← School of Hard Knocks Podcast
School of Hard Knocks Podcast
James Keyes | Former CEO of 7-Eleven & Blockbuster - On Truth Behind Blockbuster's Collapse, Operating as a CEO, & Priceless Business Advice
01:18:58
James Keyes served as the Global President and CEO of 7-Eleven from 2000-2005 as well as Chairman and CEO of Blockbuster from 2007-2011. This podcast is a true example of an American success story where James came from humble beginnings but through she...
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- [00:00]
A
What's going on, everybody? And welcome back to the School of Hard Knocks podcast. I'm James, and I'm here with Josh, and we have a very special guest today. We're out in Dallas, Texas, with Jim Keys. He's a business legend, a retail mogul. He's the former CEO of not just 7 11, but also Blockbuster. He's ran some of the largest companies in the entire world. Jim, thank you so much for having us out today, man. We're super happy to be here.
- [00:21]
B
Thanks, James.
- [00:22]
A
Before we get started, you know, asking you a bunch of questions on what's really led to your success. I'd love for you to tell a little bit of a story about yourself and how you got to really where you're at. Just a little bit of a background for those that may not know your story.
- [00:33]
B
Sure. Well, I'm trying to get to James, but I have to be more mature to be a James like you. So I've been. That's why I'm Jim, because I literally grew up in a small, small town in Massachusetts. Literally. I know it sounds crazy. Without running water, had a pump outside for fresh water. And, you know, I tell people that story today, and they're like, dude, what do you think you are, Abraham Lincoln or something? Come on, that doesn't happen today. But it did. And we just had too many kids and, you know, too little money, as is the case with so many of us. So there was zero expectation that I would go to college, never mind run a couple of Fortune 500 companies. It was not in the cards. Somehow I. I found the secret. I found the formula, and I'm actually working on a book right now to share that formula with everybody, because, look, if I could do it, anybody could do it. Even Josh. Yeah, there you go.
- [01:32]
A
I love it. So I guess, kind of like, what was then that turning point, like, for you to really go all in and get savvy in the business world? You know, like you said, you didn't come from a ton of money. You didn't have necessarily the best resources. But what was kind of that first step that you took to venture out into the business world and start running some big companies?
- [01:50]
B
You know, literally, for me, the path was all about education. And, you know, at some point, I realized that no one was going to take care of me. You know, when you don't grow up with rich parents who can put you through college and give you all the finest schools kind of on your own, and I was fortunate to be encouraged by teachers, et cetera. I liked to read. I liked to learn. I was curious. And so that propelled me, and I found that, you know, the more I work at school, the more opportunities I get. Whether it was in school or even my first job, McDonald's, I was flipping burgers, and I discovered that, you know what? Hard work actually pays off. So when I would clean the parking lot at McDonald's, I would run around. And I'm sure everybody thought I was a jerk for doing that, but, you know, I was a high school athlete. I thought, okay, I'm going to stay in shape while I'm cleaning the parking lot a half mile up and a half mile back. And I would do stuff like that. And what I discovered is it seemed like everybody around me wanted to work less and make more. And so I thought, you know, if I work harder, I'll get rewarded for it eventually. And sure enough, the bosses, you know, paid attention, and I became kind of the talk of the management team, and they made me a shift manager at, like, 16 years old. So I had positive reinforcement along the way that the more you learn, the harder you work, you know, the luckier you get. Right?
- [03:20]
A
Yeah, I love that.
- [03:22]
C
And I feel like something you talk about a lot is how education is the pathway to freedom. And I feel like as time has gone on, especially I'd say our generation as well, people are going to school less and still, like you said, trying to get more. What's kind of your thought on, like, the narrative of education changing and kind of people maybe people shifting to not necessarily going the traditional college route as they once were?
- [03:46]
B
Man, it kills me. I see so many people today that are looking for the shortcut. They're looking for the get rich quick. I can do this. And, you know, I'll share the story of my brother. I have two brothers, three brothers, actually, but two of them are exact opposites. One of them, every time I see him, he's like, man, I'm so proud of you. You know, look at all that you've accomplished. And I'm proud to call you my brother. The other brother, God bless him, you know, he's like, yeah, dude, you were lucky. You hit the lottery. You know, you just got lucky. And I'm like, while you were out screwing around and, you know, getting in trouble and doing all this other stuff, I was busting my butt and I was working, and I was, you know, in school, and I was working as hard as I could at being better, and you were out goofing around looking for the quick, quick fix, whether it Was, you know, some near to well job or, you know, whatever. And the difference was dramatic. And so it wasn't about luck, but his perception was because he was looking for the quick fix fix that my success was more lucky than it was hard work that had paid off. I see that in a lot of people today. They're like, I don't need school. I'll get a job. I can make more money than the teachers. Yeah, but dial forward 20 years, what's that model gonna look like?
- [05:12]
C
It kind of reminds me of the analogy of the two sons that were raised by the alcoholic father. One son used that as a motivation of, I'm never going to drink again and I'm going to better myself. That way my kids don't have to deal with that. Whereas the other son was. Used that as his excuse and was like. Became an alcoholic like the father, and was like, I grew up without a father. He wasn't a good role model for me. So I'm not going to become much of a man myself. And for someone who's grown up in a situation like that, maybe they don't have the best mentors around them. Maybe the family doesn't really support them that well. What advice would you give to someone?
- [05:48]
B
Josh, you just nailed it. That story is so relevant because there's two ways to deal with adversity. You're growing up with a, you know, father with issues, whatever. You grow up with other crises. I mean, I had all kinds of things that I encountered as a kid. I had two ways to respond. It's not about the situation, it's not about the adversity. It's about how you respond to it. That matters, makes all the difference in the world. And you can either have your head down and be the victim. Whoa, what was me? You know, I'm poor, or, you know, my dad's got issues or whatever, or you can say, you know what? Like you said, I'm going to learn from that and I'm going to be better. I'm going to have a different kind of life. And it's that response that's so important. And that's what I. In the book, I'm trying to encourage people to. To recognize adversity can actually build muscle memory. It can make you stronger if you see it that way. Yeah.
- [06:47]
A
I wanted to ask you because you are a big advocate for education for people, you know, getting the highest, you know, attainable education possible, but what are some things that you would currently change right now about the education system? Because a lot of People would may argue that, you know, you go to college and you have to take a lot of Gen ed courses that may have nothing relevant to do with what you're ultimately going to do later on in whatever career that you pursue. So what are some changes that you see are fundamental that you would potentially want to work with, you know, Congress or whatever it may be to help get that passed, to really help ensure that people are getting the best education possible?
- [07:18]
B
Yeah, first of all, if I was king, I don't think I could ever be president. I'd never get elected. But if I could change the, the public, especially the public education system tomorrow, I would make us stop fighting about all the things we're fighting about now, which I think are irrelevant. They're backward looking issues or they're current issues. You know, books banning books indoctrinating kids, you know, curriculum, all this, teachers unions, there's a jillion excuses, right? Meanwhile, we are on the cusp of and have the ability to transform education in a way that hasn't been around for 500 years. We've got technology, we can use AI to teach kids the way they learn. We can modify, we can modify lessons and lesson plans so some people learn better with video, some people learn better with the written word, some people are better at memorization, some people are better at hands on practice. But with AI teaching methods, you can actually modify those approaches and immediately determine what's working best so that the person learns better. A whole host of things we can do to use technology to help people teach better. Most important thing though, got to stop using it as an excuse because people are glomming on to that, oh, the system is broken. So therefore I don't need to mess with that system. Well, the only victim there is the individual that's going to wake up in 30 years in the information age and be unprepared to compete in tomorrow's workforce.
- [08:57]
C
Talking about education, that's actually one of the biggest reasons why we actually started this channel, the school of hard knocks in the first place is because, you know, thankfully we grew up with a lot of great mentors around us, people who are able to teach us their ways and we're able to learn from their mistakes. And one of the things that, or one of my personal gripes with like the education system is that they don't really teach people, you know, the difference between owning and renting a home, you know, how to leverage credit and really even just how to do basic accounting in their life. And those are all things that I think could be implemented and changed within the education system as well as using the things like AI where there's people learn in different ways. Some people are visual learners, some people are audio learners. And if you could cater and like enhance teachers, you know already, like they're already teaching, but you can enhance their capabilities by teaching individuals how they want to be teached, it could explode. Yeah.
- [09:52]
B
Sorry, I had that. It was a teaching moment. You're great.
- [09:55]
C
Yeah. The education system could boom. And I think America could go to that next level. But would you also agree that maybe not everyone should go the college traditional route?
- [10:08]
B
Route, yeah. That's a tough one. Let me give you an analogy. When I was in high school, I worked for McDonald's. As I mentioned, they offered to send me to Hamburger U. It was very tempting. It was going to come with a big salary increase and they were going to teach me everything I needed to know to be in the hamburger business. Well, yeah, but think about that. And instead I said no. I said thank you for the opportunity. And I went to a traditional four year college. And in that four year college I learned, man, there's all kinds of other stuff I can do. I don't have to be flipping burgers for the rest of my life or even managing McDonald's. I can do anything I want to do, man. Maybe I want to. Maybe I want to be a business person. Maybe I want to be a lawyer. So I went on to graduate school. And then graduate school even opened my eyes further. Had I stayed in that McDonald's vertical hamburger you, I would have made more money than I ever thought I'd make in my life. I would not, I don't think, unless I ended up being chairman of McDonald's. Odds aren't very good at that. I probably would be struggling a little bit today had I stayed in that vertical. So that's the trap and that's what I worry about today. I've seen this trap and I've seen people get stuck in this trap of thinking, thinking, well, look at these great jobs. I can make 150 bucks an hour doing this or that right now. Airline pilots, you can go through and learn to fly without a college degree and you can make 100, 150,000 bucks a year. Would you rather be the pilot up front or would you rather own that airplane and have somebody else flying? Would you rather be the pilot or would you rather be be on a commercial flight going to some exotic location somewhere in the world? And that's the difference. Because education gives you the option Gives you the flexibility to do anything you want. So let me answer this specific question. Should everybody go to college? No, it's not for everybody. Should everybody have the chance to go to college and to be the best they can be and to get as much freedom? Because it's not about money, it's about freedom. I promise you, yes. Everyone should at least have the opportunity to learn as much as they can and have as much college as they can or graduate school. And then it's always the opportunity to default to, I'll go take this job or this career or even this vocation, which is fine.
- [12:41]
A
I love it. Information can change the situations.
- [12:44]
B
Absolutely.
- [12:44]
A
Let me ask you this then. When you were coming out of graduate school, what was that first, first job that you had out in the corporate world and what was your mentality like starting out? Did you have goal set that you were eventually going to want to run big companies or what was your starting job in the corporate world and what was again that mentality that you had back then?
- [13:01]
B
I've got a great story around the corporate world and I'm sorry if my stories are too long, but they're great. I can't help but share some of these things. So my first corporate job was an internship. I was, I was at Columbia Business School. I get hired by Gulf Oil to go to Houston, Texas. I'd never been out of New England. I'm like, wow, man, this is awesome. Houston, Texas. I go down there and I'm like, I'm gonna show these guys that I am the best worker that ever showed up for the summer. And I start really busting my butt. And I'm there at 7:00am and I'm leaving at 8:00 clock at night. And it's a white collar job and I've got my, you know, I've got my tie on and everything and I'm working hard. Well, I get this guy that comes over and he's like, dude, you're working too hard. What do you mean I'm working too hard? You're making us look bad. Stop that. You're just an intern. What the hell are you doing? Why are you working like that? You don't have to work. Go have fun, go to the bars. I'm going, but I want to prove myself, you know, I want to make this a career. And they're like, yeah, whatever, just stop. So I'm going to take you back. That was a white collar environment, right? I thought, no, don't tell me that white collar world is like this. Because when I was trying to make money for college. I went to work at my dad's shop. So I'm in this factory, right, with a bunch of pretty tough factory workers. And they had this thing called piecework, where the more you made, the more you'd get paid. And I'm like, I'm making money for college. I'm gonna, boy, I'm gonna blow this thing out. So I'm an athlete. I can do this. And I'm on this machine and I'm making these blocks. You have to cut these big blocks into little blocks. And I'm, I'm making them as fast as I can. I'm like one of those guys on the Flintstones, you know, I'm cranking out these, these, these products and I'm all proud of myself and wow, look at how much I made in my paycheck. And I get visited by one of the guys who puts his arm around me and says, stop this, you're working too hard. I'm going, no, I got to work making money. It's like you're screwing it up for the rest of us. I'm going, what? What do you mean? Well, the more I would make, the scale of expectation for everybody would go up. And so they were worried that I was gonna screw it up for the full time people that were there to make their living. And there was a bit of an argument there, but man, what a depressing environment where you can't work as hard as you can and make as much as you can. So I was like, man, I'm glad I'm out of this, this tough factory world. I ended up getting in a fight over it. Rolling down a flight of stairs. Oh, it was bad, it was bad. I had no business getting a fight with this dude. I mean, he was tough. And the foreman of the shop takes me aside, says, your dad was here for like 40 years, never got in any trouble. You're here for two weeks, you get in a fight, what's the matter with you? And I start telling him all this stuff, man. They want me to punch them out early. They leave at 2am or 2pm and they want me to punch them out at 5. They're doing all this bad stuff now. I'm like singing like a canary. And he's gone. That's the way it is. Really frightening. But remember what I told you about the blue collar, the white collar world. Here I was in a corporate environment. It was the same thing. Lesson, really important lesson here. There is conformity. Whether it is in the shop or the corporate office. There is a pressure for conformity. You see it in the classroom. Who are you raising your hand? Don't raise your hand. Conformity will kill you as an individual. The crowd sometimes like to push you down and not have you be an outlier. You, as an individual, need to fight that and get out there and do the best you can, work as hard as you can, block out the noise, and the results will come.
- [17:03]
A
I wanted to ask you because, you know, you've led, you've worked with a lot of really big companies. And I think that there's kind of a debate in today's world about some people will say that being really loyal to one company is a big driving factor in force for their success. However, I think a lot of people would argue in the younger generation, they're really opportunistic, trying to jump from company to company to constantly find a better offer, a better opportunity. What are your thoughts on remaining loyal to one company as opposed to trying to jump around, get experience in different industries? And how do you think people should really navigate their way through. Through the corporate world and whichever industry that they're in?
- [17:37]
B
I'll tell you, I see it today. I look at a Resume, I see 10 jobs in 20 years, and immediately the alarms go off. What's wrong? Why can't this person stay and have continuity? Look, I don't know if it's good or bad, but here's the rule that I had. I will stay in a role as long as I keep learning, even if I'm not progressing at the rate that I would like to. Because in a corporate hierarchy, sometimes it takes longer to succeed. But as long as I'm still learning, I'm fine. That was my personal criteria. And as a result, I stayed at 711 for 20 years, had some tough times, some really tough times that made me want to jump and go somewhere else. And never would have been CEO, maybe ever, of a 4 Fortune 500 company if I had jumped. But I stayed, and I was rewarded for it over time. I stayed because I was still learning. That's. I think that's the key.
- [18:38]
C
Yeah, And I feel like it's almost similar to sales, where people are like, if you're not. If you're not growing, you're dying. And I'd say it's similar with skill sets because you always had to be constantly evolving, and then as technology changes, you have to be changing with it. Right. And so how would you kind of encourage that? Maybe someone's a new entrepreneur or they're Just starting to grow their team. How would you encourage them to kind of build a culture around them? And also tying this in with conformity of not trying to be average, but trying to be great.
- [19:05]
B
You know, you hit the nail on the head. It is a culture, and it's a culture in a corporation that literally starts at the top. It's the tone at the top. What is the senior management setting for expectations? Do they encourage that behavior or. Or. Going back to my example of the shop, here's the foreman saying, I know people are cheating, but ignore it. You know, that's not a healthy culture. And if you're in that kind of culture, it might be good to jump if you can't change it. My recommendation is stay and try to change the culture. Be the champion for performance. Look, we're all in this together. Let's all work together and make this entity more successful as a result. I think that's the better solution. And it takes tremendous confidence to be able to get in there and withstand those negative pressures, because they'll always be there. The negative Nellies are going to be there.
- [20:01]
A
So you brought up how you were at 7:11 for 20 years. I have to ask you, what was that feeling like when you were ultimately promoted and became the CEO of the company that's one of the biggest companies in the entire world, and you were the number one at it? I mean, think about this. And for people watching right now, it doesn't matter if you're in Australia, if you're in Europe, like everybody in the entire world knows has been to a 711 and you were the number one, what was that feeling like when they made the decision? Because I know that we talked about earlier how you were the COO and you were in a couple different roles, but when you really became the number one of 7 11, what was that feeling like?
- [20:35]
B
It was a very cool feeling. I mean, you. I can't imagine what winning a lottery is like, but it has to be something similar. When you say, my goodness, this is great. It was alternatively an oh, shit moment. It was like, I have the dog that caught the car. Now what. What do I do with it? And it was very humbling because you realize, wow, man, I've got a lot to learn now. So this is a great opportunity, but it is a license to learn. It's not now that I really am king. I am now responsible for all these people and all these shareholders and stakeholders. So it was quite a humbling recognition.
- [21:19]
A
And I wanted to just follow up on that. When you are in that position, running a multi billion dollar company, you have to balance the wants and needs of so many people from maintaining employee satisfaction, from. From making sure that, you know, customer satisfaction is there, that you're innovating with new products and keeping them coming into your stores, as well as the wants of the shareholders. How did you go about balancing the wants and needs of customers, employees and shareholders? And any advice to somebody who may be running a company with all those, all those factors that have to that make it up?
- [21:52]
B
Yeah. Well, the first thing I'll share with you, I went home. It's a true story. I went home. It's like, man, this is great. This is the first time in my life I don't have a boss. You know, I am the boss. And then it took about maybe two weeks to have me come home and say, you know what? I don't have a boss. I have 12 bosses because my board of directors all have a different point of view. And you know what? I don't just have 12 bosses. I have about 500,000 bosses because I have all of these teammates that are counting on me and they've all got a point of view about what I should be doing and how to run this company. So this is a challenge. And what it comes down to is again, learning and balance. Because we've all read all of the leadership guru advice on how to be a leader and all this kind of of stuff. And really what it comes down to to be a leader is you've got to be constantly learning and constantly changing why conditions change. So if you don't respond to those conditions and you don't learn how to respond to those conditions and learn how to manage these various constituencies, you won't succeed.
- [23:16]
A
Yeah.
- [23:17]
C
And so I think about this, right? So you're just brought on and one of the things that you're saying is you always have to constantly be changing. And as the CEO, you're the chief visionary, you're responsible for the direction of the company, more or less. So what do those early days kind of look like? Are you just checking out the balance sheets, kind of what the current goals and plans are? And then how are you kind of forecasting your vision of where you want to take the company? And in those early days?
- [23:43]
B
So I'm going to give you a better one. You mentioned 7 11. You didn't mention Blockbuster. But after we had the Privilege of selling 711 to our largest licensee, I took on the challenge. Chairman and CEO of Blockbuster. Talk about an environment with change, Right. I walked in and said, okay, here's what we're going to do. We're going to develop a digital future for this company, but we also have to pay for it by making these stores more profitable. Now, that was a pretty controversial strategy because there were some people that believed the stores were dead. Get rid of them. Just go straight digital, you dial back. And that's easy to say with 2020 hindsight, but in 2007, the iPhone had just been introduced, apps weren't, and people are like, app, what's that right? Wi Fi was a horrible experience. We had the dial ups we had. I mean, it was terrible. So there really wasn't viable streaming in 2007. It got better by 2008. By 2009, when we were ready to go, all of a sudden the company was experiencing the financial crisis that hit it in the year 2009. So that was quite a learning experience to use. Jump into that environment, try to transform the company. It's kind of like changing a tire while the car is running down the road. It's a lot of work and very dangerous. So we're trying to shift to digital. We bought a digital streaming company, but we couldn't afford to expand that to market it, et cetera, unless we made more money from the stores, which was doable, but it took time. So that was the process that was underway. Quite a challenge in dealing with change and dealing with all of those constituents, as you said, had employees like, what the heck? What are we doing? Why aren't we doing DVDs by mail? Because that's what Netflix was doing at the time. Oh, we are. But that's not the future. The future streaming, you know, it was quite an interesting time and an interesting challenge.
- [25:49]
A
So change, adversity, it's inevitable when you're running a major company like that. Especially like you said, when you took on Blockbuster, it was the complete digitization of the entire industry during those times when a company is facing everlasting change. What it seems like, what are some of those, the most crucial leadership principles that you had to hold into your tool belt that you noticed that really enables you to kind of get through some challenges both at 711 and at Blockbuster.
- [26:14]
B
Yeah. There are three things that I think are essential. When I have the privilege of going back to Columbia Business School, Harvard Business School, I teach these three things and it's basically what to learn. Because to deal with change, it's all about learning. But what to learn in order to deal with these changes are one, that change is not as bad as people Think that change is opportunity. I have even coined the expression CEO change equals opportunity. That's the job of a CEO A to be able to deal with that change and say, okay, if we respond better than our competitors respond, we're gonna come out as a winner of this, as bad as it may seem. Could be a horrible financial crisis, could be a shift to digital. If we respond better than them, we'll be fine. So embracing that change is first. The second is confidence. Everyone has a point of view. And when you show up in the New York Post with a Pinocchio nose in full color and your buddies are calling you, laughing, you go, oh, man. You have to realize it's not about you. It's about the business. So I had stood up and said, we're not going to file bankruptcy for Blockbuster. We've got a strategy. We're fine. We have sufficient cash flow. Well, that was before the street collapsed and the financial markets didn't allow us to refinance our debt. And the press then picked this up and said, well, you lied to us. They are going to file bankruptcy. Which we still weren't, but that was the rumor at the time. Well, having the confidence to weather the storm during tough times like that is critically important. And then the third is you can't over communicate enough and you can't over communicate with clarity. So my third C, if you will, in the learning says change confidence and clarity. And clarity requires inbound clarity, listening carefully, outbound clarity, communicating carefully, being able to communicate your strategy, your message, and keep all of the stakeholders apprised of the situation. Those three elements, change, confidence, and clarity, are essential to any company, but especially in times of significant change or adversity or. Or challenge from the external marketplace.
- [28:38]
A
One of the things that. And studying up on you a little bit that you said that if you were to kind of go back to when you were first starting Blockbuster, that you would have refinanced from day one. And there's a huge debate in today's world of whether cash is trash or cash is king. And for new business owners, too. They're starting companies. A lot of people would advise them against borrowing money from banks or borrowing lines of credit to start their businesses. What are your thoughts on just kind of in general, like again, that saying cash is king or cash is trash. And what were your thoughts on that when you were enacting it at Blockbuster?
- [29:10]
B
Cash is always king, and only from the perspective that cash is your lifeblood. It's your oxygen as a company. Debt is fine, and there's nothing wrong with debt. In fact, we went through a period where you could borrow at crazy low rates, 2 and 3%. And that's fine as long as the business will support that debt reimbursement, the cash flow will support that. Where companies get in trouble is they get over levered and then something happens. And like Blockbuster. Blockbuster had a billion dollars of debt and that came from a spinoff from Viacom in 2004. They were owned by the large studio, spun them out into a public entity with a billion dollars of debt. That was about two times EBITDA at the time, which was a reasonable debt load. But all of a sudden, the financial crisis occurs in 2008. Well, a third of that debt, Think of the timing. They borrowed in 2004, they had to pay back a third of it in 2009. So 300 million comes due in 2009. And the banks are saying, no, we're not going to refinance that debt. We're not lending anybody any money at the moment. And that put a severe strain on Blockbuster. Had we seen that coming, we had a crystal ball. There are two things that could have happened. One, we would have refinanced the debt earlier. So when I arrived in 2007, I had the opportunity to refinance that debt, but said, no, with the changes we're making in the business, I'll have a better interest rate in two years. I didn't see the financial collapse coming even then. We could have managed a much leaner operation and been able to withstand that financial crisis had we managed our cash flow more effectively. We were trying. We doubled our cash flow by the year 2000. By the third quarter of 2008. I've got a press release from Moody's actually that was congratulating on us on improved cash flow. But they also forecasted the upcoming need to refinance that third of the debt and whacked us for that. So bottom line is, yes, there is this debate there shouldn't be. Cash is always the most important. Debt is a very important tool to expand and to grow, but always within the cash flow generation capability of that company or that entity. Get outside of those boundaries and that's where you can get in trouble.
- [31:52]
A
So would you say that it's like one of the most important things is to pay off any business debt really early on or whenever you can?
- [31:59]
B
Not at all. No, that's the extreme. Because right now, for example, I've got some debt that's outstanding. There's some debt on a building that I own that is at 2%, 2.5%. I'm not going to pay that off, even though I can, because it's just in today's market, with interest rates of 7%, I can instead put money in a CD at 5% and pay off and pay down that mortgage. That's 2, 2.5% and still make money. Right? So why would I pay that debt off? It really is no simple formula of you should always pay off all your debt as fast as you can. It's a matter of the market conditions. What you should do is take the responsible path and make sure that you've got line of sight visibility in your cash flows, that if things do change, I can get out of that cd, pay off that debt and be done with it without putting my business in jeopardy.
- [33:04]
C
In the year 2000, Netflix was knocking on Blockbuster's door. And they're saying, hey, we want you guys to acquire us, you know, and they put an offer out there for $50 million. And this is coming from the Netflix CEO, but he said that pretty much that the blockbuster CEOs or a boardroom kind of like laughed him out, out the door and saying, like, hey, you guys are probably overvalued, not profitable at the time either. And this is also, if you think about it, prior to really the digital boom, right? So it's a little bit of ahead of its time. What, at what point though, would you say Netflix started to become like, hey, this, these guys are actually a viable competitor within our market and they're starting to look like a disruptor here.
- [33:48]
B
I'm going to get in so much trouble for this answer. Never. That's why I get in trouble. Because the look on your face is what? What do you mean never? Here's why. I have a lot of admiration for the folks, Reed Hastings, Mark Randolph, the guys that started Netflix, and what they've done to evolve. But think about everything we've talked about. What they have done is adapted and changed. So in 2007, would it have been wise to buy Netflix? Not really. I mean, it's easy looking now back and say, well, look at their market cap. We should have bought them. They were going to make House of Cards with Kevin Spacey and they were going to make a fortune on that, or they were going to do all of these other streaming video series. No one saw that coming. They adapted. What they were in 2007 was DVDs by mail, maybe a glimmer of hope into streaming. What Blockbuster had and didn't capitalize on is the Opportunity to exclusively own content that would have left Netflix with nothing to stream. We chose not to do that. Now, I put anybody in that position in 2007, and it would have been hard for Anyone to justify $100 million investment per year to lock down exclusive content so Netflix couldn't have anything to stream. Because the giant unknown in 2007 is how long will it take for WI fi to be robust enough streaming, to be good quality, enough that I can actually watch a movie on my device or on my home TV without buffering, without. You know, that'll be a better viewing experience than a dvd? How long will that take? No one knew. So it was $100 million bet we would have had to make to lock that in and block out Netflix. But was there any reason to buy Netflix? No, we. We could have made that bet ourselves and left let Netflix doing DVDs by mail. So it's easy to second guess. Looking back, it's so easy to armchair quarterback and say, well, you should have done this and you should have done that. I put anyone in that position at that time, even me. I wasn't at the company in 2007. I mean, in 2000, when Netflix first approached the company, it was my predecessor. I could look back at that and say, oh, you should have bought them for 50 million bucks. It was so cheap. You would have taken them out of the market. It would have been easy. Easy for me to say now or in 2007. But in 2000, Netflix didn't have anything that Blockbuster couldn't do themselves. So why would they pay $50 million when they could do a DVD business and did DVD by mail on their own and could do streaming on their own? So again, hindsight's 20 20, but I hope there's a lesson there for everyone, that there's always more to the story. And again, it comes back. I keep coming back to learning. The more you learn about the facts and the more you have critical thinking and be able to ask why this happened, the less likely you are to leap to conclusions like Blockbuster didn't keep up with streaming, or Netflix crushed them, or Redbox was the problem. You know, those are easy answers, but. But not correct answers.
- [37:28]
A
And I love that you talk a lot about being adaptable, pivoting at the right times. But how important do you think it is to really be an innovator in whatever niche that you're in? Because like you said, competition can increase, technology can develop. How important is it to be able to innovate in whatever that particular niche that you're in, like you said, blockbusters, retail movies, DVDs. How important is it to be able to innovate when running a business?
- [37:49]
B
Yes, critically important. I'm going to use Netflix in a positive fashion as it relates to innovation, because they did come up with some very good innovation. Let's say. Where did they start? DVDs by mail. Great innovation, right? They had a competitive edge versus Blockbuster stores because you could get the DVDs by mail, right? Well, then Blockbuster did DVDs by mail. But the advantage was you could take those into Blockbuster store and exchange them for something you really wanted to see. Okay, advantage Blockbuster. What does Netflix do? They create a search engine that makes their DVDs by mail experience better than Blockbuster. Because what they did is they used technology at the time to see what you had ordered in the past and then to recommend good movies. That recommendation engine was an innovation, and it was a strong innovation. Theirs was better than Blockbuster. So Netflix dealt with the challenge of Blockbuster copying their model with innovation to create a better search engine. And then here, Blockbuster trumps that, buys a streaming video company. And Netflix went out when we blinked and didn't secure content exclusively. They came up with streaming video. They partnered with a company because you couldn't get into TVs. They were the first to partner with a company called Roku to have a device now that can stream your movies. So their innovation at that time then gave them a temporary advantage versus Blockbuster. Dial forward. We sell the company to Dish. Dish is in a position to stream now. They've got a better library. They can crush Netflix. What does Netflix do? They go out and create original content. Partnered with. They rolled $100 million bet on house of Cards. No one had done a streaming TV series at that point. They hired one of the highest paid movie actors in the world to have him do a TV show. Huge bet, very smart bet. Created a whole new genre of streaming movies that you could watch all at one time. You could binge watch. So if you think about every step along that path, Netflix innovated. They were matched. They innovated again. They were matched. They innovated again. And that innovation continues. If they don't continue to innovate, I don't know what their next trick will be or next way to satisfy their viewers will be. But if they don't keep that trend of constant change and innovation, they too will go the way of other big companies.
- [40:39]
A
So I wanted to ask too, because it kind of reminds me of like the whole Coke and Pepsi situation, right? Where they Talk about how, like, if one of them does something dramatically different in a commercial or a new product line or something like that, the other one is going to be right there, right behind it to where it's like, it's always going to close that gap. So do you think, though, as a competitor in an industry, it is important that you do learn how to, I wouldn't say like, be like a copycat, but learn how to, like, mimic what the competitor is doing to try and stay like, in the game with them.
- [41:04]
B
It's important to understand what the competition is doing. But mimicking isn't always the best solution. The best solution is to again, back to learning what is it about that change that's better. When Coke decided that they were going to go from Diet Coke to Coke Zero, big, big deal, because they changed the whole formulation and now they have a product that tasted as much like original Coca Cola as ever before. Pepsi also had Pepsi Zero, but they could have taken it one step above. What could they have done to make it even better than Coke? So in the Coke vs. Pepsi wars, you see that move back and forth and pivot from advantage Pepsi to advantage Coke, et cetera. What they have to constantly do is find that next thing rather than just copy the competition. That will propel you even farther ahead of the competition.
- [42:13]
C
So if we actually, I kind of want to take a step back to where you were before you were the CEO at Blockbuster, because, you know, you're coming with your background from 7 11, you don't actually have a lot of experience within the, you know, the content media kind of realm. Why did they decide to go with you and what was kind of your thoughts going into like just Blockbuster and how you were going to kind of change the company?
- [42:37]
B
All right, so how did I get the Blockbuster? Okay, that's a good backstory too. So here I am looking after 7:11. We had a wildly successful run at 7:11. I wanted to take those tools somewhere else. So I was looking at other industries and other companies, and Radio Shack was struggling at the time. I know you're like Radio Shack, but think about what they had. They had massive density of locations. And about the same time Apple came in and they built this new thing called an Apple Store and basically doing much of the same thing. Radio Shack had the largest market share of mobile phones at the time, but they carried Samsung and Motorola and all these different brands. Apple Store only had the Apple phone. Well, what if you could take that Radio Shack model and like Apple, have a little genius bar in there? So somebody could help you integrate your Motorola phone with your HP computer and be able to do all kinds of things just like you would do within the Apple infrastructure. I thought, you know, a technology agnostic Apple store would be cool. So I'm going to buy Radio Shack, take it to the private equity markets, raise the money, we'll take it private, make these transformations and go forward. But at the same time, I thought, boy, dial forward. Wouldn't it be cool if every phone or every computer sold in Radio Shack could come with Blockbuster movies baked inside? Wow. Well, what if I buy Blockbuster and bang it together with Radio shack, now have 10,000 locations at a little mini Apple Stores that are technology agnostic with the advantage over anybody else that now you get free streaming capability in any of these devices and somebody to help integrate all this stuff, stuff in every store. That was the wild big hairy vision. Two public companies, pretty high level of difficulty, degree of difficulty. I'm on the road. I'm selling both to private equity firms and to investors. I got a deck on Blockbuster and a deck on Radio Shack because the idea with Blockbuster was on its own. You could do this with Blockbuster, bring it to streaming and then go buy Radio Shack or somebody else. There was the vision. I'm on the road and I'm selling. I was actually pitching Radio Shack to an investor and he said, have you thought about doing this for Blockbuster instead of Radio Shack? Well, matter of fact. And I pulled out the second deck and he said, oh, my gosh, this is great. He picks up the phone, he calls Carl Icahn. Carl Icahn was the lead director for Blockbuster. And he said, we'll be over in 20 minutes. He drags me over to Carl Icahn's office. Carl Icahn is larger than life. Carl says, who the blank are you think you can do all this stuff? I said, well, I had a pretty good track record over at 7:11. He was like, yeah, this is a convenience store. It's got nothing to do with this business. And the more we talked it through, he saw the vision and saw how we were going to make media entertainment more convenient for everybody. And he liked the idea and he endorsed that idea. Went to the board, big mistake, he said. I said, carl, we have to take this private. We can't do this as a public company. He said, keys, you're the operator. I'm the financial guy. Trust me, we'll keep it public, public, private, doesn't matter. Now think about that in the context of what happened three years later. The financial markets Collapse. We're a public company with a billion dollars of debt. Had we refinanced the debt in 2007, taken it private with five to ten year terms on that debt, we would have sailed right through the financial crisis without batting an eyelash. So that's ultimately how I got to Blockbuster.
- [46:48]
A
So I wanted to ask about one of the companies that you had brought up in that last response. You talked about Apple. And what I think Apple does better than just about anybody is they create a brand of raving fans in the sense of like Steve Jobs is the marketing guy. I love to talk about how AirPods, AirPods, they release the headphones. If that was a company by itself, not the phones, not anything else, it would be the 30, it's like in, would be like in the top 30, like richest companies in the entire world. Apple could release a shoe and it would sell out instantly because of the brand that they built. And I love the saying that in sales, people buy from people that they like, they buy from brands that they love. So how important was the emphasis that you put on building a brand rather than just creating great products and services for your customers, for your clients? What is really that importance of building a brand beyond just like what exactly is in the store?
- [47:39]
B
Building a brand is important, but the brand is nothing but for the products within. So let me remind you, history lesson, Apple, I was a believer, man. I bought the first personal computer, Apple Mac that was out there. I thought, this is awesome. It changed my life as a young corporate employee. Made me look like a genius because everybody else was still with punch cards, believe it or not. And I had this PC dial forward. Steve Jobs leaves the company, the Mac is floundering. I mean, you wouldn't use a Mac for a doorstop at some period, right? And people forget that. They think, oh no, Apple's always been great. No, the Mac was terrible. It was just clunky and goofy looking and it, it didn't communicate with other devices and they didn't have a whole infrastructure stuff. So everybody says, wow, Apple's just got this killer brand. What launched Apple back on track was yes, the Mac was an improved version. And that's what Steve Jobs did when he came back to the company. He had a better edition of the Mac that was better. But then the iPhone really is what the game changer was. It didn't start with Apple, it started with the product. And that iPhone was such a compelling product that it transformed the brand and it made Apple the brand that we know today. Then of course they Kept adding to the infrastructure. Bring in the iPad. Wow. Now I've got a screen I can use. And then bring in the iWatch and the iPods and the I, the buds, the earbuds, et cetera, et cetera, et cetera. And then integrate them all and provide the genius bar not only in store but via phone. So you've got somebody to help you manage this infrastructure. It's the product that makes Apple great. And if Apple loses sight on that innovation and the quality of the products, they too will be another IBM, Hewlett Packard, BlackBerry. All these great brands that declined over time because they didn't keep up with technology and keep their products sharp.
- [50:02]
C
One of the things that I think you've touched on today is not only is convenience important, but also just keeping a good focus on the consumer and the customer and the customer experience. And I read a story about one of the decisions that you made at 7:11, when the credit card processor was just being implemented on gas pumps and all the investors and the board is like, no, we got to keep the customers, consumers coming inside because that's going to get the customers to have upsells and downsells. You know, they get candy, a drink, whatever it may be. And you voted against it and you swayed their decision and you said no, you got to have let the convenience store be the convenience store and be there if need be. But if someone just wants to get gas, then just let them get gas. So if you could, if you could tell that story for us and kind of how that played out, that'd be great.
- [50:54]
B
Yeah, it's a fun story because, you know, technology was brand new. I was leading the gasoline department at the time for 7:11 and here we had this opportunity now to let people pay at the pump. Well, if you put it in context, it's hard to remember today, but back in the day there were drive offs. So people would steal gas, they'd drive up, they pump the gas and instead of going inside to pay, they drive off. That was very costly. So this was a huge opportunity to do pay at the pump. But our operators at the time had it in their mind that when they added gasoline to 7 11, it was only there for one reason. That was to lure customers in to buy things inside. They made 70% margins on Slurpees. They wanted people to come inside. Instead of making a couple pennies a gallon on gas, they wanted to come inside and buy a Slurpee. And so this mindset, it's a classic example of corporations that get into a Rut in their unwillingness to change, there's a brand new technology, ironically allows us a higher level of convenience. The core business of 711 was convenience. But the entire management team at the time said, in fact, we had one field manager, division manager, 711 stood up in the middle of this big meeting everybody envisioned around a board table. And this guy gets up and he slams his fist on the table. He's over my dead body. With those Blanken devices being my stores, it's like, okay, maybe you're gonna die. But he was that firm about it. And here's the solution. Took data. They wouldn't let me do it. They wouldn't let me put these devices in all the stores. Okay, let's prove it. So we actually put the device in about 20 stores, tracked the data, tracked the results, went back six months later. Here's the data. We sold 20% more inside because we had a 30% increase in traffic at the pumps because of the convenience of these cards. And by the way, people are using their card and still going inside to buy that Slurpee. So there is no excuse for not taking this level of convenience to the entire chain. Message there, Data. Learning, that's amazing.
- [53:32]
C
You always got to focus on the customer first.
- [53:35]
B
Always got to focus on the customer. But even when the system is stacked against you, facts, data will always prevail. And that's why learning is so important.
- [53:46]
C
Speaking about, you know, you guys are.
- [53:48]
B
Getting some, you're mining some good, good nuggets here.
- [53:51]
A
I like it.
- [53:51]
C
Yeah, this is phenomenal.
- [53:53]
B
I've never done anything quite as, you.
- [53:55]
C
Know, so we're talking about that consumer, you know, you got to have a focus on the customer at all times. Because if you don't have customers, they're not satisfied, they're not going to come back. And when you talked about how, when you just started at Blockbuster, one of your ideas on how to increase revenue and increase sales is to actually increase the average order value of the average consumer. How did you kind of plan on going about that and what was your idea of like, how can we increase the average order value for our customers right now?
- [54:30]
B
There's a funny story behind that too. Sometimes these stories, you know, it's kind of like, really, I don't know if you're old enough to remember the Blockbuster experience. I mean, big time experience where every Friday night you'd go in the store, but it wasn't always a great experience. You'd walk into the store and the first place you go is a new release wall. And the new release wall was all the latest movies, right? I can't wait to see Paul Blart, Mall Cop. It just came out and I want to see it, right? And you go up there and it was always out of stock. It was like, damn, I should have gotten here earlier. All the copies are gone. There was a reason for that. In the days before Netflix, when Blockbuster was the primary competitor, they figured out that if they run out, if they order enough of the top releases, which was 80% of the sales of the store, by the way, if they don't order enough of the new releases, you'll be disappointed, but you'll come back. They actually had a name for it. I can't remember what it was. It was like, it was like manage Discontent or something. It's like, really you're going to disappoint your customer on purpose because you think they're going to come back. And apparently it worked for a period of time. They got people that kept coming back into the store more often to get the new release that they wanted to see. Enter Netflix, enter Redbox, enter all these other competitors. Now all of a sudden, well, I'll just go somewhere else because I want to get the new release. So one of the simplest things we did was to say that was yesterday's strategy. Today's strategy is in stock. You want new releases, we're going to order three times as many new releases. Now. It cost us more money, it was a financial risk, but it significantly drove sales and profits. Because we were in stock, we had customer satisfaction, we didn't on purpose drive them away.
- [56:32]
A
You've had an amazing career, but what is the one accomplishment that you're the most proud of? Maybe it's not even work related, maybe it is. But like what just throughout your lifetime, what is the number one thing that you're the most proud of that you accomplished?
- [56:47]
B
Probably the creation of a foundation that I've finally now written the book. In fact, it's the foundation is by the same name. It's called Education is Freedom. And the reason I'm most proud of that is that it helps others recognize their full potential. We go into started it 20 years ago when I was at 7:11. We go into public schools and just catch kids when they're young enough, seventh, eighth grade, and say, you can be anything you want to be. Don't let somebody else tell you you can't. And here's how, here's the pathway.
- [57:25]
A
And I love that I saw you talking about before and I guess like a prior interview that you've done that no matter what you always wanted when people were trying to cut budgets, you always wanted to maintain giving the same philanthropic efforts to, you know, the community and whatever that you were giving back to. So, like, how important was that kind of selfless service to be able to give back to the community? And now you started your own foundation.
- [57:47]
B
Yeah. You know, I've got a different perspective about philanthropy. I really believe that shareholder value and public service doing good are not mutually exclusive. That so many companies have found out that you can tie the two and you can actually do good things and increase shareholder value as a result. And to me, that's part of the responsibility of a CEO, to be able to look out there across the landscape and say, what can I do that will leave not only this company and its shareholders, but this world a better place because of what I do. And that's really a privilege that comes with that role of CEO. Now what you do with it is maybe you're just there for shareholder value. But I can promise you, if you take a different perspective, that I have the ability from this chair to do things that can positively change the world. It just gives you a much, much better feeling for the role that you have and the legacy that you leave.
- [59:03]
C
After your career at Blockbuster, what have you been up to since then and what are you up to now?
- [59:11]
B
My problem is that I learned as a kid, the more I learn, the more I can do. So I have been a passionate learner. And once I was freed of the responsibilities of a Fortune 500 company to lead, it gave me license then to go do a whole bunch of stuff, stuff that I always wanted to do. Well, you know, I was a space geek as a kid. I told you I wanted to be an astronaut. I've been enamored with SpaceX and what they're doing. I started to get involved in the commercial space industry. I built one company or started one company called Back to Space that is now doing AR VR space experiences. There's one opening up here in Texas this year, and you'll be able to put on a space helmet. Basically that is a modified VR headset. And you'll be able to experience launch and going to the moon where you'll get out and be able to experience moon base. Isn't that cool?
- [60:19]
C
That is incredible.
- [60:20]
B
It's going to be a fun experience.
- [60:22]
C
That's one of the favorite things that I think is I started to learn more about AR VR is that it's you can immerse yourself in experiences and make it accessible for everyone who may not have access to those events. Like, you always want to watch the Super Bowl. Why watch in your living room when you can put on the headset and you can be at the stadium.
- [60:39]
B
Yeah. Or on the field.
- [60:41]
C
Yeah. You know, and I think. I think over, you know, the next 10, 20 years, who knows what that's going to be like. It's going to be that, like you said, that change that we've been talking about all day and that adaption and of how does that change not only experiences but also just business as a whole.
- [60:57]
B
Well, you know, I'll give you another extension of that. And you know, the fun thing about technology is that most people don't have the imagination to think about what could be. We're so trapped in what is. Right. So here's this amazing access to technology, A.R. vR, you know, laser imaging, etc. Etc. AI I'll give you an example. I was called by the Bishop of Dallas to help raise money for the cathedral in town. It's one of the second oldest building in Dallas. It's a beautiful facility. Wanted to raise money and I said, you know, instead of raising money for brick and mortar and plaster, maybe we should do something cool. It's right in the heart of the arts district. I said, let's partner with the Vatican and let's bring a Vatican art museum right here to Dallas. And we can do it with technology because. Because we can take an absolute digital replica of the Sistine Chapel ceiling and we can reproduce it in Dallas with a hologram of Michelangelo and you can give people a microphone and ask Michelangelo questions. This technology exists, by the way. I worked on a project that now is with USC and their technology labs. The project is now in the Holocaust Museum. You can see speak to a Holocaust survivor, but he's a hologram. And you're asking questions and getting answers. It's all AI empowered use of technology. So I thought, well, wow, what if we bring this technology from Vatican art that sits in a museum in Rome and take it all over the world and let people ask questions of Michelangelo or any of the artists or any of the characters in the ceiling of the Sistine Chapel that tell the story of creation? That project was beyond anybody's imagination in its early days. It's now taken off. We're partnering with the Archdiocese of Sydney. And just last night at the cathedral in Dallas, we did this thing called projection mapping. And it's the coolest thing because on December 12, last night was the 491st anniversary of the Appearance of Our lady of Guadalupe in Mexico City. So what we did is we took the cathedral and put a projection on the wall that showed St. Juan Diego, a peasant at the time in Mexico City, looking up and seeing this bright light. We had rays of sunlight coming down the cathedral and then we showed the Virgin Mary appear to him. And then we cut to graphic scenes, the blue stars that are part of the image that you see. We showed a beautiful pattern that was on the image of Our Lady Guadalupe. And then in the final minute of this scene, the whole front of the cathedral had the classic image of Our Lady Guadalupe. We had 30 some thousand people in the streets on their knees in tears, holding up their phones. And it was such a powerful example of the use of technology to teach, to inspire, to move people in ways that we've never been able to do before. So those are the kinds of things I get involved in that are some non profit, some for profit, but really exciting.
- [64:21]
C
That's super cool. And I just want to add, ask one more question about just the digital art is how do you, what does that process even look like? Because I don't, I have no idea. How would you go about, you know, transporting the, the art to Dallas?
- [64:35]
B
Yeah, well, it helps that I'm an artist. Is another one of those crazy things you say, what do you do? Well, I write music, I paint pictures and I, you know, it's like, why do you do stuff like that? Well, I'm curious and I took art lessons. I went to, was lucky enough to be able to go to school at the Florence Academy of Art in Florence, Italy. They taught me how to paint, they taught me realism and oils. And so that passion for art and a knowledge of technology led me to recognize, you know, art for the last several thousand years, going all the way back to the cave paintings, was a way to inspire and to teach. Well, why can't we do that today in a different way? Why can't we use technology? So what we discovered is you can actually use digital technology today to produce a reproduction of the Mona Lisa that is so realistic you wouldn't know the real from the fake from the digital side by side. We can do that today with the power of technology. Well, why not then let Mona Lisa talk to you, which you can, as you know, and with AI powered technology you can ask her questions and say, come on, what are you smiling at? You know, and, and, and these are the things that you can do. So it just gets me so excited to be able to take a modern technology and apply it to such a traditional art form as oil painting and to be able to really enrich the lives of others by bringing those paintings to life. So we can take everything in the Louvre or the Vatican art museum and we can take it here to the United States, project it on a wall. You've seen these immersion experiences that are being advertised now with Van Gogh and others, Renoir. I mean this is exciting people and getting them interested in art in a way that we have never seen.
- [66:25]
C
Yeah, that is incredible. That is incredible.
- [66:28]
A
And I'm kind of like wrap up here with just kind of like a few quick last ones for you. But for, for, for, you know, a young 20 year old kid right now that, that's watching this, they're starting out in their first or second job. They really want to work their way up in the business world. They want to ultimately, like yourself, run a massive company one day. Beyond just hard work, what is it that you see that really differentiate people and sets people apart in the business world? In other words, when you're building a team, a leadership team, what is that number one trader? Maybe it's a few. What are those things that you really look for in somebody that tells you I need this person to come work for me, I need them to come work for my company that is really going to enable that person to grow in their career, work their way up and eventually be able to run a Fortune 500 company?
- [67:09]
B
Well, the simple answer, and you teed me up for this is read my book called Education is freedom. Because in the book I capture all of these, I call it the C suite learnings. I've got what to learn, how to learn and why to learn that will help you with your career. But I'm a big champion of simplicity. I'm going to dumb it down. One thing, you see this little plaque behind you? Do you know the story of that? Did I tell you that? I don't think I did. So this plaque I made in high school. I was working at McDonald's, going in the break room and I see this plaque, I'm like, damn, I like that. I like that. That's true. And I start, started taking it to heart. And when I said I ran around the parking lot, I was the fastest guy flipping burgers. That was what motivated me. I was like, I'm going to be faster and better and more determined than anybody else. And what this plaque says, I'm going to read it to you. Press on. Nothing in the world can take the place of persistence. And it talks about talent and talks about education, which I'm big on. Genius will not. Ultimately, it says, persistence and determination alone are omnipotent. All right, so that's pretty cool. So this plaque, I got them to give me the poster at McDonald's. I took it to shop class. Evidence that I was still in high school. I was in shop class, right. Burned the edges, put it on this wood, beat up the wood, varnished it, the whole thing. And it's been on my desk throughout high school, throughout college, every job I've ever had. 711 blockbuster. It sits in my office today, and it's always been with me. It's a Calvin Coolidge quote, believe it or not, called Press On. Well, I was always inspired by this, but I never really understood the power of this quote until one day I had an opportunity to visit with Warren Buffett during my Blockbuster days. Getting a little beat up. Needed my own advice about confidence and determination and persistence and all that stuff. And I get a book in the mail from Warren. I'll share it with you. I get this book of permanent value. Warren Buffet. How cool is that? That he was nice enough to send me a copy of his autobiography. To Jim, with best wishes, Warren. That's pretty cool, right? Who gets a book from Warren Buffet? So I'm feeling all cool. And then I thought, well, maybe I better read it, you know, in case I see him again. I better read it. And I'm flipping through, and it's really fascinating. Talks about his whole life story. But I turned to chapter 271. Check this out. No way. Look familiar?
- [70:10]
C
Yes.
- [70:12]
B
I don't know if you can see this, but chapter 271. Same font.
- [70:21]
C
There is no way. It's the same quote that's in the. In. In the book. Right there.
- [70:26]
B
It's the same quote, the same font. I don't know where he got it. I mean, maybe he worked at McDonald's when he was a kid. I don't know. I don't think so. He was an investor in McDonald's. I'm sure. He perhaps was friends with Ray Kroc. I don't know. But Warren believed it was worthy of an entire chapter of his book. An entire chapter dedicated to the importance of this Calvin Coolidge quote. Press on. I. And the words. Nothing is more important. Persistence and determination.
- [71:03]
A
Amazing.
- [71:05]
C
I have one more for that. You had a meeting with Warren Buffett, and if you could kind of just set the stage of why. Did you like what happened there? Yeah, what happened there?
- [71:18]
B
So when you run a big company like a 711 or a blockbuster. You get to do some pretty cool, cool stuff. You get invited some things. So I get an invitation. This thing called the CEO Summit with Microsoft. Right? That's pretty cool. So I go to the CEO summit, and it's a bunch of fellow CEOs of big companies. And, you know, Bill Gates is there, of course, because he was running Microsoft still at the time, and he hosted an event at his house. That's pretty cool. I get to go to Bill. To Bill Gates house. That'll be fun. And, you know, he's got a little buffet set up at his house. And, you know, I'm over there getting shrimp. Who do I see in line next to me but Warren Buffett? And I'm like, come on. This is, like, cliche. This is too cool to be true. So I introduce myself and shake his hand. Hey, Warren. My name is Jim Keys. Yeah, I know. Remembered me from 7 11. And, you know, Warren is the oracle of Omaha for good reason. He's a student, constant student. Reads five books a week or something, at least. And he knew about 7 11. He knew about the success we had. And he said, hey, congrats, it was a good run. What are you doing now? And I told him I was at Blockbuster, and I started making excuses, and I was like, yeah, but, you know, getting the crap beat out of us and markets to tough. And the financial markets collapsed, as you know, and we got a billion dollars of debt. I don't know if I can get it refinanced. I mean, I. You know, I. I don't know. I. I may not stay. And he looked at me and he goes, really? Would you rather be on the. On the bench watching somebody else do this, or would you rather be there in the game? I was like, I'd rather be in the game. You're right. He's like, well, get up there, dust yourself off, get back at the plate and take a swing. That's what you do. I was like, you know what? That's what I do. So I stayed. It was brutal. We went through a restructuring, but I got the company sold. We had a near deal with Google, and I almost got across the finish line. Ultimately got the company sold to Dish Networks, and we saved 20,000 jobs. And, you know, the company lived to see another day. Now it didn't have the outcome I would have liked long term. I hoped that Dish would take it full streaming. They didn't get there, But I am, in hindsight, very glad I stayed. And that decision to stay really was the encouragement of Someone like Warren Buffett, and he didn't say these words, but.
- [73:56]
C
You just lived him.
- [73:57]
B
But I lived them, yes.
- [73:59]
C
That is incredible.
- [74:00]
A
I had to ask you this because you got to that level. One of the things that we always, I say, joke around about is like there's times where we just have a million thoughts, a million things going on. Like, you're extremely busy. I can't even imagine, like in your position. You've got thousands of decisions that you're having to make on a weekly basis. You've got a million thoughts, million things going on. And one other piece of advice that you said that you would have told your younger self is to just chill. It's like everything's going to be okay. But, but, but really when you were in that role, right, running a 7 11, running a blockbuster, you have incredible responsibility and pressure. And some people will say that, you know, low pressure means low performance. So it's in the sense of like, it could be a good thing. But how did you really go about managing the balance in your life and being able to like, like mentally, like, like, what was that like? And how did you overcome that?
- [74:50]
B
Think I did. I think I'm crazy now. Obviously it made me.
- [74:54]
A
Would you say you lost your mind a little bit?
- [74:56]
B
Yeah, yeah, maybe just a tad. Obviously I'm a little weird now, but no, it's a tough balance. You know, you make trade offs, I'm sure. Yeah. I had the blessing of a family that supported me and said, look, whatever you do, you understand, you have to do whatever you have to do. And you know, a lot of people, you know, suffer from making that trade off between focus, get it all done work seven days a week, and family life and balance. I probably never had the appropriate work life balance. But the trade off is that I've never seen work as work either. I am inherently curious and I think that curiosity drives me to want to keep exploring and solving problems and looking at new things. That's what I get excited about if there is a diversion that does keep me balanced. Yes, family is important, but also the creative stuff is important. I can come home and sit down and write a song on the piece piano. And it's just such a different kind of problem solving and uses the right brain to balance that left brain overload that I think those kinds of things help keep me balanced.
- [76:21]
A
How do you ultimately want to be remembered? You know, you've had an incredible career, you've inspired so many people, but how do you ultimately, you know, when it's all said and done want to be remembered.
- [76:30]
B
I hope that. That I can leave a legacy. And my legacy is not likely to be 7 11. Although they have 80,000 stores now and they're growing, I'm proud of them. It'll be a piece of my legacy. I don't want my legacy to be the guy that screwed up blockbuster because he didn't keep up with streaming, because that's not true. I do hope my legacy ends up being that I was able to in some small way, inspire other people to be successful. And that really is the purpose of writing this book. Because I was really fortunate. Really fortunate. I beat the odds because I should not have had the privilege of the freedom, not the money. Forget the money. I have the most amazing. Every day is a new adventure for me. It's all about freedom. And if I can share with others that don't get trapped in the money trap, don't get trapped in the you're not good enough or, you know, you don't need to learn, you don't need college. If I can keep people from falling into those traps and then have them grow up using education and learning, lifelong learning, it doesn't have to be formal education necessarily, but hopefully someday people will say, yeah, you know what? I was inspired by Jim's book and I lead now a life of adventure. I am more free because of my commitment to lifelong learning. And I attribute that to Jim. That would be my legacy that I'd love.
- [78:08]
A
Beautiful answer and an amazing episode, guys. Seriously. So be sure to leave a like and subscribe for amazing content coming soon. But the gym, like, where can everybody find you out and find out more about what all you're working on right now?
- [78:22]
B
I've got a couple of. I've got a website. Jameswkes.com is the website you can learn more about things I'm working on and doing there. And there's links to the book and links to the foundation and other things. J. Keys, author, is my social media presence that I'm out there just trying to build on on TikTok. I've got a TikTok following now. I love it. Yeah, it's fun.
- [78:49]
A
It's fun. Everybody go tap in. Go follow. And again, thank you so much for having us out to Dallas city, man.
- [78:56]
C
It was a pleasure.
- [78:57]
B
Enjoy. Thanks. Cool.
- [78:58]
C
Thank you.