The Trillion-Dollar Paycheck Paradox

Jeffrey Madoff: Hi. This is Jeffrey Madoff, and welcome to our podcast called Anything and Everything with my partner, Dan Sullivan.
 
Dan Sullivan: We are just past the agreement that would give Elon Musk a trillion-dollar salary if you meet certain measurements out in the marketplace. And we're just talking about how, one, that we're in an age where amounts of money that single individuals are now getting seems in the stratosphere, which is probably pretty good when we referred to Elon Musk, that most people really don't comprehend how a single individual can be worth it. And I think it creates a lot of confusion. I think it creates a lot of animosity, I think it creates a lot of economic misunderstanding. It creates political misunderstanding, it creates cultural understanding. But what's your take on this? You know, I don't have any problem, because I think the value that people get out of who he is and what he's created and what he has created does in the world, he's probably worth a trillion dollars.
 
Jeffrey Madoff: Well, what we were talking about before we started recording was you made the statement that you're kind of investing in Elon, the man, not necessarily the company. Now, by that metric, I would be very frightened, because he's such a mercurial individual, yeah, and I don't know if the wealth that he generates ends up making it into other people's pockets. Also, I found it interesting that the company that he started, he's now basically saying, and if I don't get it, I'll leave, and that leaves an awful lot of investors holding the bag. Now one could say that's really smart negotiating.
 
Dan Sullivan: What have you had to do before the present moment in the way of creation and economic impact because of what you've created, that you can be in a bargaining position like this right now?
 
Jeffrey Madoff: Well, that's, I think, what's interesting, because that probably plays out at all different financial levels, because it's really a negotiation that gets you to that point and then safeguards that. I'm sure they are hoping they have covered enough that if he doesn't make those benchmarks, then he's not going to make that kind of return. And how much those guard rails will protect the other investors, because the landscape has changed so much. Tesla's no longer novel. There's car companies that have much better distribution, dealership networks, all of these kinds of things that I think you know was not the case when he started out. And so I wonder. I don't know the details of the contract, other than he had certain milestones he had to cross in order to make that, but I think it's interesting, because it is a different world now than when Tesla started.
 
Dan Sullivan: Well, the interesting thing is that Tesla, as I understand it, the company, doesn't just include the cars. It includes SpaceX, you know, the rockets. It includes Starlink, the satellite company. And my sense is from the actual value of things the future what stocks are basically, when you have a stock, it's a present number with a future story. Basically that's you're betting on a future value when you buy a stock. But I think the greatest invention he's ever had, and I think he's a legitimate inventor, he's as much of an original inventor as Thomas Edison is, you know, because so much of Edison's career was based on teamwork, when it was just him in a lab, and he produced the first incandescent bulb. That was Thomas Edison. But by the time he gets to Menlo Park out in New Jersey, he's got 100 scientists and technicians and engineers, and they had an agreement anything they produced, he got the patent. I was very interested in that. He got 1067 patents. That's how many patents Thomas Edison had. But probably once he got past 50, it was team patents that he got the full credit for. But my feeling is that space is going to get bigger and bigger and bigger, and the great invention that Elon Musk came up with was that he reduced the cost of launches by 90%.
 
Jeffrey Madoff: That I didn't know. I thought the main pioneering thing was to be able to land and reuse.
 
Dan Sullivan: Yeah, before every launch, you'd wasted the billion dollars you put into the launch because it ended up in the ocean, right? And with him, the goal is that each of them can be used 20 times. So he's reduced the cost of launching. And that's, all the cost of space travel, is the launch. Once you get out of the 80 miles, I think it is, the atmosphere, there's not very much cost to it. It's that first 80 miles of getting above the Earth and going into …
 
Jeffrey Madoff: Well, what about all the R&D and prototypes and tests and all that leading up to the takeoff?
 
Dan Sullivan: Yeah, yeah.
 
Jeffrey Madoff: I mean, that's an expensive runway also,
 
Dan Sullivan: Oh, yeah.
 
Jeffrey Madoff: But I thought that SpaceX and Boring technology was another one of his companies.
 
Dan Sullivan: Yeah, he's got Neuralink, yeah, put them all under Tesla. He combined everything inside Tesla.
 
Jeffrey Madoff: Oh, I did not know that.
 
Dan Sullivan: Yeah. So when you're talking about it, you're talking about the whole bundle.
 
Jeffrey Madoff: Interesting, yeah. But are those, in fact, separate companies.
 
Dan Sullivan: You would need a lawyer to really explain how this …
 
Jeffrey Madoff: Probably need 50 lawyers to untangle whatever that, yeah.
 
Dan Sullivan: Let me say his invention of the deal is far more complex than any of his inventions.
 
Jeffrey Madoff: I'll bet. I'll bet. Which is, by the way, another interesting, if you will. Yeah, yeah, you know, how do you establish such an audacious deal? I mean, I think it's interesting. I don't know that he's the first one to succeed at doing it. I don't know if he's the first one that has tried. I doubt it. The idea of, well, you know, we could, instead of just this thing burning up and sinking to the bottom of the ocean, you know, we could actually use this again and again, and it would cover costs and all that. And, you know, I can imagine a meeting or something. How would we do that? Well, I don't know. That's what we got smart people around the table figure out. But, you know, the audacious challenge, in a way, you know, I guess in a way, you could even, it makes me think of John Kennedy when he talked about, you know, landing on the moon, you know, having that kind of audacious goal is kind of fascinating. I mean, even coming up with the logistics of it all, right, so how do we actually then do this?
 
Dan Sullivan: Yeah, well, you know, the real kicker in his promise was the one that the Russians couldn't make and that was, we're going to bring them back safely, right? Russians never talked about bringing anyone back safely.
 
Jeffrey Madoff: Well, and I don't remember what year it was, but then the Challenger, you know that happened, and I think with Musk's things, when they blew up, nobody was on, isn't that correct? The earlier test, right?
 
Dan Sullivan: Well, his whole point is to push it to failure. He has a different way of proceeding. He said that you innovate to failure, and then you figure out what you learned from the failure, and then you go the next jump, and you do that much faster. He says, it wastes too much time trying to not fail. He says, fail really fast, and then go on to the next edition, go on to the next version. And he went through about five or six versions in the time that NASA would just be getting ready to test one of their rockets.
 
Jeffrey Madoff: Yeah. I guess it’s also that idea, which, you know, sounds daring, you know, move fast and break things.
 
Dan Sullivan: That's Mark Zuckerberg.
 
Jeffrey Madoff: That's right. No, I know, but what I was going to say is that these are phrases, but then when you think about them, for instance, what if lives are at stake? Yeah, how cavalier can you be? You know? And so I think it's very interesting, because you have to determine, what are the stakes here? Because that's a big determinant of, is this a risk we should be taking? And I do believe there's a lot of people that really don't care about the peril they place others in if it moves their project forward.
 
Dan Sullivan: Yeah. Well, quite apart. What's your moral stance on that? Or what's your ethical stance on that? There's a huge public relations risk. In other words, humans remember incidents where somebody died 10 times more than where it was just a technological failure, right?
 
Jeffrey Madoff: That's right. And the thing is, it comes down to things like, is it a rush to judgment? Should we have waited? Are we pursuing a race that isn't ready to be run yet? And you know, that's another part of the PR, because you get here, we are talking about how much money Musk’s making, you know, so he's been on the forefront in terms of just popular culture, and it's the audacious things he's done, you know, he made his fortune in PayPal. It was really the audacious things that he did that elevated him to a level of celebrity that people are willing to bet on him.
 
Dan Sullivan: That's right, yeah, this is where our conversation started. I think he's the stock that everybody bets on.
 
Jeffrey Madoff: Yeah, I think so too. I also think that it's interesting, because I don't think that people understand that. distinction. And so I remember when Johnny Carson, this was back in the late ‘60s, early ‘70s, he invested, along with a bunch of other people, on some kind of innovative oil pipelines that were being laid down. And the guy would literally take them out to a site and show them, and they were actually painted water pipes. I remember that whole thing.
 
Dan Sullivan: I don't think it was a new phenomenon.
 
Jeffrey Madoff: Yeah. But the thing is, what sold it, not unlike Theranos, as a matter of fact, if you get certain high-profile people involved, and that's what sells it, not the project itself.
 
Dan Sullivan: Yeah, go for former secretaries of state.
 
Jeffrey Madoff: That's right, exactly who knows zilch about anything, but that's exactly right, exactly right.
 
Dan Sullivan: Yeah, she didn't have a scientific or medical person on her board.
 
Jeffrey Madoff: That's right. They were all chosen on the basis of no knowledge but great fame, and most importantly, that they agreed with her. So I think that's kind of fascinating. When you talk, by the way, about designing …
 
Dan Sullivan: I wonder if she's found Jesus yet, because that's the comeback route. No, you know, after you've done something like that, it's American culture. You go to prison, and in prison, you find Jesus, and then you come back and you go on the speaking tour, talking about how you found Jesus and you've now transformed your life. And let me be a bad example to teach good example to your children. And, you know, get a TV series and everything else. And who knows, you might be back in the tech game in 5, 10, years.
 
Jeffrey Madoff: You seem to have thought that very well. You have plans. I don't know about them.
 
Dan Sullivan: I just know the value of using Jesus as a good cover for a comeback. And remember where he started, you know, remember who his parents were, remember what setting he came out of, you know.
 
Jeffrey Madoff: Well, when people, people have said to me at certain points, at certain places, like, have you found Jesus? I didn’t even know he was lost. Where was he when you last saw him? But yes, people often inoculate themselves with philanthropical pursuits and religious key.
 
Dan Sullivan: You know, it's really interesting. One of the fundamental archetypes of American culture is the comeback.
 
Jeffrey Madoff: Oh, absolutely.
 
Dan Sullivan: Or redemption, redemption and come back. It's just, yeah, so deep into the DNA of America.
 
Jeffrey Madoff: Yes, that kind of transformation.
 
Dan Sullivan: I went bankrupt in the late ‘70s, and it was because of receivables. I was too close to the line, and we had a downturn in the economy. Instead of getting the check in 30 days, it was put off to 90 days. I was too close to the line, and I fell off the cliff. And in Canada, it was seven years before you got another credit card. In the United States, if you go bankrupt on Monday, you get three new ones on Friday, right? We'll charge you 29%. Not only that, but they've done the numbers, and they factored down what the win-lose is on … they want people back in the game, yeah,
 
Jeffrey Madoff: Well, they don't make interest if you don't owe them money, you know, and that interest that they're charging you costs them nothing. It's fascinating. I wanted to bring something up when you were talking about that designing to failure. So one of my favorite musicians is Frank Zappa. And I was at this concert in New York, and this wasn't a Zappa concert. It was a guy named Mike Kennealy who toured with Zappa. And Keneally was an extraordinary, extraordinary guitar player. And I met him after the show, and we were talking, and I said, so what was it like auditioning for Zappa? And he said, well, you know, when I knew I was going to be meeting with them, I couldn't afford it, but I took a car service so I could work on all the fingerings going over, instead of, you know, taking a bus or something, and I walk in, and since I had been playing, my guitar wasn't in the case, I was just carrying the guitar by its neck. And the first thing Zappa said to me is nice case.
 
Jeffrey Madoff: So Zappa started off as a drummer. So he was having Kennealy play these different charts, and then Zappa would keep calling out different time signatures, and he would call them out faster and faster and faster. And Keneally said, now I can listen to something once and play it. I can't read music, but I can retain everything. And it got to a point where I just stopped because I couldn't do it anymore. And so I got up to leave, and Zappa said, Where are you going? He said, well, I couldn't do what you wanted. He said, oh, nobody could. So he looks at him. He goes, I want to take you as far as you can go without breaking so I know what I can do in live performance. I thought that was really fascinating, yeah, you know, because that not only allows you to test, it allows you to push boundaries. So I thought that was really cool. And that's part of what I think these audacious dreams do, is they can cause you to look at the perimeters as more elastic than most people view them who don't undertake the challenge.
 
Dan Sullivan: Well, the other thing is, it all depends upon if you've gone beyond where you've ever performed before. Is that a bad thing or a good thing? Right?
 
Jeffrey Madoff: Yeah, yeah. With Personality, my play, in terms of the things that we're doing that are necessary to move something along, and as the air is more and more rarefied in terms of the competition that we have and how much tougher it is, and everything else, you know, to keep setting the audacious goals and hopefully continue to keep surpassing, that shows what's possible, you know, as opposed to debating whether it's possible, you know, because ultimately you don't know. You know. You don't know. Well, could this place sustain a seven-month run on the west end so that you can recoup because it's going to take at least seven, eight months of at least 75% ticket sales and all this. And no matter how you've crunched the numbers, it's all to use the phrase that we use a lot, which I love, which is 12 guesses and bets you don't know, you know, and I think you're right. Within that framework, people are betting on Musk, not the companies. And to me, he has certainly proven an ability to do something that rewards himself highly. I don't know if that's extended into other than the earliest investors. I'm sure they have done well, you know.
 
Dan Sullivan: Yeah. The other thing, PayPal, he had a lot of partners who were inventive. Peter Thiel was one of them, right? So he had a lot of technological people as partners in PayPal and with Tesla. He was an investor in Tesla and then bought it out after a while. So in those first two he wasn't the sole creator, but when you get to SpaceX and when you get to Starlink and you start, he's the innovator here now. So he's not only proven that he's technologically successful, but he's proved that he can start with a new idea and he can take it big. I mean, in the summer, we have very, very clear skies. We're north of Toronto by about three hours, and we've seen the SpaceX rockets come up, and we've just seen a string, and it'd be 30 or 40 string ends the little satellites that are being laid and then once the satellites are up there, he can maneuver them wherever he wants. Pretty neat technology that you can do that. I mean, half the satellites and the active satellites in the sky right now are his half.
 
Jeffrey Madoff: Half?
 
Dan Sullivan: Yeah, that's what people are betting on.
 
Jeffrey Madoff: Well, yeah. I mean, I think the part that's the unknown is, no matter how mercurial his personality is, which is quite mercurial, as long as he, I don't even know how to say, it feeds the imagination, yeah, and stays present as a force, and has people talking about him and his story, he's going to be able to make more and more.
 
Dan Sullivan: Yeah. I mean, he's part of the flag though. I mean, he's, you know, I mean, this type of person counts very, very large in U.S. folklore.
 
Jeffrey Madoff: He's a legendary folk hero. You're right, you're right, and not even American, but that's part of it too.
 
Dan Sullivan: Yes, Tesla wasn't either. But where do you go to be this type of character? You don't go to Belgium to do this, yeah.
 
Jeffrey Madoff: I mean, that gets into a whole other thing is, you know, I think many people have been conditioned into thinking that the immigrants are people that are lining up to cross the border, as opposed to people that are coming here and creating these mega businesses.
 
Dan Sullivan: Yeah, oh, they're both right, yeah.
 
Jeffrey Madoff: So, I mean, that's, I think, I think that's pretty fascinating also.
 
Dan Sullivan: Yeah, the thing is that over the long term, the immigration is always good.
 
Jeffrey Madoff: Yeah, but I think also historically, there's always a group that. How can I say this that are the other and that somehow their presence diminishes the possibilities for success?
 
Dan Sullivan: Well, I think more and more accounts of what kind of culture they came from, in other words, that immigrants are not equal to each other and where they come from, Jewish culture produced certain kinds of qualities, certain sort of cultural traits, developed over a couple of 1000 years that made them very self-initiating and self-enterprising when they came into the culture.
 
Jeffrey Madoff: That was survival.
 
Dan Sullivan: Yeah, motivated. It's very interesting that there's a history of technological schools in the east coast of the United States in the 1800s, late 1800s, and the whole thing was to turn unskilled workers into skilled workers through technological training. And that was also coincided with the big Jewish immigration because of the pogroms in Eastern Europe. Essentially everything that the Russians had any influence on was a bad place for Jews, and they came over in the 10s of 1000s, and what they discovered was they didn't have Jews in the technical schools because that was a job. That was a job. And if you had a job, you were working for your family. If you didn't have a job, you had created your own company.
 
Jeffrey Madoff: Well, what about the physicists like Einstein? What would you call that? I mean, he was a faculty member, right?
 
Dan Sullivan: Well, that was, don't have Jewish science. Get rid of Jewish science. You know, physics was called Jewish science in Nazi Germany. I saw a very interesting little YouTube thing, though there's such great stuff on YouTube, but it was about a half hour and after the British and Americans and Canadians had taken over a sufficient part of Europe going to Berlin. This is 1944, 1945. A lot of the German scientists who were working on the nuclear program made their way so they could surrender to the Americans. The big thing in the last year of the war is, can we find out a way to surrender to the Americans instead of being captured by the Russians? And these are Heisenberg, who was one of the great geniuses of nuclear science. Han, another guy, he won the Nobel Prize for discovering fission, nuclear fission, and they were all working on the Nazi German nuclear program because they were trying to make the bomb. So the British captured them, British and Americans captured them, and they put them in a mansion outside of London, and the whole mansion was wired for sound, and they just let them talk.
 
Jeffrey Madoff: Did they know they were being monitored?
 
Dan Sullivan: Oh, they did not know they were being monitored. And the particular incident was the day that the British Broadcasting Corporation announced that the Americans had dropped a bomb on Hiroshima, and then the conversations among these people, and at first they didn't believe it. They thought it was propaganda. And then they just goes over three or four days, they're coming to grips with it, and the fifth day, the second bomb had dropped. By that time, it was the sixth and ninth of August in 1945 when the two bombs dropped, and the consensus among the scientists was because it was America. They were lost before they even began, just because of the industrial strength that when the Americans put their mind to something, because they knew that the U.S. were producing an aircraft carrier—every month, a brand-new aircraft carrier. They're producing 10s of 1000s and they knew they had this industrial strength, but they didn't know that they had the level of physicists. Well, half the physicists in New Mexico at Los Alamos, half of them were refugees from Germany. I mean, they were the people that these people had actually not supported because they were Jewish. Yeah, you know, the reason we got to the moon was that our Nazis were better than the Soviets’ Nazis.
 
Jeffrey Madoff: How do you mean?
 
Dan Sullivan: Wernher von Braun was the person. He was the head of the v2 rockets and everything. But there were about 100 Nazi scientists that went to Alabama to build the Apollo spacecraft that went to the moon, you know, like this, I mean …
 
Jeffrey Madoff: Which is so fascinating, because it's, how does your enemy become your partner?
 
Dan Sullivan: Have a bigger enemy.
 
Jeffrey Madoff: Yeah. Well, you know, that's, you know, that's like the trope about, if we were invaded by aliens, would we unite to counteract what is perceived as a bigger enemy?
 
Dan Sullivan: Yeah, we would, you know.
 
Jeffrey Madoff: And there's nothing to say that we would, and that would be a lasting relationship. It might be lasting until somebody felt they were out of jeopardy,
 
Dan Sullivan: Yeah, yeah. It was very interesting. Another one of these YouTube series that I was watching was when Hitler got an email or a telegram from Roosevelt. This would have been in late 1944 right around Christmas 1944, and it was a telegram that wasn't to Stalin, but it was an intercepted telegram and said, we have to rethink our entire lend lease program to Russia. Okay, Soviet Union, and at that point, Stalin knew that the agreement and the cooperation with the United States was now over. I mean, there was no way the Soviets could have ever won the war against the Germans if they weren't getting 10s of 1000s of trucks getting massive amounts of fuel for their airplanes, jeeps, medical supplies, food, everything like that, and the Americans had basically given them everything they needed to lose half their population and win the war, and then it's a new deal. So I talked to people. I said, countries don't have friends, countries have interests.
 
Jeffrey Madoff: Yeah. And I think there's a lot of people, I mean, you put that on the larger level, but I think there's lots of people that don't have friends, but they have interests.
 
Dan Sullivan: As long as there's parallel, you know you're going in a parallel direction and everything like that, you're friendly. You know, you're friendly, you socialize, you send birthday cards and everything else, but the moment the interests diverge, it's not so friendly anymore.
 
Jeffrey Madoff: Yeah. And I think this has been going on from time immemorial, you know. And our friend Joe Polish, I love the title of his book, you know, What’s in It for Them?, which I think is an important thing to think about in any deal that you're approaching, or just a negotiation, or whatever relationships like that.
 
Dan Sullivan: It’s also important to know what's in it for me.
 
Jeffrey Madoff: Well, of course, that's right, but you kind of start off already knowing what you hope to get. But why should they give it to you? What's in it for them? You know? So it's kind of both of those things going on. And I think it comes down to, is history really about even history, which is going to include Elon Musk, is it the story of circumstances history, or is it the story of people who had an impact on circumstances? You know, which is it? Or is it both?
 
Dan Sullivan: Yeah, well, you know, I'm really interested in history, but you realize how much of success in history is just good timing, right person, right situation, right time, right situation. And I think this is what makes it nerve wracking for a lot of people who have great talent, is that you could have great talent, but you miss your window.
 
Jeffrey Madoff: Can you give me an example?
 
Dan Sullivan: No, because we don't know them. You know. I mean, let's just suppose there was a person equally talented to Elon Musk, and they were having the early meeting with PayPal, and the guy was sick and he couldn't show up for the meeting. And so these guys got together, and each of them became famous. I mean, there's, you know that PayPal group went off in about five different directions, and all of them, I mean, Peter Thiel may be the most successful of the unknown tech pioneers of Silicon Valley, because he created Palantir. And Palantir is essentially a secret organization that does all the technological structure of the U.S. government. Well, there's no billboards about this. There's no commercials about this, because everything he's doing is probably secret.
 
Jeffrey Madoff: And in a way, PayPal, PayPal was before Uber, if I'm not mistaken, but in some ways, not the GPS aspects, but the what PayPal has to do is, first of all, have people trust financial transactions online, which initially people didn't, and then that was a shift. And it's seeing what parts could go together, because with more and more business being transacted online, if we can be the entity in the middle that is making the percentages on the purchase and on the sale. And it was probably not as big a leap as the projects that came later.
 
Dan Sullivan: Well, it was also then you have unexpected, big things that happen. A lot of what moved the financial industry to doing large transactions online was actually COVID.
 
Jeffrey Madoff: Well, there were things happening before that, though.
 
Dan Sullivan: Oh no, they were happening, but the size of transactions was significantly smaller. And I remember my financial services people saying that if it was a million dollar check or more for a transaction, you had to do it in person within two years of COVID they were doing 10 million. They were doing 20 million, they were doing 25 million. But they had built all sorts of digital protections into the deals, you know, like they were doing it, but you just couldn't get people together. They weren't able to get together. And so the market said, well, we'll have to build in all sorts of structures that make it trustworthy.
 
Jeffrey Madoff: So that makes me think of the robbery that happened at the Louvre, you know. So with all this technology, motion sensors and so on, somehow they pull up what looked like the equivalent of a fire truck with a ladder, yeah?
 
Dan Sullivan: Well, they look like a work team. Yeah, we've got to get to the second balcony. They get to the second balcony, open the doors, and all of it's right there, you know, in and out 10 minutes, you know?
 
Jeffrey Madoff: I mean, it's like, it truly is, like, I'm sure there will be a movie made of it, yeah, you know, but it's kind of fascinating, because, did they use any technology, or was this just a …
 
Dan Sullivan: It was an inside job. They now know it was an inside job.
 
Jeffrey Madoff: Oh, I guess I don't know the latest. What was …
 
Dan Sullivan: Yeah. Well, they've captured three of them. They've captured that much, yeah, yeah. But they found out it was an inside security job when it comes right down to this. I mean, unless they never sell, but gangsters aren't too smart.
 
Jeffrey Madoff: Yeah. I mean, the initial stages, you know, the initial thing was right out of a movie, also down to it being an inside job.
 
Dan Sullivan: But I haven't seen any news whatsoever that they've recovered anything, and my feeling is those jewels were gone within a half hour, they already had the hand off. They probably already had the hand off, pre-planned, and the jewels are now somewhere in Beijing.
 
Jeffrey Madoff: But isn't it fascinating to think that that kind of a heist could happen now, well, at the Louvre, you know. I mean, that's what's kind of fascinating, because talk about, let's go retro with the way we're trying to make money. Break in and steal the crown jewels. I mean, it is out of a movie, yeah?
 
Dan Sullivan: Well, we had a robbery at Toronto Airport. It was about three four years ago, and it was, I think it was 28 million in gold bars.
 
Jeffrey Madoff: Oh, really?
 
Dan Sullivan: Yeah, and it's only been, it was three and a half years, it’s, they solved it. But, you know, there's no mention that they recovered the gold bars. You know, I've always had the feeling that criminality really starts with a condition of incompetence.
 
Jeffrey Madoff: So how do you mean that?
 
Dan Sullivan: Well, that you're incompetent so that you never get a beginning of life where you're actually making money in an honest way. From beginning, you're not confident enough to earn an honest living. You have to steal or you have to con or something to be successful, okay. And I think that it's an inability to just play the game legally. I think it starts a very early age. And I think there's a certain laziness about it too. You know that, you know you just don't want to work hard. You would like to make a lot of money by not working hard. But the other thing that requires, and I think all lack of ethics and lack of morality really depends upon this, you don't see too far into the future. Like they found that kids in the south side of Chicago, New York, I don't know what the really dangerous part of New York City would be. Where is it? Where's the real crime ridden parts of New York City?
 
Jeffrey Madoff: No, I don't know, because I think that that has changed. And it's not like, you know, an area to stay out of.
 
Dan Sullivan: But when you grew up, where was it? Oh, well, you didn't grow up there.
 
Jeffrey Madoff: No. But I started coming here in the ‘60s, and it was probably Times Square.
 
Dan Sullivan: Yeah, so they said that kids who robbed somebody for a pair of sneakers, tested these kids, and they have no sense of consequence beyond going to bed that night. In other words, if I steal it today, am I caught by nighttime? And they're not, and so they steal. And if you think about you and you think about me, we have a sense, if I do this today, what's it going to look like five years from now? And I think morality and ethics are an extraordinarily well-developed sense of consequence at a longer period in the future.
 
Jeffrey Madoff: Well, one could argue that it's, religion does that.
 
Dan Sullivan: Well, parents do that too. Yeah, yeah. I mean, religion is the big parent.
 
Jeffrey Madoff: Yes, even called in the Catholic religion, father.
 
Dan Sullivan: Yeah, it'll get more parental than that.
 
Jeffrey Madoff: No, that’s right, but the key word here is legal, and that changes. And so it's fascinating to me, because things that were legal didn't mean that they were right or even ethical, but I think that there are many businesses that have profited very highly from knowing how to navigate the legal system or interpret or throw a wrench in the gears or whatever. That has brought about whole new questions that we haven't had a real precedent in answering before.
 
Dan Sullivan: What would be an example?
 
Jeffrey Madoff: I think our current president that, when the courts rule against them, basically the response is, what are you going to do about it? And I think you're correct in the sense that there's a lot of people that grow up without a sense of consequence, and that having no sense of consequence, I think, often emboldens one to do things, and like with our kids …
 
Dan Sullivan: Using the Trump example, would you also say, what's the legality of the district judge making a national judgment?
 
Jeffrey Madoff: Well, I'm saying that all of these different angles that are being worked on, that's why it's not cut and dried. You know, there's a thought that you can bring something—now, there were a number of things were thrown out of court, but there are a number of things that it raised questions that had no precedent. And, you know, so it's interesting, because what happens in a situation where…
 
Dan Sullivan: I didn't use the word legal, I used the word moral and ethical.
 
Jeffrey Madoff: And I'm using the term legal because …
 
Dan Sullivan: I kept legal out of it. It's moral and ethical that I was using, because I'm also …
 
Jeffrey Madoff: That’s also determined by what's legal,
 
Dan Sullivan: Somewhat.
 
Jeffrey Madoff: You know, that's a social determinant of what's moral.
 
Dan Sullivan: Slavery was an issue. It was legal, it was determined not to be moral and ethical. That's what made it illegal over time. It's usually morality and ethics that changed legality.
 
Jeffrey Madoff: Knowledge that Lincoln had is that if he destroyed the economic engine of the South, that would hamstring them in the Civil War. So I think, you know, there's a lot of things that come into play and that becomes very malleable over time with the lawsuits and everything else, but it's an interesting situation. I was going to say with our kids when they were little, Margaret, and I would say, okay, we're going to count to three. And if this doesn't stop, there's going to be consequences. And at a certain point, our kids were bright enough that they knew we didn't really have anything. After three, we didn't know what we were going to do if we actually had to get, I think it was five, actually one to five. I said to Margaret at one point, what are we going to realize we really got nothing to back this up? The threat worked.
 
Dan Sullivan: You could like lessons from one of our longtime team leaders. She's the one who's basically responsible for hiring and firing people in the company, but she's the parent whisperer in the company. Our team members have lots of kids, and one of the big things that she teaches that you have to always give a child a choice. She said, you can't give a command. You have to give a choice. She said, for example, you have a choice. You can eat your vegetables, or you can go to bed, right? She said, it’s good for them, because they have to weigh one thing over another, and then they get it or she says, if they're running around and they fall down and they start crying, she said, you have a choice. You can run it off, or you can shake it off, yeah, and everything like that. So you should have had a choice there. If in five seconds, you don't do this, if you choose to keep doing this, then we choose to have this happen. So you didn't really plan well enough to create a real consequence.
 
Jeffrey Madoff: That's right, although we evolved into that.
 
Dan Sullivan: The consequence was, you lost credibility.
 
Jeffrey Madoff: But we evolved into the choice aspect of we didn't have to have that initially, it was just the looming threat of whatever the hell it was, was sufficient. Then when we realized, okay, this is not going to work anymore.
 
Dan Sullivan: So let me ask you a question about, let's take it from Jake and Audrey and let's move it to the cast. When you're putting together a play, how do you define lines in the theater world? You know, you're either going to do this or you're fired? I mean, is that clearly explained or is that so well-known and understood that …
 
Jeffrey Madoff: I think that if there were behaviors that were jeopardizing the production because of somebody's particular mania or something like that, and you know, you just have to make a strong enough case if you fire somebody, and equity challenges it, that you've got your dossier, you got a case, so there are protections about that. But you know, what you try to do is, before you ever get to that point, that is that the audition stage, really, and then you have another chance, and that's during rehearsals. Because that one, let's assume this person is wrong and just not a good person to work with. That one bad person in the ensemble brings down the whole production, and they make the job unpleasant for everybody. And so you know what you try to do? We've been very fortunate that we have not had that and the different iterations of the show that we've had, but that goes down to as what we were talking about in the premise of our book, Casting Not Hiring. Because when you are casting, you were looking at who the person is, what are their behaviors. You're not just looking at what are their alleged capabilities, and you're trying to just build, check the boxes on capabilities. You're also trying to find out who is this person. How do they interact with others? Let's see in a rehearsal doing these kinds of scenes, can they take direction? Yeah, you know, how well do they play with others in a business situation, if somebody in the first meeting doesn't display any interest in the company, but talks about, well, what kind of benefits do you guys have? You know, what's the, what's the track in terms of increased wages? Do you do a six-month review, a yearly review, if you're only asking about what impacts you? That's going to let the potential employer know that you don't really care about this job or this company.
 
Dan Sullivan: My team leader that I talked about, Karen Skleryk, I asked her, I said, you know, for the last, let's say, five, six years, there's been the sort of this parody about millennials and the entitlement of millennials, but I haven't noticed it in any of the new people that we've hired. Let's say, in the last 10 years I haven't noticed any of the entitlement behavior. And I said, are you doing something different in the hiring process? Because I'm just noticing, you know, I go on YouTube and there's parodies, hundreds of parodies, about entitled millennials, and I'm just not seeing any of that show up. And she said, yeah, we just have one more question. And the question is, if you come to work for a Strategic Coach, what do you think you're entitled to?
 
Jeffrey Madoff: And if they answer the question, they're gone, right? And that's the thing, is that even an interview and audition, either one is a kind of performance. And so, like, what I would tell my students is that, and this is in terms of rehearsal, which I think is so important on so many levels, not just theater. So I had a student who was going to be applying for a job at Ralph Lauren, and he said, do you have any suggestions for me? I said, I don't have any suggestions. I have questions for you, like what I said. So their flagship store, it's on 72nd Madison, have you gone there yet? No. So you want to go to work for this company and their main public interface, which is their flagship store, you've never gone there? No. I said, well, that's something you need to do. But also what you need to do is go to a few different departments and interact with the sales staff, interact with concierge at the front and get a sense of this company, how they operate, what they do, have questions. So that's something else. In other words, do your research, do your homework, because if you don't do that, you're not even showing interest in the company that you supposedly want a job in. What are you even basing that you want the job in there for? And you know, I would also get answers like, well, because it's going to really look good in a resume. And I said, you've gone through during your college years six different internships. That doesn't count for a lot. What counts for a lot is, you know, actually, I only had this one internship because they kept rehiring me.
 
Dan Sullivan: Well, the other thing about the resume answer is that, in other words, you're already looking ahead to where you've been hired, you work there, and you're not working there anymore, right?
 
Jeffrey Madoff: That's right. So, you know, it's so much more about in all these cases, who is this person? What are their interests? Why do they want this job? What do they bring to it? And to the person who's seeking the job, or the part in the play is, you know, it's like, I think I told this thing once, we were doing the musical auditions. And music auditions, one on one, bring in your sheet music. So you're going to be asked to do in most cases, do you have a ballad? Do you have something that's upbeat? Yeah, you know, whatever. And it was stunning to me that there were people that you—bring a sheet music? Oh, no, no, sorry, I didn't bring any sheet music. Well, you know, and there's a piano player there to play with every audition person, and it's like applying for a job and you haven't gone to their store or see what their business is, or anything else. And it's surprising how those little things become very big things when you don't do them. So you've got the one question that, boom, that's a disqualifier.
 
Dan Sullivan: Yeah, not alert, not curious, not responsive, and not resourceful, and not hired.
 
Jeffrey Madoff: That's right, that's right. So, you know, it's really fascinating, because so much of this stuff, relatively speaking, is easy, you know, and if you won't even take the initiative to do the necessary homework so you can ask informed questions, demonstrate your interest, demonstrate your intelligence, not a good way to impress somebody that you're hoping will hire you or cast.
 
Dan Sullivan: Yeah, it's kind of interesting. One of our coaches, I don't know if you've ever met him, Lee Brower.
 
Jeffrey Madoff: Yes, I have.
 
Dan Sullivan: And he said, you know, it's a weird world. Everybody's competing to be interesting, but nobody's competing to be interested.
 
Jeffrey Madoff: It's a good point. And he's right, because I think I told my students, never go into an interview without you having a few questions in your pocket that you want to know about the company, and don't make those questions about yourself. Be inquisitive about where it is you're thinking of working, which means do your homework. Again, do your homework. It's amazing how many people don't prepare, and that's kind of stunning to me. And some people are just stupid, you know, like, I have gotten emails and they didn't even BCC it. There's like 30 other companies they've sent the email to, and that's the delete button, push right there. And that's happened more than once, and I'm thinking, well, this is good because you're demonstrating a quality that no company wants, yeah.
 
Dan Sullivan: Well, back to our original topic when we started today. Would you say that over the years, Elon Musk has demonstrated that he's really, really interested in creating new things in the future?
 
Jeffrey Madoff: I can't claim to know his motivation.
 
Dan Sullivan: No, I'm not talking about his motivation, just his behavior.
 
Jeffrey Madoff: Well, I think he has created extraordinary things and that he has had an impact on our culture. And I think that throughout history, there are those people like Edison. Do you imagine? You know, there are those people that seem to be the focus and almost act as a metaphor, you know, for ingenuity, and you know, whatever, it's also in current times. And I'm going back now a few decades, who that person is, as opposed to just what they do, becomes a consideration, too. And you know, when I mentioned that, I think you correctly said that people are investing in him, and for me, and I'm no expert investor, but the mercurial nature of his personality, I think, you know, impacts on the things that he does. And so I wouldn't want to ride that bucking bronco at this stage of my life that I might have chosen to do 30 years ago, because I don't want that kind of mercurial aspect. What about you?
 
Dan Sullivan: I don't want to have to think about it, right? It isn't like we're down to one choice of who to invest in. I mean, there's lots of things. You know, you have to say, what kind of future do I want to have from an investment? And we're all investors. I mean, every day, when you wake up in the morning, you're investing in something. You know, you're investing time, you're investing attention, you're investing effort, you're investing money, and everything like that. And I think that, you know ,what we're seeing more and more. However, I think that's really interesting, because I grew up in the ‘40s, ‘50s and ‘60s, and I don't remember individuals like this during our childhood, this colossal, big economic force, and I think it was more military and political in ‘40s and ‘50s because of the Depression and the Second World War. We were talking at one of the, we were just talking with somebody at Genius Network. They said, you know a lot about politics. And I said, yeah. I said, I kind of got hooked very early. My mother said politics were really important. And they said, well, for example, what was the big thing when you were growing up? And I said, the big thing is that my parents were Roosevelt Democrats. You know, they were blue collar. They were Catholic, they were a blue collar, but they said everybody voted for Eisenhower and he was a Republican. And I asked my mother once, I thought, you're Democrats, why are you voting for a Republican? And she said, well, he's the hero, you know, Eisenhower is a hero. And the truth is, both parties wanted Eisenhower as their nominee, you know. I mean, he was, you know, he could have been a Democrat, and he could have won just as easily as a Democrat. But my memory is that the marketplace was not such that you could have someone like Elon Musk in the 1940s and 1950s. Maybe Walt Disney, but that would be the closest that I can remember.
 
Jeffrey Madoff: Well, it's interesting you mentioned him because I was thinking that the most well-known people at that time and politics had not yet become a spectator sport, which it is now. So I think that at that time, it wasn't entertainment.
 
Dan Sullivan: Well, that's right, yeah, yeah. I mean, politics is entertainment unless it's not.
 
Jeffrey Madoff: That's true. That's true. But I think probably the only people that would achieve that kind of fame would be like movie stars and sports stars, you know. So you mentioned Joe DiMaggio or you mentioned Cary Grant or whatever. And I think that what has happened is that businesses have recognized the value of, in some businesses, of high-profile leaders, so along with that, then becomes the press agent, the screening of interviews, all these kinds of things
 
Dan Sullivan: To the entertainment industry, actually.
 
Jeffrey Madoff: That's right, yeah. So with Walt Disney, and I would include it with Walt Disney. Disney was a phenomenal marketer. And you know, somebody, the seeming to be the avuncular uncle Walt on Sundays, that was a thing, and it made me think of the other great self-marketer, was Alfred Hitchcock. And he had his show, his movie, which he introduced. He had his movies, which he would always put himself in the background somewhere, and you go to spot him, but I think that the marketing between politicians and celebrities has pretty much gone away, and I think I don't know if that came into more fruition with Reagan, maybe, but I don't really know that, but it's interesting because it has become much more. I think the first really mythologized candidate in my lifetime that I can remember was Kennedy.
 
Dan Sullivan: Yeah, yeah. I was just thinking that. I mean, and there, it wasn't oblique or anything that Joe Kennedy, his father, knew a lot about Hollywood. They brought the skills of Hollywood to the political campaign. They brought, they brought Hollywood lighting, Hollywood makeup, Hollywood, you know, where you positioned yourself, how you looked at the camera and everything, that was the first time that Hollywood made a huge impact, as far as I'm concerned.
 
Jeffrey Madoff: Well, the first televised debate, yeah, where Nixon, with his stubble and his perspiration, and, you know, was not telegenic, no, and Kennedy, in spite of his father, or along with his father's knowledge of some of those things, Kennedy was a very attractive …
 
Dan Sullivan: Oh yeah, charismatic person, yeah, very pleasing, very pleasing.
 
Jeffrey Madoff: So it's interesting, but that has all changed. Now you go back in history, the Lincoln Douglas debates were an entertainment and were built like a championship fight, you know? And when those came to town that was a big deal.
 
Dan Sullivan: Well, Harry Truman won in ‘48 because he went across country. He barnstormed basically across the country on a train.
 
Jeffrey Madoff: Right. And his, the president who he served under, who died, Roosevelt wanted nothing to do with him, and it was very close. After the election, I remember how close it was, quite close that when Roosevelt died, that he even found out that the atom bomb existed. He didn't even know about that.
 
Dan Sullivan: Yeah, yeah, that's true. That's actually a true story. Not only is it interesting, Jeff, it has the added benefit of being true.
 
Jeffrey Madoff: Something that lots of people don't care about anymore.
 
Dan Sullivan: Anyway, we really covered the rounds today. But, you know, I think we had a very, very powerful lead off topic, and I think that's really important. If you got a great opening topic, you have permission to go anywhere you want and everywhere and everywhere.
 
Jeffrey Madoff: Yeah, this was great. Thanks for joining us today on our show, Anything and Everything. If you enjoyed it, please share it with a friend. For more about me and my work, visit acreativecareer.com and madoffproductions.com. To learn more about Dan and Strategic Coach, visit strategiccoach.com.