#366

Leaked Memo and Beast Headquarters Visit

• An exception was made to discuss a leaked memo titled "How to Succeed in Mr BEAST's production" from a young founder, Jimmy, who has decades left in his career (0s).
• The decision to discuss the memo was made for two primary reasons: knowing Jimmy and having spent time talking about ideas from the podcast, and having visited Beast headquarters with friend Rick Gerson, who has invested in Jimmy's company (16s).
• The visit to Beast headquarters provided an intense download of how Jimmy thinks about YouTube and his business empire, including meetings with his top team and his CFO (41s).
• The memo contains ideas that relate to the biographies studied every week, and it was printed out and analyzed like any other biography (1m2s).

Jimmy's Memo and Knowledge Transfer

• Jimmy starts the memo by explaining that as the team grows, he no longer has unlimited time to spend with everyone, so he is brain dumping his knowledge into the memo to help new people learn (1m10s).
• Jimmy believes that the knowledge in the memo will help new people succeed, as it contains lessons learned over the past decade with the channel, and most problems faced are not novel (1m49s).
• This approach is similar to that of experienced entrepreneurs like Sam Zell and Charlie Munger, who have historical databases of companies and industries that help them solve problems (2m6s).
• Jimmy's memo emphasizes the importance of learning from experience and understanding the knowledge contained within to be better set up for success (2m57s).
• The purpose of the content is not to provide a set of rules to follow, but rather to inspire questions and encourage learning, as the subject matter is complex and situation-dependent (3m12s).
• It is essential to approach the content with a critical mindset, applying everything read with a grain of salt, and recognizing that it is not an exhaustive list (3m22s).

Importance of Understanding the Business

• The content is interconnected, covering various aspects such as creative, production, and editing, and understanding these different components is crucial for success (3m32s).
• James Warren is cited as an example of someone who has a deep understanding of every part of the company, enabling him to make decisions quickly and effectively (3m51s).
• A quote from Sam Zell's book "The Fish That Ate the Whale" emphasizes the importance of knowing one's business from A to Z, as it allows for the solution of any problem (4m17s).

Sam Zell and Jay Pritzker's Wisdom

• Sam Zell's autobiography mentions his relationship with Jay Pritzker, who taught him the value of using simplicity as a strategy and identifying the most critical aspect of a complex situation (4m42s).
• Jay Pritzker's ability to locate the weakness in a complex situation and focus on the essential element is highlighted, with Sam Zell noting that he was the smartest financial guy he ever met (4m59s).
• The importance of simplicity as a strategy is reinforced, with the idea that identifying the most critical aspect of a situation can lead to quick and effective decision-making (5m13s).

Simplicity as a Strategy

• The concept is also illustrated by Warren Buffett's description of Charlie Munger's ability to get to the essence of a problem immediately, and Nick Sleep's quote about the art of being wise being the art of knowing what to overlook (5m37s).

The Goal: Best YouTube Videos

• The key to success is understanding the purpose and goals behind actions, and striving to make the best YouTube videos possible is the primary objective of this production company (6m20s).
• The company's goal is not to make the best-produced, funniest, best-looking, or highest-quality videos, but rather to make the best YouTube videos possible, as everything else will follow from achieving this goal (6m39s).
• Robert Kierin, founder of Fenol, emphasizes the importance of maintaining commitment to an organization's common goal, which should be repeated and known by every single person in the organization (7m9s).
• The leader's job is to ensure everyone stays on track and focused on the shared common goal, which in this case is to make the best YouTube videos possible (7m29s).
• Having a clear and simple goal, like Steve Jobs' "insanely great products," makes it easy to interface with others and motivates employees to work towards a common objective (8m11s).
• The author believes that YouTube is the future and will continue to grow, and therefore wants to focus on making the best YouTube videos possible, rather than following traditional media approaches (8m42s).

No Experience vs. Bad Experience

• The idea that it's better to have no experience than bad experience is a recurring theme in biographies of successful founders, who often find it easier to train employees with no prior experience than those with existing habits and experience (9m20s).
• YouTube is considered the future, and 99% of movies or TV shows would be unprofitable and inflexible on the platform, with long lead times that can't adapt to trends, emphasizing the need for nimble content production (9m37s).
• To achieve success, it's essential to learn why certain methods are used at a deep level before trying to make changes, as the current approach has been developed through countless videos and hundreds of thousands of hours of collective effort (9m55s).

Results-Based Approach and Ideal Employees

• The amount of hours worked is irrelevant, and what matters is the results achieved, as the company is results-based and judges employees on their accomplishments, not the time spent working (10m33s).
• The ideal employees are "A players" who are obsessive, learn from mistakes, are coachable and intelligent, don't make excuses, believe in YouTube, and are exceptional at their job (10m51s).
• "B players" are new employees who need training to become "A players," while "C players" are average employees who are not exceptional, not obsessive about learning, and should be transitioned to a different company (11m8s).
• PayPal prioritized speed over everything except recruiting and hiring, keeping the bar for talent high, and repeating the mantra "A's hire A's, B's hire C's" to emphasize the importance of hiring top talent (11m42s).

Hiring and YouTube Virality

• The company's approach to hiring involves having every potential prospect meet every single member of the team to ensure the right fit (12m0s).
• Studying YouTube virality for around 5 years and 20,000-30,000 hours has provided a good grasp of what makes YouTube videos successful (12m19s).
• The emphasis is on creating content that only Mr. Beast and his team can produce, drawing inspiration from Steve Jobs and Edwin L.'s philosophy of not doing what others can do. This approach is exemplified by offering someone $500,000 to live in a circle for 100 days, with a house brought in by crane, highlighting the unique capabilities of Mr. Beast's team. (12m48s)

Uniqueness and MrBeast's Strategy

• The concept of doing something unique is compared to Larry Ellison's strategy in the America's Cup race, where he aimed to build a hard wing for his sailboat, something no other competitor was attempting, to eliminate competition. (13m59s)

Content Creation and Deep Knowledge

• The process of content creation is discussed, emphasizing the need for the best people who are obsessed with YouTube. The idea is to be deeply invested in YouTube to understand how to stand out and be original, with a focus on watching and analyzing Mr. Beast's videos. (15m5s)
• The importance of being knowledgeable in one's field is highlighted, referencing David Ogilvy's idea that the best professionals know more about their industry. This is likened to filmmakers like Tarantino and Spielberg, who have extensive knowledge of film history. (15m56s)
• Many people have favorite movies they've watched 50 to 100 times, and there are ideas that they learned from these movies that they didn't use in their own work until 20 years later, as seen in various biographies and episodes (16m12s).
• Bill Gates is a prime example of someone who is very knowledgeable about his industry, being able to tell you who the CEO of a software or hardware company is, their revenues, what they're currently working on, and the problems with their products, even in his 20s (16m37s).
• Edwin Land dedicated his life to the science of light at the age of 12, reading about optical science and discovering the textbook "Physical Optics" by Robert Wood, which he would read nightly, and later went on to read every single book about light in the Harvard Library and the New York Public Library (17m0s).
• John D. Rockefeller had a fascination with business that led him to read the entire accounting book for the entire history of the company he worked for, eventually knowing more about the firm than his boss did (17m53s).
• Steve Jobs was also known for his knowledge of the entire history of Silicon Valley, knowing the companies, founders, and great work from the past, and could relate his work on the Macintosh to Alexander Graham Bell's work on the telephone (18m26s).

Effort, Passion, and Learning from Mistakes

• The idea of effort, caring, and passion is emphasized, with the notion that people don't have ideas, but rather ideas have people, and that this passion and dedication to learning and understanding is what drives success (18m50s).
• The importance of learning from mistakes and understanding concepts like bottlenecks is highlighted, with the recommendation to read the book "The Goal" and watch videos on the topic to avoid making similar mistakes in the future (19m1s).

Project Management and Effective Communication

• To successfully complete a project, several key steps need to occur beforehand, including creating a thumbnail and writing the video content, which requires effective communication with the creative team (19m21s).
• It's essential to clearly explain the project's timeline and expectations to the team, emphasizing that they are the bottleneck and must deliver on time, and to set a specific date for completion (19m49s).
• Regular check-ins are necessary to ensure the team is on track to meet the target date, and it's crucial to take ownership of the project and avoid excuses (20m10s).
• Having a mindset that nothing can stop the project from being completed on time is vital, and this requires effort and caring about the project's success (20m21s).

Results over Excuses and Larry Ellison's Approach

• The idea is to focus on results rather than excuses, and if someone is asked to do something, it's essential to follow up and ensure it gets done (21m15s).
• Larry Ellison's approach to high-stakes decision-making emphasizes the importance of bringing results rather than excuses, as seen in his interaction with the Israeli Defense Forces (20m52s).

Welcoming Bad News and Avoiding the Persian Messenger Syndrome

• Jimmy's approach to management emphasizes the importance of saying the negatives, telling people why something is not good, and welcoming bad news, which is a key aspect of avoiding the Persian messenger syndrome (21m33s).
• The Persian messenger syndrome refers to the tendency to avoid delivering bad news, and the proper antidote is to develop a habit of welcoming bad news, as practiced at Berkshire (22m15s).
• The approach of always telling the bad news promptly is essential in avoiding the negative effects of the Persian messenger syndrome (22m24s).

Verifying Information and Key Traits

• It is emphasized not to take anything at face value and to always investigate further, especially when something seems too good to be true. This includes verifying claims made by others outside the company to ensure reliability and accountability. (22m33s)
• A summary of key traits that work well together includes ownership, accountability, creativity, and effort. These traits are rare to find in a single individual who can consistently apply them over time. (23m25s)

Effective Communication and Ownership of Mistakes

• Effective communication is highlighted as crucial, with a preference for real-life interactions over emails to avoid miscommunication. The more complex the message, the higher the form of communication should be used, such as calls or face-to-face meetings. (23m51s)
• Written communication is not considered complete unless the recipient confirms they have read it. (24m52s)
• Ownership of mistakes is important, and excuses are discouraged. Mistakes are seen as learning opportunities, and it is expected that individuals will make them. The focus is on learning from these mistakes rather than avoiding them. (25m1s)

David Ogilvy on Risk-Taking

• David Ogilvy's book "The Unpublished David Ogilvy" contains a collection of internal memos that highlight the importance of taking risks and being entrepreneurs, as companies tend to stop taking risks as they grow bigger and more successful (25m55s).
• Ogilvy shares a story about the toy buyer at Sears who made a mistake that cost the company $10 million, and the head of Sears replied that he would not fire the buyer, but rather people who don't make mistakes (26m21s).

Mistakes and Risk-Taking

• Jeff Bezos is quoted as saying that if you're not making any mistakes, you're not taking enough risk, and that the bigger the company gets, the more expensive the mistakes should be (26m38s).

Consultants and High-Agency People

• Consultants are considered "cheat codes" that can save time and effort by providing expertise and experience, and it's recommended to always ask for their help when assigned a task (26m54s).
• Working with high-agency people is crucial, and when dealing with people outside of your organization, never take "no" at face value, but instead try to find alternative solutions and push through obstacles (27m50s).
• James Cameron is cited as an example of a high-agency person who, despite facing rejection and obstacles, continued to pursue his goals and eventually became a successful filmmaker (28m35s).
• James Cameron created his own film school by photocopying graduate student theses on esoteric filmmaking subjects from the USC library, essentially giving himself a graduate-level degree in visual effects for a few hundred dollars (29m2s).

Unique Content and Honesty

• One of the most important ideas in content creation is to focus on unique and original work that cannot be replicated by others, with not every video needing to be a spectacle (29m55s).
• It's more important to be honest with each other than to be nice, as honesty is crucial in creating high-quality work and holding it as the most important aspect (30m11s).
• This approach makes it easier to interface with others and understand what is expected of them, allowing them to choose whether they want to work in that environment (30m34s).

Prioritizing Work over Personal Perception

• Steve Jobs emphasized the importance of prioritizing work over personal perception, as seen in a story where he told Johnny that he was being vain by wanting people to like him instead of focusing on the work itself (31m6s).

Internal Validation and Perfectionism

• The goal of content creation should be to excite and impress the creator, rather than seeking external validation or approval (32m6s).
• The goal is to do what makes one happy and ultimately makes the viewers happy, and this is non-negotiable, with a willingness to throw away a multi-million dollar video if it doesn't meet standards (32m22s).
• Examples of perfectionism can be seen in the biographies of Steve Jobs and Anna Wintour, who both have stories of rejecting expensive ad campaigns and photo shoots due to not meeting their quality expectations (32m39s).

Constant Improvement and Attention to Detail

• The importance of constant improvement and innovation is emphasized, with a focus on always approving and innovating camera angles, pacing, story, jokes, color, lighting, music, props, people, framing, and ideas (33m19s).
• Being obsessed with every single second of a video is crucial, similar to how a founder should be obsessed with every single aspect of the customer experience, as details matter and can make or break a company (33m46s).
• Walt Disney's quote "if we lose the details we lose everything" is referenced, highlighting the importance of attention to detail in growing a company (33m57s).

Impact of Attention to Detail on Views

• A comparison between two videos with different view counts (120 million vs 45 million) is made, with the video with higher retention numbers performing better, demonstrating the impact of attention to detail on a large scale (34m20s).
• The difference in retention numbers between the two videos is significant, with people watching the more engaging video an average of 1 minute and 38 seconds longer, resulting in triple the views (34m56s).
• The importance of making every second of a video count is emphasized, as longer watch times directly correlate with better video performance on YouTube (35m10s).
• Watching a video for an extra 90 seconds can result in 80 million more views, as seen in the difference between two 11-minute videos, one watched for an extra minute and a half on average (35m33s).

Value of Watching Videos and MrBeast's Expertise

• Valuable knowledge can be gained from watching large quantities of videos, as quantity has a quality of its own, and this is a point that is repeated over and over again (35m53s).
• MrBeast has dedicated tens of thousands of hours to studying YouTube, allowing him to see things in videos that are invisible to others, similar to how retail expert Bernard Oal can see things in stores that are invisible to others after 10,000 store visits (36m12s).
• To get 60% up to speed, it is recommended to watch the last 50 videos, and to really understand the history of the company and its innovations, it is recommended to watch every video back until the 10 million subscribers special (36m48s).
• Watching every video made since the 10 million subscribers special will provide a lot more context and information, making one more valuable (37m0s).

Rewarding Talent and Steve Jobs' Philosophy

• MrBeast believes in rewarding the people who help the business succeed and pays for talent, going after the best people in the world, as stated by Steve Jobs (37m43s).
• MrBeast's team consists of young but highly skilled individuals who are the best in the world at what they do, and he is willing to pay them a significant amount for their talent (37m57s).

Overpaying for Talent and Brad Jacobs' Perspective

• The idea that you can't overpay for talent is also mentioned in the book "How to Make a Few Billion Dollars" by Brad Jacobs, who has founded multiple billion-dollar companies (38m20s).
• The idea of rewarding people who help a business grow is emphasized, with the notion that it's nearly impossible to overpay for exceptional talent, as the best person in a field can be 100 times better than others (38m41s).
• Steve Jobs is cited as an example, where Apple paid almost half a billion dollars to rehire him, which turned out to be a great deal for the company (39m11s).
• Brad Jacob's statement is referenced, highlighting that it makes no financial sense to skimp on salary and incentives to save $100,000 a year when hiring the second-best candidate may cost millions of dollars in lost profit (39m22s).

Leadership and Growth Opportunities

• The importance of leaders in a company is stressed, with a call for hardworking, obsessive, coachable, intelligent, and grind-oriented individuals who can step up and lead (39m41s).
• To become a production manager, one should express their intention, ask for feedback on areas for improvement, and work on mastering those skills to be considered for the role (39m50s).
• Steve Jobs' approach to feedback is mentioned, where he didn't believe in formal reviews and instead provided continuous feedback, with the expectation that team members would use it to improve (40m32s).
• The company's approach to growth and compensation is outlined, where taking on more responsibility and risk leads to higher earnings, and there is infinite room for growth and development (41m0s).
• The company's vision is to build something amazing, with the potential to be worth tens of billions of dollars, and those who contribute to its growth will be rewarded (41m12s).
• The goal is to create a fun and rewarding work environment where employees can become incredibly valuable to the company and earn more money than they could elsewhere (41m33s).

Les Schwab's Quote and Conclusion

• The last line of a memo is referenced, which triggers a thought about a quote from Les Schwab, a favorite founder of Charlie Munger and Warren Buffett. (41m44s)
• Les Schwab is quoted as saying that whatever you do, you must do it with gusto, in volume, and repeatedly. (41m53s)
• The full story is recommended to be read in a leaked memo, with a link provided to access it for free online. (42m3s)
• The current progress is 366 books read, with a goal of 1,000, and a promise to talk again soon. (42m9s)