Why Legacy Brands Lose Their Edge

Jeffrey Madoff: This is Jeffrey Madoff, and welcome to our podcast called Anything And Everything with my partner, Dan Sullivan.
 
Dan Sullivan: It's a very important part of every weekend when it's possible that I spend a couple hours with Jeff Madoff here. First of all, because we haven't the foggiest idea what we're going to talk about. So we're already recording because we may just hit on something. And the question is, do we know it before you know it? That's the big thing here.
 
Jeffrey Madoff: Well, Dan, we were starting to talk about the interesting developments in streaming and moviemaking and how Sarandos took Netflix out of the equation to purchase Warner Brothers, acquire Warner Brothers, which it looks like still a ways away yet, but it looks like it's going to be taken over by Paramount and Ellison. And, you know, just what were some of the moving parts of a deal like that? And what I found really interesting is that Sarandos decided to not invest further in a legacy company, which is highly, highly leveraged at this point. Paramount is very highly leveraged, and they don't know whether to put UFC championships on or movies or whatever. Netflix, I think, has managed to create a brand which actually means something, and the name means something, and I don't know that anybody cares about Paramount anymore. It's not what it was, which was one of the great movie producers, but it's not anymore. But I thought that the insight, well, I'm calling it insight that Sarandos had in terms of walking away from a legacy company, which that used to be the highest value was the name and reputation. And I don't know how much that means at this point for those kinds of companies.
 
Dan Sullivan: I'm right with you. I don't know either. I don't think anybody does. You have to do something new with the old thing.
 
Jeffrey Madoff: That's right. That's right. It was really interesting. When Netflix started, the big player was Blockbuster. You know, you go to the Blockbuster store and you would rent a physical cassette, and you had to go back and return the physical cassette.
 
Dan Sullivan: And you had a deadline on that. And if you didn't do it, you got charged extra. It's like the library. And while he was sort of the guy who started it, whose name I don't know, he was just PO'd, you know, he was just pissed off. And he said, I'm going to take this company down. And this is the way things do. People can just get irked by something personally. You know, they obviously have skill and they have capabilities and everything like that. People would like to watch their movie when they want to watch their movie and don't want to be on someone else's schedule.
 
Jeffrey Madoff: That's for sure, but you know, when we look back at how they started, they're competing with Blockbuster, which of course is gone, gone, gone.
 
Dan Sullivan: Yeah, that's right. As they should be.
 
Jeffrey Madoff: Yeah, because what Netflix did, it's interesting. I can't think of any other company, although I'm sure there are, that basically their entire company was built on a delivery system, and that they were able to tack with whatever the new delivery system was. So initially it was cassettes. You remember those signs in the store, Be Kind, Rewind? You know, because people wouldn't turn to VHS tapes and they had to rewind them. That's another few minutes that they had to spend before their inventory back on the shelf, you know?
 
Dan Sullivan: Yeah. Civilizational crises.
 
Jeffrey Madoff: Yes. Be kind, rewind. But what was interesting is then they made it easier. They went to DVDs and they gave you a self-stamped, ready-to-return envelope. And so you had to do a hell of a lot less to get the movie. But it was essentially like they were in kind of using space holders until there was enough bandwidth to deliver that streaming-wise. And then they erupted into the behemoth they are now. But it was really interesting, the earlier steps, because they didn't try to reinvent the world. I think they learned a lot about the business. I think they're really smart, which is why when I sent the article about them acquiring Ben Affleck's company, which will be doing some of the, it's very creative work, but it's something that will never be recognized by the public. People that do color correct, people that match the lighting, people that do the stuff with the audio, all of these kinds of things, which are essential.
 
Dan Sullivan: Yes, they went for the back stage rather than the front stage.
 
Jeffrey Madoff: That's right. So when Netflix walked away from Paramount because they thought they had the deal, I'm sure there was also some pissed off aspect to it that you told us we had a deal and now we don't and I'm not gonna bet anymore. But I think he's a very smart guy. And investing in Affleck's company, which by the way, the unique characteristic to that is it is the people with the skills, the human beings with the skills that will monitor all that stuff in Affleck's company. He's a smart guy too, you know, and being an actor who puts creator first, they're not talking about, you know, stealing likenesses. They're talking about going back to your Four Seasons maxim. You know, they're going to routinize those things that you don't necessarily need the person for other than to check the work, you know, and I don't think we ever want to eliminate.
 
Dan Sullivan: Well, I don't think it will be eliminated.
 
Jeffrey Madoff: Pardon?
 
Dan Sullivan: I mean, the whole thing is that new niches are being created all the time. But if you're the one who does the niche, you own the niche. I always say the smaller the niche, the bigger the market. Because you don't need two of those companies; you need one of those companies.
 
Jeffrey Madoff: Give me an example.
 
Dan Sullivan: Well, just to the point that Ben Affleck probably is an observant actor, and he just notices all the mistakes that are made that slow down production, or you have to do things over, and you have a money-making schedule, or you miss it completely. The difference between one and zero is extreme. You know, if you say you're going to get the movie out at a certain point and everything's going to be right about it, you have one chance to do that and you don't have 10 chances to do that.
 
Jeffrey Madoff: And I think that he's also in looking at what are the capabilities necessary, what are the things that in a way mirrors, I think, what Netflix saw in terms of going from VHS to then DVD in a self-returned envelope and all that. I think the company that mastered simplicity for the consumer was Amazon. You know, it was a price proposition with quick delivery. And, I mean, I know people that hate Amazon. They don't want to do business with Amazon. It's hard not to. You know, they're so ubiquitous and their value proposition is, you know, hard to beat. Give consumers what they want at a decent price and quick. We never needed things so quickly before.
 
Dan Sullivan: Yeah, there was an interesting article in The Wall Street Journal. You can't get the paper anywhere. The airports have no newspapers now. Nobody has newspapers now. You know, I have The Wall Street Journal digitally, but I like the paper. Last night when we got home, we had a couple hours, and I just went through back copies of The Wall Street Journal. And they're saying that now what the companies are doing is that immediately now means three days. If you want it in two days, it's going to cost more. If you want it today, it's going to cost you a lot more. So they've taken what was free and they've put a price on it now.
 
Jeffrey Madoff: Yeah. It'll be interesting to see how that impacts their business.
 
Dan Sullivan: Well, you know, the one thing about technology, it's only exciting the first time. By the time you do it the fourth time, it's boring. What seems like a luxury becomes a necessity very quickly with technology. So everybody's used to getting Prime, and Prime gets it, you know, if you order it at 9 o'clock in the morning, you have it about 2 o'clock in the afternoon. But it's only certain people who want that. For me, if I get it within the next five days, that's like immediate.
 
Jeffrey Madoff: Well, it's like I was talking to a friend and they were celebrating the fact that they could get something really quickly and all that. And I said, you're talking like that's new. We used to walk into a store and walk out with the merchandise we wanted. That was as fast as you can get.
 
Dan Sullivan: Right. A hundred years ago, Sears and Roebuck would sell you a house and have it delivered within a week. Sears and Roebuck houses, I mean, they didn't make them. It was a supplier who made them. But you had your choice of 25 different kinds of house, and it would all be pre-cut. Every part of the, and it would arrive in big, big boxes on the train, and you had to have a local contractor who would just follow the rules, and they'd build the house. That was a hundred years ago. Because all that required was, you know, the telegraph and the railroad. There's some towns in Frankenmuth, Michigan has about 50 Sears and Roebuck houses. Now you can't tear them down because they're historically important.
 
Jeffrey Madoff: That's funny.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: I remember in the mid-‘50s through the early ‘60s, there's probably a 10-year run or so on these prefabricated homes. And you could get the home on the lot of your choice, a ranch house that back then might have been $28,000. It's crazy now we're at the age of looking back at prices that seemed insanely low, but people forget also that the incomes and minimum wage and everything else were also insanely low back then too. But anyhow, so there was a company called Space Homes. My uncle worked for it for a while, and it was the home of your choice on your lot. And you would get a catalog of looking at all these nice homes, and instead of $28,000, it would cost you like $12,000. But what they would do is they would deliver those boxes four in the morning, three in the morning, and if you were a skilled tradesman, maybe you could build the house. But they never said they would build the house. They would say that you can build the house of your dreams. Basically, it was a kit. They eventually were sued out of business. But that was a thing. I didn't know it went back that far with Sears. But I'm also having to remember that 1950s was over 70 years ago at this point.
 
So it's, when I think about it, I say, whoa, wow, wait a minute. I guess that does make sense. It was that long ago. And Sears was a great example because it was, you know, Sears has everything was the slogan. And, you know, the catalog was an early hard copy version of the internet, if you will. That thick. I mean, they were constantly in production creating a catalog because that had to be a huge, huge feat, you know, to accomplish that. And just how ubiquitous Sears was and Montgomery Ward and all of those, you know, retailers like that that are essentially all gone. It's fascinating.
 
Dan Sullivan: Yeah. Well, they get to the point where they think they have their market. I can remember my sister for almost her entire adult life has lived in Lorain, Ohio. And Lorain was one of the big steel. They had three different steel companies there, you know, the big steel mills. You didn't have to go too far into the 1960s before you know that steel was not going to be an American product. The Japanese were into it. They could produce steel so much more cheaply and ship it across the Pacific and deliver it. I remember I was visiting with my sister and Lorain was a big thriving place and now it's a ghost town. And there was a TV crew and it was the last eight hours before they were going to close down the steel mill. And they had workers there. Their father had been in the steel mill. Their grandfather had been in the steel mill. And workers were being interviewed and they were going to close the gates. This was the end of the steel industry in Lorain, Ohio. And somebody said, why didn't someone tell us this was coming? And I said, the message was out there 25 years ago. You just weren't picking up on the message. Yeah, I think that happens to a lot of businesses.
 
Jeffrey Madoff: Oh, yeah, and they're not paying attention to the landscape for them translates into this happened all at once. I would like to have been prepared for this, but this just happened so quickly. And no, it didn't happen that quickly. Nothing happened that quickly. But the work that it takes to stay up and the money it takes to spend wisely to create that moat around your business, that's a hard thing to do.
 
Dan Sullivan: Yeah, and by, you know, those steel mills would have started in the late 1800s. They were very tied to the auto industry, the steel industry. Plus there was enormous infrastructure work going on. New bridges, new highways, new, you know, there was a, but that was done. Once you have a railroad, you need rails to replace old rails, but you don't need too much more steel. And it's an interesting thing of what different people pay attention to. You know, you can see it right now, the universities have been in trouble for a couple decades now, you know, the university system. But there's, like, every year now, you've met Don Munce. Had you ever met Don Munz?
 
Jeffrey Madoff: No.
 
Dan Sullivan: Richard Rossi came in to Coach as a result of Don Munce. And Don Munce had a dating service on the internet, the dating service eHarmony.com. You say who you want in a partner, and the other person says, and then they had the algorithms saying probably the two of you should get to know each other. Well, Don Munce did this between 11th and 12th grade students and private universities. So there's more than 1,000 private universities in the United States. And the university would say, we're looking for this type of student, and the students are looking for this type of university, and they do a matchmaking. And it was extraordinarily successful. But Don sold it about 15 years ago. He sold the company. And he said, you know, I've talked to about 10 wealthy parents in the last 12 months, and they're saying, I don't know if university is worth it anymore. And they said, maybe you should just go to a community college for a year or two in the local area rather than going off to a high-priced university, you know, see what he wants. Maybe he doesn't want to go to university, which tells me that a lot of university …
 
I mean, there's obviously, there are great subjects to take and the university is the only place where you can get that type of professors who have this type of specialty. But a lot of it has gotten watered down. That's mostly social issues that they've packaged up, and you'll get a degree in something which has a social value in the university culture, has a social value in certain segments of society, but a high-paying job is no longer the payoff for doing it. So the parents, he says, when the parents who can write the tuition out of their ATM, you know, the money is not the issue. The only question is, is it worth their time to go to the university? And that was about 15 years ago. And he sold right at the right time to get out. And now, first of all, he could see that the population of new students was going down because the university system is a product of the Baby Boom generation. You know, you just had this massive number of people. It was the biggest American generation ever. But we're into the fourth one after that now. And it's not really clear that a university education is that important for your financial future.
 
Jeffrey Madoff: Well, and I guess it depends. I mean, if you're going into law or medicine or engineering and some of those things, you know, electrical engineering, there are those areas that I think you need to go for. I also think, you know, there was a stigma when we were younger that there were the college prep courses in high school. And I, like you, I went to a public high school and it was a new high school. I was a third graduating class. But if you were taking something practical, it was, why are you in this class? I was asked that a few times. We've talked about that kind of thing before. And you know, you can make a really good living being an electrician or a plumber or a painter and working all the time. And since I've been going through this renovation, talking to these different people about it, because I find it really interesting because most of the people don't want to do that kind of work. And it's expensive. They're very well paid. And trade schools used to be looked down on by those who, you know, were going on to college in a different way. And I think the whole process of education and for what I think needs to be looked into. I do believe in the notion, I think all years of your life, you should be having your eyes open to learning and curiosity and all of those kinds of things. And I don't know, when I went to college, I don't know that my parents ever thought of, it was just an assumption, if you went to college, you would get a better job.
 
Dan Sullivan: Yeah, and I think there was a good deal of truth to that.
 
Jeffrey Madoff: Yeah, I think so too.
 
Dan Sullivan: Yeah, it's funny because we've had about 25,000 entrepreneurs come through the program in 36 years. And it's not a subject that's ever talked about by the entrepreneurs. It's almost very rare that somebody says something significant about their college education, even before college, what kind of school they went to. They just don't talk about it. And I think the reason is that they were already on an entrepreneurial path when they were about 12 years old. And they knew there was a social value to it. In other words, there was a social status connected with having a college degree. But they didn't see it as being a practical advantage, having a college degree. They were already making money. They already knew how to make money in the marketplace, but it had to do a lot with just kind of what circles were they going to hang out with.
 
And somebody said to me, I mean, do you think it's important for an entrepreneur to have a college degree? And I said, yes, I do. I think it's absolutely crucial. And he says, well, why? And I said, you have a college degree and you're sitting across the table from someone else who has a college degree. You know, it doesn't mean anything. And that's an important thing to know, that it doesn't mean anything. The ones who don't have a college degree, it sits like something on their shoulder for their entire life, and they have to be smart. They want to prove that they're smart because they didn't have a college degree. And there's so many of them. I said, you know, you should have just gone away for four years. The grades didn't really matter if you got the college degree. And then you'd be free from this social status of not having a college degree. And they go out of their way to show that they're well-educated. I only went to college because I wanted to read the great books. I mean, I know that was a big part of your education and that was important. But I wouldn't have gone to college with that curriculum.
 
Jeffrey Madoff: Well, the good thing was that you knew what you wanted to get out of it. So you could target your application to go into the place that you wanted to go. I knew that when I was researching colleges or decided where I wanted to go and saw the offerings, I think there's so much to college beyond just that you've gone to college.
 
Dan Sullivan: Well, I think it is. First of all, you know that there's a lot of smart people in the world, and they're smart in a lot of different ways. The other thing is, you're separating from your childhood culture. You're getting into another culture. And I think that's very, very important, that you hang out with people that your childhood didn't put you in touch with, that you get to do it. And there's just a lot of different ways of being smart. I mean, smart comes in a million different forms, and you get used to that. But the other thing, there's networks that form in college that last your entire lifetime.
 
Jeffrey Madoff: Whether you're a filmmaker and you go to USC or Tisch in New York, or if you are into tech and you go to MIT or Stanford, I think that you're going to be around like-minded people in terms of the pursuit. And that I think, you know, your entry can be into a whole different world, or it could be the same world that your parents grew up in and you're just following that same path. I mean, that's another thing too. But I think that the notion of what you were saying, being around other people who are not the people that you went to high school with, in a much broader swath, in many cases, a much broader swath of the population, I think that there are so many benefits that go along with that college education, potentially. They don't necessarily potential. And you with the great books, me with studying philosophy and psychology, those are things, chances are, I would not have been exposed to had that kindling not ignited a fire of curiosity and wonder about those areas. And my parents, who were solidly middle class, they weren't wealthy, but we never wanted for anything. I mean, they did fine, but they never looked at what's the ROI on college. But with the costs of college now, how expensive it is, I think that the legitimate question is asked, what am I going to get out of this if I do this? And what do I hope to get out of it so I can try to maximize whatever that is while I'm there? And it's not just about showing up.
 
Dan Sullivan: Yeah, I mean, you can look at college from a hundred different directions. I think part of it is four years when they're not in the job market and the economy needs storage places to put 18- to 22-year-olds, you know, put them out there. But I think it's what happens to the individual, really. You'd have to take individual by individual to say, was there a good return on investment in terms of what this person became after college? You know, and my college, I mean, I would say they specialize in eccentric introverts. They really like eccentricity. But again, eccentricity for what? And in my feeling, entrepreneurism was the only possible payoff for this. Because I know where the ideas come from, you know. And my biggest imprint from college was Shakespeare and Adam Smith. Adam Smith, that was just when The Wealth of Nations came out. It was March of 1776. And that book changed the world. The influence of Adam Smith on the founders of the United States was huge. That came out, and his whole thing that you have to have trade. If you don't have trade between countries, you have no wealth in countries. That was a very important idea. And the specialization, that you require specialization, it's people who double down on some specialty that's really important in the marketplace. You know, so it was worth it to get to Adam Smith, and I think Shakespeare's just the greatest expert on human nature that's ever lived on the planet. There's more Shakespeare plays every year in every possible language than any other writer in human history.
 
Jeffrey Madoff: Yeah, which is amazing when you think about that phenomenon. It's incredible. Well, you know, I think when you talk about what is the ROI on the college education, if you're looking at it in traditional investment terms that it costs 70,000 a year or whatever it costs and all of that, or do you also look at what I look at, I should say, the life enrichment and opportunities that you can recognize or learn to recognize, the relationships that you foster and maintain, all of those things, I think that period of time is an incredibly important time.
 
Dan Sullivan: Sure.
 
Jeffrey Madoff: And, you know, I gave about five minutes of thought to being a professor. Of course, I ended up teaching as a professor for 16 years at Parsons. But, you know, I was thinking when I was getting my philosophy degree, I didn't know when I started that philosophy and psychology initially started off as the same pursuit, and that it wasn't until Freud wrote the entry on psychology in the Encyclopedia Britannica back in 1932 that it became its own separate discipline. But what I found so fascinating was it was the first time I took courses that had to do with human behavior, which I found absolutely fascinating. And the first thing that had ignited me about that is when I had read Vance Packard's book called The Hidden Persuaders, and I think I was in like seventh grade or something like that, and just about putting the colorful cereal boxes low so the kids could grab them, which usually ended up in the parents having to buy them to quiet their kid down. But I think that it comes to a really fundamental question when you talk about ROI is, what do you mean by that? What are you investing? Are you investing money? Are you investing time? Are you investing both? Because I think you have to, in whatever you do, fully invest in order to be successful, have a successful outcome.
 
Dan Sullivan: In anything.
 
Jeffrey Madoff: That's right, exactly. That's right. But the reason that I didn't become a professor was I thought, wow, by the time you get to that level where you get your doctorate in philosophy, the only people you can talk to are other philosophers. And so I felt like this widened my worldview so much and challenged me to think about things I had never thought about before and ways of thinking about those things, all of which I think have tremendous value, but you can't put a dollar sign on.
 
Dan Sullivan: Yeah, we're writing a quarterly book right now, and I think this is going to be a really interesting book for our company. The big books that we've created have done an enormous amount of good for marketing. But this one, the title of the book is Who We're Looking For, and we just described the people who do really well with Strategic Coach. And to a certain extent, we're saying this is the way you already are, but you don't have a lot of other people to talk about. And what we're going to give you is a community where you can talk about the things that are actually happening. We're not saying that you have opportunity problems. You don't have opportunity problems. You know how to take advantage of opportunities. You don't have money issues. You're already making a lot of money. The question is, is there any meaning to it that you can talk about? So what we're contrasting is saying, if you mean who you are, you're intelligent, you're talented, you're successful, and you're ambitious, but your biggest problem is that you don't have a lot of people to talk to about the things that really interest you. And what we're going to give you is a whole community of people who are going to totally understand you. And they're going to value you just because of what your brain does.
 
Jeffrey Madoff: Yeah, which is fascinating because the key to me and what you're talking about is community. And, you know, how would you distinguish between a community and a tribe.
 
Dan Sullivan: Yeah, it's an interesting thing because people use that word tribe and I said, you know, the whole point of human civilization is to get past tribalism. And you want a tribe? I said, why do you want a tribe? First of all, I don't consider myself a member of a tribe. Okay, so it doesn't really attract. My relationships are based on conversation. So I think a community is only formed if you have a common language.
 
Jeffrey Madoff: Yeah, that's what I … But that's true with the tribe, too.
 
Dan Sullivan: Yeah, kind of, but it's not a local tribe. It's an ideational tribe. Entrepreneurism is a life sentence. If you choose at a teenager or you're in your twenties and you choose to go in an entrepreneurial direction, there's a cost to that in that the sense is that if you're not part of the employment culture, they're not going to have you back if they see a five or six year period when you haven't, you can't say what kind of job you had. The only people you can talk to are other people who created their own communities. And I think this is a recent thing in human history. I don't think until you got to steam power that you really had entrepreneurism. The way that you and I talk about entrepreneurism is a recent experience in human nature. It doesn't go back too much beyond Adam Smith, where there's a whole way of living where you take care of your financial security, you don't depend upon an employer.
 
Jeffrey Madoff: Well, you know, I think going back further in time. I'm not saying there weren't entrepreneurs, but they weren't a class. And what I'm suggesting is that there were things that weren't called communities or tribes, but there were guilds. And those guilds could open doors to opportunity and that kind of thing, opportunity and work. And it was not unlike establishing a community of entrepreneurs. It was probably very much like that.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: You know, and I think that there is always that human desire to aggregate people of, generally speaking, similar beliefs. And I think that it's fascinating because I think we need that as people. Although I look at tribal as protecting a certain custom and the protection aspect of it can become very negative. A community I see is built on mutual growth and support. But there are many places where the lines are fuzzy. But I think that community to me seems to be a much more positive approach.
 
Dan Sullivan: Yeah, me too.
 
Jeffrey Madoff: You know, rather than a tribal approach?
 
Dan Sullivan: Yeah, it's very interesting. We do surveys about every three or four years, and we ask fairly simple questions. We're already presupposing that they're talented. We're already presupposing that they're successful, just by the qualifications of getting into Strategic Coach. I mean, you have to have take-home of $200,000 or more to even be considered. And we have to get tax statements. We have to get letters from accountants. We have to get letters from, you know, someone who would be an advisor. And they don't have to tell us how much they're making. We simply say, can you verify that their tax return has more than $200,000 personal income? Different from company income, personal income. And first of all, there aren't that many people who actually can qualify. It's about one out of 500 we've sort of analyzed. Out of 500 entrepreneurs, there's one person who could qualify for that. That's why most of our marketing is word of mouth, because people who are at a certain level of success tend to hang out with people at that level of ambition.
 
And the other thing is, if there's a unifying discussion, it's, how you had a setback or a failure and how you responded to the setback or failure. And there's a sort of a business researcher right in the city where you live. His name is Louis Schiff. And he said that he's interviewed three different types of people. He's interviewed CEOs who are corporate CEOs, people who are high up in the C-suite. You know, they could be VP of marketing, they could be VP of all the different areas that a corporation could have. And then there are professionals, and professionals have a credential, you know, lawyers, doctors, law training. You have to have an ambition for doing this at a very young age because your educational stream would qualify you to go along. You had to have an undergraduate, then you had to have graduates, and then you had to have ultimate degrees. And so when they're talking among each other, they have a particular topic that they talk about. CEOs only talk about their success. We found corporate managers and executives only talk about their success. People who are professionals only talk about the problems that they're solving. And entrepreneurs only talk about how they had a disaster and they came back from a disaster.
 
Jeffrey Madoff: See, now that's interesting because in some of the circles we have in common, in terms of people, there's a lot of, you know, having the near-death experience before you woke up and approached your business in a different way. And their credential is the level of trauma that they have bounced back from.
 
Dan Sullivan: Yeah, yeah, yeah.
 
Jeffrey Madoff: Which to me always seemed odd that that was your bona fides that you, you know, you went through the windshield and you thought that you were going to die and you didn't and that made you want to sell more of your personalized journal or whatever the hell it was.
 
Dan Sullivan: Well, I think the other thing, it requires a high degree of confidence and courage to be a really successful entrepreneur.
 
Jeffrey Madoff: Absolutely. Yeah, absolutely. And I think one of the most important aspects of that, we both had this belief, but it was stated differently. And the way that you stated it, which is very good, was that double sale. First, you got to sell yourself on it because you aren't going to be able to sell anybody else on it if you're not, you know. So, yeah, I found that I didn't know if that was unique to some of the circles that we both know.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: That the trauma part, you know, the near-death experience, the, I was holding on with my cuticles to the edge of the mountain, ready to careen down to oblivion. And I somehow climbed back up again. And I can tell you those secrets.
 
Dan Sullivan: Yeah. And the other thing, there's mindset shifts that, you know, if what you're offering to the marketplace is rejected by the marketplace, you have to go through a mindset shift. You have to start paying attention to who's the buyer of what it is that you're offering. And if there's a buyer. That's a terrific branch of psychology.
 
Jeffrey Madoff Are you talking about behavioral economics?
 
Dan Sullivan: Yeah, yeah. In other words, how is the consumer looking at this? You know, what is it in their life that what you're offering would be interesting to them?
 
Jeffrey Madoff: Yeah, and that, yeah, that's really, I mean, let's show a very clear example and I'll state this and you can tell me if this is what you're talking about. Disney. Walt Disney's is family entertainment. That's the brand. Everything they do has to do with that. And then once they were around war. I mean, you and I predate Disneyland by just a few years, you know, which was an audacious vision. And then it went from Disneyland to Disney World, you know, and it was quite incredible, that vision and the execution against that vision. So I think that's a level of entrepreneurship. I mean, Walt Disney is up there with Bezos and Steve Jobs and all of those people who, what they did changed the world. And it's quite fascinating what that is. But I think that entrepreneurs, I don't think it's a necessary condition. I mean, you and I were in that same meeting when one person's story was worse than the previous. They had to outdo them. Yeah, I almost died. Yeah, but I actually came back from the dead. My head was severed from my torso. I was able to hold it in place and had that eclectic light aura that saved my life and move forward. And now I've built this business and I can tell you how to do the same thing for a certain amount of money. I don't know where that part came from. I guess it's an effective, in some circles, an effective sell, I guess.
 
Dan Sullivan: Well, I think the other thing is that failure means something different to you than it does to other people.
 
Jeffrey Madoff Okay. Explain that.
 
Dan Sullivan: Well, yeah, I'm going through this, but what else am I going to do except get to the other side of this? In other words, not giving up. Yeah, the thing is that when you decide to be an entrepreneur, and the definition that I like about entrepreneurism is a student of Adam Smith, actually a French economist, and he wrote a book, is Jean-Baptiste Say, and he's very famous in entrepreneurial circles, because he was doing it in France, which was a much worse situation than Great Britain. Great Britain has, you know, there's a certain amount of, first of all, they're a very mixed population, the British. I mean, they've had so many invasions and tribes beating up this tribe and everything else. And the other thing was that even the wealth in Great Britain was more or less new wealth, depending on which family you associated with who became the monarchs and became the aristocratics. And they had their own revolution. They killed one of their kings. And then they had the battle that, you know, we need the monarchs, but they're pretty worthless. But it's good to have the monarch. It gives you sort of a unifying symbol. But you don't want them to have any power. You want them to have an opinion, but you don't want them to have power. Parliament will have the power.
 
And that happened in the 1600s, so they had gotten that out of the way. And a lot of the other European countries, they went to absolute monarchism. You know, France, Spain, Germany, Russia was the worst case of it. And they were a thing of the past. But what happened in Great Britain, and I bring it back to steam power, all of a sudden in human history people who were nobodies but who had a notion of who could buy something new and they built cotton, was the first thing the steam power was used to produce clothing and that was huge, and the cotton wasn't produced in England. England had the great opportunity. They had nothing. The only thing that got them big was the fact that they had an enormous amount of coal. They had burned all their wood. They had no wood left. I mean, Britain has more wood today than they had 200 years ago because they used wood for everything.
 
And so you got these people like Watt who created the first steam engine. That was in 1776, too. It was the first steam engine that produced 25% more energy than it used. And that single fact that you could have something that you created that actually produced more energy than it used was huge, because slavery had been the only way that you could do that up until steam power. It was steam power that ended slavery. And that happens all right at the end of the 1700s. Adam Smith, the American Revolution, and steam power all happened within a decade of each other. And then you could get these very, you know, not particularly literate individuals, not well-trained, but they just had an ingenious mindset that you could apply steam power to this, you could apply steam power to that. And all of a sudden, it just broke loose.
 
And then the British were seafaring country because they were an island. And the greatest institution the British ever created was the Navy. They had an amazing Navy. But these were up-from-the-bottom people. It was a very risky adventure. Just sailing was a very, very precarious occupation. But this whole notion that you could be a nobody socially, you had nothing, but you had an idea, and they had investors, and investors would invest in your idea. And, you know, sometimes it worked, sometimes it didn't work. But that whole notion that you could jump over social classes, and by the middle of the 1800s, the aristocracy was fading because all their wealth was based on land. So there was this trade-off between wealth and status that started happening.
 
I mean, Steve Jobs, you know, he was an adopted child. He didn't have anything going for him socially, but he created a new idea. You know, the town that I grew up near when I was on the farm was Milan, Ohio, and Edison was born there just at a point where a lot of experimentation was going on with electricity. He just had everything. I think Edison probably has put the greatest stamp on the United States of any inventor in the United States. Electricity was just an amazing breakthrough. And he wasn't the only one, but he was the one. He understood marketing. He understood the stock market. Everything you would need to be a breakthrough entrepreneur, he had it.
 
Jeffrey Madoff: And I would add, by the way, too, and I think it was within the same time period as they might have even been a little before the steam engine, I'm not sure, the by-product of smelting they discovered in England, they noticed that when the sludge came over the top of the vats and fell onto the wooden floor, that water didn't permeate the floor. And so, as a result, they were coating the inside of ships and they could do transcontinental trade. And that was the birth of Lloyd's of London, was ensuring trade.
 
Dan Sullivan: They could create copper.
 
Jeffrey Madoff: All the ships, the British ships, had copper bottoms. Yeah, and so I think that was huge because in a way, insurance is a bet. Not in a way, it is a bet. But that opened up the world for trade because ships couldn't make those long journeys because their cargo would be ruined eventually until they learned how to seal it against the seawater.
 
Dan Sullivan: And woodworms. There were worms that would get into the wood and it would take the wood apart. So they had to be re-coppered.
 
Jeffrey Madoff: Yeah, I mean, it's fascinating, but then also what's interesting is when you talk about, you know, the aristocracy fading, it was very hard in those cultures to overcome the class system, even if you were very wealthy. You could certainly attract people who wanted somehow to get their hands on some of your wealth, but they didn't have the breeding.
 
Dan Sullivan: They weren't the right sort of person.
 
Jeffrey Madoff: That's right. So that was also, you know, there was a striving to be a part of that class. And that was a very difficult goal to achieve.
 
Dan Sullivan: Oh, yeah. You know, and one of the ways they did it, that they formalized the language, the king's English. They brought in the German families. The king comes from a German family. And the reason is that they couldn't have a British family have that much power, so they imported their monarchs so that there was no advantage to any of the families being connected. But they said, oh, the king, the king, the queen, the queen, and everything else. But they didn't pay any attention to them. They just had to have them. And then there was people whose status was connected to the monarchy, but they wanted their children to marry into wealth. Because the land was losing its value. Britain isn't a great agricultural country. Climate's not right for it, the soil isn't right for it, and everything. So you had this interesting trade-off that wealthy entrepreneurs would buy their children into the aristocratic class, because it would give them higher status to go along with their wealth. And the aristocracy were running out of money, so they would marry their children into the wealthy class. So there was this trading going on between two classes of people.
 
Jeffrey Madoff: Well, when you think about the fact that …
 
Dan Sullivan: In the United States, it's only money.
 
Jeffrey Madoff: But, you know, it's interesting in terms of trying to cross those social barriers in upward mobility. And so much had to do also with sexual relations. And it always is interesting to think about that syphilis started with sheep.
 
Dan Sullivan: Yeah, who knew sheep were such dangerous animals?
 
Jeffrey Madoff: That's right. Well, I would say who knew people were such dangerous animals? You know, I mean, it was the only thing that upended Al Capone. And I think that too many acceptance in social mobility and I think social mobility was probably more a part of the American dream than any other culture, was that upward social mobility potential. Although my sister, who has owned a business for 47 years in Charleston, South Carolina, is still considered an outsider, because she's not of the landed gentry that was there, which is kind of interesting how so many of those age-old perceptions still exist.
 
Dan Sullivan: Yeah, and I think that will never disappear because, you know, there's always a sense of hierarchy. I don't care if you put a hundred people together, I can tell you there's 10% of them that have the social status.
 
Jeffrey Madoff: Right.
 
Dan Sullivan: It's just happened. I think hierarchy is as natural as gravity.
 
Jeffrey Madoff: I think so too. And then, you know, with hierarchy, it gets into an interesting topic of leadership, because there is the desire to at least compel people to do what you want them to do. I don't know if that's necessarily leadership. It can also be coercion.
 
Dan Sullivan: Well, it's who's in charge of the rules.
 
Jeffrey Madoff: Right. Which can shift. And who becomes in charge. There are some of those who become incredibly vindictive because of what they're now showing you what they're able to achieve.
 
Dan Sullivan: They didn't need you. Are you talking about real estate developers from Queens?
 
Jeffrey Madoff: Yeah, and the overarching need for revenge against those who you believe slighted you.
 
Dan Sullivan: I think the bell curve can be applied to all human talent and interest. Anyway, it's an interesting time to be living in. I like it.
 
Jeffrey Madoff: I do too. So I guess we have successfully touched all the bases on anything and everything today.
 
Dan Sullivan: Yes. Yep. And even though we don't know it right now, next time we talk, we'll probably find something to talk about.
 
Jeffrey Madoff: 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.