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It's just one of those things when when you look at it and kind of unpack what happened, you know, you just have to try to stare at the facts as they are and see what you could do better.


Hello and welcome. I'm Shane Parrish and this is the Knowledge Project, a podcast exploring the ideas, methods and mental models that help you learn from the past and what other people have already figured out. You can learn more and stay up to date with the podcast at F-stop Blog Slash podcast. We have a newsletter that comes out every Sunday called Brantford. It's free and packed with all the best content that we've come across this week. It's worth reading and thinking about.


It contains quotes, book recommendations, articles and so much more.


You can learn more at F-stop Blogs newsletter. On the show today is the normally reclusive businessman Thomas Tahl. Thomas was the chairman and CEO of Legendary Entertainment. He produced more than 30 films that together have grossed more than 13 billion dollars worldwide at the box office, movies like Straight Outta Compton and Godzilla, The Dark Knight Trilogy, Inception and so much more. Today, he's living his dream as part owner of his favorite childhood sports team, the Pittsburgh Steelers.


He's running Tokyo and buying companies and investing. He was early money and magically Pinterest Oculus, which sold the Facebook. But we're not going to talk too much invested.


We're going to talk about intellectual honesty, learning from mistakes, how the entertainment industry is changing professional football and so much more. It's time to listen and learn.


Before we get started, here's a quick word from our sponsor. Farnam Street is sponsored by Medlab for a decade, Medlab has helped some of the world's top companies and entrepreneurs build products that millions of people use every day. You probably didn't realize that at the time, but odds are you've used an app that they've helped design or build apps like Slack, Coinbase, Facebook Messenger, Oculus, Lonely Planet and so many more. Medlab wants to bring the unique design philosophy to your project.


Let them take your brainstorm and turn it into the next billion dollar app from IDEO sketched on the back of a napkin to a final ship product. Check them out at Medlab Dutko. That's Medlab Dutko. And when you get in touch, tell them. Shantanu, I'm so glad to finally sit down and talk to you.


We've talked on the phone many times.


I've never talked in person.


Yes, you grew up as a single child. What was it like being having a single parent?


You know, it's interesting because if you don't know anything else, then it's, you know, maybe it doesn't seem as different. But, you know, it was challenging circumstances.


My mom had me at a young age and my father had left and had a number of issues. And, you know, I had two younger sisters and we were definitely challenged economically and so forth.


And, you know, looking back on it, it certainly had a material impact on the rest of my life. And, you know, hopefully something that, you know.


Who knows if that's what develops drive or doesn't, but it's what happened, so, you know, that's the way I grew up.


Was there a point where you realized that your family was different from other families?


Yeah, I think also when I went away to college, it became a little more pronounced just in terms of, OK, this is the outside world.


And and I think that, you know, there was certainly a period that I got very frustrated and felt, you know, how unfair and all those other things that I guess when you're processing things as a teenager, your neurons aren't firing the way they should or.


But, you know, but my mom worked two jobs. She was a dental hygienist and I did a lot of shoveling snow, had that business and a lawn mowing business running around at 13, doing that kind of stuff. And, you know, to try to help out. And and you just kind of realize at a fairly young age that there are things you don't want to do. You'd rather be doing other things. But, you know, the task at hand is the task at hand.


What was college like? I think I went to Hamilton, which is a fantastic school, and it's in what they call the Nasdaq with Williams in Amherst and and in Middlebury. And I received first rate education and I think for the first time. Because of the alumni of the school and, you know, many of my classmates had went to fancy prep schools and things like that, I wasn't aware of what a trust fund was prior to going there and so forth.


But I think more importantly, it had a profound impact on how to think, how to communicate and that you could have efficacy in the world. And I think that if I had to really distill the education down it, sort of looking at other people and the fact that you could have impact in the world, that it wasn't just how I'm going to get up and do whatever my job is and I'm sort of slotted in in my life and and so forth.


Is that because you were surrounded by ambitious people or.


Yeah, I think people that were ambitious, people whose families had had impact in the world, you know, again, notable alumni and that you get to rub elbows with and be around and suddenly, you know, your your worldview opens up and you decide that, hey, maybe, you know, maybe there is something that that you can do with luck and, you know, sort of applied work and so forth after that, like opportunities.


Did you go into college thinking there would be one set of opportunities in life and come out thinking another?


Yeah, the plan was always I was definitely going to go to law school. And then I had a family friend talk to me and say, look, it's not like it is an L.A. law and, you know, you're going to come out in debt. There's no more sports scholarships and things like that for for law school.


And so, you know, but I'm always fascinated by people that whether they're practicing attorneys or they have a law degree as part of their educational background, I actually think it's a pretty great set of skills to have in some of the most interesting people, people whose thought process and how they process things, you know, our attorneys.


And so but, yeah, definitely went a different direction through what happened after college.


Well, I had a stint. I got to look from the Atlanta Braves, you know, playing to play baseball as you were on a sports scholarship in college.


Yeah. And so and the Braves were smart enough to figure out that I was going to be able to help them. So I got sent home and then I had a, you know, a couple of small businesses in my early 20s, a Laundromat chain and an auto repair center, because I lived in an area that was economically challenged and those were just talking with the laundromat, the back to that.


Everybody wants to talk about the laundromat. It's kind of funny, but. Yeah, and then, you know, from from there, I had moved down to Raleigh Durham and was a, you know, a partner at a venture fund, a tech venture fund. And, you know, kind of and then all kinds of things started to happen when I come back to this point.


But I want to, like, rewind a little bit the last three months. Talk to me about that.


You started you were an entrepreneur, if you want to call it that, in my twenties, just trying to figure things out, you know, if there's any.


But you innovated in this industry as well. Yeah, yeah.


So if if there's any sort of thematic to to my business career, I'm not I'm not good at coming up with a new thing. Like there was no such thing as social media. And I invented social media. And now that's a thing I'm not that's not my skill set. What I've done. OK, that is looking at an industry or a business model and saying, OK, where are the points that you could either improve this or make it more efficient or come at it from a different angle?


And that that's been sort of a running theme throughout my business career. So at the Laundromat, there were a couple of different things that, you know, were, I guess, innovative at the time.


I found a company who was selling the washers and dryers that had, you know, a built in computer and that you could set dynamic pricing. And the reason that that was important at the time is the laundromats would be jammed on the weekends and, you know, more business and you could handle and then during the week, there's nobody in there. And there are people, whether they're retirees or whatever their their schedule allows them to go in.


And so we put in sort of a dynamic pricing model so that you would try to even those things out. And it it it certainly helped the numbers.


How many laundry mats did you end up with? I think we I think I had four of them and then sold it. Was this based on frustration, like you were doing laundry and it was you just like, oh, I have this idea and I think I can do this better than other people.


Yeah, it was you know, it seemed like they're there in the laundromats that we're in this area that I grew up in.


We're a little sketchy. And I thought, you know, if you could just make it clean and safe and and then have this slightly different economic model.


And also, you know, when you have the attendant at the laundromat, I mean, certainly when you're dealing with mostly cash, you want to be able to track these things. So the computer system allows you to track, you know, every nickel that came in, so to speak. And so that was very helpful. You know, being a newsletter editor should have. That's exactly what's in their district and made sure everybody knew that.


So you had this test of entrepreneurial freedom. I mean, it's really it strikes me as a little bit rare, almost, that you would go work for somebody else, even as a partner after that.


Well, it was a pretty independent shop. In other words, you would look for your your own deals.


That is one thing I was fairly certain of at a young age that I'm unemployable.


And I think for whatever reason, you know, just being able to see something maybe a little bit differently and say this is what I want to do.


And at least if if it doesn't work, I certainly have myself to to blame.


But I you know, one of the things that I enjoy doing you some you know, some university and college lectures, which is great for me, I'm not sure what they get out of it, but it's you know, I find it invigorating.


And one of the things that I'm asked for advice is to be as intellectually honest as you can be about not only your skill sets, but what you enjoy, what motivates you, because if you're constantly saying, like, OK, this is the ideal profile of myself or my projected self. You know, versus no, this is actually the way I'm wired, this is what I enjoy, this what motivates me, this is something that I'm really good at.


You have to put yourself in a position to be successful.


Otherwise, I think you're going to end up frustrated and not as productive as you can be. So it's it's not easy to do, I think.


But if you can really be introspective about it and in a brutally, intellectually honest about your own makeup, I think that's very helpful.


How do you do that for yourself? Well, like, it's so easy to say that I'm wondering what is your process?


It's much, much harder in practice. I think the first thing is for me, I always look at mistakes that I've made.


And try to do true postmortems, and if you're constantly giving yourself an out like while.


Yes, I probably didn't make a great decision here, but these three circumstances are these the these things happened and therefore and what I try to look for is, OK, there are certain times the ball just doesn't bounce your way and, you know, and you can't dwell too much on that.


But where are the things that I find a common thread in?


Hey, you know, you're ending up in the same place here. And is it are you philosophically wrong? Are you not taking in the right information or you being emotional about this? Are you surrounding yourself with the right people for whatever the you know, the job is, so to speak? And if I find Jesus, I keep finding myself back in this spot or you know that. If it's I've put myself in a position to succeed or fail or fail, you know, do I look at it and say it's almost, you know, sports is a big part of my life.


So, you know, if you're in the World Series and it's the bottom of the ninth inning and you're a relief pitcher and you throw ninety eight miles an hour, don't get beat on your curveball. Right. Right. And so I think if you if you're constantly putting yourself in a position where you're on your back foot, you know, that's hard. But I think at the end of the day. You have to be willing to look. At what has unfolded, what has happened?


Is there any pattern recognition there and then being able to have the sound judgment to say these are things that happen just because I'm not going to beat myself up or read too much into that?


And at the same time, if there are things that are either recurring or he's or you just say, look, I we ended up in a tough spot and here, here, here's how we got there. And I also find.


That a lot of times that I unpack those things, it's it can be momentum that you've let momentum take you to a place and that you didn't at certain points where you could have jumped off said, wait a minute, you know, sort of the train is moving.


So, you know, you're you're letting that inertia take over instead of saying, hey, this is not the destination that we want the train going to and let's stop it.


What example comes to mind when you think of that? Well, I'll tell you when when I had legendary, you know, and you're making movies one hundred percent, I look back at some of my biggest mistakes were movies that you put together, for example, that you got the director you wanted. You got a release date, you got cast. But the script isn't coming together. For whatever reason, you just kind of feel it, that it's it's just not there, but because you've worked so hard and now there are a bunch of people that are counting on it and and there's a momentum to it.


And, you know, all the agencies, everybody involved in the ecosystem now is a stakeholder. And you just kind of it's it's tough to put the brakes on. So I think about that often. That whole business is one of the more nuanced businesses I've ever been around or involved in.


So you left the VC firm as a partner. You started legendary. Yeah, there was. Want to get into legendaries.


Yeah. So so, yeah. Basically what happened there is around 2003 I became fascinated with the media business but but in particular with movies.


I think at the time it was a 30 billion dollar industry.


It was I, I believe, the country's second biggest export.


I'm not sure what it is today.


And, you know, there were a couple of trends that I thought were really interesting at that time. There was global expansion. You had this unbelievable business called DVDs that a lot of the big box retailers were using as a loss leader, great margins. And I believed very deeply in the ownership of intellectual property and especially, you know, sort of premium grade, a global intellectual property.


And, you know, the thing that struck me is usually with an industry of that size, you will see sort of a institutional capital in and around and among it.


Right. Large private equity or whatever it might be. And in the movie industry, certainly, if you had if you owned Disney stock or News Corp stock, that's available. But for an industry that size, there was no adjacent capital system. And I thought that that would be an opportunity. So. I looked very deeply at the data, you know, the previous 10 years of of Studio Ultimates, which is the accounting from the movies, and asked myself the following question, if you hit your plan and you're successful, is there any money to be made?


And I had a bunch of friends that almost had sort of an intervention with me and said, look, you've never been in the media industry.


You don't know anything about this.


You're going to go out to Los Angeles and just get destroyed on this thing. And, you know, I really had conviction because I had looked at the economics and felt like if you could build it in a different way, you know, and decided very early, I didn't want to have distribution. I was fortunate enough to partner with Warner Brothers, have them distribute.


And if you could sort of have the right structure and draft off of that global infrastructure that you could you could build a nice business. And then like with anything else, you know, there's certainly luck involved.


I mean, I met a young guy at the time named Chris Nolan, and when our first movie was Batman Begins, obviously he's an incredible generational talent.


And, you know, but there were a lot of things along the way, both, you know, things that worked out remarkably well and then things that just have.


So much of a human element and emotion around a business that it's it's in retrospect, really fascinating.


What did you learn about producing movies that you had? Like, I don't even know anything about producing movies like. Walk me through what that means.


Well, I think there's there's a couple of things that I found, or at least that I believed, first of all, stand as close as you can to absolute talent.


Right. And if you can find people that are incredibly talented versus people that were kind of in the right place at the right time, and there is a difference. Certainly Chris Nolan is an example of that.


And then it's you got to make sure that you're spending an appropriate amount of money.


So if you're trying to make a global tentpole that's going to capture the world's attention where you can't spend 30 million dollars on that. And on the other hand, if you're going to make something that is more contained, you have to spend the right amount of money on that. And and then you have to think about how you're going to get people's attention, how are you going to market the film?


And it's just each each film is like a startup company and has its own fingerprints and so forth.


And then a number of years ago, there were some trends that that I started to that concerned me, you know, being an independent company over this.


And there were a couple of things used to be if you made a good movie and you tested the movie and had pretty good test scores and you got a good trailer out there, you'd be fine. And, you know, that started to not be the case. I started to see some corollaries. And then I think part of it is, you know, when I was growing up and even when I started in the movie business, what else is there to do on a Friday and Saturday night?


Right. You go.


And it's always since I was a kid, I love movies just as a filmgoer because, you know, you go in to the theater, the lights go down and you go on this adventure and you're it's communal and all these other things. And I think there have been some massive fundamental changes in in our society and on entertainment experiences. I certainly don't think the movies are going away. But one of the things that I would say is that we are clearly in the golden age of television or whatever, you know, the expansion of television that this is you know, you're seeing some incredibly compelling things being made across, you know, not just the traditional folks in TV, but certainly Amazon, Netflix and Hulu.


They've really changed the game.


And part of what that becomes is now you're not in the appointment business anymore, because if you go out to a movie in the theater, well, you have to look it up and say, if I want to experience this, I have to go to this place and it's 740 be in my seat. And that's what it is.


You have an entire generation of of people that that's a very foreign concept to I have a supercomputer in my pocket and I can listen to any song I want, see any clip I want. And, you know, and I think certainly you're seeing the attention span come down. Entertainment is coming in sort of faster and faster increments. And so that makes it much more challenging to get people's attention.


And then, you know, the other thing that, again, when I was growing up, if you had your favorite movies, you might watch that movie five, six, 10 times. Yeah. And I think what happens today is because there is such a glut of high quality entertainment and things to do. And it's not just stuff on Netflix, Xbox Live, watching professional gaming leagues, everything on demand all the time. And, you know, one of the things that I got fascinated with when we had legendary analytics, which we can talk about a little bit, but is I ask our team to sort of build a measurement instead of just what is tracking, say we're going to open two for the weekend or, you know, what are the the the ratings of our television division, our shows and so forth.


I also wanted to understand. Sort of a meter against your addressable waking hours for media. How are you making those choices? And, you know, there's only so many hours in a day, right? So the problem is that if you're trying to keep up with your Netflix queue and you're watching, you know, college or professional sports and you're doing you look up and it's like XYZ, ask people this all the time, who will say you saw the trailer for the movie and you thought, that's a really good trailer.


That's you know, I would like to see that. Well, how many times do you actually go to the movie versus just saying, I'll see it at some other date? So everybody's doing their job movies. Good. The trailer is good. The marketing department did a good job, but it just boils down to time and attention. And again, I certainly, you know, the the death of the movie business has been described for decades.


And I don't think that, but I do think it has changed fundamentally and that the business has to shift and change with it.


What do you think those shifts will be? And like who wins in the next 10, 15 years?


Well, I mean, you know, I have to say the job that Disney has done.


Is unbelievable, I mean, they I think under Bob Iger leadership and then Alan Horn, who is my partner at Warner Brothers before he went over to Disney, I mean, they went out and cornered the market between Pixar, Marvel and Star Wars with Lucasfilm and have now, you know, you look at their calendar of releases and it's basically everybody has to move around Disney.


So I think you're still going to see the big event films worldwide, you know, move the needle and be as big as they've ever been.


It's just how many movies for for theatrical release are going to come out? What's the appropriate number? And, you know, how can you market them in a way that, you know, is is more efficient, which is something that we I got fascinated with, with and why we had an analytics division.


Talk to me about that analytics division, what sort of insights you are trying to acquire that you would put into practice with these not only the movies you're producing, perhaps, but the movies that you were trying to market.


So one of the things that became both frustrating to me as well as just, OK, we're going to stare at this business model and see if there's another way to do it. Is our studio partner who would deploy the capital for marketing. Right. So we would jointly kind of look at the poster in the trailer and all those things, but they would actually go out and decide and they would have buying programs. So they would go out and buy X number of gross rating points.


They would with the gross rating points. So so they would go in and basically buy a block of television that should deliver you X eyeballs and and folks.


But then I would start to see some of our movies that didn't make any sense.


Like you see a Dark Knight ad on the Golden Girls that may not be the best use of capital.


And I think we got a seven million dollar bill on one of The Hangover movies for newspaper display ads. And I thought that's probably not a great or efficient use of capital. So I was fortunate. I'm friendly with with Eric Schmidt, who is the chairman of Google and is a was a shareholder at Legendary. I went to see Eric and kind of went through with him what I wanted to build. And we we bought a boutique analytics company in Boston with this really sharp guy named Matt Miralda.


And basically what I said is I want to deliver a much more customized message to people and I want to be able to insert ourselves into the decision point electronically, both mobile and online.


And if it's clear to me sort of psychographics that you're not interested in this movie, I don't want to bother you.




And and conversely, if you're someone who is persuadable and we could make interested in and so it had a pretty material impact on our on our business, we were able to cut out a pretty large chunk of advertising dollars and I think be much more efficient.


We use it across movies and television, that we licensed it to other media companies and then, you know, and then other industries came in and it was and it taught me a lot about.


Being able to apply technology and new techniques to spaces that maybe had not had a lot of innovation or been a little sleepier and, you know, being able to get non-linear results on that, that's fascinating.


What else was in legendary holdings?


So there there were a couple of pivot points that that were that were helpful ultimately in getting the result that we got. One was going into China early and, you know, before it became fashionable, I guess, and establishing a presence there, trying to build a real brand in China.


We were very lucky that legendary translates this word, twangy in Mandarin. That means. Exactly legendary. And I'm I'm Scott echa symbol as a Celtic not.


And it kind of looked so those things are just, you know. Pure, pure luck, but we spent a lot of time in the market learning about it, hiring a local team and, you know, we're very successful in putting movies out in that market. And, you know, clearly you have a massive movie going audience. Movies were a new thing there, and they were building screens and theaters out at a, you know, incredible pace.


And, you know, needing content to kind of drive people to the theaters we thought was compelling, obviously, that, you know, we were required by a Chinese company.


So all those things mattered. The analytics company I just mentioned was important to us. We had a television division that had quite a few shows on the air. We had a company called Nerdist that was an online content sort of aimed at that that space. And, you know, it was it was an incredible experience.


Did you guys ever have a big box office flop? Oh, yeah. Which one?


I mean, we usually comes to mind.


Look, we had a lady in the water early, early days with Night Shyamalan who had done six cents and all these big movies.


And, you know, that one that one didn't work.


You know, we had a movie that did very well in China called Great Wall with Matt Damon that, you know, was was trying to sort of fuse east and west and be kind of a story that was universal and can be told.


And, you know, it just didn't didn't connect with audiences. So, yeah, no, no question about it. We we I think we had a pretty great track record, but absolutely had mrs.


So when you had Mrs how did you go back and extract the signal from that. Because there's so many variables going on between like how you marketed the time that it comes out and other movies that are coming the way that it's produced, the script, the like, how do you go back and pull out the like. This is the most probable cause of this failure?


Yeah, I think so. There's a couple of things. First is, was there a fundamental rejection of the concept? You know, we did another movie that that did not connect was a movie called Black Hat that Michael Mann, who's one of the all time great directors Chris Hemsworth starred in. I mean, all these elements and people just didn't want to see a movie about hacking.


And that being the action StaffWriters that we're watching Chris Hemsworth, you know, hack.


And so I think in some cases you look at it and say. You know, the fundamental concept of the movie was rejected. And those, I think, on some. Continuum hurt the most because you're like, wow, that's just your way of act, I think other times, you know, you're taking a stack of papers with words on it called a script. You're creating sort of a mini city when you do a movie and you're sending human beings in to see if they have chemistry, whatever is going on in their own lives can can sometimes have an impact how the cast interacts with each other, you know, how the whole thing comes together.


And there's been times where you're like, look, what a great idea for a movie. It just didn't come together in execution. And then there's sort of that. And then I also think there's some things in the zeitgeist that just the mood of the country, so to speak, and the world wants to see that that, you know, that film at that time with Universal had a big hit, was straight out of Compton. And just for whatever reason was a great movie.


Yeah, no, they did an amazing job. And, you know, you know, and then I look at something like Jurassic World, which again, was a huge hit.


The Jurassic franchise had kind of waned.


And, you know, you captured the magic of Steven Spielberg. You know, Chris Pratt is suddenly this enormous star. And, you know, everybody went to the movies. So I think you just have to look at it. And understand, what were the things within your control where you made good or bad decisions, what are the things that look, what are you going to do, you know, or even even things?


Because movies used to have an opportunity to build an audience and be out for months and word of mouth and so forth.


And because there's so many movies coming out and because there's so much pressure on that opening weekend, if you're not a success and that opening weekend, you're gone.


So what happens if there's an ice storm in the eastern United States, your opening weekend? Right. I mean, it's just one of those things that when when you look at it and kind of unpack what happened, you know, you just have to try to stare at the facts as they are and see what you can do better.


How hands on were you like assembling a great team is one thing, but were you in there active and like, oh, no, we should do this or this would be more exciting or are you more hands off?


It depended on the circumstance. There were times very, very hands on, you know, throughout an entire project moving certainly. And then, you know, you're making a movie with Steven, with Steven Spielberg or you're making a movie with Chris Nolan. You just make sure you get their catering right.


So, you know, you have to know to when to just stay out. Right. And let amazing people do their job.


I think one of the things I used to spend a lot of time on legendary was on culture. And I've always kind of felt like great culture will trump a great business plan every day of the week because you can have an amazing business plan and I guarantee that it'll morph and change. And you're going to have to you know, you're going to have to make sometimes big changes. But if you have a culture. That people are excited about working there and, you know, you have the right mindset then making those changes and that journey is going to be a lot easier.


And, you know, so spent a lot of time, you know, making sure that people were passionate about working there, doing everything we could, you know, to be inclusive and to try to be transparent about what what we are up to. I would certainly get up in front of the whole company and explain, look, these are the three things that we're really focused on right now, and this is what we're trying to do and build.


And, you know, it was it was it was an amazing experience.


And one of the things that is just crazy about my life and how incredibly lucky I am is all the things that I loved as a kid, Godzilla, Batman, you know, Jackie, the Jackie Robinson story, you know, and then I bled black and gold Pittsburgh Steelers since I was a little boy.


It's it is remarkable that I got to partake and be around some of the things that I loved since I was a kid. So it was it was it was a pretty remarkable journey.


I'll talk to you at the NFL. At what point did you buy part of the Steelers? Were you still with Legendary? Was that you?


No, it was my first year in the ownership group was twenty eight in which we we won the Super Bowl that year, which is amazing.


And, you know, growing up right on the Pennsylvania border in upstate New York, I just the first football game I ever saw was the Steelers in the Super Bowl.


And I just I mean, the steel curtain, the whole thing, it's amazing.


And what had happened is the the Steelers had asked to see a print of We Are Marshall, a movie that we did with Matthew McConaughey. And so when they asked to see it, I was like, I'll go.


I'll I'll take it. And so I came to Pittsburgh and had the opportunity to spend real time with Mr. Dan Rooney and we just hit it off right away. I think he was probably amused by how passionate I was and how much I knew about the Steelers.


And, you know, and, you know, we we we lost Mr. Rooney. I think it's two years ago now. But of all the people that I've gotten to meet and spend real time with, I mean, he is. Was just a remarkable man and so. You know, to to be part of the ownership group and you're you know, you're sort of team that you've loved and followed since you were your kid is surreal, to say the least.


So you had these ideas coming in 2008, what an NFL team looks like from the inside. Where were they different? How did that line up and not line up?


Well, the interesting parallel between being a legendary and then in professional football is you are squarely in the human being business, right? So you're round incredibly talented people. You're around people that are well compensated and come from all different walks of life and maybe motivated in different ways.


And I think I think the human element sort of behind the curtain is fascinating because you you see people, athletes that come into the NFL that are incredibly talented. There is no question they have the physical makeup and you look at success or failure in some people that come in and aren't as talented.


But for some reason, the light comes off their professionalism, their ability to improve themselves, understand the game, whatever it is, and have impact.


And then there are other people that you just sit there and you're like, my goodness, you know, you have you're fast, you're strong.


You have all the ability in the world, but you're not connecting the dots. And when the lights come on in the game, you're you're not your highest and best.


What does it mean to be in the human business, like what does that tangibly mean from like how you organize things for how you run things to how you think about problems?


Well, I think the first the first thing that I think about, especially in something that is physically demanding, is the NFL is how do you check the box on everything you can in terms of comfort and performance and saying, look, I want to provide an atmosphere in which you have all the tools at your disposal to to be successful.


And then also one of the things I can't speak about other teams, because obviously I, you know, have only been inside the the Steelers organization, but I've been told by a lot of players who left and came back or left and then you see them in retirement, that that the Steelers really are different.


It truly is a family like atmosphere.


And that certainly starts with Rooney's, you know, and we try very hard to to take care of our our guys and.


You know, I've seen a lot of examples of that that certainly are never going to nor nor should they make the press and so forth. And I just think that. When when you have athletes that are under such tremendous pressure and under the spotlight like never before, I mean, when you talk to the guys that played back in the 70s, there was no social media, there weren't camera phones, there weren't.


So the you know, the scrutiny and the opportunity to make mistakes and whatever it is, you know, is is more certainly than it's ever been.


And, you know, and I think that when I talk about being a human being business, it's that.


You know, everybody in that arena is incredibly talented, and how do you separate yourself and how do you make sure that that you're your team is not not just motivated professionally, but they feel appreciated and and and all those things, I think I think are those intangibles are important.


What makes the difference between somebody who comes out and say, like the first round, he's got all of the physical traits that you would look for and raw talent like what makes the difference between success or failure in the NFL where everybody's talented and that delta between talent probably matters a little bit.


Is that the most important thing, like what separates people?


You know, it's interesting. I think part of it. And this is a cross-business across any and any walk of life, but I think particularly in the NFL, that grittiness, right?


Your you know, your your ability to overcome things and to be comfortable being uncomfortable. You know, I look at somebody like Antonio Brown, who was a fourth round pick coming out of central Michigan.


And, you know, I remember having a conversation with him at the end of his rookie year. And he just kept asking me, like, how do I get what?


What else can I do? And I just hooked him up with a nutritionist, this guy named Chris Talley, who's, you know, one of the best nutritionists in the country.


And not only did he go and follow through, but has become, you know, like religious about what he puts into his body in terms of food and then trains harder than everybody else and just, you know, never takes a rep off. I watch him in practice and I'm like, wow, that's why he's the best in the world, because every rep is.




Came, you know, you look at other guys that, again, came in with first round talent or just look like they ought to be able to dominate.


And whether they they're not willing to put the work in, whether they're not willing to do all the little things, you know, in terms of taking care of your body. I'm a huge believer in sleep hygiene. Right. Certainly nutrition training, all those different things that go into maximizing your talent.


And especially in a lot of cases, you have guys that, you know, from the time they walked on to a field were clearly better than anybody else.


And whether they worked harder, they didn't. The results were going to be the same. Right. And so that's the other thing that, you know, I think either kicks in or doesn't kick in that, hey, what got you here may not be enough. Walk me through what surprised you the most about when you got to peer inside an NFL organization?


I would say and again, I think and I I certainly have a prejudiced point of view on this because, you know, it's not like I I grew up a fan of another team and, you know, got involved with the Steelers and begrudgingly that, you know, I so so I know that my point of view is is going to be skewed on this, but.


One of the things that was that was great to see is I was a little bit worried because after I had, you know, gotten to know Mr. Rooney for a few years, that when you got to look behind the curtain that OK, you know, sort of the folksy right and the image that I have of the Pittsburgh Steelers and the family of it, how they conduct themselves.


And again, the most pleasant surprise was doesn't matter if there's no microphones, there's nobody else around. The conduct is the same.


And that's you know, that's something that I think the organization takes real pride in. You know, I was a little surprised and certainly this has come a long way in football and certainly in our own organization with using data and analytics, which, you know, it's a physical, emotional game. So I don't believe you can make all your decisions by slide rule or abacus. But, you know, being aware of your own tendencies, you know, self scouting, thinking about little ways that you can improve your chances, I think are very, very important.


And now that the NFL has a massive pool of of data that it's sharing with all the teams, I think if you're not prepared to take advantage of that, you're you know.


So what does the analytics look like inside of an NFL team now? Do you know, like what your offensive coordinator is prone to call in certain situations of a game? And is that information available in real time on the sidelines? Because it seems like there's like an anti technology bent on the sidelines?


Well, I wouldn't say I wouldn't say there's anti technology. Just the problem in game things are happening so fast, you can certainly make halftime adjustments and other and other things.


But I think it's more in how you prepared. And, you know, one of the things to me is that if we're able to self scout and pick up your tendencies while then. Probably means that the other teams count as well, and it's just. You know, I think because there's much more information available now, even down to, you know, how fast exactly the guys are running on field.


So when you say, huh, I wonder if they're in their corner, everybody's saying is lost a step or has a hamstring. Well, you can actually tell. You can tell. Right.


What's the reaction time? How's everything going? And the teams and the athletes are so remarkable now that I think just any little.


Any little advantage you can gain is, you know, is helpful, so if I do, all teams have the same information. Do they all use it the same way, like where's the edge in terms of analytics and who does analytics really well versus like who's still learning?


You know, again, I would never opine about somebody else's organization. I think we're very fortunate in Pittsburgh. You know, we're sitting next to Carnegie Mellon University, which is one of the top in the world for analytics, machine learning, A.I. And so the person who runs our analytics division is from Carnegie Mellon. And, you know, we have tremendous resources there.


And is that the future of sports? And are those algorithms or sort of insights proprietary now more than they used to be? Yeah, I think so.


And I think that it really is a blend of art and science, though, because, you know, you still have to be able to think about how, again, human beings are going to function and leverage situations.


And you're going to have to you know, I think the highest and best outcomes are where you use the information and the technology. But you're able to interpret it and apply it instead of just saying to inform your decision. That's exactly right. And I think certainly you look at baseball, it has become an arms race. And for the teams a number of years ago that rejected it and say we're not doing that.


Well, you know, it's tough to be playing in October when you don't have the right amount of information.


And certainly baseball is easier to apply analytics because you have a lot of one on one matchups.


Exactly. So it's so it's easier to apply, but football's come a long way. Do you think we'll ever see like a.


Then I version of an offensive coordinator or defensive coordinator.


Yeah, I mean, just from calling players, not from coaching perspective, but it's like this play this. We know what's going on on the field.


We have real time data where that would not surprise me. I mean, or at least, you know, like Jarvis in Iron Man. Right. Like, here's what you should do. I mean, that that to me is not far fetched at all. How far away do you think we would be from the.


Oh, that's an interesting question, because I always find that technology usually usually happens slower than you think.


And then suddenly because if if somebody used it and it worked, it would be like nobody's wearing headsets and able to communicate upstairs and then all of a sudden one person dies and that's an unfair advantage.


So I would be completely guessing. But I think over the next five to 10 years, you're going to see remarkable advancements, you know, across the board in artificial intelligence.


So are we in a place where we're using analytics to adjust players practice routines in the sense of like this player work really hard, we need to give them more of a rest. This player can work harder. They can give like more reps.


Like, how are we using that to inform, like the individual players outside of games?


I'm not sure we're quite there yet. There are tests where, you know, the guys you spit in a cup essentially, and it says, look, you're you're low on X, Y and Z. You should hydrate or you should. So I know there are clubs using some things like that I'm not aware yet of. Using that level of granularity at practice, but do you think that's where we're going to or will always just be this element of I think in the foreseeable future it will be a tool in the toolbox, but not, you know, the tool?


Yeah, I don't look like anything else but sport.


Sports is a great imitator. So if somebody, you know, employed those types of things and won the Super Bowl or won the World Series, you can you can bet that people are going to emulate it.


What's the difference between without getting into specifics, but the teams that are perennially good in a salary cap area, which is hard, and teams that sort of like build up, they have one or two years of success and then they fall off the clip.


Is that all salary cap management or is it?


My own personal opinion is it's a number of things. Again, back to that word of culture. You know, do you have athletes that want to play for you and want to play in that city so that when you're talking about second contracts and people you want to keep, you know, can you make a compelling case? Certainly, salary cap management is important. I think continuity is huge in coaching staff and.


Absolutely. I mean, look, there are times changes need to be made, but I'm often find it fascinating and remarkable how quickly. You know, coaches and coaching staffs get get changed out, you know, the Steelers have had three coaches since I've been alive. Yeah. And you know that that's that's an extreme, obviously.


But I think Howard Tomlin and who is the Chuck Norris Hall of Fame?


Chuck Noll. But, you know, I think that you look at the teams over the past 10, 20, 25 years that are constantly competing and in the conversation in the playoffs every year and relevant, there's you know, you can't say that. That's that that's blind luck not not over that amount of time.


So then you kind of look at what those organizations do differently to keep themselves in that equation.


And then there's other teams that just seem to struggle when you're out and, you know, those teams maybe have to ask themselves a different set of questions.


So let's go back to Legendary for a second even. Why did you end up selling and what year was that to be?


Three years ago this march. So, yeah, twenty, twenty, sixteen. Well, I think I think a couple of things.


You know, I had been in the business for long enough that it was you know, I think it was time for me personally to to to think about something else and look at the end of the day, you know, my principal job was to make sure that I delivered for our shareholders.


And, you know, fortunately that happened in this case.


And we had, you know, the opportunity to not only be bought by a company, this is Wanda, a big company in China, but with some of the expansion and some of the opportunity in China as a growth business, you know, it was maybe the right the right partner and direction to take.


So, you know, and some of the lessons learned or, you know, the things that got me interested, like I mentioned, legendary analytics.


That sort of experience led me to Tulka, which is my, you know, the holding company that I have now.


And what we're up to talk to me about that, because you clearly see an opportunity that's not.


Yeah, the idea the idea from talk kind of sprang from that experience with legendary analytics and again, taking something that was kind of a staid business model, but with large numbers and applying technology and getting a pretty good result. So the thesis is basically it's a holding company. It's not a fund or a, you know, two and twenty model. It's an operating company. And in the middle of it is Toco Labs, in which we have a bunch of incredibly talented folks in machine learning.


And I am data science and will look to buy companies that are in sort of large but maybe sleepy spaces and reimagine the way they do business, employing technology and hopefully getting a, you know, a pretty big result if you give me an example of what you're doing.


So there's a there is a company one of the companies that we own is called Figgs. And it was started by these two brilliant women.


And they basically reinvented the medical where the scrub and other sort of clothing adjacent to that and.


You know, anti-microbial A. Staind did all these innovative things, made it fashionable and breathable, and so when I first started to get to know the company.


When I would talk to doctors and nurses and people in the medical space, they were passionate about it and had huge cult following.


And then what we talked about is, you know, building an online and mobile platform in which you're selling directly to health care professionals. And they have you know, we're just named by Inc magazine as one of the fastest growing companies and most innovative. And they're just doing, you know, a remarkable job. And, you know, part of our job is to, you know, partner with people like this who have deep domain expertise to provide the capital and the technical wherewithal to help them, you know, really propel themselves for forward.


And, you know, so it's going it's going really well. And it's a different set of challenges.


And I you know, I really enjoy it because every day you're kind of looking at new businesses and new markets and saying, you know, how can we. Kind of employ what we've learned or technology that we have and and it's kind of cool to to just to have to to have the.


You know, not the folks in the lab always say to me, like, we're not writing white papers, right? Like we've come up with a solution and in two weeks we get to see see if it works and see the results. So that's that's kind of exciting.


How do you make these decisions on the companies to buy? Imagine you're saying no to yourself a lot more than you're saying. Yes. What are the differences between the. Walk me through that process.


Well, for us, I think it's first of all, is there enough there there in terms of scale and size? Right. Because we're not again, it's not a venture fund. So we're not placing small bets.


We're doing concentrated number of companies and trying to trying to make sure that we have the right size and scale that's appropriate to kind of put your shoulder behind.


And the second thing is, you know, you've got to find the sweet spot with the management teams that, again, have our experts in their space. But embrace change because if you find experts in the space but they say, well, you know, I would certainly love a check from you, but I don't know about this new thing that you want to do that's probably not going to turn out very well.


And then I think it's a big enough category. And being able to see I always try to ask myself, if you execute, does it matter?


Is there enough sort of there, there and is there enough, you know, upside and all those other things. And so, you know, and then the last thing that we aspire to and we talk about is causing outcome. So rather than just saying, look, we're going to make some choices and hopefully it works out, we really try to make sure that if we can't have a clear path to how we think we can help cause the outcome, then, you know, it's not for us either.


So we we try to be pretty focused. Like, how do you determine, I guess, is a better word of phrases like you're giving somebody a check, it's enough money for them to retire? How do you align the incentives that for that point?


Well, in a lot of cases, well, there's a couple of things.


We like it when the management team still has enough skin in the game that it's not, hey, we just bought your company. You don't own any shares anymore and you're just getting a paycheck and running out the clock.


That's not a great situation.


So we like to do situations that we can partner with companies, buy them or large majority or, you know, a large stake, you know, buying out previous investors or shareholders, if they're already certainly allowing them to take some money off the table where appropriate, but then providing growth capital for the company. So that's why, you know, I don't think we're going to end up with 40 companies because it's each each case is pretty unique.


And you want to make sure that you can you can check those boxes.


Are you having fun? I am I mean, look, it's it's as I as I get older, one of the things I constantly ask myself is, is each day when you go to bed every night and you're like, wow, that day is over.


Did you spend the day the way you wanted to? You know, are you are you still intellectually curious, are you still, you know, excited about what you're doing every day? And unless somebody invented something I'm not aware of, the one thing that we can't make any more of his time. So I try to be as thoughtful as I can about, you know, how I spend my time and, you know, and trying to do everything I can do.


At this point, I find myself thinking a lot about, like, the most elemental things, right? You start thinking about your health and well-being and, OK, what am I doing?


You know, if your workouts are part of your lifestyle versus, oh, I better jump on the tread because I've had a bad week of eating or something, you know, again, sleep hygiene, nutrition, and then certainly spending time with your family and friends. And, you know, and I think I am certainly an optimist at heart and I'm one of the luckiest human beings walking the planet. And so, you know, I always believe in the future.


I do think we've come through and are in the middle right now all the time.


That seems like there's a lot of chaos and uncertainty.


And one of the things that I try to think a lot about is if there's someone that is important to you, whether it's a family member, whether it's someone that's been a mentor or just somebody that you like.


Take the time to express that and tell them how important they are to you and. And then I just I think to myself a lot about. All you can ever do is if at the end of the day, you say to yourself, look, today at least I did the best that I could and the things that I believe in like that I really believe and not just, you know, I wrote down on some lists that people are going to see, am I living towards that or applying that and, you know, trying to make your way through it.


You have access to some of the best resources in the world when it comes to nutrition and sleep and health. What what have you learned that you wish more people would know or what really makes a difference for you?


Well, there's a couple of you know, there's a book by Matthew Walker called Why We Sleep that had a pretty profound impact on me. And I've been fortunate enough to get to know Matthew a little bit. Brilliant guy.


What I'm trying to do is, again, find the difference between the easy fad thing or if somebody tells you like, oh, if you lay down on this electrical field, you know, versus things that are tried and true and communities and so forth, where, you know, the stakes are pretty high and they've had some results with things.


But, you know, I just think there are so many random things that can happen to you.


And, you know, I have. Certainly, we all do have friends and family or people that we know that something that's happened to them, that event is so impactful that their whole life is marked before that incident and after that incident, you know, last year on the Steelers, our linebacker Ryan Shazier, who I'm very close.


He's a remarkable young man.


One one tackle in one play, and, you know, he he went down and you could tell right away that it was that it was bad.


And for three weeks of watching him every day at the hospital, there didn't look like there was a lot of hope that he would ever walk again.


And through his hard work and commitment, thankfully, he's you know, he's he's done that.


I read I'm not as good at it as I wish I was, but I read a lot of stoicism because it rings true to me.


I read the words and I'm like, you know, I actually think that's that's right and true. All you have are your own reasoned choices. And those types of things try to take as much of emotion as I can, which I am clearly not far from perfect at.


But I just I think in life I've had the opportunity to experience and do things that are beyond my wildest dreams. And I just think at the end of the day, a lot of it boils down to. You know, your relationships and how you what kind of a friend are you, what kind of a, you know, a parent are you, what kind of a and, you know, you want to be able to answer to yourself that you've done as good as you can do on those fronts.


I mean, it's amazing. One of the ways that we connected a couple of years ago was your intellectual sort of curiosity and lending on Furnham three. And we've gotten to know each other a bit since then. Was it always that way or is that something that developed in you after school?


No, I have to say that one of the things that I know made a big difference for me and I constantly talk to my to my little guys about this is reading, you know, and ever since I was a kid, because, you know, we didn't have a lot.


But you could always lose yourself in a book and, you know, be transported to wherever whether it was, you know, reading Lord of the Rings for the first time or, you know, reading about science or history.


And so I've always been a pretty voracious reader across a lot of topics.


And I just am so fascinated by the way the world works that, you know, I, I it's just involuntary. It's not even something that I, you know, set out to do. It's just kind of the way I'm wired. How do you as a parent, what do you actively do to try to instill that in your kids? You have to turn to.


I do, yeah. Twin boys. I would say a couple of things that the first is to.


Encourage them. To be intellectually curious and to wonder how things work and ask questions and to read and so forth, and then, you know, you also kind of balance that.


Also we talk a ton about. Character and the things and habits that will carry through, like we all do little things each day and those little things add up to who we are.


So I talk to them a lot about that. And it's one of the I've said to a couple of friends that are recently new parents that it's the one experience I've had that was undersold.


And, you know, it's just been the greatest experience of my life.


How would agree with that? Think that's probably a great place to end this conversation. It was a fascinating chatting with you. Thank you very much for having me.


Hey, guys, this is Shane again, just a few more things before we wrap up. You can find show notes at Farnam Street blog, dotcom slash podcast. That's fair. And I am s t r e t blog. Dotcom slash podcast. You can also find information there on how to get a transcript.


And if you'd like to receive a weekly email from me filled with all sorts of brain food, go to Furnham Street blog, dotcom slash newsletter. This is all the good stuff I've found on the Web that week that I've read and shared with close friends, books I'm reading and so much more. Thank you for listening.