial photography.

And they brought in color, film and color movies. So it was a company that was always out and moving ahead. And one of the key things he learned early on too, at first, he was involved in patent fights and patent suits and trying to defend himself that way. And they finally realized, Hey, only the lawyers get rich and we fight for years and you never know how it's going to turn out.

And so he. Kind of abandoned that and said, no, the only way we can win is to make a better product every day and work and work at it and we'll leave our competitors in the dust. And he did the, the thing that's striking me, Gary, about George Eastman. Is, I am struggling to think of any other entrepreneur that Chad and I have discovered on the show that has, I mean, The, the breadth of interest in endeavor.

I mean, you know, the concept of the Renaissance man. Sure. I mean, it feels like George Eastman was the archetype. He, I mean, I have not heard of anybody having such breadth, such interests, such endeavor across such a wide spectrum. Chad, can you think of anybody that comes close? Bill Gates? Yeah. Yeah. And it's pretty impressive.

And like Eastman, he as a second career as a philanthropist. Yes. It's the, the longevity of what Eastman did himself. That's really incredible. I like, I don't know that we have kind of enough time in history to have had another person like him, just because the longevity of the Kodak product was as you know, from, so for 70 years, you know, it was.

It was still in 1980, it was kind of one of the most valuable companies on the stock market. Again, like I just don't think we have had enough time in history to have another person like him. One thing too, that I've noticed. It's true of most of these people, I write up, these people were all really roll in by the time they were 20 and you know, they were high school, dropouts and stuff.

Uh, most of them and you know, so they started earlier. Now they tended to die younger. A lot of the people I studied died in their sixties and seventies. But even so, um, how do I say it nicely? And I have a bachelor's degree. I'm glad that I do. I'm very proud. Proud of, yeah. I love going to school, but you know, big chunk of the world now it takes four years.

Uh, sometimes six, you know, and the MBA or a law degree, or if you become a brain surgeon is like 10 or 12 years or something. We take all these years doing other things. And, and a lot of college degrees people aren't doing as much a learning as partying. And I, I partied too. I'm a that's. Okay. But, uh, you know, these people hit the ground early and they, they learn by.

Uh, reading, talking to people and in many cases, working as kids, you know, in other people's stores or whatever. And so they, and most of them you'll see in the biography, they'll say, well, I could keep going to school and waste my time, or I could take a job with this guy and learn how he does it. And so it was really on the job training in many cases.

And that's kind of in many ways, been abandoned today. I mean, certainly as, as also a college dropout, I can relate to, to these gentlemen in the fact that that hard work at such an early age, I think also comes from a sense of if the default. The de facto standard is everyone goes to college knowledge, and you've opted out.

You do feel a great sense of urgency to get on with things because you don't want to be left behind. Um, and when you find your calling that that pulls you out of college, I think you quickly just throw yourself. All in, and it sounds like George Eastman, um, went all in, but I wanna, I wanna challenge you, Gary.

I'm sure George Eastman was already succeeding at the end of the 18 hundreds. At its peak at Zenith, you know, Eastman Kodak was remarkable in the degree in which it dominated its given market with all of the accomplishments, the philanthropy, the work he did in Rochester. If we now take a filter of, well, what, what can we today?

What can our audience learn from Eastman? What would be some things that Eastman did that we could do today? To go out and succeed in the world at innovating being an entrepreneur or just creating products that people love. Well, you know, like I said, I think any technology leader, really, any business leader had learned so much and you really have to go through his whole life and look at the things and stop and thinking about it the other day, you know, I live with them.

Something like 50,000 books. And I realized that for every five minutes I spend reading, I probably spent another five minutes thinking about what I just read and what it means and how it might relate to my life or my students' lives. And so really I'm a really slow reader. And so you've really got to look at all the pieces, but you know, some of the things is he, all these people, they were obsessed with the customer.

They love the customer. They value the customer more than anything else. They weren't locked in their office all the time. They were out talking to customers. They use their own products, uh, every day, or when Eastman traveled the world, he took all these pictures. You can still find a lot of them in his biography and in books and things.

Um, you know, he worked hard to lower the prices. He wasn't trying to increase his margins. Even when he didn't have strong competitors to scare him, you know, he was like, well, how can I make it cheaper? How can and I get it in the more people's hands. Uh, he was always open to new ideas, but he would test them.

And he wouldn't, well, I started saying wouldn't ship. It was perfect. That's usually not a good idea, but man, and he would ship a product and realize it wasn't good and send everybody their money back and said, send them back to me. And that's not good enough. And, uh, he was always moving ahead. And one thing I'd say, when we're talking about his multiple interests, he was very project oriented, all this stuff he did with the YMCA and the two universities and the music school and the theater.

And, uh, and he built dental clinics for kids in Rochester, Rome and London. Uh, and, and, but each of those, he would put his mind to it, focus on it, get it done, and then drop out. And these charities would, okay, well, you gave us all this money. We want more money. So I'm sorry. I. Nope. I did why I was going to do there.

I achieved my goals. I'm not giving you any more money. I'm going to the next one. And he was in a chat attack, another project. And he did that like almost till the day died. So, so that, I mean, that is an enormous suite of. Uh, good habits that he had. He was, uh, a tester and a learner. He was always his own customer.

He was trying at all times, even when he didn't have to, to democratize a product and he was very project focused. I want to kick it over to Chad and say of all of those, which one has inspired you the most? Chad, which one has got you going? Hmm. I gotta do more of that. Oh, man, I have to choose just one.

Yeah, it's a bit like that. Isn't it? Um, I don't know. I, I really like this idea of, because for, for him it was, it all started with creating a better user experience for taking photos and he just became obsessed with removing all of the barriers to taking photos. And then kind of the happy accident of that was he found out a way to.

Put photography in the hands of really billions of people, as opposed to maybe a couple hundred or a thousand professionals that were out there in the world. I think that's kind of the most inspiring part of his story. You know, I don't quite have his name and maybe, maybe, maybe I should maybe, maybe I should revisit some of the change that I'm hoping to make in the world.

So yeah, maybe, maybe that's what I'll do. I'll revisit my ambitions to see how I might learn. Yeah. Yeah. From, from a young George Eastman of your point. I do agree. He is a great case study in school, solving a problem because you've got to remember. I mean, he was working in banks. He was sort of like an accountant who, who fell into having a camera.

The camera sucked. And he's like, well, this is just not good enough. And three years later, he'd sort of cracked the code on the first invention. And then so many powerful things came out of it. He obviously had this massive legacy. Which all started with solving a problem. I do want to give Gary one last year question on Eastman before we move on to add Zucker, Gary.

I'd love to, to hear your analysis. How did a company that was founded by such a marvelous entrepreneur that achieved great Heights of success, who was dethroned by a technology that they ironically invented the digital camera? How do we get to a point where. The company went bankrupt. How did, what's your view on how did such a great company fails so badly?

Uh, yeah. Well then there's a lot to say about that, but I kind of short version, they couldn't make the transition to digital. By that time it was an older company, more bureaucratic, more ingrown, uh, had, uh, he died in the 1930s. So it was. 60 years after that. And, and the other thing which most observers don't come is, no, it wasn't an, an electric or electronics company.

It wasn't a consumer electronics company. Like we think of today, it was a chemical company. They made their money making film. And in fact, they created their own chemical company. And today Eastman chemical is stronger than ever. I was just driving. See here, they, I forget they do billions of dollars a year is a giant public company.

So while the film company we all know about, uh, really collapsed, uh, that chemical company is enormous. And, and, and I have to add that, uh, the code that company still exists and it's got new management and they're trying to be imaginative and turn things around. We'll see if they do. But, uh, no, I mean, most companies have an art, they have a birth than a glory days and a death, or certainly a decline.

And a lot of it's just a natural evolution. Like I always say the greatest cause of failure is success. You know, people get satisfied. The bureaucracy gets big, they drink their own Koolaid. Uh, I got the, the not invented here syndrome. And then it's time for another disruptor to come along. You know, one of the key things, right?

All these people, for sure, Coda, Eastman, nobody else saw what they saw. They had this vision of a whole new, and when he quit his job at the bank to focus on photography, all the businessmen in town said, he's not sees, he's leaving this good job. The salary for this will of the wisp is what they called it.

And they thought, well, nothing's ever going to become photography. This is silly. And he said, no, there's something here. And, and much like Steve jobs and bill Gates in the early days, he said, this is going to get big. This is going to get bigger than you guys think. And I'm going to bet myself on it. And, um, And despite all the obstacles and all the naysayers, you know, everyone, everyone, and, and I'm sure even as relatives, uh, set a, I don't know, George, I don't know, George, why are you doing here?

And man, it takes 'em man. It takes a real belief in yourself and in your ideas. And those usually evolve over over time. I work with so many. Teens and 20 somethings that have this idea and they want to run out and start a business. And so often are great advantages, their youthful energy and their self confidence, but their disadvantage is a lack of experience.

Oh, you know, like you say, George had been working several years playing with this stuff by the bank job and, uh, when went rolling. Yeah, he certainly got on a roll and it was amazing to think that even though he, you said he passed away in the 1930s, you know, when I look at my, my useful back in history, Kodak were amazing corporation, a mega brand in my childhood.

Like I remember in the eighties. Kodak was a powerhouse. Um, so to think that it succeeded for a long time after Eastman passed away is, is Testament to his legacy. Leave him a cup, a couple of quick things. He was unique. He was a bit eccentric. He was a practical joker. He thought there could be a more efficient calendar.

And for 60 years, the Kodak company ran on a 13 month calendar. All 13 months had 28 days. So every month I had the same number of weekends and all that made it easier for accounting and measuring sales. And that was different. And the other thing probably not tip, we should take from him, but he got old and he got sick.

He couldn't exercise anymore. Couldn't see his friends and he asked his doctor to paint the outline of his, uh, heart on his chest. Uh, you know, Mark it on there somehow. And the doctor left and then he smoked one last lucky strike cigarette and pointed a gun at his heart and shot himself to the heart and left a note saying my work is done.

Why wait? So he was a one of a kind man. Oh my gosh. Oh, my gosh, the, um, there's so much to take from him. He was just the perfect way to kick off a look into some of the, the mystery innovators in our world. So, um, I am totally primed after that first dive into the world of Kodak. Chad, how are you feeling about adult Zucca and paramount studios?

Where do we begin in that world? Well, I am a student of the films. Of the era in which Zugara kick kicked things off, but I am completely ignorant of the industry itself. So I'm really interested in learning, you know, kind of about the creation and rise of stars in Hollywood, you know, which wasn't a thing when, when films first came out, I know that it was very much driven by people like Adolf Zucker and kind of creating this.

Quote unquote, product of Hollywood stars. And yeah, I'm just, I'm really curious what we can learn about some, some of these early media companies. Yeah. And so let's Gary, take us into the world of adult Zucca of paramount studios, and maybe you can start just, what was the contribution of adult Zocor. Uh, well, he, he really invented the movie industry.

He invented the feature film. If you can use some word invented innovated maybe, but I think you got to step back and understand where he came from. So he's an orphan in, uh, Hungary, right? Uh, they all Austria Hungary empire and, uh, his uncle takes him in his uncle, thinks all the boys ought to become rabbis.

Uh, that isn't for eight offing. Nah, he finds the Bible stories, fascinating. The people, the adventures they had and he was reading the great novels. He found stories really interesting, but didn't want to be a rabbi. And after some stuff finally convinces his uncle and other people to let him come to the United States.

I think he was 16. So it comes over and steer each, you know, the bottom of the boat, it's got $40 sewn into the lining of his clothes lands. Doesn't speak English looked down upon because even though wealthy German Jews, who's in New York city, they considered the Eastern European Hungarian and other Jews being beneath them.

But he struggles. He gets a job at a fur furrier making furs and becomes an expert at cutting them, making furs. And, and he learns English. He always had an accent, but he learns English. She becomes Americanized. He does some boxing. He plays baseball. Hey, ends up going to Chicago, um, to the world's fair in 1893.

And says, Oh, this is an exciting city. And he ends up being on a partnership making first there. Well, he makes a whole lot of money, like the equivalent of a hundred thousand dollars today. And he's like 20 years old. And so he's rich, you know, but then he guesses the wrong way. He picks red Fox. For his, when that didn't turn out to be the fashion, he loses all that money.

And so there's a guy who loves stories and he also now understands a business that has fads that has fashions come and go sometimes rapidly. So those two things are very key. He ends up, goes back to New York, gets back in the business, makes money again, his neighbor, a guy named Marcus lo LOE w another furrier.

He says. Uh, Hey, I'm investing in these vaudeville places and as a real estate investment, you know, where the performance come and everything, and you should come in with me or you should get some of your own. And over time, the two of them, and they became partners in this, they built nickelodeons where you go in, you drop a nickel in and you'd watch either play a phonograph.

Or you watch a short five minute reel, you know, look down in a little box, a kinetic scope that Edison made and, and, and they were had penny arcades, but these are more expensive. These were a nickel, you know? And so, uh, and that they started belting. They made a lot of money. But Zilker would sit and watch.

And he started doing little movie theaters with a five minute movie and he'd watch the audience, uh, hours and hours of what made him laugh. What made him cry? What got him excited and what boredom. And it got to the point where he said he could just sit there with his eyes closed and he could just sense it.

He could tell what the audience was feeling. But one of the things he said is what about good stories? You know, these are just locomotives running over a, about to run over the maiden and then the guy comes and saves and, uh, or the black headed villain, chase scenes, and pratfalls, and. You know, a little short thing.

So that at that point, the mood, while we've called the movie industry was controlled by Addison and his friends. He had invented the movie camera and he using co Eastman's. Terry all had made the film and everything. And to show movies in the U S you had to use Edison equipment, and you could only show films made by one of his companies.

He was friends with, there were nine or 10 filmmakers, and they made these little short movies. And, and so zinc or wanted to make like a, Hey, I want to make 10 minutes, 15 minutes, even 20 minutes. And they said, Oh, that's stupid. And he went and met with them and try to convince him to keep his little theaters full, make me a longer movie.

And they, they basically laughed at him. They had him sit and wait in the office for three hours one time and, and. So no go away, go away. Well, he ended up bringing in this 40 minute long film from Europe about queen Elizabeth with a great actress, Sarah Bernard. And he spent like $35,000 and we were outrageous amount of money to bring it in.

And he figured out how to show it. And it was a big hit. And, and over time, the Edison and his buddies, they lost control of the industry all nine or 10 of those companies went away. And so there were all these independent filmmakers, little guys making films and took, or didn't want to make films. He liked operating the, you know, the real estate having the theaters, but he couldn't get enough good films.

So he started making some, and then he partnered with guy named Jesse his ideas Zucker's idea. It was let's take famous plays and famous players because Broadway was a big deal. Then that was a lot more expensive as a dollar 50 to go to a Broadway show. Nicholas, see one of his movies. Gary went though here.

This is George Eastman, the accountant who bought a camera and thought, well, this is a terrible product. I need to fix it. What we're talking about here is. Adam Zucca previous Cote and fashionista. Now real estate magnate doesn't have enough good films in his cinemas, so decides to make some films. Yup.

And it's a matter of seeing opportunities of, you know, when it knocks hearing it, which most people don't, you know, Steve jobs did, bill Gates did a hand and Eastman did, and Zucker did. And, and so he Zucker and Eastman, we're so tuned in to these opportunities. And why do you think they lept at them? When it seems like few people see it and even fewer really jumped for it.

It gotta be a lot of reasons, but one of them is paying attention to the public, to the customers and, uh, you know, a little bit different with Eastman, but he hailed a picture, his hand that took him hours to make and said, this is pretty darn cool. And, and Zuko, he said, look, you know, people like stories, they read novels all the time.

They they'll say three hours for a Broadway play. Why are you telling me I'm nuts? And, um, and one of the things is even when they did start to make. Films with the stars, people from Broadway, which is very difficult because some of them didn't know how to pose for a camera and all that. But to find the right ones, Mary Pickford came off Broadway and soon enough, she was making the equivalent of today's money of a hundred thousand dollars a week from these guys.

But the other filmmaker said, well, don't put the actors and actresses names on the screen because it'll go to their heads and I'll want too much money. And Zucker said, damn right. You know, and he graded the movies. Dar he put their names up there. He made a big deal out of him paying these outrageous prices.

And, um, and, and as it evolved, uh, there's a part of the movie industry. Most people don't know about called distribution. So you got production. They make the movies, you've got exhibition. They call it. The movie theaters, but in between, and they get like 35% of the revenue of your movie ticket when you buy one distribution and that Jen outfit that may finance the movies and then picks what theaters to put them in cuts the deal, the theater gets a certain percent and the production to get certain present.

Does all the advertising. And there were a little local ones all over the U S little ones in each state, every region and a guy named, I think Hodkinson now no, California. He paramount. And the idea was I'm going to have it. National distribution system pick the best theaters, whether they're in New York or California, the movie makers and producers can just deal with me.

And so Zuko has signed up with him and zoo, or was making three quarters of all his films for Paramount's separate companies Zocor then said, well, I want to take over. And he took control, bought out paramount, put himself in as president and merged all that. So then all of a sudden you had movie production and distribution.

Now I forgot to mention Zucker in the meanwhile had gotten out of the theater business. He was totally focused on making movies and distributing them. But then later, uh, as other people started to buy up movie theaters to make chains of them, he was afraid his films would get cut out of the deal. So he started buying movie theaters and by the late twenties owned over a thousand of them and became the biggest in that too.

So it had everything theaters, distribution, and production, paramount pictures. Would you say Gary, that he kind of pioneered vertical integration from raw production through creation, refinement, distribution market. Like he sort of almost created an end to end chain didn't he? Absolutely. Yep. Yup.

Certainly in that industry. Yeah. And it's in something that's not like a physical product. So I'm sure that had been done in physical products before. And certainly people were beginning to learn the power of controlling supply chain, like Henry Ford and many other manufacturers, but here's someone that was, we never got into distribute into a exhibition.

He never owned the dealerships, but I'm sure you're right. Uh, Kodak had stores. So, but most of the stuff they sold to other people, but, but this was absolute total control of everything by 1929. Everyone else copied him. Right. All of the other people, just like you said, if someone only did. District or if someone only did exhibition, then all of a sudden they want to just start distributed and making the movie movies themselves.

It was a chess game. Uh, you know, he didn't want to get into theaters until he got worried about that. He didn't want to go into production back when he owned theaters until he was afraid he couldn't get the movies. So the other people were doing things and at the same time, but, but he perfected it.

There's no question about that and became the biggest and most powerful and. Richest until the depression hit. What came, what you mentioned he's he's riches before the depression, but what, what results came of that vertical integration? I mean, how successful did they become Gary? Well from certainly by the thirties, this, they call it the studio system.

There's a great book about the Hollywood studio system that I recommend in the stuff I write and it dominated. And it continued to dominate until probably the fifties, maybe the sixties, but in the fifties television really hit. And that really shook everything up. The movie companies had a lot of issues, spent huge amounts on money, like, uh, on things like Cleopatra with Elizabeth Taylor, that lost money.

And over time, first of all, in 1948, I think it was the government made all the movie companies sell their theaters. And the theaters were where they made a lot of the money, but they spun them off. The theaters had Tash, but we're going downhill. The whole paramount chain became a company called United paramount theaters run by a young lawyer, a guy who had learned under Zucker.

And, and he saw the theaters going down, but they had cash and he's the one that bought the ABC network. When everybody told him he shouldn't because it was a distant third, 10 BC and CBS Zocor in his eighties or not. You said no young man. You're right. TV's the future. Cause he was such a visionary. But theaters came out in 48 later by the nineties, the government led them own theaters, again, bunch of theaters and realized that's a different business.

They make their money selling candy and popcorn. You know, they don't make that much money on the tickets and they got back out of it. Uh, and now, and today, the movie industry is really, really what I call networked industry. You know, individual groups that get to people, individual groups of people get together for a single project.

So bring in this editor, bring in this screenwriter, bring in these actors and actresses bring in that director. And, and it isn't like a big top down thing. There's still a lot of power in the distribution companies. But the old guys, MGM 20th century Fox paramount. The number one, one is, is Disney now, which by buying Pixar and the marble franchise Marvel franchise, it has risen to be the biggest one, I think the last show or years in a row.

Um, so that was another twist, but. Isn't it, isn't it fascinating, Gary, that, that Disney will also be launching Disney go. I believe it will be called their own Netflix. So they're going to be in by a little bit of adult Zika and go over some vertical integration. So they will own the end to end chain in an attempt to keep up with Netflix.

How do you see that playing out? Well, do you think Netflix will open theaters? Just like Jeff Bezos is opening retail stores and buying retail companies. Oh my gosh. Just the thought. I mean, why not? I mean, if you wanted to dimensionalize the Netflix brand, you could reinvent the space cinema and just have some sort of, you know, Nike has a Superstore in major cities.

Maybe they, maybe they, yup. Create these very high end theaters I show up. They may also discover it's an entirely different business altogether in the same way that the studios came back and when bought theaters in the nineties. But I'll just say personally, I would love to see what a Netflix movie theater experience would be like.

You know, there's so few. Theaters and really only independent theaters that are, I think, able to provide at least the experience that I enjoy, uh, on a regular basis. Yeah. Yeah, totally agree. I totally agree. Now if we were to adopt the very best, uh, adult Zucker today, Gary, um, it sounds like we've been, we've all been rather.

Struck by the power of the vertical integration he hit that he saw. And what else can we take from the Adam Zucca playbook? What could we be applying on our projects on our products today among many other things? I think one thing is the power of content. I personally lean towards believing that the content is more longterm has more value than the.

Conduits, um, the distributors in a sense, uh, I mean, if you look at it of all the industries I've studied, so Kodak cameras are collectible, but not worth much chemo or. That company company's gone. We're going to talk about Sears in a minute that company's about gone even great buildings, skyscrapers sooner or later, they get demolished to make grim for a new one.

Uh, most of them do and a lot of them, so we think are permanent. Aren't very permanent. I grew up in a general motors factory town, and I can tell you my. Dad would roll in his grave. If he thought that company would ever go bankrupt. It wasn't nearly as permanent as we thought. And yet gone with the wind, the wizard of Oz, uh, 10 commandments, Lawrence of Arabia, star Wars.

Those are going to be worth money in 200 years, 500 years. They're more like the Beatles or Beethoven. Those are things that are. Really going to last and because they're owned by a company they're a financial asset and those film libraries, which has changed hands many times over the last several years.

Some of the big libraries, you know, those, those are going to outlast them empire state building and that, you know, that's pretty interesting. I think too, I only had about eight hours before we leave him is yeah. He, uh, he borrowed heavily to build a theater chain and buy all these companies. And sometimes he gave him stock, so he didn't have to use cash.

And any promise to buy the stock back at $80 a share, this is 1929. Everything's going great. The stock was saying selling for seven, the aide, and he was an optimist. Sure. I'll buy it back at about that price stock went down to like eight in the depression. The whole thing collapsed, went bankrupt. Does 40 some law firms to straighten it out.

Zucker loss control. One of his old guys that worked for him became the chief Zucker help get him in. And then Zocor was named chairman, not the CEO, but chairman and up until his nineties, he continued to spend two hours every day at the studio and watch every Monday morning, see the box office results until the day he died.

They said he had a better eye. And ear for what a good movie was and why one worked and one didn't and anybody in the industry and the old boy lived to be 103, uh, and exercised all his life. So again, another very interesting individual. So it, it feels like what he shares, what Adam Zuka, uh, of paramount shares with George Eastman of Kodak is this relentless drive to solve a problem, which.

Starts with humble beginnings, but seems to, with all that courage and that tenacity and that learning, they end up creating vast empires, which all started by solving a very simple that's solving a problem or maybe better words, seizing an opportunity. Yeah. Seeing an upside because. I mean, you can make a case.

Nobody was walking around before Eastman Santo. I wish I could take pictures know, and sometimes the need is not so obvious there. Visible needs. Uh, Henry board saw people needed to get off the farm and get into town and faster than a horse, you know, but there are a lot of unseen needs. When I started my giant bookstore chain, there were no giant bookstores in America.

There were a couple of independent stores, but nobody did it like I wanted to and discount and everything. And then when I did surveys, almost nobody said, Oh yeah, I could use a story. Yeah. They didn't know it until they saw it. Whereas I saw it in my mind's eye. Like for seven years I worked on developing the idea.

So before we jump into the world of a Robert Wood and see is the retailing. Great. I want to ask Chad, have you got any last thoughts or questions around the world of Hollywood and, and Adam Zucker? Well, just to, to Gary's last point in kind of being able to identify the opportunities, I'm kind of drawn back to his days as a furrier.

And that maybe it seems to me many of the lessons that he learned about business in, in that seemingly completely disconnect, acted in a world and industry. I actually think. And you, you foreshadowed at Gary, you know, this idea about trends. And, and, you know, playing, playing to fashion of the day, so to speak.

I think he applied that astute observation. Yeah. I'm sure as a farrier, I'm sure you had to know exactly the colors and styles and the way people were wearing them and using them or not. And he blew it, you know? It was really taught him. Yeah. I mean, he was really down and out and he lost his a hundred thousand dollars, but then he, like you said, went back to New York and, and did it again and, and kind of pulled himself back up.

But I think this is a theme maybe that Mike, you and I have seen across many of these innovators is this, I'll just call it pattern matching there's this time spent observing and then, you know, connecting the dots and doing this pattern matching to. See the opportunities. And then of course having the ambition to, to, to tech, to go after it and to seize it.

No, another way of looking at that thing with Zucker and this, uh, both his love of fiction and stories and his understanding fads that made him the ideal person to do all this. But the idea of I'll call them hidden talents. So I was talking to the head of career advice at the university of Texas some years back, I think she's moved on to another university and she wrote a book about it and everything.

Very interesting, but you counseled all these students. And a lot of them, you know, were in the wrong majors and she was working with this one young woman. And I forget what she was majoring in, social sciences or humanities or something. And, uh, the counselor did deep probing. Tell me about your childhood and tell me what you were interested in.

Well, turn out the young lady had been great at pool at billiards. And the counselor said, well, you know, that really means you're good at geometry. And the gal said, well, I don't know. I never tried. Well, she changed majors to math, delighted and happy and went on and you can, that's kind of parallel to what went on with Zucker and learning about fads and fashions.

When he ran into fads in the movie industry, it didn't freak him out. He said, I've seen this before and I might be wrong and I'd be right. But today I'm going to bet this way. And his son said that every evening at dinner, he come home with the kids and the mom and would say, boy, did I screw up? I said, that was going to work.

And it didn't work. So tomorrow I'm going to do this. And in the early days, they'd have to move from a. A big house with servants to a, a little apartment above a theater somewhere because he was always rolling the dice place in bats, but he grew comfortable with that. And you know, a lot of business people, Hey, those GM executives.

Even with automotive styling change and stuff, even the best of them probably would not have made it in the movie business with a whip lashes that come with a fashion-oriented business. Well, it certainly is. It sounds like what we can learn from Adam Zucker is he's got a bit of a resilience because he was working well up until his late nineties, every single.

They famous for his work ethic. He saw boom and bust cycles time after time, the advent of new technologies. I mean, he is a true Testament to staying the course, isn't he? Absolutely. Okay. Well now it's time for us to jump into another business of ups and downs of great peaks and troughs it's world of retailing.

And we're going to go to. Really an American stole an icon of. Shopping and the retail experience in America, which is Sears. And we're going to look at a gentlemen code or Robert E. Wood. And he brings us some really different skills. Um, as well as sharing some with, with, uh, Zilker in Eastman, Robert, he would, uh, tell us, Gary, why does he matter?

And, and what's his story. Oh, those who know me know my favorite field is retailing. I've spent most of my life in retailing. And so now we're finally to Mary. I know something about, I don't want him to let it go unsaid, Gary, but you were the founder of my absolute favorite bookstore when I was growing up in Austin, Texas book stop.

So not only are you learned it in this, like you've done it. You've literally. Yeah, he built the stores. Now I learned from some great. I worked for some big retailers and spent I've been studying it since I was 12 years old. So. Would, uh, well, he built a biggest, greatest retail company on earth. Uh, that, that, that enough, uh, but that, let me backtrack a little bit.

He, uh, came out of Kansas city. Um, he wanted, he couldn't afford college. His father had ups and downs and it was during a financial downtime. And so. Uh, Hey, he said, where can I go to college free? Well, the military Academy government pays for it. So we want to go to West point. Well, who went to West point was picked by your local Congress back then there were all men, I guess.

And he, he, uh, the congressmen would only send Democrats in that. Please cause he was a Democrat and would, and he and his dad were Republicans. And so he convinced the Congressman said, no, don't just send your friends, do a test and then send whoever does best and convince the guy he would at the task goes to West point, um, gets a lot of demerits.

He was sloppy. Didn't keep his bed and his neatness, boot shined and all that. Didn't like the discipline, but, but he learned a lot. Got a good education. Came out, goes, he runs a whole. True, but whole town of 60 people in the Philippines when the U S army was down there. And learns how to manage at the age of like 20, 21, uh, ends up working on the Panama canal and becomes like the number two guy and his twenties.

He's responsible for buying millions of pounds of concrete, building a railroad, carrying out all the details under this brilliant engineer. Who loved to design it, but didn't want to deal with the details. And he said, man, that was the roughest job he ever had in his life. And he learned more than, than anywhere else.

And, uh, and he later was the, uh, what they call the quartermaster general in world war one, uh, responsible for bringing all the supplies to the troops in Europe. Uh, but that came somewhat later, Sarah, he goes to the military thing and gets out of the military. Uh, it has a couple of different jobs ends up at the first big they'll order company in America called Montgomery ward and Wars was the original one.

Sears came along like something like 20 years later, uh, Sears by 1900 became bigger Sears Roebuck. But, um, what was working for the competition would, was a data junkie. He, um, the legend is when he was in the Panama canal, working on him for a while, he got sick, he got a fever or something and they put him in the infirmary.

And the only thing to read were census books. So he'd be became an expert on this census. He was a lifelong voracious reader and he became an expert on this census and it was said that all his life. Every day, maybe right before I went to sleep, we don't know. Every day he read a table out of a big statistics book published by the U S government called us statistical abstract.

And he said, work in the Montgomery ward. And they're making all this money with mail order catalog, selling the farmers, competing with the larger Sears. And he says, look with the model T the car, the farmers are going into town and they can go to stores then. And they don't. Um, uh, you have to buy just out of a catalog, they got other options.

And the other thing is the number of farmers is going down with McCormick's Reaper and all this John Deere new equipment. You know, we need less people. People are moving to cities where we're building factories and everything. So we should open stores in the cities and small towns, but he was focused on the cities and this all came from his study of data.

Well, the Montgomery ward guys, they said, no, no, we're making all this money on the catalog. You're doing a great job. He was doing great stuff for them. And, uh, they said, no, no. And he eventually got in a fight with his boss. Uh, I think would says he quit. His bald boss said he got fired. Doesn't matter. He's out on the street.

Well, I got to back up a little bit. One more time here. Richard Sears. I've seen lists that say Sears is one of the greatest retailers of all time. They don't mention wood. They don't mention another guy named Julius Rosenwald. Rosa wall was a Jewish guy in Chicago who made suits procedures. Dream to be in a banker and one it out.

And he ended up selling control of Sears Roebuck to this guy. Rosenwald Rosenwald is the one that really made it the biggest catalog operation on earth and became one of the wealthiest Americans and amazing guy gave like 15% the company to the employees treated them well at theaters at the big catalog plant in Chicago.

He was amazing and he's almost unknown right away by the 1920s. Wood has been fired and Rosenwald is old and looking for a successor and. He picks another guy, a guy that it was a railroad executive because the railroads were well run and big and powerful and makes him a, the new head of Sears will end.

He finds out from a Shoemaker that would, is looking for a job and would be ideal. Well, Rosenwald is not the kind of guy to go back on his word. So he says, okay, I just hired a president. I want you would to come to work for us, but I can't make you president, which would, was ambitious. That's what he really wanted.

He said, but I'll make it number two and I'll pay you well and give you some stock. And the company would says, look, I'll only go to work for you. If you let me open retail stores in the cities and Rosenwald, it depends on which source you read. But I think he's like a, I don't know, we're making a lot of money on the catalog, but if that's what it takes to get you to join us.

Okay. So he grazed to let would open stores. Well, The president, the railroad guide hired dies a few years later. I think he was like 45 or 50 years old, both he and Woodward about that age. So would become president. And by, by the time we hit the mid, late twenties, what is building stores all over America?

And by 1931, Sears was getting more revenue from stores than the mail order catalog. Wow. So that's kind of the beginning of Sears, real greatness. That, that sounds like a massive shift because running a direct mail order business, and then switching into physical retail. That is a massive change in how you distribute and engage with your customers.

But what we should also say was in 1931 as well, that they actually launched all state insurance. This is a vastly different business to what it was say, 20 years prior. It's quite a remarkable transition and quite quick for its time. Yeah. Yeah. And would understood that they didn't know what they were doing.

They tried to buy JC penny. Which was a much bigger. They had a lot of stores and mr. Penney and his team were highly regarded. I've written a biographical piece on JC penny, James Cash, Penney, a great name. And, and they tried to buy penny. And, uh, interesting, even though they were going to be competitors.

Penny showed him all this data and they shared all this stuff and they ended up not doing the merger. Penny wanted to keep his company pendant for a number of reasons, but, but would understand they needed retail talent. He tried to turn some of his catalog people into store managers. And it wasn't very successful.

Wood was always trying stuff. And when he opened the stores at first, they were like discount stores. They were dirty shells. They were cheaply built. The stores were ugly. And uh, he said, I don't want to waste money, money on fancy fixtures. Well, within a couple of years he said, wow, Fancy tested them, Mancy fixtures work and, and he brought them in.

And, and so he had a catalog company and a retail chain. They use the same buyers, but the buyers were biased towards a catalog chain. So you had all this tension, all this fighting. And would just did not put up with it. He sat them together in a room and he, whatever, shut the door nor, and say, either you guys get along or you're both fired, I'll be back in an hour, you know, that kind of thing.

And, and he tried every kind of management structure, like all 400 or more serious scores. Every single store manager reported directly to the CEO, Robert Wood. Wow. There was no middle manager and he was always boosting failure. And he'd be in meetings and, and he'd come out and he'd say, look, what that executive wants to do is nuts.

It'll never work, but I told him to go ahead and do it cause it's better. If he burns his own fingers and learns the lessons the hard way, he'll be a better executive. Then he was always telling key executives. Don't give orders, listen from below. And he made his store managers rich. He gave out all this stock to the employees, boys following in Rosenwald.

The, what he had set up would make it even bigger, but he also, he put caps on what the executives could get, but not on the lower people. So he made his cashiers, his appliance salespeople, rich. He was. Hey, there's people incredibly well, Gary. Um, what we, what, what I, uh, came across was that wood served as in the end, I believe he served as chairman, uh, for close to 20 years in the subsequent time.

But in his early period at Sears, they introduced, um, the first real savings and profit. Sharing fund for the employees of the company, which at the time was quite revolutionary now, uh, you would touch. But what was really interesting is that, um, what I, we discovered is that at, towards the end of his life, he said that the thing that he was most proudest of was actually the work that he had put into the savings and profit sharing plan.

For the pensions of employees here, despite everything here at chief plus serving in the, in the military, it came down to taking care of the pension fund for the employees. Do you think that's one of the most distinctive things about would, is he seemed. Compared, particularly to Zilker and maybe less so to Eastman, but he seems so driven by the welfare and wellbeing of his own employees.

That seems like such a strong thing in his life. Uh, yeah, I, I put Eastman right up there with him, but, uh, but that really was a Rosenwald obviously would believed in it. He expanded it and by the 1970s, 25% of Sears stock. Was owned by the employees through that program. And he always said, we gotta pay more than a competition.

Um, but, but he was tough, you know, in fact he remained long friends with people he fired because he was so. Good at it and graceful, but man, if you didn't measure up, you were gone now and that wasn't a lot of turnover as he developed training programs and everything. Another thing that's very parallel and this was a well maybe Rosenwald, but this was really good was the way you treat your suppliers would, I did not want any company selling everything they made to series.

He wanted them to also sell to Macy's and competitors. And he said, look, it'll make him stronger. It'll keep our buyers on their toes. And he also wanted to make sure that all of his suppliers were profitable because he wanted to be around longterm instead of looking at each deal and saying, what's my price today.

He made longterm contracts. He, he created all these companies. They created Whirlpool, which is the biggest appliance maker in the world. And still today. But that was a wood and his people that put some of their suppliers together, invested in it helped finance it to make sure Sears had the best products.

And that's the other thing on products. He was always saying, look, everybody sells a refrigerator this size, but I looked into it. He was always looking at this stuff. I looked into it. And it doesn't just a little more steel, only cost two bucks. We can make a 20% bigger refrigerator sell for the same price.

And he did that in every category. He did that in tires. He did that, even sold automobile. At one point they sold 150,000 houses, kit houses, and they're still standing all over America. Everything they did. They worked with the supplier to say, how can we make this more efficiently? His buyers became experts in manufacturing, in their category.

How can and when he saw the South was poor, he financed all these farmers. Uh, he told us. Producers to build factories in the South when he saw Latin America at a future, because he studied the data. He started opening stores in Mexico, which interestingly were sold off a few years ago and a really well run they're owned by the richest, Mexican Carlos slim.

And they're doing great. Unlike the U S operation. Gary there was this story. Just, I want to take it even his achievement list. Even further. This is story. I came across that I think it was roughly 45, three 53 managed to lead a project. It sees where they tripled. This sales through improving the infrastructure in the stores and facilities and so forth.

Like he seemed to be a brilliant retailer. Oh, brilliant man. In every regard. Uh, everybody who met him, said he was a genius. So if we try and decode some of his mental models and approaches you, you've talked a lot about being a data junkie and experiment. He really cared about his star. What are the other signature?

Robert E. Wood approaches to how he has succeeded. And, you know, we mentioned that they created banking companies. They created insurance companies under seas. Don't forget the craftsman brand and the Kenmore brand were all born out of his as well. What else did he do? How did he do it? What was that special?

Robert Wood saw? I think one really big thing was this whole thing about telling his managers not to give him orders. He really wanted a bottom up. Organization. He taught the most powerful person in the company was the store manager and he wanted develop great store managers. He made him rich. He would fire, you know, he didn't like them and they get bad ratings if they weren't the head of the chamber of commerce, if they didn't build a Y YMCA.

Yeah, this whole vision of what these people were in every town in America, he even big companies would put all pool, all their cash in a big New York bank to get the most interest. And he started doing that. But then when the manager said, well, the local banker is not real happy with us. He moved all that money back into the local banks, and then they made less money because of that.

But this idea, cause I was just reading. There's a lot of chatter now about agile management. There's a. Interesting book by a guy named Steve Denning out about it. There are a lot of books, a lot of talk and a lot, a lot of it is like there's even a thing called leaderless management. And how do you move it back downstream?

How do you put the power closer to the customer? That's very difficult and, and would, did it. He lived by it, it upset a lot of his key executives. He fought him all the time. I mean, he's a good guy. They stayed with him for years, but. There was all this tension. And what's interesting is if you look at the decline Sears, you can make a case.

It really started in the sixties and seventies that they really peaked just about the time that he was no longer on the board of directors. What it was is it became bureaucrat, attic. They got into big executive suite fights up in the Sears tower. You know, the world's tallest building. What good did that do the customer, but would, would never have done that man.

And. You know, so in a lot of ways, his agile management was not sustainable. The people that took over after him where people had been there 30 and 40 years, they probably sat around. I'm sure they didn't say, well, we'll do it the way the general did it. Well, the way the general did it, 1945, isn't the way the general would have done it.

1985 at much you can count on, you know, and yet they did that. So in a lot of ways, he set the company up for failure in a way. But how, how do you do that? One of the many books that needs to be written in business. Maybe I'll write it someday is why do great leaders pick losers, successors? You see it over and over and over.

They have yes-man or something. Gary, it goes wrong. Have you heard the thought that the greatest leaders are judged by the successes they pick? I haven't heard that, but I like that. Yeah. And it's a theme that comes back obviously in good to great. Jim Collins was looking for companies that got better.

When the, sort of the hero CEO when he, or she left, if it got even better after them. Yeah, that was, that was actually a lens by which he judged truly great companies. And it's so true. I mean, look at the trouble Starbucks had, when Schultz has tried to leave it a couple of times or Microsoft been there all those years.

Yeah, but that's tricky if you study the greatest manager of all time, Alfred P Sloan, the man that really built general motors. When he retired, he refused to participate in the selection of his successor. He thought it was be beyond him and the board should do it. He later much later said he wouldn't have picked that person, but he didn't tell the other guy was dead.

I think. Uh, he was a pretty cool guy, but, um, no, but you know, it's going to reflect the kind of people you surround yourself with and, and how do you get people that think differently? Sam Walton, when he opened the new to a Walmart store? He said he always made sure there was somebody in that store's management team that annoyed the other people that was different, that didn't fit in.

And, and one day, you know, Sam called in his chief operating officer COO and his CFO, chief financial officer. And said, I want you guys to switch jobs and they were flabbergasted. The counting guy says, man, I've never run a store in a store. A guy says, I I'm not an accountant. And Sam says, no, you need to be broad enough.

To carry this thing on and hay wood. He said the best thing for series would be to break it up into several companies. He'd studied the breakup, a standard oil back in 1912 or 1913, and saw that the stockholders I came out way ahead. When you broke it up into a bunch of smaller companies. And he said series should do that.

And Sam Walden said the same kind of thing about Walmart, break it into a group of regional companies. And of course, none of either their successors ever even contemplated it. Mm mm. Well, while we're on this topic, I did want to ask you, Gary, we've looked at three, uh, entrepreneurs that reached enormous Heights, uh, breathtaking Heights.

You know, when you look at the cultural scale of paramount films and what they did, not only in the U S but abroad, obviously with Kodak, really bringing to life, not only the film industry, but this democratization of us being able to take. Uh, family photos on vacation and obviously series as one of the most prolific retailer financing, product, creating, uh, conglomerates.

Um, but strangely, none of them are anywhere near the Heights that they Rose to. What reflections do you have as an author and a historian? What do you take out of that? What, what's the sort of. The twist on all of this. Obviously we know that business has its ups and downs, but beyond that, It's it's it's, there's more than irony.

It's, uh, it's very bitter sweet as you look at these three entrepreneurs and what they built to think that those, those organizations are a pale shade of what they used to be. I think in every case, the later leaders should have read these biographies. You know, Jeff Bezos should read the book. I recommend on Robert Wood.

You learn so much, but you have to work hard to think. How do we. Thank like he did and, uh, adapt his philosophies, not just the actual techniques of that era, but I gotta say the other thing needs, we've talked about a three of my favorites, but then you've got to look at people who build a company that stronger than that ever.

And they're long dead. And if you look at the biographies I've written, you can see them on Hoover's world and LinkedIn and other, and the arch bridge Institute that sponsors this series. Jim Casey created at a, I forget he was 16 or something. What was it with 20 bucks or something? He created what became ups, Estee Lauder.

I wrote her up, she went around telling them cab drivers. Oh, your skin could be better here. Try the thing. I made my kitchen. That company, her, Oh, her grandkids are all worth $2 billion. Each, you know, Hilton, uh, started with nothing, wanting to be a banker. Uh, the bank found a bank. He could buy in a little town in Texas.

The banker selling it, raised his price on him, pissed off Helton Hilton went to the local hotel to crash and they were renting the sofa because they were so full and they were renting rooms, eight hour periods running shifts. And he said to the hotel owner, you're making a lot of money here. And the guy says, well, I'm making money.

The real wealth is in the oil fields. I want to go in the oil business. Helton bought the hotel. And today Hilton hotels is far bigger and stronger than when he ran it. So John Deere founded in 1836, Procter and gamble founded 1836 P and G as I understand it there executive compensation system. And they're not there necessarily their pensions, but their retirement pay it in part depends on the performance of Proctor and gamble for the next several years after they retire.

That's how great his sense of wanting to survive. Uh, Eric, an ex shell oil guy. Wrote a book called the living company. And in it, he talks said there's two kinds of companies. There's companies who want to get rich this month, this quarter, and there's companies where the key goal of the executives is to survive, to be a durable company, to be around in a hundred years.

And he probably over overstates that it's either or. But, I mean, look at general electric, man, you talk about an amazing company in this glory days. And then Jack Welch, who everybody thought was a genius, goes into finance and a bunch of areas they didn't belong in. And it was a great technology company and study the whole history of it.

And now it's not going to go away, but boy, is it troubled? Colgate Palmolive on the other hand found at 1806. It's stronger than it's ever been in its history. So those are the ones you also want to study. Well, Chad, I tell you what, as Gary was telling us about companies that have gone from good to great over generations, I'm thinking we need to invite Gary back.

Don't you? I just kind of assumed at this point, but yeah, I know I'm easy. I have a lot of stories. No, it's fascinating to me because I don't know why I'm always surprised, but. No matter where we turn for these insights on how people are. Innovating or have innovated the same themes crop up again and again, like Mike, yours and mine.

And I'm sure yours too, Gary, the list of qualities that we need to, you know, cultivate and habits, uh, we need to install. It keeps growing, but it's, it's, it's pretty similar. You know, this, this idea of lifelong learning, adaptability ambition, lots of yeah. Ambition, well, willingness and embracing of, of failure.

All of these things. It's encouraging to me to know that while there may not be a formula, we have some really fantastic role models across history. And maybe we could, should go back to the early 18 hundreds with companies like Palm, olive and John Deere. Um, so I, I definitely see several shows in our future revisiting our American history of, of great innovators.

We could do a podcast to thorn. We could go 24 straight hours. And then you could say that the sun never sets on the moonshot podcast. Hey, there you go. Wait, do we have to call it the moon? She had sunrise podcast. Certainly think there was, as you said, Chad, there was a lot of themes in looking at these three entrepreneurs, but I think seizing opportunity.

Uh, one thing that was really strong in these three, which they have brought to life, this idea that Eastman was like, this thing is, this camera is. Awful to move around. It should be better. Uh, Zucker after being in the furniture and fashion business was like, Why aren't people standing and sitting in my cinemas for a couple of hours, like they do for the theater.

Let's go fix that and create what we know is Hollywood and, and see is, was like, we're not going to be a direct mail order business. Let's make this massive switch. And I think that in all of those, they were fearless in, in making really big pivots and switches either in defacto standards or taking a business from left.

Too. Right. And what was really inspiring from my part is that in the end, the good guys win particularly Eastman and would seem to have such a deep interest in taking care of their staff whilst they work for the company. And after I found that to be a really special accent, if you will, to these three, I found that very inspiring chat.

That's those. Two particular things, seizing opportunity and taking care of people seem to be the unique character that we've been able to, to define as sort of essential for entrepreneurship today. And tying into that. I mean, one way you could phrase it as they have the, had the courage of their convictions and, you know, once they, I believe in something, man, he threw all in right now, I'm working.

One of the ones that'll come out in a few months. Future biography is a guy named George Westinghouse. And Thomas Edison was absolutely convinced that, uh, electricity in America should all be direct current DC power. And he went to great lengths. Uh, he, the electric chair used alternating current power, which he didn't believe in.

And so he called it the Westinghouse chair because Westinghouse believed in alternating current. Now. When all this first began to happen, Westinghouse all of his own executives, everybody, except maybe two people said you're nuts. Don't invest in alternating current. It won't work. I won't go into the technical reasons.

They believe that, but he had come to believe it would work. And, um, and alternating current one out Edison was wrong and Westinghouse and his system and other companies that were in that took over. But, but Westinghouse was just stubborn and said, no, I'm going to pour my money into it. And it's going to be the future.

And I don't care what anybody says. And you see that in all three of these people we've talked about today. Yeah. Sticking to the strength of your convictions. I often say the things I see missing in big company leadership today, the two things that are missing are courage and imagination. All the people we're talking about had tons of boats, but some people just don't have the guts there.

Please. They're making $5 million a year. How do I knock? Not rock the boat? How do I not take chances? How do I fire people who fail? And then you just look at it. They just lack imagination. They, they aren't spending any time thinking about what the world's going to look like 20 years from now. Now, obviously that's not true of everybody.

Check out all the Elon Musk or not so old Elon Musk, you know, check out Bezos and his dream and how he stuck to it. And people. I remember at a board meeting one San Diego, and I was still close to the book business and had a book publisher on the board. This was at, Hoover's not a bookstore, but, and a book publisher said, well, why do you think we have this Amazon?

You think they'll make it? And we all made gases. Uh, I doubt any of us were right. I'm sure none of us dream that it would become what it is. But, uh, so it's, it's not. Uh, impossible today, but, but the one thing you often see Sears was the exception maybe is as long as that driven ambitious unorthodox founder, is there the bill Gates, the Steve jobs, herb Keller at Southwest airlines, the company's dynamic, but then there becomes a huge question, Mark.

When they stepped down, when you get the second generation, if you study revolutions in governments, There's a big thing about those who were present at the revolution and then their assistants and lieutenants who take over when the first generation dies and many times, I mean, even I'm, I really dislike communism of all types, but Stalin was a whole different kind of guy from linen, you know?

So there are real issues with how do you build an organization? How do you, they asked herb Keller her at Southwest airlines once. What happens if after you retired, the board brings him somebody who doesn't buy your values, the love of the employees, or love of the customers, a egalitarian treatment of customers, all the things Southwest payment, Southwest was famous for.

And Herb's answer was if they bring in somebody who doesn't share our company's values, the employees will drive them out within a year. Hmm. And it actually kind of happened at home Depot where one of the guys from general electric who got passed over when Jack Welch picked his successor, who didn't work out that well longterm.

But, uh, one of the guys that are lost out, ran home Depot, they hit record sales and earnings, and the board fired him. And I'm pretty sure a lot of it was, he tried to turn home Depot into an army and to do it to discipline and, uh, would, would have hated that he hated all the rules and processes and procedures.

And, and have you studied home Depot? You know, they are, they are one of the two most successful bricks and mortar companies in America. Today. They're 50% more profitable than Apple computer. If you look at return on assets, they're building new stores, their sales are setting records. It's a wonderful place to work.

And, and so somehow the values survive that one fella and the values of founders put in are still there because they were so deeply embedded in the organization. What was the other company alongside a home Depot? That a two. And I can, well, I'll give you four. Home Depot and TJX are the two powerhouses.

The two that do over 30 billion a year in sales, TJX operates discount apparel stores called TJ Maxx and Marshall's and home furnishing stores called home goods. And they're brilliant. And besides those two, I'd have to mention a dollar general and Costco, both of which, uh, and also family dollar. There's quite a few, but these are giant companies.

That are booming. Uh, dollar general is building three new stores a day, year round. They're building more next year than they did this year. They're going to build almost a thousand new stores. And they're also doing a, a thousand remodels of old stores three a day. And of course Penney's and Macy's, and everything are building no stores or very few.

And, and Macy said, they're going to remodel some, they really need to remodel a lot. Although that's, you know, company from the 1860s. And, uh, they're probably going to be with us a while, but, but that the four, I just mentioned, they're on a terror. They're just doing great. Yeah. I love, I love home Depot and it's so easy to compare them with Lowe's and that's where you see how distinctly better they, they, they truly are as a company because kind of carbon copies of each other yet.

The secret sauce is so evident in home Depot and it's kind of lacking at, at Lowe's, but Gary we've, we've taken a ton of your time. We've dived. I've enjoyed it. We've dived into the world of Adam Zilker, George Eastman, Robert Wood. We've enjoyed it. Chad I'm I'm pumped with inspiration and new ideas. How you feeling at the end of this deep dive?

Oh. I have the immense pleasure of going back and editing this. So I'm going to be listening and relistening to this over and over. I'm sure my, my notes, this is going to grow. I just, I want to just say thank you, Gary. Uh, again, for the two of us at what stuck with me was your last comment about, we need more courage and we need more imagination.

I think that is a great call to action for all of us, uh, here in, in the moonshots network. Um, so, and just wanted to say thank you for, uh, bringing some new inspiration, uh, some old blood into our, uh, Somewhat futuristic show here on the moonshots podcast. And yeah, just one more time. Where, where can listeners find out more about you and the things that you've written about these innovators and many more, the easiest place to go is a Hoover's world.com and you can sign up for my newsletter that way you'll get all the new ones I write.

You'll also be able to read everything I've written, these biographies and a bunch of other management advice. And. Oh, gosh, even travel advice and stories about architectural history. I have a lot of interest, uh, book recommendations out the wazoo. Uh, so there's a lot there, but I'm, I'm spread across the internet.

I put my stuff on LinkedIn. I answered a lot of questions on Quora. I answered a lot about Sears and its bankruptcy. Uh, the arch bridge institute.org, uh, is where these stories first appear. Uh, we've got, uh, two already written in the pipeline. It'll be published next several weeks and a lot more interesting stories like I've touched on with JC Penney, Conrad Hilton, the Estee Lauder, Jim Casey of ups.

So, uh, there's a lot of material there. And, uh, my current plans are to produce a lot more. I'm working on starting a new nonprofit organization just to celebrate business history and the great leaders of the past. How exciting. Well, we we're here and we want to be part of the Gary. I definitely want to extend an invitation to you for coming back for another special.

Maybe we can do the courage and imagination yup. Episode where we, where you really focus on some great stories of entrepreneurs both past and present that have shown bucketloads of courage in innovation and in imagination. Cause I think as you said, we could, we could do with a dose of that. So I want to thank you, Gary.

I want to thank you, Chad. It has been an Epic journey into three wonderful entrepreneurs. Everybody can find all the show notes, which will include link to, uh, to Gary's site, to the arch bridge Institute and to all the different things we've mentioned on the show. There'll be in the show notes at moonshots.

Dot IO a thank you to you, our listeners and all your great feedback. We'll be back with another episode of the moonshot podcast. That's a wrap for today.